Third Age Health announces 1H NPAT up 115% to $1,154k

25 October 2024

Primary care provider, Third Age Health Services (NZX: TAH), has today reported its unaudited results for the six months to 30 September 2024 (1H25).

At the outset of this year, we set out with ambitious plans, focusing on delighting customers, expanding our care services and scaling operations. We’re pleased to report that our efforts have translated into significant growth across key areas of our business in the first half of FY25.

Net Profit After Tax (NPAT) has increased by 115% to $1,154k, up from $537k in the same period last year, and Underlying NPATA* grew by 96% year on year, reaching $1,361k. Overall gross profit margin improved to 51.6% from 47.6% in the same period last year.

Our Hub Aged Care acquisition in April has already contributed to expanding our elder care services in the Lower North Island. We now service 13 aged residential care facilities providing care to 733 residents (patients) in this region.

Our relationship with current and potential aged residential care customers has been integral to supporting the growth of our care facilities and enrolled patients. The total number of aged residential care facilities we now service is 87 providing care to 5,278 residents up from 67 facilities providing care to 4,360 residents as of 31 March 2024.

The total number of patients we provide care to across aged residential care and our community general practices has grown to 25,810 up from 24,969 as of 31 March 2024.

While our core elder care services business is performing well, we continue to make investments in improving the quality and reach of services we provide. This includes investments in digitisation, process improvements and additional resource.

A good example of an investment we’ve made in partnership with CHT is the Navigating Wellness guidebook that we produced. Published in June 2024 it has been well received by practitioners, patients and stakeholders across the wider healthcare community. 5,000 physical copies have been shared across the country and it is now becoming a widely used resource.

The performance of our six community general practices has also significantly improved. Refinements to the operating model have seen the implementation of team-based care, along with several other productivity and service level improvements. Trials of AI tools to assist with transcribing patient notes are also underway. Nevertheless, several of these practices are still underperforming their potential and work to remediate this remains ongoing.

Challenging Environment

The current landscape is as challenging as ever. While demand for our services continues to grow, so does competition. We also face workforce shortages and ongoing funding limitations, driven by tightening health budgets. While we believe the strategies we have implemented to address these risks are promising, we continue to assess and refine them as part of our ongoing risk management efforts to ensure we remain the provider of choice.

Capital Allocation

During the period we took on debt of $598k to fund the acquisition of Hub Aged Care, while accelerating debt repayment of $729k resulting in net debt repayment of $131k. We also initiated an on-market share buyback acquiring 1,050 shares at an average price of $2.02 per share.

Going forward our capital allocation priorities remain unchanged – we will continue to prioritise investments that better enable us to serve our customers. While returning capital to shareholders through quarterly dividends in line with our dividend policy, we will opportunistically repay debt or buy back shares based on market conditions. We continue to actively seek out opportunities to make acquisitions of businesses that have similar commercial characteristics to our core business and are casting the net wider than we previously have.

Outlook

We are cautiously optimistic that performance in the second half of this financial year will be ahead of the performance delivered during the first half.

Quarterly Dividend

The Board of Third Age Health Services Limited (NZX:TAH) has declared a fully imputed interim dividend of 3.55 cents per share (cps) for Q2 FY25. This brings the total dividends declared for the first half of FY25 to 6.83 cps up 72% vs the same period last year.

*Underlying NPATA is adjusted for non-cash amortisation charges arising as a result of purchase accounting rules

Please see attached for more information.

For more information, please contact:
Geraldine Bromley,
Head of Finance – Third Age Health
+64 22 127 5598
[email protected]

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Announcement PDF