Oceania Healthcare, which listed on the NZX last May, has reported first-half profit nearly doubled as its investment property became more valuable and it sold more retirement village units.
The Auckland-based aged-care operator said that in the six months to November 30, operating revenue rose 2.8 per cent to $90.2 million, while total income increased 3.6 per cent to $126.3m including changes to the fair value of its investment property.
Net profit rose to $42.5m from $22m a year earlier.
Total expenses dropped 10 per cent to $81.9m, with increased staff wage costs offset by much lower finance costs and a $1.1m reverse impairment on property, plant and equipment.
Oceania said the equal pay settlement which came into effect in July last year drove a 5.9 per cent lift in employee benefits to $54.5m.
Total assets increased 19 per cent million to $999m.
Oceania has 51 sites around the country with 3,893 care beds, care suites and units, and 1782 more in the development pipeline, of which 59 percent are either under construction or consented.
It is shifting its portfolio composition towards care suites and units as care beds deliver lower returns, with its existing portfolio composition showing it has the highest proportion of care beds compared to other listed operators.
Net debt rose to $118.1m at the end of the first half, lifting gearing to 18.7 per cent, from $84.4m at the end of the 2017 financial year when it had gearing of 15.3 per cent.
The company said that headroom under its debt facilities "provides the flexibility to accelerate our existing brownfield development pipeline and/or undertake further brownfield and greenfield acquisitions."
The directors declared a maiden interim dividend of 2.1 cents per share.
The shares last traded at $1.08, and have gained 37 per cent from its initial public offering price of 79 cents.