Eureka abandons Couran Cove, drops 104% on profit

GOLD Coast retirement village operator Eureka Holdings is set to limp away from its Couran Cove experiment.

The move will cost Eureka $2.89 million in writedowns in the value of its holdings, a move that helped plunge the group to an annual loss of $276,000 for the 2018 financial year, a drop of 104 per cent from the $6.5 million profit the previous year. The loss came on the back of a fall in revenue of 11.6 per cent to $23.4 million while earnings crashed 71 per cent to $2.7 million.

However, there was some blue sky for the group, which owns 32 properties and has nine under management across five states, with occupancy up 3.3 per cent to 92.9 per cent and earnings on its core activities up 17 per cent to $6.94 million.

In the group’s annual report executive chair Murray Boyte acknowledged the year had been hard.

“While Eureka Group has experienced a difficult year the core business providing affordable senior rental accommodation and other services has performed strongly,” he said.

Eureka was called in to run Couran Cove in September 2015, and had planned on adding the resort, created by US philanthropist Chuck Feeney nearly 20 years ago at a cost put at more than $250 million, to its retirement properties.

Mr Boyte said the settlement was a pragmatic solution given the financial challenges faced by Eureka’s partner in the resort Onterran Limited.

“While it is not entirely satisfactory due the asset writedowns and losses incurred on this investment, the independent directors are of the view this settlement is in the long term interests of Eureka and is the best outcome in the circumstances,” he said.