The country’s second-largest listed retirement village operator Metlifecare has signalled full-year underlying profit may rise about 13 per cent as it expands.
The Auckland-based company posted a 70 per cent gain in first-half underlying profit, which removes non-cash items including unrealised valuation gains, to $NZ26 million ($A24.86 million), and said profit in the second half of its financial year is expected to be in line with that.
That equates to full-year underlying profit of about $NZ52m, up from $NZ46m in 2014.
Metlifecare, which counts the New Zealand Superannuation Fund and Infratil as cornerstone investors, benefited in the first half from increased sales as it sold more units in Auckland and other higher value villages.
Its development margin, which measures the margin obtained selling an occupation right after development, jumped to 20.8 per cent after it settled the sale of 29 new units, compared with a margin of 14 per cent on the sale of 19 units in the year earlier period. Sales of new units more than doubled to $NZ16.1m, from $NZ7.8m.
“Metlifecare is beginning to enjoy the material benefits of an experienced in-house development team and is looking at other opportunities to build its in-house capabilities and reduce costs as it advances the company’s development pipeline,” said chief executive Alan Edwards.
The company, which boosted its size by merging with Vision Senior Living and private Life Care Holdings in 2013, has 198 units and beds under construction, as it nears its sustainable build rate to at least 200 a year by the 2015 year.
“Identifying and assessing suitable land sites particularly in the upper North Island, remains a priority for the company,” Mr Edwards said. “The property market within our targeted geographical regions continues to perform well and we are taking a carefully considered approach to land acquisition in these areas.”