Vital Healthcare Property Trust half-year profit up 60%, boosted by $61m revaluations

Vital said it had outperformed benchmarks on the NZX, despite the pandemic. Photo / supplied

Vital Healthcare Property Trust pushed net profit after tax up 60 per cent in its latest half-year results.

The business which owns 42 hospitals, outpatient, specialist and medical centres here and in Australia declared a $91m net profit after tax for the six months to December 31, 2020.

Revenue rose 8.5 per cent to $54m, up on the previous corresponding period's $49m but the bottom line was boosted by property revaluations which came in at $61m.

Vital manager NorthWest Healthcare Properties Management said the NZX listed trust's defensive portfolio helped it record a 19.8 per cent total return for the 12 months ended December 31, outperforming the S&P/NZX REIT Index by 15.4 per cent and the broader S&P/NZX 50 index by 5.9 per cent.

That was despite the pandemic, it said.

Aaron Hockly, Vital's fund manager, said: "During the half-year, the manager continued to execute on our announced strategy:

• "Improving the portfolio across all key metrics including over $200m of capital transactions with three sales and two acquisitions;

• "Continuing to expand our development pipeline to ensure 10 to 15 per cent of the portfolio remains under development over the medium-term;

• "Raising over $170m in new equity to reduce balance sheet gearing and provide capacity for future value-enhancing acquisitions and developments."

Net property income rose 7.5 per cent from $49.9m to $54.2m.

The business leased more than 25,000sq m of new or existing space during the six months and has 99.1 per cent of its space committed to tenants, with an extremely long weighted average lease term of 19 years, up from 18 years previously.

It sold three regional Australian hospitals for $100.4m in the half-year at Taree, Dubbo and Burnie.

It used the money from those sales to buy the 51-bed, 11-theatre purpose-built Grace Hospital in Tauranga for $95m. That hospital was built in 2007 but expanded last year and is the city's only private in-patient hospital on a site of nearly half a hectare, Vital said.

Southern Cross leases it in a joint venture with Evolution Healthcare on a 30-year term.

Vital has a further $356.5m development pipeline in hand in nine projects - six private hospitals and others out-patient or mixed properties.

Unitholders will get 4.3cpu for the half-year.