Aged care provider Radius Residential Care has reported a sharp lift in earnings for the year ended March 2026, with net profit climbing 36 percent on the back of stronger occupancy across its 24 homes and a final dividend that is half again as large as last year.
According to the company’s NZX announcement released on Wednesday morning, full-year net profit came in at just over $10 million, with revenue rising 14 percent to $202.5 million. Underlying earnings were up 17 percent to $27.4 million, equivalent to $31,100 per bed, compared with $27,900 per bed in the previous year. The result represents the fourth consecutive year of underlying profit growth for the listed operator and lands the business well ahead of where it sat through the post-pandemic occupancy slump that hit the sector hard between 2022 and 2024.
Chief executive Andrew Peskett told RNZ the result was driven by stronger occupancy and improved operating metrics across the business. Average occupancy lifted 2.1 percentage points to 94.9 percent, a level that is widely regarded inside the sector as close to the practical ceiling once normal turnover, refurbishment and infection-control beds are taken into account.
Radius runs 24 aged care homes across both islands, with locations stretching from Whangarei down to Invercargill. It is one of a handful of New Zealand-listed pure-play aged care operators, alongside Ryman Healthcare, Summerset, Oceania and Arvida, although Radius sits firmly at the smaller end of that group and is more focused on hospital, dementia and rest home care than on the retirement village model that the larger operators have built their balance sheets around.
The company said it expected to open its 25th aged care home at the end of this month and is planning to build an additional six villas during the current financial year. Peskett said the financial performance should be further boosted by those developments as new beds and units come on stream. A final dividend of 1.2 cents per share will be paid, which the company described in its NZX release as a 50 percent increase on the previous year’s distribution.
The first-half result, released last November, had already pointed to the underlying trend, with Radius posting $6.3 million of profit for the six months ended September 2025 compared with $2 million in the same period a year earlier. The full-year numbers confirm that momentum carried through the second half rather than tapering off, even as government funding for the sector has remained tight.
The wider aged care sector continues to grapple with structural pressures that this result somewhat masks. The New Zealand Aged Care Association has been warning for several years that the per-bed-day funding rate paid by Te Whatu Ora has not kept pace with wage settlements and rising operating costs. Several smaller, regionally-owned providers have closed beds or exited the market entirely over the past three years, and the association estimates the sector is short several thousand beds against projected need as the baby boomer cohort moves into its eighties.
Demographic demand, however, is clearly running in the listed operators’ favour. Stats NZ population projections show the number of New Zealanders aged 85 and over, the cohort that overwhelmingly drives demand for residential aged care rather than home support or retirement village living, is expected to roughly double over the next 15 years. That structural tailwind is part of why investors continue to back the sector even as funding fights with Wellington drag on.
Radius shares are thinly traded compared with the larger village operators and the company carries a smaller institutional shareholder base, which has historically meant the stock has moved less than its peers during sector-wide sell-offs. The lift in dividend and the visibility of the new home and villa pipeline are likely to be the parts of Wednesday’s release that the market will weigh most heavily.
The result also sits in stark contrast to the broader corporate news flow this week. Manufacturer margins are at an eight-year low, Westpac has downgraded the growth outlook, and the Reserve Bank’s latest survey of expectations shows businesses now pencilling in inflation of 3.41 percent within a year. Against that backdrop, an aged care operator quietly compounding earnings while filling beds and lifting its dividend looks like one of the more boring, and probably one of the more durable, business stories of the week.
What do you think β is the aged care sector a defensive bright spot in an otherwise gloomy New Zealand economy, or are the funding pressures going to catch up with even the well-run operators? Let us know in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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