Arvida Group Limited Analysis

Overview

Arvida is one of the larger operators of aged care facilities and retirement villages in New Zealand. The group comprises 32 villages spread nationally with 2,475 retirement units and 1,688 care beds. Over 4,7500 residents are provided a continuum of care that extends from independent living to full rest home, hospital and dementia level care.

Arvida listed in December 2014 and became a constituent member of the NZX 50 Index in December 2016. Since raising $80 million at the Initial Public Offer, Arvida has grown considerably completing the acquisition of a further fourteen villages and now has a development pipeline of 1,683 units/beds to be progressively rolled out over the next 5-7 years with an annual build rate of 200 units.

Arvida continues to invest in its residents and support network adding programs and engaging in the local communities. A holistic approach is taken to care where as much emphasis is put on vitality and community inclusion as to quality of care. Arvida has a vision to be true leaders and innovators in the New Zealand retirement and aged care industry, creating rich and dynamic resident communities.

Arvida targets a dividend payout ratio of between 50% and 70% of Underlying Profit per annum, with imputed dividends paid on a regular quarterly basis.

Performance

The following information was extracted from Arvida Group Limited's half year results, released on 19 November 2024:

• Operating EBITDA of $44.1m, up 13%
• Gross ORA sales value of $193.4 million, up 13%
• 70 new units delivered, including 65 care suites
• Total assets of $4.3 billion
• NTA at $2.14 per share
• Scheme implementation pending

Retirement village operator Arvida Group Limited (Arvida) today reported its unaudited financial results for the six-month period ended 30 September 2024.

Financial Result

Net profit after tax of $64.0 million included a fair value gain on the investment property of $72.9 million (1H24: $88.6 million), supported by ongoing development activity and continued resale price momentum during the period. Operating EBITDA increased 13.1% to $44.1 million (1H24: $39.0 million) despite a difficult property market and weak economic environment.

Operating revenue increased 2.8% on the prior corresponding period to $125.5 million from the continued growth in deferred management fees from resales and new development village sales, along with higher care and village fees. Care occupancy at 94% continued to be at lower than historical levels and remained an area of strategic focus.

At $79.5 million, operating cash flow improved on the prior year (1H24: $45.6 million) mainly reflecting settlement cash flows.

The gross value of sales of occupation right agreements for the period increased 12.9% to $193.4 million. This reflected strong resale performance, up 32.4% on the prior period, but lower new sales activity on a reduced development programme. A total of 292 settlements occurred in the period.

Arvida’s balance sheet has continued to grow, with total assets increasing by $104.8 million over the period since year end to $4.3 billion.