Coast retirement company reaches milestone
GOLD Coast-based retirement village operator Eureka Group has received final approvals from Tweed Council to strata-title its Terranora village, more than two years after plans were first lodged.
The move means the Southport-based microcap can move forward with sales of the 61 units and effect settlement for the properties that have sold.
Eureka executive chairman Murray Boyte said the project could now be brought to fruition after “a period of frustrating delays”.
“This is an important milestone for Eureka that will facilitate the release of funds to expand the core business and strengthen the balance sheet,” he said.
Shares increased by close to eight per cent in the wake of the announcement to close 2¢ higher at 27.5¢.
Eureka’s first-half result, released last week, showed a vast improvement for the company. Net profit soared to $2.83 million from a loss of $100,000 in the previous period.
Revenue increased by five per at $11.8 million, due to stronger occupancy levels at its retirement villages and additional service fees from a five-village joint venture in Tasmania.
Debt was cut from $55 million to $50 million after using cash received from the sale of Eureka’s units at Couran Cove and a loan repayment from Onterran Ltd, which is linked to Eureka director Lachlan McIntosh.
Eureka is also owed $330,000 by Mr McIntosh, due on December 31 this year and a further loan of $320,000, called the West Cabin Loan, guaranteed by Onterran and Mr McIntosh, is due to be paid by mid-April.
The company said despite strong trading results it would miss forecast pre-tax earnings guidance of between $7.8 million and $8.3 million for the full year due to one-off costs.