Oceania Healthcare (OCA) H1 2025 earnings summary

Executive summary

• Underlying EBITDA increased 2.7% year-over-year to $38.6m for the six months ending 30 September 2024, reflecting improved sales, portfolio rebalancing, and operational efficiency.

• CEO Suzanne Dvorak appointed in July 2024, with a focus on sales execution, debt reduction, and portfolio modernization.

• Portfolio rebalancing continues, targeting a 50/50 split between independent living and care assets, with divestments of non-core sites and new developments in premium care and retirement units.

• Sales momentum and operational right-sizing are top priorities, with new executive appointments and external firm Marketability engaged.

• Sustainability initiatives advanced, including SBTi-validated GHG reduction targets and finalist status in Deloitte Top 200 Awards.

Financial highlights

• Underlying EBITDA rose 2.7% to $38.6m, with operating cash flow up 23.1% to $70.4m and realised capital gains up 34.9% to $38.2m.

• Underlying NPAT was $24.0m, down 12.5% year-over-year due to higher interest expense; reported total comprehensive income was $11.8m, down from $61.7m in the prior year.

• Net debt headroom stands at $96m, with gearing reduced to 37.5% and all banking covenants met.

• Total assets increased to $2.82bn, with net tangible assets per share at $1.43.

• Unsold inventory value decreased to $305m, down 13.5% from FY24.

Outlook and guidance

• Focus remains on accelerating sales, reducing unsold stock and gearing, and improving care service returns.

• Board will revisit dividend resumption once sales and gearing targets are met.

• Cost reduction target of NZD 5–7 million for FY2026, with a $5m right-sizing program underway.

• No new major development stages or land bank acquisitions until successful sell-down of current stock.

• 224 independent living units and care suites to be delivered in FY25, with strong application volumes into the Christmas period.