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Metlifecare lifts earnings

NZN 23/08/2016 Paul McBeth

Metlifecare has lifted annual earnings and dividends as the retirement village company continues to benefit from an ageing population and increased demand for its units.

Underlying earnings, which strip out unrealised movements in the value of the Auckland-based company's property portfolio, rose 26 per cent to $66.1 million in the 12 months ended June 30, beating Forsyth Barr analyst Jeremy Simpson's prediction of $63.3m.

That was driven by a 16 per cent increase in sales of occupation rights agreements to 568, a record for the company, of which 138 were new sales and 430 were resales.

Including a $237.2m increase in the fair value of Metlifecare's property portfolio, net profit soared to $228.7m, from $122.7m a year earlier.

"Demand has been consistent across new and established villages with overall occupancy at 97 per cent," chief executive Glen Sowry said in a statement.

Metlifecare has been targeting building villages in Auckland, Bay of Plenty, and Waikato, an area it has called the "golden triangle", which it sees as having large and ageing populations in need of more retirement services.

The board declared a final dividend of 4 cents per share.That takes the annual payment to 5.75 cents, more than the 5 cents forecast by Forsyth Barr and up from 4.5 cents in 2015.

The shares last traded at $6.08 and have climbed 31 per cent so far this year.

The company's total income increased 5 per cent to $106.2m.

It received $12.8m from the Ministry of Health as a government care fee to subsidise residents with rest home or hospital level care.

The company's wage bill rose 16 per cent to $4.6m from a year earlier, and Mr Sowry said it had invested significantly in its people.

"The improved qualification-based wage structure for our care staff has seen immediate and positive outcomes, with more than one-third of our staff now in training; higher quality care being delivered; and greater staff retention," he said.

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