Sales of retirement units boost Oceania profit

Friday, 22 January 2021

Awatere Village in Hamilton, one of Oceania Healthcare’s 44 sites around the country. The company hopes to add more than 200 new units to its portfolio by March.

Retirement village and aged care operator Oceania Healthcare has reported a first half net profit of $24.8 million, an increase of $9.9m on the previous year.

The company told shareholders on Friday that its profit for the six months to November were boosted by a 44 per cent increase in sales volumes which boosted its cashflow by 30 per cent.

Underlying earnings came in at $35.4m, a 2 per cent increase on the previous year.

It was a solid turnaround for the company which had no cases of Covid-19 but previously posted a full year loss of $13.6m loss after suffering a $22.5m fall in asset values.

* Covid-19 cuts retirement village values resulting in $13.6m loss for Oceania Healthcare

* Oceania Healthcare forges ahead on its $400 million construction programme

However, in November, Oceania's asset values were revised upwards, jumping 11 per cent to $1.7 billion, due primarily to new development work.

The company said it was on track to complete 217 new apartments and villas before March and finished another 28 apartments and 61 care suites in Nelson last September.

In October, Oceania raised $125m in retail bonds, which was oversubscribed.

Chief executive Earl Gasparich said the company was enjoying strong sales and resales of its units and was very pleased with its $125m retail bonds issue in October, which was oversubscribed.

Hamilton Hindin Green analyst Grant Davies said Oceania’s share price initially gave up a few cents after the result, but that was after hitting a record high of $1.50 on Thursday.

Investors were likely a little disappointed to see the dividend remained at lower levels at being cut during Covid, he said. Otherwise, it was ‘’a pretty solid result’’.