KEY POINTS:
Retirement village operator Metlifecare has posted a loss of $53 million for the year to the end of June, saying the result was due to revaluations and non-cash impacts of new accounting rules.
The comparable figure from a year earlier was a net profit of $101.7m.
The company said the key change from the new rules was that unrealised gains or losses arising from revaluations of investment property were included in the income statement.
As a result, reported profits were now strongly influenced by the underlying property market and could vary significantly from year to year.
The company's gross investment property value at the end of June was $1.176 billion, $44m down on the corresponding figure from a year earlier plus additions during the year.
That "essentially flat" movement in the gross value of investment property was a positive outcome given the state and decline of the New Zealand residential housing market during the reporting period, Metlifecare said.
It should also be noted that there was an exceptionally strong revaluation gain of 9.7 per cent, or $102m, for the comparative full year to June 2007.
Metlifecare chief executive Richard de Haast said it was important for Metlifecare investors to understand that the fluctuations in reported profits did not affect Metlifecare's cash position or its underlying business performance.
"In fact cash flow in the business remains very strong and the company has delivered a cash operating surplus of $23.6m for the period," he said.
For the corresponding full year net operating cash flow was a surplus of $48.8m.
For the latest year a final dividend of 8 cents per share was declared, taking the total for the year to 19c.
Mr de Haast said the company was well positioned to take full advantage of easing conditions in the economy and the inevitable upturn in the residential housing market.
During the year the company bought Merivale Retirement Village in Christchurch, with 61 villas and serviced apartments and an 80 bed care facility.
Among other developments during the year, the building of 28 apartments was completed at Metlifecare Pinesong, completing the village which includes 359 villas, apartments and serviced apartments and 10 resident only care suites.
At the end of June, Metlifecare owned and operated 16 lifestyle villages incorporating 10 care facilities. Across those villages it had 2384 villas and apartments, with more than 3300 residents.
- NZPA
