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


Metlifecare profit sinks 69% on lower property revaluation

Metlifecare profit sinks 69% on lower property revaluation, pays back debt

By Paul McBeth

Aug. 23 (BusinessDesk) – Metlifecare Ltd., which sold its Merivale Retirement Village for $26 million in December, reported a 69% drop in full-year profit after booking a smaller gain in the value of its portfolio than in 2010.

Net profit was $20.8 million, or 17 cents per share, in the 12 months ended June 30, down from $67.5 million, or 55.1 cents, a year ago, the Auckland-based retirement village operator said in a statement. The slump in bottom line profit came as booked a $27.5 million gain in the unrealised value of its investment properties, compared to a $73.2 million gain a year earlier.

Operating revenue rose 3.6% to $65 million, though there was an outflow of cash from its operating activities, including interest payments, of $12.2 million, up from an outflow of $7 million in 2010. It blamed higher operating costs for the increase.

Total cash-flow was positive on the back of the Merivale sale, which netted $24.4 million and along with internally generated cash, was used to cut debt by $44.5 million. Metlifecare had bank loans of $124.3 million as at June 30, down from $168.1 million in 2010.

“Our strong cash flow result enabled a considerable reduction in debt and this together with our announced profit increased the company’s total equity,” chairman Greg Flood said in a statement. “This position has enabled the company to create additional debt headroom and the company is therefore well-placed as we enter 2012.”

Metlifecare’s previous chairman, Charles MacDonald, was an outspoken critic of the International Financial Reporting Standards, which became mandatory in 2007 and forced companies to recognise the changing value of assets, even if those assets were retained.

MacDonald called them a case of “form over substance” after the retirement village operator posted a loss of $115.7 million in 2009 as it wrote down the value of its investment portfolio, which has since bounced back.

The value of Metlifecare’s portfolio fell to $1.26 billion as at June 30 compared to $1.27 billion a year ago.

Metlifecare said its stronger balance sheet will help it reinvest in existing assets and complete brownfield development as well as begin greenfield plans.

The retirement village operator won’t pay a dividend to shareholders, though it is optimistic it can resume returns to investors from its stronger position.

The shares were unchanged at $1.95 in trading yesterday, and have dropped 15% this year.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Consumer NZ: Bank Complaints On The Rise, Survey Shows

Nearly one in five Kiwis had a problem with their bank in the past year, Consumer NZ’s latest satisfaction survey finds. Consumer NZ chief executive Jon Duffy said the number of bank customers reporting problems had jumped to 18%, up from 11% in 2020... More>>

Federated Farmers: Applauds UK-Australia Free Trade Deal

News that Australia and the UK have signed a free trade agreement is a promising step forward in the fight against tariffs and protectionism, Federated Farmers says.
"It reinforces the international rules-based trading framework and is important for rural producers and global consumers," Feds President Andrew Hoggard says... More>>

REINZ May Data: House Price Rises Continue; Auckland Hits New Record Median Price Again

Median prices for residential property across New Zealand increased by 32.3% from $620,000 in May 2020 to $820,000 in May 2021, according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand... More>>

Stats NZ: GDP Climbs 1.6 Percent In March 2021 Quarter Following December Dip

Gross domestic product (GDP) rose by 1.6 percent in the March 2021 quarter, following a 1.0 percent fall in the December 2020 quarter, Stats NZ said today. "After an easing of economic activity in the December quarter, we’ve seen broad-based growth in the first quarter of 2021... More>>

Reserve Bank: Debt Serviceability Restrictions Added To Policy Toolkit

The Reserve Bank – Te Pūtea Matua and the Minister of Finance have agreed to update their shared Memorandum of Understanding (MoU) on macro-prudential policy and add debt serviceability restrictions to the list of potential tools available... More>>

Auction: 1.4 Million In Rare Vintage Watches, Gems, Jewels & Diamonds Go Under The Hammer At Webb’s

An auction event showcasing over 1.4 Million dollars in rare jewels, gems, diamonds and vintage watches is due to take place this Sunday by Auckland based auction house Webb’s... More>>