Metlifecare makes record $251.5m profit, up 10pc

The Poynton, a Metlifecare village in Auckland. Photo/Jason Oxenham

New Zealand's second largest listed retirement business, Metlifecare, pushed up its annual net profit after tax by 10 per cent to a record $251.5 million due to a big expansion of its operations.

The company, second only to Ryman Healthcare, has released its annual result for the year to June 30, 2017 to the NZX this morning.

Metlifecare plans to increase dividends, paying out 30 to 50 per cent of underlying operating cash flows and of record profitability.

"The company will aim to increase dividends yearly," the business said.

Last year, Metlifecare made a net profit after tax of $228.7m

Chief executive Glen Sowry said the record performance was driven by a 14 per cent increase in the total asset values to $3 billion, as well as a significant increase in realised resale gains and development margins.

The value of Metlifecare's net tangible assets increased to $6.43 per share, up 21 per cent or $1.11 per share.

"We delivered on our growth targets with the completion of 235 new units and care beds - more than double last year's number - while at the same time increasing the development margin to 23 per cent from last year's 13 per cent," Sowry said.

Metlifecare made underlying profit - which removes the impact of unrealised fair value movements on investment properties - of $82.1m, up 24 per cent. Record development sales of $82.5m were made, with an average price of $640,000 per property.

The business says it is now on track to finish 233 retirement village units, apartments and hospital care beds in the June 30, 2018 year but it has a development land bank of 1666 units and hospital beds.

More than 5000 people live in Metlifecare's 24 villages which the business says are "located primarily in high-value and high-growth regions of the upper North Island.

However the business has leaky building issues, estimating this will cost it $44.1m over seven years.

At Coastal Villas north of Wellington, units it has fixed are selling for about $100,000 higher than pre-repair, the business said in today's investor presentation.

The company is initiating remediation work at Waitakere Gardens and Dannemora Gardens in Auckland.

Shares are duel listed on the NZX and ASX.