PBT rose 191.7% to $10.5m as margins and cash conversion stepped up

Radius delivered EBITDA growth of 12.3% to $23.5m on revenue of $175.3m (+3.9%), and operating cash flow rose 42.2% to $20.1m. The headline NPAT swing from a $8.5m loss to a $7.0m profit looks dramatic, but the cleaner operating read is PBT, which grew 191.7% to $10.5m. The prior-period effective tax rate of 335.8% pulled FY24 NPAT into loss territory even though PBT was positive; this year's 29.4% effective rate normalises that distortion. Net debt fell roughly 8% to $67.7m, taking net debt/EBITDA to 2.9x from 3.5x. Aged care contributed roughly 93% of group revenue, with retirement village and group support each below 3%.

PBT grew 191.7% versus reported NPAT growth of 182.9%, an 8.1 percentage-point gap that reflects the prior year's anomalous tax charge. The underlying operating improvement is closer to the 12.3% EBITDA lift than the loss-to-profit headline implies, which means investors should not extrapolate triple-digit profit growth into FY26.

Cash conversion improved materially. OCF/EBITDA rose to 85.5% from 67.5%, supported by stable working capital. Operating working capital fell roughly $0.3m and receivable days tightened to 24.0 from 25.5, so margin gains converted into cash available for debt paydown and dividends rather than locking up in receivables.

Deleveraging adds financial flexibility. Net debt/EBITDA stepped down to 2.9x from 3.5x, and capex of $6.4m (3.6% of revenue) remained well within OCF. The lower leverage and stronger interest coverage create headroom for the capital-light growth strategy management is executing without forcing equity issuance.

Against the shape context, HY25 contributed only 41.1% of full-year EBITDA and 28.0% of full-year NPAT, indicating a meaningfully second-half-weighted result. Implied H2 EBITDA of $13.8m and H2 NPAT of $5.1m show that operating momentum accelerated through the year. Whether that exit run-rate is sustainable into FY26 is not addressed in the release, so forward expectations rest on continued occupancy and EBITDAR-per-bed gains rather than on disclosed guidance.

EBITDA margin expansion (roughly 13.4% versus 12.4% prior) is consistent with management's stated lift in EBITDAR per occupied bed, and the cash-conversion improvement is supported by working capital that moved slightly favourably rather than by a one-off release. FCF before lease payments of $13.7m comfortably covers the disclosed 1.45 cps full-year dividend, and the company-disclosed AFFO payout ratio of 47% leaves room for both deleveraging and selective growth.

The main quality caveat sits in the tax line. The prior comparable's 335.8% effective tax rate generated a reported loss from a positive PBT, so any framing of "loss to profit" overstates the operating turnaround. Capex rose 56.1% in absolute terms to $6.4m; it remains modest at 3.6% of revenue but is worth watching if the capital-light strategy increasingly relies on leased rather than owned beds, because the cash-conversion advantage may compress if maintenance capex normalises higher.

This briefing cannot assess occupancy trajectory, government funding settings, or integration economics of recently acquired sites because none are quantified in the supplied materials.