Thank you for standing by, welcome to the Estia Health Limited interim half year results. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by one on your telephone keypad. I would now like to hand the conference over to Mr. Sean Bilton, Chief Executive Officer and Managing Director. Please go ahead. Everybody, welcome to the Estia Health FY half year results. I'm Sean Bilton, Chief Executive Officer and Managing Director, and with me today is Steve Lemlin, our CFO. I would like to start by acknowledging the Gadigal people of the Eora nation, the traditional custodians of the land from where I am presenting, and pay my respects to their elders past, present, and emerging. As part of the AGM in November, we outlined positive momentum as the impact of COVID-19 lessened, which had translated into a partial recovery in key indicators such as occupancy. Today, I'm pleased to report that this positive momentum has been sustained across the majority of metrics, notwithstanding workforce challenges persisting across the sector and broader economy. In addition, further key reforms have been introduced during the first half, including a new funding mechanism, AN-ACC, star ratings and a worker code of conduct, all of which have been successfully implemented by the group. As each element of the reform agenda is delivered, in my view, the outlook for the sector has become more certain. The key remaining planks of this agenda are the work of the Independent Health and Aged Care Pricing Authority, IHACPA, which will inform the indexation of subsidies from July this year, and the introduction of mandated care minutes in October 2023, both of which are related. We will speak to each of these later in the presentation. Further, the introduction of quarterly reporting, new requirements for key personnel, and changes to governance arrangements for providers underpin the challenges facing smaller, poorly equipped providers, and there is evidence of greater consolidation of the sector via exits and closures. I'll start first on slide four with a summary of the key metrics which trended in the right direction during the first half, contributing to the positive outlook. The improved performance of the business provides the opportunity to deliver better returns and maintain the group's strong balance sheet, which allows incremental growth to be funded without the requirement to raise equity, while sustaining a fully franked dividend payout ratio between 70% and 100% of NPATA. This is evidenced by the acquisition of the Premier Health Care portfolio, which settled on December 1, 2022, and today's announcement of the acquisition of the Mount Clear Home in Ballarat. Overall, the number of available beds in our portfolio will have increased by almost 13% in a 12-month period by the time our two new homes open in the first half of FY 2024. Despite our size, we account for around 3% of the market, providing strong opportunities to continue incremental growth as the sector consolidates. Importantly, our occupancy levels have demonstrated good recovery over calendar year 2022 towards pre-COVID levels. The recent COVID wave slowed progress in December and January. The quality of our portfolio, both in physical terms and in relation to the level of service provision, gives us confidence in our ability to further improve occupancy and to outperform sector averages. As I mentioned earlier, the financial impact of COVID in aged care continues to lessen, and as a result, we have seen a reduction in COVID expenses during the period and over the last 12 months, partly as a result of shorter duration and less impactful outbreaks, but also the reduced preventative settings as recommended to the sector and greatly improved supply chains and costs for PPE. Remaining costs are heavily skewed to workforce impacts during outbreaks, primarily agency. The grant recovery program continues to experience extensive delays, sometimes exceeding six months. Nevertheless, we have now seen more than 50% of our FY 2022 claims processed and confirmed with minimal amounts within those claims rejected. The significant increase in the NPIR during the first half and indexation of non-AN-ACC government set fees and subsidies from 1 October has supported an increase in average resident revenues and also contributed to an uplift in RAD inflows compared to prior periods. Given the current economic environment and likely further growth in the NPIR, we expect this influence to continue. Together, these factors have seen an improvement in our level of profitability in the second half when adjusted for COVID impacts, both costs and grant income. In particular, the second quarter has been strong as revenue has increased with the introduction of AN-ACC ahead of the establishment of mandated care minutes and the costs of COVID have reduced. I'll go through our star ratings in more detail later in the presentation, we were pleased with our initial results, which reflect our overall group performance exceeding sector and peer averages, with 98% of our homes being at or above three stars. Overall, these graphs signal a turnaround from a difficult three years and demonstrate strong execution of key initiatives and reforms by the group. I'll move on now to the financial highlights on slide five. Our occupancy increased to an average of 91.9% in the period, an increase of 1.3%, and continuing its recovery from COVID-19 lows experienced in February 2022. Victorian occupancy increased by 1.2% during the period, but still materially lags the average occupancy of 94.6% across the other regions. Spot occupancy at February 19 was 92.9% across the whole company. Average revenue per occupied bed day increased in the period to AUD 323, an increase of AUD 18 compared to FY 2022. This reflects the adoption of AN-ACC from October 1, 2022 and the higher NPIR. The average revenue in Q2 was AUD 331.50 per occupied bed day, and we expect this to be maintained through the remainder of FY 2023, which represents an increase of AUD 25.30, or 8% compared to the FY 2022 average. COVID expenses fell in the half year to AUD 16.3 million, less than half the level of the prior corresponding period and a further reduction from the second half of FY 2022. The cost per day and the number of days in outbreaks significantly reduced. We did experience an uptick in COVID outbreaks in late November and December as the fourth wave impacted Australia and the broader aged care sector. Total aged care outbreaks peaked at 915 on December 23, but had reduced to 291 by the end of January and was at 142 outbreaks by the February 17th. Expected grant recovery for these costs is now typically 70%-80%. RAD inflows were strong during the six-month period at AUD 28.5 million. Contained within this was an increase of AUD 36.3 million in RAD balances for current residents, which excludes the RAD liabilities assumed from the Premier Health Care acquisition. Proved liability reduced by AUD 8.7 million in the period. With current interest rate settings expected to continue, we believe positive RAD inflows are likely to persist. The net debt figure at December 31 was AUD 59.7 million. As usual, that figure for the half year reporting includes the impact of prepaid January subsidies of AUD 43.5 million, excluding which net debt would be AUD 103.2 million, which includes the settlement of the Premier Health Care acquisition in full of AUD 61 million in cash and an additional AUD 6.6 million in acquisition costs, largely stamp duty. As a result, and part of for the period, excluding acquisition costs and bed license amortization was AUD 9.6 million. Of particular relevance is the strong result for the second quarter, which should largely continue for the remainder of FY 2023, prior to the implementation of mandated care minutes in FY 2024. I'm very pleased that based on the stronger financial performance and improved outlook, we have declared an AUD 0.037 per share interim dividend, which will be fully franked and represents 100% of NPATA, excluding acquisition costs for the period. Slide six provides a recap of the Premier Health Care acquisition announced in October and settled in December, and a new acquisition announced today of a newly constructed 120-bed home in the regional center of Ballarat in Victoria. As outlined in our acquisition announcement, the Premier acquisition represented four high-quality homes with 409 additional single-bedded operational places in our existing operating clusters. The initial net cash consideration was AUD 61 million, with an estimated further near-term RAD uplift of AUD 10 million as occupancy increases in the Queensland ramp-up homes. With AUD 2.3 million of RAD cash flow received since December 1. The integration of the homes into our portfolio has proceeded as planned, and despite a short period between exchange and completion, 98% of staff agreed to transfer employment, with all employees and residents on Estia Health financial and accounting systems at completion. All homes are currently trading in line with expectations, with occupancy increasing by approximately 11 residents since settlement. As communicated to the AGM, we continue to expect future earnings of each of these homes to be in line with the performance of our other similar quality and scale homes. The new acquisition announced today is entirely consistent with the Premier acquisition, being a new home construction in late 2019, with all single rooms and ensuites. The location in Ballarat fits with our Victoria West cluster, with existing homes in Geelong and Bendigo. Importantly, Ballarat is the third largest city in Victoria, with a population exceeding 110,000 and is a center for manufacturing, health and education. The home has recently completed its ramp-up and is currently operating in excess of 95% occupancy. Gross purchase price is AUD 30 million, with final cash investment estimated at approximately AUD 15 million as RADs are received from the newly admitted residents during the final phase of ramp-up. Slide seven reinforce, reinforces the demographic trends that underpin our confidence in sustained future demand for residential aged care services. The key graph on this page summarize the various reports and projections from government, presenting a potential increase of more than a third in total residents in the sector over the next decade. Even if the current stock in the sector increased occupancy to 100%, there is a significant requirement for new and replacement stock to meet the needs and expectations of future generations as the baby boomer cohort intersects with the sector. Evidence of the adequacy of returns underpinned by the work of IHACPA will be a key factor in encouraging new supply to meet this required capacity increase. Notwithstanding the growth in funding for home care services, which has reduced overall utilization rates for residential aged care, our services remain an essential needs-based offering that is not easily substituted without extensive informal care support in addition to any formal home care package. At the same time, new supply has been significantly reduced due to increased construction costs and perceived regulatory uncertainty, and the number of providers has fallen consistently over recent years. Together with the predominance of small providers, the estimated 25% of existing stock, which requires major refurbishment or replacement and deregulation of supply, it remains an attractive proposition for well-managed and capitalized providers to expand. Slide eight provides an update on the reform agenda, with key elements relating to governance, compliance and reporting having now been legislated. The much anticipated star rating system was finally published in December, increasing transparency and visibility on providers. Overall, the results for the sector were arguably better than the media and other stakeholders expected, though subsequent reporting has continued to focus on the relatively small number of homes who have performed below expected levels. With initial responsibility for making pricing recommendations for July 2023. Given the recency of their appointment and ongoing development of their methodology and data set, we would likely expect that their recommendation for subsidies from July 2023 would be based on an assessment of cost escalation and any impact relating to workforce, be that care minutes or the Fair Work Commission interim decision. With IHACPA's cost and activity study to commence shortly, it is likely future recommendations from July 2024 will have a richer set of information to consider as part of their work. Mandated care minutes remain an area of considerable uncertainty for the sector. The biggest challenge will be to actually source sufficient workers to provide the increase in mandated care minutes, which will be needed to meet the required levels. More broadly, the focus on inputs rather than outputs arguably does not represent best practice or encourage nor reward innovation. Given the wide variety of homes and providers, scale of operations, resident types, and care models, it is inevitable such mandating of inputs will require providers to review care and resourcing models. In relation to our own approach, our average star rating reflect a level of resourcing that is broadly in line with the sector, but below the overall average mandated. We are undertaking a carefully considered assessment of how we may need to amend our cost and revenue models, incorporating all aspects of service provision in order to deliver the mandated minutes, should the work of IHACPA not incorporate a sufficient funding envelope to reflect the requirement. Given the interaction of our own work and that of IHACPA, it is not possible at this stage to provide an indication of the potential financial impact for FY 2024 onwards. Until there is certainty on funding levels, we do not propose to make any significant changes to our operating model, which is delivering the strong outcomes demonstrated in all other aspects of the star ratings, customer experience, quality, and compliance. On an overall basis, the level of regulatory reform which has been implemented with the intention of increasing quality and performance in the sector is creating significant barriers to entry and new supply, and is encouraging smaller providers without the ability to manage increasing administrative compliance and governance requirements to consider exiting the sector, which is reflected in the reducing number of residential aged care providers. This journey still has a way to go, and in my view, this is likely to accelerate during FY 2024 and 2025 as aged care follows a likely path of transition towards a more mature and professional sector, much in keeping with trends in the broader healthcare sector over previous decades. I'll talk further about key operational initiatives and growth options later, but will now hand over to Steve to take us through financial performance for the half year in more detail. Thank you, Sean. Given the impact of COVID, the timing of grant recovery, and the introduction of AN-ACC, which only impacted from October 1, we provided substantial detail in the pack, including quarterly analysis to provide further insight, only some of which I'll talk to you today, starting on slide 10. Overall revenue, excluding temporary funding and grants, increased by $31 million or 10% compared to the second half of FY 2022. I'll work through the key elements of that increase. Firstly, average occupancy increased by 1.3% compared to the previous six-month period, which resulted in an additional 15,000 occupied bed days, delivering approximately $5 million of additional revenue. A further $6 million of revenue increase arose from the classification of Blakehurst as a mature home. Our most recent capacity increase prior to the Premier Healthcare Homes acquisition. Again, demonstrating the benefits of leveraging scale by delivering incremental expansion without materially increasing overheads. The three extra days in the period compared to the second half of FY 2022 contributed around $5 million additional revenue. The introduction of AN-ACC from October 1 was and will continue to have a significant impact on revenue. The initial average AN-ACC rate of $224 a day was around $10 higher when compared to the previous ACT fee regime, which included the $10 a day fee supplement. Depending on occupancy, this should deliver a sustained annual revenue increase around $20 million. Although for the half-year, this only contributed around $5 million of incremental revenue. The six-monthly indexation of other government set subsidies, fees, and supplements effective from October was nearly 4%, the highest in many years, reflecting current levels of inflation. A significantly higher MPIR on DAPS also applies to new financial residents, which moved to 6.3% in October, but from January 1 has been 7.06% and is not expected to decrease in the foreseeable future. Overall, these factors resulted in a revenue increase excluding grants of 10% compared to the second half of FY 2022 and 6.6% compared to the first half. Workforce availability and resulting staffing costs remain a substantial challenge. Total staff costs increased by AUD 19.6 million or 8.8% compared to the second half, FY 2022. AUD 4.1 million of this related to Blakehurst being included as a mature home for the first reporting period, and the extra three days in the period increased costs by around AUD 3.4 million. The remaining like-for-like increase of roughly AUD 12 million represents an increase of around 5%. This arose partly from EA increases taking effect, but more so the impact of higher agency and overtime costs being incurred as a result of the acute sector workforce shortages, which is also exacerbated during public holiday periods such as Christmas. We started to see some gradual easing of this impact as we demonstrate on the next slide, which looks at the two quarters separately. The impacts are expected to continue for some time. Non-wage costs increased by AUD 4 million or 8% compared to prior periods. After removing the effect of the volume-driven impacts of Blakehurst and the three extra days in the period, the increase was around AUD 1.7 million or 4%. This arises from inflationary impacts across many areas, but particularly food, allied health, cleaning and waste costs, and professional and support services. Pleasingly, COVID costs more than halved compared to the preceding six-month period, reflecting the reducing impact of the pandemic. Despite ongoing high numbers of outbreaks, the duration and health impact on residents has lessened and reduced public health settings are resulting in lower costs. Overall, EBITDA on mature homes for the period increased significantly back towards levels seen before COVID at AUD 26.5 million after the COVID cost of AUD 16.2 million. Importantly, as shown on the next slide, it's much higher in the second quarter than in the first, which is relevant when one looks to ongoing run rates and the effect on potential second half outcomes. There are no surprises with depreciation of finance costs, which were in line with prior periods and expectations. The group also benefits from increases in the NPIR, which increases in line with market interest rates. We have also undertaken a hedging program to protect for further upward pressure on interest rates. Prior period COVID-19 grants from FY 2022 were confirmed at AUD 13.7 million, are therefore recognized as revenue in the period. A part of before acquisition costs was AUD 9.6 million, which equates to AUD 0.037 per share, as Sean said, will be distributed as a fully franked interim dividend. The acquisition cost of AUD 6.6 million relate almost entirely to stamp duty on the Premier Health Care acquisitions, which under accounting standards requires expensing in full in the period of that acquisition. I'll now move on to slide 11. In the same format provided in August, we highlight here the underlying financial performance, excluding the impact of COVID costs and grants, to provide a better understanding of overall trends. It will also show the difference in financial performance between the two quarters following the introduction of AN-ACC, the impact of increasing occupancy and declining COVID costs in the second quarter. Average total government revenue increased daily AUD 14 from the first to second quarter to an average of AUD 251. Our permanent AN-ACC average daily revenue was AUD 224. The positive impact of the indexation, and to a lesser extent, the higher NPIR on resident revenue, can also be seen between the two quarter results. Overall average revenue in quarter two increased by AUD 16.50 a day compared to the first quarter, to AUD 331.50 a day, which is currently expected to sustain as the average revenue run rate into the second half. Staff and non-staff costs were relatively stable across the two quarters at an overall level and on an occupied bed day basis. As a result of these factors, mature homes EBITDA, excluding COVID costs and grants, increased in the second quarter alone to AUD 25.6 million, which is the run rate that should be used as a guide to second half EBITDA, obviously excluding COVID costs, which are reducing but do remain uncertain. Annualized mature home EBITDA, excluding COVID costs and grant income in the second quarter, increased significantly to AUD 17,829, around AUD 5,800 higher than the first quarter. This will be the indicative run rate that would be expected to continue in the second half, all things remaining equal. Moving on to slide 12, which shows the mature home EBITDA bridge from the immediately preceding period, isolating the impact of COVID grants and COVID costs on performance. This shows the increase in mature homes EBITDA from AUD 34.9 million- AUD 42.8 million, highlighting the contribution made from increasing capacity, improving occupancy and government rate increases. One must bear in mind the difference in performance between the two quarters with a significantly higher proportion of that AUD 42.8 million being contributed in the second quarter. Slide 13 highlights a significant downward trend in COVID-19 costs, which reached a high level of AUD 24.4 million in the third quarter of FY 2022, and had fallen to AUD 7.3 million by the second quarter of FY 2023. Total costs and the average daily cost incurred continued to decline. This trend has extended into January. Grant cost recovery rates at around 80% reflect the fact that not all costs incurred relating to COVID are recoverable under grant schemes. Slide 14 provides more detail on the status of our grant applications and approvals. The impact of COVID grants does make interpreting the financial statements a challenge due to the timing differences between cost incurrence and grant recovery, which we continue to see as a result of extended delays in the processing of claims by government. We've shown them quite separately and clearly on the face of the profit and loss presented today. As of today's date, more than half or AUD 22.9 million of our AUD 41.8 million of COVID claims submitted in relation to FY 2022 have been processed and confirmed by government. AUD 13.7 million of that was confirmed in the six months to December 31. As such, recognizes income in the half. In relation to FY 2022, we therefore have AUD 18.2 million still waiting to be assessed. Most of these claims were lodged by the end of August 2022. If the government continues to clear the backlog of claims, there'd be a reasonable expectation that these will be substantially or wholly confirmed before the end of the current financial year, in which case they'll be recognized as income in FY 2023. In relation to FY 2023 costs, as of today, we have submitted grant claims totaling AUD 13.3 million for all eligible costs incurred in the first half. At the current rate of processing, it's uncertain if this amount may also be confirmed by the end of this financial year, but that remains out of our control. The government has confirmed there'll be a grant recovery scheme for COVID outbreak costs in calendar 2023. It's unlikely that any reimbursement of second half claims will be confirmed by June 30th without a significant acceleration of processing by government. I just note as well that less than 3% by value of our claims processed have not been accepted as eligible. The impact of these processing delays in the sector cannot be underestimated. Ongoing representations from across the sector have been made to government about the consequences. As of today, the group has approximately AUD 31.4 million of unprocessed claims, which once processed, and if approved, will not only significantly reduce the net debt position, but will also improve the reported financial results of the group in future periods. I'll move on now to net debt and cash flow on slide 15. The half year has seen another very solid cash performance. Combined impact of the increased RAD flows of AUD 28.5 million, the AUD 11 million tax refund, and continued high EBITDA to cash conversion, has facilitated net capital outlays of AUD 88.4 million without overstretching our balance sheet. The acquisition of the Premier Health Care Homes accounted for AUD 60.5 million. AUD 17.6 million related to other capacity increases, namely the new developments still in progress at St. Ives and Aberglasslyn, and the 24-bed expansion at Burton, which completed in early December. Reported net debt at December was AUD 59.7 million, excluding the advanced payment of January fees of AUD 43.5 million. Full reimbursement of grant applications would reduce net debt, excluding the prepayment, to around AUD 72 million, well below our target range even after the Premier acquisition being fully funded from existing facilities and reserves. That continued high level of EBITDA to cash generation and ongoing balance sheet strength positions the group well to take advantage of incremental expansion opportunities which may present in the future, whilst not exceeding stated capital management targets. Our RAD movements are shown on slide 16. Total RADs increased to AUD 959 million, of which AUD 46.9 million were assumed RADs from the Premier acquisition. The net RAD flows of AUD 28 and a half million were better than had been seen for some time, in line with our expectations that the current economic and interest rate environment would lead to increased preference for RADs over DAPs. The average incoming RAD prices comfortably exceed outgoing prices by around AUD 33,000, which should continue in future and will benefit RAD cash flows in coming periods. In summary, the financial performance for the six months has significantly improved from prior periods across all measures. In particular, the performance of the last three months, which was positively impacted by AN-ACC, reducing COVID costs, increasing occupancy, and higher RAD receipts, provides a very strong starting position for the second half. I'll now hand back to Sean for the remainder of the presentation. Thanks, Steve. In the final part of the presentation, I will cover some of the other key operational focus areas in more detail, starting with a brief outline of our portfolio. In an environment of greater transparency, competition, and elevated expectations, our portfolio is a strong differentiator, being of high quality, diversified geographically and demographically, while facilitating strong network clusters, which we consider to be essential to the optimal management of performance and risk in an intensive human services business. The geographic spread has assisted us to maintain a level of performance through the pandemic, our density in metropolitan areas allows us to achieve better outcomes through access to larger resident and workforce cohorts. This is further supported by a high proportion of single rooms with en suites, clearly aligned with the expectations of our residents and families, while also facilitating improved financial returns. Our ability to acquire and integrate the Premier Health Care homes and add 13% to our capacity over a 12-month period without significantly increasing our central overhead cost base demonstrates the advantages of scale in applying management, leadership, systems, and processes to an expanding portfolio. Slide 19 provides further detail on our occupancy, which remains the most sensitive lever of profitability. A 1% increase in occupancy on our current portfolio at current daily revenue rates will deliver an uplift in revenue of close to AUD 8 million, and even under the incoming mandated minutes regime effective from October 1, 2023, around 55%-60% of this incremental revenue is expected to flow through to EBITDA. First half 2023 occupancy of 91.9%, which compares favorably to second half 2022 of 90.6%. Whilst we have not yet recovered to the levels of overall occupancy in excess of 93.5% seen before the pandemic, we're nonetheless seeing a steady recovery and outperformance compared to the sector. Ultimately, a return to pre-pandemic levels of occupancy will be a key driver towards improving financial returns. Current spot occupancy on mature homes has increased to 92.9% as of February 17th. As noted before, there remains a divergence across our portfolio. Outside Victoria, average occupancy during the period was 94.6% across all homes, which is in a further improvement in already strong metrics. The recovery in Victoria is continuing at a 1.2% improvement in the half and a further improvement of 2.5% to 88.5% on a spot basis at February 17. This continues to lag performance by the states and represents a key focus and opportunity. I'll move on now to slide 20 in star ratings and compliance performance. The charts here demonstrate the group's overall performance compared to the sector averages, and in the appendices, we show our rating against each category in greater detail. Overall, I'm very pleased with our initial performance, not least that only one home secured less than a three-star rating overall, which has subsequently closed out their non-compliance and returned to three stars. There remains challenges with the methodology and dataset, as well as in its communication, which are both expected to evolve and mature over time. The bottom chart is an analysis prepared by one of our banking syndicate, which compares our regulatory and compliance record against the sector. This chart illustrates the number of adverse outcomes reported by the commission as a percentage of the number of visits. Overall, the number of visits that the sector has been receiving has increased steadily since COVID in an effort to catch up accreditations that had been delayed, which is also our experience. Given this backdrop and in the context of COVID and workforce pressures, I'm even more pleased that our level of reported adverse outcomes has declined steadily over the last 18 months and is well below sector levels. This reflects a significant investment in recent years in quality and safety in order to achieve these results. The increased transparency around performance in an era of increased competition makes it even more important that providers are able to demonstrate to prospective residents the level of competence and performance. Slide 21 outlines some of our key initiatives and highlights in the area of people and workforce. There is no question workforce remains the greatest challenge to the sector and reflects broader issues in the economy. It is estimated that there is a current shortfall of 35,000 workers with a further 170,000 workers required by 2030. Providers are typically relying on a higher proportion of agency and overtime support in order to ensure the provision of services, and this pressure is expected to become more acute when mandated minutes are in place from October 2023, with significant uncertainty surrounding the source of additional workforce. The Fair Work Commission work value case has recommended a minimum 15% increase for direct care staff in the sector and invited responses to its proposal from government, unions, and other stakeholders. The final outcome related to this interim decision remains unclear, although the government have indicated a continued commitment to fund the final increase, which will ultimately need to be incorporated in AN-ACC for funding recommendations. There remains debate about how much, when, and how the increase is implemented and funded, and ultimately which categories of employees it applies to. This increase should assist in attracting workers back to the sector and retaining the current workforce. Inflationary wage pressures in other sectors of the economy means increases in excess of 15% are likely to be required to attract and sustain the workforce required in the future. In this context, it is pleasing that our group staff turnover has remained stable, comparing well to the sector, although still higher than desired. Overall, we continue to invest heavily in our workforce to increase attraction and retention rates through development, remuneration, and recognition, technology, and talent sourcing. Our safety performance remains strong in difficult circumstances with our LTIFR continuing to reduce post-COVID, and was seven point three at December 31, compared to a sector average in excess of 20. Slide 22 provides details on our actual and future growth opportunities. As outlined on the graph on slide four, with the addition of the Mount Clear acquisition and the completion of the projects in progress at Aberglasslyn and St. Ives, total operating beds will have increased approximately 13% in a little over 12 months. Earnings momentum will build as the new developments are completed and commissioned, and the ramp-up of the Premier homes in Queensland is complete. Outside of the developments in progress, careful consideration is being given to the timing for commencement of the projects in the pipeline, which are well advanced in terms of being shovel-ready. Increased construction costs are challenging feasibilities, and unless these moderate, there will likely need to be adjustments to revenue assumptions or funding levels to proceed. Beyond our core business, we continue to explore opportunities to leverage and add value to our portfolio, most likely by expansion of the allied health concept at Blakehurst in New South Wales. In concluding, slide 24, there is positive momentum in a number of indicators, particularly with incremental funding from the introduction of AN-ACC, continuing to translate to better margins for the remainder of FY 2023. COVID reimbursement grants continue to be processed for FY 2022 and FY 2023, with further significant cash flow expected in the second half of FY 2023, and a new scheme announced for calendar year 2023. The positive momentum in the NPIR to its highest point since 2013 is improving outcomes on DAPs and RADs. Opportunities for growth are expected to be available in keeping with the premise of undertaking the Premier Health acquisition and the announcement today of the purchase of a new home at Mount Clear in Victoria. Two major elements of the reform agenda remain, mandated care minutes and IHACPA's work in the sector, each of which are material factors in the outlook for earnings in the sector beyond FY 2023. The improvement in earnings in the first half, and particularly in the second quarter, has given confidence to declare an interim dividend of AUD 0.037 per share. Overall, the company remains committed to its stated goals of target gearing levels of 1.4-1.9 times EBITDA and distribution of earnings of 70%-100% of NPATA. As part of its ongoing capital management strategy, the group intends to reinstate its on-market share buyback with effect from April 2023. Thank you for your time today, and we would be pleased to answer any questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. We would appreciate it if you could keep to one question at a time and rejoin the queue if you have more questions. Your first question comes from Tom Godfrey from MST. Please go ahead. Hello. Good morning, Sean and Steve, and thanks for taking my questions. Can you hear me okay? Yep. Great. Yes, we can, Tom. Perfect. Just one question from me, and I'll jump back in the queue. I just wanted to circle back to your comments, Steve, just on slide 11 in the financials, just around the second quarter and what that means for the second half run rate. Just in terms of clarifying that, it's a reasonable starting point to semi-annualize the AUD 25.6 and then obviously form sort of an assumption of incremental occupancy and then Premier and Mount Clear contributions. Is that a reasonable starting point? That's what I said, Tom. The certainly the revenue rate of AUD 331.50 should continue. There's no unusual items in there, and as I said, we've seen that continue into January. The employee and non-wage costs, Yeah, there's still pressures there, but they were pretty high in that first and second quarter. I do think that that's a reasonable run rate. Those exclude the COVID costs, which are reducing, but still remain a little bit unpredictable. Yes, that second quarter rate is a much more indicative rate than the first quarter going into the second half. Got you. Just the Premier contribution, if any, in the second quarter. Very modest. We gave indications at the time of the acquisition, that was only one month contribution in the second quarter. There'll be a full six months from that in line with expectations in the second half. Got it. That's clear. Thanks for taking my question. Thank you. Your next question comes from Vanessa Thomson from Jefferies. Please go ahead. Morning, thank you for taking my first question. I just wanted to ask about agency staff, and I mean, it sounds like that's not going to decline any in the near term. Is that reasonable to assume? Yeah. Thanks, Vanessa. Yeah. Look, I think definitely the level of agency use, you know, across healthcare more generally, including the aged care sector and indeed in our own business is, you know, has increased from the pre-COVID levels. I think that probably reflects, you know, a workforce that got more used to engaging in that way during COVID with a number of, you know, project-based initiatives like vaccination and testing, where they could access higher rates of pay. At the moment I think, there's a, you know, a higher proportion of the health workforce that are continuing to work in that way, which I do think will change over time. At the moment, yes, we're certainly seeing a continuation of that broader, higher level of agency use across the sector. Sorry, just to jump in, but off-COVID peaks or continuing at high levels? Look, I do, I do think it will moderate, Vanessa. At the moment, you know, the experience is that, you know, we're continuing at, you know, we're not getting the huge spikes caused by the really high number of outbreaks. I mean, as we've referenced in the presentation, when we do get outbreaks, you know, we're more able to cope with that within our own business rather than having to bring in sort of, call it surge agency workforce. The level of agency use has sort of come back to what would be, you know, almost for the ordinary course of the, of the business. That proportion being used is higher than it was prior to COVID. Thank you. Thank you. Your next question comes from Craig Wong- Pan from Royal Bank of Canada. Please go ahead. Thanks. Good morning. My question was just around the labor costs, noting the 5% increase here. I was wondering, as we enter into the period where the mandated care minutes starts, how should we think about labor costs from the current run rate? Is there much more increase expected to come, or is there gonna be a shift there with kind of labor shifting more towards the care which is included as opposed to the other parts that aren't included in the mandated care minute requirements? Craig, I might deal with the first part just up until that period, and then Sean might talk about mandated minutes. The rates that we're seeing in the first half would probably continue into the second half and prior up until mandated minutes. As Vanessa just spoke in answer to Vanessa's question, there are high agency costs in there that will continue. It may start to reduce a little bit, so that will offset any EBA increases that come through after July. I think in the immediate period, prior to mandated minutes and prior to the Fair Work Commission case, which are two fairly major impacts, those run rates are probably reasonable going forward. Yeah. I think, Steve, just to add to that, I think you referenced the Fair Work Commission case, and that, you know, is something we're obviously watching very closely, both ourselves and as a sector. you know, at the moment, we do have a very, you know, repeated commitment from government to fund that increase. Exactly how it plays out, how it's funded is, you know, still up in the air. From our perspective, we're viewing that as neutral, which I think is the only way we can, we can view it. As we've referenced with care minutes, there's still a reasonable amount of water to pass under that bridge. You know, we've specifically called out the requirement for providers to, you know, most likely consider their models of care as you reference, you know, what's included, who does it, all of those sort of things, considerations, as well as obviously, you know, that huge impact potentially from IHACPA's, you know, recommendation and their work in the sector because, you know, obviously our revenues and the ultimate net impact of mandated care minutes for the sector and indeed ourselves will be, you know, closely related to the, you know, recommendations and government's response to that from July 2023. Yeah, that's probably our current thinking about that, Craig. Great. Thank you. Thank you. Your next question comes from Matthew Johnston from Jarden. Please go ahead. Morning, Sean. Morning, Steve. I might just pick up on that, just on the IHACPA, I guess, recommendation. Is that expectation that you'll hear something before, this May budget? I'm actually not sure, Matt, to be frank. I don't know when we'll- Okay. we'll have an understanding of what their recommendation is. I, you know, As part of that budgetary process, you know, I'd expect they would be making those sort of finalizing work and recommendations sort of, you know, in the short term. As for how we get clarity on the outcomes of that process, yeah, I'm not sure. I guess just following on from that, like, obviously a couple of acquisitions, but still, I guess this uncertainty around the mandated care minutes going into 2024, and you've got rising interest rates and using debt to obviously buy them. Sort of just wondering what management board are thinking about what gives you confidence that obviously the returns are gonna be there to give, you know, to pay, give and deploy capital? I'd just be interested in any comments around that. Yeah, look, I think we've been very clear and consistent in our communication, you know, over the last 12 months that, you know, the growth we're undertaking is in a careful, disciplined, cautious manner. You know, we're buying assets that we're very confident in their long-term return profile because of the quality of the assets, the profile of the homes, and how they fit into our portfolio. I think, obviously the answer I just gave, Craig on mandated care minutes around the impact of IHACPA, you know, ongoing discussion about staff mixes, models, and the like, you know, gives us a degree of confidence that, you know, there's a way through this and that the cautious deployment of capital in the way we are, you know, makes sense, particularly in an environment with, you know, ongoing, you know, relatively strong cash flows we're seeing around, particularly underpinned by RADs and some of the benefits from higher MPIRs and the like. So, you know, I think what it really reflects, you know, quality assets at good, at good value, in a, in a cautious and disciplined way. Okay, great. I'll jump back in the queue. Thanks. Thank you. Your next question comes from David Lowe from JPMorgan. Please go ahead. Thanks. Thank you for taking my question. Just, perhaps if I could get a big picture view. I mean, when do you think we're gonna get clarity on some of these issues? There's obviously a number of things overhanging, from pricing to minutes to the wage case. Sort of as a related question, do you think, you know, there's likely to be delays to some of the things like mandated minutes given the challenges with the workforce? Yeah, look, I think we're a long way along the reform agenda. When you think about even my time at Estia, both as the COO and now as the CEO over sort of four point five years, sort of came here as the Royal Commission got announced. It's been quite a journey through the Royal Commission, COVID, and now the reform response. You know, I do feel like we're at the end of that journey. There are a couple of key planks, as we've clearly called out in our presentation around IHACPA's work and the mandated care minutes. A lot of the other reforms, which are due to come in in December this year around governance and, you know, for us as a large listed provider are things that we, you know, largely already have in place. From, from our perspective, we're less focused on those. You know, they are things we'll comply with, we're largely compliant with now. You know, I do think the last sort of key elements will play out indeed, including the Fair Work Commission case which you reference, you know, over this calendar year, largely. At this point, we have no sense of any, delays on the, you know, the reported timelines for the reform agenda that the government have announced. Okay, great. Thanks very much. Thank you. Your next question comes from David Bailey from Macquarie. Please go ahead. Thanks. Morning, guys. You mentioned the consolidation that's sort of taking place because of the increased compliance. Just sort of thinking medium to longer term, in conjunction with the changes to ACO. I mean, how are you seeing the opportunities for larger players such as yourself in the aged care space? Well, again, I've been involved in the sector for 16 years, and I think we've been talking about a couple of things for that entire period, which is consolidation of the sector and the aging demographic. You know, both of those things are starting to really play out now, probably in the early days of consolidation piece, but you are seeing consistent reduction in the number of providers, you know, operating in the sector, and you're seeing, you know, a reasonable number of closures and exits starting to play through now. You know, I really do firmly believe that the reforms that the government have put in place, particularly around some of the, I suppose, less public reforms around governance, administration, transparency, data, those sort of things really make a difference for small providers, make a very difficult operating environment for small and less well-resourced providers. I think, you know, that in itself, as well as some of the financial outlook, it makes it, you know, a fairly, you know, attractive proposition for larger providers to be consolidators in the sector. You know, we would see ourselves playing a role in that for the right opportunities over time. You know, at the moment, there is still a way to play out with a couple of those key reforms that we've referred to through the presentation and through the Q&A. You know, that's why we're sort of taking a relatively, you know, disciplined and cautious approach to our growth profile until those things play out. Thank you. You have a follow-up question from Vanessa Thomson from Jefferies. Please go ahead. Hi there. Thanks again. I just wanted to ask about higher acuity residents and under AN-ACC, they obviously require more minutes of care. Does that make them less attractive than under the previous AN-ACC model? Thank you. No. Not, not on the face of it, Vanessa. The overall mix that across the portfolio, we'll see across a home and across the portfolio, we'll see a range of acuities. Not necessary that higher AN-ACC residents were necessarily more profitable. It's one of the issues around AN-ACC and also AN-ACC is the residents are not homogenous. Although you have your, the care minutes assigned with each AN-ACC classification, the actual time that a particular resident may want or need can vary. At this stage, we wouldn't say that there's a huge divergence in profitability of residents. It's not really the way that we would look at our model of care is to focus on the resident, and put their needs first. The average across the portfolio comes up with that 224, 223 minutes that we spoke about. Does that answer your question? Not an easy question. I can see where you're coming from. Yeah. I just wondered whether, you know, it changes the way that you know, ramp up a home or whether it's, you know, kind of business as usual. It's how it was done before. Thank you. Yeah. Not really, Vanessa. I mean, I think in a perfect world, in a, on a, on a spreadsheet, you can sort of, you know, pick, you know, have this theory that you're gonna pick individual residents, you're only gonna take certain types of residents. At the end of the day, you know, we look at our business across the portfolio of 72 homes with, you know, almost 6,000 residents and, you know, we manage, you know, sort of the business like that. It's in reality, you know, in a competitive market with, you know, with occupancy sort of recovering, you know, the concepts of sort of specifically selecting certain types of residents is probably, you know, not really changed, to be frank, from what we did during AN-ACC and indeed the predecessor to AN-ACC. Thank you. Thank you. You have a follow-up question from Craig Wong-Pan from Royal Bank of Canada. Please go ahead. Thanks. Just wanted to ask about Victoria. What has been the cause of the slower recovery in occupancy there? When do you think the gap might close to Victoria and the group's occupancy rates? Yeah. Thanks, Craig. Yeah, I mean, it's obviously a question we get a lot. We are, you know, we've been quite transparent in our publication of our relative occupancy performance across our different regions. It's probably in the top three questions we get every time around Victoria. You know, I think there's two factors at play there. One is certainly the Victoria is a very competitive state. It has been. There's been a lot of new supply go into that market over the last decade. If you look at the profile of providers, you know, most of the large providers operate in Victoria. In generally, it's a more competitive market, which has meant that recovery has been a little bit more challenging. You look at the other states and, you know, there's probably only, you know, half the top 10 providers call it in each of the other states, whereas pretty much all of the sort of top 10, at least private providers are in Victoria or have a big base in Victoria. You know, I do, I do also genuinely believe having sort of lived and breathed COVID in Victoria as the COO, during 2020 and, you know, frankly, a horrific experience for everyone involved in at that time, I do believe that, I do believe there is more of a sort of, hangover from that period, and the response that, you know, certainly if you think about, say, Queensland and South Australia, which have been our strongest occupancy states, you know, they really didn't experience COVID at all until Omicron hit, you know, at the end of 2021. You know, big difference by then we had antivirals, vaccination, testing, et cetera, et cetera. You know, I do think that's the other factor which has caused Victoria to be a bit slower to recover. Obviously, you know, we've had some good recovery, as we reported in the presentation around the spot occupancy in Victoria, sort of in the last few months. You know, the gap has closed a little bit in the, in the last three months or so. You know, I do think it'll still take us, you know, quite a while to lift that to where we'd like to see it above, you know, above 90%. Okay. Thank you. Thank you. You have a follow-up question from Matthew Johnston from Jarden. Please go ahead. Thanks, guys. My question is just around, I guess, co-contributional increase resident funding. A lot of your peers have been coming out. It looks a bit like lobbying about increasing those rates. Can you give any clarity or any sort of insights about what you're hearing? I just the acceptance whether the government will has the appetite to increase those payments? Look, I think it's a conversation that is, you know, is becoming more prevalent. We would certainly advocate for, you know, going back to some of the recommendations, even back to the Tune Review, which I think was probably a review into our sector that probably a lot of the things that made, you know, I think most people agree, made a lot of sense, sort of haven't been enacted. I think there's opportunity there to reevaluate some of those things and certainly discussions about thresholds around asset thresholds and, you know, lifetime caps, you know, particularly for very wealthy, I think all bear consideration. You know, I do think that process will take a little while to work through, but I equally think when you combine the impacts of mandated care minutes going ultimately to 215 minutes, you also look at costs of the Fair Work Commission funding commitment from government, which is sort of a, you know, 15% increase at the moment, potentially could go higher, and the cohort of staff that it applies to could also increase. You know, there is a very real, there is likely to be a very real increase in the cost of funding the sector. I think that will play out over time, the need to, you know, consider some of those recommendations that came through Tune. I think that's why you're starting to see a little bit more prevalence to the conversation around co-contribution. Okay, great. Thanks for the comments, Sean. Thank you. You have a follow-up question from David Bailey from Macquarie. Please go ahead. Thanks. Just in relation to care minutes, obviously the sector is below the 200 and 215. Has there been any increased discussions about including things such as allied health and other non-direct staff costs as part of the, the minimum care minutes? Or is it all pretty much unchanged? At the moment it's unchanged. David, there's guidelines that have got issued in November that have been reissued a number of times since then, they haven't materially changed. There was some reference I haven't seen, I didn't listen personally, I haven't seen the answer sort of records yet, there was some discussion of it at Senate estimates this week, I believe, or last week, I should say, around staff mix and the like. You know, I think it's things that we still have a view that there are areas that should be considered. We've talked about in our initial Senate estimates submission around the role of... The important role of ENs in aged care and probably the unintended consequence of directly mandating, you know, registered nurse time, but not EN time. You know, we put some positions forward around some at least partial recognition of ENs in that 40 minutes of RNs. I think there's probably opportunity to consider things like task versus role. The guidelines have a very clear list of the tasks that are included in care minutes, but then also have a requirement for them to be done by just three roles being ENs, RNs, and PCAs. You know, some of those things are done by people other than those three roles, and you know, for me, that doesn't make a lot of sense. That's even before you get into sort of, you know, debates about allied health and lifestyle, which the department have been fairly, you know, fairly consistent and direct on. You know, I think there's at this point, though, the guidelines are the guidelines and that's what we're working to at the moment. Understood. Thank you. Thank you. Unfortunately, we have come to the end of our allocated time. We will conclude our conference for today. Thank you for participating. You may now disconnect.