Providers are optimistic about growth

Most aged care operators are looking to expand their businesses over the next three years, according to a recent survey.

Most aged care providers are looking to expand their operations over the next three years, according to a survey conducted by NAB Health at the Aged Care Association Australia (ACAA) annual congress last month.
 
In a show of confidence, none of the 104 senior managers who took part in the poll expected that their organisation’s business operations would contract over the next three years.
 
Just over half said they planned to grow their business organically, while 15 per cent were considering mergers and acquisitions and a further 12 per cent hoped to develop partnerships or joint ventures.
 
Providers that operate more than 500 beds were much more likely to consider mergers and acquisitions while smaller groups were focusing more on organic growth.
 
NAB Health’s general manager, Matina Karvounaris said the survey results were an endorsement of the investment opportunities in aged care.
 
“As an investment class, [aged care facilities] enjoy lower-risk cashflow with government sourced income streams and the potential for strong capital appreciation,” she said.
 
“The economic and demographic fundamentals, in particular, Australia’s growing and ageing population, make aged care an attractive sector to invest in.”
 
The biggest concern for providers over the next 12 months was government policy and regulation.
 
“With much of the industry subject to government influence, especially through the Aged Care Funding Instrument, it’s understandable that this issue was top of mind,” said Ms Karvounaris.
 
Other key concerns for providers included staff training and retention, along with changing industry trends.
 

Tags: acaa, expansion, growth, nab, reform, regulation, residential-aged-care,

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