Retirement village operator Aveo yesterday admitted it needs to lift its game after posting a 118 per cent jump in net profit to $253 million for the past financial year.
In a statement to the Australian Securities Exchange (ASX) Group Chief Executive Geoff Grady said: “The strong performance of the core Aveo retirement business was strengthened by solid contributions from the Freedom and RVG acquisitions.”
The company said the operations had lifted earnings to 18.9 cents per share and was aiming for more gains this financial year to reach 20.4 cents.
Aveo has been under fire this year following media reports that it was allegedly “gouging” many village residents.
The company spent tens of thousands of dollars on full-page newspaper advertisements defending its record.
But yesterday, Aveo said “we can do better and we’ve resolved to simplify both the Aveo Way and Freedom contracts further within the next 12 months”.
It acknowledged that it was “genuinely distressed” at “falling short of the standards our consumers expect of us”.
“We know that some of our consumers feel that we have let them down.
“Having listened to the needs of its consumers, Aveo is today announcing: (It) has improved and strengthened its own complaint and incident handling procedures, including a requirement for independent mediation.
“We’ve listened carefully to the public discussion about us,” the company said, adding that it supported the push for federal legislation for the retirement village industry.
The Australian Competition and Consumer Commission launched an investigation of “the more serious matters being raised” in the Aveo scandal last month.
Aveo’s mea culpa yesterday smacked of a besieged organisation desperate to clean up its act after a slew of current and former village residents revealed to the media allegations of mistreatment.
The stunning backflip was contained in a glossy, 94-page document peppered with photographs of content seniors smiling broadly.
We can assume that the retirees pictured did not include the dozens who have shamed the giant village operator, some of whom have been technically evicted in the past year or two for insisting on their rights.
Interestingly, Aveo states in the document it will not sue any of those who have outed its appalling behaviour. Not because it believes the claims are indefensible but because it says its hands are tied.
“Aveo faces a number of legal restrictions in its capacity to respond to or comment on media coverage,” the document reports.
“While vigorously disputing the accuracy of many of the claims and representations, as a corporate entity, Aveo is unable to pursue any defamation remedies.
“For this reason, all Aveo responses to date and going forward can deal only with addressing the accuracy of the general rather than specific claims that have been made regarding its businesses.”
What a cop out! But if this organisation thinks it will be able to evade its day in court, it is wrong. There are at least two class actions currently preparing to sue Aveo on behalf of residents with genuine claims of unfair treatment.
Luckily for the village operator, it will be able to dig into its nine-figure profit of $253 million announced yesterday.
Those dollars translate to a profit contribution of almost $20,000 per each village household.
The current legislation allows free rein to village operators to treat our most vulnerable citizens appallingly while at the same time charging them exhorbitantly in their twilight years.
We can only hope Aveo gets what it wishes for and the Federal Government steps in to write national laws. Politicians need to draft and pass legislation quickly to protect residents from unscrupulous behaviour by giant corporations aimed at lining the pockets of investors while delivering sub-standard service.
Do you live in a retirement village or would you ever contemplate moving into one? What has been your experience of village life? Do you think the huge profit made by Aveo off its elderly residents is an unconscionable rip off?