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Aveo Half Year sales reflects retirement village market: deposits up 120%, written sales down 10%

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The country’s second largest retirement village operator, with 88 communities and 11,786 village homes, has released its Half Yearly performance (July to December 2018).

The company appears to have overcome the negative media coverage of 2017, with cash deposits increasing by 120% over the same period last year.

However, those deposits were slow to convert to sales as customers struggle to sell their family homes.

The result: Aveo ‘sold’ 270 established homes this six months compared to 299 last year, a drop of 10%.

Profit from established home sales was down 8% from $26 million to $24 million.

On top of the 270 established units sold Aveo also transacted 94 new homes.

The continued trend of new residents being older is evident, with average age of entry into independent living units for Aveo at 77 and Serviced Apartments at 84.

This compares to a national average age for entry into residential aged care of just 83. Retirement villages are a significant saving to government.

Aveo also confirmed that a number of buyers for the group have put in indicative non-binding bids, interested in a whole-of-company transaction at prices above the $1.65 it has been trading at.

Late on Friday the share price was $1.96, a jump of 21% in the last two weeks largely because of that news.

The company projects its true Net Tangible Assets (NTA) value per security is $3.83.