Primelife’s joint venture scheme, McKinnon Road Developments will retain ownership of Claremont Terrace retirement and aged care facility, after entering an agreement with the liquidator appointed to wind up the managed investment schemes formed to invest in the development of the facility.
McKinnon Road Developments is a 50/50 joint venture between Primelife and Ulter Pty Ltd.
The liquidator of the schemes has agreed to terminate the contractual arrangements relating to the incomplete sale, development and management of Claremont Terrace for a total consideration of $3 million.
It is expected that settlement will occur in mid April 2007.
Claremont Terrace is an integrated retirement and aged care facility managed by Primelife comprising 79 serviced apartments coupled with a 56 low care bed hostel located in McKinnon in
Last week, Primelife announced a net loss of $2.2 million for the six months to December 31, 2006.
While no dividend was declared, Primelife’s managing director John Martin said the company is on course for a strong second half with and positioned to better the 2006 net result of $6.2 million in the full 2007 year.
While the underlying businesses of Primelife showed improved performance, the company was affected by a number of one-off costs in relation to staff departures and the resolution of several unregistered managed investment schemes, which resulted in a net after tax loss of $2.2 million for the period.
Retirement Living EBITDA is up three times to $13.2 million, as a result of real growth in the DMF book, revaluations and contributions from PrimeLiving Trust asset management fees coming through for the first time.
Aged Care occupancy is up 3% on pcp to 93% with operational efficiencies driving the 82% increase in forecast operating profit plus bond appreciation per bed to $7,800.
Martin said Primelife continues to be in discussions with its major shareholder Babcock & Brown Limited about its interest in creating a specialised investment vehicle in the Retirement Living and Aged Care sector which would include Primelife and PLT, an acquisition joint venture between Primelife, Babcock & Brown and MFS Limited.
“In respect of the full year, current projections are that this year’s results will outperform the $6.2 million profit of last year.
“Primelife expects strong contributions from growth in unit sales at Primelife’s new broad acre developments, strong earnings growth in the Retirement Living business, increasing occupancy and further efficiencies in its Aged Care business and running down costs associated with residual legacy litigation and winding up the remaining unregistered investment schemes,” he concluded. Australian Property Journal
