The listed retirement village operator, Metlifecare's first half net profit is down by two thirds, with fewer unit sales and a smaller increase in the fair value of the company's assets.
The company's net profit fell 65.8 percent. Photo: 123RF
The company's net profit fell 65.8 percent to nearly $56.4 million in the six months to the end of December, after posting a record gain in the year earlier of $165m, which reflected valuations gains of $170.8m, compared with $59.8m in the period just ended.
Revenue rose 4.6 percent to $56.5m, driven by an increase in village fees, resale gains, but offset by fewer sales of units.
Chief executive Glen Sowry said the company had buyback of 41 units for the temporary rehousing of residents, displaced by renovations, which also added to costs.
"While these additional costs are impacting profitability in the short-term, they are necessary investments to support Metlifecare's strategic growth objectives and to drive longer-term value," said Mr Sowry, adding that the investment increased net debt by $65.2m, taking total debt to $141.3m.
"Our strong balance sheet continues to provide us with ample headroom to fund future construction and development activity as well a buffer in the event of softening market conditions," said Mr Sowry.
He said the company's assets grew by 10 percent to $3.1 billion, while house price inflation had returned to a level more reflective of long-term averages.
The company said market conditions had firmed since December, and had signed more sales and resales applications for settlement this year, than last year.
It expected to deliver a stronger second half performance, with underlying profit expected to be in line with last year's.