Regis Healthcare Ltd (ASX:REG) (H1 2026) Earnings Call Highlights: Strong Revenue Growth Amidst …

GuruFocus News

Mon, February 23, 2026 at 2:00 PM GMT+9 4 min read

In this article:

REG.AX

+7.61%

This article first appeared on GuruFocus.

**Revenue:** Increased 18% to AUD668 million.

**Underlying EBITDA:** Rose 4% to AUD70.6 million.

**Operating Cash Flow:** Increased 40% to AUD291.7 million.

**Net Cash Position:** Ended the half at AUD198 million.

**Interim Dividend:** AUD0.09 per share, 100% franked.

**Net RAD Cash Inflows:** AUD178.5 million.

**Average Occupancy:** Increased to 96% at mature homes.

**Capital Expenditure:** Increased 212% to AUD102.1 million.

**Average Care Minutes:** Increased to 220 minutes in Q2 FY26.

**Staff Costs:** Increased by 22%.

**Depreciation:** Increased to AUD26.5 million.

**Finance Costs:** AUD5.1 million for the half.

**Effective Tax Rate:** 44%, with underlying rate circa 31%.

**Paid-up RAD Balance:** Increased by AUD390 million to over AUD2.2 billion.

**Average Aged Care Revenue per Occupied Bed Day:** Increased 9% to AUD460.60.

Warning! GuruFocus has detected 4 Warning Sign with ASX:REG.

Is ASX:REG fairly valued? Test your thesis with our free DCF calculator.

Release Date: February 22, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Regis Healthcare Ltd (ASX:REG) reported an 18% increase in revenue to AUD668 million and a 4% rise in underlying EBITDA to AUD70.6 million for the first half of FY26.

Operating cash flow increased by 40% to AUD291.7 million, supported by strong net RAD cash inflows of AUD178.5 million.

The company ended the half in a net cash position of AUD198 million, reflecting strong financial health.

Regis Healthcare Ltd (ASX:REG) has improved its star ratings from 3.56 to 3.92 and increased average care minutes, indicating enhanced service quality.

The company has successfully reduced employee turnover from 25.6% to 20.2%, demonstrating effective workforce management and engagement strategies.

Negative Points

The AN-ACC funding model changes have resulted in a AUD10 million earnings impact for FY26, highlighting challenges in funding adequacy.

Despite revenue growth, the EBITDA margin decreased to 10.6% from 12% in the previous year, indicating margin pressure.

The aged care sector faces a significant gap in accommodation funding, with a revenue shortfall of over AUD50 per supported resident per day.

Regis Healthcare Ltd (ASX:REG) incurred one-off costs related to acquisitions and integration, impacting statutory NPAT.

The company anticipates further margin contraction due to AN-ACC pricing, with no expected funding increase until October 2026.

Q & A Highlights

Q: Why is Regis Healthcare maintaining its current guidance despite positive factors such as strong RADs and occupancy? A: Rick Rostolis, CFO, explained that the guidance considers the historical earnings split of 54% in the first half and 46% in the second half due to fewer days and more public holidays in the latter. The second half will also see six months of AN-ACC margin degradation, partially offset by contributions from recent acquisitions. The RAD retention will become more material in FY27.

Story Continues  

Q: Can you explain the relationship between care minutes and AN-ACC, and why care minutes decreased in the second quarter? A: Linda Mellors, CEO, clarified that care minutes are determined by the AN-ACC classification system and change with resident mix. The decrease in care minutes in the second quarter was due to changes in resident mix and AN-ACC classifications.

Q: What operational efficiencies are being targeted, and can we expect continued operating leverage? A: Rick Rostolis, CFO, noted that significant investments in technology and automation are expected to improve efficiency, particularly in the back office, rather than in the homes themselves.

Q: How are room prices trending in the market, and what is Regis’s approach to pricing? A: Linda Mellors, CEO, stated that competitors are also increasing room prices, which were previously suppressed during COVID. Regis is catching up on pricing movements and will continue to monitor market conditions.

Q: What is driving the reduction in staff turnover, and how is the broader aged care labor market? A: Linda Mellors, CEO, highlighted efforts to improve systems, employee value propositions, and learning programs. The Fair Work changes and higher wage rates have also helped attract and retain staff. The labor market has improved, but there remains a global shortage of registered nurses.

Q: Is there any indication that government funding will favor new developments due to the lack of new building? A: Linda Mellors, CEO, mentioned that the government is reviewing the accommodation supplement, which may differentiate between existing and new builds. The review is expected to be completed by July 1.

Q: How confident are you that the Independent Pricing Authority is setting AN-ACC payments in line with costs? A: Linda Mellors, CEO, expressed confidence in the authority’s tools but noted that the removal of margin from AN-ACC funding was unexpected. The sector is advocating for an appropriate margin in care funding.

Q: Will Regis have fewer supported residents in the future, and what is the status of regulations affecting supported resident ratios? A: Linda Mellors, CEO, indicated that government pricing signals are moving away from supported residents, which could lead to fewer supported residents if not addressed. The minimum supported ratios ceased with the new Aged Care Act, but some accommodation supplements still depend on supported resident proportions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Terms and Privacy Policy

Privacy Dashboard

More Info