Four retirement bosses quit: Shakeup at top of listed sector

Four heads of listed retirement businesses have left in the last few months, with the latest on Monday being Arvida’s Bill McDonald.

In November, Julian Cook of Summerset Group said he was retiring from the job he had done for seven years, having worked at the business for 10 years. Former CFO Scott Scoullar now heads that company.

In March, Oceania Healthcare chief executive Earl Gasparich resigned and Metlifecare said it was employing him to implement its growth strategy. Oceania is now headed by Brent Pattison who was its CFO.

Metlifecare was de-listed from the NZX after its takeover last year.

In turn, Metlifecare said its chief executive Glen Sowry was leaving.

Yesterday, Arvida chairman Peter Wilson said the company’s chief executive Bill McDonald would go at the end of September to “pursue personal interests”. McDonald has been at the helm since Arvida rose to prominence on the share market and expanded fast.

CFO Jeremy Nicoll has been appointed to replace him from October.

“Bill has done a fantastic job leading Arvida through an NZX listing in 2014 to become one of the larger and most respected retirement village and aged care operators in New Zealand,” Wilson said.

McDonald said the company had a vision on transforming aged care.

Forsyth Barr released new research this month saying the aged care landscape was changing.

“Three of the four listed aged care operators have pivoted new care development towards care suites or similar, sold under an occupational rights agreement. The reason for this pivot is likely to be a combination of poor profitability within standard care, increased expectations with regards to standards from care residents and a wish to differentiate offerings,” Forsyth Barr said.

Before the announcement, McDonald said: “For Arvida incorporating care into retirement communities is core to strategy, offering residents a continuum.”

This means residents can move from independent living to fully assisted living within the same retirement community if needed, he said.

“All of our future care development of around 450 units or a third of our current development pipeline is under the care suite model and subject to an occupation rights agreement,” he said earlier this month.

Demand for a better product is being demand driven by the community which wanted more than just a room off a corridor, he said.

Oceania is on a similar path and Summerset is developing similar with its memory care units.

Ryman Healthcare has provided traditional care beds but under the Australian refundable accommodation deposit structure.

For Arvida, McDonald said the care suite model allowed the company to accelerate the build of care, which would not have been possible under the traditional or standard care model.

“Care suites are purpose-built and differ in room size, quality and amenity from the standard care bed,” McDonald said.

“They are certified to allow up to hospital-level care to be provided in the same room which means rooms have to allow for hoists, wide beds, etc. We also design our care suites in small clusters so that a more home-like community within the care centre can evolve,” he said.

The sector is in the midst of a possible major shakeup with the Commission for Financial Capability seeking feedback on reform.

Guaranteed retirement unit buyback periods when residents move or die, limits to how long weekly fees are charged when people leave, more voice for residents and a consumer protection probe are mooted.

The commission recommends stronger protection for the population which real estate agents and property consultants JLL estimate number at least 45,000 New Zealanders, with a further 12,000 places now under construction.

But Retirement Villages Association chief executive John Collyns wants things to stay the same.

Research by UMR Insight showed 96 per cent of the 45,000 residents living in retirement villages were satisfied or neutral with their decision to move in. They scored their villages highly for security and safety, peace of mind and a hassle-free lifestyle, he said.

“This research demonstrates that residents in the main are highly informed on the arrangements they are entering, the services they can expect and they understand the financial model. In fact, the sector is clearly delivering what New Zealanders want, and this is highlighted by our increasing market share of those aged over 75 living in villages.

“We consider that the current statutory and operating framework is fit for purpose. It provides a comprehensive and effective resident-focused consumer protection regime. Minimum standards are set out in the code of practice and this is regularly reviewed by the commission and amended as required,” Collyns said.

The sector’s regulatory regime allows retirement village operators flexibility to differentiate their commercial offerings and gives customers considerable choice, he said.

Source: Read Full Article