New Acting CEO of Estia Aged Care, Norah Barlow, has moved quickly to establish realigned expectations of its 2017 profit, cutting it from $105M to between $86M and $90M – a drop of around 18%. They made $93M in FY16.

The challenge is her predecessor, Paul Gregersen, had given the $105M figure just six weeks ago. He has since fallen on his sword after the 50%+ crash in their share price in a matter of weeks.

Barlow announced that non-wage overheads are now forecast to be $12M higher than previously expected. She also states their $287M in debt has to be reduced. Acquisitions have been put on hold, meaning they no longer have growth from 5,500 beds to 10,000 beds by 2020 as a goal.

Their challenges, like the rest of the sector, include the drift of new clients now preferring DAPs to RADs (meaning funds pegged for acquisitions have to be repaid), ACFI cuts from January, substantial integration costs for their existing acquisitions and recognition of realistic depreciation schedules.

However Norah Barlow is one of New Zealand’s most seasoned and successful executives. $1.6M profit a week in a market where demand exceeds supply gives her the time and latitude to stabilise Estia while they identify a permanent CEO.