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Metlifecare reaps housing boom

NZN 26/02/2017 Paul McBeth

Metlifecare's first-half profit has jumped by almost a third as the country's housing boom bolstered the value of the retirement village operator's property portfolio and fattened its margins for unit sales.

Net profit rose to $164.1 million in the six months ended December 31, from $125.7m a year earlier, the Auckland-based company said on Monday.

That included a $170.7m gain on the value of its investment portfolio to $2.74 billion. Those rapid house price gains helped Metlifecare boost realised gains on resales 35 per cent to $24.4m and development margins 35 per cent to $9.6m, even as new unit sales dropped 14 per cent to 89 in the half and resales fell 13 per cent 175.

Stripping out the effects of the housing market, Metlifecare said underlying earnings were up 15 per cent to $38.6m.

"We have continued to experience strong sales price growth and market conditions in our stronghold of Auckland and the Bay of Plenty," chief executive Glen Sowry said.

"We are on track to meet our 2017 development delivery targets and, looking further out, have also made excellent progress on a number of strategic initiatives that will drive accelerated growth and create a competitive edge in the markets we are targeting."

Metlifecare has targeted villages in what it calls the 'golden triangle' of Auckland, Bay of Plenty and Hamilton where it sees large, ageing populations in need of its services.

The company's board declared an unimputed interim dividend of 2.25 cents per share.

The shares last traded at $5.60 and have gained 20 per cent over the past 12 months.

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