Estia Health Ltd (ASX: EHE), which operates a network of retirement homes and provides various aged care services, confirmed that it is on track to meet its prospectus forecasts for the 2015 financial year after what was a strong half-year period for the company.
Investors rewarded the company's performance, sending the shares 4.9% higher to $5.40 late in the session.
So What: Estia Health managed to top its forecast $19.7 million profit for the half, reporting pro-forma net profit after tax (NPAT) of $19.9 million. Pro forma earnings before interest and tax (EBIT) for the period were $28.5 million on the back of $137.5 million in revenues, which were driven by higher occupancy levels (93.4%), and a good number of residents receiving higher care subsidies (91.3%).
Here are some of the other highlights from the report:
- Aged Care Funding Instruments (ACFI) subsidies increased to $170.56 per day in December, and $165.75 across the entire period
- Average equivalent new Refundable Accommodation Deposit (RAD) of $327,274, compared to a forecast $238,000 for the half
- Group's growth strategy sitting above prospectus target, with the previously announced 80 bed acquisition in Metro Adelaide to be finalised in May
- Estia's portfolio currently consists of 45 homes with 3,693 places
Now What: Although its shares have jumped 27% over the last month or so, the long-term prospects for Estia Health, and its rivals Japara Healthcare Ltd (ASX: JHC) and Regis Healthcare Ltd (ASX: REG), are still very appealing.
The aged care industry is expected to boom over the coming decades due to the nation's growing and ageing population. As one of Australia's largest public aged care operators, Estia Health is in a solid position to benefit, especially due to its industry leading figure of 92% single rooms, which are the most highly sought after in the industry.
