Highlights

  • Radius Care delivered higher FY26 profit, underlying EBITDA and available funds from operations.
  • The Acquisition of Karori Village and new developments are expanding its aged-care footprint.
  • Lower financing costs and an extended Debt Maturity profile could support the next phase of growth.

Radius Residential Care Limited (NZX:RAD) enters FY27 with stronger Earnings momentum and an expanding national footprint after delivering improved financial performance in FY26. For the year ended 31 March 2026, profit before tax increased 37% to NZ$14.3 million, while net profit after tax rose 34% to NZ$9.5 million. Available funds from operations increased 44% to NZ$12.7 million, and underlying EBITDA advanced 17% to NZ$27.4 million. Average occupancy also improved to 94.9%, up 2.1 percentage points from FY25. These results suggest that higher occupancy, improved operating execution and growing scale are translating into stronger financial outcomes as Radius continues investing in aged-care facilities, retirement living and related health services across New Zealand.

Could Expansion Drive Radius Care’s Next Growth Phase?

Radius Care is continuing to expand its core aged-care portfolio as Demand for specialist elderly care increases across New Zealand. In May 2026, the company completed the acquisition of Karori Village in Wellington, adding a 90-bed care home providing hospital and dementia-level services. The transaction increased Radius Care’s network to 25 aged-care homes nationwide.

The company is also pursuing greenfield development opportunities. In March 2026, Radius acquired 4.3 hectares of land in Belfast, Christchurch, where it plans to develop a 100-bed care home together with an approximately 75-villa retirement village in stages. The proposed Facility will incorporate the company’s new design for hospital-level and dementia care.

At its August 2026 investor session, Radius outlined plans to accelerate expansion of its aged-care portfolio while also growing services and products that support people as they age. The company introduced Radius Health as a broader framework for these activities, signalling that future growth may extend beyond traditional residential care.

Higher occupancy remains particularly important. Annualised EBITDAR per bed on a same-site basis increased to NZ$31,100 in FY26 from NZ$27,900 in FY25, indicating that better utilisation and operating performance are improving returns from the existing portfolio.

Can Better Funding Support Future Investment?

Radius Care also strengthened its funding arrangements shortly after releasing its FY26 results. In May 2026, the company established a lending syndicate involving ASB Bank and Bank of China New Zealand and increased its facility limits by NZ$30 million. This included NZ$15 million of additional core debt capacity and a NZ$15 million development facility.

The facilities were extended to 30 June 2029, while average margins and line fees were reduced by 65 basis points. The additional funding capacity is intended partly to support the Karori acquisition and development at Belfast. Lower financing costs could therefore help offset some of the Capital intensity associated with expanding aged-care infrastructure.

Radius Care nevertheless faces several execution risks. New developments require substantial capital and can be affected by construction costs, consenting, labour availability and project delays. The aged-care sector also remains exposed to government funding settings, workforce shortages and wage inflation.

Even so, the company enters FY27 with stronger profitability, higher occupancy and a broader growth pipeline. Its FY26 final Cash Dividend was increased by 50% to 1.2 cents per share, reflecting improved earnings and funds from operations.

The key question now is whether Radius can maintain occupancy and operating efficiency while successfully integrating Karori and progressing its new developments. If expansion is delivered without materially weakening financial discipline, the enlarged portfolio could provide another avenue for earnings growth over the coming years.