Oceania Healthcare’s 1HY26: 5% Sales Rise and Gearing Falls to 34.8%

Strong Sales Momentum Amid Market Challenges

Oceania Healthcare Limited has delivered a solid interim result for the six months ended 30 September 2025, despite ongoing headwinds in the residential housing market and broader economic conditions. The company reported a 5% increase in total sales volume to 271 units, driven by strong presales at key developments such as Franklin, Auckland, where 35.5% of Stage 1 villas have been presold ahead of the January 2026 opening.

The Helier development in Auckland also showed promising progress, achieving 54.5% occupancy and accelerating sales applications from under two per month to four per month since October 2025. These developments underpin Oceania’s strategy to build a disciplined sales and marketing function aimed at accelerating applications and occupancy.

Operational Excellence Lifts Care Profitability

Business excellence initiatives have translated into tangible financial benefits. Care EBITDA per bed surged 45.5% to $12,430, reflecting improved operational performance across the portfolio. Occupancy rates increased to 94.7%, up from 94.0% in the prior comparable period, demonstrating sustained demand and effective portfolio management.

Cost discipline remains a priority, with $4.0 million in cost savings realised during the half and a target of $13.2 million for the full year. The corporate office restructure has been completed, reducing staff costs by approximately 20% annually and positioning the company for scalable growth.

Capital Management Focused on Sustainable Growth

Oceania’s capital management strategy is delivering results, with gearing reduced to 34.8%, comfortably within the target range of 30-35%. Net debt decreased by 3% to $609 million, supported by the accelerated sell down of development stock and active divestment of non-core sites. Four divestments are on track for completion in FY26, expected to release approximately $40 million in capital.

The company maintains strong liquidity, with $116 million in headroom on banking facilities and a blended fixed interest rate of 2.7% on retail bonds. This financial flexibility supports ongoing development projects and debt repayment plans.

Balance Sheet Strength and Future Outlook

Total assets have grown to over $3.0 billion, driven by property revaluations linked to higher occupancy and sales activity. Net tangible assets per share increased 3.8% to $1.57, reflecting the company’s expanding asset base and improved profitability.

Oceania has updated its dividend policy to align payouts with sustainable free cash flow from operations, choosing not to declare an interim dividend while focusing on cash flow stability. The company’s disciplined approach to sales, operational efficiency, and capital management aims to deliver long-term shareholder value and sustainable growth.

Looking ahead, Oceania plans to complete 71 units in FY26, including the Franklin Stage 1 villas, and continue reducing unsold stock to less than two years. The company also targets further cost savings and improved free cash flow, supported by ongoing divestments and debt reduction initiatives.