Royal Commission Drives Aged Care Shares Down

The share price of aged care companies tumbled on Monday, following Prime Minister Scott Morrison’s announcement of a Royal Commission into Australia’s aged care system.

Estia Health Limited [ASX:EHE] took the biggest hit, down more than 18.6% at time of writing. Japara Healthcare Limited [ASX:JHC] fell 17%, and Regis Healthcare Limited’s [ASX:REG] share price reached a record low — falling 17.1%.

Details of the Royal Commission

As reported by the ABC, the investigation will focus on residential and in-home care for seniors as well as care for young people with disabilities who live in aged care facilities.

Mr Morrison stated that he was disturbed by the briefings he had received related to the aged cared sector, throughout the last three weeks since becoming Prime Minister.

I think we should brace ourselves for some pretty bruising information about the way our loved ones, some of them, have experienced some real mistreatment,’ Mr Morrison said.

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How are the aged care companies responding?

Both Japara Healthcare and Estia Health decided to keep ahead of the game, releasing a response to the ASX yesterday welcoming the Royal Commission into the sector.

CEO & Managing Director of Japara, Andrew Sudholz, said:

Japara has always focused on high standards of care for our residents. We welcome the Commission with the hope that it facilitates further reform to the sector that supports better outcomes for all aged care residents now and in the future, as well as providing long term sustainability for our important industry.’

Estia Chief Executive Officer, Norah Barlow, said:

Caring for the elderly is a privilege and enormous responsibility. We will continue to work with government to build a viable sector that older Australians deserve.

While publicly listed aged care operators may receive backlash from the negative press surrounding the industry, both Japara and Estia didn’t seem phased by what’s to come. Investors will definitely be looking for further reassurance though.


Ryan Clarkson-Ledward,
For Markets & Money

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Ryan Clarkson-Ledward is a junior analyst for Markets & Money. Ryan has degrees in both communication and international business. His priority is bringing you the latest price updates on stocks through ASX updates, as well as supporting Sam Volkering with background research. As part of the team at Markets & Money his aim is to provide unbiased and relevant news for readers. Ryan’s work with Sam is designed to provide research that complements Sam’s analysis for small-cap and technology stocks. Together, their objective is to break through all the jargon and give you the hard facts to inform your investment decision-making. Ryan writes for:

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