EBITDA up 47% but NPAT loss widened on tax distortion

Profit before tax turned positive at $3.6m versus a $3.0m loss in FY23, and underlying EBITDA rose 47.4% to $20.9m, yet net profit after tax worsened to a loss of $8.5m from $2.1m. The driver is the tax line: the effective tax rate was 335.8%, against 29.4% in FY23.

Operating cash flow more than tripled to $14.1m, and net debt fell 26.5% to $73.5m, taking net debt to underlying EBITDA from 7.1x to 3.5x. The board declared a final dividend of 0.7 cents per share, ending the prior nil position. The prior comparable included an aged-care acquisition, which limits clean like-for-like revenue comparison. Separately, Radius Announces $19m Sale of Facility (the Arran Court disposal, signed September 2023) preceded the result period close; proceeds are disclosed but have not been reconciled to period-end debt or cash flow in the supplied excerpts.

Pre-tax profit improved by roughly $6.6m year-on-year, but a tax charge of about $12.1m against $3.6m PBT pulled NPAT below FY23. The supplied commentary does not explain the charge, so the read on statutory earnings depends on a one-off that has not been quantified or reconciled. This matters because using NPAT in isolation makes FY24 look weaker than FY23, while underlying EBITDA and cash generation point the other way.

Leverage has been rebuilt and the dividend resumed. Net debt fell to $73.5m from $100.1m and net debt to underlying EBITDA has more than halved from 7.1x to 3.5x. Capex dropped from $58.7m to $3.5m, reflecting the absence of FY23's acquisition. The Radius Announces $19m Sale of Facility transaction is consistent with the deleveraging direction, though the supplied excerpts do not reconcile its proceeds to the closing debt position. The 0.7-cent final dividend, paired with a disclosed 27% payout ratio on an AFFO basis, signals board confidence in cash generation rather than in statutory earnings.

Underlying operating economics improved. EBITDAR per occupied bed rose 24% to $24.7k, and operating cash flow climbed to $14.1m from $4.0m. With aged care contributing 96.9% of revenue, the read on the business rests on whether per-bed economics can sustain this level once the mid-FY24 funding-step benefits anniversary.

HY24 delivered 49.4% of full-year revenue and 49.9% of full-year underlying EBITDA, so the second half effectively matched the first at the operating level. NPAT tells a different story: HY24 was a $1.4m profit, implying a second-half loss of roughly $9.9m. That points to the tax charge, and likely accompanying non-cash items, concentrating in the second half rather than a step-down in trading.

No formal FY25 targets accompany this release in the supplied excerpts, and forward work metrics are not disclosed. The release does not support a clean forward earnings path because the tax distortion has not been broken down. What it does support is a cleaner balance sheet entering FY25.

Underlying EBITDA of $20.9m is matched by $14.1m of operating cash flow, and free cash flow before lease payments of $10.6m compares with negative $54.6m in FY23, when acquisition capex drove the comparison. Capex normalising to 2.0% of revenue is consistent with a year without major property transactions and confirms FY23's negative FCF as acquisition-distorted rather than a steady-state baseline.

Working capital was a modest tailwind: receivable days fell from 32.6 to 25.6, inventory days from 1.9 to 1.2, and operating working capital declined by $1.4m. The cash improvement is therefore supported by both earnings and collections, not borrowed from creditors.

The reservation sits on the tax line and through to NPAT, where the 335.8% effective tax rate and the resulting $8.5m loss are not reconciled in the supplied commentary. Until the composition of that charge is disclosed, the gap between operating earnings, cash flow, and statutory profit cannot be fully assessed.

This briefing cannot assess the composition of the tax charge or the durability of underlying earnings beyond what the supplied excerpts disclose.