Regis Healthcare (ASX:REG) share price leaps on return to profit

The ASX healthcare share reported its FY21 results this morning.

| More on:
jump in asx share price represented by man leaping up from one wooden pillar to the next

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Regis Healthcare Ltd (ASX: REG) share price is leaping higher in morning trade, up 6.09% to $2.09 per share.

Below we take a look at the residential aged care provider's financial results for the year ending 30 June (FY21).

Regis Healthcare share price up on FY21 results

Some top results likely moving the Regis Healthcare share price this morning:

  • Revenue from services increased 3.5% from FY20 to $701.4 million
  • Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $137.8 million, down 2.7% year-on-year from $141.6 million
  • Net profit after tax (NPAT) of $19.9 million compared to a loss of $700,000 in FY20
  • Declared a final dividend of 4.63 cents, 50% franked

What happened during the reporting period for Regis Healthcare?

During the financial year, Regis reduced its debt by 39.8%, down to $142.4 million from $236.7 million at the end of FY20.

Average occupancy at its facilities edged 0.7% higher, to 88.9% from 88.2% the prior year.

As an operator of aged care facilities, COVID-19 mitigation measures were prioritised. All residents were offered vaccination via a government program. Regis also secured a separate provider, offering vaccines to all willing residents and employees.

As at 27 August, the company reports 78% of residents have had 2 doses while 58% of staff is double dosed. Regis received $7.7 million of government funding and $4.2 million of government grants in relation to costs incurred from COVID-19..

On 9 August, Regis announced that it had "identified potential underpayments of employee entitlements" going back 6 years and affecting some current and former employees. The review is ongoing, but Regis provided $35 million in the financial statements in relation to the issue. $7.1 million of this comes off the FY21 profit before income tax. The rest has been "recorded as a prior period restatement".

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) moved to acquire Regis in September in an initial confidential, non-binding indicative proposal, valuing Regis Healthcare's share price at $1.65. In November WHSP upped the offer to $1.85 per share.

Regis said the proposals were rejected as they "materially undervalued the company". In January, WHSP withdrew its proposal.

The final dividend is payable 30 September. It takes the full-year dividends to 6.63 cents per share, or 100% of FY21 NPAT.

What did management say?

Commenting on the results, Regis' CEO, Linda Mellors said:

Regis has performed strongly, responding to a range of significant events, including the threat to residents and employees from the global pandemic, an extended Royal Commission, the Australian government's reform agenda, and various internal matters. Each challenge has been met with commitment and focus from a highly experienced team…

The company continues to review the progress of the COVID-19 pandemic and take necessary steps to protect the health, well-being and safety of residents, clients and employees.

What's next for Regis Healthcare?

Looking ahead, management said it wasn't prudent to provide guidance in the current macro-environment and the ongoing pandemic.

Mellors said:

Our focus on providing quality resident care, service and accommodation to support improved occupancy remains a high priority, while the reduction in debt places the company in a strong position to take advantage of various growth opportunities as they emerge.

The Regis Healthcare share price is up 68% over the past 12 months.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Earnings Results

Graincorp share price lifts off as dividend is maintained and debts plunge

ASX 200 investors are bidding up the Graincorp share price today. But why?

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Earnings Results

Why is this ASX 200 stock avoiding the market selloff and pushing higher?

Not all shares are falling with the market on Thursday.

Read more »