Arvida posts first-half profit of $7.4 mln, expects to beat full-year prospectus forecasts
By Jonathan Underhill
Nov. 26 (BusinessDesk) - Arvida Group, which operates 21 retirement villages and aged care facilities, posted first-half
profit of about $7.4 million, putting it on track to meet its prospectus forecast for full-year earnings.
Arvida listed in December 2014, having raised $75 million in an initial public offering at 95 cents a share. It was
created through the merger of an initial 17 retirement villages and added to that in July with the $62 million cash and
scrip purchase of the three Aria villages in Auckland. The results for the six months ended Sept. 30 included three
months' contribution from the Aria properties. The shares last traded at 87 cents and have dropped 8.4 percent since
listing.
First-half sales were $39.3 million, including $34.6 million in care fees and village services, and total assets were
$436 million, ahead of the $365 million year-end target set out in its prospectus. That included a $3.8 million
fair-value gain on investment properties after a review by CB Richard Ellis. Expenses of $33.8 million included one-time
costs from the Aria acquisition and earthquake remediation work of $1.4 million, and $19.6 million for employee costs,
the Auckland-based company said in a statement.
The company said it has made "significant progress" integrating its 21 properties and benefits from leveraging its new
operating structure, it said. "Supported by positive ongoing sector demographics and the favourable outlook in demand
for services, we are confident that by keeping our focus on our strategy we are well positioned to exceed the profit
forecasts contained in the prospectus."
The company had forecast full-year revenue of $69.3 million and profit of $10.6 million, or underlying profit of $13.3
million. The underlying profit measure replaces the fair value adjustment in investment property values "with the
board's estimate of realised components of movements in investment property value", elimination of deferred tax and
one-time items.
During the first half, Arvida agreed with its insurer to a gross settlement of $18.1 million to resolve claims over six
properties damaged by the Christchurch earthquakes. The actual claim is reduced by $1 million to account for Earthquake
Commission contributions already received and a $400,000 excess on policies.
The company plans to add 225 beds/units in the next three years, including 32 in the current year. It has lodged
resource consents for 173 units and is drafting a consent for a further 20, it said.
Arvida will pay a second-quarter dividend of 1.05 cents a share, imputed to 0.35 cents, on Dec. 21, with a record date
of Dec. 10.
(BusinessDesk)