Sharechat Logo

Metlifecare considering buyback to lift share price

Thursday 18th October 2018

Text too small?

Metlifecare is considering ways to boost the share price, including a potential buyback, says chairman Kim Ellis. 

The shares recently traded at $5.98, down from a peak of $6.51 in September, and a sizeable discount to their net asset value of $6.93.

Ellis told shareholders at today's annual meeting that the board has a strong belief in the long-term value of Metlifecare's portfolio and land bank, and the discount has been an ongoing frustration. The board is considering ways to bridge that gap and will update shareholders of any decision at the first-half result in February. 

"There are a number of initiatives that we could take to try and narrow the gap, such as a possible share buyback and diversification of the share register to assist with creating marginal buying support," he said. 

Metlifecare had 4,499 shareholders as at July 12, of which 61 owned 90 percent of the retirement village operator. Of that, it has three substantial shareholders: the New Zealand Superannuation Fund with 19.8 percent, ANZ funds with 10.8 percent, and Investment Services Group at 6.4 percent. 

The company has a market capitalisation of $843.8 million, just behind Summerset Group's $1.03 billion value. Ryman Healthcare is valued at $4.21 billion. 

Ellis said the company is reviewing its debt structure, and will also update shareholders on that work at the first-half update. 

Metlifecare's net debt almost doubled to $138.4 million in the year ended June 30. The gearing ratio - net debt as a percentage of debt plus equity - was 9 percent, a level the company described as showing the "exceptional strength" of its balance sheet and capacity for future growth. 

Chief executive Glen Sowry said the company's accelerated growth has required the management of more projects than it's ever handled before. That pace will continue to pick up in the current year, with activity across 11 existing and new villages and 145 units and two new care homes set to be delivered before the end of June.

The following year, Metlifecare anticipates a build rate of at least 300 units, he said. It delivered 254 in the 2018 financial year. 

"We are still expecting to deliver higher volumes of occupation right agreements for both new homes and resales in FY19," Sowry said. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares follow Asian markets higher on renewed hopes for China-US resolution
Housing Ministry head hints he acted against departed KiwiBuild head Stephen Barclay
NZ dollar heading for 1% weekly slide as outlook weakens
Currency frozen in multi-million dollar Cryptopia theft
NZ manufacturing activity hits highest level since April
Tilt affirms guidance; Dec qtr production misses long-term expectations
NZ dollar extends slide as Philly Fed lifts sentiment in US
January 18th Morning Report
MARKET CLOSE: NZ shares get further lift from positive offshore markets
NZ dollar extends decline amid mixed data

IRG See IRG research reports