Benchmarking Financial Performance Big Numbers! The 2017 Survey - - PowerPoint PPT Presentation

Benchmarking Financial Performance – Big Numbers!

 Data collected from over 957 Facilities  Represents more than 38% of Sector  Data from more than 20,000 HC Packages  Represents over 30% of Home Care Sector  Largest known survey of its kind in any industry sector in Australia

The 2017 ACFPS has been the largest so far and continues to grow in participation and coverage

The 2017 Survey

Residential Care

Results for the Year ‐ Survey Average

Metric 2017 2016 Difference Care Result Per bed day $9.42 $10.78  $1.36

+

Accommodation Result Per bed day $(0.05) $0.97  $1.02

=

Facility Result Per bed day $9.37 $11.75  $2.38 Per bed per annum $3,236 $4,082  $846 Facility EBITDA Per bed per annum $8,397 $8,941  $544

Results for the Year ‐ Top Quartile

2017 2016 Difference Care Result Per bed day $37.96 $38.41  $0.45

+

Accommodation Result Per bed day $(0.72) $(0.40)  $0.32

=

Facility Result Per bed day $37.25 $38.02  $0.77 Per bed per annum $13,102 $13,483  $381 Facility EBITDA Per bed per annum $18,285 $18,121  $164

Average Care Result ‐ Trends

$5.07 $4.74 $1.48 $5.10 $10.66 $12.00 $6.79 $8.47 $9.84 $10.78 $9.42

$‐ $2 $4 $6 $8 $10 $12 $14

Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11 Jun‐12 Jun‐13 Jun‐14 Jun‐15 Jun‐16 Jun‐17 SURVEY AVERAGE CARE RESULT DOLLARS PER BED PER DAY

ACFI subsidy rate freeze

Revenue v Expenses

86.8% 83.0% 26.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CUMULATIVE INCREASE

Cumulative increase in ACFI + supplements and Care costs (Base Year 2007)

ACFI & Supplements (including MTCF) Expenditure ‐ care services CPI

Occupancy by Quartile

96.9% 95.5% 95.7% 91.3% 94.9% 96.2% 93.7% 94.3% 96.4% 95.3% 95.0% 92.0% 94.6% 95.8% 93.5% 94.1%

88% 89% 90% 91% 92% 93% 94% 95% 96% 97% 98% 1st quartile 2nd quartile 3rd quartile 4th quartile Survey Average Top 50% Bottom 50% Bottom 75%

Occupancy ‐ Top to Bottom

2016 2017

Comparison of Survey Average and Top Quartile

$5.10 $10.66 $12.00 $6.79 $8.47 $9.84 $10.78 $9.42 $26.39 $33.23 $38.68 $36.19 $35.24 $35.29 $38.42 $37.96

$‐ $10 $20 $30 $40 $50 $60

Jun‐10 Jun‐11 Jun‐12 Jun‐13 Jun‐14 Jun‐15 Jun‐16 Jun‐17 CARE RESULT DOLLARS PER BED PER DAY

Care result ‐ average Care result ‐ top quartile

ACFI Subsidy Rate Freeze

Survey Average 2017 Survey Average 2016 Top Quartile Average 2017 Top Quartile Average 2016 Revenue ‐ Care 221.73 214.55 223.30 214.95 Expenditure Direct care costs 130.71 125.78 111.70 105.83 Total expenditure 212.31 203.77 185.34 176.53 Care result for the year

$9.42 $10.78 $37.96 $38.42

Accommodation result

$(0.05) $0.97 $(0.72) $(0.40)

Facility Result

$9.37 $11.75 $ 37.25 $38.02

Facility EBITDA per bed per annum

$8,397 $8,941 $18,285 $18,121

KPIs Occupancy 94.6% 94.9% 96.4% 96.9% Care costs as % of care income 59.0% 58.6% 50.0% 49.2% Average bond/RAD held $279,513 $252,319

$291,179 $259,177

Average RAD taken during year $320,254 $298,627

$352,619 $311,888

RACF Summary Survey Average vs Top Quartile

RACF Summary Top Quartile vs the rest

Top 25% Average 2017 Bottom 75% Average 2017 Bottom 50% Average 2017 Bottom 25% Average 2017 Revenue ‐ Care 223.30 221.25 220.43 218.36 Expenditure Direct care costs 111.70 136.43 141.67 147.52 Total expenditure 185.34 220.41 228.14 237.37 Care result for the year

$37.96 $0.84 $(7.71) $(19.01)

Accommodation result

$(0.72) $0.15 $0.49 $0.69

Facility Result

$37.25 $0.99 $(7.22) $(18.32)

Facility EBITDA per bed per annum

$18,285 $5,495 $2,749 $(1,029)

KPIs Occupancy 96.37% 94.13% 93.51% 91.95% Care costs as % of care income 50.02% 61.66% 64.27% 67.56% Average bond/RAD held

$291,179 $203,351 $158,096 $267,187

Average RAD taken during year

$352,619 $219,256 $166,646 $308,266

Breakdown of Care Result

Average Top Quartile Difference Care income 221.73 223.30 (1.58) Care services costs 130.71 111.70 19.01 Hotel services 39.96 37.10 2.87 Utilities 6.21 5.91 0.31 Administration and support services 35.42 30.64 4.78 CARE RESULT ($ per bed day) $9.42 $37.96 $28.54 Average Top Quartile Difference Occupancy 94.6% 96.4% 1.7% Supported resident ratio 45.4% 43.0% (2.3%)

Key Messages ‐ strong financial performance

Building design efficiency Good quality management ‐ set targets, KPI’s, forecasting Benchmark performance ‐ dollars & hours Maximising income in line with resident’s care needs (ACFI); Staff numbers and skill mix aligned to the funding levels and facility design (roster management & operational efficiency); Maximising accommodation prices; Maintaining occupancy levels; and Significant refurbishment ‐ operational efficiency and higher RAD price

ACFI ‐ Further Analysis

Changing nature of Residential Care

24% 16% 29% 23% 25% 28% 13% 18% 9% 15% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2016

Proportion of facilities in each Band

Band 1 Band 2 Band 3 Band 4 Band 5

• Fewer facilities in

“low‐care” bands

• More facilities in

Bands 1 and 2

• 2016 data has

been restated using 2017 Bands

Average ACFI Subsidy by Band

$194.98 $175.43 $162.11 $148.02 $125.12 $169.74 $195.55 $177.54 $164.00 $150.54 $125.98 $165.42

$100 $120 $140 $160 $180 $200 $220 Band 1 Band 2 Band 3 Band 4 Band 5 Average June 2017 June 2016

• 2016 data restated

for 2017 bands

• Adjusted for COPE

(real terms)

• Decrease in real

terms of approximately 1% in each band

• Increase across

survey due to higher acuities

Looking Forward

We calculated the projected facility results for FY18 in doing so we:

• Adjusted for ACFI reductions and Rate Freeze
• Adjusted for Resident fee increases
• Adjusted for Wage increases of 2.5%
• Adjusted for other expenditure increases

Projected results ‐ Facility Results June 2017 and Possible effects of ACFI freeze and expenditure increases

$10.85 $10.26 $7.83 $8.31 $7.68 $9.37 $41.04 $35.48 $31.97 $39.37 $42.51 $37.25 $4.05 $2.43 $0.49 $0.77 $2.30 $2.18 $34.12 $29.12 $24.87 $34.16 $38.62 $31.08

‐ $5 $10 $15 $20 $25 $30 $35 $40 $45

Band 1 Band 2 Band 3 Band 4 Band 5 All Facilities

June 2017 Survey Average June 2017 Top Quartile Forecast Survey Average Forecast Top Quartile

Basic Daily Fee and costs of Everyday Living

Cumulative increases in Resident fees and Everyday living expenses

54.5% 71.3% 26.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cumulative increase Resident income ‐ care (excluding MTCF) Total hotel, utilities and admin costs CPI

Revenue Gap ‐ Everyday Living Costs

$31.52 $32.05 $33.41 $38.65 $40.25 $41.71 $44.54 $46.50 $47.49 $48.25 $49.09 $3.11 $3.26 $3.65 $4.32 $4.95 $5.36 $6.23 $6.33 $6.20 $5.93 $6.21 $19.11 $20.96 $25.20 $25.24 $24.79 $27.19 $28.35 $29.48 $33.32 $34.04 $35.42 $(16.10) $(18.88) $(24.15) $(20.59) $(20.97) $(22.74) $(23.79) $(23.95) $(29.06) $(29.74) $(32.51)

‐$35 ‐$15 $5 $25 $45 $65 $85

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Basic Daily Fee Hotel services Utilities Administration Revenue gap

Outsourcing vs In‐House

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Catering Cleaning Laundry

61% 32% 36% 39% 68% 64%

Contract In‐House

Costs of Utilities

Electricity, 87.6% Gas, 48.7% Rates, 209.5% Rubbish removal, 104.6% Total utilities , 100.0%

‐50% 0% 50% 100% 150% 200% 250%

Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11 Jun‐12 Jun‐13 Jun‐14 Jun‐15 Jun‐16 Jun‐17

Cumulative increase in utilities since 2007

Electricity Gas Rates Rubbish removal Total utilities

Average Refundable Deposits Received

ACT NSW QLD SA TAS VIC WA National average 2016 408,504 320,189 240,570 288,827 232,289 332,784 279,719 298,627 2017 392,235 332,006 267,694 308,497 243,966 371,712 323,405 320,254 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000

Average RAD taken during financial years 2016 and 2017

2016 2017

Average RAD taken in FY17 vs published Accommodation Prices by state

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 National ACT NSW QLD SA TAS VIC WA Minimum Published Accommodation Price Median Published Accommodation Price Average RAD Taken Maximum Published Accommodation Price

Median state facility RADs compared to median capital city house price

38.48% 58.13% 67.31% 73.86% 68.80% 87.65% 88.67% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sydney Melbourne Perth Adelaide Brisbane Canberra Hobart

RAD/DAP/Combination splits

54.9% 61.9% 40% 41% 41% 19.6% 14.3% 33% 33% 35% 25.5% 23.8% 27% 26% 24% Listed provider average Listed provider average ACFPS average ACFPS average ACFA report Jun‐17 Jun‐16 Jun‐17 Jun‐16 Jun‐16

PERCENTAGE SPLIT

RADs/RACs DAPs/DACs Combination

Policy for Refurbishment

28% 20% 32% 20% 28% 23% 31% 18% Over 20 years Between 15 and 20 years Between 10 and 15 years Under 10 years

2016 2017

Depreciation Policy

6% 22% 10% 46% 17% 1% 17% 15% 54% 13% Under 20 years 20 to 30 years 30 to 40 years 40 years 50 years and over

2016 2017

Profiling the Top Quartile and Survey Average

Survey Average Top Quartile Characteristic

Profiling the Top Quartile and Survey Average

Survey Average Top Quartile Characteristic

Home Care

FY17 Home Care Results

* Band 1 results fluctuate from quarter to quarter and are not reliable due to small number of programs and packages

FY17 EBIT VS FY16 EBIT

Band 1 Band 2 Band 3 Band 4 All 2017 Average $(7.60) $1.52 $5.30 $12.51 $5.37 2017 Top Quartile $2.59 $9.35 $22.57 $36.53 $25.03 2016 Average $(8.70) $(0.99) $3.51 $11.77 $2.91 2016 Top Quartile 4.90 6.87 16.97 36.26 $20.93 $(15) $(10) $(5) $‐ $5 $10 $15 $20 $25 $30 $35 $40

Dollars per client per day

* Band 1 results fluctuate from quarter to quarter and are not reliable due to small number of programs and packages

Average Age of clients

Overall average (years) Average age of Level 1 clients 79.5 Average age of Level 2 clients 84.8 Average age of Level 3 clients 83.4 Average age of Level 4 clients 82.5

Movement in packages at provider level

• Average package growth since December 2016:

‐6.4%

• Average package retention since December 2016: 89.4%
• Average package growth since February 2017:

0.0%

• Average package retention from February 2017:

94.3%

• Exits

– 30% exit to residential – 4% exit to other home care providers – 66% exit to other (out of system, pass)

HCP Revenue Utilisation

75.8% 91.5% 92.7% 93.9% 79.3% 91.6% 88.3% 95.4% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Band 1 Band 2 Band 3 Band 4 2017 Top Quartile 2017 Average

* Band 1 results fluctuate from quarter to quarter and are not reliable due to small number of programs and packages

HCP Average Direct Service hours per week

Band 1, 3.2 Band 2, 4.8 Band 3, 6.5 Band 4, 12.8

Band 1 Band 2 Band 3 Band 4 Survey Average hours client/wk

Band 1, 1.0 Band 2, 4.3 Band 3, 5.8 Band 4, 12.4

Band 1 Band 2 Band 3 Band 4 Top Quartile Avg hours client/wk

* Band 1 results fluctuate from quarter to quarter and are not reliable due to small number of programs and packages

Service Revenue

$53.26 $63.79 $76.96 $67.06 $94.64 $84.21

$‐ $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00

Band 2 Band 3 Band 4 Service income per hour worked (based on 7 day week) Top Quartile Survey Average

* Band 1 results excluded as not reliable due to small number of programs and packages

Key Financial Performance Indicators

StewartBrown

Grant Corderoy

Senior Partner

Consulting

David Sinclair

Partner

Patrick Reid

Director

Loula Koutradimos

Senior Manager

Tracy Thomas

Senior Manager

Emily Nicholson

Senior Manager

Jimmy Gurusinga

Senior Manager

Audit

Stuart Hutcheon

Audit Partner

Siobhain Simpson

Audit Partner

David Gallery

Audit Director

Travis Rickard

Audit Director

Annette Gough

Senior Manager

StewartBrown

Russell McGree

Partner

Business Services

Matthew Davie

Partner

Susan Whiteman

Partner

Bahvna Lathigara

Director

Contact Us

For Benchmark enquiries benchmark@stewartbrown.com.au For Consulting enquiries consulting@stewartbrown.com.au For General enquiries Telephone: Sydney: (02) 9412 3033 Adelaide: (08) 8229 2280 Sydney Office Level 2, Tower 1 495 Victoria Avenue Chatswood NSW 2067 Adelaide Office Level 1 104 Frome Street Adelaide SA 5000