Vital Healthcare lifts bottom-line annual profit 22% to $9m

BUSINESSDESK: Vital Healthcare Property Trust's boost annual profit 22% to $9 million on acquisitions and completed development projects, the manager says.

Net distributable income rose 28% to $23.3 million for the year ended June 30, or 8 cents per unit, down from 8.2 cents the previous year.

Chairman Graeme Horsely says successful delivery of a 7.7 cents per unit payout for the year, as promised in the prospectus for the trust's $151 million capital raising in late 2010 which funded the purchase of 12 Australian properties, was "at the core" of the annual result.

The property trust's manager is forecasting net distributable income in 2013 will be between 7.7 cents per unit and 7.9 cents.

The manager's chief executive, David Carr, says the healthcare sector demonstrated stability through the economic cycle.

"Vital remains uniquely positioned to benefit from Australasia's ageing demographic, resilient private healthcare insurance levels and Vital's execution capability and credibility in the sector." 

Its compound annual total return in the seven years ended June 30, 2012, was 11% and outperformed the listed property sectors in both Australia and New Zealand.

As previously reported, the value of the trust's portfolio fell $6.2 million or 1.1% in the year ended June 30, led by a drop in the value of its Mercy Ascot Hospital in Auckland. This means the manager is not entitled to an incentive fee for the year.

However, because of acquisitions, the manager's ordinary fees rose to $4.1 million from $3.2 million the previous year. The proposed internalisation of the management contract, which did not proceed, cost the trust $700,000.

Instead of internalising the contract, ANZ Bank sold it and its 9% stake in the trust in January this year to Canada's NorthWest Value Partners for $11.5 million. The purchase took North West's stake to 19.8%.

Vital will pay a final distribution of 1.925 cents per unit with imputation credits of 0.0998 cents attached to take the total payout to the promised 7.7 cents.

Vital units rose 0.4% to $1.255, just below their recent high at $1.26 and up from $1.06 in August last year.