Metlifecare profit grows as takeover reaches Overseas Investment Office

The retirement village operator and takeover target Metlifecare has posted a larger half year profit, on the back of valuation gains, encouraging it to progress its development timeline.

Its net profit rose 28 percent to $24.6 million in the six months ended December, as it built more retirement homes. The underlying profit, which excluded $31.3m in valuation gains, fell 5 percent, because of increased construction costs.

Revenue rose 4.8 percent to $96.8m as it sold more new and existing living units, despite price hikes.

It added 81 new homes to its portfolio in the period, including a new village and converting some units to cater for residents with dementia. It would not add any more units in the second half.

Chief executive Glen Sowry said Metlifecare's premium living and hospital-level care was in demand.

"Overall occupancy at our established care homes remains at 96 percent, reflecting the quality of our offering and the value placed on Metlifecare's resident-directed model of care by our residents and their families."

It had rejigged its construction programme, after slowing down last year.

"These initiatives have allowed us to ensure the robustness of Metlifecare's construction and procurement models and to continue delivering high quality villages at acceptable development margins.

Construction was underway on five new villages, which were expected to add about 220 homes and beds by 2021.

Metlifecare is subject of a takeover offer from the Swedish-backed EQT Infrastructure Fund, at a price of $7 a share, which is currently being looked at by the Overseas Investment Office, and will be put to a shareholders' meeting in late April.

This article was originally published on RNZ and re-published with permission.

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