The ASX-listed rental village operator has downgraded its forecast for the financial year ended 30 June.
On 23 February this, Eureka had advised the market that its Underlying EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) forecast for the FY22 was expected to be within a range of $10.9 million to $11.1 million, subject to the timing of settlement dates for existing and any further acquisitions.
It has now advised the ASX it has revised its Underlying EBITDA guidance range of $10.2 million to $10.4 million, a loss of $700,000 on the 23 February forecast.
Eureka said its EBITDA was impacted by the flooding of its Cascade Gardens rental village in Lismore in Far North NSW on 28 February.
“Prior to the flood, the Lismore property was expected to contribute $0.875 million to Eureka’s forecast U-EBITDA for FY22 (equating to $0.3 million for the period from March to June 2022),” Eureka said in its profits guidance announcement.
“The Lismore property has limited insurance for flood damage due to its Lismore location. It has sufficient insurance to cover staff terminations, clean-up costs and to safely secure the site. A decision will be made on the impact of the diminution in value subject to ongoing discussions with the Lismore council on any future usage of the site by Eureka and prior to the issue of the FY22 financial statements.”
Eureka announced last November that it had entered into conditional contracts to acquire the management and letting rights for Oxford Crest’s portfolio in South East Queensland. In March, it completed the purchase of six rental villages comprising 333 units. In addition, it bought the 46-unit Port Denison Motor Inn in Bowen, QLD.
“The acquisitions are performing in line with expectations. However, delays in obtaining regulatory and body corporate approval have reduced their forecast contribution to the FY22 results,” said Eureka, which owns 33 villages, five of which are owned in a joint venture and an additional eight villages under management, representing 2,250 units.
“The repositioning of Eureka’s village (pictured) in Orange, Central-Western NSW, to bring the resident profile into line with the senior independent living model has been prolonged but is nearing completion and the village is expected to return to normalised contributions in FY23,” added the statement.
Eureka posted a net profit of $4.03 million for the Half Year to 31 December.