Dedicated rental village operator Eureka has acquired three rental villages in Wynnum, Terranora and Rockhampton, taking them to 885 owned rental village units and 771 managed units. They also have seven additional rental village opportunities in the pipeline. They do not operate retirement villages.
Having returned the business to a profitable business model after more than 10 years of annual losses, Eureka reports the Wynnum village of 41 units cost $4 million and will generate an EBITDA profit of $470,000. Core to the profitability is incentivised village managers which transfers into resident satisfaction and cost control.
This level of steady cash return is significantly higher than a traditional retirement village will generate.
In October 2014 the Eureka share price was 16 cents. 24 months later it is 58 cents, a 360% increase.
Last week they also raised a net $10M from institutional investors to fund further acquisitions. New shares were issued in a raising led by CCZ Equities and Conaccord Genuity along with Hunter Green Institutional as Co Manager.
Given the accelerated ‘buy and build’ strategy of the company the Non Executive Chairman, Robin Levison, has moved to Executive Chairman for 12 months when a CEO will be recruited. Maintaining the lean management and overhead structure, he will be paid $120,000.
