ElderCare Delivers $5.6 Million

Monday, 14 August, 2000 Media Release

ElderCare Delivers $5.6 Million on Back of Strong Second Half
35% Up on Initial Forecast

Auckland – 14 August 2000 – Listed retirement care provider ElderCare New Zealand (NZSE: ELD) today announced a net after tax profit of $5.6 million on revenues of $25.6 million for the twelve months ended 31 May 2000. This compares with a loss of $3.3 million on revenues of -$844,000 for the corresponding period in the previous year and represents a fully diluted earnings per share (EPS) of 3.2 cents.

ElderCare Chief Executive Officer, Alan Clarke, said the result was up 35% on the full year profit after tax of $4.1 million forecast in the company’s Information Memorandum of May 1999 relating to its change in direction.

Condensed statement of financial performance
(audited)
Year ended 31 May 2000
($000s)
FY 1999
Actual FY2000
Forecast FY 2000
Actual
Total Revenues $(820) $20,940 $25,560
Net profit (Loss) $(3,325) $4,109 $5,550

The result also represents a significant improvement in the company’s earnings for the six months ended 31 May 2000, which showed a profit increasing from $2.2 million in the first half to $3.4 million in the second half, and revenues increasing from $9.8 million in the first half to $15.8 million in the second half.

Clarke said fundamental to this improvement was ElderCare’s realisation of significant parts of its growth strategy which called for a drive to improve the company’s strong fee-based revenues to complement its property development activities.

“In the second half of the year we began to further evolve our growth strategy, seeking investment opportunities in related healthcare areas. In March we completed the acquisition of two hospital facilities, further strengthening our fee-based earnings and adding capacity for another 98 residents. We now provide accommodation for in excess of 900 residents throughout our 11 nursing homes and hospitals and four retirement villages (including one under construction)”.

In the same month ElderCare issued 14.07 million shares to a number of leading institutional and professional investors at 51 cents per share raising a total of $7.08 million, the success of which Clarke says reflects increasing institutional interest in the company and appreciation of the growth sector in which it operates.

Commenting on activity post 31 May 2000, Clarke said the company continued to focus on investment opportunities in related healthcare areas. “On 2nd June we completed the purchase of a 67 percent share in Ranworth Healthcare Limited, New Zealand’s largest brain injury assessment and rehabilitation service provider. This fits the company’s strategy of acquiring care-based operations with good track records in sound locations with expansion opportunities.”

Going forward, ElderCare’s Chairman, Maurice Kidd, said the company will continue to build on its growth strategy by focusing on costs, enhancing service delivery and the capability of its people. “Each of our operations has set operational improvement goals for the year and we believe through a combination of strong management and a stable fee-based earnings structure we will continue to bring greater value to our residents and shareholders.”
Company Background
ElderCare New Zealand Limited (NZSE: ELD) develops, invests in and manages retirement and other health care facilities. The company owns a substantial portfolio of nursing homes, assisted living and assessment and rehabilitation facilities throughout New Zealand, in which it offers broad and varied services to meet the healthcare needs of New Zealanders.

ENDS

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