Source: Radio New Zealand
File image. 123RF
Retirement village operator Oceania Healthcare has made a first-half profit, despite a slight drop in total revenue.
The company’s total unit sales rose 5 percent to 271 units, including 161 care suites and 110 independent living units.
Key numbers for the six months ended September compared with a year ago:
- Net profit: $4.9m vs $17.1m net loss
- Revenue: $131.6m vs $132.6m
- Underlying profit: $41.5m vs $38.6m
- Total assets: $3.04b vs 2.82b
- Interim dividend: nil
Sales at the Auckland-based Franklin complex were strong with 11 villa sales ahead of completion of construction, which was on schedule.
“The early sales success at our Franklin development reflects the growing strength of Oceania’s sales capability, with product design, pricing, and location increasingly aligned to customer demand,” chief executive Suzanne Dvorak said.
“The project illustrates the effectiveness of Oceania’s disciplined approach to development.
“The broader housing market has constrained our residents’ ability to sell their family homes over recent times, acting as a handbrake on sales. However, once the housing market cycle starts to improve, we expect the strong demographic drivers to return to the fore.”
Chair Liz Coutts said Oceania would not pay an interim dividend in line with the policy targeting a payout ratio of between 40 and 60 percent of free cash flow, subject as well to capital and investment requirements.
“Dividend payments are expected to resume when the business achieves positive free cash flow from operations, supporting a return to payment of dividends,” Coutts said.
She said the focus was on reducing debt, increasing sales and cutting costs.
Oceania planned to take an annual $20.4m out of the business from the next financial year, with four divestments expected to release about $40m in capital.
Dvorak said progress had been made to ensure Oceania’s strategy can deliver stronger cash generation, a leaner cost base and with balance sheet improvements.
“We said we’d strengthen sales, improve operational efficiency, and reduce debt. We’re delivering on all three,” Dvorak said.
“That disciplined execution gives us confidence as we move into the second half and beyond.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
