Mulpha International Berhad, Australia’s leading owner, operator and manager of retirement communities through its strategic investment in Aveo Group Limited (ASX: AOG) today announced it has exchanged contracts for the acquisition of 100% of Freedom Aged Care Pty Ltd (Freedom).

Freedom owns and operates more than 1,000 units in 15 retirement communities across Australia in Queensland, NSW, Victoria and Tasmania, as well as a development pipeline of 533 units. The development pipeline includes 387 units in five of the 15 existing villages and a 146 unit site for an additional new village on the Sunshine Coast in Queensland.

The acquisition of Freedom is a key component of Aveo’s strategy to increase the levels of care and support services to its residents. It follows the acquisitions last year of a 50% interest in two allied health businesses, Mobile Rehab and The Physio Co. Freedom retirement communities are unique private care retirement communities under the Retirement Villages legislation, dedicated to delivering unmatched levels of freedom, lifestyle and care with 24 hour nursing available. Its offering is to residents with initially low to moderate care needs.

Mulpha International Berhad’s Executive Chairman Mr Lee Seng Huang said: “This is a significant, long-term investment in building our care offering and is underpinned by Aveo’s commitment to grow with older Australians by inspiring greater living choices. Post-acquisition of Freedom and with the rollout of our existing development pipeline, Aveo will be operating 95 retirement communities with over 17,000 homes for elderly Australians, making us the largest owner and operator of retirement communities in Australia.”

The announcement of the acquisition follows the release of the Aveo Group’s HY16 financial results. Aveo delivered an underlying net profit after tax in HY161 of $45.6 million, an increase of 89% on the HY152 result.

Key financial highlights for HY16 were:

• Statutory profit after tax of $66.5 million, up 121%
• Underlying earnings per security of 8.9 cents, up 85%;
• Funds from operations up 204% to $89.5 million and per security, up 195% to 17.4 cents;
• Net assets of $1.57 billion, up 4%;
• Net tangible assets per security of $2.98, up 5%; and
• Reported gearing of 8.8%, versus 13.8% at 30 June 2015 and below Aveo’s target range of 10% to 20%.

“We are on track to achieve our stated FY16 targets of a return on retirement assets of 6.0% - 6.5%, underlying profit after tax of over $80 million and a full year distribution of 8 cents per security.

We have strong momentum across the Group and total sales volumes in the second half are expected to exceed the first half. We are in a strong position financially and strategically to achieve our objectives in FY16 and beyond”, said Mr Lee.