North Island rest-home operator Metlifecare has delivered a half-year result below broker expectations, driven by lower sales volumes than expected.
Earnings before interest and cash (ebit) were down 63% to $62.9million and reported profit plunged 66%, from $165million to $56.4million, the latter mainly because of a smaller increase in asset values.
Metlifecare's dividend rose from 2.25c per share to 3.25c. Its share price eased 4% to $6 following the announcement.
Metlifecare chief executive Glen Sowry said it was a ``solid'' first half, highlighted by the company's growth strategy, including the opening of two new care homes and buying a site for a new village in Hobsonville, west Auckland.
Metlifecare operates from Kerikeri to Kapiti, with 14 rest-homes in Auckland.
While house price inflation had returned to levels closer to long-term averages, Metlifecare's asset base grew 10% to $3.1 billion.
Mr Sowry noted the reported after-tax profit was down from last year's $165million to $56.4million, primarily because of the smaller increase in fair value of Metlifecare's assets.
Underlying profit declined by 6% from $38.6 million a year ago to $36.2 million.
Mr Sowry said improved revenue was driven by increased village fees, realised resale gains and deferred management fees, but was offset by lower unit sales volumes; which included a 41-unit buyback for remediation work.
"Timing is uncertain in terms of new stock delivery and this will be heavily skewed to the second half,'' Mrs Howe said.
Although new sales and resales volumes were both down on expectations, the result was helped by better margins than forecast.
"Resales vacancy of around 2% looks solid and consistent with prior periods,'' she said.
Metlifecare's half-year result highlighted the time it took to get a development business up and running from scratch, she said.
Metlifecare had indicated it was on track to deliver 254 units and beds during the full year, in line with Forsyth Barr forecasts, and was targeting 300 a year, from full year 2020.
