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

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news