Oceania Healthcare records $17.1m interim loss, sells seven properties
Retirement company Oceania Healthcare recorded a bottom-line loss of $17.1 million after financing costs increased and revenue was only up 1% from $131.6m to $132.6m.
The company has sold seven properties lately and is about to sell an eighth, as it quits older rest homes and goes into more upmarket new villages with expensive care suites.
The results for the business, whose properties include Auckland’s new $150m The Helier in St Heliers, are for the half-year to September 30, 2024.
Oceania has 111 units at The Helier, for sale from $1.5m to $5m. But occupancy remains extremely low, at only 31% by October 31. Today’s announcement said only 21 apartments and 13 private care residences were occupied.
But the company said it believed in the product and service at that village which won a Property Council award.
The company’s finance costs were hit by additional interest costs for completed but unsold developments, the company said.
Oceania has $725m debt facilities to be used for future developments and land acquisitions.
The loss is a turnaround on the $$35.2m profit recorded in HY123.
It also came about because a previous $45.2m gain in property values was clocked at only $3.5m in the latest period.
The company acknowledged the economic downturn but called its performance solid because underlying ebidta rose 2.7% to $38.6m.
Sales volumes grew 1.2% and the company referred to “robust” care suits sale volumes.
The business has quit several older rest homes lately.
It sold seven properties for about $45m in the last 18 months. It has an eighth under contract: Otumarama care centre in Stoke, Nelson, expected to settle soon.
The properties Oceania has sold in the past 18 months are:
New chief executive Suzanne Dvorak, who joined the company in July, said today the focus was on improving sales and modernising the portfolio.
“We are rebalancing the mix of care and retirement as well as a focus on quality sites as part of the modernisation of the portfolio,” today’s investor presentation said.
It wants to reduce debt and increase sales.
Chairwoman Liz Coutts said today the board had decided to continue pausing dividends for the interim period given the current gearing levels.
Graham Wilkinson, who owns the national retirement village chain Generus Living Group, mentioned listed companies selling properties lately.
He said that was occurring when the property market was in decline but was the result of financial pressure, especially higher financing costs.
Generus has headed in the opposite direction, spending more, he indicated.
That includes its extensive work at Parnell’s The Foundation where a new apartment block is rising and $17m has been spent on the heritage building Pearson House, the hub of the new village with communal facilities.
Oceania is trading at 80c, down 16% annually, giving a market cap of $579m.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.