ASX Listed Aged Care Company Performance Summary
Another six months has passed by since we last reported on the listed aged care companies. During that time, Estia has continued to face scrutiny from the media and investors, however, the company is not alone in facing the new challenges that this ever-dynamic industry brings. In previous years, we saw the application of rapid growth strategies in a buoyant market. Towards the end of last financial year, we witnessed cuts to funding and a slow-down in transactions.
As we move into a new year, providers are being faced with new opportunities and threats. Whilst some of the cuts to funding were revised, the Department has also communicated the possibility of a new aged care funding model and supply deregulation in their search for a sustainable system. This creates a level of uncertainty across the industry, especially during a time when many providers, including the listed aged care providers, are investing heavily in brownfield and greenfield developments.
At the same time, changes in the home care legislation came into effect in February 2017 which will drive innovation and new investment into the aged care and retirement living sectors (click here).
As always, we look towards the listed aged care providers to see how they are faring in this brave new world. The attached article provides a summary on the listed aged care companies results for the six months to 31 December 2016.
Although there is a level of uncertainty surrounding funding and regulation, we know that the growth in Australian seniors will drive demand for additional aged care services. Whilst supply is still regulated for the residential aged care sector, providers are not immune to the growing competition and innovative service models being developed in a less regulated home care sector. For all providers, the ability to remain relevant and to meet the dynamic needs and preferences of the incoming baby boomer generation will be key to long term sustainability (click here).
The next “In a Nutshell” publication will focus on potential funding model changes, deregulation of residential aged care supply and the impact this would have on consumers, providers and the Government.
We hope you enjoy the report.