Home' Japara Healthcare Annual Report : Japara Healthcare Annual Report 2016 Contents The Company’s greenfield strategy is
focused on enhancing our existing portfolio
by building new high-quality facilities in
attractive metropolitan locations. Site
selection is supported by extensive internal
research on local demand dynamics, which
are expected to underpin strong occupancy
and pricing when new facilities are opened.
We have now secured most of the required
sites to deliver our current pipeline of over
900 places by the end of FY2019.
Japara Healthcare’s success in the
Department of Health’s 2015 Aged Care
Approvals Round (ACAR) saw the Company
awarded provisional licences for an
additional 313 places. Together with licences
already held, this means that we have
most of the licences to deliver the current
The Company also expects to benefit from
an uplift in significant refurbishment income
as we continue to invest in our portfolio
to maintain asset lifecycle and quality
Overall, our developments are self-funding
through RADs, with bank debt drawn to fund
the construction, which is then repaid with the
incoming RADs when facilities are opened.
Strong track record of
The Company has continued its strong
track record of value-accretive acquisitions,
successfully completing its purchase of
the Profke portfolio in December 2015.
The acquisition added 587 places to our
portfolio, expanding our national presence
into Queensland and increasing our footprint
in New South Wales.
As highlighted at the time of acquisition,
we see significant potential to improve and
enhance the Profke business through the
implementation of Japara Healthcare’s
operating model and the upgrade and
reconfiguration of a number of facilities.
The Profke business is being successfully
integrated and we are pleased to confirm
our expectation that its annualised EBITDA
contribution will reach approximately
$9.5 million within 18 months.
Japara Healthcare will continue to assess
acquisition opportunities that meet our
strict acquisition criteria, with a focus on
targets with strong care fundamentals,
which expand our national footprint, offer
the potential for business improvement
under our ownership and, importantly,
are value accretive for our shareholders.
Looking ahead, Japara Healthcare expects
to continue to deliver sustainable earnings
growth in FY2017, with EBITDA expected to
grow at a similar rate to FY2016.
The Company expects to benefit from
the full year contribution from recent
acquisitions, and a further contribution from
brownfield and greenfield developments in
FY2017. Due to the timing of the planned
delivery of the development pipeline over
the course of the year, contributions from
developments completed in FY2017 are
expected to increase further in FY2018
In the third year since the Living Longer
Living Better reforms were implemented,
the transition to post-reform income
(DAPs, additional services and significant
refurbishment) from pre-reform income
(such as bond retention and accommodation
charges) will continue, with the mix
of revenue continuing to skew towards
post-reform income streams.
Following moderate growth in income from
care and accommodation in FY2016, we are
anticipating low single-digit ACFI growth in
FY2017, reflecting our residents’ growing
clinical healthcare requirements. Additionally,
we expect to make further investments in
capability in the year ahead to support the
business’ development and growth strategy.
As the residential aged care sector continues
to change, Japara Healthcare is well placed
to deliver sustainable earnings growth
with a sound, diversified growth strategy
underpinned by a focus on high-quality
resident care. The Company has a prudent
approach to fiscal management, maintains
a conservative balance sheet, and has
diverse sources of capital to support the
exciting growth strategy ahead.
The dedication and commitment of our
team of over 5,000 nurses, carers and
other staff across the country are central to
our ability to provide high-quality care and
wellbeing services to our residents. I would
like to thank each of you for your valued
contribution during the year.
To our shareholders, I would like to extend
my gratitude for your continued support of
Japara Healthcare in FY2016, and I look
forward to seeing you at our upcoming AGM.
Managing Director and CEO
22 August 2016
“Japara Healthcare has continued
to implement its strategy to
significantly expand its portfolio
through development of new facilities
and refurbishments and extensions
of a number of existing facilities.”
06 Japara Healthcare Annual Report 2016
07 Japara Healthcare Annual Report 2016
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