About $10 million has been shaved off the value of Lyndoch Living's assets, but chief executive officer Doreen Power says the aged-care facility was still in a strong financial position to deliver on its $100m masterplan.
Lyndoch - which is in the middle of a major revamp - posted a loss of $398,256 for the 2018-19 financial year, an improvement on last year's $1.57 million loss, which Ms Power said was "a really good result".
But Ms Power expected Lyndoch to be back in the black in two to three years.
The construction of the $11 million Swinton wing refurbishment has reached the halfway point and work will begin on a new medical centre in July.
Ms Power said she was disappointed Lyndoch's assets - which include buildings and other assets - were revalued from $61.7 million to $51.2 million.
"Whilst disappointing, our balance sheet is strong and the revaluation has not impacted our operational cash flow or our ability to deliver the 2020 strategic vision and masterplan," she said.
To implement its ambitious masterplan, Lyndoch Living was given permission from the state health minister in 2018 to change from an association to an incorporated company, Ms Power said.
She said this had to be done because associations had finances up to $20 million and Lyndoch's finances were now almost $40 million.
As part of those changes, new auditors were appointed who wanted the property and assets re-evaluated, even though it had been done the previous two years.
And despite employing the same company to carry out the re-evaluation, Ms Power said the revaluation methodology had changed which resulted in Lyndoch's Assets being devalued by $10 million.
She said it was a paper loss that did not affect Lyndoch's cash flow and did not impact its ability to borrow funds for the expansion projects.
To pay for the Swinton refurbishment, Lyndoch will draw down about $4 million on its loan in about two weeks to cover the cost of the $11 million project.
"We've self-funded so far," she said.
Ms Power said the loan would be paid off "very quickly" because there would be an extra 16 beds making it a 43-bed facility.
She said she was still working on how much Lyndoch would need to borrow to fund the medical centre, which was subject to board approval.
"This is a major refurbishment of Lyndoch. It's going to be fantastic," she said.
"It's ambitious, the masterplan, but our facilities needed it.
"We were actually ahead of our time.
"We know the baby boomers are coming... our facilities will meet those needs."
To implement the $80-$100m masterplan, which Ms Power said she was asked by the board to do, Lyndoch Living was using a lot of its own funds and each of the four stages had its own finances, she said.
"We can't touch the bond money that the residents pay in, that's sectioned off. You cannot touch that," she said.
Ms Power said the delay in releasing Lyndoch Living's financial data, which usually comes out in October, was because of government changes to Australian Charities and Not For Profit Commission's reporting schedule.
Revenue at Lyndoch increased from $33 million in 2018 to almost $39 million at the end of the 2019 financial year.
Its operating profit was $8.4 million compared to last year's $46 million.
The drop in profit was attributed to the buyout of Terang's May Noonan facility and Warrnambool Medical Clinic which also increased staff numbers from about 470 to 520 and employee costs by more than $4 million to $27.8m.
Ms Power said staff turnover was between 10 to 13 per cent which is below the state benchmark of 21 per cent.
Some of the increased staff costs, she said, was down to an increase in lifestyle staff. "Aged care isn't just about nursing care," she said.
Ms Power said Warrnambool would become a leader in aged care. "This is major. We will become an epicentre of Warrnambool," she said.
"Primary health care is what the Royal Commission is wanting for aged care. It's wanting our elderly to have access to doctors and allied health. Our residents are going to have that."
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