Retirement village operator Aveo Group has reported a $44.7 million half-year loss, buffeted by a downturn in residential property prices that affected both its own real estate portfolio and the homes of its prospective customers.
The company, which is also an aged care provider, said its revenue for the six months to December 31 was $144 million, a drop of 30.8 per cent on the previous corresponding period.
‘Settlements are taking longer to occur as incoming residents are experiencing increased difficulty in selling their homes,’ Aveo Group chief executive Geoff Grady said.
Aveo, which faced claims in mid-2017 that some of its residents had been neglected, pointed to the $63.2 million fall in value of its retirement property portfolio as contributing to its half-year loss but noted that the sale of its Gasworks complex in Brisbane in December helped its bottom line.
It said total retirement revenue increased by one per cent to $154 million boosted by improved care and other services revenue, but this was partially offset by lower sales volumes of minor development stock due to settlement delays.
The Aveo board is considering bids for the company, which is up for sale through Merrill Lynch.
‘In late January 2019, a number of indicative non-binding bids were received from parties interested in a whole of company transaction,’ Aveo said in a statement, adding that it would have a shortlist of preferred bidders ready by late February.
The company has not declared any dividends since the end of the previous financial period.
Shares in Aveo Group were up 2.48 per cent to $1.757 at 1145 AEDT on Wednesday.
AVEO HALF-YEAR LOSS
* First-half net fall of $44.7m vs $149.3m profit in pcp
* Revenue down 30.8pc to $144m
* No dividend