Oceania Healthcare : Annual Report to shareholders

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ANNUAL REPORT 2022

For personal use only

Kiwis have a desire for better.

Our ambition at Oceania is to change the preconceived idea of getting 'old'. We're reimagining retirement living and aged care for the better through our human centred approach, designing spaces and experiences with residents at the heart - driven by a desire to do better for our residents, our team and our investors.

This desire is personal.

A committed desire from within our business for a better resident experience.

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It's in our
For	CONTENTS

Letter from the Chair

Trading highlights

At a glance

Our timeline

Letter from the CEO

Change of balance date

COVID-19 leadership

DNA.

02 How we create value

1. Board of Directors

1. Three year summary

10	Consolidated
14	Financial statements

1. Corporate governance

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For the year ended 31 March 2022, operating cashflow was $105.5m, compared to $96.0m for the 10 months to 31 March 2021, reflecting strong first time sales and resales during the period.

Throughout the year, Oceania has further strengthened its balance sheet to ensure that it is fit for future growth,

Oceania's total assets increased to $2.2b as at 31 March 2022, compared with $1.9b as at 31 March 2021.

This material increase is due to the addition of the Waterford and Franklin transactions in the period coupled with growth in asset value on first time sales of development sites.

Unaudited Underlying EBITDA of $76.2m for the year ended 31 March 2022 was 16% higher than the prior corresponding period of $65.6m. This was largely as a result of strong sales and resales despite the COVID lockdowns and the increased premium charges from previous developments in the form of growing deferred management fees.

Last year Oceania changed its balance date from 31 May to 31 March. This Annual Report represents the first full 12 month period under the new balance date and has a comparative reporting period of the 10 month period to 31 March 2021.

Financial Performance

Oceania has remained focused on providing a safe environment personalfor its people to live and work in and has continued to demonstrate

resilience and strength in its business model despite the demands of the pandemic and macro environment. These factors have contributed to a solid financial result for the year ended 31 March 2022.

For

onlyLETTER FROM THE CHAIR

Results from the heart.

useI am pleased to present our Annual Report for the year ended 31 March 2022.

O CEANIA

ANNUAL REPORT 2022

Better experiences

with the issue of a second retail bond and the refinance and increase in its banking facilities. Building on the successful inaugural issue of Oceania's $125m retail bond in October 2020, Oceania issued a second retail bond of $100m in September 2021. This second retail bond was again heavily oversubscribed and strengthens Oceania's position to support

future growth.

On 9 May 2022, Oceania announced that it had entered into an amended Facilities Agreement which provides for an increase in facility size from $350m to $500m and an extension of maturity date to mid 2027. The increased facilities will be used to accelerate Oceania's development pipeline and are pivotal to Oceania's growth strategy moving forward.

As at 31 March 2022, Oceania had current drawn down debt and bonds of $379.8m and $9.7m of cash, representing $204.9m of undrawn net debt headroom.

On 9 May 2022, Oceania announced that it had entered into conditional agreements to purchase Remuera Rise (Newmarket, Auckland) and Bream Bay Village (Northland) for approximately $57m. Remuera Rise comprises 58 apartments and 12 care beds, while Bream Bay Village currently comprises 75 villas, with an additional eight villas under construction and development potential for an additional 124 villas. This acquisition was undertaken following exclusive negotiations with the vendors and will deliver Oceania an existing vertical village in the heart of Newmarket, Auckland, with significant embedded value, as well as a recently developed village in Bream Bay and a development opportunity in the form of a neighbouring parcel of land. The agreements are conditional

come from within.

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Strategy

With the current macro environment and market context presenting challenges for all businesses, including Oceania, Oceania has been reassessing its strategy and its approach going forward. Oceania has developed four key strategic pillars - offer, resident experience, people capability and growth - and is working towards achieving specific goals for each of these pillars.

With the completion and selldown of many of its key developments in recent years, Oceania is now moving beyond its brownfield development pipeline opportunities. The next cycle for Oceania is in both the execution

of acquisitions of premium properties as demonstrated by the recent acquisitions of Remuera Rise and Bream Bay Village together with

a greenfield development strategy. The acquisition of premium properties can deliver strong accretion to underlying earnings per share.

A greenfield development strategy is attractive to Oceania as it

In the coming years, Oceania will be seeking to leverage its established operating platform and accelerate its development pipeline,

by pursuing a range of both organic and inorganic growth opportunities.

For

upon Statutory Supervisor, Ministry of Health and DHB consent and it is expected that completion will occur by July 2022.

Oceania is reviewing its current portfolio of sites and its development pipeline to create increased optionality, which in turn will ensure optimal capital allocation and the recycling of cash within the business. We will update the market on the outcome of this review in due course.

The Directors have declared a final dividend of 2.3 cents per share, taking full year dividends (non-imputed) to

Elizabeth Coutts - Chair

4.4 cents per share, which represents 53.9% of Underlying Net Profit After Tax. This reflects strong trading and operating cashflow throughout the period. A dividend reinvestment plan for our New Zealand and Australian shareholders will apply to this dividend, which is payable on 21 June 2022. This provides a cost effective and convenient way for our shareholders to increase their investment in Oceania without any brokerage fees, by reinvesting all or part of any dividend paid on their shares in additional Oceania shares instead of receiving that distribution

in cash.

provides greater flexibility to stage developments, product can be brought to market more quickly and presales will be easier to achieve. Oceania has been investigating greenfield land acquisitions in key population growth areas of New Zealand. Any such acquisitions must be on-strategy and deliver sustainable value

to shareholders.

In the year ended 31 March 2022, Oceania completed the acquisition of 7.9 hectares of land at Franklin.

The development at Franklin represents a transition to a full service, fully integrated village including a range of on-site amenity and community facilities on a greenfield site.

As part of the greenfield development strategy, there will be a reweighting towards the construction of

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