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Retirement giant's profit leaps 24pc but shareholders won't get interim dividend

Anne Gibson,
Publish Date
Wed, 22 Nov 2023, 12:16pm

Retirement giant's profit leaps 24pc but shareholders won't get interim dividend

Anne Gibson,
Publish Date
Wed, 22 Nov 2023, 12:16pm

Rising revenue helped $2.7 billion retirement village giant Oceania Healthcare push up net reported profit 24 per cent in the latest six months, but shareholders aren’t getting a payout for this first half.  

The company, which has opened the new $150 million Auckland village The Helier, made $35.2m reported net profit after tax in the six months to September 30, 2023. 

That is well up on the previous year’s first half of $11.2m. Revenue rose from $122.1m to $131.6m. 

Oceania’s total assets now stand at $2.7 billion, up 6 per cent since March due partly to buying new parcels of land adjacent to existing sites, but also because of revaluations, up $61.6m. 

However, no interim dividend will be paid. 

Company chairwoman Liz Coutts said: “The directors have resolved not to pay an interim dividend to provide for ongoing investment in Oceania’s growth and portfolio transformation.” 

Directors would consider paying dividends again at the next reporting date, after looking at cash flow, market conditions and growth opportunities, she said. 

Village occupancy stands at 90.3 per cent and gearing is at 37.7 per cent with $114m debt headroom. 

Underlying net profit after tax was $27.4m, down 1.4 per cent from last year’s first half when the company reported $27.8m. That metric adds back depreciation on care suites to better reflect the economic substance of the company’s asset base and helps compare the company with its peers. 

Oceania made 255 sales in the six months, up from 226 sales in the previous first half. 

On its future development, the company said 60 per cent of its portfolio was now premium units and care suites, but that would change to 74 per cent once the current pipeline of work was completed. 

The company has a current and future portfolio pipeline of 1396 care beds and 984 care suites. 

Oceania has divested, closed and exited leasehold interests at six care centres and villages. 

The sale of two Auckland sites was completed on August 29 at an amount above independent valuation. 

“We have seven remaining sites held for sale as at September 30,” the company said today. 

Residents are now at Oceania’s new 111-unit St Heliers village, The Helier. The property at 38 Waimarie St has 79 apartments, of which the most expensive has pre-sold for $5 million-plus, according to marketing general manager Sandra Daniel. 

The village has a further 32 premium care hospital suites, which Daniel and CEO Brent Pattison call the “private care model”, costing about $3500 a week or $182,000 a year. The exact weekly fee will depend on the level of care required, but the concept is to provide hospital-standard rest home and palliative care for residents at the luxurious end of the market. 

Shares in the company are trading down 13 per cent annually, about 71¢, giving a market capitalisation of $514m. 

Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas. 

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