Rising costs eat away at profit
Eureka is the only ASXlisted company to solely focus on providing affordable accommodation for independent seniors.
The company’s first chief executive Jeff Weigh said the performance of the supported-care villages in South Australia, which require a higher staffing level, had weighed on the results.
Eureka is exploring strategic options for the villages, which may include exiting the supported-care business.
“As a company, we had the eye off the ball but most of that has been worked out,” he said.
He said a company-wide strategy on occupancy had led to the improved result.
Mr Weigh said he remained confident the Tweed Shire Council would approve plans for a subdivision and the strata-titling of 60 units at the former Royal Terranora Resort.
Eureka purchased the property for $7 million in 2015 but has been unable to make progress on its plans to start work on stage one – a 240-townhouse development.
It said it had made significant progress in creating value at the Terranora village and Couran Cove.
Mr Weigh said the purchase of four villages, two in Queensland and two in NSW, in FY17 had been below expectations due to deals falling over.
Eureka’s share price has fallen sharply this year from 68 to a low of 32 in May.
It closed yesterday with no change at 36.5 .