Archive | Summerset

Summerset lifts underlying profit on fatter margins, feels impact of flatter housing market, looks at Australia

Retirement village operator Summerset Group Holdings Ltd said yesterday strong margins on both sales & resales lifted its underlying profit for the June half by 27% to $45.2 million, in line with the profit guidance provided in early July.

Under IFRS (international financial reporting standards), net profit fell 9.2% to $82 million. Underlying profit includes realised resale gains, development margin & deferred tax expense, minus the fair value movement of investment property. Under IFRS, fair value is included.

Financial & operational highlights (2017 first half in brackets):

Net profit after tax under NZ IFRS, down 9.2% to $81.97 million ($90.25 million)
Investment property fair value movement, down 10.1% to $78.3 million ($87.1 million)
Underlying profit, up 26.8% to $45.2 million ($35.7 million)
Total revenue, up 29.5% to $65.7 million ($50.7 million)
Net operating cashflow, up 7.4% to $92.8 million ($86.4 million)
Total assets, up 25.2% to $2.42 billion ($1.9 billion)
Net tangible assets, up 32.2% to 377.85c/share (285.72c/share)
Basic earnings/share, down 10% to 37.22c (41.37c)
Diluted earnings/share, down 10.2% to 36.53c (40.67c)
Interim dividend, up 54% to 6c/share (3.9c/share)
Total occupation right sales, down 7.4% to 299 (323)
New sales, down 19% to 145 (179)
Resales, up 6.9% to 154 (144)
New units delivered, down 3.5% to 165 (171), but on track for delivery of 450 for the full financial year
Development margin, 17.9% higher at 33% (28%)
Realised development margin, up 21.3% to $25.8 million ($21.3 million)
Gross new sale proceeds, up 3.2% to $78.3 million ($75.9 million)
Resale realised gains, up 38.3% to $14.9 million ($10.8 million)
Sales margins lift returns, fair value fall reflects flatter property market

Chief executive Julian Cook said the underlying profit increase was driven primarily by strong margins on both new & resales: “While sales volumes were lower than the same period of 2017, we are seeing good levels of contracts on homes – both on resales & homes to be completed before the end of 2018 – many of which will settle in the second half of the year.”

He said the lower fair value movement reflected smaller price increases in response to the flattening property market being seen in some areas of the country.

As for the sharp increase in development margin, up from 28% to 33%, Mr Cook said the result was “pleasing, but reflects the particular mix of retirement units settled in this period, and our long-run expectations for development margin are less than this”.

Summerset grew total assets by 25% from a year ago to $2.4 billion.

“We delivered 165 new homes this half year and we are on target to meet our build rate of 450 homes for the year. This is despite continuing pressure from the Auckland construction market. Our key construction activity in Auckland is to complete our Hobsonville village, main apartment buildings at Ellerslie, and new villa builds at Karaka & Warkworth.”

Residents moved into the first homes at Casebrook (Christchurch) & Rototuna (Hamilton) villages in the June half.

Summerset recently received resource consent for its proposed Avonhead village in Christchurch, and is awaiting the outcome of consent applications for proposed villages in Boulcott (Lower Hutt) & Kenepuru (Wellington). Resource consent for its proposed village in St Johns (Auckland) has recently been declined.

“We are currently working through this decision, but remain confident we will be able to progress a successful village on this site,” Mr Cook said. “There is strong demand for all of these villages and we are keen to progress them as soon as possible.”

Company sees gains from staff benefits

In May, Summerset announced additional staff benefits, including a day of leave for staff birthdays, travel voucher prizes every quarter and paid sick leave from the first day of employment. These complement the staff benefits announced in 2017.

“Pleasingly we’ve seen the staff attrition rate at our villages drop by 8% in the last 12 months, and the company-wide attrition rate has reduced almost 7% over the same period. We believe this is a result of both the investment we are making in our staff and the Government’s equal pay settlement.

“However we are seeing the shortages in care staff increase due to the changes introduced to immigration last year by the previous government. We believe it is important the current government recognises the importance of immigration alongside local training & development to ensure there are sufficient qualified & competent people in the aged-care sector.”

Mr Cook said Summerset continued to investigate the feasibility of an Australian expansion. It has opened an office in Melbourne with a dedicated team who are working through the appropriate diligence process. The company said it was making good progress.

Attribution: Company release.

Continue Reading

Summerset buys site for second New Plymouth village

Summerset Group Holdings Ltd has bought 8.1ha 7km from New Plymouth’s cbd for its second retirement village in the city.

The property in Pohutukawa Place, Waiwhakaiho, is near the Fitzroy & Ngamotu golf clubs & Fitzroy Beach.

Summerset chief executive Julian Cook said today the site had sea views & an outlook to Mt Taranaki: “We’ve had huge demand for homes at our existing New Plymouth village, and I expect this village with its great views will be just as popular with people who want to experience a coastal Summerset lifestyle.”

The village will offer a retirement community with about 300 homes, including 2- & 3-bedroom villas and serviced & memory care apartments. A care centre will provide resthome & hospital-level care.

The memory care apartments will be Summerset’s first in New Plymouth. They will offer people living with dementia their own one-bedroom apartment with living space & bathroom in a secure environment.

Summerset’s first New Plymouth village has over 200 residents in independent homes & a care centre.

“The new village will help to provide for the expected 37% increase in people aged over 75 in the New Plymouth area within the next decade,” Mr Cook said.

Amenities will include communal vegetable gardens, a bowling green, library & café. It’s also expected to provide up to 50 full-time-equivalent jobs.

Mr Cook said Summerset was on track to build 450 retirement units nationally this year. This purchase takes its greenfield sites to 8.

Attribution: Company release.

Continue Reading

Summerset new sales slip again, but strong profit growth forecast

Retirement village developer & operator Summerset Group Holding Ltd issued a forecast yesterday that its underlying profit for the 30 June half-year, just ended, would be between $43-45 million, reflecting growth of between 21-26% on the June 2017 half.

Chief executive Julian Cook said new sales volumes of occupancy rights were down, but development margins were strong on homes that had settled.

“We are also seeing good levels of sales contracts & presales on homes which will be completed & delivered over the remainder of the year.

Mr Cook said resales volumes remained strong across all villages “and are at levels consistent with 2017, with no sign of impacts from any changing property market conditions”.
He said the company hasn’t forecast NZ IFRS net profit after tax due to the inherent uncertainty in fair value movement of investment property, a key component of this profit measure.

Summerset will release its half-year financial results on Tuesday 14 August.

Sales figures

Comparing second quarters this year & last, new sales were down by 5 to 77 (82), resales were up by 9 to 79 (70), for totals of 156 (152).

That’s a distinct difference from the first quarter, when new sales were well down, to 68 (97), resales were 75 (74), and the totals were 143 (171).

Sales for the first half were: new 145 (179), resales 154 (144), total 299 (323).

Summerset has 23 villages completed or in development and 7 more sites for development.

Attribution: Company release.

Continue Reading

Summerset takes greenfield sites to 7

Summerset Group Holdings Ltd has bought a 9ha property at Eriksen Rd, Te Awa, for its second retirement village in Napier & fourth in Hawke’s Bay.

Chief executive Julian Cook said the village would have about 320 homes, including 2- & 3-bedroom villas and one-bedroom serviced apartments. There will also be rest-home and hospital level care as well as Summerset’s first memory care centre (for people with dementia) in Hawke’s Bay.

Mr Cook said Summerset was on track to build 450 retirement units this year. It now has 7 greenfield sites. The others are Richmond (Nelson), Avonhead (Christchurch), St Johns & Parnell (Auckland), Kenepuru (Wellington) & Boulcott (Lower Hutt).

Attribution: Company release.

Continue Reading

Summerset has slower start to year

Retirement village developer, owner & operator Summerset Group Holdings Ltd started 2018 well short of its performance in the first quarter last year – 143 sales, down from 171.

Resales held up (75 this time, 74 last time) but sales of new retirement village units fell from 97 to 68 for the quarter.

Chief executive Julian Cook said on Friday serviced apartments, whose occupancy was more needs-based, made up a large proportion of the retirement units held at year end, and these typically had a slightly longer selldown period than villas & apartments.

“Retirement unit deliveries for 2018 are weighted towards the second half of the year, with new sales volumes throughout the remaining quarters of 2018 expected to progressively increase as we deliver new homes for which we will sell occupation rights. We are on track to deliver 450 new homes over 2018.

“We are seeing good volumes of resales across our villages, and have seen settlements track at normal levels for the first quarter.”

New sales & resales for last 5 quarters:

Attribution: Company release.

Continue Reading

Summerset lifts earnings by 54%

Retirement village operator Summerset Group Holdings Ltd announced a 54% increase in net profit after tax for the December 2017 year on Friday, to $223.4 million.

Chief executive Julian Cook said the company’s profit growth has been driven by strong demand for homes, the continued benefits of in-house construction of new villages and the well run operation of existing villages: “We saw good demand for our homes across the country throughout 2017, including in Auckland. This is despite the slowing Auckland property market, which reflects the demographic we serve.”

Financial highlights:

  • Net profit after tax up 54% to $223.4 million ($145.5 million in 2016)
  • Underlying profit, which excludes unrealised valuation gains on the fair value of investment property, up 44% to $81.7 million ($56.6 million)
  • Total assets up 30% to $2.2 billion ($1.7 billion)
  • Total sales of occupation rights up 4% to 682 (658)
  • 450 (409) new retirement units delivered, up 10%
  • 300 resales (244), up 23%
  • Land bank total of 2841 retirement units & 396 care beds
  • Final dividend of 7.1c/share
  • Development margin up from 22.2% to 27.3%

Mr Cook said it was 20 years since Summerset built its first village in Wanganui: “We’ve come a long way since opening that village. Last year we welcomed 500 new residents & 200 staff to the Summerset family. At the end of 2017, we had more than 4700 residents living at our 23 villages and more than 1200 staff.”

Link:
Results presentation

Attribution: Company release & presentation.

Continue Reading

Summerset quarterly sales top 200

Retirement village developer & operator Summerset Group Holdings Ltd achieved 200 sales of occupation rights in a quarter for the first time in the 3 months to December.

The 106 new sales matched 4th-quarter sales in 2016, but resales were far above previous quarterly figures in both 2016 & 2017.

The highest previous number of resales over the 2 years was 77 in the June 2016 quarter. In the December 2017 quarter there were 98.

Total sales for the year were up 3.7%, from 658 to 682 – new sales 382 (414 in 2016), resales 300 (244).

Summerset chief executive Julian Cook didn’t comment on the drop in new sales for the year, but said presales & waitlist levels “both continue to track positively.”

2017 sales by quarter & annual totals:
New sales: 97, 82, 97, 106; 382
Resales: 74, 70, 58, 98; 300
Total sales/quarter: 171, 152, 155, 204; 682

2016 sales by quarter & annual totals:
New sales: 75, 108, 125, 106; 414
Resales: 46, 77, 71, 50; 244
Total sales/quarter: 121, 185, 196, 156; 658

Attribution: Company release.

Continue Reading

Summerset lifts profit guidance

Retirement village developer, owner & operator Summerset Group Holdings Ltd has lifted its earnings guidance for the 12 months finishing on 31 December, putting underlying profit in the range of $77-79 million. Previous guidance was $72-75 million.

Chief executive Julian Cook said the new guidance represented a 36-40% increase on the 2016 underlying profit. The company has delivered average annual underlying profit growth of 46% since it listed on the NZX in 2011.

Mr Cook said: “We have seen ongoing strength in resales volumes & margins as well as good margins on new occupation right sales. Sales interest & time from contract to settlement remains very good and we expect this to continue into the new year.”

He said Summerset hadn’t provided a forecast for NZ IFRS net profit after tax due to the inherent uncertainty in fair value movement of investment property, a key component of this profit measure.

Underlying profit differs from NZ IFRS net profit after tax: “This profit measure is provided to assist investors in determining the realised & non-realised components of fair value movement of investment property and tax expense in the group’s income statement. Underlying profit is an industry-wide measure which the group uses consistently across reporting periods. Both underlying profit & NZ IFRS net profit after tax are audited.”

Earlier story:
6 October 2017: Summerset says it’s on track for 450 units this year

Attribution: Company release.

Continue Reading

Summerset buys more land for Christchurch village

Retirement village developer & operator Summerset Group Holdings Ltd has bought an extra 2.1ha next to its Casebrook village in Christchurch.

Chief executive Julian Cook said yesterday the land on Cavendish Rd would provide for an additional 71 villas: “We are seeing strong enquiry for our Casebrook village, which is currently under construction, with the first homes available to move into in March next year.”

On completion, Summerset on Cavendish will now offer over 340 homes, including 2- & 3- bedroom villas and serviced apartments. It will also provide rest-home & hospital-level care and the company’s first memory care centre in Christchurch. This concept provides for people with dementia to have their own one-bedroom apartment complete, with living space & bathroom, in a secure environment.

“We were the first aged-care operator in New Zealand to launch this style of apartment living for those with dementia. Our first memory care centre opened in Levin last November. These centres provide residents with the dignity & respect of having their own home within a secure centre, purpose-designed for their needs.”

Attribution: Company release.

Continue Reading

Summerset says it’s on track for 450 units this year

Retirement village developer & operator Summerset Group Holdings Ltd said yesterday it was on track to deliver 450 units this year after achieving 155 sales in the September quarter.

The company made 97 new sales & 58 resales in the quarter, but chief executive Julian Cook many units were delivered late in the quarter, which would be reflected in settlement volumes in the fourth quarter.

The company made a strong start to the year with 171 sales in the first quarter but is behind its 2016 performance.

Attribution: Company release.

Continue Reading
WordPress Appliance - Powered by TurnKey Linux