The Estia Health Ltd (ASX: EHE) share price could be on the move on Tuesday following the release of the aged care provider's full year results.
How did Estia Health perform in FY 2019?
During what has been an incredibly challenging period for aged care providers including Japara Healthcare Ltd (ASX: JHC) and Regis Healthcare Ltd (ASX: REG), Estia Health managed to deliver a reasonably solid full year result.
According to the release, the company posted a 7.1% increase in revenue to $586 million, a 4.3% lift in EBITDA to $94 million, and flat net profit after tax of $41.3 million.
Estia Health finished the period with an average occupancy rate of 93.6%, but advised that on August 16 its occupancy rate had improved to 94.1%.
In light of the flat profits, the company's board elected to maintain its fully franked full year dividend at 15.8 cents per share. This represented a payout ratio of 100% and equates to a fully franked 6% dividend yield based on its last close price.
At the end of the financial year Estia Health had net debt of $110.4 million and $201 million in undrawn facilities.
The company's chief executive officer, Ian Thorley appeared to be pleased with the way the company had performed given the challenging trading conditions.
He said: "There is no doubt that this has been one of the most challenging periods for the aged care sector. Continuing to lift quality of care and amenity for residents, while maintaining our financial results, reflects the hard work and dedication of our 7,500 team members, our resident-centred operating model and our disciplined approach to managing costs and capital."
"While funding is not keeping pace with rising operating costs and the need to continually improve resident care, we continue to increase revenue through ongoing refurbishments and measured, well-executed growth in response to growing community demand. Despite occupancy declines in the sector we were pleased to deliver average occupancy during the year of 93.6%, with an up-tick post year-end seeing spot occupancy at 16th August being 94.1%," Mr Thorley added.
Outlook.
Excluding any potential impacts of the Royal Commission and new care home additions, management expects FY 2020 EBITDA on mature homes, based on pre-leasing standard changes to be in the range of $86 million to $90 million. Whereas EBITDA on mature homes, reflecting the new leasing standard is expected to be in the range of $132 million to $141 million.
