HealthCo Healthcare and Wellness (HCW) H1 2026 earnings summary

Executive summary

• Portfolio valued at AUD 1.4 billion as of December 2025, with 100% rent collection and 99% occupancy, reflecting strong operational performance and critical infrastructure status.

• Healthscope, a major tenant, is in receivership or partial rent deferral, leading to paused distributions and ongoing negotiations with alternative operators.

• Portfolio reduced from 19 to 13 properties due to asset recycling, with $76.8 million in asset sales settled during the half-year.

• Strategic focus remains on long-term value preservation, prudent capital management, and ensuring continuity of healthcare services.

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

Financial highlights

• Net operating income (NOI) grew 4.2% for the half, with 80% of income CPI-linked, providing strong income protection.

• FFO per unit was 2.2 cents, down from 4.2 cents year-over-year, impacted by non-declaration of distributions from the unlisted healthcare fund.

• 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 of $77 million completed in the half.

Outlook and guidance

• No distributions will be declared until the Healthscope situation is resolved.

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

• FY26 focus is on prudent capital management and maintaining flexibility.

• AUD 500 million development pipeline will only be unlocked when conditions are favorable.

• No FY26 guidance provided due to ongoing uncertainty.