Third Age Health announces preliminary full year result

Company Announcement
30 May 2022



THIRD AGE HEALTH FY22 FINANCIAL RESULTS
Aged care medical services provider, Third Age Health Services (NZX: TAH), has today reported its
results for the year ended 31 March 2022 (FY22), delivering a solid performance of Net Profit after
Tax (NPAT) growing by 12.7% to $1.2m, despite challenges and sector headwinds during the year.
Key highlights during the period include the appointment of Tony Wai as CEO from October 2021,
the completion of an in-depth business review and reset, Board approval of a future-focused
strategic plan and acquisition of two community General Practices that will support accelerated
growth of our core aged care business. A growing number of clinical practitioners joined the group
during the year and the company increased the number of partnerships it has with Aged Residential
Care (ARC) providers.
The FY22 result reflects Third Age Health’s first full year as a listed company and expenses associated
with this, as well as investment into resources and capability building, a number of one-off expenses
reflecting the business reset, and five months’ contribution from Belmont Medical Centre, following
its acquisition on 11 October 2021.
Total revenues have increased to $5.9m (FY21: $5.5m), an increase of 7.5% driven by the strategic
acquisition of community General Practices, with 61% growth in GP revenues. Existing General
Practice, Hawkes Bay Wellness Centre, recorded growth of 23.5%, with revenue for the year of
$0.9m (FY21: $0.7m). New General Practice, Belmont Medical Centre Limited, acquired on 11
October 2021, contributed an additional $0.3m revenue since acquisition. Revenue from services to
Aged Residential Care facilities was in line with the prior year, with the decision of one client to
move services in-house quickly offset by the addition of a number of new ARC partnerships in
Taranaki, a new market for us.
Gross margin increased from 60% to 63%, benefiting from the expanded General Practice portfolio.
Total expenses grew in line with planned investment into the workforce and capability and also
include a full year of listed and governance costs following listing in February 2021. The result also
includes $138,000 of non-recurring expenses, reflecting the business reset during the year.
The lower income tax expense for FY22 of $0.4m (FY21: $0.5), includes a one-off tax credit
recognised from share based payments.
The business has a strong financial position generating net operating cashflow of $1.0m. Cash and
cash equivalents were $1.1m as at 31 March 2022.
Dividend
The Board has declared a final dividend for the year of 4.05 cents per share (cps). Including the
interim dividend of 4.52 cps, the full year dividend for FY22 is 8.57 cps (FY21: 8.02 cps, excluding the
special dividend), an increase of 6.9%.
Pathway for future growth
Following the appointment of Tony Wai as CEO from October 2021, a review of Third Age Health’s
business model and strategy was taken.

A future-focused strategy has now been put in place, which revolves around providing a consistent
primary health service as people move from community living into the aged care setting. Two
pathways have been identified to drive growth. Firstly, to increase the number of partnerships with
Aged Residential Care providers; and secondly, to expand Third Age Health’s offer to older people
living independently in retirement villages, and in the community.
In addition to a focus on delivering solid organic growth, opportunistic acquisitions of local GP clinics
will continue to play a supporting role in this. The company was pleased to welcome Belmont
Medical Centre and Ponsonby Medical Centre to the group during the year and, since year-end, has
announced the acquisition of Devonport Family Medicine, further expanding its presence in the
Auckland market.
The business model centres on four pillars – workforce and capability, clinical efficiency and quality,
commercial sustainability and growth, and health innovation. Investment is being made into each of
these areas and initiatives are being progressed, with benefits already being seen.
Chair of Third Age Health, Bevan Walsh, said: “We are committed to creating a sustainable business,
one with a strong long-term outlook which provides high-quality services to our customers and
creates value for shareholders. With New Zealand’s rapidly aging population there is the potential to
grow beyond aged residential care facilities to include those people who wish to age “in place”.
There is significant opportunity in the sector because of our aging population, and, with the right
model in place and the innovation and capability to support it, Third Age Health is front footing to
respond to the growing market need.”
Capital Structure
In May 2022, Third Age Health entered into a $3 million loan facility with ANZ Bank Limited to
support the company’s acquisition strategy. A portion of the facility was drawn to fund the
acquisition of Devonport Family Medicine and we intend to make use of it for future acquisitions.
We have covenanted that Debt-to-EBITDA (based on 12 “months” results) is capped at two times,
tested at each reporting date.
Outlook
While Third Age Health’s core focus remains on the provision and management of healthcare
services to Aged Residential Care (ARC), private geriatric hospitals and secure dementia facilities, it is
now looking to expand services to older people living in a wider range of settings. This includes those
living independently or in serviced apartments in a retirement village, as well as those still at home
in the community.
Over the next 12 to 18 months, the company will continue to build capability, reorient towards the
new strategy and invest into the business and growth initiatives.
CEO of Third Age Health, Tony Wai, commented: “The FY23 year will be one of further momentum
as we leverage the additional resources and capability we have invested into over the past few
months and execute on our strategy. We have initiatives in place to expand our reach and are
building strategies to attract and retain a highly valued workforce. Our ongoing investment in data
and technology will help us streamline and optimise the delivery of care and will create the ability to
scale our business efficiently. We will continue to identify general practices to either acquire or
partner with, to further improve our national delivery of high quality care for older people.

“Our focus remains on our key drivers – organically increasing patient enrolments in contracted aged
care facilities and in our family of general practices; and ongoing business improvements that enable
us to better serve our customers and unlock value for shareholders.
“Our team are working hard to realise the growth potential for our company, and we will be
innovative and resourceful as we pursue the opportunities ahead of us to create value. “
ENDS
For more information, visit www.thirdagehealth.co.nz or contact:
Tony Wai
Chief Executive Officer
E: tonyw@thirdagehealth.co.nz
M: +64 21 739 199

For media assistance, please contact Ruth Morse, M: +64 021 263 1415 or email
ruthm@thirdagehealth.co.nz

About Third Age Health
Third Age Health is the leader in providing quality health care services for older people including those living in
retirement villages, private hospitals, secure dementia units as well as in communities across New Zealand. A
dedicated Third Age Health clinical team provides onsite clinics, rostered rounds and after hours on-call
healthcare services aimed at supporting the health and wellbeing of older people to improve quality of life. As
well as providing clinical services for over 50 aged care facilities throughout New Zealand, Third Age Health
owns several general practices providing primary healthcare to their local community.
www.thirdagehealth.co.nz

Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)



Results for announcement to the market
Name of issuer Third Age Health Services Limited
Reporting Period 12 months to 31 March 2022
Previous Reporting Period 12 months to 31 March 2021
Currency New Zealand Dollars
Amount (000s) Percentage change
Revenue from continuing
operations
$5.900 7.5%
Total Revenue $5,900 7.5%
Net profit/(loss) from
continuing operations
$1,173 12.7%
Total net profit/(loss) $1,173 12.7%
Final Dividend
Amount per Quoted Equity
Security
$0.04049994
Imputed amount per Quoted
Equity Security
$0.01574998
Record Date 8 June 2022
Dividend Payment Date 20 June 2022
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$10.5 $13.1
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the accompanying market announcement and
unaudited summary financial statements
Authority for this announcement
Name of person

authorised
to make this announcement
Tony Wai
Contact person for this
announcement
Tony Wai
Contact phone number +64 21 739 199
Contact email address tonyw@thirdagehealth.co.nz
Date of release through MAP

30 May 2022

Third Age Health Services Limited
Consolidated statement of comprehensive income
For the year ended 31 March 2022





Unaudited Audited

Group Group

2022 2021

$000 $000
Revenue

5,900 5,490
Cost of Sales

(2,205) (2,169)
Gross Profit

3,695 3,321

Other Income

31 52

Employees and contractors

(1,251) (1,086)
Professional and consulting fees

(486) (349)
Other expenses

(263) (228)

Depreciation & amortisation

(142) (114)

Finance Costs

(23) (43)

Profit before Income Tax

1,561 1,553
Income Tax Expense

(388) (512)
Profit after income tax

1,173 1,041

Other Comprehensive Income for the year, net of tax

- -

Total Comprehensive income for the year

1,173 1,041


Earnings per share

Basic earnings per share (cents per share)

11.9 11.1
Diluted earnings per share (cents per share)

11.8 11.0




These financial statements are to be read in conjunction with the accompanying other selected financial information

Third Age Health Services Limited
Consolidated statement of changes in equity
For the year ended 31 March 2022






Share Capital
Share Based
Payments
Reserve
Retained
earnings Total

$000 $000 $000 $000
Balance at 1 April 2020 (Audited)

(1,300) 607 1,555 862

Profit for the year

- - 1,041 1,041
Total comprehensive income for the year

- - 1,041 1,041

Shares issued

1,531 - - 1,531
Dividend

- - (1,400) (1,400)
Transaction costs arising on issue of shares

(58) - - (58)
Balance at 31 March 2021 (Audited)

173 607 1,196 1,976

Profit for the year

- - 1,173 1,173
Total comprehensive income for the year

- - 1,173 1,173

Shares issued

342 - - 342
Dividend

- - (831) (831)
Tax credit on share based payments

- 30 - 30
Share based payments

- 6 - 6
Balance at 31 March 2022 (Unaudited)

515 643 1,538 2,696


These financial statements are to be read in conjunction with the accompanying other selected financial information

Third Age Health Services Limited
Consolidated statement of financial position
For the year ended 31 March 2022





Unaudited Audited

Group Group

2022 2021

$000 $000

Current assets

Cash and cash equivalents

1,124 1,829
Trade and other receivables

386 325
Loan receivable

313 59
Total current assets

1,823 2,213


Non-current assets

Property, plant and equipment

22 11
Right-of-use-assets

1,093 227
Intangible assets

1,902 782
Trade and other receivables

20 20
Loan receivable

- 297
Deferred tax asset

57 20
Total non-current assets

3,094 1,357


Total assets

4,917 3,570


Current liabilities

Trade and other payables

669 592
Current tax liabilities

55 319
Employee share purchase plan deposits

75 345
Lease liabilities

111 53
Total current liabilities

910 1,309

Non-current liabilities

Trade and other payables

29 -
Lease liabilities

976 180
Deferred tax liability

306 105
Total non-current liabilities

1,311 285

Total liabilities

2,221 1,594

Net assets

2,696 1,976

Equity

Share capital

515 173
Share based payments reserve

643 607
Retained earnings

1,538 1,196
Total equity

2,696 1,976

Net tangible assets (cents per share)

10.5 13.1


These financial statements are to be read in conjunction with the accompanying other selected financial information

Third Age Health Services Limited
Consolidated statement of cash flows
For the year ended 31 March 2022





Unaudited Audited

Group Group

2022 2021

$000 $000

Cash flows from operating activities

Receipts from other operating activities

5,885 5,473
Payments to suppliers and employees

(4,147) (3,512)
Interest received

16 30
Interest paid

- (32)
Income taxes paid

(691) (399)
Net cash flows from operating activities

1,063 1,560


Cash flows from investing activities


Payments to purchase property, plant and equipment

(3) -
Acquisition of general practices

(971) -
Cash acquired through acquisition of general practices

4 -
Net cash flows used in investing activities

(970) -


Cash flows from financing activities


Deposits received under share purchase plan

72 308
Share purchase plan deposits applied to acquire shares

(342) -
Proceeds from issuing shares

342 1,266
Payments for costs of issuing shares

- (57)
Principal elements of loan repayments

47 -
Repayments of borrowings

- (673)
Payment of lease liabilities (principal)

(63) (51)
Payment of lease liabilities (interest)

(23) (10)
Dividend paid

(831) (1,400)
Net cash flows from financing activities

(798)
(617)


Net increase in cash and cash equivalents

(705) 943


Cash and cash equivalents at the beginning of the period

1,829 886
Cash and cash equivalents at the end of the period

1,124 1,829




These financial statements are to be read in conjunction with the accompanying other selected financial information

Third Age Health Services Limited
Other selected financial information
For the year ended 31 March 2022



1. LOAN RECEIVABLE

Unaudited Audited

2022 2021

$000 $000
Current

Third Age Digital Health Limited loan note 313 59
Non-current:


Third Age Digital Health Limited loan note
-
297

313 356

Interest has been charged at rates between 5.73% - 6.54% for the year ended 31 March 2022 (2021:6.35%)
and the Group has recognised interest income of $19,332 (2021: $21,010).
In May 2021 monthly principal repayments commenced in line with the loan agreement with a total $62,414
paid during the year. Repayments were ceased by Third Age Digital Health Limited (TADH) in March 2022 in a
breach of the loan agreement.
The loan was set up to be repaid through monthly instalments by 31 March 2026 with early repayment
permitted. Following failure of TADH to maintain the monthly payments the Company is now seeking full
settlement, so the loan is considered to be current.
While the loan to TADH is unsecured, the Board of TADH provided the Company with a warranty that it had
received legally binding assurances of financial support from its major shareholders such that in the borrower’s
opinion (acting reasonably and in good faith) TADH would make all repayments.
Michael Haskell is the Director of TADH, and its major shareholders are Michael Haskell & Associates Limited
and Bevan Walsh.
The Independent Directors of the Company are seeking to enforce the warranties provided by TADH including
the potential appointment of a liquidator to TADH, and therefore remain of the view that the loan will be
recovered in full.
2. DIVIDENDS DECLARED
Dividends declared for year ended 31 March 2022:
Cents per share $000
Interim dividend 4.52 450
Final dividend
1
4.05 403

8.57
853


Dividends declared for year ended 31 March 2021:
Cents per share $000
Interim dividend 4.12 400
Final dividend (paid June 2021) 3.90 381

8.02 781
Special dividend 10.26 1,000

1,781

1. The final dividend for the year ended 31 March 2022 was declared on 30 May 2022 therefore it is treated as a non-adjusting post
balance date event for financial reporting purposes.