Arvida FY underlying earnings in line with prospectus, affirms outlook

Thursday 28th May 2015

Arvida Group, the retirement village operator which listed on the NZX last December, reported annual earnings in line with the prospectus forecast, and affirmed its outlook for the 2016 financial year.

Underlying profit, which Arvida said it will use as its primary earnings measure, was $4 million in the year ended March 31, $100,000 below the offer document forecast. Net profit was $3.1 million, or 1.37 cents per share, compared to a forecast loss of $2.3 million, due to a bigger than expected increase in the value of its property portfolio. Revenue was $1 million above expectations at $20 million.

"Arvida is performing well and in line with forecasts set out at the time of our IPO (initial public offering)," chairman Peter Wilson said in a statement. "This reflects the significant progress made integrating the 17 retirement village and aged care facilities and the benefits resulting from implementation of our support centre structure built to manage the group."

The company raised $80 million in December, selling shares at 95 cents apiece, to repay debt after bringing together a group of villages. The shares were unchanged at 91 cents today.

The board declared a dividend of 1.03 cents per share, payable on June 22 with a June 12 record date. The company intends to pay 60 percent to 80 percent of underlying profit a year on a quarterly basis.

Wilson said the board affirmed guidance from the offer document, which projects underlying profit to $13.3 million in the 2016 financial year.

"A number of acquisition opportunities continue to present themselves," Wilson said. "Arvida will continue to investigate acquisitions opportunities that are accretive to the business."

The company's growth focus is on brownfield opportunities, and it's seeking to source sites in areas with "attractive demographics", including land adjacent to existing villages, according to presentation slides accompanying the result.

As at March 31, Arvida held cash and equivalents of $1.82 million, and had drawn down $7.3 million of its $40 million bank facility.

BusinessDesk.co.nz

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