Annual Report 2024 Summary
Oceania's Annual Report for the year ended 31 March 2024 highlights a period of favourable financial performance, driven by increased sales volumes and strong capital gains. The company continues its strategy focused on delivering premium retirement living and aged care experiences, marked by innovation and a resident-centred approach. Key initiatives include advancements in care models, sustainability efforts, and portfolio transformation through development and divestment. Despite sector challenges, Oceania expresses confidence in sustainable long-term growth, supported by strong demand demographics and ongoing strategic execution.
Oceania delivered significant growth in FY2024. Total Comprehensive Income surged 104.3% to $70.5m, and Net Profit After Tax (NPAT) increased 104.5% to $31.5m compared to the prior corresponding period (pcp). Underlying NPAT saw a solid 6.0% rise to $62.1m, while Underlying EBITDA grew 3.2% to $82.6m. This performance was underpinned by a 16.7% increase in total sales volumes and continued development across 10 sites. Operating cash flow improved by 21.7% to $85.4m, reflecting increased cash receipts from occupation right agreements (up 26.6%). Total assets grew 9.3% to $2.8 billion. Consistent with its focus on funding growth and portfolio transformation, the Directors resolved not to pay a final dividend.
Oceania maintained a robust capital structure. As of 31 March 2024, undrawn net debt headroom was $88.5m, increasing to approximately $100.0m by 23 May 2024. Total assets increased to $2.8bn, while net assets grew to $1.0bn. The company successfully met all three performance targets for its $500m Sustainability Linked Loan (SLL) in its second year, covering resident wellbeing, construction waste diversion, and GHG emissions. This achievement potentially positions Oceania for lower borrowing costs under the SLL terms, reinforcing the financial benefits of its sustainability focus. The dividend policy payout ratio was revised to 30%-50% of Underlying NPAT to support ongoing investment, though no final dividend was declared for FY2024 to prioritize growth funding.
| Metric | As at 31 March 2024 | Commentary |
|---|---|---|
| Total Assets | $2.8bn | Up 9.3% from $2.5bn in FY23 |
| Net Assets | $1.0bn | Up 6.7% from FY23 |
| Undrawn Net Debt Headroom | $88.5m | Increased to c.$100m post balance date |
| Sustainability Linked Loan | $500m (established FY23) | All 3 FY24 performance targets met |
| Final Dividend FY2024 | Nil | Decision to retain capital for growth |
Oceania holds a significant property portfolio valued at $2.8 billion in total assets. Over 90% of these assets are property assets carried at fair value, primarily assessed by independent valuer CBRE Limited (page 56). The valuation uses income capitalisation, discounted cash flow, and direct comparison approaches, incorporating key assumptions like discount rates, property price growth, and occupancy periods (page 67). A notable point raised in the report (page 56) is that the company's market capitalisation at balance date was below the carrying amount of its net assets ($1.0bn). Management acknowledges this difference but expresses confidence in the underlying property valuations determined by independent experts, suggesting the market may not fully reflect the assessed fair value of its substantial property portfolio. Oceania positions itself as an innovator offering a premium, modern living environment, which underpins its growth strategy and market differentiation (page 40).
Oceania demonstrated resilience and strategic progress in FY2024, achieving strong financial results despite external pressures. The company is well-positioned with a premium portfolio, a clear development strategy shifting towards greenfield opportunities like Ngā Mara, and a strong focus on innovation in resident care and experience. Meeting sustainability targets further enhances its profile. While challenges related to the macroeconomic environment, staffing, and regulatory changes persist, Oceania's leadership expresses confidence in its ability to navigate these and deliver sustainable long-term growth, driven by its differentiated offering and favourable demographic trends.