This article is from the Australian Property Journal archive
RETIREMENT community operator Gateway Lifestyle Group has posted a 4.5% increase in distributable earnings to $39.6 million but has downgraded its outlook.
Gateway announced a downgrade in full-year earnings guidance in June due to “adverse weather conditions” affecting construction in the second half of the financial year. The 241 home settlements recorded for FY17 was in line with the recent guidance, but down from the original forecast of between 260 and 290, and from FY16’s 262 settlements.
Home sales revenue dropped by 10.3% to $57.5 million. Settlements came in at an average net profit margin of $105,000 per home, up from $100,000.
Distributable earnings increased by 4.5% to $39.6 million, with distributions of 9.1 cents per stapled security down 16.4% to 9.1cpss.
Operations expenses increased by 41.6% to $26.2 million and development revenue fell by 10.3% to $57.5 million.
It posted an annual profit of $59.7 million, including a net gain in fair value of $25.0 million. Annualised long-term rental revenue is more than $48 million from 6,539 long-term occupied sites, up from 5,944, and average weekly rent has grown from $138.2 to $142.4. Rental revenue jumped 22.5% to $60.9 million on the back of a 24.5% increase in long-term site rental revenue to $46.3 million.
Gateway acquired five assets over the year, including 362 long-term occupied sites bringing around $2.7 million to the long-term rental revenue in FY18.
“Our focus remains on growing the portfolio of cash generative, long-term occupied sites through the management of our communities, acquisition of new communities and the development of new homes,” chief executive officer Trent Ottawa said.
“Strong revaluations of the communities during the year resulted in a net fair value increase of $25 million demonstrating improved operating performance, the contribution from growing the long-term income stream and continued cap rate compression.”
The group has a 96% underlying cash flow conversion for the period, and gearing of 23.4% and debt capacity of $70 million. It is targeting distributable earnings growth of7% for FY18, excluding further acquisitions.
Australian Property Journal
