Metlifecare Limited

Tuesday 15th December 2015

Metlifecare (MET.NZ) is New Zealand's second-largest listed retirement village operator and developer. Metlifecare has 25 villages (Ryman: 27) scattered over Northland, Auckland, Hamilton, Bay of Plenty and Lower North Island. The company was listed on the NZ Stock Exchange in July 1994 after a public issue of 15 million shares at 85c. On 23 July 2012, Metlifecare completed the merger with Vision Senior living (VSL) and Private Life Care Holdings Limited (PLC) adding eight villages and thereby boosting its profits for the year ending 30^th June, 2013. Metlifecare completed its secondary listing on the Australian Stock Exchange (ASX) in October 2013.

Metlifecare, New Zealand's second largest listed retirement village operator, lifted annual profit 78 percent after its properties jumped in value. Net profit rose to $122.7 million, or 57.9 cents per share, in the 12 months ended June 30, from $68.8 million, or 32.7 cents, a year earlier. 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 percent to $52.4 million, in line with the company's forecast in February. Total income increased 7.1 percent to $101.5 million while expenses advanced 9.2 percent 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. It 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.

The company's development margin, which measures the margin obtained selling an occupation right after development, slipped to 17.3 percent from 21.4 percent the year earlier. It may slip below its target of at least 15 percent in the coming year as 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, as indicated by the company.

Sales of occupation rights agreements rose 7 percent to 490 in the past year, boosting the gross value of sales and resales by 12 percent to $196.2 million. Sales of new units rose 43 percent to 87 while resales increased 1.5 percent to 403. Its occupancy level rose to 97 percent from 96 percent last year and is at 98 percent including stock currently under contract.

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

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