Home' Japara Healthcare Annual Report : Japara Healthcare Annual Report 2017 Contents extensive brownfield projects being
completed in Victoria, delivering 124
new places. A further 10 projects were
commenced during the year, with six
brownfield and 10 greenfield projects now
underway at various development stages.
I am pleased to report that our greenfield
project, Riverside Views near Launceston,
Tasmania, is now completed and on track
to open in late September 2017. This will be
our 44th facility and will provide an additional
88 places to the Group's portfolio.
During the year, we also secured five
additional land sites in optimal metropolitan
locations across Victoria and Queensland,
with land now secured for all of our
greenfield projects. We have now invested
more than $50 million in site acquisitions
since listing. We are on track to deliver
over 1,100 new greenfield places by the
end of FY2020 for which we hold most of
the operating licences, having received an
additional 266 licences during the year.
A significant refurbishment program
commenced during the year across 14 of our
facilities. This two-year program is designed
to improve the quality of accommodation
and extend the life of our assets. It should
generate additional profit and improved
returns to shareholders through higher
accommodation supplement income.
We also expect to continue to benefit
from the ongoing management and value
extraction from our real estate portfolio,
which has a current book value of circa
Well positioned for future growth
Japara Healthcare continues to significantly
invest to position our Company for future
growth. This includes significant investment
in human capital, ICT systems and our
specialist dementia care model.
With the backdrop of a freeze on indexation
of Government funding for FY2018, a
business enhancement program was
undertaken during the year to optimise
revenue and costs without compromising
on care and quality. We expect to see the
benefits of this program moving forward.
Japara Healthcare continued its good record
of strong cash generation during the year,
delivering net operating cash flows of
$31.8 million plus net cash inflows from
RADs of $55.7 million. The Company's
balance sheet is strong and well positioned
to support future growth, with modest net
bank debt of $19.6 million at 30 June 2017
and available liquidity of circa $190 million.
We also continue to strive to be best in care,
hospitality, lifestyle, customer and dementia
services. In particular, we expect to provide
improved life benefits to our residents
through adoption of our specialist dementia
care model across all facilities and in the
design and functionality of new memory
support areas and homes.
Value accretive acquisition
Unlike previous years, no acquisitions were
made during FY2017 as opportunities we
considered did not meet our investment
fundamentals. Japara Healthcare continues
to assess acquisition opportunities that meet
our strict acquisition criteria, including being
value accretive for our shareholders and
we are confident that future acquisitions
will be made to enhance the Group's
Looking ahead, Japara Healthcare expects
FY2018 EBITDA to be in line with or slightly
EBITDA is expected to increase from FY2019
as more greenfield developments complete
and ACFI indexation increases recommence.
Japara Healthcare has a sound, diversified
growth strategy underpinned by a focus
on high quality resident care and services.
Its extensive developments program is
supported by a strong balance sheet
allowing capital management flexibility.
These provide an excellent foundation
for the Company's medium-term growth.
The dedication and commitment of our
team of facility and other support staff across
Australia is core to our ability to provide high
quality support and services to our residents.
I would like to thank all staff and the Board
for their contributions during the year.
Managing Director and CEO
28 August 2017
Japara Healthcare Limited | Annual Report 2017 | 07
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