Announcement

HALFYR: OCA: Oceania Healthcare - Half Year Result and Interim Report 08:30a.m. 
OCA  
24/01/2020 08:30  
HALFYR  
PRICE SENSITIVE  
REL: 0830 HRS Oceania Healthcare Limited  
 
HALFYR: OCA: Oceania Healthcare - Half Year Result and Interim Report  
 
Substantial Increase in First Half Unaudited Underlying NPAT* for Oceania  
Healthcare.  
 
Oceania Healthcare, Aged Care and Retirement Village Operator and Developer,  
announced today an unaudited half year underlying net profit after tax* of  
$24.1 million for the six months ending 30 November 2019, a substantial 17.6%  
($3.6 million) increase compared to the prior corresponding period (pcp).  
 
Highlights  
? Unaudited Underlying Net Profit after tax* (NPAT) of $24.1 million, up  
17.6% ($3.6 million) on the pcp.  
? Unaudited Reported Net Profit after tax (NPAT) of $14.9 million, up $13.6  
million on pcp.  
? Operating Cash Flow of $57.0 million, up 21.0% ($9.9 million) on the pcp  
primarily due to strong sales proceeds from the new developments completed in  
May 2019.  
? Total assets increased to $1.5 billion, up 23.8% ($287.7 million) on  
November 2018 primarily due to significant development capital expenditure  
during the period.  
? Interim dividend increased from 2.1 cents per share (unimputed) to 2.3  
cents per share (unimputed). The Dividend Reinvestment Plan will apply.  
? Aged Care occupancy increased from 92.3% to 94.2% at centres not impacted  
by redevelopment, up 1.9% on the pcp.  
? Completion of 265 new retirement village units and aged care beds for the  
year ending 31 May 2020 is on track with 90 care suites at Awatere, Hamilton  
already completed in July and ten villas at Whitianga, Coromandel. Build  
rate is in line with the prior corresponding period and skewed to second  
half, similar to FY2019.  
? Standing consent granted by the OIO for residential land purchases.  
? Preparation for a domestic retail bond issue has commenced and will be  
subject to market conditions.  
 
$ million Half Year Ended  
30 November Growth  
Unaudited  
2019  
 
2018  
$m %  
Reported Operating Revenue 97.9 96.4 1.5 1.6  
Reported NPAT 14.9 1.3 13.6 1,046.2  
Underlying NPAT* 24.1 20.5 3.6 17.6  
Operating Cash Flow 57.0 47.1 9.9 21.0  
Total Assets 1,496.5 1,208.8 287.7 23.8  
Interim Dividend (cents/ share) 2.3 2.1 0.2 9.5  
*From continuing operations. Adjustment is included to 2018 for sites  
divested during 2018  
 
Oceania Healthcare CEO Earl Gasparich advised that "the first half of the  
financial year reflects the strong sales momentum at our two new Auckland  
Villages, The Sands and Meadowbank Stage 4, as well as continued strong  
demand for our new premium care suites across the country".  
 
At The Sands, on the beachfront of Browns Bay on Auckland's North Shore, 48%  
of the retirement village apartments and, at Meadowbank Stage 4, 49% of the  
retirement village apartments sold within the first six months of operation.  
"Sales volume and pricing at these two luxury Auckland sites are to  
expectation and reflect their prime locations", said Mr Gasparich.  
 
Aged care occupancy at centres not impacted by redevelopment increased to  
94.2%, compared to 92.3% last year, due to the ongoing investment being made  
to redevelop Oceania Healthcare's portfolio and in particular, converting  
older, standard aged care rooms into premium care suites sold under  
occupation right agreements. "We opened 90 new care suites at Awatere in  
Hamilton in August and they are already attracting demand, as are our care  
suites at The BayView in Tauranga, The Sands and Meadowbank. We are very  
pleased with the execution of our aged care strategy and the revenue streams  
being generated from our new care suites."  
 
Operating Cash Flow was particularly strong over the period, increasing from  
$47.1 million to $57.0 million (21.0%). Total assets also increased by  
$287.7 million to $1.497 billion primarily reflecting the significant  
development capital expenditure invested in the portfolio over the period.  
Net debt of $288.1 million as at 30 November 2019 represents a prudent  
gearing level of 31.8% (net debt to debt plus equity).  
Oceania Healthcare's impressive development programme continues to be  
delivered on time and on budget, with Oceania Healthcare on track to complete  
265 aged care beds and retirement village units by the end of this financial  
year, in line with previous guidance. It has resource consents in hand for  
86.6% of its 1,958 unit/bed development pipeline which are planned to be  
delivered over the next six years.  
 
In the second half of the year, Oceania Healthcare is scheduled to complete  
retirement village apartments at Meadowbank Stage 5, Green Gables in Nelson,  
as well as the extension of Gracelands Village in Hastings, Elderslea in  
Upper Hutt and Woodlands Village in Motueka. The conversion of standard  
rooms to Care Suites will continue across a number of sites and higher  
occupancy levels across the Care portfolio are expected as recently completed  
developments are sold down.  
 
*From continuing operations. Adjustment is included to 2018 for sites  
divested during 2018  
 
"We are also pleased to announce that Oceania Healthcare has been granted a  
standing consent for residential land purchases by the Overseas Investment  
Office. This will allow us to make up to 12 transactions of residential land  
over the next three years without requiring individual approvals from the  
Overseas Investment Office enabling us to acquire residential land in a  
timely manner when attractive opportunities arise.  
 
A domestic retail bond issue is also being explored to provide diversity of  
funding and tenor and help facilitate Oceania Healthcare's future growth,  
subject to market conditions."  
 
Oceania Healthcare Chair Liz Coutts advised the Board was pleased to increase  
the interim dividend from 2.1 cents per share (unimputed) to 2.3 cents per  
share (unimputed). The record date is 10 February 2020 and payment date 24  
February 2020. The Dividend Reinvestment Plan (DRP) will apply to the  
dividend payable on 24 February at a discount of 2.5% to the volume weighted  
average price of shares sold on the NZX Main Board over the period of the  
five trading days starting 7 February 2020.  
 
ENDS  
For all media enquiries, please contact Kelly Bennett on 021 380 035.  
This release should be read in conjunction with the Financial Statements  
contained within the Interim Report.  
End CA:00347503 For:OCA Type:HALFYR Time:2020-01-24 08:30:53  

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