HealthCo Healthcare and Wellness (HCW) H1 2026 earnings summary

Executive summary

• Portfolio valued at AUD 1.4 billion as of December 2025, with 99% occupancy and 100% rent collection, reflecting strong asset quality and operational resilience.

• Healthscope, a major tenant, is in receivership and entered partial rent deferral; negotiations with alternative operators are ongoing to ensure continuity and stable income.

• Strategic focus remains on long-term value preservation, prudent capital management, and maintaining balance sheet flexibility amid Healthscope uncertainty.

• Portfolio reduced from 19 to 13 properties due to asset recycling, generating $77 million in proceeds.

• Suspension of distributions in 1H FY26 to preserve liquidity and balance sheet strength.

Financial highlights

• Net operating income (NOI) grew 4.2% year-over-year, supported by high occupancy and CPI-linked leases for 80% of income.

• FFO per unit was 2.2 cents, down from 4.2 cents year-over-year, impacted by the pause in distributions and Healthscope situation.

• Property NOI was $26.8 million, a decrease of $2.6 million compared to 1H FY25.

• Net loss increased to $26.8 million (from $15.3 million year-over-year).

• Asset recycling generated $77 million in proceeds during the half.

Outlook and guidance

• No distributions will be declared until the Healthscope situation is resolved; recommencement is planned post-resolution.

• Directors consider the group a going concern, supported by cashflow forecasts and compliance with debt covenants.

• Ongoing tenant negotiations and potential lease transitions may impact future cashflows and guidance.