During October, Arvida completed the purchase of three villages and a one-for-five renounceable rights issue. The villages are Mary Doyle Lifecare (Havelock North), Strathallan Lifecare (Timaru) and a 50% interest in Village at the Park Lifecare (Wellington).
Forsyth Barr broker Lyn Howe said the three villages were established and integrated with aged-care facilities.
They had high occupancy and Ministry of Health certification, offering a full continuum of care with dementia services.
There was brownfield expansion opportunities of more than 100 units across the Mary Doyle and Village at the Park villages.
In total, the purchase added a further 315 aged-care beds, 88 serviced apartments and 363 independent living units.
Arvida now had a portfolio of 1752 units and 1761 beds, plus a development opportunity
of more than 1000 units and beds.
''All three villages are strong performers in their catchment areas. Mary Doyle, in Havelock North, competes with five other villages and rest-homes. Its strengths are its central location, very spacious grounds, and it is the only village offering dementia services.''
With the exception of Summerset in the Vines, all the other villages and rest-homes were small, Ms Howe said.
The new villages were purchased on October 12 and Forsyth Barr had incorporated them into the new forecasts. Financial year 2018 earnings per share (EPS) has been lifted by 4.6% and by 8.7% in 2019.
Forsyth Barr had assumed resales and new sales pricing and margins broadly similar with the existing Arvida portfolio, as were operating cost levels and revenue per care bed.
The increase in earnings was broadly in line with Arvida's pro forma guidance of EPS growth of 8%, assuming assets were acquired for a full 12 months in the 2018 financial year, she said.
A key catalyst for Arvida's share price was the market gaining confidence about its ability to execute well in terms of its development plans and selling new stock quickly.
Evidence of the plans should start to be delivered next year, Ms Howe said.
''We expect Arvida to have an increasing focus on growth through development - both brownfield and greenfield - rather than by acquisition.''
