- Aged care provider Japara Healthcare (JHC) has flagged a $300 million impairment for the 2020 financial year
- The company said the impairment is directly due to COVID-19, but won’t impact debt facilities, cash flows, or normalised earnings
- Japara is suffering from softened demand as a result of the coronavirus and had to withdraw its guidance in late March due to market volatility
- Still, Japara said it has $144 million in available liquidity through a mix of cash and undrawn debt
Shares in Japara are trading almost five per cent higher today, currently worth 58 cents each
Aged care provider Japara Healthcare (JHC) has flagged an impairment of between $270 million and $300 million for the 2020 financial year.
The company said the impairment, which is mostly against goodwill, is a direct result of the COVID-19 pandemic.
According to Japara, the non-cash impairment will have no impact on the company’s debt facilities or covenants, future cash flows, or normalised earnings.
Japara has only released one other market update regarding the coronavirus crisis so far. In late March, the company withdrew its guidance due to market volatility and said the extent of the COVID-19 impact remains unknown.
Today, Japara said at the end of April 2020, its net debt totalled $201 million. The company had $144 million in available liquidity in a mix of cash and undrawn debt.
As for the health of its staff and residents, Japara said no aged care residents have tested positive for COVID-19. One staff member contracted the virus in early April, but was immediately isolated and has since recovered.
Of course, though its homes remained healthy, the virus brought about a softening in demand for Japara’s services. As such, the company experienced a moderate weakening in occupancy from Easter onwards.
Since December 31, 2019, Japara has had an increase in occupied places of just five — reflecting a reduced occupancy rate of 91.7 per cent. The company currently has 4060 occupied places.
Still, despite the spreading pandemic, Japara went ahead with the sale of some Victorian properties and expects to settle another property sale in mid-June.
Moreover, the company opened a new home on April 20 which is currently housing 16 residents.
Shares in Japara are trading 4.5 per cent higher today, currently worth 58 cents each.