Oceania Healthcare village in Nelson. Photo / supplied
Listed retirement village owner-operator Oceania Healthcare’s net after-tax interim profit dropped from $35 million to $8m.
And that was partly due to the previous result being inflated from an adjustment on new business assets.
But revenue was up at at the company which declared its half-year result to September 30, 2022.
Revenue rose from $113m in the previous corresponding period to $122m in the latest six months.
Revaluations which were $31m previously were $21m in the latest period.
Total expenses rose too, from $122m to $136m, but total assets were up 12 per cent to $2.5b.
The increase included the addition of the Remuera Rise and Bream Bay villages for $57m. These sites have 83 villas, 58 apartments and 12 premium hospital beds.
Oceania has the option to buy a further 6.7ha of Bream Bay development land.
These purchases were funded by an increased bank facilities agreement and contributed to the 12 per cent growth in total assets since March.
Realised gains from new sales and resales were up 12 per cent, with strong development and resale margin performance.
Total sales volumes were in line with the prior corresponding period but development and resale margins increased, “demonstrating Oceania’s ability to maintain pricing despite residential housing market conditions”.
Brent Pattison, chief executive, said: “We have achieved a good level of resales and strong resale margins during the period, with 165 resales of independent living unit and care suites in the six months to September 30, 2022.”
The company is developing a further 519 units and care suites at 10 New Zealand sites. In the latest six months, 127 care suites were delivered at Lady Allum at Milford, and Woodlands at Motueka.
Oceania has current drawn debt and bonds of $503.2m and $5.8m of cash, representing $227.6m of undrawn net debt headroom.
The increased facilities will be used to accelerate its development pipeline.
Shareholders will get an interim dividend of 1.9 cents per share on December 14.
Shares are trading around 82c, down 36 per cent annually. The company has a market capitalisation of around $586m.
Firm selling older rest homes to put money into more upmarket villages, fancy care suites.