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Oceania Healthcare Limited (ASX:OCA) announces its half-yearly results to the market (6 months to 30 November 2018). The underlying NPAT was 5.3% above 1HY2018 and there is 8.7% growth in continuing operations as compared to 1HY2018. OCA is a care focused operator and developer of aged care homes and retirement villages.Â
The village segment saw a resale and development margins were in line with FY2018 and remained at strong levels. The gains on resale decreased due to lower volumes of ILUs sold (32in 1HY2019 v 44 in 1HY2018). However, resales margins for ILUs (Independent level unit) were consistent at 30.3% in 1HY2019. The total sales of 114 units and care suites in 1HY2019 is 56.5% higher than the 92 achieved in 1HY2018.
The total comprehensive income for the period of $19.5m reflects the delivery of the new care suites at the Bay View and gains in valuation in relation to their premium care suites. Their operating revenue increased by 4.7 % with revenue up by 3.7% to $82.9m and village DMF up by 14.3% to $18.9m. The care suites were also revalued. The fair value of these increased by a $18.2m net of tax, reflected in Other Comprehensive Income. The operating expenses increased due to higher care wages following the equal pay settlement for HCAâs and 5% increase provided to the RNs ($3.7m in total) as well as the rental payment for the right to use asset at Everil Orr ($4.8m).
The total assets of the company increased by $209.7m (21%) from 1HY2018. The capital expenditure has almost doubled to 95.3m in 1HY2019 from $49.2in 1HY2018. The Net Adjusted Value (NAV) is recorded at $1.06 per share as at 1HY2019. The operating cash flows of $47.1m for 1HY2019 were materially ahead of the $17.1m in 1HY2018, reflecting the sell down of new developments.
All the sixty- two apartments at Meadowbank Stage 3 delivered in January 2018 are sold or are under application. A total number of 81 suites have been completed at The Bay View (on time and on forecast cost). They are on track to deliver their increased build rate of 250 units and care suits per annum to 2020 and more than 300 per annum post that. There is a robust performance in the village segment, maintaining a resale margin of 30.3 % for villas and apartments; in line with the margin for FY2018. There was also progress in executing their aged care strategy which continued with strong MoH (Ministry of Health) audit results with 31% of homes at four years, all others at 3 years (up from 25% at 4 years as at 1HY2018). The company declared their interim dividend per share as 2.10 cents per share (not imputed).
The gearing level in the capital structure has increased from 18.7% to 26.6% in the period as they have drawn down to fund their developments.
The shares of OCA closed the dayâs session at A$1.020, down by 0.971 % or 0.010 points as compared to the last day close of A$1.030 (as on 25 January 2019).
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