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Metlifecare returns to profit after recognising gain in property values

Thursday 25th February 2010

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Metlifecare returned to profit in the six months through December after the operator of 17 retirement villages recognised a gain in the value of its investment properties.  

Net profit was $17.3 million, or 14.1 cents per share, compared to a loss of $61.9 million, or 70.7 cents a share, a year earlier. The company recognised an $18.8 million gain in the unrealised fair value of its investment properties, compared to a loss of $55.3 million a year earlier. Revenue rose 2.3% to $30.7 million. 

“This net profit figure is largely driven by the $18.8 million revaluation of the company’s investment properties,” chairman Charles MacDonald and chief executive Alan Edwards said in a statement. “The company’s performance in these half-year results points to a much more positive outlook for the future.” 

MacDonald was scathing about the International Financial Reporting Standards, which require companies to recognise the market value of assets such as property and financial instruments, in the company’s 2009 annual report, saying they distracted from Metlifecare’s operational performance.  

The shares, which trade infrequently, fell 2.3% to $2.15 on the NZX today.  

The retirement village operator is renegotiating new bank facilities with its existing facility expiring at the end of June. Metlifecare cut its bank loans to $176.5 million in the six months through December from almost $200 million a year earlier.  

“The directors are confident that the terms of the new facility will be agreed prior to the maturity of the current facility,” MacDonald and Edwards said.  

The company spent $13.3 million during the period on further developments of the second stage of its Takapuna village which is due for completion in April.  


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