Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Vital Healthcare posts 48% gain in 1H earnings

Vital Healthcare posts 48% gain in 1H earnings, signals further development potential

By Tina Morrison

Feb. 14 (BusinessDesk) – Vital Healthcare Property Trust, New Zealand’s largest listed medical and healthcare property investor, posted a 48 percent gain in first-half earnings as it gleaned extra income from acquisitions, new developments, rental increases and a tax benefit.

Net distributable income, the earnings it uses for distributions to unitholders, rose to $20.6 million in the six months ended Dec. 31, from $13.9 million a year earlier, the Auckland-based company said in a statement. Gross rental income rose 3.8 percent to $29.9 million while administration and other expenses fell 8.5 percent to $3.2 million.

Vital Healthcare is investing in private hospital facilities in New Zealand and Australia as it expects demand to increase from an ageing population, a rise in chronic disease and higher patient expectations. Three quarters of its assets are in Australia, where 47 percent of the population has private health insurance for hospital care, compared with less than 30 percent in New Zealand, which showed its first quarterly growth in four years during the period.

“The healthcare sector continues to be supported by strong underlying trends, including an ageing population base with rising healthcare demands,” David Carr, chief executive of the trust’s management company, said in the statement.

Units in the trust rose 0.8 percent to $1.285.

Vital Healthcare’s debt-to-total assets ratio dropped to 33.9 percent at Dec. 31, compared with 42.4 percent the year earlier, and below its bank and trust deed covenants of 50 percent.

“This provides additional head room to undertake brownfield developments and acquisition opportunities as they arise,” it said.

In the first half of its financial year, the trust completed three development projects worth A$19.4 million, yielding 10 percent per annum, and it has a further A$30 million of developments underway with similar yields expected. Vital Healthcare has potential projects worth A$100 million over the next four years, it said.

Vital Healthcare gained average rent increases of 2.4 percent from reviews in the first half and its weighted average lease term increased to 14.9 years from 12.1 years in the year earlier period.

The trust is mulling alternative uses for its Allamanda Private Hospital facility in Southport, Australia, from November 2017 because the existing tenants are building a new private hospital.

“We have had good initial interest from potential healthcare operators across several sub-sectors including hospital and aged care providers,” Carr said.

The trust will pay a second quarter distribution of 1.975 cents per unit on March 18 and reaffirmed its expectation for total distributions of 7.9 cents a unit for 2014.

Net profit after tax rose 14 percent to $16.6 million in the first half as the trust benefited from a $600,000 taxation credit, lower interest costs after it reduced debt following an equity raising and as earnings from Australia were crimped by a rise in the New Zealand currency.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news