Oceania Healthcare doubles profit for the six months ended 30 November 2017
Highlights
o Reported net profit after tax increased by $20.5m (93%) compared with
the prior corresponding period (pcp) to $42.5m due to strong uplift in
valuation of investment properties, higher resale margins and sale of new
retirement village units.
o Underlying net profit after tax improved by $10.9m (121%) compared
with pcp to $19.9m.
o Operating cashflow improved from $12.8m to $17.1m (34%) due to the
increase in profit and reduction in interest paid compared with pcp.
o Total assets increased by $160m from pcp to $1.0bn due to significant
development capital expenditure, acquisitions and revaluations. New
greenfields site acquisition in St Heliers, Auckland announced.
o Development programme continuing to accelerate with 360 units and
care suites under construction across four sites.
o Key stage of Meadowbank Village (Auckland) development practically
complete, with Care facility certified. Presale applications received on 26
apartments out of a total of 62 in this stage.
o Supreme Winner Overall Excellence in Care Award for the third
consecutive year for innovative "I Love Music" programme.
o Interim dividend per share announced of 2.1 cents per share (not
imputed) payable on 20 February 2018.
$m''s Six months to 30 November Growth
2017 2016 $m %
Operating Revenue 92.1 89.2 2.9 3.3%
Reported NPAT 42.5 22.0 20.5 93.2%
Underlying NPAT 19.9 9.0 10.9 121.1%
Total Assets 999.1 838.6 160.5 19.1%
Operating Cashflow 17.1 12.8 4.3 33.6%
Earl Gasparich, Chief Executive Officer, commented:
We have delivered a strong result for the first half of the year and expect
to achieve our forecasts for the year ending 31 May 2018 set out in our
Product Disclosure Statement.
Our Retirement Village business grew $4.2m or 35% in the period due to the
sales of new units at our Lady Allum Village (Milford, Auckland) that were
completed in April last year, as well as an increase in our resale margins to
28% (3% over last year). Earnings generated from our Care business declined
by $2.0m (11%) due to both the decommissioning of sites for redevelopment
purposes and softer occupancy in some DHB regions, the impact of which was
partially offset by good cost control.
All of the development projects outlined in the Product Disclosure Statement
are well on track. Completed developments - Elmwood (Manurewa, Auckland) and
Stoke (Nelson) - have been delivered on time and on Forecast. The third
stage of our Meadowbank Village (Auckland), a significant component of the
FY18 Forecast, is practically complete with the Care facility now open and 26
out of the 62 new apartments are subject to presale application, which is
already almost the levels of sales forecast for the full year.
In the second half of the year we will continue to sell down the Lady Allum
Village Attwood apartments (Milford, Auckland) with 30 of the 44 apartments
completed in April 2017 already sold or under application, Elmwood (Manurewa,
Auckland), Stoke (Nelson) and Meadowbank (Auckland) Stage 3. We will
commence presales of "The Sands" (formerly Maureen Plowman) on the beachfront
of Browns Bay (North Shore of Auckland) for which we already have received
extraordinarily high levels of inquiry. We have also just commenced the
redevelopment of our Trevellyn facility in Hamilton with the first stage
comprising a new 90-bed Care Suite facility as well as detailed design and
consenting for our newly acquired site in Waimarie Street, St Heliers
(Auckland).
In our Care business, we will roll out our Clinical Information System which
enhances the way we organise the delivery of care to our residents and
streamlines our compliance requirements, and continue the roll out of our
Award winning "I Love Music" programme.
On behalf of the Board, Oceania Chair Liz Coutts confirmed that an interim
dividend of 2.1 cents per share (not imputed) would be paid to shareholders
on 20 February 2018. This dividend reflects Oceania''s steady earnings and
cash flow and is in line with the Board policy.
ENDS
Oceania Healthcare Limited is New Zealand''s third largest residential aged
care provider and sixth largest retirement village operator. Oceania
Healthcare has a total of 3,893 beds, suites and units located at 50 sites in
the North and South Islands.
Appendix - reconciliation of reported net profit after tax to underlying net
profit after tax
$m
Reported net profit after tax 42.5
Less: Change in fair value of investment property and reversal of impairment
of property, plant and equipment (35.3)
Add: Realised gain on resale 6.7
Add: Realised development margin 4.1
Add: Deferred tax expense/(benefit) 1.9
Underlying net profit after tax 19.9
End CA:00313390 For:OCA Type:HALFYR Time:2018-01-25 08:30:35