Property revaluations reflecting valuer caution due to Covid-19's economic impact drove Metlifecare to report a bottom-line loss of $33.7 million for the June year, compared to a $51.2m profit in 2019.

The listed retirement business said revenue rose 7.7 per cent from last year's $124.5m to $134.1m.

"The net loss after tax largely reflected changes in the valuer's assessment of the value of investment properties to reflect the projected economic impact of Covid-19," the business said.

The fair value movement of investment property rose $53.9m last year but this year fell $74.8m.


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Metlifecare said it had reported a solid operating performance in a period which included the full effects of the Government-mandated lockdown.

Chief executive Glen Sowry said despite the significant challenges and costs involved in successfully keeping residents and employees safe from Covid-19, the company delivered an underlying profit before tax of $93.8m, slightly below last year's strong performance.

"This is an excellent achievement in a tough period. After an encouraging first half we experienced a temporary, but major, sales decline in April and May 2020 due to the Government-mandated lockdown restrictions. While our whole team did an incredible job of keeping our villages safe, we invested heavily in additional staff, training, security and personal protective equipment," Sowry said.

"We were pleased to see sales momentum return in late May and continue into the first part of the new financial year. Despite the challenges imposed on us by the lockdown, we managed our costs well and maintained good margins."

Plans for Metlifecare's Fairway Gardens project on an Auckland golf course. Photo / supplied
Plans for Metlifecare's Fairway Gardens project on an Auckland golf course. Photo / supplied

Shane Solly of Harbour Asset Management said: "Metlife has delivered a solid underlying profit while doing a good job looking after its residents through the lockdown period - a high note for what could be its last result as a listed company. Solid sales statistics highlight how well the better capitalised parts of the industry have performed in terms of looking after residents so far through the pandemic."

The company said changes in valuation assumptions following the Government-mandated lockdown resulted the reduction in the fair value of investment property for the year, compared to last year's gain of $53.9m.

"The impact of this movement was partly offset by a reversal in the deferred tax liability of $26.9m," it said.


Total assets at balance date were unchanged at $3.6b and net assets per share were $7.18 per share.

Net assets per share, underlying profit and several other metrics have been adjusted as a result of different factors that are set out in full in the financial statements and notes and the company's presentation.

Metlifecare invested more than $120m in new and existing village developments in the year, with 81 new homes completed in three villages and the opening of two new care homes at existing Bay of Plenty villages.

Sowry said that, as with other property developers, the lockdown stopped construction activity during alert levels 4 and 3.

This delayed construction delivery timeframes by almost two months: around 140 homes scheduled for completion towards the end of FY21 won't be finished until FY22.

The company has 220 units and beds under construction.


Last month, Metlifecare said it had entered into a new scheme of arrangement with Swedish company EQT to buy all its shares for $6 each. That was $1 less than the earlier deal EQT proposed then withdrew after the pandemic broke out.

The new price values Metlifecare at $1.28b, down from the $1.49b earlier.

Metlifecare's largest shareholder, the New Zealand Superannuation Fund, has agreed to vote in favour of the scheme of arrangement.

Shares were yesterday trading around $5.93.