New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Arvida Group (ARV) 1H22 Result</h2>
Arvida Group (ARV) reported a largely pre-announced 1H22 result (resales and new sales) with underlying profit of NZ$26.6m (+30% YoY) and EBITDA of NZ$33.5m (+28% YoY), these compare to RYM of +8% and +13% respectively. Annuity EBITDA was NZ$22.3m (+4%) YoY (RYM +15%). The softer resales gain drove the relatively weaker annuity EBITDA versus underlying earnings and EBITDA. This shift was largely pre-announced and was driven by a mix towards lower priced and lower margin serviced apartments and care suites.
Our rating is RESTRICTED and we have no published numbers.
Key points of interest
<ul>
<li>Cash recovery of capex in the half: 86% including a NZ$10m acquisition, 97% excluding the acquisition, this compares to 52% for RYM.</li>
<li>Build rate guidance: ARV has maintained its FY22 development guidance for 200+ units.</li>
<li>Dividend: Increased by 4% to 2.5cps</li>
<li>Balance sheet. Net debt increased by NZ$22m to NZ$393m</li>
<li>NTA: Net tangible assets per share increased to NZ$1.59 (NZ$1.46 at FY21)</li>
</ul>
Investor briefing – 11am NZT
Dial-in; 0800 667 018 (NZ), 1 800 148 258 (Australia). Passcode; 8784779
1H22 result summary
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 184.3pt; height: 12.75pt;"></td>
<td style="width: 49.1pt; height: 12.75pt;">
1H20
</td>
<td style="width: 40.95pt; height: 12.75pt;">
1H21
</td>
<td style="width: 40.95pt; height: 12.75pt;">
1H22
</td>
<td style="width: 88.7pt; height: 12.75pt;">
% change vs 1H21
</td>
<td style="width: 3cm; height: 12.75pt;">
% change vs 1H20
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Care fees
</td>
<td style="width: 49.1pt; height: 12.75pt;">
64.1
</td>
<td style="width: 40.95pt; height: 12.75pt;">
65.9
</td>
<td style="width: 40.95pt; height: 12.75pt;">
70.9
</td>
<td style="width: 88.7pt; height: 12.75pt;">
8%
</td>
<td style="width: 3cm; height: 12.75pt;">
11%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
DMF
</td>
<td style="width: 49.1pt; height: 12.75pt;">
12.9
</td>
<td style="width: 40.95pt; height: 12.75pt;">
15.5
</td>
<td style="width: 40.95pt; height: 12.75pt;">
19.4
</td>
<td style="width: 88.7pt; height: 12.75pt;">
25%
</td>
<td style="width: 3cm; height: 12.75pt;">
51%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Resale gains
</td>
<td style="width: 49.1pt; height: 12.75pt;">
12.7
</td>
<td style="width: 40.95pt; height: 12.75pt;">
10.3
</td>
<td style="width: 40.95pt; height: 12.75pt;">
11.9
</td>
<td style="width: 88.7pt; height: 12.75pt;">
16%
</td>
<td style="width: 3cm; height: 12.75pt;">
-6%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Newsale gains
</td>
<td style="width: 49.1pt; height: 12.75pt;">
5.2
</td>
<td style="width: 40.95pt; height: 12.75pt;">
5.0
</td>
<td style="width: 40.95pt; height: 12.75pt;">
11.4
</td>
<td style="width: 88.7pt; height: 12.75pt;">
128%
</td>
<td style="width: 3cm; height: 12.75pt;">
119%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Other
</td>
<td style="width: 49.1pt; height: 12.75pt;">
2.6
</td>
<td style="width: 40.95pt; height: 12.75pt;">
4.8
</td>
<td style="width: 40.95pt; height: 12.75pt;">
3.7
</td>
<td style="width: 88.7pt; height: 12.75pt;">
-23%
</td>
<td style="width: 3cm; height: 12.75pt;">
41%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Total revenue
</td>
<td style="width: 49.1pt; height: 12.75pt;">
97.5
</td>
<td style="width: 40.95pt; height: 12.75pt;">
101.5
</td>
<td style="width: 40.95pt; height: 12.75pt;">
117.3
</td>
<td style="width: 88.7pt; height: 12.75pt;">
16%
</td>
<td style="width: 3cm; height: 12.75pt;">
20%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Total costs
</td>
<td style="width: 49.1pt; height: 12.75pt;">
68.4
</td>
<td style="width: 40.95pt; height: 12.75pt;">
75.4
</td>
<td style="width: 40.95pt; height: 12.75pt;">
83.7
</td>
<td style="width: 88.7pt; height: 12.75pt;">
11%
</td>
<td style="width: 3cm; height: 12.75pt;">
22%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
EBITDA
</td>
<td style="width: 49.1pt; height: 12.75pt;">
29.0
</td>
<td style="width: 40.95pt; height: 12.75pt;">
26.1
</td>
<td style="width: 40.95pt; height: 12.75pt;">
33.5
</td>
<td style="width: 88.7pt; height: 12.75pt;">
28%
</td>
<td style="width: 3cm; height: 12.75pt;">
16%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Depreciation &amp; amortisation
</td>
<td style="width: 49.1pt; height: 12.75pt;">
2.7
</td>
<td style="width: 40.95pt; height: 12.75pt;">
3.1
</td>
<td style="width: 40.95pt; height: 12.75pt;">
3.3
</td>
<td style="width: 88.7pt; height: 12.75pt;">
8%
</td>
<td style="width: 3cm; height: 12.75pt;">
22%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Net interest
</td>
<td style="width: 49.1pt; height: 12.75pt;">
2.3
</td>
<td style="width: 40.95pt; height: 12.75pt;">
2.9
</td>
<td style="width: 40.95pt; height: 12.75pt;">
3.8
</td>
<td style="width: 88.7pt; height: 12.75pt;">
32%
</td>
<td style="width: 3cm; height: 12.75pt;">
63%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Other
</td>
<td style="width: 49.1pt; height: 12.75pt;">
0.6
</td>
<td style="width: 40.95pt; height: 12.75pt;">
-0.3
</td>
<td style="width: 40.95pt; height: 12.75pt;">
-0.2
</td>
<td style="width: 88.7pt; height: 12.75pt;">
n/a
</td>
<td style="width: 3cm; height: 12.75pt;">
n/a
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Underlying profit
</td>
<td style="width: 49.1pt; height: 12.75pt;">
23.4
</td>
<td style="width: 40.95pt; height: 12.75pt;">
20.5
</td>
<td style="width: 40.95pt; height: 12.75pt;">
26.6
</td>
<td style="width: 88.7pt; height: 12.75pt;">
30%
</td>
<td style="width: 3cm; height: 12.75pt;">
14%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Annuity EBITDA
</td>
<td style="width: 49.1pt; height: 12.75pt;">
23.2
</td>
<td style="width: 40.95pt; height: 12.75pt;">
21.4
</td>
<td style="width: 40.95pt; height: 12.75pt;">
22.3
</td>
<td style="width: 88.7pt; height: 12.75pt;">
4%
</td>
<td style="width: 3cm; height: 12.75pt;">
-4%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
EPS (cents)
</td>
<td style="width: 49.1pt; height: 12.75pt;">
4.3
</td>
<td style="width: 40.95pt; height: 12.75pt;">
3.8
</td>
<td style="width: 40.95pt; height: 12.75pt;">
4.9
</td>
<td style="width: 88.7pt; height: 12.75pt;">
30%
</td>
<td style="width: 3cm; height: 12.75pt;">
14%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
DPS (cents)
</td>
<td style="width: 49.1pt; height: 12.75pt;">
2.9
</td>
<td style="width: 40.95pt; height: 12.75pt;">
2.4
</td>
<td style="width: 40.95pt; height: 12.75pt;">
2.5
</td>
<td style="width: 88.7pt; height: 12.75pt;">
4%
</td>
<td style="width: 3cm; height: 12.75pt;">
-14%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;"></td>
<td style="width: 49.1pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 88.7pt; height: 12.75pt;">
&nbsp;
</td>
<td style="width: 3cm; height: 12.75pt;">
&nbsp;
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Net debt
</td>
<td style="width: 49.1pt; height: 12.75pt;">
277.9
</td>
<td style="width: 40.95pt; height: 12.75pt;">
362.0
</td>
<td style="width: 40.95pt; height: 12.75pt;">
392.8
</td>
<td style="width: 88.7pt; height: 12.75pt;">
9%
</td>
<td style="width: 3cm; height: 12.75pt;">
41%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Operating cash flow
</td>
<td style="width: 49.1pt; height: 12.75pt;">
30.4
</td>
<td style="width: 40.95pt; height: 12.75pt;">
52.9
</td>
<td style="width: 40.95pt; height: 12.75pt;">
69.3
</td>
<td style="width: 88.7pt; height: 12.75pt;">
31%
</td>
<td style="width: 3cm; height: 12.75pt;">
128%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Investing cash flow
</td>
<td style="width: 49.1pt; height: 12.75pt;">
237.6
</td>
<td style="width: 40.95pt; height: 12.75pt;">
80.7
</td>
<td style="width: 40.95pt; height: 12.75pt;">
86.1
</td>
<td style="width: 88.7pt; height: 12.75pt;">
7%
</td>
<td style="width: 3cm; height: 12.75pt;">
-64%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
New sales cash flow
</td>
<td style="width: 49.1pt; height: 12.75pt;">
18.4
</td>
<td style="width: 40.95pt; height: 12.75pt;">
38.3
</td>
<td style="width: 40.95pt; height: 12.75pt;">
73.9
</td>
<td style="width: 88.7pt; height: 12.75pt;">
93%
</td>
<td style="width: 3cm; height: 12.75pt;">
301%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;"></td>
<td style="width: 49.1pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 88.7pt; height: 12.75pt;">
&nbsp;
</td>
<td style="width: 3cm; height: 12.75pt;">
&nbsp;
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Cash recovery (straight)
</td>
<td style="width: 49.1pt; height: 12.75pt;">
8%
</td>
<td style="width: 40.95pt; height: 12.75pt;">
47%
</td>
<td style="width: 40.95pt; height: 12.75pt;">
86%
</td>
<td style="width: 88.7pt; height: 12.75pt;">
38%
</td>
<td style="width: 3cm; height: 12.75pt;">
78%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;"></td>
<td style="width: 49.1pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 88.7pt; height: 12.75pt;">
&nbsp;
</td>
<td style="width: 3cm; height: 12.75pt;">
&nbsp;
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
NTA
</td>
<td style="width: 49.1pt; height: 12.75pt;">
1.25
</td>
<td style="width: 40.95pt; height: 12.75pt;">
1.32
</td>
<td style="width: 40.95pt; height: 12.75pt;">
1.59
</td>
<td style="width: 88.7pt; height: 12.75pt;">
20%
</td>
<td style="width: 3cm; height: 12.75pt;">
27%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;"></td>
<td style="width: 49.1pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 88.7pt; height: 12.75pt;">
&nbsp;
</td>
<td style="width: 3cm; height: 12.75pt;">
&nbsp;
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Sales - new units
</td>
<td style="width: 49.1pt; height: 12.75pt;">
44
</td>
<td style="width: 40.95pt; height: 12.75pt;">
42
</td>
<td style="width: 40.95pt; height: 12.75pt;">
120
</td>
<td style="width: 88.7pt; height: 12.75pt;">
186%
</td>
<td style="width: 3cm; height: 12.75pt;">
173%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
New sales margin (%)
</td>
<td style="width: 49.1pt; height: 12.75pt;">
15%
</td>
<td style="width: 40.95pt; height: 12.75pt;">
14%
</td>
<td style="width: 40.95pt; height: 12.75pt;">
16%
</td>
<td style="width: 88.7pt; height: 12.75pt;">
3%
</td>
<td style="width: 3cm; height: 12.75pt;">
1%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Sales - resold units
</td>
<td style="width: 49.1pt; height: 12.75pt;">
148
</td>
<td style="width: 40.95pt; height: 12.75pt;">
103
</td>
<td style="width: 40.95pt; height: 12.75pt;">
133
</td>
<td style="width: 88.7pt; height: 12.75pt;">
29%
</td>
<td style="width: 3cm; height: 12.75pt;">
-10%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Resales margin (%)
</td>
<td style="width: 49.1pt; height: 12.75pt;">
24%
</td>
<td style="width: 40.95pt; height: 12.75pt;">
24%
</td>
<td style="width: 40.95pt; height: 12.75pt;">
20%
</td>
<td style="width: 88.7pt; height: 12.75pt;">
-4%
</td>
<td style="width: 3cm; height: 12.75pt;">
-3%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;"></td>
<td style="width: 49.1pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 40.95pt; height: 12.75pt;"></td>
<td style="width: 88.7pt; height: 12.75pt;">
&nbsp;
</td>
<td style="width: 3cm; height: 12.75pt;">
&nbsp;
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Average unit price - new sales (NZ$000's)
</td>
<td style="width: 49.1pt; height: 12.75pt;">
780
</td>
<td style="width: 40.95pt; height: 12.75pt;">
874
</td>
<td style="width: 40.95pt; height: 12.75pt;">
575.8
</td>
<td style="width: 88.7pt; height: 12.75pt;">
-34%
</td>
<td style="width: 3cm; height: 12.75pt;">
-26%
</td>
</tr>
<tr>
<td style="width: 184.3pt; height: 12.75pt;">
Average unit price - resales (NZ$000's)
</td>
<td style="width: 49.1pt; height: 12.75pt;">
364
</td>
<td style="width: 40.95pt; height: 12.75pt;">
413
</td>
<td style="width: 40.95pt; height: 12.75pt;">
442.9
</td>
<td style="width: 88.7pt; height: 12.75pt;">
7%
</td>
<td style="width: 3cm; height: 12.75pt;">
22%
</td>
</tr>
</tbody>
</table>
Source: Forsyth Barr analysis, Company reports

Arvida Group (ARV) 1H22 Result
Arvida Group (ARV) reported a largely pre-announced 1H22 result (resales and new sales) with underlying profit of NZ$26.6m (+30% YoY) and EBITDA of NZ$33.5m (+28% YoY), these compare to RYM of +8% and +13% respectively. Annuity EBITDA was NZ$22.3m (+4%) YoY (RYM +15%). The softer resales gain drove the relatively weaker annuity EBITDA versus underlying earnings and EBITDA. This shift was largely pre-announced and was driven by a mix towards lower priced and lower margin serviced apartments and care suites.
Our rating is RESTRICTED and we have no published numbers.
Key points of interest

Cash recovery of capex in the half: 86% including a NZ$10m acquisition, 97% excluding the acquisition, this compares to 52% for RYM.
Build rate guidance: ARV has maintained its FY22 development guidance for 200+ units.
Dividend: Increased by 4% to 2.5cps
Balance sheet. Net debt increased by NZ$22m to NZ$393m
NTA: Net tangible assets per share increased to NZ$1.59 (NZ$1.46 at FY21)

Investor briefing – 11am NZT
Dial-in; 0800 667 018 (NZ), 1 800 148 258 (Australia). Passcode; 8784779
1H22 result summary





1H20


1H21


1H22


% change vs 1H21


% change vs 1H20




Care fees


64.1


65.9


70.9


8%


11%




DMF


12.9


15.5


19.4


25%


51%




Resale gains


12.7


10.3


11.9


16%


-6%




Newsale gains


5.2


5.0


11.4


128%


119%




Other


2.6


4.8


3.7


-23%


41%




Total revenue


97.5


101.5


117.3


16%


20%




Total costs


68.4


75.4


83.7


11%


22%




EBITDA


29.0


26.1


33.5


28%


16%




Depreciation &amp; amortisation


2.7


3.1


3.3


8%


22%




Net interest


2.3


2.9


3.8


32%


63%




Other


0.6


-0.3


-0.2


n/a


n/a




Underlying profit


23.4


20.5


26.6


30%


14%




Annuity EBITDA


23.2


21.4


22.3


4%


-4%




EPS (cents)


4.3


3.8


4.9


30%


14%




DPS (cents)


2.9


2.4


2.5


4%


-14%








&nbsp;


&nbsp;




Net debt


277.9


362.0


392.8


9%


41%




Operating cash flow


30.4


52.9


69.3


31%


128%




Investing cash flow


237.6


80.7


86.1


7%


-64%




New sales cash flow


18.4


38.3


73.9


93%


301%








&nbsp;


&nbsp;




Cash recovery (straight)


8%


47%


86%


38%


78%








&nbsp;


&nbsp;




NTA


1.25


1.32


1.59


20%


27%








&nbsp;


&nbsp;




Sales - new units


44


42


120


186%


173%




New sales margin (%)


15%


14%


16%


3%


1%




Sales - resold units


148


103


133


29%


-10%




Resales margin (%)


24%


24%


20%


-4%


-3%








&nbsp;


&nbsp;




Average unit price - new sales (NZ$000's)


780


874


575.8


-34%


-26%




Average unit price - resales (NZ$000's)


364


413


442.9


7%


22%




Source: Forsyth Barr analysis, Company reports

Arvida

Arvida Group (ARV): 1H22 Result