Arvida Peninsula Club at Auckland's Stanmore Bay. Photo / supplied
Arvida Peninsula Club at Auckland's Stanmore Bay. Photo / supplied
Listed retirement giant Arvida Group, with assets worth $3.4 billion, pushed up annual profit by 51 per cent after a big revenue boost from expansion and property revaluations.
Revenue rose 27 per cent following Arvida buying Arena Living's six Auckland and Tauranga villages for $345 million.
In the year to March 31, 2022, the company in which some ex-All Blacks hold shares made $198.9m net after-tax profit.
That was up on last year's $131m, following care and village service fees growing from $133.6m to $144.7m.
Investment property values increased overall by $1.2b through $841m of acquisition activities and a $159m increase in fair value gain on properties. Last year, gains were only $121.3m in the accounts.
Notes to the accounts said increased revenue from villages and deferred management fees came from buying Arena, new units Arvida added via its own development pipeline and the resale of its existing units at higher prices.
Other revenue included $100,000 of Government subsidy claimed under the Covid-19 support scheme.
Operating expenses rose to $181m, up $28.2m compared to last year.
Arvida made 337 resales of existing properties, up 26 per cent on last year. Only 2 per cent of units are available for resale so occupancy levels are high.
Chief executive Jeremy Nicoll said Arvida's performance benefited from the $345m Arena acquisition, with six villages.
Jeremy Nicoll said Covid took its toll on revenue. Photo / Dean Purcell
Underlying profit for the year at $73.5m was up 42 per cent on the prior year.
On a per share basis, underlying profit was up 25 per cent. The mid-November Arena purchase meant it contributed $14.9m of underlying profit.
The Arena villages had delivered financial performance above expectation highlighting the benefit of buying them, Nicoll said.
"The villages in prime Auckland and Tauranga locations delivered a number of immediate benefits that we have been able to realise as well as presenting longer-term options for future growth," he said.
New care suite facilities at Auckland's Aria Bay and Tauranga's Copper Crest sold strongly. Nicoll said the purpose-built care suite product at those places was designed to offer residents a premium product with up to hospital-level care.
But Covid took a toll. Revenue was hit by staffing shortages, particularly nurses, and restrictions on new admissions during lockdowns and the Omicron peak, Nicoll said.
About $500,000 of additional operating expenses related to Covid-19 in the year.
"Additional expenditure was again incurred to ensure resident safety and staff wellbeing, as the priority was to protect our resident communities and teams," he said.
Arvida's national portfolio is 5456 units and beds in 35 retirement villages. Acquisition, disposal and development activity in the year added a net 1089 units, resulting in a 25 per cent expansion.
The company built 221 new units and apartments at 10 sites in the year, despite Covid lockdowns. Building activity was in line with market guidance given at the start of the year of between 200-250 units.
The company bought greenfields sites at Waikanae Beach and Te Awamutu for future development.
Arvida now has a significant future development pipeline of 1928 units, it said today.
"Adding to our land bank supports future greenfield development as we look to lift our build rate to 300-plus units annually," Nicoll said.
Shareholders will get a final dividend of 3cps on June 22. Chairman Anthony Beverley said total annual dividends were $40m.
Shares are trading around $1.59, down 11 per cent annually, a far lesser drop than many other listed retirement businesses have suffered. It has 720 million shares issued, giving a market cap of $1.1b.
