Arvida, operator of retirement and aged care villages, makes record profit

Retirement village and aged care operator Arvida Group posted record profit, boosted by the $345 million purchase of the Arena portfolio of six retirement villages in November.

Arvida’s net profit increased by 52%.

Key figures for the 12 months ended March compared to a year ago:

  • Net income $198.9 M vs. $131.1 M
  • Revenue $201.7 million vs. $174.5 million
  • Valuation $158.9 M vs. $123.5 M
  • Underlying profit $73.5m vs. $51.7m
  • Expenditure 181.0 million versus 152.8 million
  • Annual dividend 5.5 cents per share against 5.4 cps

Net profit rose 52% with an underlying profit gain of 42%, which was boosted by a $15 million profit from the Arena portfolio.

“The villages in the prime locations of Auckland and Tauranga provided a number of immediate benefits that we were able to realize and presented longer-term options for future growth,” said the managing director of Arvida, Jeremy Nicoll.

Revenue was impacted by Covid-19-related disruptions to care sales and construction activity, with staff shortages, particularly nurses, and restrictions on new admissions during lockdowns and the peak of Omicron.

Covid-related measures added about $5.0 million to expenses.

“Additional expenses were again incurred to ensure the safety of residents and the well-being of staff, as the priority was to protect our communities and our resident teams,” said Nicoll.

However, proceeds from new sales and resale unit settlements increased to $325.2 million, up $97.8 million from the prior year, with settlements of 580 units up. 44% during the year.

He said resales were a key driver of financial performance with margins of 26% compared to 23% the previous year.

Nicoll said demand remained high, with 221 new homes built in the year, across ten sites.

“We’ve seen an increase in inquiries about living in a retirement village, so people are seeing the benefits of living in a retirement village community,” he said.

He said the slowdown in the housing market had yet to affect the business, with demand strong.

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