ElderCare signals change in direction

Friday 24th November 2000

Shareholders have been told at ElderCare's (NZSE: ELD) AGM that the retirement care provider will branch out into additional medical and healthcare opportunities.

Shareholders were also told that the company expects to post a loss for the six months ended 30th November 2000 of between $6.5 million and $6.9 million because of one-off write downs.

This change in direction shows that the retirement care market is not a cash cow ElderCare can milk with ease. ElderCare Chairman Maurice Kidd said that the company was exercising some caution about the actual direction in which they steer the company.

"We determined that there was a unique opportunity to move ElderCare into a listed medical health operating company by concentrating on new investments in the health care market and not be constrained purely to the retirement sector," Mr Kidd said.

Alan Clarke, ElderCare's CEO, said that the company's acquisition of Ranworth Healthcare in May this year was the first significant step toward a change in direction. Ranworth Healthcare is a provider of rehabilitation services to the Accident Compensation Corporation.

ElderCare will write down a number of assets, including goodwill associated with the acquisition of village developments which the company will no longer complete and land value to more realistically reflect the current real estate market conditions.

Mr Kidd reported earnings before interest tax depreciation and the amortisation of goodwill to the six months ended 30th November 2000 to be around $3 million. - but with the write downs they are expecting a loss of between $6.5m and $6.9m.

Mr Kidd said the company's objective will be to increase earnings per share for all shareholders and to have this reflected in a sustainable and improving share price.

ElderCare shares have taken a pummelling over the past six months, and are currently trading at around 20 cents, unchanged on the day's news.

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