Financial statements indicate operating surplus

The Operating profit for 18/19 was $0.097m – a welcome improvement on prior year losses of -$0.054m and -$0.029 in 16/17 and 17/18 respectively. Whilst holiday facility operational losses continue to be subsidised the turnaround is welcome and occasioned by good returns from investments.

As anticipated, the operational outcome has improved once again during 18/19 despite the impact of lower than anticipated occupancy. As forecast in the prior year report the completion of the disposal of loss making assets and the restructure of the investment profile, with subsequent positive returns, provided for a return to an operational surplus.

Property valuations are accurate

The sale of all apartments at the Tuscany complex has been completed; fulfilling the decision made at the 2015 Strategy meeting. Final settlement took place in July 2018. Gross sale receipts were $1.956m. Valuations for the apartments at the time of sales totalled $1.895m.

The value of the Ambassador apartments remains unchanged.

A market summation of Ambassador Apartments was commissioned to provide guidance in relation to movements in property values which in turn allowed to Board to consider if there had been a material shift in values during 18/19. In the valuers opinion in relation to market activity was that overall prices on the Gold Coast remained fairly unchanged. Given the guidance, the Board agreed that the current book value of the asset was fair and accurate.

Returns on investments reflect growth against CPI.

CPI for the eight capital cities averaged 2.1%.

Cash returns on property were negative.

The worth of the Colonial investment portfolio increased 7.16% and provided earnings of $0.123m.

Property. Holiday facilities recorded an operational loss and, as such, a negative return on investment.

Investment. Positive returns for most of the financial year were reflected in the earnings and growth in the portfolio. A compound return of 6.72% was achieved for the year.

Positive returns from the investment portfolio were offset by a negative return of holiday operations. However, for the first time in a number of years an overall operational surplus was achieved.