This article is from the Australian Property Journal archive
ESTIA Health (ASX: EHE) has slumped to a half year loss as it grappled with the threat of COVID to its aged care homes, and agreed to settle a shareholder class action suit.
The group swung to a $5.3 million net loss after tax, after posting a $14.3 million profit this time last year. No dividend will be paid.
Estia agreed to an $11.7 million settlement on a shareholder class action relating to market disclosures made between August of 2015 and October of 2016. Shares jumped after it upgraded its FY16 guidance, despite issues following its acquisition of Kennedy Health Care in 2015. Estia’s outlook then soured for FY17 and guidance was downgraded, and its share price plummeted as a result.
As part of the settlement terms, Estia will not admit liability.
More than $20 million was committed during the period to infection prevention measures, PPE, cleaning, waste disposal and staff and family welfare support during the period. Most of these actions were undertaken in Victoria, which experienced a second outbreak and subsequent lockdown during the period.
Group occupancy averaged 90.6% during the period. This was at 93.5% in its 42 homes outside Victoria, and 85.1% across its 27 homes in Victoria, and which fell to 82.5% in mid-October. Victorian spot occupancy had improved to 87.8% at February 19. Group occupancy at this date had also improved, to 92.7%, with the rate outside of Victoria up at 95.3%.
Government temporary funding and grants received by the group during the first half of FY21 totalled $8.5 million. Additional grant support of $7.3 million has been applied for.
“The second wave COVID-19 outbreak in Victoria from July to October tested the sector in a way never previously experienced and we again thank our residents, their families and employees for their ongoing support during this difficult time,” chief executive Ian Thorley said.
“The aged care sector, which cares for some of the most vulnerable members of the community, will need to continue to be on alert to COVID-19. As infections and clusters emerge in local communities it is likely that regular lockdowns, restrictions to visitor access and increased PPE usage will continue to be part of the normal operating mode of residential aged care homes for a significant time to come.”
Net bank debt was $86 million. The group has $221 million of undrawn debt facilities, from a total of $330 million.
The sales of two surplus land sites at Mona Vale and Wollongong totalling $8.2 million were completed.
The Royal Commission into Aged Care Quality and Safety concluded its hearings in November. Estia gave evidence to the funding and financing hearings in September.
“Reform is essential for the sector to continue to attract capital, provide secure returns and deliver the highest quality care and services to residents,” Thurley said.
“The sector is anticipating a whole of government response to the Report as part of the May budget.”
The final report is expected to be released on Friday.
