Vital Healthcare lifts bottom line annual profit 22 percent to $9 million

Friday 24th August 2012

Vital Healthcare Property Trust's boost annual profit 22 percent to $9 million, on acquisitions and completed development projects, the manager said. Net distributable income rose 28 percent to $23.3 million for the year ended June 30, or 8 cents per unit, down from 8.2 cents the previous year.

Chairman Graeme Horsely said successful delivery of a 7.7 cents per unit payout for the year, as promised in the prospectus for the trust's $151 million capital raising in late 2010 which funded the purchase of 12 Australian properties, was "at the core" of the annual result.

The property trust's manager is forecasting net distributable income in 2013 will be between 7.7 cents per unit and 7.9 cents. David Carr, the manager's chief executive, said the healthcare sector demonstrated stability through the economic cycle.

"Vital remains uniquely positioned to benefit from Australasia's ageing demographic, resilient private healthcare insurance levels and Vital's execution capability and credibility in the sector," he said.

Vital's compound annual total return in the seven years ended June 30, 2012 was 11 percent and outperformed the listed property sectors in both Australia and New Zealand. As previously reported, the value of the trust's portfolio fell $6.2 million or 1.1 percent in the year ended June 30, led by a drop in the value of its Mercy Ascot Hospital in Auckland.

The drop in value means the manager isn't entitled to an incentive fee for the year. However, because of acquisitions, the manager's ordinary fees rose to $4.1 million from $3.2 million the previous year.

The proposed internalisation of the management contract, which did not proceed, cost the trust $700,000. Instead of internalising the contract, ANZ Bank sold it and its 9 percent stake in the trust in January this year to Canada's NorthWest Value Partners for $11.5 million.

The purchase took North West's stake to 19.8 percent. Vital will pay a final distribution of 1.925 cents per unit with imputation credits of 0.0998 cents attached to take the total payout to the promised 7.7 cents. Vital units rose 0.4 percent to $1.255, just below their recent high at $1.26 and up from $1.06 in August last year.

BusinessDesk.co.nz

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