What you need to know about Lifestyle Communities Limited 24% profit surge

Credit: GotCredit

While many investors are focussed on the larger players in the aged care sector such as Estia Health Ltd (ASX: EHE) and Regis Healthcare Ltd (ASX: REG) there are other companies which are carving out attractive niche businesses for themselves in the independent living sector for retirees.

Lifestyle Communities Limited (ASX: LIC) is one such company and judging by the interim results it released today, it’s on a solid growth path. Here are the highlights from the announcement…

  • Revenue from home site annuity rentals increased 22% to $5.5 million
  • Revenue from deferred management fees increased by 52% to $1.2 million
  • Net profit after tax increased 24% on an underlying basis to $8.9 million
  • Net debt increased to $43.3 million and the net debt to equity ratio increased to 24%
  • A fully franked dividend of 1 cent per share (cps) was declared. The shares will trade ex-dividend on March 10 with payment due on April 8
  • 110 homes settled during the half year, taking the total number of home sites under management to 1,256
  • An acquisition of land during the half took the total portfolio of home sites to 2,255

Looking forward

Lifestyle Communities operates in a sector that enjoys a favourable tailwind from an aging Australian population.

The group has provided guidance for the dividends in financial year (FY) 2016 to be greater than the total dividends paid in FY 2015 of 1.5 cps.

The company also stated that settlements in FY 2016 are likely to be lower than FY 2015 due to the timing of community developments. Pleasingly for shareholders however, profits in the current financial year are expected to be roughly the same as last year with the lower settlement rate being offset by increased contributions from rental and deferred management fees.

Discover the 'new breed' of blue chips that could take your portfolio higher in 2016

Forget about yesterday's blue chips -- NOW YOU CAN DISCOVER TODAY'S BLUE CHIPS! These 3 "new breed" top blue chips for 2016 pay fully franked dividends and offer the very real prospect of significant capital appreciation. Click here to learn more.

The report is free! No credit card required.

Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.