Eureka expands empire with $18m Tassie buy
VARSITY Lakes company Eureka Group has bought the entire Tasmanian property portfolio of a rival aged-care group for $18 million.
The company, which owns Couran Cove and the former Royal Terranora Resort, will take on two seniors rental villages in Hobart, two in Launceston and one in Devonport.
In a statement to the ASX, Eureka said the portfolio added 254 units to its stock and had been acquired through a 50-50 joint venture with a group of private investors who the company had existing management contracts with.
The investment group will take on management of the Tassie villages, bought from Ingenia Ltd.
Eureka Group shares climbed 3.7 per cent yesterday, to trade at 28¢ at 11.30am Gold Coast time.
The group’s December halfyear results showed it slumped to a $102,000 first half loss from a $6.2 million profit the previous year.
It attributed the losses to asset revaluations at South Australian villages, delays to sales at its Terranora project, and the failure of the Couran Cove operator to pay $2.9 million it owes Eureka.
Group CEO Jeff Weigh said the company’s client base, mostly independent retirees, was growing.
“EGH clients enjoy quality affordable accommodation and meal packages within the scope of the age pension and location allowances,” he said.
Mr Weigh said their “prime objective is to aggregate assets in the growing retirement sector and achieve increased returns from a profitable growth platform.”
Eureka Group said earnings on the new villages were within its targets and would flow from the first year.
The transaction settle next month.
“While EGH has debt funded the acquisition, the realisation of proceeds over the next 12 months from the sale of non-core assets will be used to strengthen the balance sheet and fund further targeted acquisitions,” the statement to the ASX said.
Eureka Group Holdings now owns 32 villages and has another nine villages under management. is due to