Out of the ashes of Village Life and SCV, the 49 village Eureka group turns a maiden profit

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The signs of small, positive change in the sector continue. Greg Rekers and Kerry Potter have performed the herculean task of turning around the old Village Care/SCV stable of rental villages. In 2008 SCV had 89 villages and projected losses of $29 million and no money in the bank – at all. This week its first profit – $524,000 after tax for 6 months – was announced. Rekers explains they have achieved 13% more earnings with a reduction of 48% in costs. The National Australia bank has extended their facility.
Now known as the Eureka Group – a name created by Mike Bozell when he took up Prime Trust’s rental business (before Prime Trust went into receivership) – it has 49 villages with 2,722 units across strata, rental and DMF operations. They also have control of Village Care, Loretta Byer’s original management business in the stable. Along the way SCV burnt through the personal funds of Michael Gordon who established Peppercorn Child Care and sold out to ABC Learning at the top of the market. He put money in each month to keep SCV afloat. Then Melbourne’s Smorgan Family got involved with grand plans through private funds manager Co-Investor but quickly got out again. Finally 333 Group, a division of KordaMentha, the corporate recovery firm, got involved. They engaged Greg Rikers who comes from residential real estate. Managed villages have been moved to ‘independent contractor operated’ and instead of a fixed service offering (meals, linen, rent for a fixed percentage of the pension), they now offer freedom of choice of services.