MET
30/10/2012 14:58
ADDRESS
REL: 1458 HRS Metlifecare Limited
ADDRESS: MET: Chairman & Managing Director's Addresses to Annual Meeting
Company Announcement
30 October 2012
CHAIRMAN AND MANAGING DIRECTOR & CEO'S ADDRESSES TO THE ANNUAL MEETING
Chairman's Address to Annual Meeting
I am pleased to review the performance of your company for the financial year
ended June 2012.
FY12 Highlights
2012 was a milestone year for our company.
In October 2011, we undertook a strategic review to evaluate options for the
company's capital and ownership structure. This ultimately led to a capital
raising and share placement initiative, as well as a sell down by Retirement
Villages New Zealand, the majority shareholder in Metlifecare.
In May 2012, we announced plans to merge with Vision Senior Living and
Private Life Care. The merger settled on 23 July 2012.
As a part of the merger transaction, RVNZ sold down its shareholding further,
from 50% to 43%. This is important for shareholders, as it provides a more
diverse shareholder base and has already led to significantly greater
liquidity and trading volumes.
FY12 Financial Performance
The reported profit result for 2012 was impacted by two non-cash expenses.
The first was a decline in the fair value of investment properties; and the
second was a deferred tax charge.
As a result, Metlifecare had a reported loss of $132 million. Excluding the
two non-cash expenses, trading performance was $6.2 million.
Debt
Bank debt was $69 million as at year end.
Following the merger, bank debt is currently $193 million, with a loan to
value ratio below 25%. This figure will reduce at the end of November
following receipt of the net proceeds of the sale of the company's village in
Richmond, Nelson.
Governance
There have been a number of changes to the Board in the past 12 months.
o I was appointed as Chairman of the Board, following the resignation of Greg
Flood in December 2011.
o In January 2012, Guy Eady, resigned from the Board in accordance with
changes to the management of RVG.
o In August 2012, we were pleased to welcome Alistair Ryan and Chris Aiken to
the Board as independent Directors.
o Most recently, Geoff Grady has joined the Board as a representative of RVG.
Geoff, Chris and Alistair are up for election at today's meeting. Each of
these individuals offer complementary skills, experience and expertise which
are of value to Metlifecare and the Board fully supports their election.
Also, Mr John Loughlin is retiring by rotation and offers himself for
re-election.
Mr Brent Harman has indicated that he will retire from the Board at the
conclusion of today's meeting. Brent has been a Board member since 2006. I
would particularly like to thank Brent on behalf of my fellow Directors and
Management for his excellent service to the Company and wish him all the very
best for the future. Thanks Brent.
The Board is currently seeking to appoint a further independent Director with
commercial and healthcare sector experience, and we will advise when we have
identified an appropriately qualified candidate.
Dividend
Based on the Company's asset rationalisation programme and focus on
debt-reduction, the Board believes that it is prudent not to declare a
dividend for the year to 30 June 2012. The position on dividends will be
reviewed as at 31 December 2012.
Outlook - MET
Following the merger with Vision Senior Living and Private Life Care, our
company is now one of the largest retirement village providers in New
Zealand.
As announced at the time of the merger, we have undertaken a planned
portfolio rationalisation. The rationalisation has seen the sale of two
properties; an undeveloped site in Christchurch and a village in Nelson that
is due to settle on 30 November 2012.
This is in line with our strategy to focus on prime residential markets in
the North Island.
On October 19, we acquired a 4.4 hectare land site in Unsworth Heights on
Auckland's North Shore and look forward to commencing development there in
2013.
Outlook - Operating Environment
The New Zealand economy remains relatively static but the real estate market,
especially in Auckland is buoyant.
Recent REINZ statistics recorded increases in sales volumes in the Auckland,
Waikato and Bay of Plenty residential property markets of between 15 to 17%
compared to September last year. A shortage of new listings is tightening
the market and pushing prices up, particularly in the Auckland region. The
Housing Price Index rose 5% overall compared to September 2011, with Auckland
rising 8.4%.
Opportunities
New Zealand has an ageing population, with growing demand for retirement
lifestyle options and aged-care support.
Currently, retirement village penetration levels are quite low in New Zealand
compared to other OECD nations. As the sector grows, we expect to see these
penetration levels increase. We have a growth strategy in place to take
advantage of this increasing demand.
The New Zealand Government has recognised that more aged care beds will be
needed to meet the projected growth in demand. The ability to provide a
continuum of care is increasingly important, and we will be looking at
opportunities to expand our care offer across more of our properties.
Vision
Our vision is to be the leader in providing innovative and sustainable
solutions for the lifestyle and care of older people.
To achieve this, we have a carefully considered development and growth
strategy in place. Metlifecare is well positioned to take advantage of the
significant potential available in the retirement sector.
I would like to take this opportunity to thank our senior management team for
their efforts during the year. It has been an extraordinarily busy 12 months.
Thank you for your commitment and efforts on behalf of our company.
I would also like to thank all the staff at Metlifecare, who meet and exceed
the expectations of our residents every day. Our residents report very high
satisfaction levels, with nearly 100% of residents satisfied with the
politeness and friendliness of our staff. Thank you to you all. Thank you
also to our residents throughout the country who we trust will continue to
enjoy fantastic Metlifecare experiences in the next year and into the future.
Managing Director & CEO's Address to Annual Meeting
Our Company
Metlifecare currently operates 24 retirement villages around New Zealand, of
which 9 include care facilities. We employ over 1,200 staff and have more
than 5,000 residents living in our villages.
We also have a pipeline of over 700 development units and an experienced
in-house development team.
We target development locations, where there is an identified need for
retirement living options and a suitable demographic.
Developments
We are likely to shortly commence Stage 3 of our most recent development, The
Poynton, in Takapuna. Sales showed good improvements in 2012 and this is
continuing into 2013.
We are also progressing resource consents at our Glenfield and Unsworth
Heights properties. Construction is set to commence by 2013 at both these
locations.
Sales
We experienced a strong uplift in sales in 2012, and again, we are seeing a
large number of applications signed in 2013.
Operating Cashflow
As we said at the time of the merger, we are now seeing immediate and
significant benefits flowing through from synergies and cost efficiencies
after combining the three organisations.
Moving forward - 2013
We have a six-point plan for activity in 2013, and we are already well set on
the path to achieving these. To summarise:
We undertook to pay down debt through the rationalisation of some of our
assets -
(a) Ilam site in Christchurch - achieved.
(b) A significant asset sale, Oakwoods - achieved.
(c) Integration and rationalisation of our senior and middle management teams
- achieved.
Looking forward we are focussed on executing the following:
1. Integrate all business systems and seek to achieve additional cost
synergies in the merged businesses.
2. Sell down stock at developing villages, being Papamoa, Bay of Islands, The
Poynton and Forest Lakes and to execute further stages of development.
3. Progress, obtain and execute resource consents at The Avenues, Crestwood,
The Poynton, Glenfield and Unsworth Heights.
4. Drive higher occupancy and seek further synergies across all villages as
we implement best practices and Centres of Excellence.
5. Explore further development opportunities which meet our strategic
criteria.
This all to extract further value for our shareholders; being our sixth point
of the plan:
6. Deliver improved shareholder value
Moving forward - Longer Term
This is an exciting time for Metlifecare, and we look forward to reaping the
benefits provided by our scale and size, and the taking advantage of the
opportunities available in the market.
-END-
For more information, please contact:
Alan Edwards
Managing Director & CEO
Tel: 09-539-8000
About Metlifecare:
Metlifecare is a publicly listed aged care and retirement lifestyle company.
Established in 1986, the company has a proven track record of successfully
owning and managing retirement villages in New Zealand. Metlifecare currently
owns villages in prime locations throughout New Zealand, with most providing
provide a full continuum of care from independent villas and apartments
through to serviced apartments, rest homes and hospitals.
www.metlifecare.co.nz
End CA:00229063 For:MET Type:ADDRESS Time:2012-10-30 14:58:30
