Promisia’s occupancy gains unlock first dividend and higher FY27 target

Occupancy drives earnings upgrade and first dividend

Promisia Healthcare Limited (NZX:PHL) has reached a useful milestone in its turnaround: the New Zealand aged-care operator is now generating enough cash to pay its first interim dividend while raising its FY27 underlying EBITDAF guidance to at least NZ$9 million.

For the six months ended 30 September 2026, operating revenue rose 13.7% to NZ$21.80 million and underlying EBITDAF increased 50% to NZ$3.83 million, from NZ$2.55 million a year earlier. Group care occupancy stayed above 95% throughout the half and averaged about 96% in September, compared with the improvement from 87% to more than 94% achieved during FY26. The result was supported by the Chatswood acquisition, which had been completed on 1 October and was expected to contribute from the second half.

Cash flow turns positive as costs lag revenue

The operating improvement was not simply a revenue story. Operating expenses rose 6% to NZ$16.32 million, well below the increase in revenue, with Promisia citing rostering discipline, supplier consolidation and procurement savings. Borrowing costs also fell 25% to NZ$860,000 after the group’s FY26 refinancing and lower underlying interest rates.

Profit after tax swung to NZ$1.32 million from a NZ$49,000 loss in the prior corresponding period. More importantly for the new payout policy, Operating Free Cash Flow moved from a NZ$380,000 deficit to a NZ$1.02 million surplus after cash interest, committed debt repayments, tax and maintenance capital expenditure.

Dividend begins with a fixed NZ$390,000 pool

The Board declared a fully imputed interim cash dividend pool of NZ$390,000, equal to about 38.2% of first-half Operating Free Cash Flow and near the top of Promisia’s 20% to 40% policy range. Based on the share count at 11 November, the indicative gross dividend is about 1.00 New Zealand cent per share, comprising 0.72 cents in cash and 0.28 cents of imputation credits.

The pool is fixed, however, so the final per-share amount may fall if more warrants are exercised before the record date. The dividend has a 26 November record date and is scheduled for payment on 3 December. The policy remains discretionary and sits alongside debt reduction, maintenance spending and possible growth investment.

Chatswood adds scale but raises leverage

Chatswood’s contribution comes with a more leveraged balance sheet. The NZ$25 million Christchurch acquisition was funded principally through NZ$20 million of new BNZ facilities and existing liquidity; immediately after completion, bank loan-to-value was approximately 43%, compared with 31.5% at 30 September. Promisia expects surplus operating cash flow and potential warrant proceeds to reduce borrowings.

The company is also pursuing an option to accelerate full ownership of Golden View Village, with completion targeted for early March 2027 rather than August 2028, subject to financing. Promisia says ownership would allow it to retain future village resale proceeds and remove vendor repayment commitments, but the funding structure and financial effect have not yet been confirmed. The earlier Golden View ownership option had been flagged as potentially moving forward to March 2027, subject to financing.

Second-half test is execution, not occupancy alone

The upgraded guidance assumes continued occupancy above 95%, a full six months of the 4% care-funding increase introduced in July and Chatswood’s earnings from October. Cromwell remains the softer patch: Ripponburn averaged 79% occupancy in September after an extended period of winter illness, although the company said demand in Central Otago remained strong and occupancy had begun to recover.

The next financial test is whether Chatswood can add earnings without allowing the acquisition debt to blunt cash generation. Promisia has improved the operating engine; the harder question is how quickly that engine can reduce the leverage taken on to expand it.