Radius Residential Care enters trading halt for capital raise, buying four properties

Radius Elloughton Gardens aged care facility in Timaru picture. Photo / supplied

Newly-listed retirement village and owner Radius Residential Care is raising new capital and has gone into a trading halt this morning.

"Radius has requested that a trading halt be applied to its quoted ordinary shares to facilitate an orderly market for its securities while the bookbuild for the placement component of an equity capital raising is undertaken," the company said today.

It subsequently announced it is buying four properties it already leases for $31.4 million via cash and shares: Taupaki Gardens in Kumeu, Windsor Court in Ohaupo, Heatherlea in New Plymouth and Timaru's Elloughton Gardens.

Conditional agreements have been struck on the four sites all owned by the largest landlord Radius deals with, Ohaupo Holdings.

"The purchase of these facilities increases Radius Care's brownfield development pipeline and gives Radius Care ownership of the aged care facilities adjacent to two co-located retirement villages that it owns and operates," it said today.

Settlement will be partly in cash and new Radius shares in to Ohaupo Holdings.

Radius plans to raise money for the purchases via a $23m placement with an extra $7m provision, and a $5m retail offer with an extra $5m provision.

The business, only trading on the NZX for the last seven months, announced in May a net after-tax position change from last year's $2.8 million loss to $1.7m profit. Results were for the year to March 31.

Revenue rose from $113m last year to $121m.

But the pandemic and hiring more management took a toll on staffing costs at the business which only listed on the NZX in December.

"The closure of New Zealand's borders in March 2020 led to a requirement to recruit nurses from the local labour pool which, together with a strengthening of the senior management team ahead of the NZX listing, contributed to a 5.1 per cent increase in employee costs," Radius said.

The business was established in 2003 to meet the growing demand for aged care and associated health care services.

Radius has operations 22 geriatric or aged-care hospitals and accommodates around 1700 residents.

It owns Elloughton Village in Timaru, Windsor Court in Ōhaupō in the Waikato and bought a 4.3ha Belfast, Christchurch property.

Early in 2010, chief executive and director Brien Cree led a management buyout of the company, which brought it back into New Zealand ownership from foreign investors.

Radius leases 1537 aged care beds from third parties. It owns five sites but leases a further 19 from other parties. All up, it owns 254 village units and aged-care beds.

The company did not issue any new shares when it listed seven months ago and the listing was purely so it could expand - an ambition now being fulfilled via the capital raise.

Shares are trading at 90c, unchanged since listing.