Metlifecare Delivers Strong Half Year Result

Metlifecare Delivers Strong Half Year Result

Metlifecare achieved another strong result for the half year ended 31 December 2014 (1H15) as it continued its focus on construction, development and portfolio growth.

Net profit after tax of $39.7 million for 1H15 was up 48% on 1H14 and achieved an underlying profit1 of $26.0 million, up 70%.

Sales activity remained strong in 1H15, with 29 sales and 202 resales generating gross cash flows of $89.1 million, 28% up. New sales produced gross cash flows of $16.1 million in 1H15, twice the value produced in 1H14. Realised resales gains of $14.1 million were up 64%.

Metlifecare currently has 198 units, apartments and care beds under construction and is making good progress to lifting sustainable build rate to at least 200 per year.

On Auckland’s North Shore, construction continues on The Poynton stage 4 (62 apartments), Greenwich Gardens stage 1 & 2 (27 villas), The Orchards stage 1 (17 apartments and 36 care beds) and stage 2 (37 apartments). Metlifecare expects to see the first residents move into these developments late in Q4 FY15 except at The Orchards stage 2 where occupation is expected in Q1 FY16. At Oakridge Villas in Kerikeri, Metlifecare has initiated construction of the Pavilion which will provide the residents with lounges, dining areas, an activities area, a swimming pool, gymnasium and a wellness centre and additional infrastructure is being built to support further development at this site.

Metlifecare has also progressed consenting and achieved resource consents to build 70 care beds and 16 serviced apartments at Somervale in Mount Maunganui. Resource consent was also achieved to build 42 apartments and 36 care beds at The Avenues in Tenth Avenue, Tauranga.

Revenue of $48.9 million was a 4% improvement driven mainly by higher DMF income. Total expenses reduced slightly to $41.2 million for1H15. Operating cash flow increased to $33 million (1H14: $11.8 million) on the back of stronger sales volumes and higher realised resales gains.

Total assets grew 4% to $2.09 billion during the period. This growth was due to the $32.3 million increase in the fair value of investment properties and increased development activity, consisting of $42.4 million of capitalised expenditure.

Metlifecare Chief Executive Officer, Alan Edwards, said: “We are pleased to report another strong result for the 2015 half year as we continue to build on our position as a leading New Zealand retirement village and care provider.

“Growing Metlifecare profitably remains an important part of our focus for this year. The company is positioning itself to cater for the increasing demand for quality retirement living options.

“We have a number of exciting development projects currently underway. The conditional addition of the 5 hectare Red Beach property to our development pipeline is a significant highlight as it will add over 300 apartments and care beds. Identifying and assessing suitable land sites, particularly in the upper North Island, remains a priority for the company. The property market within our targeted geographical regions continues to perform well and we are taking a carefully considered approach to land acquisitions in these areas.

“Metlifecare is beginning to enjoy the material benefits of an experienced in-house development team and is looking at other opportunities to build its in-house capabilities and reduce costs as it advances the company’s development pipeline.

“We are strategically located in prime residential markets, where there is good demand for our offering. New sales stock levels will increase as The Poynton stage 4, The Orchards stages 1 & 2 and Greenwich Gardens stages 1 & 2 reach completion late in Q4 FY15 and early Q1 FY16.”

The directors have declared an interim dividend of 1.5 cents per share (up 20% on 1HY14), to be paid on 17 April 2015, with a record date of 2 April 2015. The Dividend Reinvestment Plan continues.

ENDS

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