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AVEO Group (ASX:AOG) has posted a strong boost in profit, confirming its growth strategy of focusing on the retirement business.
Aveo recorded a 7.4 per cent increase in full year net profit after tax of $42.1 million, compared to the previous period.
Net debt was reduced to $313 million, following divestment of non-retirement assets and $232 million capital raising in December 2013.
This includes the sale of three residential development sites at Newstead for $40 million in March, with the remaining site sold for $19.5 million in May.
CEO Geoff Grady says the results indicate Aveo is on the right track, by expanding retirement assets.
“We have made solid progress since announcing our pure retirement strategy in 2013 and we are on track to hit our medium and longer term retirement group targets,” Grady says.
“Creating a continuum-of-care concept for residents and higher care facilities is a key foundation of our broader pure retirement strategy and part of our commitment to grow with older Australians by inspiring greater living choices.
“We will continue to build long term, sustainable value for our security holders.”
Aveo has commenced construction at four sites to assist meeting the FY16 target of delivering 200 retirement units.
The group has acquired two extra sites with the potential to develop 740 units, with an end value of $380 million.
AOG is targeting a profit increase of between 15 and 20 per cent for FY15.
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