Radius Care forges ahead with ambitious aged care development plans
Monday, 18 May 2026
Radius Residential Care is “pushing for growth” in aged care beds, and running a care home new-build programme much bigger than it has previously delivered, Forsyth Barr says.
On Wednesday, the NZX-listed aged care provider released its results for the year to March 31 and the emphasis was on growth, with net profit after tax of $9.5 million a 34% increase on the previous year.
The company’s available funds from operations were up 44% to $12.7m, and underlying pre-tax earnings were up 17% to $27.4m.
Management of fixed costs, and reducing financing costs, along with stronger occupancy levels were the drivers behind the improvement in the bottom line, the company said.
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But the company’s focus on growth goes beyond profits and earnings to the expansion of its core business, and particularly its aged care home building plans.
Radius Care chief executive Andrew Peskett told The Post that increasing the number of aged care beds to cater to growing demand was a key part of its strategy.
That had led to its recent purchases of care homes in Karori and Christchurch, with the Karori home becoming the company’s first in the Wellington region, he said.
“We’ll continue to purchase existing care homes, but long-term there are not that many care homes that fit the need, and are ready at a hospital and high acuity level for sale.
“The best way we can help to bridge the gap for that need is to build. So we’re progressing with development of up to 20 new-build 80 to 100-bed care homes, and some will be in provincial areas, such as Hokitika, where there’s a lack of facilities.”
Radius has already made a start on its development plans. It bought land in Belfast in Christchurch in March, and has now started earthworks to prepare for the construction of its first new-build village.
A 100-bed care home, with dementia and hospital-level care will be built first, followed by 75 villas to be developed in stages.
Once the Belfast build is under way, the company expected to accelerate development of new-build care homes and had a large pipeline of projects around the country supported by private property investors.
It was also continuing with brownfield development to add value to its existing retirement villages, and would be building six villas a piece at its villages in Matamata and Invercargill this year.
The company’s development plans come at a time that others in the retirement and aged care sector are slowing down building work.
When asked about that, Peskett said for many retirement village operators there was a link to the real estate market and potential residents not being able to sell their homes to buy units.
“But we have a different model. We have a need-based, high acuity offering where people who need care can get it in days or hours.
“The demand is there for that, and with the ageing population it’s growing, and there’s a looming shortage of beds. We want to up our capacity to help cater to that.”
Another area of growth for the company was the launch of Luma, a range of continence products designed by its clinicians specifically for the elderly.
Peskett said the product had been developed to better and more efficiently support their residents, but would drive significant savings of about $400,000 a year for its care homes.
The product would eventually be made available beyond Radius care homes, and that would help to accelerate growth for its online shop, he said.
Radius was also continuing to expand into home support services to broaden its reach beyond residential care, and had a growing number of clients receiving home care and support nationwide.
In a report on the results, Forsyth Barr analysts said the company was pushing for growth through both purchases and development, using a mix of owned and capital-light structures that preserved balance sheet flexibility.
The development programme represented materially greater scale and execution complexity than the company has historically undertaken, and the next test would be in the execution, they said.
“Materially strengthened operating cash flow places Radius well to fund growth without straining its balance sheet.
“The primary earnings driver is shifting from occupancy ‒ where occupancy gains will become progressively harder to achieve ‒ to care bed growth.”
They said the company’s revenue and underlying earnings before tax were below their forecasts, but year-on-year earnings growth remained strong, and on balance they viewed the risk skew constructively.
Radius operates 24 aged care homes, with 1898 aged care beds, around the country. It owns half of the homes and leases the other half, and it also owns and operates four retirement villages.