Aveo’s strategy to transform itself into a pure retirement village operator is starting to pay significant dividends with an 18% increase on their First Half Year net profit (after tax) of $23.8 million.

In July 2013 Geoff Grady as the new CEO announced the company would move from a diversified property and retirement village business to a pure retirement operator. At that time the shares were trading at about $1.40.

Yesterday they closed at $2.65. In 19 months they have increased 87%; in the past two weeks they have risen from $2.25 to $2.65 or 18%.

Grady quotes the following actions that have driven the business:

• sales volumes are up with 11.4% turnover of their 6,300 Aveo owned village units

• over the next six months they will build and sell 62 new units

• next financial year they plan to build 182 units to generate $10M+ in development profit

• they plan 224 new units in FY17 and 553 in FY18

• they have allocated $40M+ a year for retirement asset acquisitions

• they are about to announce several village acquisitions

• they intend adding another 600 aged care beds across their villages on top of the 209 they have now

• they are acquiring allied health businesses that will service their village residents, such as physiotherapy and      rehab, which will add $8 million in earnings by FY18

• they have formed strategic relationships with Royal District Nursing Service, RSL Care and the St Ives Group to deliver home care across 72 villages nationally