17 Feb 2012

Retirement village profit down as insurance costs soar

12:07 pm on 17 February 2012

Underlying profits at Metlifecare have fallen sharply due to higher insurance costs.

The retirement village operator says revenues rose 13% to $42 million in the six months to the end of December, but underlying profit, which excludes the unrealised movements in the value of its portfolio, dropped 38% to $3.4 million over the period.

Metlifecare says operating expenses rose due to increased insurance, property and staff costs. Insurance costs increased 120% because of the impact of the Christchurch earthqake.

Operating revenue fell slightly after the group sold one of its villages.

The company says it has been trading well and expects to see this continue in the second half of this financial year.

Metlifecare more than halved its bank debt during the period to $76 million after raising $45.5 million in new equity.