This article is from the Australian Property Journal archive
AEVUM Limited has posted a bumper 24% jump in net profit after tax to $28.5 million for the FY08 (FY07: $22.9 million).
The result was underpinned by a 37% increase in earnings to $36.9 million for the year ended June 30 compared to $26.9 million in the same period last year.
Aevum also increase its operating cash flows by 100% from $10.2 million to $20.4 million.
As a result, earnings per share growth increased 4.0% to 24.1 cents and positive revaluations factoring in capital growth was $35.2 million which saw net tangible asset per share jump 20 cents from $1.97 to $2.17 over the period.
Aevum’s chief executive Simon Owen said the results were broadly in line with internal forecasts but had been impacted by challenging trading conditions and market sentiment in recent months.
The company has declared a final dividend declared of 4.5 cents an increase of 0.5 cents over last year. This will take the full year dividend to 9.0 cents (FY07: 8.5 cents).
Owen said the valuation of retirement villages has come under downwards pressure over the course of the past nine months, like most sectors of the property market.
“It is worth noting that there have been very few transactions in the past year. Aevum has softened the discount rates used in the valuation of its retirement villages by a weighted average of 46 basis points, to 12.51%, to reflect recent market sentiment.
“Demand across the portfolio remains firm with over $22 million in reservations and presales presently in place. This provides us with a firm footing to commence the new financial year,” he added. “Across our portfolio of 21 villages we presently have 15 villages operating above our longterm occupancy rate of 95% including four operating at 100% capacity. Lack of available stock remains an issue at some villages,”
Owen said sector fundamentals remain very strong for the industry with Australians over the age of 65 today representing 14% of the population, rising to about 26% by 2051.
“This fundamental change combined with increasing market acceptance of retirement villages and high levels of industry fragmentation provide a platform for strong, long-term growth for Aevum,” he continued.
Looking ahead, Aevum is not providing any guidance on growth in earnings due to current abnormal market conditions.
Owen said the company does continue to experience strong demand for its retirement living and aged care accommodation and has 70 new units due for completion between now and December 2008.
“These new units, which are supported by strong presales, are expected to underpin earnings and cash flows in the current financial year,” he concluded.
Aevum shares closed 4 cents higher at $1.72.
Australian Property Journal
