HealthCo Healthcare and Wellness (HCW) H2 2024 earnings summary

Executive summary

• FY24 marked a transformative year with 16% FFO per unit growth to 8.0 cents, strong operational performance, and income security from long-term leases to leading healthcare providers, supported by demographic megatrends.

• Portfolio value reached $1.6bn, with 99% occupancy and 100% cash rent collection, outperforming traditional real estate subsectors.

• Completed $195m in asset sales and launched a $50m on-market unit buyback, 14% complete.

• Strategic investment in Unlisted Healthcare Fund secured $650m in equity commitments, with HealthCo's interest deconsolidated to 49.6%.

• Achieved a 30% reduction in Scope 1 & 2 carbon emissions and a 5.8 Star NABERS Energy rating.

Financial highlights

• FY24 FFO per unit rose 16% to 8.0 cents ($45.3m), with DPU up 5% to 8.0 cents, both in line with guidance.

• EBITDA increased to $68.6m from $33.5m year-over-year.

• NTA per unit stable at $1.64 as of June 2024.

• 100% rent collection achieved, and balance sheet remains strong with gearing at 32.5%.

• Net assets at $919.9m; consolidated investment property portfolio at $1.6bn.

Outlook and guidance

• FY25 FFO per unit and DPU guided at 8.4 cents, a 5% year-over-year increase, supported by CPI-linked leases and development completions.

• Development pipeline exceeds $500m, targeting 6–7%+ yield on cost.

• Focus on closing the unit price discount to NTA and proactive capital management.

• Positive demand outlook for private healthcare, supported by demographics and public system constraints.