Vital Healthcare Property Trust, the listed hospital owner and developer, has increased annual earnings 4.6 per cent, beating estimates, as its rents increased from an expanding Australian business, and flagged a bigger return for investors in 2016.
Distributable earnings, which strips out unrealised movements in the value of property, rose to $36.4 million, or 10.6c a unit, in the 12 months ended June 30, from $34.7 million, or 10.4c, a year earlier, said trust manager Vital Healthcare Management. That was ahead of Forsyth Barr's forecast for a fall in annual earnings to $32.3 million.
Net profit more than doubled to $96.5 million, including an $84 million gain on the value of Vital's property portfolio. About 93 per cent of that uplift came from the trust's Australian properties, and 70 per cent was on sites that had been redeveloped.
"Vital has finished the 2015 financial year with solid financial results and a strong portfolio of properties," said chief executive David Carr.
"The fundamental drivers of healthcare - an ageing population, growing private health insurance and high demand for outpatient and hospital services - remain positive tailwinds in executing our strategy."
The trust is investing in private facilities in New Zealand and Australia as it expects increased demand from an ageing population, a rise in chronic disease and higher patient expectations.
About 47 per cent of Australians have private healthcare cover for hospitals, compared with about 30 per cent of New Zealanders.
Vital's net property income rose 2.5 per cent to $59.4 million, with Australian rents, up 4.5 per cent to $46 million, offsetting a 4.3 per cent fall in New Zealand income to $13.4 million.
The board declared a fourth-quarter distribution of 2c a unit. That takes the annual return to 8c a unit, and Vital intends to raise that to 8.1c in the 2016 financial year.
The units closed down 1.2 per cent yesterday at $1.65.
Vital Healthcare
• Year ended June 30
• Distributable earnings of $36.4 million, up from $34.7 million.
• Net profit more than doubled to $96.5 million.
• Annual distribution of 8c a unit.