Aged care and retirement village operator Metlifecare has more than tripled half-year net profit, mainly due to the impact of booming property prices.
Net profit for the six months to December 31 was $125.7 million, up from $37.7m in the prior half, although underlying profit, which removes property revaluations measures, rose 29 per cent to $33.5m.
The Auckland-based company, which operates 25 retirement villages and nine care facilities nationwide employing more than 1000 staff, said revenue increased just 2 per cent to $52m.
But the fair value movement of investment property leapt 298 per cent on the prior period to $128.5m as a result of last year’s rampant property market particularly in Auckland and Bay of Plenty.
Chief executive Alan Edwards said Metlifecare’s low level of debt and significant funding headroom allow it to seek further brownfield and greenfield opportunities.
“This is another strong result and we are pleased that the villages in Auckland and the Bay of Plenty have experienced strong value growth on the back of a solid real estate market,” he said.
“With the number of New Zealanders aged over 75 years expected to almost double in the next 30 years, the bulk of them in the upper North Island, Metlifecare’s development pipeline is strategically focused in these regions.”
Underlying profit guidance for the full year is in the range of $62m-$64m, up from $52.4m in the previous year.
Metlifecare currently has 307 units under construction, up 55 per cent on the previous period. During the half, it completed 41 units and 36 care beds. The company expects to deliver a further 28 units in the second half at Oakridge Villas and Papamoa Beach Village.
The overall target is to deliver a range of 105 to 160 units and beds in the 2016 financial year.