Regis Disappointed Shareholders, Close To Swipe New Pay Policies

Regis Healthcare’s shareholders voted in favor of election and re-election of Directors but were not convinced to adopt the new pay policies.

Shareholders were too close to hit the ‘strike’ with 23.59% votes against the company’s remuneration report but just missed to touch the threshold line of 25%. This comes after the Regis Healthcare Limited (ASX: REG) concluded its 2018 Annual General Meeting today on Thursday, 25 October 2018.

Chairman Graham Hodges, who took the Regis’ chair on 1 July 2018, addressed the headwinds from cuts to Federal Government aged care funding and the changes to the aged care funding instrument that swept the Regis’ profit in FY18. The government funding cuts to residential aged care were such that Regis’ earnings before interest and tax (EBIT) declined to $117.1 million reflecting $11.9 million reduction in steady state sites.Â

But the profit downtrend was anticipated well in time as Regis’ FY18 normalised net profit after tax (NPAT) of $56.9 million was in line with company’s guidance.

However, funding cuts were not the only factor to report steep decline of 12% in group’s NPAT compared to FY17. The occupancy pressures from serious flu outbreak across the industry and mobilization cost associated with new facilities have underpinned the disappointing financial results for the year ended 30 June 2018.

To offset the dissatisfaction among shareholders the Board had declared the 100% of NPAT as FY18 dividend, which took full year dividend to 17.93 cents per share.

Further, in September the listed operators of aged care services came under the claws of newly formed Royal Commission into the sector.

On 16 September 2018, Prime Minister Scott Morrison announced the historical government decision of establishing a Royal Commission into the aged care sector to ensure the provision of quality care services. The regulator targets to investigate the malafide practices and mistreatment ongoing across residential and aged care industry.

The name of Regis Healthcare along with peers Estia Health and Japara Healthcare is under the check list of commission. Commenting on which, Chairman Mr. Hodges said Regis would give complete support to Commission in the scrutiny process.

Looking into FY19, Managing Director Ross Johnston told that NPAT is expected to range between $47 million and $51 million while EBITDA is anticipated to be broadly in line with normalised FY18.

Mr. Johnston stated that the effects of the 2016 Federal Government cuts to residential aged care funding are expected to be ‘substantially grandfathered’ into the portfolio by the end of Fiscal 2019.

As of the 18 October 2018, Regis year to date net RAD cash inflows are of $41 million.

On the release of 2018 AGM results, Regis’ stock price plunged 2.834% or $0.070 to trade at $2.40 on 26 October 2018 (1:48 PM AEST). Moreover, it is currently trading at a PE ratio of 13.780 x with market capitalization of $742.61 million. Over the past one year, the stock has seen a performance change of -34.66%.


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK