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The retirement village and aged care operator Arvida Group has made a record underlying profit, while a drop in revaluation gains hit its bottom line.
Key numbers for the 12 months ended March compared with a year ago:
- net profit $82.5m vs $198.9m down 59 percent
- revenue $222.0m vs $174.5m up 10 percent
- underlying profit $88m vs $51.7m up 20 percent
- valuation gain $80.4m vs $158.9m down 49 percent
- expenses $212.1m vs $181m up 17% percent
- FY dividend 4.85 cents a share vs 5.5cps down 12 percent.
Arvida chief executive Jeremy Nicoll said the business had delivered a sound result on the back of record resales and new sales.
"We have had a very strong year for sales, up 16 percent on the prior year to $376.4 million," he said.
"The retirement living side of our business continued to experience high demand and delivered solid sales performance for the year."
Resale gains increased 59 percent on the year earlier to $69.1m, including a full-year contribution from the villages purchased in November 2021, as well as higher resale prices and improved margins to 32 percent from 26 percent.
Sales volumes were also up 10 percent, to a total of 371 units.
"We continue to experience high demand for our care suite product with it now forming a core part of our standard master plan for new greenfield developments," Nicoll said.
Arvida bought a further two greenfield sites during the year, including 11 hectares in Lincoln and 55 hectares in Warkworth.
Arvida chair Anthony Beverley said government policy continued to shape and frustrate the sector's profitability.
"Policy most affecting aged care primarily relates to workforce, pay disparity and funding adequacy," he said.
"The government has responded to sector advocacy with a process to reduce nurse pay disparity as well as including nurses on the green list pathway for residency.
"Neither have had a discernible impact on resolving sector workforce issues yet."
He said it was necessary to generate an acceptable return on capital as a for-profit operator, but government funding of aged care had not kept pace with the costs and had worsened in the current inflationary environment.
"This policy gap can only lead to poor outcomes for New Zealand as capacity closes or service quality deteriorates on inadequate economics."
Despite the challenges, Beverley said the outlook was positive for growth.
"The company is well placed in terms of its underlying business model and strategy to progress and grow," he said.