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ElderCare Confirms $4.1 Million Profit Forecast

ElderCare Confirms $4.1 Million Profit Forecast, Adds to Assets

ElderCare (NZSE: ELD) today confirmed that it was on track to achieve its full year earnings forecast and elaborated on its expansion programme.

Speaking at the company’s Annual Meeting, Chief Executive, David Lowry, told shareholders that ElderCare’s fee based earnings structure has put the company on track to achieve its net earnings forecast of $4.1 million for the year ending 31 May 2000.

“Fees from resident services provide an excellent platform for sustained growth in the elderly care market,” he said. “While earnings derived solely from property development can be at times lucrative, they are susceptible to volatile market fluctuations. On the other hand, earnings derived from in-house hospital and care fees tend to be more sustainable. In addition the margins associated with these services are also relatively high and stable.”
Lowry also confirmed that the company was in the process of finalising arrangements for the purchase of two more facilities, which will add another 100 beds to its operations.

He also outlined progress on three of the company’s major developments: Regents Park, at Westgate in Auckland , Eldon Lodge in Paraparaumu, and Te Mata in Havelock North.

Regents Park Village is now well underway: the prospectus and stage one villas have now been completed. Stage two, comprising six villas, is expected to be completed in mid-February. This village will ultimately cater for 102 residents, plus the 40-bed nursing home on the adjacent West Harbour Lodge.
Eldon Lodge Hospital in Paraparaumu was opened last Monday, 22 November. The 46-bed hospital has been added to the company’s current 54-bed facility, and will allow residents to move into hospital care as required.

Te Mata Residential Estate, at Havelock North, is also underway with the prospectus completed, and the show unit up. ElderCare is about to commence with stage two of this village, which will ultimately cater for 220 residents.
Last month ElderCare settled purchase for the 4.2 hectare Chelsea Rosedale Road site on Auckland’s North Shore for $2.5 million. The Chelsea site will be used to build a 100-bed hospital and assisted living units for elderly people.

“ElderCare is a growth company in a growth industry,” said Lowry. “It is operationally sound and on-track to a profitable first year following its change in direction. It has a management team who have the expertise and resolution to position it as the investment vehicle of choice for investors in the elderly care market.”

Company Background

ElderCare New Zealand Limited (NZSE: ELD) is a retirement care provider. The company owns a substantial portfolio of nursing homes and assisted living facilities throughout New Zealand at which they offer broad and varied services for the healthcare needs of elderly people.
ENDS

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