AVEO'S STRATEGY MATURES INTO RECORD RESULT
Written on the 19 August 2015
THERE'S money to be made in retirement, at least for Aveo Group (ASX: AOG) which just delivered a record result.
The property group's turn to retirement services is paying off, with the company delivering a full year profit increase of 30 per cent to $54.7 million. This was driven by record retirement unit sales of 721 for the year.
Aveo CEO Geoff Grady (pictured) says since becoming a pure retirement play, the company has seen its profits rise and a steady sell-off in non-retirement assets. Close to home, its Milton residential development is now 92 per cent sold off.
"Our strong financial results in FY15 and record retirement business performance are a direct consequence of the pure retirement strategy that we launched in mid-2013," says Grady.
"Our non-retirement asset sales are progressing well and acquisitions continue to expand the retirement development pipeline.
"We are on track to achieve our stated FY16 and FY18 return on retirement assets targets of 6 per cent to 6.5 per cent and 7.5 per cent to 8 per cent respectively."
Aveo delivered 62 new units in the past financial year, and has 182 new units scheduled for delivery during the year. The upcoming units will be held at Clayfield, Cleveland, Durack and Peregian Springs in Queensland, Island Point in New South Wales, and Mingarra in Victoria.
Increasing care and support services will also be rolled out across its entire retirement portfolio, after the company has identified opportunity in moving beyond pure property.
"As a consequence, we are providing FY16 underlying profit after tax guidance of over $80 million, a 45 per cent increase on our FY15 result, and a full year distribution of 8 cents per security, representing a 60 per cent increase on the FY15 distribution of 5 cents per security," says Grady.