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Group Managing Director’s
report

Rohan Mead
Group Managing Director & CEO

The year under review was one of sound financial performance and continued advancement of our strategic plan—to create contemporary business models within a portfolio spanning the areas that matter most to people’s wellbeing while also addressing the social infrastructure challenge for our community.

After some years of investment, the growth seen across the Group during the past year reflects our strategic choices. We are now well-placed to continue developing our portfolio  
of valued health, wealth and living services for members and customers—services with demonstrated broader social impact.

Operating in an external environment of heightened uncertainty and volatility, the Group sought to balance the need to perform now, while also building our capabilities for the future. During the year, the outworkings of this approach were clear in the significant progression of key initiatives within our human services and private health insurance businesses; ongoing development of our social infrastructure projects; realisation of cost efficiencies from  our Group transformation program; and maintenance of a strong and flexible balance sheet.

These initiatives were progressed in parallel with positively developing the financial performance of the Group. The Group’s net profit after tax was $53.0 million, a 2.8 percent increase on the prior year. Given the significant transaction in the prior year involving the sale of the Grand United Corporate Health Limited (GUCH) insurance business, it is important to look to the year-on-year result of the continuing operations. On the basis  of continuing operations, the year  saw an overall $68.3 million increase in profit after tax.

Valued human services

Our strategic ambition to become a leading provider of valued human services was further progressed in the year under review with the continued transformation of the Home & Disability Services (HDS) business. An adjusted EBITDA of $14.5 million effectively represented a two-year, $50.6 million improvement for our HDS business—a result underpinned by ongoing investments in new operating models and capabilities. 

Building a sustainable business in human services can require difficult decisions. Following a review of the National Disability Insurance Scheme (NDIS)-funded component of the HDS business, we began reducing our geographical footprint through the progressive and careful transition of NDIS-funded customers to other providers within those areas where we will no longer deliver these services. This decision will strengthen our capacity to provide aged care services, which are by far the larger segment of our HDS business. An 87.7 percent increase in Home Care Packages revenue was a significant driver of 13.3 percent growth in HDS total revenue for the year under review. Australian Unity is one of the top five providers in what remains a highly fragmented market.

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Private Health Insurance

The past year was challenging for private health insurers, who faced significant political uncertainty, government-mandated product reform, and continued affordability pressures. Against this backdrop, our reinvigorated private health insurance business delivered an adjusted EBITDA of $67.9 million—a 10.9 percent increase on the prior corresponding period—while managing the lowest Australian Unity Health Limited premium increase in 18 years. These results reflect our continued efforts to reduce operating costs and advocate for sector-wide reforms, particularly against low value care, along with active management of hospital contract negotiation outcomes and cost containment..

Social Infrastructure

The development of Brisbane’s  Herston Quarter health precinct with the Queensland Government progressed significantly during the year. Construction within the precinct of the $390 million Surgical, Treatment and Rehabilitation Service by the Healthcare Property Trust commenced in May 2018, with completion of this hospital planned for the second quarter of the 2021 financial year.

Strategic and financial performance of the three operating platforms

Key to the Group’s strong performance this year was the ongoing ‘settling in’ and resultant cost efficiencies from our new Group structure—implemented two years ago and formed around three operating platforms that design and deliver valued services to members and customers in the areas of health, wealth and living.

Independent and Assisted Living (IAL) ended the year under review with an adjusted EBITDA of $48.2 million—an increase of $51.5 million on the prior year that reflected the continued focus on improving the sustainability of the HDS business as discussed above. IAL’s development pipeline of aged care and retirement communities met key milestones, with four development projects completed across NSW and Victoria during the period.  

The portfolio now consists of 3,255 independent living units and aged care beds—an increase of 176 units on the prior year.

Remedy Healthcare continued to focus on integrating its health services into the IAL business and developing a continuum of care approach across the platform. During the year, Remedy delivered more than 390,000 episodes of care across 14 treatment programs. 

These episodes were in addition to the more than 3.8 million episodes of care delivered during the year by the HDS business.

Retail delivered a sound result despite complex trading, policy and environmental circumstances for healthcare, health insurance and banking. Retail’s adjusted EBITDA rose by $9.8 million or 15.2 percent. This result was driven principally by a favourable underwriting experience in the health insurance business, strong growth in net interest income in the banking business and sound containment of operating expenses. Australian Unity Bank maintained strong lending momentum throughout the year, with $173.3 million in new loans written. In combination with improved retention rates, this has lifted the loan book by a net $85.5 million.

Wealth & Capital Markets (W&CM) had a successful year of business growth in the property, investments and trustees segments, and favourable outcomes in specific initiatives in social infrastructure related developments.  It recorded an adjusted EBITDA of  $50.5 million for the year under review, which represented a 36.7 percent increase on the prior corresponding year. In the year under review, Australian Unity's Healthcare  Property Trust, the largest fund of its kind in Australia, increased assets under management to $1.63 billion and recorded a return of 9.3 percent. 

The ASX-listed Australian Unity Office Fund (ASX: AOF) achieved a return of 24.5 percent, outperforming the S&P/ASX 300 A-REIT Accumulation Index by 5.2 percentage points. Returns across more than 75 percent of funds managed recorded returns above benchmark.

In conclusion, the year under review has seen further unfolding of the Group’s strategic shape and a solid financial performance across our three operating platforms and their respective business units. We believe that during the year, the organisation strengthened its capacity to provide and to extend valuable services for the community, related to important aspects of wellbeing. I thank all of my colleagues at Australian Unity for their committed work to the ongoing development of the organisation.


Rohan Mead
Group Managing Director & CEO



"We are now well-placed to continue developing our portfolio of valued health, wealth and living services for members and customers—services with demonstrated broader social impact."

Rohan Mead
Group Managing Director & CEO

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