NZX-listed retirement village & aged care operator Arvida Group Ltd lifted net profit by $14.5 million (47.4%) from a year ago to $45 million in the September half-year.
The company said yesterday said the net profit included fair value movement on investment property of $35.3 million, up from $25.3 million in the September 2018 half-year. The higher fair value movement reflected continuing positive unit pricing movement across the portfolio and the increase from 3 villages acquiring from the Sanderson Group for $180 million.
From March to September, the company grew its assets by 53% ($542 million) to $1.8 billion, including the Sanderson acquisitions.
Arvida now has a portfolio of 2359 retirement units & 1682 aged care beds in 32 villages, and a development pipeline of 1693 units.
Underlying profit included $17.9 million of gains on the settlement of 192 sales of occupation rights, up 16%, and a 41% ($12.7 million) lift in resale gains. This reflected 148 resales, up 10%, and higher resale margins at 24%. On average, resale prices were 3% above the pricing independently assessed at 31 March 2019, highlighting continued pricing momentum & demand for homes.
$34.3 million of new unit sales were settled at a development margin of 19%.
Chief executive Bill McDonald said the outwardly facing community concept at Waimea Plains in Nelson had been well received: “The concept helps make the connection to the community by creating a ‘neighbourhood’ that may include a health & fitness centre, hospitality, allied health & mixed retail. Sales of new villas & townhouses in the first stage at Waimea Plains has gone particularly well.
“In Christchurch, the development at Park Lane is to include a similar concept where both residents & the wider community will have access to a new on-site facility and complementary health & wellbeing services.”
Mr McDonald said development of new care & apartment facilities at Aria Bay in Auckland and Copper Crest in Tauranga were progressing to completion in the 2021 financial year. These developments would provide the first care suites to be offered under the new Arvida care occupational right agreement structure.
Mr McDonald said Arvida expected to continue the momentum of the September half-year into the balance of this financial year.
Performance highlights (September 2018 half-year in brackets):
- Net profit after tax, up 47.4% to $45.0 million ($30.5 million)
- Underlying profit, up 30.8% to $23.4 million ($17.9 million)
- Underlying earnings/share, up 16% to 5.0c/share
- Revenue, up 5.1% to $79.6 million ($75.7 million)
- Continued high care occupancy above 95%
- Total occupation rights sales, up 16% to 192
- Total resales, up 28% to $53.9 million
- 94 new units delivered, on track for delivery of 200 new units for the 2020 financial year
- Annual delivery rate confirmed at 250+ units in the 2021 financial year
- Investment properties, $1.55 billion ($1.02 billion at 31 March, $929 million at September 2018)
- Net tangible assets/share, $1.25 ($1.15)
- Basic earnings/share, 9.62c (7.38c), diluted 9.58c (7.33c)
- Dividend of 1.45c/share declared for second quarter
1 August 2019: Arvida settles Sanderson purchases after strong capital-raising support
25 June 2019: Arvida buys 3 Sanderson retirement villages
13 September 2017: Arvida buys 3 more retirement villages
Attribution: Company release.