• Net profit after tax of $45.0 million, up 47% on 1H19
• Underlying profit of $23.4 million, up 31% on 1H19
• Underlying EPS of 5.0 cents per share, up 16% on 1H19
• Continued high care occupancy above 95%
• 192 total occupation rights sales, up 16% on 1H19
• Total resales of $53.9 million, up 28% on 1H19
• 94 new units delivered, on track for delivery of 200 new units for FY20
• Annual delivery rate confirmed at 250+ units in FY21
• Dividend of 1.45 cents per share declared for second quarter

NZX listed retirement village and aged care operator Arvida Group Limited reported strong growth in net profit to $45.0 million for the six months ended 30 September 2019, up $14.5 million compared to the prior corresponding period.

Arvida said IFRS profit included fair value movement on investment property of $35.3 million relative to $25.3 million in the first half of FY2019. The higher fair value movement reflected continuing positive unit pricing movement across the portfolio and the increase from the three acquired villages.

The total value of assets for the Group grew to over $1.8 billion at 30 September 2019, up $542 million from the start of the 2020 financial year. Arvida now has a portfolio of 2,359 retirement units and 1,682 aged care beds spread across 32 villages.

The three high quality villages acquired from the Sanderson Group for $180 million have now been largely integrated. Arvida said it was focused on completing their integration and refining plans for development of complementary care facilities at two of the villages; Bethlehem Shores in Tauranga and Queenstown Country Club in Queenstown. Construction teams welcomed as part of the transaction had continued to make excellent progress with the planned development at these villages and their expertise was being utilised across other developments in the Group.

BUSINESS PERFORMANCE

Underlying profit for the half increased to $23.4 million, a 31% lift on the prior corresponding period.

“The result was driven by higher volumes and strong margins on the resale of occupation rights and an excellent operating result that was underpinned by the continuing performance of the care business,” said Arvida CEO Mr Bill McDonald. “High demand for our care services and range of quality accommodation offerings is producing year on year growth in financial performance.”

Arvida reported care occupancy at 95% in September, which continued to be significantly higher than industry experience, and that 72% of Arvida’s care centres had now attained the gold-standard four-year Ministry of Health certification.

Mr McDonald commented that “the culture and know-how brought together in Arvida’s person-centred care service offering – The Attitude of Living Well – forms a critical component in delivering quality services.”

Staff engagement was indexed at 86%, up from 78%, in Arvida’s second annual workplace survey.

SALES ACTIVITY

Underlying profit included $17.9 million of gains on the settlement of 192 sales of occupation rights during the period, a 16% increase on the first half of FY2019.

Compared to the same period last year, a 41% lift in resale gains of $12.7 million was reported. This reflected 148 resales in the period, up 10%, and higher resale margins at 24%. On average resale prices were 3% above the pricing independently assessed at 31 March 2019, highlighting continued pricing momentum and demand for homes.

In the six-month period to 30 September 2019, $34.3 million of new unit sales were settled at a development margin of 19%.