Virus crisis takes toll on Arvida profit

Retirement village owner and operator Arvida Group made $42 million annual net profit after tax, 28 per cent down on last year, with the pandemic hitting just before the end of its financial year.

The business, whose shareholders include ex-All Black Dan Carter, said it continued to operate throughout the pandemic but its operations were hit in several areas during February and March.

All construction sites shut, with only essential weather tightness or health and safety-related works completed. New admissions to care centres and villages were restricted.

New sales and resales of occupation rights were restricted at a critical point in the financial year, although several settlements were brought forward before lockdown.

Higher labour and materials costs — such as personal protective equipment, antimicrobial cleaning and security personnel — were incurred to ensure capacity was available as and when required

In the year to March 31, 2020, underlying earnings of $51.7m were up 34 per cent on last year’s $38.6m, due to continued high care occupancy, more resales and new sales and eight months’ money from the three villages bought during the year.

Resales of occupation rights set a new record, over $100m for the first time.

The total value of assets for the group grew to $1.9 billion, up $607m from the start of the 2020 financial year.

Arvida now owns 2475 retirement units and 1688 hospital beds in 32 villages.

Gearing at 30 per cent is at the midpoint of the board’s target range.

Peter Wilson, chairman, said an additional $100m bank facility was added after balance date.

A dividend of 1.45c a share will be paid in the final quarter, giving 5.80cps to shareholders, up 8.4 per cent on last year.

Updated development guidance for FY2021 and FY2022 is provided with 200 new units to be delivered annually.

Wilson said the serious challenges of the pandemic were only just emerging as the company’s financial ended.

“It is clear Covid-19 will be a significant factor globally for some time yet and we, as a sector, will be dealing with the associated . . . challenges for our business for some time to come.”