Metlifecare bought a 20-hectare site at Clevedon last September. Photo / Supplied
Metlifecare bought a 20-hectare site at Clevedon last September. Photo / Supplied
Delisted privately-owned retirement giant Metlifecare has pushed up revenue 13 per cent but suffered a 74 per cent profit drop due to weaker property revaluations.
Revenue at the company with $5 billion of assets rose from $143 million in the June 30, 2021 year to $163m in the June 30,2022 year.
But net profit after tax fell from $307m to $78.6m when last year's $335m property revaluations sank to $111m in the latest period because of valuation assumptions about the state of the residential property market and other factors.
The company is headed by Earl Gasparich, appointed last June. For the previous seven years, he was chief executive of Oceania Healthcare.
Last year, the company expanded significantly, buying six existing villages and a commercial laundry from the Selwyn Foundation. Around 1000 people live in those Selwyn villages.
"They're buying everything," said one industry insider, commenting on media speculation Metlifecare might buy the New Zealand assets of the Bupa business or other businesses.
Australian media said this month that Bupa's New Zealand rest-home care business was up for sale, and NZX-listed Oceania Healthcare or Metlifecare were possible bidders. A Bupa New Zealand spokesperson said it didn't comment on market speculation.
The Poynton Metlifecare at Takapuna. Photo / Jason Oxenham
Nor is he commenting on any possible Bupa NZ sale.
"Metlifecare is continually exploring opportunities to expand our landbank and care portfolio to support our growth strategy. Mergers and acquisitions are part of this strategy, as evidenced by the Merivale and Selwyn Foundation acquisitions already this year. We are aware of those opportunities you mention, however, it is inappropriate for us to comment on speculation," Gasparich said today.
Metlifecare was established in 1984, and 6500 New Zealanders live in its 33 villages. It employs 1700 staff, has 4630 independent living homes, 472 assisted living units or apartments, and 842 beds and suites in its hospitals or care homes, its latest annual report says.
In one of the largest refinancing deals of the last year, the company restructured $1.25bn of debt and established facilities to borrow an extra $650m for development.
The company is different from most other national retirement village chains because all but one of its properties are in the North Island. Most other chains have more of a geographic spread. Metlifecare owns only one South Island property - a development site.
Most of its properties are in Auckland: 19 villages, nine care centres and three greenfield sites for development, the annual report said.
Earl Gasparich of Metlifecare. Photo / Michael Craig
In 2020, Swedish investment firm EQT took over and delisted the company from the NZX.
In the June 30, 2022 annual report, Metlifecare chairman Paul McClintock and CEO Gasparich said total assets rose significantly by $889m to reach $5bn, "largely driven by the Selwyn acquisition and the completion of 199 new independent living units or care beds".
Debt rose by $384m to $742.6m, reflecting what the company called "increased momentum in building the development pipeline, developing new units and villages and the Selwyn acquisition". Gearing is 28 per cent of asset valuations.
The company also acknowledged the change in NPAT, saying that was "largely driven by lower fair value movement partially due to the moderation of key assumptions in the valuation of the company's investment property portfolio and higher operating expenses as we increased the pace of investment for growth and absorbed inflationary cost pressures".
McClintock and Gasparich said Metlifecare was a very different business from what its owners bought in November 2020.
"We now have a significantly larger portfolio of retirement and aged care villages and a comprehensive development pipeline, driving our trajectory to future growth across more geographical locations," they wrote.
New villages are being opened along with new hospitals, which the two men call care centres. But the company is also buying new greenfield sites as well as the Selwyn purchase, which included a commercial laundry.
Growth had been achieved in an environment where Covid hit, which had resulted in a challenging labour market and increasing economic issues.
The company now had a landbank which could be developed into 3100 units. It had bought six premium greenfield sites in the last 12 months, it said.
"While organic growth will always be our priority, we will selectively explore acquisitions that can both accelerate key strategic goals and add value to the business," it said.
Metlifecare's development sites:
• 4.6ha in Havelock North, bought last December and where 150 units are planned as well as a hospital; • 20ha at Clevedon, bought last September and where 130 units and a 60-bed hospital are planned; • 8.6ha at Pukekohe, bought in July this year for 168 units and a 60-bed hospital; • 13ha at Mangawhai, settled in December, where 160 units and another 60-bed hospital are to be built; • 8.9ha at Whenuapai, settled in April this year for 137 units and a 48-bed hospital; • 5.4ha at Wanaka, pending settlement next year, but where the company plans 142 units and a premium care centre or hospital, whose bed numbers haven't yet been specified.
