Regis Healthcare sheds 25% on government funding changes
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More news: Shares in Regis Healthcare tanked after the aged care operator flagged that recent funding changes announced by the government fell short of its expectations.
Regis shares were down 25% to $6.92 at 12:20pm AEST. The stock is up 16.7% over the last 12 months.
Regis Healthcare says government funding increase 'falls short' of expectations
The news: Aged care operator Regis Healthcare has said pricing changes to the Australian National Aged Care Classification (AN-ACC) made by the federal government this month fell short of the company's expected funding increase.
The numbers: Regis said the headline 4.7% increase to the AN-ACC industry starting price falls short of its expected increase. The company expects the changes to result in Regis receiving an AN-ACC funding increase of 2.6% from 1 October.
The context: Regis said the funding gap is mainly due to the reweighting of the National Weighted Activity Unit across various resident classifications. This had the impact of reduced funding to several key resident classifications under the AN-ACC framework, the company noted.
Regis also flagged that the negative financial impact occurs because the AN-ACCC funding changes "do not sufficiently offset" anticipated increases in staff costs from 1 October, following the Fair Work Commission's work value case, the annual wage review, and annual changes to direct care workers' wages under enterprise agreements.
Regis said it expects FY26 underlying EBITDA to be in the range of $130-135 million, marking growth of 3% to 7% compared to FY25.
AN-ACC is an Australian residential aged care funding model where providers like Regis receive a daily fixed payment and a variable payment based on a resident's AN-ACC classification, which determines their individual care needs.
The increase in AN-ACC is intended to fund wage increases for direct care workers and registered and enrolled nurses.
The source: ASX
