Rental village operator Eureka achieves 98% occupancy and 38.3% EDITDA across 2191 homes

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The rental village market has been the poor cousin of retirement living for 20 years, with now only two significant operators – Ingenia and Eureka. That is rapidly changing with their new financial success and vacant retirement village units being converted to rental across the country.

Eureka just announced its FY21 results. We saw the growth in underlying profit before tax of 31% to $7.36 million. Its underlying EBITDA profit margin increased 35% to 38.3%.

The Group now has 40 villages made up of 32 home and eight under management, totalling 2191 homes. Total revenue was $27,582,000.

Eureka has had a rollercoaster of executives, board members and Chairs. The appointment of Cameron Taylor as COO in March 1919, and this year’s elevation to CEO, has seen the group achieve stability. Taylor was previously with Woolworths for 12 years, ending up as Head of Property for Big W.

Over the 12 months he has led the acquisition three villages and greenfield expansion of their Wynnum village. The average value of each home acquired was ~$110K.

Growth in margins has been credited to Taylor introducing client centric processes and Village manager development.

Chequered history

Eureka was created in July 2009 by Bill Lewski’s Prime Trust, when it wrestled from all from Fig Tree Limited (previously Village Life), delivering 11 villages. Prime Trust appointed Mike Bosel as MD.

Then SCV, operator of the remainder of Village Life and SunnyCove rental villages purchase 100% of Prime Trust’s villages taking them to 48 rental villages.

Soon after that both Prime Trust and SCV went into receivership. In 2014 KordaMentha as Eureka’s receiver engineered a renaissance partly backed by KordaMentha executives. It now had 43 rental villages and 2800 homes, most under management only.

Brisbane power executive Rob Levison took over the chairmanship and not the business into shape with an eye on utilising its $36 million in tax losses. They were consumed by 2019.

The share price has reflected this tortured journey over 16 years.

It appears those days are behind Eureka.