Profit surge

Metlifecare boss Glen Sowry delivers result

Retirement business Metlifecare pushed up net after-tax profit 31 per cent, from $125.7 million to $165m after a big jump in the value of its property portfolio.

Reporting its first-half 2017 result, New Zealand’s second-largest listed retirement business recorded a 33 per cent change in the fair value of its investment properties: $128.5m in the 2016 first half but $170.7m in the latest period to December 31, 2016.

“The fair value movement was up as a result of strong property price growth,” a note in the accounts said.

Net profit before tax rose from $133.4m to $171.6m.

The company’s underlying profit, which strips out non-cash items, was $38.6m, 15 per cent higher than the same period last year. Total asset values rose 15 per cent to $2.8 billion and earnings per share were 77.1c, 30 per cent up on last year.

Glen Sowry, chief executive of the business with 24 villages, emphasised demand for new units and rest home beds.

Strong sales price growth and market conditions [have continued in] Auckland and the Bay of Plenty. We are on track to meet our 2017 development delivery targets and ... have also made excellent progress on a number of [initiatives] that will drive accelerated growth . . . in the markets we are targeting,” Sowry said.

In the latest half-year, Metlifecare said there were “97 new units during the period under review, with a further 288 units and beds under construction at 31 December 2016. The current development land bank includes a further 1647 units and beds for delivery in subsequent years”.

There were no further land acquisitions made during the period, despite reviews being conducted on a number of potential sites.

The interim dividend is 2.25c, up 29 per cent on last year and it will be paid on March 31.

Metlifecare is investigating leaky building issues in its portfolio. Its accounts listed a $3.7m impairment on a Pakuranga care facility and Greenwich Gardens.