ASX:REG
Regis Healthcare Ltd
Investment Summary
The fund managers believe that Regis Healthcare Ltd is well-positioned for growth amid evolving market conditions. They highlight that the recent bipartisan support for the Aged Care Act will provide essential funding, enhancing industry operating margins. Given the company’s strong capital position, it stands to benefit from both greenfield investment opportunities and sector consolidation. Recent reports indicate that Regis has seen improvements in occupancy rates, rising from approximately 89% to 91.5%, supported by increased demand and constrained supply. This trend, coupled with new government funding aimed at addressing profitability issues in aged care, is expected to bolster earnings. Furthermore, with the expected buildout of more beds and a favorable funding model, the next decade is projected to be a golden era for aged care operators. Overall, the outlook is optimistic, indicating substantial growth potential for Regis Healthcare.
Commentary From The Managers
Milford Asset Management
28 Feb 2025
$6.60
- Regis Healthcare performed resiliently over the month with a +0.9% increase.
- Sector challenges stem from limited support in recent years.
- Bipartisan backing for the Aged Care Act is anticipated to improve funding and operating margins in the industry.
- Regis is well-capitalised to seize attractive greenfield investment opportunities.
- The company is also positioned for potential sector consolidation.
- In a tight market, Regis' premium offering allows for higher rate command, enhancing growth potential.
Blackwattle Investment Partners
30 Sept 2024
$6.19
- Regis Healthcare rose 21% in September after the announcement of the new Aged Care Bill 2024.
- The Bill has bipartisan support from the Coalition, indicating robust political backing for aged care reforms.
- The challenge of aging population care has long been recognized, yet previous administrations have delayed action.
- As baby boomers enter care, the consequences of inadequate investment are now critical.
- The new Aged Care Bill increases funding for aged care operators to encourage the development of more care beds.
- With funding security established, a ramp-up in consolidation within the sector is anticipated.
- The sector remains highly fragmented, offering opportunities for corporate operators to consolidate.
- Aged care operators are expected to experience a golden era over the next decade.
- Blackwattle Investment Partners continues to hold its position in Regis Healthcare due to these positive developments.
Blackwattle Investment Partners
31 Aug 2024
$5.20
- Regis Healthcare rose 22% in August following the release of solid but expected results.
- The share price increase is primarily driven by a significant change in the outlook for aged care operators.
- Challenges related to caring for an aging population have been recognized, but insufficient government action has delayed necessary investments.
- As the first baby boomers enter care, the repercussions of inadequate investment are becoming evident.
- The current government faces pressure to increase funding for aged care operators to support the development of more care facilities.
- Blackwattle Investment Partners believes that the coming decade could represent a golden era for aged care operators.
Spheria Asset Management
30 Sept 2023
$2.68
- Regis Healthcare (REG.ASX) share price rose over 9% in September, outperforming the market.
- The company announced financial year results showing improved averaged occupancy from ~89% to 91.5%.
- Occupancy improvement is supported by a rebound in demand and a constrained supply environment.
- Spheria Asset Management expects this backdrop to continue in the short to medium term, supporting occupancy and earnings for REG.
- The aged care sector is being bolstered by additional government funding following a recent industry review.
- The review highlighted a lack of profitability for aged care centers and inadequate care for residents.
- A new funding model aims to recoup cost inflation, increasing predictability for industry participants.
- With improved occupancy, the funding model is expected to drive better profitability for the industry.
- This is potentially more favorable for REG due to its high-quality portfolio in better socio-economic areas.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.