Announcement

HALFYR: RAD: Radius Care announces half year results of FY22 08:30am 
RAD
29/11/2021 08:30
HALFYR
PRICE SENSITIVE
REL: 0830 HRS Radius Residential Care Limited

HALFYR: RAD: Radius Care announces half year results of FY22

29 November 2021

RADIUS CARE REPORTS STRONG PROGRESS WITH GROWTH STRATEGY

Highlights:

o Acquisition of land and buildings for four facilities with associated $48
million capital raise.
o Acquisition of 69 bed / 25 unit facility in Invercargill shortly after
period end.
o Occupancy at 92.0% at period end vs industry average of 87.3%
o Total revenue of $66.3 million, up from $61.4 million on comparative
period.
o Underlying EBITDA of $11.2 million, down $1.2m on comparative period.
o AFFO of $2.3m, similar to comparative period.
o Gross Interim Dividend of 0.7 cps, up 20%.

Radius Residential Care Limited (NZX: RAD) has announced unaudited half year
underlying EBITDA of $11.2 million for the six months ended 30 September
2021, a reduction of $1.2 million compared to the prior corresponding period
(prior period). Revenue increased 8% on the prior period to $66.3 million.
AFFO was consistent with the prior period at $2.3 million.

Brien Cree, Executive Chairman, noted good progress with key performance
metrics: high care bed occupancy levels; increasing accommodation
supplements, consistent EBITDA per care bed as well as strong progress
against Radius Care's strategic pillars. In addition, there had been several
key events in the first half of the 2022 financial year that saw Radius Care
continue to deliver significant milestones against strategy.

"In July we were able to secure the opportunity to acquire the land and
buildings of four aged care facilities that Radius Care has leased for quite
a number of years. And in early October we announced the acquisition of an
integrated care facility and retirement village in Invercargill. Our
portfolio now stands at 23 properties, 1,784 beds and 101 village units
located between Paihia and Invercargill. We currently have a landbank of 194
care beds and 166 independent living units" said Mr Cree.

Business performance
"Operationally we continue to perform well, despite having had seven
facilities in the Northland, Auckland and Waikato regions being managed under
Alert Level 4 restrictions during the period.
However we continue to see costs across the business rising, particularly for
labour, food and consumables. Some of these cost increases are directly
attributable to COVID-19 related border restrictions affecting labour supply
and others to supply chain issues affecting food and consumable goods prices:
said Mr Cree.

Occupancy levels have remained above historic levels. Occupancy at 30
September was 92.0%, slightly lower than the 93.4% recorded at the end of
March 2021. Increasingly many of our facilities are operating at 100% for
periods of time.

Financial performance
Direct private revenue of $5.4 million was earned for the half year, down
from $6.2 million earned in the prior period.

Accommodation supplements revenue increased to $3.1 million from $2.7
million.

Underlying EBITDA per care bed was $10,300, compared with $10,700 for the
prior period.

Wage costs represent the single largest cost stream for Radius and accounted
for 54.3% of revenue for the period compared with 53.2% for the prior period.

Financial position
Some $48.2 million of new capital was raised during the period of which
$31.4m was used to settle the Ohaupo acquisitions, around $8m was applied to
debt reduction and $6.3m of cash available for investment in growth.
A $62m new funding facility has been negotiated with ASB, and was used to
settle the Clare House acquisition on 1 November. The ASB facility was drawn
to $18.7m and $6.7m of cash was on hand as at 30 September.

Development update
Brownfields developments are underway or planned to start at four facilities.
At Taupaki Gables at Kumeu and Windsor Court at Ohaupo, two of the four
properties which we bought in early August, an additional 20 care beds will
be added at each facility. Planning for Taupaki Gables is well underway with
initial works expected to start in May 2022. Construction work will start
shortly at Thornleigh Park to add 20 additional Care Beds. A resource consent
application will be lodged for Lexham Park in the second half of FY22.

Northwood, a greenfields development on 4.3ha at Belfast, Christchurch is
planned to open in June 2024 and will offer 70 Care Beds, 30 Care Suites and
94 Retirement Village Units. Occupation rights for the retirement village
will go on sale in mid-2023.

Dividend
A dividend of 0.7 cents per share including full imputation credits has been
declared for the half year and will be paid on 23 December 2021. The dividend
payout for the first half represents 60% of forecast reported FY22 AFFO, in
line with the policy to distribute to target a pay-out ratio of 50% to 70% of
AFFO. The interim and final dividends in total are expected to be similar to
the 1.46 cents per share paid for the FY21 year.

Outlook
Mr Cree commented "Radius Care is in good shape and is well placed to
continue its growth phase, guided by a clear and deliverable strategy. In the
near term, COVID-19 continues to present a significant challenge with a
proportion of the additional costs of operating an essential service unable
to be recovered from income set under annual negotiations with the
Government".

The Radius Care board expects underlying EBITDA of $21.5m-$23.0m for the full
year, slightly lower than the $23.4m earned in FY21, and AFFO of $4.0m-$5.0m
compared with FY21's $3.7m. On a pro forma basis, underlying EBITDA of
$22.4m-$23.9m and AFFO of $5.2m-$6.2m is expected.

ENDS

Media and Investor Contacts:

Brien Cree
Executive Chair and Managing Director
: +64 21 955 769
: brien.cree@radiuscare.co.nz

Annabel Cotton
Merlin IR
: +64 27 473 7330
End CA:00383705 For:RAD Type:HALFYR Time:2021-11-29 08:30:41

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