Arvida Group, the retirement village and aged care facilities operator, says it's "on track to deliver a strong FY17 result" after it more than doubled first-half profit.
Net profit rose to $19.4 million in the six months ended September 30, from $7.4m a year earlier, with revenue up 27 per cent to $49.9m, the Auckland-based company said in a statement. Arvida, which has 25 villages across the country, also gained $14.3m from an increase in the valuation of its investment properties, an improvement from $3.8m in the first half of the previous financial year.
In October, Arvida completed a $41.8m capital raising by selling about 35.7 million shares with a 90 per cent uptake of entitlements amongst shareholders, to help fund a $66m purchase of two villages in Tauranga and one in Cambridge. Those purchases were settled in early October and were expected to add an additional $4.4m of underlying profit to Arvida's earnings, a 28 per cent boost to its 2016 result.
The company is conservatively geared at 10 per cent following its capital raise and settlement of its October acquisitions, and has headroom to fund planned development activity and the $21.2m acquisition of Cascades Retirement Resort in Hamilton under a new $80m multi-tranche facility, it said in the results presentation posted to the NZX this morning. The Cascades acquisition, which it conditionally agreed to today with settlement expected on December 30, will increase proforma gearing to 14 per cent, it said.
Arvida's care facility occupancy is at 95 per cent, well above the national average of 89 per cent, and care facility revenue accounted for 72 per cent of its total revenue at $33.5m, it said. The company gained $21.5m from new residents through 87 resales, with a 15 per cent resale margin, and $3.6m from 12 new sales, with a 19 per cent margin, while it paid $11.4m to residents who left.
The board declared a 1.1 cent dividend for the September quarter, with a December 8 record date, payable on December 16. Arvida's policy is to distribute between 60 per cent and 80 per cent of underlying profit per annum; it said it made $9.6m in underlying profit in the first half and is paying $3.7m, or 38.5 per cent, in dividends for the quarter. The board said it affirmed guidance that the current dividend level is sustainable.
The shares gained 0.9 per cent to $1.15, and have risen 25 per cent this year.