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 or financial distress, prompting ongoing negotiations and executable agreements with alternative operators for all 11 hospitals to ensure continuity of service and stable income streams.

• Suspension of distributions in 1H FY26 to maintain balance sheet flexibility and liquidity amid the Healthscope situation.

• Strategic focus remains on long-term value preservation, prudent capital management, and maximizing investor value.

Financial highlights

• 1H FY26 FFO per unit was 2.2 cents (AUD 0.022), down from 4.2 cents in 1H FY25, impacted by the pause in distributions and Healthscope uncertainty.

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

• NTA per unit at $1.39 as of December 2025, down from $1.44 at June 2025.

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

• Gearing stands at 28.5%, below the 30-40% target range, with AUD 155 million in cash and undrawn debt.

Outlook and guidance

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

• No formal FY26 guidance provided due to ongoing uncertainty; focus remains on prudent capital management and continuity of healthcare services.

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