Metlifecare lifts profit as property values jump

See also: Metlifecare lifts profit 80% but stock price drops

New Zealand's second-largest listed retirement village operator Metlifecare [NZX: MET] lifted annual profit 78% after its properties jumped in value.

The Auckland-based company’s net profit rose to $122.7 million, or 57.9c per share, in the 12 months ended June 30, from $68.8 million, or 32.7c, a year earlier, said in a statement.

The value of its investment property increased $121.2 million, ahead of a $65.7 million gain the year earlier, lifting the total value to $2.23 billion.

Excluding the unrealised valuation gains and other non-cash items, underlying annual profit rose 14% to $52.4 million, in line with the company's forecast in February.

Total income increased 7.1% to $101.5 million while expenses advanced 9.2% to $90.1 million.

Metlifecare has doubled the size of its property development team to 18, adding additional development and project managers to support brownfield opportunities, construction sites and the development of two new greenfield sites at Red Beach and Manukau.

The company stepped up the rate of development with 133 new units in 2015, from 59 in 2014, and expects to increase that further to 158 new beds and units in 2016, and 265 in 2017.

"In FY16, we are anticipating a year of continued growth in the delivery rate of new units and care beds," says chief executive Alan Edwards.

The company's development margin slipped to 17.3% from 21.4% the year earlier. Metlifecare says it may slip below its target of at least 15% in the coming year when the company sells down the first stage at two new villages, on tighter margins from lower-priced products, and as a result of smaller developments and challenging topography.

Sales of occupation rights agreements rose 7% to 490 in the past year, boosting the gross value of sales and resales by 12% to $196.2 million.

Sales of new units rose 43% to 87 while resales increased 1.5% to 403. Its occupancy level rose to 97% from 96% last year and is at 98% including stock currently under contract.

Metlifecare will pay a final dividend of 3c per share on October 1, taking its annual dividend to 4.5c, up from 3.75c a year earlier.

The company's shares rose 1.6% to $4.47 and have slipped 6.4% this year.

(BusinessDesk)