Net debt/EBITDA jumped to 6.9x as operating cash fell 33%

Gross borrowings rose 46.8% to $558.0m and net debt/EBITDA moved from 4.4x to 6.9x, with cash on hand down to $7.4m. Operating cash flow fell 33.5% to $70.2m, taking cash conversion (OCF/EBITDA) from 125.4% to 87.7%.

Revenue grew 6.9% to $247.2m, but EBITDA slipped 4.9% to $80.0m. PBT fell 78.7% to $12.0m and NPAT fell 74.8% to $15.4m, driven mostly by lower property revaluation gains rather than a deterioration in trading: the Village Operations segment result halved from $93.5m to $53.0m, while Care Operations swung from a $1.5m loss to a $12.9m profit.

A $86.9m working-capital build sat behind the cash result — trade and other receivables jumped from $22.0m to $108.9m, lifting receivable days from 35 to 161.

Net debt/EBITDA at 6.9x is a material step up from 4.4x and leaves limited headroom against the $56.3m of undrawn facilities referenced in commentary. Because operating cash fell while drawn debt rose nearly $178m, the gap had to be funded with borrowings — which means further development spend, dividends, or any earnings stress now have to compete against deleveraging.

The receivables build is the swing factor in cash quality. Trade debtors rose almost five-fold, consistent with deferred settlements on ORA unit sales and resales rather than a trading deterioration, but the scale is unusual against a $247.2m revenue base. Until this unwinds into cash, reported EBITDA overstates what the business is actually generating.

Segment mix improved underneath the revaluation noise. Care Operations turning profitable is the cleaner operating read and aligns with the strategy reference to premium care suites. Village Operations earnings remain dominated by non-cash fair value movements, which is why PBT is more useful than NPAT for this issuer but neither is a good proxy for cash.

Commentary highlights debt and bond drawings of $557.8m with $56.3m of undrawn headroom, premium care-suite demand, and divestments of non-core assets — but does not quantify deleveraging timing or a development spend envelope.

What the release does support is that revenue growth is accelerating in care while underlying EBITDA is softer; what it does not support is any clear view on when the receivables balance converts to cash or how quickly leverage can step back from 6.9x. That gap matters because at this leverage level the cost of debt and any covenant headroom become the dominant earnings variable, not operating performance.

Care Operations' swing to profit and 6.9% revenue growth are the durable signals.

Cash quality, however, weakened meaningfully:

• OCF/EBITDA fell from 125.4% to 87.7% — within normal ranges for the sector but a clear deterioration.
• Free cash flow pre-lease only turned positive ($15.0m vs -$7.8m) because capex was cut 51.3% to $55.2m (22.3% of revenue, down from 49.0%).
• ROE roughly halved from 6.4% to 1.6%.

In other words, the FCF improvement is balance-sheet-assisted via reduced development spend, not a sign that underlying cash generation strengthened. With $86.9m tied up in receivables and debt up $178m, the result depends on receivables converting and development discipline holding.

This briefing cannot assess covenant headroom, unit pricing trends, occupancy, or DMF roll dynamics because none of those are quantified in the supplied extraction.