RAD - Radius Healthcare

[Maverick]

This company is only just deserving of "going concern " status.

If (and perhaps only if) it can sell the designated two of its 13 existing trophy freehold properties (we know Arran Court is one but the other is not named) and settle the transactions by end January it may continue to be supported by lenders. That will be a sacrifice most reluctantly conceded but interest costs alone for the half year to 30 Sept increased by $2.5m, a real drain on its minimalist profitability, and liquidity was helped by a $3m sell down of vacant/held for sale units such that only around $700k stock apparently remains in that category at 30 Sept so that success cannot be repeated just now.

Unfortunate that the listed company most involved in the "rest home and beyond" aged care service is itself on life support. No one will wish this entity to fail so I expect waivers and indulgences will be granted and it will sneak by to end FY24 but it really needs the green shoots listed above to be continued during that period.

Not investable in my opinion, even for the optimistic.

love your work and thinking Ronaldson, great synopsis.

RAD , bless their souls , do a vital job for NZ but as for investing….it’s only hope is for interest rates to fall.

It can’t build its way into a better place. I’d liken it to playing monopoly when yourve got properties but no cash to add any hotels.

RAD is really a proxy investment in falling interest rates. That is the only thing that can boost its wafer thin profit from here.

(sorry I can’t give you some rep points for your post, gotta spread it elsewhere. )

[ralph]

This morning's results any good...??

Yes that's a good result for this Industry ,even for the pessimistic

[Greekwatchdog]

Arran Court sold. $19m.

Further to its announcement made on 20 September 2023, Radius Care (NZX: RAD) confirms that its sale of the assets and business of Arran Court care home is now unconditional, except for normal regulatory approvals.
The assets and business of Arran Court have been sold for $19m with net proceeds applied to repaying existing debt, representing a material reduction in debt and significant progress in meeting the goals of the debt management programme as outlined in Radius Care’s recent Interim Report.
Brien Cree, Executive Chair, said “Arran Court has been a key part of Radius Care since 2007. We have been working closely with the new operators to transition the exceptional standards of care that have been established by Radius Care for the West Auckland community”.
Settlement is anticipated to take place on 16 January 2024.

[ronaldson]

Arran Court sold. $19m.

Further to its announcement made on 20 September 2023, Radius Care (NZX: RAD) confirms that its sale of the assets and business of Arran Court care home is now unconditional, except for normal regulatory approvals.
The assets and business of Arran Court have been sold for $19m with net proceeds applied to repaying existing debt, representing a material reduction in debt and significant progress in meeting the goals of the debt management programme as outlined in Radius Care’s recent Interim Report.
Brien Cree, Executive Chair, said “Arran Court has been a key part of Radius Care since 2007. We have been working closely with the new operators to transition the exceptional standards of care that have been established by Radius Care for the West Auckland community”.
Settlement is anticipated to take place on 16 January 2024.

This is good news because disposal at $19m is event critical for RAD. Let's cross fingers it all goes smoothly from here.

Even so, this was/is a trophy freehold property for RAD ( which will then be about 50/50 freehold and leasehold for remaining properties ) and on-sale will have bought a tear to the eyes of some! I hope the proceeds can be used to pay down the existing debt carrying the highest interest rates - 18%/16% on the Matamata property - and only then bank borrowing.

Execution of strategy is not always easy during a time when interest rates have gone from minimal to quite a bit higher - misjudgements can create a lot of angst and stress!

[kiwimalayalee]

NZSA ‘seeking answers’ from Radius Care about related party deal....
-NBR
What was this one all about...? Am not a subscriber so keen to know what the story is...

[winner69]

NZSA ‘seeking answers’ from Radius Care about related party deal....
-NBR
What was this one all about...? Am not a subscriber so keen to know what the story is...

About a property in Belfast in which Cree paid the deposit and then Radius took over the deal and paid Cree a few 100k more than original deposit and then when Radius bought that Matamata village they couldn’t raise enough cash they borrowed a few million from a Cree related party at 18%pa

Money always seems a problem for Radius eh ……amazing share price isn’t 10 cents

[ronaldson]

The share price here is falling away by the day. January 16th can't come quickly enough.

If Arran Court settles AND it is the most expensive debt that is repaid from the proceeds then I just might double or treble my small holding to average down, but not otherwise.

[kiwimalayalee]

Radius Completes $19m Sale of Facility, Reduces Debt
17/1/2024, 3:02 pm MKTUPDTE
Radius Completes $19m Sale of Facility, Reduces Debt

Radius Care (NZX: RAD) has completed the previously announced sale of the Arran Court care home, located in Te Atatu, Auckland.

Net sale proceeds of $18.3m have been applied to repay existing ASB borrowings.

Radius Care also announces that the ASB has agreed to amend the expiry date of the remaining $4.7m short term borrowings from 31 January 2024 to 1 November 2026, for consistency with the majority of Radius Care’s term borrowings. As part of the facility extension, ASB has also agreed to remove any requirement to further reduce debt, representing completion of the debt management program agreed with ASB, and referred to in Radius Care’s 2023 Annual Report.

Brien Cree, Executive Chair, said “The sale of Arran Court has materially reduced debt levels. A strengthened balance sheet and the strong operating performance seen in our year to date results ensures Radius Care is in a strong position to accelerate our growth strategy.”

Following the successful completion of the Arran Court sale, extension of ASB debt maturity dates and strong trading performance in FY24 to date, no further asset sales are required.

[kiwimalayalee]

Why would they then place the trading on halt..?

[Sophie]

Any announcement marked as Price Sensitive places the security into halt for a short period of time.