EUREKA IMPROVES WHILE MANAGEMENT REMAINS UNIMPRESSED

EUREKA IMPROVES WHILE MANAGEMENT REMAINS UNIMPRESSED

EUREKA Group has collected the gains on its 'buy and build' strategy to achieve a net profit of $6.29 million, up 72 per cent on the prior corresponding period (pcp).

The company's acquisition of 483 new freehold units helped boost total income to $15.56 million, a $9.47 million increase over pcp.

Earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 71 per cent to $7.4 million, beating the 1H16 result of $4.35 million.

More than 2,000 total units across 26 seniors' villages now comprise the Eureka portfolio, taking total asset value to $130.4 million, up from the 1H16 figure of $85.6 million.

Despite the improved results, Eureka management still isn't chuffed with the company's overall performance, citing a string of botched acquisitions during 1H17 which impacted the outcome.

In his chairman's review, Robin Levison stated the half year outcome is "below the expectation of the Eureka board and management team" even though the results were up on last year.

"Eureka expended a material sum of time and money on due diligence on a number of potential acquisitions that did not complete, either for reasons of failing the due diligence process or vendor difficulties," says Levison.

"Positively however, in reviewing the current opportunities under due diligence, the group expects to acquire between 4 to 6 assets suitable for low cost rental retirement accommodation before 30 June 2017."

During the last half, Eureka invested in significant improvements on its Couran Cove assets, particularly resourcing for the infrastructure and management contract role for the resort.

The group also appointed a new CEO, Jeff Weigh, in early February.

Eureka stock dropped 4 per cent as of 10:58am AEDT to trade at $0.48. The company has not declared an interim dividend.

Business News Australia

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