Regis Healthcare (ASX:REG) Posts 18% Revenue Surge: Can Aged Care's Growth Story Continue?

Regis Healthcare (ASX: REG) reported its half-year results on 23 February 2026, posting revenue of A$668 million, up 18% on the same period last year. The share price jumped roughly 8% on the day as investors welcomed the growth.

But the real story here is not just one company. It is the broader aged care industry, worth over A$40 billion, that is creating both opportunity and uncertainty for investors.

An Industry Under Pressure

Australia's aged care system underwent significant changes on 1 November 2025, when the new Aged Care Act came into effect. This replaced laws that had been in place since 1997. The new act puts the rights of older Australians front and centre, raises quality standards, and reforms how providers get paid.

The funding model, known as the Australian National Aged Care Classification (AN-ACC), currently pays providers around A$295 per resident per day. The catch? No further funding increase is expected until October 2026, even as costs keep climbing.

Workforce expenses are the biggest headache across the sector. Recent Fair Work decisions delivered welcome pay raises for aged care workers, but that has pushed operating costs higher for every provider. A global shortage of registered nurses adds further strain.

Then there is the supply problem. Australia is simply not building enough aged care beds. Industry data shows just 800 new beds were added nationally in FY2024-25, despite around 5,000 new residents entering aged care each year. With the over-85 population growing faster than any other age group, this gap is set to widen.

Smaller operators are feeling the squeeze. Long-running provider Annecto shut down in mid-2025 after seven decades, citing financial pressures. This kind of consolidation tends to benefit larger operators who have the resources to invest and grow.

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Where Regis Healthcare Fits In

Against this backdrop, Regis is scaling up. Its 18% revenue jump was largely driven by acquisitions, including two Victorian aged care homes completed in late 2025.

The operational picture looks solid. Occupancy at established homes sits at 96%, quality star ratings have improved, and staff turnover has dropped noticeably over the past year. Operating cash flow rose 40% to A$291.7 million, and the company declared an interim dividend of A$0.09 per share, fully franked.

Regis is also spending big on future growth. Capital expenditure more than tripled to A$102.1 million in the half, with new facilities under construction in Queensland and New South Wales. The company's longer-term goal is to reach 10,000 operational beds.

That said, risks are real. Margin pressure from AN-ACC pricing, high construction costs, and the complexity of ongoing regulatory change all need to be weighed. Staff costs alone rose 22% in the half.

Key Takeaways

Demand is structural. Australia's ageing population and bed shortage create a long runway for growth, but execution matters.

Reform cuts both ways. Higher standards benefit strong operators but squeeze margins in the short term.

Regis is betting on scale. Strong cash flow and an active pipeline suggest confidence, though funding uncertainty remains a factor.

For deeper research on ASX growth opportunities, explore ASR's Investing Report or download the free Top-3 Stocks & Market Outlook Report to get started.

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