IT'S EUREKA FOR EUREKA AS PROFIT CLIMBS 237%

SHARES in retirement village operator Eureka Group Holdings (ASX: EGH) have soared on the ASX today following a record profit result.

The Gold Coast company's share price rose more than 8.2 per cent to around 79c just before midday.

During the reporting period, Eureka acquired 13 new retirement villages for $43.49 million to become Australia's largest low cost rental senior's accommodation provider.

The company took a net profit after tax of $10.47 million and recorded earnings before interest, taxes, depreciation and amortisation (EBITDA) of $12.47 million in the year to June 30.

This is on the back of a 98 per cent gain in revenue to $24.15 million.

Robin Levison (pictured), Eureka executive chairman, says this puts the company well on track to achieve its next goal of owning and/or managing 5000 units.

Eureka currently owns and/or manages 2000 units.

"Australia's domestic retirement marketplace remains highly fragmented and ripe for continued consolidation with only around 60 of the approximate 2,270 aged accommodation facilities in Australia managed by corporatised entities, resulting in Eureka currently holding around 200 potential acquisition opportunities identified following preliminary due diligence," says Levison.

"The company's enlarged scale and associated efficiency gains resulted in Eureka recording a high revenue to cash flow conversion rate in FY 2016 and with the recurring rental revenue streams and strong balance sheet now in place, will enable our future acquisitions to be largely internally funded, barring any major transaction opportunities which may arise."

Eureka's largest redevelopment project is now underway at a retirement village in Terranora, northern NSW. The outcome will be a 'custom built next generation Eureka village' of around 125 units.

Levison says a strategic home care resident partnership with the Uniting Church's Blue Care arm, formalised in this period, will continue proving a boon to the Eureka business.

"This in home support service, including assistance on how best to access government funding for care services, is being progressively rolled out across all of Eureka's Queensland villages over the next 12 months," says Levison.

'We are confident that this value adding service will lengthen the average tenure term of our villages and increase demand for our accommodation, particularly from those retirees residing in competitor villages where they presently pay for similar aged care services."

Eureka is gearing up for another 'year of aggressive growth', which it says is evidenced by the $2 million purchase of an initial 36 units at Couran Cove Island Resort on the Gold Coast in early July.

"This initial acquisition marks the start to a major redevelopment of selected parts of the former tourist resort into a low cost retirees rental village, with Eureka already planning to purchase an additional 65 to 90 units and manage a further 50 units on behalf of other owners," says Levison.

"The developer involved with Couran Cove over time intends to build up to 170 new retirees rental units which Eureka plans to manage and upon completion of these redevelopment plans would result in it becoming the company's largest rental village.

"Eureka expects to finalise a number of other new acquisitions in the first half of FY 2017 following completion of detailed due diligence of several prospective opportunities and is confident that at the end of the financial year will be well advanced on our medium term goal of having 5,000 units under ownership and/or management."