Listing Profile
RADIUS RESIDENTIAL
CARE LIMITED
10 December 2020
Prepared in connection with the
initial quotation of ordinary shares
in Radius Residential Care Limited
on the NZX Main Board
Prepared pursuant to Listing Rule 7.3.1(b)
1.
Key information
summary
What is this?
This profile document (“Profile”) has been prepared
in accordance with the NZX Listing Rules in conjunction
with the initial quotation of ordinary shares (“Shares”)
in Radius Residential Care Limited (“Radius Care”) on the
NZX Main Board.
Shares give you a stake in the ownership of Radius Care.
You may receive a return if dividends are paid or Radius
Care increases in value and you are able to sell your Shares
at a higher price than you paid for them.
If Radius Care runs into financial difficulties and is wound
up, you will be paid only after all creditors have been paid.
You may lose some or all of your investment.
About Radius Care
Radius Care operates 22 aged care facilities across
New Zealand, comprising of more than 1,700 Care Beds.
It owns three of these facilities and leases 19. In addition,
Radius Care owns and operates two retirement villages
comprising 76 Units.
Radius Care’s aged care offering is focused on the high
acuity and specialist care segment of the market (being
hospital, dementia, psychogeriatric, physical and intellectual
care). In addition, Radius Care also provides some low acuity
rest home level care.
The high acuity and specialist care segment has the
strongest expected demand growth, the highest per
Care Bed EBITDA margins across the industry, as well as
strong barriers to entry.
For more information, see Section 2 (Radius Care and
what it does).
Listing statistics and key dates
Total number of Shares
on issue at Listing
176,495,000
Shares
Financial year end31 March
Expected Listing and Quotation date10 December 2020
under NZX code “RAD”
Expected payment of first dividendFebruary 2021
How you can get your money out
Radius Care intends to quote its Shares on the NZX Main
Board. This means you may be able to sell them on the NZX
Main Board if there are interested buyers. You may get less
than you invested. The price will depend on the demand for
the Shares.
Key drivers of returns
Drivers of financial
performance
Key strategies
and plans
The key revenue drivers for the
aged care business are:
• Occupancy levels;
• The level of care provided
(which determines daily care
fees received by Radius Care);
and
• The level of accommodation
supplements.
The majority of Radius Care’s
aged care business revenue
is funded by the Government.
However, it continues to
increase the proportion of non-
Government funding particularly
through the increasing resident
adoption of privately funded
accommodation supplements.
Radius Care’s strategy
for the aged care business
is to:
• Maximise occupancy through
a strong reputation for
clinical care excellence;
• Enhance returns through
optimal Care Bed mix;
• Ensure cost efficiency and
stability; and
• Grow the Radius Care Online
Shop which acts as an
important lead generator for
the aged care business (but
forms part of Group support
for segmental reporting
purposes).
The key revenue drivers for the
retirement village business are:
• The contractual terms of each
Occupation Right Agreement
(“ORA”). ORAs confer upon
residents a right to occupy a
Unit on the terms set out in
that agreement and determine
(amongst other things) the
Deferred Management Fees
(“DMF”) that will be received
by Radius Care;
• Weekly service fees paid by
residents; and
• Residential property prices
(which drive DMF over time
and determine Unit resale
gains).
The revenues of Radius Care’s
retirement village business are
privately funded by residents.
Radius Care’s strategy for the
retirement village business is to:
• Optimise DMF contracts; and
• Increase resale margins.
The success of Radius Care’s
growth strategy will be driven
by its ability to acquire facilities
and undertake development.
Radius Care’s growth strategy
focuses on:
• Purchasing the land and
buildings of strategically
important facilities it
currently operates;
• Brownfield Development;
• Greenfield Development; and
• Opportunistic value accretive
acquisitions.
1. KEY INFORMATION SUMMARY
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 3
Key risks affecting this investment
Investments in Shares are risky. You should consider if
the degree of uncertainty about Radius Care’s future
performance and returns is suitable for you. The price of
Shares should reflect the potential returns and the particular
risks of Shares. Radius Care considers that the most
significant risk factors that could affect the value of the
Shares are:
• Large scale infectious outbreak: A large scale infectious
outbreak, such as COVID-19 or influenza, may significantly
impact the health and safety of Radius Care’s residents
and staff and may result in a reduction in occupancy levels
at Radius Care’s facilities, a reduction in staff availability
and reputational damage to Radius Care’s business, all of
which may have a material adverse effect on Radius Care’s
financial performance.
• Regulatory risk: Radius Care operates in a highly
regulated industry. Radius Care’s financial performance
could be adversely affected if Radius Care lost any
certification as an aged care provider or registration as
a retirement village operator due to, for example, non-
compliance with regulatory requirements. Radius Care’s
financial performance could also be adversely affected if
there was a change in, or loss of, Government funding.
• Labour availability and costs: Radius Care’s operations
rely on its ability to continue to attract and retain suitably
skilled and experienced employees. Lack of availability of
such staff or any substantial increase in staff costs that
Radius Care is not otherwise able to recover through
Government funding or otherwise pass onto residents
may adversely affect Radius Care’s financial performance
and its ability to deliver on its plans to expand or develop
new facilities.
• Construction and property development risk: Radius
Care’s growth strategy is proposed to involve the
construction and development of new and existing
integrated aged care facilities and retirement villages.
Any significant increase in construction costs or delay in
completion and sell down of a development project could
have a material adverse effect on Radius Care’s ability to
meet its growth targets and its financial performance –
as well as impacting its financial position. Similarly, poor
site selection may reduce the attractiveness of a site to
potential residents which could also adversely impact
Radius Care’s financial performance.
• Property market risk: Radius Care’s growth strategy is
proposed to involve the construction and acquisition of
integrated aged care facilities and retirement villages.
A downturn in the national or regional property market
could impact the demand for, and Radius Care’s ability
to sell or re-sell, Units and, to a lesser extent, Care Suites,
as well as the value that can be achieved on the sale
or resale of a Unit or Care Suite and the timeframe to
complete such sales. Whilst Radius Care currently has a
small retirement village portfolio and no Care Suites, once
Radius Care’s retirement village and Care Suite portfolio
increases in size with the execution of its growth strategy,
a sustained downturn in the national or regional property
market could have a material adverse effect on Radius
Care’s financial performance.
This summary does not cover all of the risks of investing
in Shares. You should also read Section 5 (Risks to Radius
Care’s business and plans).
Where you can find Radius Care’s financial
information
The financial position and performance of Radius Care is
essential to an assessment of this investment. You should
also read Section 4 (Radius Care’s financial information).
Capitalisation Table
Number of Shares on issue at Listing176,495,000
Listing Price$0.80 per Share
Implied market capitalisation$141.2 million
Net interest bearing bank debt
as at 30 November 2020
1
$24.8 million
Implied enterprise value
(excluding lease liabilities under NZ IFRS 16)
$166 million
Lease liabilities under NZ IFRS 16
as at 30 November 2020
$185.1 million
Implied enterprise value
(including lease liabilities under NZ IFRS 16)
$351.1 million
1
Comprises unaudited net interest bearing bank debt as at 30 November
2020 of $30.0 million and cash and cash equivalents of $5.2 million.
1. KEY INFORMATION SUMMARY
4 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Implied Listing Multiples and Dividend Information
FY2021 Guidance
LT M
2
LowHigh
Implied EV (including lease liabilities under NZ IFRS 16) / Pro forma Underlying EBITDA16.5x15.2x14.7x
Implied EV / Pre-NZ IFRS 16 Pro forma Underlying EBITDA
20.3x
16.3x15.1x
AFFO
3
per Share – cents1.781.671.99
Dividend per Share – cents (at 50% of AFFO for FY2021)0.831.00
Implied dividend yield – cash dividend declared1.04%1.25%
Implied dividend yield – gross dividend declared
4
1.44%1.73%
As outlined in further detail in Section 3 (Key Features of Radius Care Shares), Radius Care’s dividend policy is to target a
payout ratio of 50% to 70% of full financial year AFFO with an interim dividend to be paid in December and a final dividend to
be paid in June of each year, with each dividend targeted to comprise of approximately half of the expected full year dividend.
Given the timing of Radius Care’s listing in mid-December 2020, the Board’s current intention is to pay an interim dividend
in respect of 1HY2021 in February 2021. As such, Radius Care intends to pay three dividends across the 2021 calendar year,
expected to comprise of:
• A February 2021 dividend and a June 2021 dividend in relation to FY2021, equal to 50% of AFFO (outlined in the Implied
Listing Multiples and Dividend Information table above); and separately
• A December 2021 dividend in relation to 1HY2022, in line with its dividend policy (of 50% to 70% of AFFO).
The above metrics should also be read in conjunction with the assumptions and risks in Section 4 (Radius Care’s financial
information) and Section 5 (Risks to Radius Care’s business and plans).
2
LTM reflects the twelve months ended 30 September 2020, calculated as the corresponding FY2020 metric plus the corresponding
1HY2021 metric less the corresponding 1HY2020 metric.
3
For further information on AFFO, including how it is calculated, please refer to page 75 in Section 4 (Radius Care’s financial information).
4
Gross of attaching imputation credits on a fully imputed basis but excluding RWT (Resident Withholding Tax).
1. KEY INFORMATION SUMMARY
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 5
Elloughton Grange, Timaru
1. Key information summary2
Letter from the Chairman8
2. Radius Care and what it does10
3. Key features of Radius Care shares54
4. Radius Care’s financial information56
5. Risks to Radius Care’s business and plans76
6. Tax81
7. Where you can find more information81
8. Contact information83
9. Glossary85
Table of contents
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 7
Letter from
the Chairman
My involvement in the aged care and retirement village
industry was motivated by my own personal experience.
My mother required hospital level care for several years
following a major stroke. The feeling I had after visiting her
and her not wanting me to leave, led me to believe that
the focus should be on ensuring people felt comfortable
knowing their loved ones were in a safe place, receiving high
quality care with a good quality of life.
From a single, 54 bed aged care facility purchased in 2003,
we have grown Radius Care into a nationwide operator with
22 aged care facilities and two retirement villages caring
for over 1,700 residents. Whilst Radius Care has historically
focused on operating but not owning aged care facilities,
it has begun to strategically pivot towards increased facility
ownership where this provides greater control to undertake
strategic growth initiatives. Today Radius Care owns three of
the aged care facilities and both retirement villages that it
operates, whilst leasing 19 aged care facilities.
Radius Care provides a full range of accommodation and
care options from retirement village to rest home care
and right through to high acuity and specialist care (being
hospital, dementia, psychogeriatric, physical and intellectual
care). Whilst we provide a broad offering allowing residents
the confidence that they can “age in place” as their care
needs change, our key focus is on providing high acuity
and specialist care to the community. This focus is a key
differentiator of our offering relative in particular to other
NZX listed aged care and retirement village operators.
We note that the high acuity and specialist care segments of
the aged care market:
• are expected to experience the greatest increase in
Care Bed demand as the population ages and
dependency levels increase;
• generate the highest margins per Care Bed across the
industry; and
• have strong barriers to entry, given the regulatory and
operational requirements.
We note that our business generates strong cashflow
underpinned by Government funding, with increasing
diversification through privately funded revenue streams.
In particular, Radius Care and the wider industry continue
to experience increasing resident adoption of private
accommodation supplements.
The listing of Radius Care on the NZX
Main Board represents a major milestone
for the business. It gives me great pleasure
that once listed, the wider investment
community will have the opportunity to
invest in Radius Care, and therein the ability
to participate in Radius Care’s next phase
of growth – alongside myself and Knox
Investment Partners.
Brien Cree
Executive Chairman
8 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
LETTER FROM THE CHAIRMAN
We see a listing on the NZX Main Board as the first step in
our next stage of growth, providing us with enhanced ability
to quickly access capital to fund growth initiatives, as and
when specific opportunities arise. We have a clear growth
strategy to:
• purchase strategically important facilities already
operated (but not owned) by Radius Care, providing
greater control to undertake value enhancing initiatives;
• leverage our strong Brownfield Development capabilities
to undertake value accretive facility extensions and
reconfigurations;
• leverage our strong Greenfield Development capabilities,
but shifting to a model where Radius Care not only
operates the new facilities but also funds the development
and retains ownership of the land and buildings; and
• continue our successful track record of undertaking
opportunistic acquisitions of attractive aged care facilities
and retirement villages, again shifting to a model where
Radius Care both operates and owns the acquired
facilities and villages.
Over the next three years, Radius Care intends to undertake:
• two Brownfield Developments on facilities owned by
Radius Care, totalling approximately 44 Care Beds/Care
Suites and 20 Units in aggregate;
• three Brownfield Developments on leased facilities,
totalling approximately 60 Care Beds/Care Suites and
20 Units in aggregate; and
• two Greenfield Developments, totalling approximately
200 Care Beds/Care Suites and 200 Units in aggregate.
As part of this next phase of Radius Care’s growth, earlier
this year, I transitioned into a role focused on execution of
these strategic growth initiatives, with Stuart Bilbrough,
our CFO between 2010 and 2017, returning to take up the
CEO position. In addition, Radius Care hired a specialist
Development Manager in May last year and will look to
continue to build out its own internal development and
acquisition capabilities to support this growth strategy.
We believe we are in a strong position to meet the aged care
needs of older New Zealanders, particularly as the growth
in older New Zealanders accelerates with the oldest of the
“baby boomer” generation turning 75 in 2021. Radius Care’s
existing processes and procedures around infectious disease
control meant it was well prepared to rapidly respond to
COVID-19 challenges. As such, to date Radius Care has
experienced only limited operational and financial impact
as a result of COVID-19, and importantly there have been no
resident or staff COVID-19 cases reported
5
.
This Profile contains detailed information about Radius
Care, as well as the key risks associated with its business.
I encourage you to read this document carefully and in its
entirety before seeking to purchase Shares on the NZX
Main Board.
We look forward to our exciting next phase of growth as a
listed company as we continue our commitment to care.
Yours sincerely,
Brien Cree
Executive Chairman and Managing Director
5 As at 30 November 2020.
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 9
LETTER FROM THE CHAIRMAN
2.
Radius Care and
what it does
Overview
Radius Care is committed to providing the very best high
acuity and specialist care across New Zealand. As such,
Radius Care uses its smaller retirement village business to
support its aged care business, while drawing aged care
residents from the wider community (either those aging at
home or from other retirement village operators). This is a
key distinction relative to other NZX listed sector peers, who
typically use care as a mechanism to support Unit sales for
their own retirement village businesses, and as such have a
growth focus more oriented to retirement village than aged
care.
Corporate structure
At listing, Radius Care will be 54.0% owned by the
Wave Rider Trust, a trust associated with Executive
Chairman Brien Cree, 15.2% owned by funds managed
by Knox Investment Partners and 30.8% owned by
other shareholders
6
.
Radius Care was founded in 2003 and
operates in the New Zealand aged care
and retirement village sectors. It is a
nationwide provider offering the full range
of accommodation and care options giving
residents the ability to “age in place”.
While historically Radius Care has operated
but not owned its facilities, it has begun
to strategically pivot towards increased
facility ownership. Today, Radius Care
operates 22 aged care facilities, of which it
owns three and leases 19. It also owns and
operates two retirement villages.
Elloughton Grange
Village Limited
Ownership/operating entity
for Elloughton Grange
retirement village
100%100%100%100%
Lessee entity for Radius
Arran Court facility
Ownership/operating
entity for Windsor Court
retirement village
Property owning entity for
St Helenas, Thornleigh Park
and Lexham Park facilities
Radius Arran
Court Limited
Radius Care
Holdings Limited
Windsor Lifestyle
Estate Limited
Radius Residential Care
Limited
6 The other shareholders in Radius Care comprise (a) shareholders that received Shares as a result of a series of in-specie distributions of Shares undertaken by funds
managed by Knox Investment Partners prior to listing, (b) Radius Care staff members and (c) Harmos Horton Lusk Limited, which was issued 250,000 Shares in
consideration for the provision of $200,000 worth of legal services to Radius Care in connection with the listing.
Radius Care current corporate structure:
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 11
Radius Care
at a glance
Portfolio summary
EXISTING PORTFOLIO
PROPOSED
BROWNFIELD
DEVELOPMENTS
Staff and residents
76
Radius Care
Owned
-
Leased from
3
rd
Parties*
76
Total
20
Radius Care
Owned
20
Leased from
3
rd
Parties*
40
Total
178
Radius Care
Owned
1,536
Leased from
3
rd
Parties*
1,714
Total
44
Radius Care
Owned
60
Leased from
3
rd
Parties*
104
Total
254
Radius Care
Owned
1,536
Leased from
3
rd
Parties*
1,790
Total
318
Radius Care
Owned
1,614
Leased from
3
rd
Parties*
1,923
Total
5
Radius Care
Owned
19
Leased from
3
rd
Parties*
24
Total
RETIREMENT
VILLAGE UNITS
RETIREMENT
VILLAGE UNITS
AGED CARE
BEDS
AGED CARE
BEDS
TOTAL PLACES
TOTAL EXISTING
+ BROWNFIELD
SITES
1,500+
STAFF
1,700+
RESIDENTS
* All leases are triple net lease and long term in nature – with an average term to next renewal of 9.5 years but
28.0 years after accounting for all renewals as at 30 November 2020. Radius Care has first right of refusal to
purchase on all facilities (except one).
2. RADIUS CARE AND WHAT IT DOES
12 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
AUCKLAND
SitesCare BedsUnitsTotal
Leased
3248-
248
NORTHLAND
SitesCare BedsUnitsTotal
Leased
3155-
155
OTAGO
SitesCare BedsUnitsTotal
Leased
193-
93
PALMERSTON NORTH
SitesCare BedsUnitsTotal
Leased
162-
62
WAIKATO
SitesCare BedsUnitsTotal
Leased
4334-
334
Owned
1-22
22
BAY OF PLENTY
SitesCare BedsUnitsTotal
Leased
2266-
266
Owned
163-
63
CANTERBURY
SitesCare BedsUnitsTotal
Leased
3278-
278
Owned
25254
106
NEW PLYMOUTH
SitesCare BedsUnitsTotal
Leased
155-
55
Owned
163-
63
NAPIER
SitesCare BedsUnitsTotal
Leased
145-
45
National portfolio with strong regional presence
Denotes leasehold sites
Denotes freehold sites
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 13
Key business
strengths
I) Focused on high margin high acuity and specialist care
Radius Care’s portfolio is oriented to high acuity and specialist care, the highest margin segment
of the aged care market with strong barriers to entry, underpinned by resident need.
Overall
2.0
–
4.0
6.0
8.0
10.0
12.0
Rest HomeHospitalDementia
Low acuityHigh acuity and specialist care
Industry relative profitability:
7
Annual EBITDA per resident (NZ$000)
7 Source: EY Aged Residential Care Funding Model Review, August 2019
2. RADIUS CARE AND WHAT IT DOES
14 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
High acuity and specialist careLow acuity
ActualExpected
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
–
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
II) Offering underpinned by strong expected demand for Care Beds,
particularly at high acuity and specialist care levels
Expected demand for high acuity and specialist care far exceeds demand for low acuity care.
Expected Care Bed demand:
8
Care Bed days (000s of days)
Expected Care Bed demand
8 Source: EY Aged Residential Care Funding Model Review, August 2019 (Figure 21). Chart shows actual use of care categories over the period 2006 to 2017
and projected demand for care categories over the period 2018 to 2031 using the past 5-year trend for the period forward 5 years, thereafter is based on
demographic changes only.
DementiaHospitalPsychogeriatricRest Home
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 15
III) Strong clinical care outcomes for residents
Radius Care has a strong reputation for providing high quality care, with all of its facilities except one
9
being certified by the
Ministry of Health at the highest certification levels
10
, with a 36- and 48-month certification period being the highest certification
levels available.
9 Due to operational issues relating to complex care profiles of some high acuity residents, one facility was issued a 24-month certification to allow surveillance of care
to those residents. This facility had an audit in July 2020, in which it received a 100% compliant outcome. As a result it is expected that on its certification renewal in
August 2021, it will receive an extended certification period from its current 24- month certification period.
10 Certification levels for this purpose are measured by the time period a facility is certified for following an audit before the next certification audit of that facility
is required.
11 Source: MoH Audit Reports, per the MoH certified provider register, as at 30 November 2020. Industry average from NZACA 2019-20 Industry Profile.
Proportion of aged care facilities with 48- or 36-month Ministry of Health certifications:
11
Radius CareIndustryOceaniaArvidaRymanSummerset
Facilities with
<36 month cert.
1N /A1020
5%
3%
10%
7%
36%
21%
16%
38%
46%
45%
59%
47%
52%
79%
84%
52%
<36 month36 month48 month
Like Oceania,
Radius Care has
only one facility
with <36-month
certification.
However, this
makes up a greater
percentage of its
overall portfolio
due to the fact that
it operates less
facilities in total.
2. RADIUS CARE AND WHAT IT DOES
16 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
IV) Secure revenue streams underpinned by Government funding
While Government funding is expected to always underpin Radius Care’s revenues, Radius Care has
significantly increased its non-Government revenues over time.
12 Direct private revenue includes accommodation supplements, retirement village revenues, Radius Care Online Shop revenue and other privately paid revenues.
Private funded aged care refers to full or partial private aged care payments where the resident exceeds means testing thresholds.
Growth in direct private (non-Government) revenues:
12
2.5
FY2013
3.4%
2.2%
3.0%3.0%
4.5%
6.2%
7.1 %
10.1%
9.2%
8.1%
1HY2021
10.1%
FY2014FY2015FY2016FY2017FY2018FY2019FY2020
2.5%
–-
5.05.0%
7. 57.5%
10.010.0%
12.512.5%
Direct Private Revenue (NZ$m)
Proportion of total revenue (%)
Direct private revenue (LHS)Direct private proportion of total revenue (RHS)
FY2020 total revenue split was:
8.1% direct private revenues,
26.1% private funded aged care and
65.9% Government funded aged care
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 17
Go forward strategyHistorical track record
1. Purchase of strategically
important facilities already
operated by Radius Care
Purchase of land and buildings of existing
operating sites providing greater freedom
to undertake value enhancing activities
Land and buildings of existing operating sites acquired at:
• St Helenas (FY2014) – 52 Care Beds
• Thornleigh Park (FY2014) – 63 Care Beds
• Lexham Park (FY2020) – 63 Care Beds
2. Brownfield DevelopmentValue enhancing expansion of existing
facilities
Brownfield Developments on leased facilities undertaken
with, and funded by, landlords at:
• Elloughton Gardens (FY2017) – 27 Care Beds
• Waipuna (FY2017) – 28 Care Beds
• Windsor Court (FY2018) – 15 Care Beds
3. Greenfield Development Development of new aged care or
retirement facilities with Radius Care
retaining ownership of both operations and
the land and buildings
Greenfield Development on leased facilities undertaken with,
and funded by, landlords at:
• Millstream (FY2017) – 80 Care Beds
• Glaisdale (FY2018) – 80 Care Beds
Greenfield Development on owned facilities undertaken and
funded by Radius Care at:
• Elloughton Grange Village (FY2021) – 54 Units
4. Opportunistic value
accretive acquisitions
Acquisition of care focused facilities with
Radius Care retaining both the operations
and land and buildings
Acquired the operations of 26 aged care facilities and
retirement villages comprising 1,998 Residences since 2003
13
V) Clear growth strategy leveraging strong existing development and
acquisition capabilities with greater focus on facility ownership
Radius Care’s strategy for growth builds upon its proven track record.
13 Refer to the “List of Radius Care acquisitions and sales” on pages 40 and 41 for further detail on historical acquisitions.
2. RADIUS CARE AND WHAT IT DOES
18 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
14 Of these offerings, psychogeriatric, physical and
intellectual care are a relatively small component of
the industry and, as such, industry data shown in this
Profile may not include these offerings.
Industry overview and
Radius Care positioning
There are three related sectors providing
accommodation, support and care to older
New Zealanders which together provide
a full continuum of options to meet
individual needs.
• Home based support: is part of the Government’s strategy
to encourage and assist older New Zealanders to remain
supported in their own homes;
• Retirement village: cater for individuals who can live
independently or require low levels of assistance (for
example with meals, cleaning or laundry services); and
• Aged care: cover low acuity care (rest home care) and
high acuity and specialist care (hospital, dementia,
psychogeriatric, physical and intellectual care)
14
. Care is
provided under MoH certification.
While Radius Care is most focused on aged care, it also
has a growing retirement village business and through the
Radius Care Online Shop (see page 30 for further detail)
engages with the home based support demographic.
Importantly, relative to other NZX listed aged care and
retirement village operators Radius Care has a significantly
greater focus on aged care (particularly high acuity and
specialist care). Radius Care’s development focus remains
heavily aged care orientated.
Radius Care offerings in relation to the “continuum of care”:
Home based
support
Retirement
village
Rest home
care
Hospital
care
Dementia care
and other
specialist care*
Units
(including with some
level of assistance)
Lowest level of
assessed care
Highest level of
assessed care
Specialist care for dementia
or other specialist needs
Low acuity
*Other specialist care includes psychogeriatric, physical and intellectual care
High acuity and specialist care
DHB assessed care and increasing acuity
Radius Care
Online Shop
Radius Care
Retirement Village
Radius Care
Aged Care
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 19
15 Source: The most recent annual or interim report of Oceania, Arvida, Ryman and Summerset published prior to 30 November 2020.
16 Source: The most recent annual or interim report of Oceania, Arvida, Ryman and Summerset published prior to 30 November 2020.
Existing portfolio composition:
15
Focus on portfolio development:
16
Oceania
Radius
Care
Proposed
Brownfield
Developments
Longer
term
focus
Oceania
ArvidaArvida
RymanRyman
SummersetSummerset
UnitsCare SuitesCare BedsUnitsCare SuitesCare Beds
4.2%95.8%
20%80%
30%10%60%
72.8%48.9%17.7%33.4%
59.9%
66.1%72.4%
8 7.0 %17.6%82.4%
40.1%
33.9%27.6%
13.0%
62.1%36.7%1.2%
27.2%
2. RADIUS CARE AND WHAT IT DOES
20 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Drivers of demand
New Zealand’s aging population and increasing levels of dependency are key drivers of demand for both aged care and
retirement villages services. In particular, we note that:
• Whilst the 65 to 85 year age bracket (the retirement village demographic) is currently experiencing peak levels of population
growth, the strongest growth is expected to be ahead for the 85+ year age bracket (the aged care demographic).
• Whilst life expectancy has increased by 5.1 years for males and 3.5 years for females between 1996 and 2013, the number
of years with dependency over the same time period has also increased by 3.7 years for males and 3.4 years for females
respectively.
17 Source: Statistics New Zealand.
18 Source: Ministry of Health, 2013.
1996
Males
Females
2013
1996
2013
Independent Life Expectancy
Not requiring daily careRequiring daily care
63.8
66.47. 8
66.510.7
5.5
83.26.0
65.210.24.179.5
79.7
7. 53.174.4
New Zealand population growth:
17
Rolling 5 year population CAGR (%)
Life expectancy and dependency requirements:
18
Males and Females
Jan 03
2.0%
–
4.0%
6.0%
8.0%
Jan 12Jan 21Jan 30Jan 39Jan 48Jan 57
Aged care demand
bow-wave
from 2023-2043
65-85 5-yr CAGR85+ 5-yr CAGR
Life Expectancy with Dependency
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 21
Expected increase in Care Bed demand:
19
Care Bed days (000s of days)
19 Source: EY Aged Residential Care Funding Model Review, August 2019. Based on data from the ARC demand planning model released March 2018.
As part of the EY Aged Resident Care Funding Model Review, EY undertook analysis using the age-related residential care
(“ARC”) demand planning model which indicated that growth in Care Bed demand is expected to be greatest for high acuity
and specialist care segments.
2006
4,000
–
8,000
12,000
16,000
20,000
20172031
High acuity and specialist careLow acuity
DementiaHospitalPsychogeriatricRest Home
2. RADIUS CARE AND WHAT IT DOES
22 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Radius Care focus on high acuity and specialist care
Radius Care’s portfolio is heavily oriented to the provision of aged care to the high acuity and specialist care segments.
Currently ~67% of Radius Care’s Care Beds are in use at high acuity and specialist care levels vs. the industry average of ~53%.
In order to ensure strong occupancy (given needs assessment determines the level of care a resident requires) Radius Care
operates a significant number of swing beds that are certified to provide high acuity hospital level care but can also be used to
provide low acuity rest home level care. In aggregate, ~82% of Radius Care’s Care Beds are certified for use at high acuity and
specialist care levels.
20 Source: CBRE analysis, September 2020.
Composition of Radius Care offerings (March to August 2020):
20
High acuity and specialist careLow acuity
~82% of Radius Care Beds are certified for high acuity
~67% of Radius Care Beds are used for high acuity, vs industry of ~53%
DementiaHospitalSwingPsychogeriatricPhysical and intellectualRest Home
Care
Bed
type
Care
Bed
use
Industry
17.9%
33.2%
47.1 %
34.1%30.3%
49.3%
38.1%
11.1%
10.7%
11.1%
5.7%
5.8%
3.6%
0.9%
1.0%
Radius Care
operates a
significant number
of swing Care Beds
which are able to
provide rest home
or hospital level
care depending on
resident needs.
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 23
21 Source: MoH Audit Reports, based on latest MoH audit reports as disclosed on the MoH website as at 30 November 2020. Average based on a
simple average of all certified facilities.
22 Source: MoH Audit Reports, based on latest MoH audit reports as disclosed on the MoH website as at 30 November 2020. Specialist offerings
include dementia, psychogeriatric, physical and intellectual but does not include rest home or hospital-geriatric or hospital-medical care.
Average based on a simple average of all certified facilities.
Radius Care provides a greater range of aged care offerings on average per facility than its NZX listed sector peers and, most
notably, materially more dementia and other specialist offerings per facility.
As such, Radius Care has a strong reputation for the provision of high acuity and specialist care and tends to be able to
achieve good utilisation at the hospital level care from its swing beds (as noted previously). As noted earlier in the key business
strengths section, high acuity and specialist Care Beds typically generate higher margins across the industry. The high acuity
and specialist care segments of the aged care market also have strong barriers to entry, including:
• the requirement for residential aged care facilities to be certified by the MoH under the Health and Disability Services (Safety)
Act 2001;
• the need for new entrant aged care providers to have the necessary policies and procedures in place in order to receive that
certification;
• the need for aged care providers to have appropriately experienced and qualified clinical staff;
• the capital expenditure required for a new entrant to either build or purchase a residential aged care facility; and
• the business infrastructure required to execute and comply with policies and procedures necessary to maintain certification.
Total aged care offerings:
21
Per aged care facility
Dementia and other specialist offerings:
22
Per aged care facility
Radius
Care
Radius
Care
OceaniaOceaniaArvidaArvidaRymanRymanSummersetSummerset
3.90.86
3.2
0.52
3.6
0.75
3.1
0.42
2.9
0.10
2. RADIUS CARE AND WHAT IT DOES
24 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Regulations and funding
Aged care
Residential aged care facilities are required to be certified
by the MoH under the Health and Disability Services (Safety)
Act 2001. This acts as a strong barrier to entry for new
entrants, as an operator needs to be able to demonstrate
that it has the necessary policies and procedures in
place before receiving certification and becoming fully
operational. All except one of Radius Care’s aged care
facilities are certified for three or more years.
DHBs are responsible for funding residential aged care
under the Residential Care and Disability Support Services
Act 2018. DHBs have a contract in place with aged care
providers, in the form of the Ministry of Health’s national
age related residential care contract (“ARRC Contract”), to
provide long-term residential care to residents eligible for
Government funding. Funding under the ARRC Contracts
is set each year following a national review between
representatives of MoH, the DHBs and the NZACA and
typically varies slightly between regions across the country.
Care Beds are funded by the Government (via DHBs under
an ARRC Contract with the aged care provider) and/or
privately via resident contributions.
To determine if a person is entitled to Government funding,
a person must first have a needs assessment from a DHB or
needs assessment agency. If the person is aged 65 or older
(or 60-64 and single with no dependent children) and the
needs assessment shows that they require ongoing, long-
term residential care, their eligibility for Government funding
will depend on a financial means assessment carried out by
Work and Income NZ.
The financial means test has two components – an asset test
and an income test:
• If the person’s assets are equal to or below the applicable
asset threshold, they qualify for Government funding (the
residential care subsidy) to pay for most of the cost of
their care. An income test will then determine what the
person must contribute to the cost of their care.
• If the person has assets above the applicable asset
threshold, then the person is liable to pay for the cost of
rest home care up to a maximum contribution amount
(equal to the ARRC Contract price for rest home care for
their area). The person may be eligible for an interest-free
residential care loan from the Government that is secured
over the person’s former home.
If the person is assessed as needing high acuity care, the
relevant DHB will pay the difference between what the
person is contributing (either the assessed amount or
maximum contribution) and the ARRC Contract price for the
higher level of care, provided the person is receiving care at
a facility that has a contract with the DHB.
People can enter aged care facilities of their own accord
without having a needs assessment, but if they choose to do
so they will be personally liable to pay the full cost of their
care (i.e. no maximum contribution amount will apply).
In addition, people may choose to receive extra amenities
and services from their aged care provider in excess of the
Government recommended minimum standard, which they
will be required to pay their aged care provider directly
for. These extra amenities may include room features
such as a larger room, ensuite and/or view, for which an
accommodation supplement will be payable, or additional
services such as day trips and supplementary therapy
services.
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 25
The key components of aged care funding can be summarised as follows:
Government funding• Residential care subsidy (for residents that fall below asset and income thresholds). This does not need to
be repaid by the resident
• Residential care loan (for residents with assets above the threshold level, but limited cash and other assets).
This is an interest free loan that is paid directly to the aged care provider and secured via a caveat against
the incoming resident’s home
Private funding• Private funding by residents (full private payment if the requirements for Government funding are not met,
or partial if only the requirements for a partial subsidy are met)
• Accommodation supplements for room features above the Government recommended minimum standard
(e.g. larger room, ensuite and/or view), representing a direct private payment, limited only by what the
private market is willing to support
• Additional services which include day trips and supplementary therapy services
Government funding has continued to increase over time, with the industry continuing to advocate for further increases.
In addition, the acceptance of accommodation supplements within the industry has risen markedly in recent years, with
accommodation supplements now a feature of most industry facilities.
23 Source: CBRE Analysis, September 2020.
24 Source: NZACA Member Profiling Survey 2019, December 2019.
Cumulative ARRC Contract price increase
by Care Bed type:
23
%
Proportion of industry facilities with
accommodation supplements:
24
%
80%80%100%
80%
60%60%
60%
40%40%
40%
20%20%
20%
––
20062006200820082010201020122012201420142016201620182018
49.2%
51.6%
69.4%
8 7.0 %
21.0%
DementiaHospitalRest Home
2. RADIUS CARE AND WHAT IT DOES
26 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
25 Direct private revenue includes accommodation supplements, retirement village revenues, Radius Care Online Shop revenue and other privately paid revenues.
Indirect private revenue reflects full or partial private aged care payments by residents at the maximum contribution amount where a resident exceeds the
financial means test thresholds.
Retirement villages
Retirement village operators must comply with the Retirement Villages Act, which requires operators to register each
retirement village with the Registrar of Retirement Villages and appoint a statutory supervisor for each facility to protect the
financial interests of the residents. The statutory supervisor for both of Radius Care’s retirement villages is Covenant Trustee
Services Limited.
Units in retirement villages are funded privately by residents, with operators selling incoming residents the right to occupy their
Unit under an Occupational Right Agreement (“ORA”). Under the licence to occupy, the village operator agrees that following
the resident’s exit and resale of the Unit, the resident will be refunded the licence payment they initially paid for the ORA, less
an accrued Differed Management Fee (“DMF”).
As such there are three main revenue streams:
• DMF;
• Movements in the fair value of investment property for statutory purposes, but for Pro forma Underlying measures only,
reflects realised gains on the resale of Units and development margins on the sale of new Units; and
• Weekly service fees (covering, among other things, insurance, rates, cleaning of common and outside areas, gardening,
provision of common facilities).
Further information on these revenue streams is set out in Section 4 (Radius Care’s financial information) under the heading
“How Radius Care generates revenue” on page 64.
Radius Care’s funding streams
Given the relative size of its aged care business, Radius Care’s revenues continue to be underpinned by Government funding.
However, in recent years Radius Care has continued to increase the proportion of its revenues derived from non-Government
sources, most notably through a material increase in direct private payments from a combination of accommodation
supplements, retirement village revenues, the Radius Care Online Shop and other private payments.
Radius Care revenue composition over time:
25
FY20
FY13
Direct private revenueGovernment funded revenueIndirect private revenue
8.1%
3.4%2 7.7 %68.9%
26.1%65.9%
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 27
Business overview
History of Radius Care
Radius Care was founded in 2003 with the purchase of
a single facility (Heatherlea) with 54 Care Beds and has
subsequently grown to a national portfolio of over 1,700
Care Beds and 76 Units across its 22 aged care facilities and
two retirement villages. Originally Radius Care was a division
of Radius Health Group, which also included separate
medical and pharmacy divisions. Brien Cree was CEO of
Radius Care and with interests associated with Brien Cree
holding 20% of the Shares in Radius Care.
There are three distinct time periods in the evolution of the
Radius Care business:
• Acquisition-led growth period (2003 to 2008): Over
this period Radius Care undertook the acquisition of 22
facilities with an aggregate of 1,549 Residences (in each
case with the operations being retained and the land and
buildings being onsold and leased back by Radius Care);
• Global Financial Crisis (“GFC”) and management
buyout period (2008 to 2013): Radius Care continued to
perform well thorough the GFC period. In 2010, interests
associated with Brien Cree (together with two other
investors) acquired the 80% of the Shares not already
owned by them, with Radius Care becoming a standalone
business. Radius Care then commenced a period focused
on operational improvement to get the most from the
existing portfolio;
• Acquisition and development period (2013 to today):
Radius Care commenced its first Greenfield Development
at Elloughton Grange Village in 2013. A shareholder
restructure took place over late 2014/early 2015, resulting
in Knox Investment Partners becoming a key shareholder.
Over this period Radius Care has undertaken:
• Three Brownfield Developments at Elloughton Gardens,
Waipuna and Windsor Court;
• Three Greenfield Developments at Millstream, Glaisdale
and Elloughton Grange Village; and
• Purchased the land and buildings of the St Helenas,
Thornleigh Park and Lexham Park facilities.
Overview of Radius Care facilities
Radius Care operates a nationwide portfolio of aged care
facilities with a focus on both key urban centres and regional
centres. It also owns and operates two retirement villages,
both of which are co-located with Radius Care aged care
facilities, providing a continuum of care to residents.
All leased aged care facilities (except for one)
26
operate
under a triple net lease structure whereby Radius Care
pays for all rates, insurance and day to day maintenance
with any larger more remedial maintenance requirements
(such as a new roof) paid by the landlord. All leases are
long-term in nature with an average time to next renewal
of 9.5 years but an average time to expiry of 28.0 years as
at 30 November 2020, assuming all leases continue to be
renewed. We note that renewal of all leases is at Radius
Care’s option (rather than the landlord’s). Radius Care has
11 landlords across its current 19 leased facilities. As outlined
in more detail on pages 34 and 35, Radius Care has begun
to strategically pivot towards increased facility ownership,
having purchased the land and buildings at its St Helenas,
Thornleigh Park and Lexham Park facilities in Christchurch,
New Plymouth and Katikati respectively.
Rents under Radius Care’s aged care facility leases were
initially set based on prevailing market rents, with rent
increases across the leased facility portfolio based on a
mix of CPI increases and independently assessed market
rent reviews.
26 One lease includes an additional obligation on Radius Care to meet the costs of repair of any structural and inherent defects.
2. RADIUS CARE AND WHAT IT DOES
28 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
List of Radius Care facilities:
27
27 As at 30 November 2020.
28 Note: these are considered part of the Millstream aged care facility, however have been shown differently due to different lease terms.
FacilityLocationCare
Beds
UnitsCurrent
lease
term
Time to
next
renewal
Rights of
renewal
Time
to final
expiry
Landlord
Leased:
HeatherleaNew Plymouth55 - 12 yrs 5.3 yrs 3 x 12 yrs41.4 yrs A
Taupaki GablesKumeu60 - 12 yrs 5.3 yrs 3 x 12 yrs41.4 yrs A
Windsor CourtOhaupo76 - 12 yrs 5.3 yrs 3 x 12 yrs41.4 yrs A
Elloughton GardensTimaru86 - 12 yrs 5.3 yrs 3 x 12 yrs41.4 yrs A
KensingtonHamilton96 - 10 yrs 3.5 yrs 2 x 10 yrs13.5 yrs B
PeppertreePalmerston North62 - 10 yrs 4.0 yrs 2 x 10 yrs14.0 yrs B
St JoansHamilton82 - 10 yrs 4.4 yrs 2 x 10 yrs14.4 yrs B
Fulton HomeDunedin93 - 10 yrs 4.9 yrs 2 x 10 yrs14.9 yrs B
Arran CourtAuckland102 - 10 yrs 8.6 yrs 1 x 10 yrs18.6 yrs B
Potter HomeWhangarei55 - 20 yrs 8.9 yrs 2x 15 yrs38.9 yrs C
Rimu ParkWhangarei55 - 20 yrs 8.9 yrs 2x 15 yrs38.9 yrs C
WaipunaAuckland86 - 30 yrs 26.2 yrs - 26.2 yrs D
Hampton CourtNapier45 - 10 yrs 8.2 yrs - 8.2 yrs E
BaycareNorthland45 - 12 yrs 5.3 yrs 3x 12 yrs41.4 yrs F
MatuaTauranga149 - 30 yrs 22.0 yrs - 22.0 yrs G
AlthorpTauranga117 - 15 yrs 7.8 yrs 3x 10 yrs37.8 yrs H
MillstreamAshburton80 - 35 yrs 30.6 yrs - 30.6 yrs I
Millstream Apartments
28
Ashburton19 - 5 yrs 3.8 yrs 2x 5 yrs13.8 yrs I
GlaisdaleHamilton80 - 15 yrs 11.5 yrs 2x 15 yrs41.5 yrs J
HawthorneChristchurch93 - 10 yrs 9.4 yrs 2x 10 yrs19.4 yrs K
Total leased 1,536 - n/a n/a n/a n/a
Simple average leased 73 - 15.0 yrs 9.5 yrs n/a 28.0 yrs
Owned:
St HelenasChristchurch52 - n/a n/a n/a n/a n/a
Thornleigh ParkNew Plymouth63 - n/a n/a n/a n/a n/a
Lexham ParkKatikati63 - n/a n/a n/a n/a n/a
Windsor Court VillageOhaupo- 22 n/a n/a n/a n/a n/a
Elloughton Grange VillageTimaru- 54 n/a n/a n/a n/a n/a
Total owned 178 76
Simple average owned 59 38
Total 1,714 76
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 29
Centralised head-office
systems and support
Oversight of facilities focused on ensuring efficiency and consistency of care, including:
• Finance, HR, IT, legal, marketing, procurement, property and development, clinical, education and
health and safety functions
• Roving facility and clinical managers available to facilities as required
• Regular in-house training and ongoing skills development to ensure staff are familiar with latest
healthcare practices
Leading IT systems• Best-in-class IT systems such as patient and resident management, assessment and clinical decision
making and shift rostering
• Focused on adoption of best in-class technology, having been one of the first to adopt Time Target and
eCase, now both considered best-practice
• Enhances efficiency, minimises risk of clinical errors and promotes consistency of resident care
outcomes
Strong staff recruitment
and retention processes
• Approximately 39% of registered nurses employed in the aged care sector are on work visas
29
and as
such access to offshore clinical staff is critical to ensure appropriate staffing levels can continue to be
maintained
• Radius Care was the second aged care provider to receive NZ Immigration accreditation which
significantly increases the speed with which staff can be brought on board, decreasing reliance on
bureau staff. Registered nurses have also been on NZ Immigration’s short term skills list since 2019
• Over the last three years, 34.4% of new Radius Care registered nurses have come through the NZ
Immigration pathway
• Radius Care aims to be an employer of choice by offering an attractive and fulfilling environment for all
staff. Radius Care has more than 150 staff with tenure of over ten years
Radius Care Online Shop• Radius Care Online Shop, established in 2017, provides a range of care products to the wider 65 year+
community providing early engagement with the home based support demographic, thereby acting as
a lead generator
• Products include continence, mobility (e.g. walking stick, wheelchairs etc), specialist furniture (e.g.
rehabilitation chairs), specialist bedroom and bathroom equipment (e.g. bed protectors and shower
aids)
• As a core component of Radius Care’s growth strategy, revenues from the Radius Care Online Shop are
expected to continue to increase strongly
Radius Care aged care business
Radius Care’s ability to deliver strong consistent clinical care outcomes is underpinned by its systematic
approach to the provision of care. Key elements of Radius Care’s clinical care platform include:
29 Source: NZACA Member Profiling Survey 2019, December 2019.
2. RADIUS CARE AND WHAT IT DOES
30 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Occupancy
Radius Care’s aged care occupancy is high relative to the industry average. As at 30 September 2020
30
, Radius Care’s aged
care occupancy was 92.7% compared to the national average occupancy of 88.0%
31
. Radius Care’s aged care occupancy has
continued to trend upwards since then.
30 TAS/NZACA data for September quarter.
31 NZACA Occupancy – TAS Aged Residential Care Quarterly Reporting Survey, as at 30 September 2020. Includes ORA ARRC-certified beds and residents.
32 NZACA Occupancy – TAS Aged Residential Care Quarterly Reporting Survey, as at 30 September 2020. Includes ORA ARRC-certified beds and residents.
Monthly occupancy rate:
32
%
94.0%
93.0%
92.0%
91.0%
90.0%
89.0%
88.0%
8 7.0 %
86.0%
85.0%
Jun 19Sep 19
Radius Care (monthly)Industry average (quarterly)
Dec 19Mar 20Jun 20Sep 20
86.8%
88.0%
8 7.1 %
86.5%
87.2%87.2%
89.6%
90.1%
90.4%
91.6%
92.7%
91.0%
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 31
DriversInitiatives
Maximise occupancy through strong
reputation for care excellence
• Continue to build profile with Government agencies and relevant referrers particularly for high acuity
and specialist care
• Continue to focus on improved clinical audit outcomes and increased length of MoH certification
• Build regional market visibility with greater advertising with emphasis on real people
• Provide the best care outcomes for residents by focusing on needs first
Enhance returns through optimal
Care Bed mix
• Expand dementia offering through Care Bed conversion
• Grow ACC rehabilitation care offering
• Focus on pricing optimisation and by employing tiered pricing approach to accommodation
supplements
• Examine ability to pivot towards an ORA-based Care Suite product (which is capital efficient and has
strong returns relative to a standard Care Bed product) as the land and buildings at existing facilities
are purchased
• Continue to ensure residents are assessed and funded at the appropriate care level
Cost efficiency and stability• Strengthen staff sourcing relationships to ensure Radius Care can continue to effectively and
economically source staff from overseas
• Minimise use of bureau staff through roving facility and clinical managers
• Seek scale efficiencies through bulk procurement (particularly as portfolio grows)
• Enhance business intelligence and reporting to gain greater insights for more rapid decision making
Grow Radius Care Online Shop• Expand product offered by the Radius Care Online Shop with the goal of becoming the largest retailer
in New Zealand of specialist elderly products
• Maximise margins, via direct import from manufacturers
Aged care business strategy
Radius Care’s strategy for its aged care business is as follows:
2. RADIUS CARE AND WHAT IT DOES
32 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
DriversInitiatives
Optimise DMF contracts• Replace remaining legacy unit titles with Radius Care’s new standard form ORA (with a 30% DMF
structure accrued over a contractual term of three years) as applicable units come up for resale
• As at 30 September 2020 Radius Care had five remaining legacy unit title contracts out of a total
of 76 Units
Increase resale margins• Continue to seek increases in pricing of Units where market dynamics allow – i.e. ensure Unit
pricing keeps pace with broader house price inflation
• Use strong aged care offering as a sales mechanism for retirement village product.
Radius Care retirement village business
Radius Care’s retirement village business predominantly offers a villa style rather than apartment product.
Both of Radius Care’s two retirement villages are co-located with Radius Care aged care facilities (however both are owned
by Radius Care, while the corresponding aged care facilities are leased). Radius Care sees increasing its retirement village
offering as a core part of its growth strategy but remains committed to being a predominantly aged care provider (as
outlined on page 20).
Radius Care has a minimum age requirement for its retirement village facilities of 70 years, with its average resident age
being 80.1 years as at 30 September 2020.
Retirement village business strategy
Radius Care’s strategy for its retirement village business is as follows:
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 33
Radius Care
growth strategy
Radius Care has a clear strategy for growth which builds on
its strong existing development and acquisition capabilities
and seeks to benefit from an enhanced ability to access
capital following its NZX listing (allowing it to quickly
execute and fund opportunities as they arise).
Radius Care’s growth strategy focuses on:
1. Purchasing the land and buildings of strategically important
facilities it currently operates;
2. Brownfield Development;
3. Greenfield Development; and
4. Opportunistic value accretive acquisitions.
In order to accelerate Radius Care’s growth strategy, Brien
Cree transitioned into an Executive Chairman role in June
2020, focused specifically on the formulation and execution
of Radius Care’s next phase of growth. Stuart Bilbrough,
Radius Care’s CFO between 2010 and 2017, returned in 2020
as CEO responsible for all day-to-day activities.
I) Purchase of the land and buildings of
strategically important facilities Radius
Care currently operates
Radius Care seeks to purchase the land and buildings of
facilities it operates where this provides greater freedom
and control to pursue value enhancing activities. Specifically,
Radius Care will seek to purchase land and buildings where:
• there is clear development potential which is constrained
by the landlord either as a result of the landlord’s limited
funding capacity or where the landlord is otherwise
constrained;
• the landlord has the financial capacity to fund
development, but the rental increase sought is
unattractive;
• Radius Care’s legal position is enhanced through direct
ownership, specifically at facilities where Radius Care
believes a Care Suite product is optimal;
• there is an ability to purchase the land and buildings at an
attractive price; and/or
• there is a financial benefit available from debt (or debt
and equity) funding the facility at a more attractive rate
than the rental charge.
Radius Care has purchased the land and buildings at:
• St Helenas – 52 Care Beds operated since September
2003 and purchased in May 2013;
• Thornleigh Park – 63 Care Beds operated since August
2004 and purchased in December 2013; and
• Lexham Park – 63 Care Beds operated since April 2004
and purchased in July 2019,
with each of these acquisitions meeting Radius Care’s
strategic objectives.
Where there is not a clear strategic rationale for the
purchase of the land and buildings of any currently operated
facilities, Radius Care intends to continue to lease those
facilities. As such Radius Care expects, over the longer
term, to continue to operate a mixture of owned and leased
facilities.
Discussions with landlords about acquiring the land and
buildings at facilities operated by Radius Care occur
periodically as part of the ordinary course of business.
Radius Care has a right of first refusal at all facilities but one.
2. RADIUS CARE AND WHAT IT DOES
34 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Case study: Lexham Park
52 Care Beds – operated since 2004, purchased in 2019
Allows development
which would otherwise
not be possible
Allows for future
Care Suite
development
Net saving
(rent less interest)
>$200k p.a.
II & III) Brownfield and Greenfield
Developments
Radius Care has significant experience in undertaking both
Brownfield and Greenfield Developments including:
Brownfield Developments
• December 2016: 27 Care Beds at Elloughton Gardens in
Timaru
• January 2017: 28 Care Beds at Waipuna in Auckland
• June 2017: 15 Care Beds at Windsor Court in Ohaupo
Greenfield Developments
• May 2016: 80 Care Beds at Millstream in Ashburton
• June 2017: 80 Care Beds at Glaisdale in Hamilton
• June 2020: 54 Units at Elloughton Grange Village in Timaru
Historically, Radius Care has been heavily involved in leading
and coordinating the planning process for developments,
including location, layout, size and design. Consenting and
construction processes have typically been handled by 3rd
party contractors, while the funding has been provided
by the landlord. Going forward, Radius Care envisages a
similar process with greater emphasis on funding its own
developments. To support this, Radius Care hired a specialist
Development Manager in May 2019 and will look to continue
to build out its own internal development and acquisition
capabilities.
FY2017FY2018FY2019FY2020
1.0
Radius Care LeasedRadius Care Owned
18.0
0.8
15.0
0.6
12.0
0.4
9.0
0.2
6.0
3.0
––
EBTDA (LHS)EBTDA / Care Bed (RHS)
EBTDA (NZ$m)
EBTDA / Care Bed (NZ$000s)
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 35
Set out below are two recent case studies illustrating the strong outcomes achieved by historical Brownfield and Greenfield
Developments undertaken by Radius Care.
Case Study: Waipuna
Brownfield Development in FY2017
Pro forma Underlying EBITDA (LHS)Pro forma Underlying EBITDA / Care Bed (RHS)
FY2017
81.1%
FY2015
81.3%
Occupancy
FY2018
68.1%
FY2016
83.8%
FY2019
83.7%
FY2020
81.6%
2.020
Post brownfield development
1.515
1.010
0.55
––
Pro forma Underlying EBITDA (NZ$m)
Pro forma Underlying EBITDA / Care Bed (NZ$000s)
Development disruption
Planning >Consenting >Construction >Funding >
Radius Care
P P P
Landlord
P
Radius Care undertook a Brownfield Development at Waipuna increasing the total number of Care Beds by 28 from 58
to 86. Radius Care oversaw all aspects of the development on behalf of the landlord.
2. RADIUS CARE AND WHAT IT DOES
36 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
A retirement village owner approached Radius Care to develop and operate an aged care facility alongside his existing
retirement village, to increase the attractiveness of his retirement village. Radius Care assisted in the design and development
of an 80 Care Bed facility with Radius Care then becoming the operator of the facility post its development.
Case Study: Millstream
Greenfield Development in FY2017
Pro forma Underlying EBITDA (LHS)Pro forma Underlying EBITDA / Care Bed (RHS)
FY2015
62.9%
Occupancy
FY2018
96.1%
FY2019
94.0%
FY2020
95.3%
2.4
24
20
16
Post completion of development
1.6
2.0
1.2
12
0.8
8
0.4
4
––
Pro forma Underlying EBITDA (NZ$m)
Pro forma Underlying EBITDA / Care Bed (NZ$000s)
Planning >Consenting >Construction >Funding >
Radius Care
P P P
Landlord
P P P P
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 37
Radius Care considers the following development
characteristics to be optimal for its growth objectives:
• Brownfield Developments: these are assessed on an
individual business case that confirms a development
would add value to an existing facility (such developments
could include extensions to, or a reconfiguring of, existing
facilities); and
• Greenfield Developments: Radius Care sees the optimal
Greenfields Developments to comprise a boutique
integrated aged care and retirement village of a minimum
of 4.5 hectares in size in regional or main centres,
accommodating a minimum of 100 Care Beds/Care Suites
and 100 Units, but will consider other value accretive
Greenfield Developments that present themselves.
Over the next three years, Radius Care intends to undertake:
• two Brownfield Developments on owned facilities,
totalling approximately 44 Care Beds/Care Suites and
20 Units in aggregate;
• three Brownfield Developments on leased facilities,
totalling approximately 60 Care Beds/Care Suites and
20 Units in aggregate; and
• two Greenfield Developments, totalling approximately
200 Care Beds/Care Suites and 200 Units in aggregate.
Radius Care has a right (but not an obligation), exercisable
at any time up until 2 April 2021, to acquire a c.4.3 hectare
property at Main North Road, Belfast, Christchurch that
Brien Cree has contracted to acquire from an unrelated third
party (see page 52 for further detail), which could form part
of the Greenfield Development pipeline above. The Board
intends to consider exercising this right if Radius Care can
obtain:
• resource consent and funding for the development of an
integrated aged care facility and retirement village on the
property, totalling approximately 70 Care Beds, 30 Care
Suites and 94 Units, on terms satisfactory to Radius Care;
and
• an independent valuation confirming that the property’s
fair value after resource consent is granted exceeds the
purchase price of the property (including the price to
Radius Care of its right to acquire the property).
An application for resource consent for the development
of the Christchurch property has been submitted and
a decision is expected before April 2021. There is no
guarantee that resource consent will be granted or granted
on the terms sought by Radius Care. There is similarly no
guarantee that Radius Care will exercise its right to acquire
the Christchurch property.
2. RADIUS CARE AND WHAT IT DOES
38 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
IV) Opportunistic value accretive acquisitions
The aged care sector remains highly fragmented. Radius Care considers that a number of operators in the industry may
re-evaluate their positions following the recent COVID-19 disruptions (see page 43 for further details), creating potential
acquisition opportunities.
Aged care sector market share (by Care Beds):
33
33 CBRE analysis, September 2020. Oceania is adjusted to include Care Suites given these are a significant part of its care offering.
Radius
Care
10.3%9.8%7.3%7.1 %4.8%4.7%48.2%
2.5%
2.8%2.5%
Bupa Ryman Heritage Oceania Arvida Radius Care CHT Ultimate Care Summerset Other
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 39
Radius Care has a strong track record of undertaking acquisitions having completed the acquisition of 26 facilities comprising
1,998 Residences (compared to a net 22 aged care facilities and two retirement villages comprising 1,790 Residences retained
today after facility sales and one facility permanently closed as a result of the Christchurch earthquakes
34
) since its formation
in 2003. With Radius Care’s strategic pivot towards owning the facilities it operates, Radius Care will seek to acquire both the
facility and its operations.
List of Radius Care acquisitions and sales:
34 Radius Care has sold facilities at Glenbrae, Lester and Seaview and closed a facility at St Ives following the Christchurch Earthquakes.
DateLocationTransaction typeCare Beds /
Suites acquired
Units
acquired
Care beds sold /
decommissioned
Units sold /
decommissioned
31 Mar 03HeatherleaPurchase of business54- - -
26 Sep 03St Helenas Purchase of business52- - -
20 Dec 03TaupakiPurchase of business60- - -
20 Feb 04Hampton CourtPurchase of business57- - -
20 Apr 04Windsor CourtPurchase of business 7622- -
20 Apr 04Lexham ParkPurchase of business65- - -
5 May 04St IvesPurchase of business56- - -
21 May 04KensingtonPurchase of business97- - -
1 Jul 04SeaviewPurchase of business34- - -
20 Aug 04Thornleigh ParkPurchase of business65- - -
30 Nov 04Potter HomePurchase of business57- - -
30 Nov 04Rimu ParkPurchase of business53- - -
30 Nov 04LesterPurchase of business35- - -
22 Nov 04GlenbraePurchase of business 41 Care Beds
+ 17 Care Suites
79- -
16 Dec 04PeppertreePurchase of business60 - - -
1 Mar 05Elloughton GardensPurchase of business64- - -
31 Mar 05HawthornePurchase of business99- - -
31 Mar 05St JoansPurchase of business100- - -
31 Mar 05WaipunaPurchase of business65- - -
31 Oct 05Fulton HomePurchase of business94- - -
7 Sep 06BaycarePurchase of business45- - -
20 Dec 06Arran CourtPurchase of business102- - -
24 Feb 10GlenbraeSale of business - - 41 Care Beds
+ 17 Care Suites
79
2. RADIUS CARE AND WHAT IT DOES
40 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
DateLocationTransaction typeCare Beds /
Suites acquired
Units
acquired
Care beds sold /
decommissioned
Units sold /
decommissioned
22 Feb 11St IvesInsurance settlement- - 56-
7 Nov 12MatuaPurchase of business153- - -
5-Apr-13Elloughton Grange
Village
Purchase of land - - - -
9 May 13St HelenasPurchase of land/
buildings
- - - -
1 Aug 13Lester Sale of business- - 35-
19 Dec 13Thornleigh ParkPurchase of land/
buildings
- - - -
31 Mar 14SeaviewPurchase of land/
buildings
- - - -
8 May 15SeaviewSale of business- - 34-
9 Oct 15AlthorpPurchase of business117- - -
4 Jul 16MillstreamDeveloped new
business
80- - -
28 Apr 17SeaviewSale of land/ buildings - - - -
1 Jun 17GlaisdaleDeveloped new
business
80- - -
31 Jul 19LexhamPurchase of land/
buildings
- - - -
1 Sep 19Millstream ApartmentsLease of land/buildings19- - -
Total 1,880 Care Beds
+ 17 Care Suites
101 166 Care Beds
+ 17 Care Suites
79
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 41
Set out below is a case study of Radius Care’s November 2012 acquisition of Matua whereby Radius Care became the operator
of the facility while ownership of the land and buildings was retained by the landlord.
Case Study: Matua
Acquired in FY2013
Pro forma Underlying EBITDA (LHS)Pro forma Underlying EBITDA / Care Bed (RHS)
FY2017
89.7%
FY2012
n/a
FY2015
88.8%
Occupancy
FY2018
93.9%
FY2013
88.4%
FY2016
90.1%
FY2011
n/a
FY2019
95.9%
FY2014
89.4%
FY2020
91.2%
3.024
Radius Care Operated
2.0
1.5
2.5
20
1.0
8
16
0.5
4
12
––
Pro forma Underlying EBITDA (NZ$m)
Pro forma Underlying EBITDA / Care Bed (NZ$000s)
Radius Care acquired in
November 2012 and has
significantly improved
performance
2. RADIUS CARE AND WHAT IT DOES
42 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Impact of COVID-19 on
Radius Care and the sector
Implications for sector and key responsesActions taken by Radius Care and key impacts
Aged care operationsImplications for sector
• Sector responsible for care of elderly residents of
materially greater vulnerability (if infected) than wider
community
Key responses
• Aged care operations deemed to be an essential
service, continuing throughout lockdowns
• Some increase in costs (particularly around the need
for additional PPE) but offset by additional MoH
funding for COVID-19 related expenses
Actions
• Policies and procedures already in place to deal with
infectious disease, given in particular existing infection
control protocols and procedure upgrades in early
2000s due to Bird Flu risk
• Frequent communication with MoH, DHBs and other
aged care providers
Impacts
• Limited impact on occupancy, with marginal increase
experienced. Strong reputation for care and ongoing
resident communication, and promotional activity has
assisted new resident confidence
• No material stresses or negative implications evident
on key suppliers
• As at 30 November 2020, no resident COVID-19 cases
reported
Retirement village
operations
Implications for sector
• Sector demographic less vulnerable than aged care
residents but still at greater risk than wider
community
Key responses
• Prospective residents unable to be shown round
facilities during lockdowns, temporarily impacting
resales and new sales volumes
• Development activities generally not deemed to
be essential requiring most development activity
to pause
Actions
• Wage subsidy support not required (with Radius Care
not meeting revenue loss thresholds in any event)
Impacts
• More limited impact to Radius Care given retirement
village business materially smaller (than aged care
business) and minimal development currently
underway
• As at 30 November 2020, no resident COVID-19 cases
reported
Staff and residentsImplications for sector
• Increased requirements including:
• Isolation requirements for residents and staff
• Screening facility entrants
• Restricting visitors to essential visitors only
Key responses
• With increased unemployment in the wider economy
there is greater focus on “repurposing” people into
the sector
Actions
• No reduction to staff hours or pay rates implemented
• No movement of staff between facilities to limit
infection control
Impacts
• Staff retention has improved
• As at 30 November 2020, no staff COVID-19 cases
reported
Further information on the financial impact of COVID-19 on Radius Care is included in the Pro forma Underlying Statement of
Comprehensive Income on page 62 in Section 4 (Radius Care’s financial information), which separately sets out the additional
COVID-19 related expenses incurred by Radius Care as well as the offsetting Government subsidy received.
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 43
Radius Care’s Directors
and Senior Management
Brien Cree
Executive Chairman and
Managing Director
Brien Cree is the founding shareholder
of Radius Care and has been Managing
Director from the company’s inception
in 2003. Brien has built the Radius
Care’s property portfolio from nothing
to its current 22 aged care facilities and
two retirement villages. As Executive
Chairman and Managing Director, Brien
is focused on the formulation and
execution of Radius Care’s strategic
growth objectives.
Brien has more than 30 years’
experience in the aged care sector. He
is a board member of the NZACA and
past board member of the Retirement
Villages Association.
Duncan Cook
Non-Executive Director
LLB
Duncan Cook has been a director
of Radius Care since 2010, and
worked with Radius Care’s founders
to establish, structure and grow
Radius Care’s business. Duncan is a
partner at Sharp Tudhope Lawyers
(Tauranga and Auckland) and has
over 30 years’ experience in practice.
His key areas of practice are mergers
and acquisitions, and turnaround and
restructuring. Duncan is a member of
the New Zealand Law Society, Institute
of Directors New Zealand (Inc) and
Restructuring Insolvency & Turnaround
Association New Zealand Incorporated.
Duncan has governance experience
across a range of industry sectors,
including fishing, exports and housing
construction. He has volunteered on
the boards of the Tauranga Chamber
of Commerce and agencies associated
with economic development in the
Tauranga region.
Board of Directors
Radius Care’s Board currently comprises:
Bret Jackson
Non-Executive Director
BCom (Honours),
MBA (Harvard Business School)
Bret Jackson has been a director of
Radius Care since 2014. Bret is an
experienced business professional
with over two decades of business
experience. Bret is a co-founder
of Knox Investment Partners (a
leading private equity manager)
and has been a Managing Director
of Knox Investment Partners since
2005 (focusing on deal origination,
strategy and value creation). Bret
has represented Knox Investment
Partners on the board of every
portfolio investment made by it and is
currently Chairman of AAM Group in
Australia. Bret is also a past President
of the Harvard Business School Alumni
Association of New Zealand. Previously
Bret held corporate roles at Mobil
Oil New Zealand, as a management
consultant at Boston Consulting Group
(Sydney and London) and has founded
and successfully operated his own
private businesses.
2. RADIUS CARE AND WHAT IT DOES
44 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Timothy Sumner
Non-Executive Director
BCom, DipGrad, CA
Tim Sumner has been a director
of Radius Care since 2014. Tim is a
New Zealand Chartered Accountant
and finance professional with over
two decades of financial services
experience. He started his career with
KPMG (Auckland and Moscow) and
then moved into banking and private
equity with Credit Suisse (London
and New York). Tim is a co-founder
of Knox Investment Partners and has
worked as a Managing Director of
Knox Investment Partners since 2005,
focusing on deal structuring and
execution and fund administration.
Mary Gardiner
Independent Director
BCom, CA, FCIS, MInstD
Mary Gardiner was appointed as an
independent director of Radius Care in
December 2020. She is an independent
director and chair of the Audit and
Risk Committee of Southern Cross Pet
Insurance, Chair of Netball Northern
Zone and trustee of Mangere Mountain
Education Trust, an Auckland Council
controlled organisation.
Mary has previously been Chair
of Auckland Netball Centre and
Badminton NZ. Her commercial
experience includes roles as Chief
Financial Officer of Instant Finance and
Radius Health Group, and Governance
Risk Manager at Air New Zealand,
following a career focused primarily
in financial services with KPMG in
New Zealand, Germany and Australia.
Mary is a member of the Institute
of Directors, Fellow of Governance
New Zealand and is a New Zealand
Chartered Accountant.
Hamish Stevens
Independent Director
MCom (Honours), MBA, CA, CInstD
Hamish was appointed as an
independent director of Radius Care
in December 2020. Hamish is an
Auckland based independent director
having held directorships in both the
listed and private company sectors
since 2010. Hamish is also currently
Chair of Evolve Education Group, East
Health Services and Pharmaco and a
director of Marsden Maritime Holdings,
Pacific Radiology Group and Counties
Power. Prior to his governance career
Hamish held senior finance positions
with Heinz Wattie, Tip Top Ice Cream
and DB Breweries. Hamish is a qualified
chartered accountant and a chartered
member of the Institute of Directors.
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 45
Senior Management
Radius Care’s senior management team currently comprises:
Brien Cree
Managing Director
See biography in this section under the heading “Board of Directors” on previous page.
Stuart Bilbrough
Chief Executive Officer
BCom, MBA (Distinction), CA
Stuart Bilbrough was
appointed Chief Executive
Officer of Radius Care
in June 2020, following
successful roles in the
healthcare industry. He was
Chief Financial Officer at
Radius Care from 2010 to
2017. Stuart has over 30
years’ experience in finance
roles in industries including
healthcare, fast moving
consumer goods (FMCG),
logistics, telecommunications
and financial services.
Notable companies include
PricewaterhouseCoopers,
Fonterra, Deutsche Bank and
American Express. Stuart is
a New Zealand Chartered
Accountant and holds an
MBA with distinction from
Massey University. Stuart
is a board member of the
New Zealand Underwater
Association Inc.
Jane Smart
Chief Operations Officer
BSc Physiotherapy,
Dip.Business Administration,
MBS
Jane Smart was appointed
Chief Operations Officer
of Radius Care in February
2011. She has over 30 years’
experience in healthcare and
extensive experience in the
aged care sector. Jane has
spent most of her career in
leadership and management
positions.
Steven Heesen
General Manager,
Commercial Services
Bachelor of International
Hospitality & Hotel
Management (Hons)
Steven Heesen joined
Radius Care in 2007 and
heads up the Radius Care
commercial services team.
He has over 20 years’
experience in hospitality
management and over 16
years’ experience in the aged
care sector. His disciplines
include all property matters,
procurement, marketing,
hospitality and information
services. Steven was trained
in Europe and has a business
management degree.
Michelle Slabber
General Manager, Finance
BCom (Hons), CA
Michelle Slabber joined
Radius Care in 2016.
Michelle has nearly 25
years’ experience in finance
roles in various industries
including healthcare
and financial services.
Michelle trained with
PricewaterhouseCoopers
in South Africa and is a
New Zealand Chartered
Accountant.
2. RADIUS CARE AND WHAT IT DOES
46 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Substantial product holders
and relevant interests in
Radius Care
Substantial product holders
As at the date of this Profile the following persons have, and immediately after listing will have, a relevant interest in 5% or more
of the Shares in Radius Care:
Person and nature of relevant interestNumber of Shares% of Shares
Wave Rider Holdings Limited is the registered holder and beneficial owner of Shares as
trustee for the Wave Rider Trust. As a result of Brien Cree having the right to appoint
and remove trustees of the Wave Rider Trust, he has a relevant interest in Shares held by
Wave Rider Holdings Limited as trustee for the Wave Rider Trust.
95,312,500 54.00%
Knox Investment Partners is the manager of Knox Fund IV NZD LP and Knox Fund
IV AUD LP (“Knox Funds”). As a result of the management role performed by Knox
Investment Partners for the Knox Funds, Knox Investment Partners has a relevant interest
in the Shares held by the Knox Funds, being:
• 22,501,977 Shares held by Knox Fund IV NZD LP; and
• 4,320,051 Shares held by Knox Fund IV AUD LP.
Each of Bret Jackson and Timothy Sumner also has a relevant interest in the Shares held
by the Knox Funds as, by virtue of being a director of Knox Investment Partners, he has
(together with the other) the power to control the exercise of the rights attaching to the
Shares held by the Knox Funds.
26,822,02815.20%
Knox Fund IV NZD LP is the registered holder and beneficial owner of Shares.22,501,977 12.75%
ROC Capital Pty Limited is the manager of ACT Private Equity No.3 Fund, ROC
Alternative Investment Trust VI and ROC Asia Pacific Co-Investment Fund II (“ROC
Funds”). As a result of the management role performed by ROC Capital Pty Limited for
the ROC Funds, ROC Capital Pty Limited has a relevant interest in the Shares held by
Perpetual Corporate Trust Limited as custodian for the ROC Funds as follows:
• 5,994,760 Shares held on behalf of ACT Private Equity No.3 Fund;
• 5,994,760 Shares held on behalf of ROC Alternative Investment Trust VI; and
• 5,994,760 Shares held on behalf of ROC Asia Pacific Co-Investment Fund II.
17,984,28010.19%
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 47
Shareholdings held by directors and senior managers
The table below sets out the equity securities in Radius Care that the directors and senior managers of Radius Care have an
interest in at the date of this Profile and will likely have an interest in immediately after listing.
Director / senior managerNature of relevant interestNumber of Shares% of Shares
Brien CreeHas the power to control the exercise of the rights
attaching to the Shares held by Wave Rider Holdings
Limited as trustee of Wave Rider Trust, by virtue of
having the power to appoint and remove trustees of
the Wave Rider Trust.
95,312,500 54.00%
Bret JacksonHas a relevant interest in 2,612,562 Shares held by
Takatimu Investments Limited as trustee of the
Takatimu Investment Trust, by virtue of being the sole
shareholder and a director of Takatimu Investments
Limited.
Has a relevant interest in a further 26,822,028 Shares
as, by virtue of being a director of Knox Investment
Partners, together with Timothy Sumner, he has the
power to control the exercise of the rights attaching to
the Shares held by the Knox Funds.
29,434,590 16.68%
Timothy SummerIs the registered holder and beneficial owner of
997,456 Shares.
Has a relevant interest in a further 26,822,028 Shares
as, by virtue of being a director of Knox Investment
Partners, together with Bret Jackson, he has the power
to control the exercise of the rights attaching to the
Shares held by the Knox Funds.
27,819,484 15.76%
Duncan CookRegistered holder and beneficial owner375,000 0.21%
Jane SmartRegistered holder and beneficial owner343,750 0.19%
Steven HeesenRegistered holder and beneficial owner281,250 0.16%
Stuart BilbroughRegistered holder and beneficial owner187,500 0.11%
Michelle SlabberRegistered holder and beneficial owner 12,500 0.01%
2. RADIUS CARE AND WHAT IT DOES
48 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Other equity securities
of Radius Care
As at the date of this Profile, there are no other classes of Radius Care equity securities.
Under the Constitution, any other class of equity securities of Radius Care that ranks equally with, or in priority to, the Shares
may be issued without a special resolution of the holders of the Shares. However, the issue of new equity securities in Radius
Care is governed by the NZX Listing Rules, which require the approval by ordinary resolution of the holders of the Shares to the
issue of new equity securities, except in certain circumstances set out in the NZX Listing Rules.
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 49
Director remuneration
and benefits
The table below sets out the total of the remuneration and the value of other benefits received by each director of Radius Care
in respect of Radius Care or any other member of the Radius Care Group during FY2020 and expected to be received in FY2021.
The remuneration and other benefits to be provided to the directors during the next financial year (being FY2022) are expected
to be consistent with the amounts payable from 1 December 2020 for the remainder of FY2021 on an annualised basis. As at the
date of this Profile, the directors are expected to receive the following annual directors’ fees in FY2022:
The fees for directors of Radius Care (in their capacity as directors) that apply from listing have been fixed as a total pool of up
to $800,000 per annum. In FY2022, the total fees payable to directors of Radius Care (in their capacity as directors) is expected
to be $522,000 excluding the Executive Chairman and Managing Director.
The directors are entitled to be reimbursed for all reasonable travel, accommodation and other expenses incurred by them in
connection with their attendance at Board or shareholder meetings, or otherwise in connection with Radius Care’s business.
Director Remuneration and
value of other benefits
received in FY2020
Expected remuneration and value
of other benefits expected to
be received in FY2021
TotalBase Fee
35
Committee Work
36
Total
Brien Cree$870,000
37
(as Managing Director)
$870,000
(as Managing Director)
Duncan Cook
38
$128,000$115,333$4,000$119,333
Bret JacksonNil$92,500$2,000$94,500
Timothy SumnerNil$92,500$2,000$94,500
Mary GardinerNil$30,000$4,000$34,000
Hamish StevensNil$30,000$4,000$34,000
PositionFees per annum
ChairNil (as Executive Chair Brien Cree will
not receive any fees in his capacity as
a director)
Directors
(other than the Chair)
$90,000
Committee Chair$12,000
Committee members $6,000
35 With effect from 1 December 2020, the base fee for directors (other than the Chair) has been set at $90,000 per annum.
36 With effect from 1 December 2020, the base fee for being a Board committee chair has been set at $12,000 per annum and the base fee for being a
Board committee member has been set at $6,000 per annum.
37 Remuneration received in Brien Cree’s capacity as Managing Director of Radius Care (comprising salary of $800,000 and a car allowance of $70,000).
38 Duncan Cook is a partner at Sharp Tudhope and, through Sharp Tudhope, provides legal services to Radius Care. Radius Care pays fees to Sharp
Tudhope for the provision of such legal services. In FY2020 such fees totalled $106,000.
2. RADIUS CARE AND WHAT IT DOES
50 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Employee
remuneration
Employee
incentives
The number of employees or former employees of Radius
Care (not being directors of Radius Care) who, during
FY2020, received remuneration and other benefits in their
capacity as employees that in value was or exceeded
$100,000 per annum was as follows:
39
Following its listing on the NZX Main Board, Radius Care
intends to establish a new long-term incentive plan (“LTI
Plan”) for senior executives, to incentivise and retain
those employees.
Under the LTI Plan, participants will be granted performance
share rights (“PSRs”) which, upon vesting, entitles the
participant to subscribe for, or be transferred, one Share
for each PSR. Vesting of PSRs will be subject to meeting
the vesting conditions set by the Board. The Board has an
absolute discretion to invite employees to participate in the
LTI Plan and to set the terms and conditions of PSRs at the
time they are granted, including the number of PSRs to be
granted and any vesting conditions.
No grants of PSRs have been made as at the date of
this Profile.
RemunerationNumber of employees
$100,000 - $109,999
7
$110,000 - $119,999
3
$120,000 - $129,999
7
$130,000 - $139,999
3
$140,000 - $149,999
5
$160,000 - $169,999
1
$190,000 - $199,999
1
$290,000 - $299,999
1
39 Note that this table does not include any remuneration for Stuart Bilbrough,
as he rejoined Radius Care as CEO in FY2021.
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 51
Material interests in
the Radius Care Group
Brien Cree is a director of, and has an interest in
approximately 24% of the shares in, Cibus Catering Limited
(“Cibus”). Cibus and Radius Care are party to a contract
catering agreement (“Catering Agreement”) under which
Cibus provides catering and catering consulting services to
nine of Radius Cares’ facilities. The annual amount currently
paid to Cibus Catering by Radius Care under the Catering
Agreement is approximately $4.4 million. The current term
of the Catering Agreement expires on 2 September 2024
and Cibus has a right to renew the Catering Agreement for
a further five year term after the expiry of the initial term.
Either party may terminate the Catering Agreement without
cause on six months’ notice to the other party.
Brien Cree and Wave Rider Holdings Limited (as trustee of
the Wave Rider Trust) have provided personal guarantees to
one landlord in respect of Radius Care Group’s obligations
under the various premises leases entered into with that
landlord. Wave Rider Holdings Limited and Radius Care have
entered into a guarantee fee deed under which Radius Care
is to pay a fee (payable quarterly) to Wave Rider Holdings
Limited equivalent to 3.5% of the annual rental and other
moneys payable under the leases guaranteed by Brien Cree
and Wave Rider Holdings Limited. For FY2021, the amount
payable by Radius Care under this guarantee fee deed is
expected to be approximately $85,937, and for FY2022
(being the first full financial year after the date of this
Profile, the amount payable is expected to be approximately
$175,301. The directors of Radius Care (other than Brien
Cree) are satisfied that the annual fee payable to Wave Rider
Holdings Limited under this arrangement is consistent with
the fees that would be chargeable by third party providers
to provide similar lease guarantee arrangements.
Brien Cree and Radius Care are party to an agreement to
assign (“Assignment Agreement”) under which Brien Cree
has agreed to assign to Radius Care his rights under an
agreement for sale and purchase of real estate (“Land SPA”)
to acquire a c.4.3 hectare development property at Main
North Road, Belfast, Christchurch for a purchase price of
$5.8 million (of which a non-refundable deposit of $300,000
has already been paid) from an unrelated third party.
The Assignment Agreement is conditional on the Board
approving the Assignment Agreement on or before
2 April 2021. The Board (excluding Brien Cree as an
interested director) intends to consider approving the
Assignment Agreement if it can obtain:
• resource consent and funding for the development of an
integrated aged care facility and retirement village on the
property, totalling approximately 70 Care Beds, 30 Care
Suites and 94 Units, on terms satisfactory to it; and
• an independent valuation that confirms that the
property’s fair value after resource consent is granted
exceeds the purchase price of the property (including the
consideration payable to Brien Cree by Radius Care for
the assignment of his rights under the Land SPA).
An application for resource consent for the development
of the Christchurch property has been submitted and
a decision is expected before April 2021. There is no
guarantee that resource consent will be granted or granted
on the terms sought by Radius Care. There is similarly no
guarantee that Radius Care will exercise its right to acquire
the Christchurch property.
The consideration payable by Radius Care to Brien Cree
under the Assignment Agreement for the assignment of
his rights under the Land SPA is $700,000 (inclusive of
GST, if any). This includes a non-refundable deposit already
paid by Radius Care of $300,000, being an amount equal
to the non-refundable deposit already paid by Brien Cree
under the Land SPA. If the Board approves the Assignment
Agreement and it becomes unconditional, the balance of the
consideration payable to Brien Cree (being $400,000) is
payable on settlement under the Assignment Agreement on
16 April 2021, and the balance of the purchase price for the
property under the Land SPA (being $5.5 million) is payable
to the third party vendor on settlement under the Land
SPA. Settlement under the Land SPA is due to occur on the
later of 31 March 2021 and the issue of title in respect of the
Christchurch property. If settlement under the Land SPA
occurs before settlement under the Assignment Agreement,
Brien Cree is to procure delivery of the Christchurch
property to Radius Care on the same terms as if settlement
under the Land SPA had occurred after the Assignment
Agreement had become unconditional and Radius Care had
accepted an assignment of the Land SPA.
Each of Radius Care’s senior managers (including Brien
Cree) have entered into employment agreements with
Radius Care.
Radius Care has granted indemnities, as permitted by the
Companies Act, in favour of each of its directors and Chief
Executive Officer. Radius Care also maintains insurance for
its directors and officers.
2. RADIUS CARE AND WHAT IT DOES
52 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Other material governance
disclosures
Appointment of Directors
The Board has the power to appoint additional directors
to the Board from time to time, in accordance with the
NZX Listing Rules. Any director appointed by the Board
must retire and seek re-appointment at the next Annual
Shareholders’ Meeting of Radius Care in accordance with
the NZX Listing Rules.
Major shareholder
At listing, the shareholding of Wave Rider Holdings Limited
in Radius Care will be 54.00%. This means that Wave Rider
Holdings Limited will have the ability to pass an ordinary
resolution of Radius Care shareholders (even without the
support of other shareholders), and will also likely have
the ability to control the outcome of a special resolution
of Radius Care shareholders under the Companies Act.
Escrow arrangements
Each of Wave Rider Holdings Limited and the Knox Funds
(together the “Escrowed Shareholders”) have entered
into escrow arrangements with Radius Care and ASB
Bank Limited in respect of the following Shares
(”Escrowed Shares”):
• for Wave Rider Holdings Limited, 88,423,995 Shares; and
• for the Knox Funds, 20,715,547 Shares.
Under these arrangements each Escrowed Shareholder
has agreed not to sell or otherwise dispose of any Shares
where such sale or disposal would result in the Escrowed
Shareholder holding less than their specified number of
Escrowed Shares until the earliest to occur of:
• the first date on which
40
• Radius Care’s equity ratio (the ratio of total shareholder
funds to total assets of the Radius Care Group
(excluding (i) in each case, the value of the village
facilities recorded in the financial statements as
investment property and (ii) in the case of shareholder
funds only, the refundable occupation right agreements
and indebtedness for borrowed money of Elloughton
Grange Village Limited)) is 40% or more; and
• Radius Care’s debt coverage ratio (the ratio of senior
debt (excluding indebtedness for borrowed money of
Radius Care Holdings Limited and Elloughton Grange
Village Limited) to Pre NZ IFRS 16 EBITDA for the last
12 months) is less than 1.5 times;
• the date on which the Radius Care Group repays all
indebtedness owed by it to ASB Bank Limited; and
• 29 July 2023.
These restrictions do not apply (and therefore Escrowed
Shares can be sold) in the following circumstances: (i) where
the Escrowed Shareholder transfers shares to an affiliate
or replacement trustee who enters into arrangements on
the same terms as these escrow arrangements, (ii) where
the Escrowed Shareholder grants a security interest over
its Shares in favour of a bona fide lender who agrees to be
bound by these escrow arrangements, (iii) where a takeover
offer is made under the Takeovers Code or a similar scheme
of arrangement, (iv) where the Escrowed Shareholder
sells Shares in connection with or after a capital raising
undertaken by Radius Care that results in Radius Care’s
equity ratio being 40% or more and Radius Care’s debt
coverage ratio being less than 1.5 times and (v) with the
written approval of Radius Care, the non-interested directors
of Radius Care and ASB Bank Limited.
The Escrowed Shares held by the Escrowed Shareholders
represent, in aggregate, 61.84% of the total Shares on issue
at the time of listing.
Government funding contracts
A number of Radius Care’s contracts for Government
funding of its Care Beds (which in aggregate relate to
just over half of Radius Care’s Government funding for
its Care Beds) contain change of control provisions that
require Radius Care to obtain MoH/DHB consent if any
person obtains or loses the ability to appoint a majority
of the directors to the Board, which Wave Rider Holdings
Limited has for so long as its shareholding is greater than
50%. Radius Care intends to seek the necessary MoH/DHB
consent prior to undertaking any capital raising that could
result in Wave Rider Holdings Limited’s shareholding being
reduced below 50%. While there can be no guarantee this
consent will be forthcoming, Radius Care considers the
risk of this consent not being obtained to be low given the
services provided by Radius Care under those contracts will
not be affected by any reduction in Wave Rider Holdings
Limited’s shareholding.
40 See the Supplementary Financial Information document on the Radius Care
Website for further detail on the definitions of Radius Care’s equity ratio and
debt coverage ratio.
2. RADIUS CARE AND WHAT IT DOES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 53
3.
Key features of
Radius Care shares
SharesDividend
policy
The key features of the Shares do not differ from
those that generally apply to other ordinary shares
in a company.
Shareholders who wish to sell their Shares on the
NZX Main Board after listing must contact a broker
and have a Common Shareholder Number (CSN)
and an Authorisation Code (FIN).
Dividends are declared at the Board’s discretion, and
depend on a number of factors, including Radius Care’s
financial performance, financial position, market conditions,
future funding requirements and any contractual, legal or
regulatory restrictions on the payment of dividends by
Radius Care. The payment of dividends is not guaranteed
and Radius Care’s dividend policy may change over time.
In declaring dividends, Radius Care must comply with the
solvency test under the Companies Act and covenants in
Radius Care’s banking facilities.
Subject to a number of factors including those outlined
above, Radius Care’s dividend policy is to target a payout
ratio of 50% to 70% of full financial year AFFO with an
interim dividend to be paid in December and a final
dividend to be paid in June of each year with each dividend
comprising of approximately half of the expected full year
dividend.
Given the timing of Radius Care’s listing in mid-December
2020, the Board’s current intention is to pay an interim
dividend in respect of 1HY2021 in February 2021. As such,
Radius Care intends to pay three dividends across the 2021
calendar year, expected to comprise of:
• A February 2021 dividend and a June 2021 dividend in
relation to FY2021, equal to 50% of AFFO; and
• A December 2021 dividend in relation to 1HY2022, in line
with its dividend policy (of 50% to 70% of AFFO).
Please refer to page 61 of Section 4 (Radius Care’s financial
information) for more information on implied dividend yields
for FY2021 based on FY2021 Guidance.
3. KEY FEATURES OF RADIUS CARE SHARES
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 55
4.
Radius Care’s
financial
information
Introduction
The tables in this section provide key financial information
about Radius Care. Full financial statements and other
financial information are available on the Radius Care
Website (www.radiuscare.co.nz). If you do not understand
this financial information, you can seek advice from a
financial adviser or an accountant.
The financial information in this Profile is presented in New
Zealand dollars and is rounded, which may result in some
discrepancies between the sum of the components and
totals within tables, and also certain percentage calculations.
Information presented in this section contains the following
types of financial information:
• Statutory historical financial information, as reported
in Radius Care’s financial statements. Historical financial
information is sourced from Radius Care’s audited full
year financial statements and unaudited interim financial
statements, which are available on the Radius Care
Website. This document presents audited historical
financial information on Radius Care for the financial
years ended 31 March 2018 (“FY2018”), 31 March 2019
(“FY2019”), 31 March 2020 (“FY2020”), the unaudited
six-month interim period ended 30 September 2020
(“1HY2021”), and the unaudited six-month interim period
ended 30 September 2019 (“1HY2020”) (collectively, the
“Historical Period”).
• Pro forma Underlying historical financial information
which has been derived from the statutory historical
financial information, with the following adjustments:
Pro forma adjustments
• NZ IFRS 16 consistency adjustments: As Radius Care
leases the land and buildings of the majority of the
facilities that it operates from, its adoption of NZ IFRS
16 in FY2020 has had a material impact on its statutory
financial statements. Radius Care has applied a Pro
forma adjustment to its FY2018 and FY2019 statements
of comprehensive income to retrospectively reflect the
impact of NZ IFRS 16 on these prior periods. This allows
for like-for-like comparison for key financial metrics
across time periods, on both a pre and post NZ IFRS 16
basis;
• Non-recurring or infrequent items: Removal of the one-
off impact of COVID-19 related expenses and COVID-19
related government subsidy; and
• Structural changes and other: Adjustments to reflect
on-going recurring listed and other company costs.
Underlying adjustments
• Adjustments to produce Underlying metrics typically
reported by other NZX listed aged care and retirement
village operators to allow for like-for-like comparison
across peers in the sector. Key Underlying adjustments
reflect removal of changes in fair value of investment
properties, addition of realised development margins on
new Unit sales and realised gains on Unit resales (and
where appropriate removal of deferred tax expenses).
Taken in aggregate these adjustments produce various
non-NZ GAAP Pro forma Underlying metrics including:
• Pro forma Underlying EBITDA;
• Pre-NZ IFRS 16 Pro forma Underlying EBITDA;
• Pro forma Underlying NPAT;
• Pre-NZ IFRS 16 Pro forma Underlying NPAT; and
• AFFO, which is a cash proxy used by Radius Care to
determine the level of dividend it can support.
These adjustments are intended to allow investors to
compare Radius Care’s historical financial information on a
consistent basis, to better understand the trends in financial
performance, and to compare Radius Care to other NZX
listed aged care and retirement village operators.
The non-NZ GAAP metrics outlined above have been
prepared solely for the purpose of inclusion in this Profile.
For further details on the Pro forma and Underlying
adjustments, the principal assumptions on which they
are based, and reconciliation to information prepared in
accordance with NZ GAAP please refer to the information
under the headings “Adjustments for Pro forma Underlying
Metrics” and “Reconciliation of non-NZ GAAP to NZ GAAP
Financial Information” on pages 74 and 72.
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 57
FY2021 Guidance
In addition to the historical financial information outlined
above, this Profile also contains guidance for FY2021 for
certain key financial metrics, namely Pro forma Underlying
EBITDA, Pre-NZ IFRS 16 Pro forma Underlying EBITDA,
and AFFO (“FY2021 Guidance”). This FY2021 Guidance is
intended to provide additional information on Radius Care’s
near-term prospects based on the Board’s assessment of
events and conditions existing at the date of this Profile.
The FY2021 Guidance reflects:
• Actual historical financial performance for the six months
ended 30 September 2020 (unaudited); and
• The Board’s estimate of financial performance for the six
months ending 31 March 2021 (taking into consideration
any known material events up to 31 October 2020).
Guidance by its nature is inherently uncertain and represents
a prediction of future events which cannot be assured. It
involves various uncertainties and risks, many of which are
beyond the control of Radius Care, and accordingly, actual
results will likely vary from the information presented,
potentially materially. As a result, neither the Board nor any
other person can provide any assurance that the FY2021
Guidance will be achieved and so undue reliance should not
be placed on the FY2021 Guidance provided. We encourage
you to read the Profile in full and take due consideration of
the information in Section 5 (Risks to Radius Care’s business
and plans) in particular.
4. RADIUS CARE’S FINANCIAL INFORMATION
58 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Summary of key financials
Selected financial information
1
NZ$mFY2018FY2019FY20201HY20201HY2021
Financial period
12 months
ended
31 March
2018
12 months
ended
31 March
2019
12 months
ended
31 March
2020
6 months
ended
30 September
2019
6 months
ended
30 September
2020
AuditedAuditedAuditedUnauditedUnaudited
Statement of Comprehensive Income:
1,2
Revenue100.2 110.1113.7 55.9 61.3
Pro forma Underlying EBITDA19.7 20.418.2 9.312.4
Pre-NZ IFRS 16 Pro forma Underlying EBITDA
3
7.78.05.83.66.0
NPAT3.8 4.2 (2.8) (1.5) 2.1
Statement of Cash Flow items and cash proxies:
Dividends declared0.9 0.90.2 0.2 0.0
Net cash flows from operating activities4.5 7. 96.5 2.1 5.9
AFFO
4
1.32.00.80.02.3
Statement of Financial Position:
Right-of-use assets under NZ IFRS 16--181.4184.1179.4
Total assets66.7 73.4270.8 265.8 273.3
Cash and cash equivalents1.84.22.3 2.1 4.6
Total external bank debt 22.320.5 31.4 31.8 30.6
Lease liabilities under NZ IFRS 16--185.3186.3185.0
Total debt27. 425.5216.7218.1215.6
Total liabilities52.0 55.5250.0249.4 250.4
Net assets14.7 17.9 20.8 16.4 22.9
Notes:
1 Radius Care first adopted NZ IFRS 16 for the FY2020 financial results. Statutory information for FY2020, 1HY2020, and 1HY2021 reflects the adoption of NZ IFRS 16,
but statutory information for other time periods (i.e. FY2018 and FY2019) does not reflect the adoption of NZ IFRS 16. As such, line items (other than those denoted as
“Pro forma Underlying” or “AFFO”) may vary materially across time periods as a direct result of the timing of the adoption of NZ IFRS 16.
2 The selected financial information is sourced from audited financial statements and unaudited interim financial statements that are available on the Radius Care
Website. Some line items in the selected financial information include adjustments applied by Radius Care (denoted “Pro forma Underlying” and “AFFO”). For an
explanation of Pro forma and Underlying adjustments in the selected financial information, please refer to the heading ‘Reconciliation of non-NZ GAAP to NZ GAAP
Financial Information’ in this section of the Profile (page 72).
3 Pre-NZ IFRS 16 Pro forma Underlying EBITDA is a non-NZ GAAP measure that includes Pro forma adjustments and Underlying adjustments as described under the
section heading ‘Reconciliation of non-NZ GAAP to NZ GAAP Financial Information’ in this section of the Profile but does not reflect the adoption of NZ IFRS 16.
4 AFFO is a non-NZ GAAP measure and is defined as outlined under the section heading ‘Reconciliation of non-NZ GAAP to NZ GAAP Financial Information’ in this
section of the Profile.
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 59
FY2021 Guidance
Capitalisation measures
For the year ending 31 March 2021, Radius Care expects to
achieve:
• Pro forma Underlying EBITDA of between $23.0 million
and $23.8 million;
• Pre-NZ IFRS 16 Pro forma Underlying EBITDA of between
$10.2 million and $11.0 million; and
• AFFO of between $2.9 million and $3.5 million.
As noted previously, the FY2021 Guidance reflects the actual
Pro forma Underlying historical performance for the first
6 months ended 30 September 2020 (shown in the table
of Selected Financial Information above) and the Board’s
estimate of financial performance for the next six months
ending 31 March 2021 (taking into consideration any known
material events up to 31 October 2020).
The Board has ascribed a listing price of $0.80 per Share (“Listing Price”), based on its view of the equity value of Radius Care.
It has been provided to inform investors of the value ascribed to Shares at listing by the Board. The Listing Price implies the
valuation metrics, as set out in the table below. The price at which Shares will be traded on the NZX Main Board following listing
will depend on the demand for, and supply of, Shares and be subject to change.
Capitalisation Table
Number of equity Shares on issue at listing176,495,000
Listing Price$0.80 per Share
Implied market capitalisation$141.2 million
Net interest bearing bank debt as at 30 November 2020
1
$24.8 million
Implied enterprise value (excluding lease liabilities under NZ IFRS 16)$166.0 million
Lease liabilities under NZ IFRS 16 as at 30 November 2020$185.1 million
Implied enterprise value (including lease liabilities under NZ IFRS 16)$351.1 million
Note:
1 Comprises unaudited net interest bearing bank debt as at 30 November 2020 of $30.0 million and cash and cash equivalents of $5.2 million
Implied market capitalisation is the value of all of Radius Care’s equity securities, as implied by the Listing Price. It tells you
what Radius Care is proposing what Radius Care’s equity is worth.
Implied enterprise value (“EV”) is a measure of the total value of the business of Radius Care, as implied by the Listing Price.
The implied enterprise value is the amount that a person would need to pay to acquire all of Radius Care’s equity securities and
to settle all of Radius Care’s interest bearing bank debt. It is a measure of what Radius Care is proposing the business of the
Radius Care Group as a whole is worth.
Implied enterprise value (including lease liabilities under NZ IFRS 16) is equal to the implied EV plus lease liabilities under
NZ IFRS 16.
41 As noted on page 11, Harmos Horton Lusk Limited has received 250,000
Shares which form part of the $0.8 million listing costs, but which are
non-cash in nature.
Given the timing of Radius Care’s listing in mid-December
2020, the Board’s current intention is to pay an interim
dividend in respect of 1HY2021 in February 2021. As such,
Radius Care intends to pay three dividends across the 2021
calendar year, expected to comprise of:
• A February 2021 dividend and a June 2021 dividend in
relation to FY2021, equal to 50% of AFFO; and
• A December 2021 dividend in relation to 1HY2022, in line
with its dividend policy (of 50% to 70% of AFFO).
In addition to the above, Radius Care expects to incur
in FY2021 one-off costs associated with its listing of
approximately $0.8 million (pre-tax).
41
4. RADIUS CARE’S FINANCIAL INFORMATION
60 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Implied listing multiples and
dividend information
The following metrics are prepared based on certain non-NZ GAAP Pro forma Underlying financial information, as set out
under the above headings, “Capitalisation Measures”, “Selected Financial Information” in the case of LTM metrics and “FY2021
Guidance” in the case of FY2021 Guidance metrics.
Implied listing multiples and dividend information
1
FY2021 Guidance
LT M
1
LowHigh
Implied EV (including lease liabilities under NZ IFRS 16) / Pro forma Underlying EBITDA16.5x15.2x14.7x
Implied EV / Pre-NZ IFRS 16 Pro forma Underlying EBITDA
20.3x
16.3x15.1x
AFFO
3
per Share – cents1.781.671.99
Dividend per Share – cents (at 50% of AFFO for FY2021)0.831.00
Implied dividend yield – cash dividend declared1.04%1.25%
Implied dividend yield – gross dividend declared
4
1.44%1.73%
Notes:
1 LTM reflects the twelve months ended 30 September 2020, calculated as the corresponding FY2020 metric plus the corresponding 1HY2021 metric less the
corresponding 1HY2020 metric.
2 Gross of attaching imputation credits – on a fully imputed basis but excluding RWT (Resident Withholding Tax).
As outlined in further detail in Section 3 (Key Features of Radius Care Shares), Radius Care’s dividend policy is to target a
payout ratio of 50% to 70% of full financial year AFFO with an interim dividend to be paid in December and a final dividend to
be paid in June of each year, with each dividend targeted to comprise of approximately half of the expected full year dividend.
Given the timing of Radius Care’s listing in mid-December 2020, the Board’s current intention is to pay an interim dividend
in respect of 1HY2021 in February 2021. As such, Radius Care intends to pay three dividends across the 2021 calendar year,
expected to comprise of:
• A February 2021 dividend and a June 2021 dividend in relation to FY2021, equal to 50% of AFFO (outlined in the Implied
Listing Multiples and Dividend Information table above); and separately
• A December 2021 dividend in relation to 1HY2022, in line with its dividend policy (of 50% to 70% of AFFO).
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 61
Pro forma Underlying
Statement of
Comprehensive Income
NZ$mFY2018FY2019FY20201HY20201HY2021
Financial period
12 months
ended
31 March
2018
12 months
ended
31 March
2019
12 months
ended
31 March
2020
6 months
ended
30 September
2019
6 months
ended
30 September
2020
AuditedAuditedAuditedUnauditedUnaudited
Aged care operating revenue98.8107.3112.655.559.0
Retirement village operating revenue0.60.91.10.60.6
Retirement village change in fair value
of investment property 0.71.4(0.6)(0.4)0.7
Group support revenue0.10.50.60.21.0
Revenue100.2110.1113.755.961.3
Aged care operating expenses(83.7)(92.5)(86.3)(42.7)(43.0)
Retirement village operating expenses(0.7)(0.7)(0.7)(0.4)(0.4)
Group support expenses(7.2)(7.2)(8.4)(3.8)(4.6)
Operating expenses(91.6)(100.4)(95.4)(46.9)(48.0)
Pro forma adjustments
Remove: Operating rental lease expense12.012.4---
Include: Other income0.1----
Remove: COVID-19 related expenses----0.6
Remove: Government COVID-19 subsidy--(0.4)-(0.9)
Include: Listed & other company costs(1.0)(1.1)(1.1)(0.5)(0.6)
Remove: Historical governance costs0.30.20.40.10.5
Pro forma adjustments11.411.5(1.1)(0.4)(0.4)
Underlying adjustments
Remove: Change in fair value of investment property(0.7)(1.4)0.60.4(0.7)
Include: Realised development margins0.20.50.40.30.2
Include: Realised gains on resales0.20.1--0.0
Pro forma Underlying EBITDA19.720.418.29.312.4
For a reconciliation of the Pro forma Underlying financial information to information prepared in accordance with NZ GAAP refer
to the sections headed “Reconciliation of non-NZ GAAP to NZ GAAP Financial Information” and “Adjustments for Pro forma
Underlying metrics” in this section of the Profile on pages 72 and 74.
4. RADIUS CARE’S FINANCIAL INFORMATION
62 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Selected operational information
Financial periodFY2018FY2019FY20201HY20201HY2021
Number of Care Beds (period end)
1
1,6821,7011,7041,7041,714
Total Care Bed occupancy
2
89.1%89.5%90.0%89.7%91.6%
Pro forma Underlying EBITDA per Care Bed
3
$18,271$17,883$17,213$8,416$10,671
Number of Units (period end)
4
5563736876
Number of new Unit sales911852
Number of existing Unit resales23--1
Notes:
1 Comprises Care Beds occupied, available to be occupied or unavailable due to refurbishment.
2 Total occupied Care Bed days divided by total Care Bed days available during the period.
3 Pro forma Underlying EBITDA for aged care (as set out under the heading “Pro forma Underlying EBITDA by segment” on
page 66) divided by the average number of Care Beds occupied during the period.
4 Comprises Units occupied, available to be occupied or unavailable due to refurbishment.
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 63
How Radius Care
generates revenue
Radius Care primarily generates revenue from the operation of aged care facilities, with some revenue being generated
from the operation of retirement villages and minimal revenue from Group support. For the year ended 31 March
2020, approximately 99.0% of Radius Care’s revenue was generated from its aged care facilities with 0.5% of revenue
generated from its retirement villages and 0.5% from Group support.
FY2020 Revenue Composition
NZ$m
FY2018
$100.2
$110.1
$113.7
FY2019FY2020
110.0
115.0
105.0
100.0
95.0
90.0
Aged CareRetirement villageGroup support
4. RADIUS CARE’S FINANCIAL INFORMATION
64 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Aged care
Set out below is a description of each of the key areas from
which Radius Care derives revenue:
• Care fees: Radius Care receives regulated care fees for
occupied Care Beds funded through a combination of
Government funding (via DHBs) and private resident
contributions. Care fees are set by the relevant DHB based
on the level of care being provided (rest home, hospital,
dementia and various categories of other specialist
care). Fees are earned based on each day the Care
Bed is occupied. For further detail on funding refer to
“Regulations and Funding” in Section 2 (Radius Care and
what it does) in this Profile.
• Accommodation supplements: Additional fees paid
privately by the resident for room features above the
Government recommended minimum standard (e.g. larger
room, ensuite and/or view).
• Other aged care income: Additional fees paid privately by
the resident for additional services such as day trips and
supplementary therapy services.
• Other: Rental income for rent charged to external parties
occupying facility space.
Retirement villages
• DMF: Retirement village residents incur a DMF for
the right to occupy a Unit under an ORA. Radius Care
typically applies a 30% DMF based on the ORA licence
agreement, which contractually accrues over a 3 year
term. For accounting purposes however, the DMF is
recognised over the average term that a resident is
expected to occupy a Unit (8 years). This term (8 years)
is applied to all financial years in this Profile. Upon resale
of the Unit the contractually accrued DMF is deducted
from the resale proceeds paid to the outgoing resident
or their estate.
• Changes in fair value of investment properties: Under
NZ IAS 40, fair value movements in the value of
investment property (i.e. Radius Care’s owned retirement
village Units) is recognised regardless of whether the fair
value movements are realised or unrealised. Fair value
movements are based on a valuation of Radius Care’s
owned retirement villages by an independent registered
valuer every 6 months. Note however, that the Underlying
metrics reflect only realised gains and development
margins on Radius Care’s retirement villages.
• Weekly service fees: Fees charged to residents for the
general upkeep and outgoings (covering, among other
things, insurance, rates, cleaning of common and outside
areas, gardening, and provision of common facilities).
• Other: Additional fees paid by residents for additional
services such as cleaning of Units and meals.
Group support
• Website sales: Sales of specialist care products to older
New Zealanders in the wider community via the Radius
Care Online Shop.
• Sundry revenue: COVID-19 Ministry of Health subsidy.
The Radius Care Group received funding from the
Government to support residential aged care providers.
The funding was provided to meet the increased costs
associated with COVID-19 to cover higher staff and
PPE costs.
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 65
Overview of financial
performance
This section provides an overview of the Pro forma Underlying EBITDA of Radius Care over the Historical Period and
should be read in conjunction with the ‘Selected Financial Information’ table on page 59 of the Profile.
Radius Care has three reporting segments used to track performance of the business as outlined below.
Pro forma Underlying EBITDA by segment
NZ$mFY2018FY2019FY20201HY20201HY2021
Financial period
12 months
ended
31 March
2018
12 months
ended
31 March
2019
12 months
ended
31 March
2020
6 months
ended
30 September
2019
6 months
ended
30 September
2020
AuditedAuditedAuditedUnauditedUnaudited
Aged care27. 227. 226.312.816.6
Retirement village0.30.80.80.50.4
Group support(7.8)(7.6)(8.9)(4.0)(4.6)
Pro forma Underlying EBITDA19.720.418.29.312.4
Reporting segmentDescription
Aged careIncludes all revenues and expenses associated with the operation of aged care facilities earned or incurred at the
aged care facility level. It does not include any expenses associated with Radius Care’s support office (which forms
part of Group support).
Retirement villageIncludes all revenues and expenses associated with the operation of retirement village facilities, earned or incurred
at the village level. It does not include any expenses associated with Radius Care’s support office (which forms part
of Group support).
Group support Includes sundry revenue, support office, corporate expenses and the Radius Care Online Shop.
4. RADIUS CARE’S FINANCIAL INFORMATION
66 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Overview of historical
financial performance
FY2019 Financial Performance Relative to FY2018
The Pro forma Underlying EBITDA for FY2019 increased by $0.7 million to $20.4 million.
Key Pro forma Underlying EBITDA Variances Explained:
1 Aged care – no change
• Brownfield and Greenfield Developments: $1.2 million. Brownfield extensions at Waipuna (Auckland) were completed
leading into FY2018. Occupancy expectations were achieved during FY2019 with a resulting uplift in Pro forma Underlying
EBITDA of $0.3 million. The Greenfield development of Glaisdale (Hamilton) opened in June 2017 (FY2018) with occupancy
improving from 66% (FY2018) to 86% (FY2019), increasing Pro forma Underlying EBITDA by $0.9 million.
• Bureau: $(0.9) million. During FY2019 the industry (including Radius Care) was impacted by DHBs actively recruiting aged
care sector staff. Increased Bureau costs were incurred to cover the resulting shortages of registered nurses and health care
assistants.
2 Retirement village – $0.5 million
• The compounding impact of DMF and additional Unit sales saw an increase in revenue during the financial year.
Weekly service fees for all Units were also increased from 1 April 2018, being the start of the financial year.
3. Group support – $0.2 million
• No specific drivers.
Historical Pro forma Underlying EBITDA - FY2018 to FY2019
NZ$m
19.0
1 7.0
21.0
$20.4
$(0.3)
$(0.9)
$1.2
$0.2
$0.2
$0.1
$0.2
Aged careRetirement village
Group
support
FY2018
Pro forma
Underlying
EBITDA
Brownfield
& Greenfield
Developments
Bureau
Other
aged care
operations
DMF and
weekly
service
fees
Realised
Gains on
Resales and
Development
Margin
Other
village
operations
Support
office
FY2019
Pro forma
Underlying
EBITDA
$19.7
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 67
FY2020 Financial Performance Relative to FY2019
The Pro forma Underlying EBITDA for FY2020 decreased by $2.2 million to $18.2 million.
Key Pro forma Underlying EBITDA Variances Explained:
1. Aged care – $(0.9) million
• Bureau costs: $(0.8) million. The impact of the increase in FY2019 Bureau costs continued into FY2020 with an increase
of $0.8 million. As a result, Radius Care embarked on a proactive programme during FY2020 that saw:
• a focus on reducing Bureau and staff rostering costs at the facility level, with Radius Care employing two full-time
recruitment and retention advisors to specifically oversee this; and
• an increase in health care assistants being sourced through the NZ Immigration channel to improve the flow of staff
into facilities.
As a result of the proactive measures that Radius Care took through this programme, Bureau costs began to materially
decline in February 2020 and have remained low, as illustrated on the following page.
• Other aged care operations: $(0.2) million. Whilst occupancy continued to increase, rising from 89.5% to 90.0% over the
period and age care fee funding from the DHBs also increased, general personnel cost increases offset these gains.
Historical Pro forma Underlying EBITDA - FY2019 to FY2020
NZ$m
19.0
1 7.0
21.0
$18.2
$0.1
$(0.2)
$(0.8)
$0.1$(0.1)
$(0.6)
$(0.7)
Aged careRetirement village
Group support
FY2019
Pro forma
Underlying
EBITDA
Brownfield
& Greenfield
Developments
Bureau
Other
aged care
operations
DMF and
weekly
service
fees
Realised
Gains on
Resales and
Development
Margin
Support
office
personnel
costs
Support
office other
expenses
FY2020
Pro forma
Underlying
EBITDA
$20.4
4. RADIUS CARE’S FINANCIAL INFORMATION
68 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
2. Retirement village – no change
• No specific drivers.
3. Group support – $(1.3) million
• Support office personnel costs: $(0.6) million. Radius Care invested in staff required to drive its growth strategy as outlined
in Section 2 (Radius Care and what it does) of this Profile including across:
• human resources $0.1 million,
• regional managers of $0.3 million,
• finance $0.1 million,
• village and development $0.1 million.
• Support office other expenses: $(0.7) million. Radius Care increased its advertising spend by $0.4 million as it embarked on
a media campaign aimed at increasing occupancy, with a longer term target of 95%. IT expenditure also increased by $0.2
million as a result of a reconfiguration of the Radius Care IT network. Travel and accommodation also increased $0.1 million
as regional managers were more active on facility sites to support registered nurses and manage Bureau costs.
Bureau Usage over time - Cost
NZ$
FY20181HY2021FY2019FY2020
250,000
300,000
150,000
100,000
200,000
-50,000
AUG 17
AUG 18
AUG 19
AUG 20
FEB 18
FEB 19
FEB 20
NOV 17
NOV 18
NOV 19
MAY 18
MAY 19
MAY 20
OCT 17
OCT 18
OCT 19
APR 18
APR 19
APR 20
JAN 18
JAN 19
JAN 20
JUL 18
JUL 19
JUL 20
SEP 17
SEP 18
SEP 19
SEP 20
MAR 18
MAR 19
MAR 20
DEC 17
DEC 18
DEC 19
JUN 18
JUN 19
JUN 20
50,000
-
Registered NursesHealth Care Assistants
Total
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 69
1HY2021 Financial Performance Relative to 1HY2020
The Pro forma Underlying EBITDA for the 6 months of 1HY2021 increased by $3.1 million to $12.4 million compared with
1HY2020.
Historical Pro forma Underlying EBITDA - 1HY2020 to 1HY2021
NZ$m
9.0
7.0
11.0
13.0
$9.3
$12.4
$0.5
$1.0
$2.3
$(0.1)
$(0.6)
1HY2020
Pro forma
Underlying
EBITDA
Brownfield
& Greenfield
Developments
BureauOther
aged care
operations
RV Realised
Gains on
Resales and
Development
Margin
Support
Office
1HY2021
Pro forma
Underlying
EBITDA
Aged care
Retirement
village
Group
support
4. RADIUS CARE’S FINANCIAL INFORMATION
70 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Key Pro forma Underlying EBITDA Variances Explained:
1. Aged care – $3.8 million
• Brownfield and Greenfield Developments: $0.5 million. The impact from the Brownfield extensions at Windsor Court
(Waikato) continued into 1HY2021 contributing an extra $0.45 million of Pro forma Underlying EBITDA over the period.
The Greenfield development at Glaisdale (Hamilton) continued to improve with its occupancy reaching 99% in September
2020 (versus 87% in September 2019).
• Bureau: $1.0 million. Radius Care continued to implement its proactive programme to reduce staff costs and increase
retention (as explained in the FY2019 to FY2020 comparison above). In addition to the benefits from that programme,
it also experienced:
• a reduction in staff turnover as a result of COVID-19; and
• the effect of the inclusion of registered nurses on the “long-term skills shortage list” approved by the Government
which increased the immigration flow into New Zealand.
• Other aged care: $2.3 million. The increase in Pro forma Underlying EBITDA was primarily driven by the improvement
in occupancy from 89.7% to 91.6%. In large part this was attributable to the advertising campaign undertaken (as noted
in the FY2019 to FY2020 comparison above).
2 Retirement village – $(0.1) million
• No specific drivers.
3 Group support – $(0.6) million
• Radius Care appointed Stuart Bilbrough as CEO in June 2020, as well as his personal assistant, as part of Radius Care’s
continued investment to support its growth strategy, increasing personnel costs by $0.2 million.
• Due to improved business performance, Radius Care implemented a bonus scheme for facility and regional managers,
at a cost of $0.1 million.
• General remuneration increases were also delayed from 1 April 2020 to 1 June 2020 in this financial year.
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 71
Reconciliation of Non-NZ
GAAP to NZ GAAP
financial information
NZ$mFY2018FY2019FY20201HY20201HY2021
Financial period
12 months
ended
31 March
2018
12 months
ended
31 March
2019
12 months
ended
31 March
2020
6 months
ended
30 September
2019
6 months
ended
30 September
2020
AuditedAuditedAuditedUnauditedUnaudited
Statutory NPAT3.84.2(2.8) (1.5)2.1
Pro forma adjustments
NZ IFRS 16 consistency adjustments
Include: Depreciation on right-of-use assets(5.7) (5.8) ---
Include: Interest on lease liabilities(10.1) (10.1) ---
Include: Other income0.1----
Remove: Operating rental lease expense12.012.4 ---
Include: Deferred tax impact relating to
NZ IFRS 16 adjustments1.01.0---
Non-recurring or infrequent items
Remove: COVID-19 related expenses--- -0.6
Remove: Government COVID-19 subsidy- -(0.4)-(0.9)
Structural changes and other
Include: Listed & other company costs(1.0)(1.1)(1.1)(0.5)(0.6)
Remove: Historical governance costs0.30.20.40.10.5
Include: Income tax impact from Pro forma adjustments0.2 0.20.30.10.1
Underlying adjustments
Remove: Change in fair value of investment property(0.7) (1.4)0.6 0.4(0.7)
Include: Realised development margins0.2 0.50.5 0.30.2
Include: Realised gains on resales0.2 0.1- --
Remove: Deferred tax expense
(incl. NZ IFRS 16 adjustments related)(0.6) (0.7)(0.1)(0.7)(1.1)
Pro forma Underlying NPAT(0.3) (0.5)(2.6)(1.8)0.2
4. RADIUS CARE’S FINANCIAL INFORMATION
72 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
NZ$mFY2018FY2019FY20201HY20201HY2021
Financial period
12 months
ended
31 March
2018
12 months
ended
31 March
2019
12 months
ended
31 March
2020
6 months
ended
30 September
2019
6 months
ended
30 September
2020
AuditedAuditedAuditedUnauditedUnaudited
Pro forma Underlying NPAT(0.3) (0.5)(2.6)(1.8)0.2
Remove: Depreciation and amortisation 8.7 9.410.95.55.7
Remove: Net interest expense 10.6 10.910.55.15.0
Remove: Current tax expense0.7 0.6(0.6)0.51.5
Pro forma Underlying EBITDA19.720.4 18.29.312.4
Include: Pre-NZ IFRS 16 operating rental lease expense(12.0) (12.4) (12.4)(5.7)(6.4)
Pre-NZ IFRS 16 Pro forma Underlying EBITDA7.78.05.8 3.66.0
Include: Depreciation and amortisation (Pre-NZ IFRS 16)(3.0)(3.6)(3.7)(1.8)(2.1)
Include: Net interest expense (Pre-NZ IFRS 16)(0.6)(0.9)(1.2)(0.6)(0.5)
Include: Current tax expense(0.9)(0.7)0.3 (0.5)(1.7)
Include: Income tax impact from Pro forma adjustments0.20.20.30.10.1
Pre-NZ IFRS 16 Pro forma Underlying NPAT3.43.01.50.81.8
Remove: Depreciation and amortisation
(excl. NZ IFRS 16 related)3.03.63.71.82.1
Include: Maintenance capital expenditure(5.1)(4.6)(4.4)(2.6)(1.6)
AFFO1.32.00.80.02.3
Table continues from page 72
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 73
Adjustments for Pro forma
Underlying metrics
Pro forma adjustments
NZ IFRS 16 consistency adjustments
Radius Care currently leases 19 of its 22 aged care facilities
and owns three aged care facilities. NZ IFRS 16 came into
effect for the FY2020 financial year. NZ IFRS 16 eliminates
the distinction between operating and finance leases for
lessees and will result in lessees bringing most leases onto
their Statements of Financial Position.
NZ IFRS 16 introduces a single lessee accounting model
that requires a lessee to recognise right-of-use assets
and lease liabilities for all leases with a term of more than
12 months, unless the underlying asset is of low value.
All of Radius Care’s 19 leased aged care facilities are subject
to NZ IFRS 16. Right-of-use assets are initially measured at
cost and lease liabilities are initially measured on a present
value basis.
Radius Care has used the modified retrospective
approach for the NZ IFRS 16 adoption, under which the
comparative information was not restated. In order to allow
for comparability across historical periods, Radius Care
has applied a Pro forma adjustment to the FY2018 and
FY2019 statutory statements of comprehensive income to
retrospectively incorporate the impact of NZ IFRS 16.
The values determined for the Pro forma adjustment in
relation to the adoption of NZ IFRS 16 have been calculated
using the modified retrospective transition approach from
1 April 2017 (i.e. the start of the 2018 financial year).
At 1 April 2017, lease liabilities are measured at the present
value of the remaining lease payments as at that date,
discounted at Radius Care’s incremental borrowing rate
(IBR). Right-of-use assets are measured at an amount
equal to the lease liabilities, adjusted by the amount of
any prepaid or accrued lease payments. The methodology
applied to determine the Pro forma impact is the same as
that adopted by Radius Care in its audited FY2020 financial
statements and is explained in further detail in those
financial statements.
Radius Care has assumed a single IBR is appropriate for all
applicable leases. To maintain consistency in methodology,
a single IBR of 6.2% was calculated for 1 April 2017 based
on the weighted average lease term of the portfolio as at
that date. The IBR calculated for 1 April 2017 is higher than
that adopted for the FY2020 financial statements (5%) due
to the reduction in bank base interest rates over that time
period.
Non-recurring or infrequent items
1 COVID-19 related expenses. As part of the response to
COVID-19, Radius Care incurred additional expenses,
including expenses in relation to additional sick leave
and isolation leave from April 2020 to September 2020.
Radius Care required staff take a COVID-19 test before
returning to work following any sick leave or isolation
leave, to ensure the safety of residents and staff in the
aged care facilities.
2 Government COVID-19 related subsidy. As with other
aged care providers in New Zealand, Radius Care
received funding in FY2020 from the Government in
relation to the increased costs associated with COVID-19
which covered higher staff and PPE costs.
Structural changes and other
1 Listed & other company costs. Following its listing Radius
Care will incur costs associated with operating in a listed
environment in respect of directors’ fees (including the
additional independent directors recently appointed to
Radius Care), audit costs, listing fees, share registry fees,
enhanced shareholder reporting costs and additional
director & officer insurance costs. From listing, Radius
Care will also incur a fee of 3.5% per annum of annual
rental and outgoings in relation to the personal guarantee
in place with one landlord, as more particularly described
under the heading “Material interests in the Radius Care
Group” on page 52.
2 Historical governance costs. These relate to non-
recurring historical directors, consulting and management
fees previously incurred by Radius Care but now replaced
by listed & other company costs.
3 Income tax. Included is the potential income tax impact
of the above Pro forma adjustments above. An effective
tax rate of 28% has been assumed.
4. RADIUS CARE’S FINANCIAL INFORMATION
74 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Underlying adjustments
Underlying adjustments allow for direct comparison to other
NZX listed aged care and retirement village operators and
include:
• The removal of changes in the fair value of investment
property relating to Radius Care’s owned retirement
villages (Elloughton Grange Village and Windsor Lifestyle
Estate Village);
• Inclusion of realised development margins on the cash
settlement of the first sale of new ORA Units following
development;
• Inclusion of realised gains on Unit resales. Realised gains
are calculated as the net cash flow received by Radius
Care on the cash settlement of the resale of pre-existing
ORA Units (i.e. the difference between the value of the
ORA licence payment received from the incoming resident
and the ORA licence payment previously received from
the outgoing resident). Realised gains are net of incurred
refurbishment costs. The margin on the repurchase of
legacy units under a unit title subsequently sold under an
ORA contract is also included.
• Removal of statutory deferred tax expenses and deferred
tax expenses including those related to NZ IFRS 16, where
applicable.
Pre-NZ IFRS 16 Pro forma Underlying EBITDA includes the
pre-NZ IFRS 16 operating rental lease expense from Pro
forma Underlying EBITDA to remove the impact of the
adoption of NZ IFRS 16 on Pro forma Underlying EBITDA.
Pre-NZ IFRS 16 Pro forma Underlying NPAT removes the
pre-NZ IFRS 16 depreciation and amortisation, the pre-NZ
IFRS 16 interest expenses and tax expenses to remove the
impact of NZ IFRS 16 on Pro forma Underlying NPAT.
AFFO
AFFO is a cash proxy used by Radius Care to determine
the level of dividend it may pay.
AFFO is calculated from Pre-NZ IFRS 16 Pro forma
Underlying NPAT by removing pre-NZ IFRS 16 depreciation
and amortisation and instead including maintenance
capital expenditure. Pre-NZ IFRS 16 Pro forma Underlying
NPAT is used as the starting point for this calculation as it
reflects the Pre-NZ IFRS 16 operating rental lease expense
which largely represents the actual cash lease payment
made, rather than the NZ IFRS 16 equivalent (depreciation
on right-of-use assets and interest on lease liabilities),
which materially exceed the actual cash lease payments
as shown under the heading “Property Lease Expenses”
in the Supplementary Financial Information document on
the Radius Care Website. Note, no adjustment is made for
differences between accrued DMF and cash DMF realised.
Maintenance capital expenditure has historically (between
FY2018 and FY2020) been between $4.4 million to
$5.1 million per annum. In FY2018 maintenance capital
expenditure included $0.8 million in relation to a new
automated care planning system and as such exceeded
the equivalent FY2019 and FY2020 levels.
Whilst maintenance capex exceeded pre-NZ IFRS 16
depreciation and amortisation between FY2018 and
FY2020, going forward maintenance capex and
pre-NZ IFRS 16 depreciation and amortisation are
expected to be broadly similar.
4. RADIUS CARE’S FINANCIAL INFORMATION
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 75
5.
Risks to Radius Care’s
business and plans
This section describes the circumstances that Radius Care is aware of that exist or are likely to arise that significantly
increase the risk to Radius Care Group’s financial position, financial performance or stated plans.
We have outlined our assessment of the likelihood, nature and potential magnitude of circumstances if they were to occur.
This assessment is based on the knowledge of the directors as at the date of this Profile. There is no guarantee or assurance
that the importance of each risk will not change or that other risks may emerge over time.
Large Scale Infectious Outbreak
Description of the riskA large scale infectious outbreak (“Outbreak”), such as COVID-19 or influenza, may significantly impact the health
and safety of Radius Care’s residents and staff and its business operations.
Why is it significant to
Radius Care
An Outbreak may result in a reduction in occupancy levels at Radius Care’s facilities, a reduction in staff availability
and reputational damage to Radius Care’s business, all of which may have a material adverse effect on Radius Care’s
financial performance.
Radius Care’s
assessment of the
likelihood, nature and
potential magnitude
of any impact
In light of New Zealand’s experience with COVID-19 to date, Radius Care is of the view that there is a reasonable
likelihood of an Outbreak, such as a further COVID-19 outbreak, in New Zealand in the near term. As a result of this,
it is possible that such an Outbreak could directly affect one or more Radius Care facilities.
If an Outbreak were to occur, it may require Radius Care to implement infection control measures in addition to
those measures already in place in its facilities. Such additional infection control measures may require Radius Care
to source:
• additional staff;
• additional PPE, cleaning and waste collection supplies; and/or
• additional administrative support to communicate and deal with residents, their families, DHBs and other
authorities.
Sourcing such additional staff, supplies and services may prove difficult should others have similar demands during
an Outbreak.
Significant negative health consequences for residents and staff as a result of an Outbreak may also lead to adverse
publicity, a reduction in occupancy at Radius Care’s facilities, and affect staff morale and retention, which may
adversely impact Radius Care’s financial performance.
During an Outbreak, Radius Care would expect that, as has been the case with COVID-19, DHBs and Government
authorities would provide support and assistance, including additional staffing and access to the national medical
stockpile to assist with boosting staffing and PPE levels.
Radius Care’s facilities are geographically disbursed across New Zealand which can assist with sharing of resources,
with group support available at both a central and regional level, as well as mitigating the risk that more than one
Radius Care facility would be directly affected by an Outbreak.
Radius Care has created a stockpile of PPE centrally located in both the North and South islands to enable rapid
deployment if required. In addition, robust protocols and procedures for dealing with an Outbreak are in place and
every Radius Care facility has practiced implementation of such protocols and procedures.
By way of example, in the case of COVID-19:
• all of Radius Care’s facilities have implemented strict protocols and measures to mitigate the risks of COVID-19
and to ensure residents are protected; and
• as at the date of this Profile, these protocols and measures have meant there have been no past, known or
suspected cases of COVID-19 at any of Radius Care’s facilities.
5. RISKS TO RADIUS CARE’S BUSINESS AND PLANS
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 77
Regulatory Risk
Description of the riskThe aged care sector in which Radius Care operates is highly regulated (see Section 2 (Radius Care and what
it does) for more information). If Radius Care lost any certification as an aged care provider or registration as a
retirement village operator, or if there was a change in, or loss of, Government funding, Radius Care’s financial
performance could be adversely affected.
Why is it significant to
Radius Care
Changes to Government funding model
Radius Care’s revenue comes from residents’ occupancy fees, which are either privately and/or Government funded.
For the financial year ended 31 March 2020, approximately 66% of Radius Care’s revenue was provided through
Government funding.
Any change to (for example, a change in eligibility criteria) or loss in aged care facility funding (including a
reduction in the total pool of funding) may have a material adverse effect on Radius Care’s financial performance.
Loss of registration or certification
Radius Care must be certified under the Health and Disability Services (Safety) Act 2001 in order to provide aged
care services and is required to maintain registrations for its retirement villages under the Retirement Villages Act.
Any loss of certification or registration as either an aged care provider or retirement village operator due to, for
example, non-compliance with regulatory requirements, could have a significant impact upon Radius Care’s ability to
operate its business, its reputation and brand and, consequentially, its financial performance.
Radius Care’s
assessment of the
likelihood, nature and
potential magnitude
of any impact
Changes to Government funding model
Radius Care believes that, given the aging population of New Zealand and well documented research into shortfalls
in current funding levels
1
, there are unlikely to be any adverse changes to the current Government funding model
introduced in the short to medium term. However, if a material loss or reduction of Government funding were to
occur, the impact of any such loss or reduction on Radius Care could, depending on the nature of the change to the
Government funding model, be significant. If such a loss or reduction of Government funding were to occur, Radius
Care would look to implement other funding methods, such as private payment, bonds and insurance, to mitigate
the impact on Radius Care.
Loss of registration or certification
Loss of certification or termination of an ARRC Contract would result in Radius Care not being able to provide
Government-funded aged care services to residents at the affected facilities. Similarly, suspension or cancellation of
a retirement village’s registration would result in Radius Care no longer being able to offer licences for Units at the
affected retirement village. Such a termination or loss of certification or registration could be expected to have an
adverse effect on Radius Care’s financial performance. It could also result in Radius Care suffering reputational harm
or brand damage.
However, Radius Care considers the likelihood that it loses an aged care facility’s certification or a retirement
village’s registration to be low. Robust systems are in place to manage, review and improve all areas of certification
and registration on an ongoing basis to provide continuous improvement. Even if a material event of regulatory non-
compliance were to occur, Radius Care expects that the relevant regulator would work with Radius Care in the first
instance to remedy any non-compliance and give Radius Care the opportunity to rectify deficiencies before taking
steps to suspend or terminate any applicable certification or registration.
1 Grant Thornton Report of September 2010 and EY Report of August 2019.
5. RISKS TO RADIUS CARE’S BUSINESS AND PLANS
78 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Labour Availability and Costs
Description of the riskRadius Care relies on its employees with specialised skills and experience (particularly nurses and health care
assistants) to care for residents in its facilities. There is a risk that Radius Care will not be able to attract and retain
an adequate number of skilled healthcare workers for its existing and future operations or may be required to pay
more than it currently expects to pay in order to do so.
Why is it significant to
Radius Care
Labour availability
There is a limited group of skilled personnel with appropriate experience (particularly registered nurses and in
regional areas) whose services are in high demand from other aged care and health sector providers (including
DHBs). Lack of availability of staff may adversely affect Radius Care’s financial performance and its ability to deliver
on its plans to expand or develop new facilities, until the issue is resolved.
Labour costs
Staff costs are Radius Care’s most significant cost item, which is a function of the high-service nature of residential
aged care. Any substantial increase in these costs, in excess of increases in Government funding or which Radius
Care is not otherwise able to pass on to residents, may adversely affect Radius Care’s financial performance.
Radius Care’s
assessment of the
likelihood, nature and
potential magnitude
of any impact
Labour availability
The availability of skilled personnel within the aged care sector has been a long term issue and, as a result, Radius
Care can face strong competition for such personnel. For example, during 2018 and 2019 Radius Care suffered
staff shortages (since resolved) at two facilities: at the first facility this was due to a national shortage of registered
nurses and the regional location of that facility; at the second facility this was due to a shortage of registered nurses
skilled in psychogeriatric care. As such, Radius considers it is possible that it may be unable to recruit and retain the
skilled personnel necessary to operate a facility to its optimum level of occupancy, or to expand or develop a new
facility, until the labour shortage is resolved.
Nurses in particular are in shortage over the entire health sector. The Government has sought to address this issue
in part by adding registered nurses (with aged care experience) to New Zealand Immigration’s Long Term Skill
Shortage in 2019. In addition, Radius Care has obtained Immigration New Zealand Accredited Employer status
which allows it to in effect fast-track immigration applications for overseas based staff and therefore reduce the
length of time before such staff are able to begin working for Radius Care. This and other initiatives undertaken by
Radius Care to address staff recruitment and costs are further described on pages 68 and 69 in Section 4 (Radius
Care’s financial information). These initiatives have resulted in a demonstrated reduction in Radius Care’s reliance on
Bureau staff.
This risk is also mitigated by the fact that, as a national operator, Radius Care has some ability to move staff
between facilities across the country to address staffing shortages that may arise.
Labour costs
It is possible that wages could escalate beyond Government funding levels and the ability for Radius Care to pass on
those costs to residents. Such risk could arise if Radius Care was unable to recruit and retain nurses because of the
higher pay rates offered by DHBs. If other aged care providers raised their pay rates in response, Radius Care would
likely need to do the same to remain competitive, which would in turn adversely affect its financial performance.
In addition, the aged care sector (through the NZACA) continues to press for pay parity for nurses in DHBs and
nurses in the aged care sector. Such a pay parity agreement would increase the pay rates of nurses in the private
aged care sector. However, Radius Care expects that any national agreement on pay parity for nurses in DHBs and
the aged care sector would likely largely be funded by the DHBs under the terms of the ARRC Contracts.
Private supplementation of fees (such as increasing accommodation supplements) is available to Radius Care as a
mechanism to offset any major increase in staffing costs which is not met by additional Government funding.
5. RISKS TO RADIUS CARE’S BUSINESS AND PLANS
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 79
Construction and property development risk
Description of the riskRadius Care’s growth strategy is proposed to involve the construction and development of new and existing
integrated aged care facilities and retirement villages. When developing new or existing facilities, Radius Care faces
a range of construction and property development risks which are potentially significant to it, including:
• construction risks arising from unexpected cost increases, quality issues and delays in the completion of
developments;
• default risks arising from participants in the development process, including construction contractors defaulting in
the performance of their obligations;
• the ability to acquire Brownfield and Greenfield Development sites that will be attractive to residents;
• the ability to obtain, or delays in obtaining, or limits imposed on the development through, resource or other
consents; and
• the ability to sell down its facilities.
Why is it significant to
Radius Care
Any significant increase in construction costs or delay in completion and sell down of a development project could
have a material adverse effect on Radius Care’s ability to meet its growth targets and its financial performance – as
well as impacting its financial position.
In addition, poor site selection may result in Radius Care developing a facility at a site that is not attractive to
potential residents which could also adversely impact Radius Care’s financial performance.
Radius Care’s
assessment of the
likelihood, nature and
potential magnitude
of any impact
While it is possible that one or more of these construction and property development risks may arise, the impact of
one or more of such risks arising will depend on the significance of the risk(s) that eventuate(s).
Radius Care believes that these risks (particularly around timing and costs) are mitigated by its internal
development capabilities and experience, which allow it to exercise a close degree of control and oversight over the
development and construction process.
Property market risk
Description of the riskA downturn in the national or regional property market could impact the demand for, and Radius Care’s ability to
sell or re-sell, Units and Care Suites, as well as the value that can be achieved on the sale or resale of a Unit or Care
Suite and the timeframe to complete such sales.
Why is it significant to
Radius Care
Radius Care’s growth strategy is proposed to involve the construction and acquisition of integrated aged care
facilities and retirement villages. Earnings will be generated through the construction and sale, and resale, of Units
and, to a lesser extent, Care Suites. Prevailing property market conditions will affect both the value that can be
achieved on a sale or resale of a Unit or Care Suite and the ability of prospective residents to acquire a Unit or Care
Suite (due to the ability of prospective residents to sell their own homes or sell them at prices which allow them to
purchase Units or Care Suites).
Radius Care’s
assessment of the
likelihood, nature and
potential magnitude
of any impact
Property market conditions and prices are constantly fluctuating and a downturn in the property market in the near
term is possible.
At present, given the small number of Units and no Care Suites in Radius Care’s portfolio, any property market
downturn would likely have a minor effect on Radius Care’s financial performance. However, it could delay Radius
Care’s plans to construct or acquire additional integrated aged care facilities and retirement villages. Once Radius
Care’s retirement village and Care Suites portfolio increases in size with the execution of Radius Care’s growth
strategy, a sustained downturn in the national or a regional property market could have a material adverse effect on
Radius Care’s financial performance.
However, in Radius Care’s experience, a person’s decision to acquire and move into a Unit or Care Suite is typically
driven by their care needs or lifestyle preferences. These drivers act to mitigate the effect that fluctuations to
property market conditions and prices have on demand for Units or Care Suites.
5. RISKS TO RADIUS CARE’S BUSINESS AND PLANS
80 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
6.
Ta x
7.
Where you
can find more
information
Tax can have significant consequences for investments.
If you have queries relating to the tax consequences of
investing in Shares, you should obtain professional advice on
those consequences.
Further information relating to Radius Care and its Shares
(including the Constitution and its most recent financial
statements) is available on the Radius Care Website, which
can be found at www.radiuscare.co.nz under the Investor
Centre tab.
Further information in relation to Radius Care is also
available on the Companies Office register of the Ministry of
Business, Innovation and Employment. This information can
be accessed on the Companies Office website at
www.business.govt.nz/companies.
Once Radius Care is listed, it will be required to make half-
yearly and annual announcements to NZX and such other
announcements required by the NZX Listing Rules from time
to time. You will be able to obtain this information free of
charge by searching under the ticker code “RAD” on NZX’s
website (www.nzx.com).
Ta xWhere you
can find more
information
6. TAX 7. WHERE CAN YOU FIND MORE INFORMATION
82 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
8.
Contact information
RADIUS CARE
Radius Residential Care Limited
Level 4, 56 Parnell Road
Parnell
Auckland 1052
Phone: +64 9 304 1670
SHARE REGISTRAR
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Auckland 0622
Phone: +64 (9) 488 8700
LEGAL ADVISER
Harmos Horton Lusk Limited
Level 33, Vero Centre
48 Shortland Street
Auckland 1140
Phone: +64 (9) 921 4300
ADVISER
Jarden Securities Limited
Level 32, PwC Tower
15 Customs Street West
Auckland 1010
Phone: +64 (9) 302 5500
AUDITOR
Baker Tilly Staples Rodway
Level 9, Tower Centre
45 Queen Street
Auckland 1140
Phone: +64 (9) 309 0463
ACCOUNTING ADVISER
KPMG
18 Viaduct Harbour Avenue
Auckland 1010
Phone: +64 (9) 367 5800
Contact
information
8. CONTACT INFORMATION
84 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
9.
Glossary
1HY[Year]a six month period ended 30 September
AFFOavailable funds from operations, which is calculated from Pre-NZ IFRS 16 Pro forma
Underlying NPAT by removing pre-NZ IFRS 16 depreciation and amortisation and
instead including maintenance capital expenditure
ARRC Contractan Aged Related Residential Care Contract with DHBs for the provision of age related
residential care
Accommodation supplementsa charge paid by an aged care resident for room features above the Government
recommended minimum standard (e.g. larger room, ensuite and/or view)
ArvidaArvida Group Limited
Boardthe board of directors of Radius Care
Brownfield Developmentdevelopment of aged care on land already including operational aged care facilities,
or development of retirement village facilities on land already including operational
retirement village facilities
Bureautemporary staff supplied by a third party agency
CAGRcompound annual growth rate
Care Beda bed in a certified aged care facility
Care Suitea room including a Care Bed in a certified aged care facility that comprises amenities
and services in excess of the minimum standard and which is typically licensed under
an ORA
Companies ActCompanies Act 1993
Constitutionthe constitution of Radius Care
DHBDistrict Health Board
DMFa deferred management fee charged under an ORA, which accrues monthly to a
specified maximum and is deducted from the refund paid to the departing resident on
the resale of a Unit or Care Suite
EBITDAearnings before interest, tax, depreciation, amortisation and goodwill impairment
FY[Year]a financial year ended 31 March
Greenfield Developmentdevelopment of aged care facilities on land that does not contain any operational
aged care facilities or development of retirement village facilities on land that does not
contain any operational retirement village facilities
High acuity and specialist carehospital, dementia, psychogeriatric, physical and intellectual care
Knox Investment Partners
Knox Investment Partners Limited or funds managed by Knox Investment Partners
Limited, as the context requires
Listing PriceThe value ascribed to Shares at listing by the Board based on the Board’s view of the
equity value of Radius Care at that time, being $0.80 per Share
Glossary
9. GLOSSARY
86 NZX LISTING PROFILE | RADIUS RESIDENTIAL CARE LIMITED
Low acuity carerest home care
MoHMinistry of Health
NPATnet profit after tax
NZ IFRSNew Zealand equivalents to International Financial Reporting Standards
NZ GAAPNew Zealand Generally Accepted Accounting Practice
NZACANew Zealand Aged Care Association
NZXNZX Limited
NZX Listing Rulesthe listing rules of the NZX Main Board, in force from time to time
NZX Main Boardthe main board equity security market operated by NZX
OceaniaOceania Healthcare Limited
ORAan Occupation Right Agreement that confers on a resident a right to occupy a Unit or
Care Suite on the terms and conditions set out in that agreement
PPEpersonal protective equipment
Pro formarefers to certain pro forma adjustments outlined on page 74 in Section 4 (Radius
Care’s financial information) of this Profile and on the Radius Care Website
Profilethis document, being a profile prepared in accordance with the NZX Listing Rules
Radius CareRadius Residential Care Limited or the Radius Care Group, as the context requires
Radius Care GroupRadius Care and each of its subsidiaries
Radius Care Website
Radius Care’s website, which can be found at www.radiuscare.co.nz, under the Investor
Centre tab
Residencea collective term used to describe any of Care Beds, Care Suites, and Units
Retirement Villages ActRetirement Villages Act 2003
RymanRyman Healthcare Limited
Sharea fully paid ordinary share in Radius Care
SummersetSummerset Group Holdings Limited
Triple net leasea lease arrangement on a property where the lessee agrees to pay the rates, insurance
and costs of day to day maintenance (the three “nets”) on the property in addition to
the rent
Underlyingrefers to certain underlying adjustments outlined on page 75 in Section 4 (Radius
Care’s financial information) of this Profile and on the Radius Care Website
Unitan apartment or villa in a retirement village, which is licensed under an ORA (or in
respect of five legacy villas at Windsor Court Village, which are currently occupied
under unit title arrangements)
9. GLOSSARY
RADIUS RESIDENTIAL CARE LIMITED | NZX LISTING PROFILE 87
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.