4.6 Compensating for Lower Financial Performance 4.6.1 Characteristics of Group 4 providers Providers in the better performing Groups 1, 2 and 3 (684) represent 67% of all providers and generate an aggregate OEBITDA of $1,909m, with an average of $14,370 prpa. The lower financially performing Group 4 (340), generate an aggregate negative OEBITDA of $77m, with average negative OEBITDA of -$2,072 prpa, for Group 4 providers are over-represented in the not-for-profit and government sectors and tend to be located in ‘regional’ locations. Table 27 shows the distribution of providers by ownership and location. Table 27: Distribution of Providers by Ownership and Location Location Not-for-Profit For-Profit Government City 264 306 20 City and Regional 29 8 2 Regional 251 58 86 Total 544 372 108 The over-representation of not-for-profit and government providers in ‘regional’ locations, which may bring financial challenges, suggests that they (and their funders) may have other than financial measures as the key focus of their operations. Providers in Group 4 exhibit the following characteristics that distinguish them from the better performing Groups 1, 2 and 3: They tend to operate smaller scale facilities. They are more dependent on capital grants. While some receive additional government (state and federal) funding, many rely on their communities (for donations) or past surpluses, and those with multiple activities may cross subsidise to supplement lower operating revenues. Despite their lower financial performance, providers in this group have indicated a desire to not only stay in the industry but to expand in either portfolio size or scale of facility. Some of the strategies that Group 4 providers may use to overcome their lower financial performance are discussed in the next section.
4.6 Compensating for Lower Financial Performance 4.6.1 Characteristics of Group 4 providers Providers in the better performing Groups 1, 2 and 3 (684) represent 67% of all providers and generate an aggregate OEBITDA of $1,909m, with an average of $14,370 prpa. The lower financially performing Group 4 (340), generate an aggregate negative OEBITDA of $77m, with average negative OEBITDA of -$2,072 prpa, for Group 4 providers are over-represented in the not-for-profit and government sectors and tend to be located in ‘regional’ locations. Table 27 shows the distribution of providers by ownership and location. Table 27: Distribution of Providers by Ownership and Location Location Not-for-Profit For-Profit Government City 264 306 20 City and Regional 29 8 2 Regional 251 58 86 Total 544 372 108 The over-representation of not-for-profit and government providers in ‘regional’ locations, which may bring financial challenges, suggests that they (and their funders) may have other than financial measures as the key focus of their operations. Providers in Group 4 exhibit the following characteristics that distinguish them from the better performing Groups 1, 2 and 3: They tend to operate smaller scale facilities. They are more dependent on capital grants. While some receive additional government (state and federal) funding, many rely on their communities (for donations) or past surpluses, and those with multiple activities may cross subsidise to supplement lower operating revenues. Despite their lower financial performance, providers in this group have indicated a desire to not only stay in the industry but to expand in either portfolio size or scale of facility. Some of the strategies that Group 4 providers may use to overcome their lower financial performance are discussed in the next section.
acfa_report_-_accessible_-_final.docx