Aveo Retirement FY15 profit up 18% to $53M

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Geoff Grady’s Aveo’s Retirement EBITDA profit has increased by $8M from $45M to $53M in the past 12 months.

$5M growth in profit came from established business despite flat resales of 685 units with an average transaction price of $267K per unit (including lower-priced serviced apartments) – just $1000 more per unit compared to last year. However average profit per sale increase from $75K -$83K delivering a 31% margin.
New units sold increased from 23 to 62 for the year with an average margin of 20%.

With continued sale of non-retirement assets of the group has gearing down to 13.8%.

In May they launch their new “Aveo Way” standard contract and report that it has not affected sales rates while they expect it will deliver an improvement in property valuations by 5% to 10% as the contract is rolled out plus added control to the exit process and condition of the units.

They forecast that profits will be between $108M – $116M by 2018, delivering an 8% return on assets compared to 4.6% today.

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