Tag Archives | Summerset

Summerset sees bonds as helpful diversification

Summerset Group Holdings Ltd set an interest rate last week of 4.78%/year for its $100 million issue of secured, unsubordinated fixed-rate bonds. The issue includes $25 million of oversubscriptions. There’s no public pool.

The offer closes on Thursday 6 July and allotment will be on Tuesday 11 July. The 6-year bonds have a maturity date of 11 July 2023.

Summerset chair Rob Campbell said the transaction was a significant milestone for Summerset, being its first domestic regulated bond issue and the first for the New Zealand retirement village & aged care sector: “The proceeds will be used to reduce existing bank debt to $211 million, leaving significant headroom within the $600 million facility.

“This provides further diversification of funding sources and tenor for the group and provides strong levels of certainty for future years for funding. The bonds complement existing syndicated loan facilities which were refinanced in March.”

Attribution: Company release.

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Summerset sets indicative margin for bonds

Retirement village developer & operator Summerset Group Holdings Ltd has set the indicative margin range above the 6-year swap rate for its $100 million bond issue at 1.85-2%/year, subject to a minimum interest rate of 4.7%/year.

Summerset is offering $75 million of bonds, with the ability to accept up to $25 million of oversubscriptions. The interest rate will be decided after the bookbuild process expected to be completed on Tuesday 14 June.

The offer is expected to open on 15 June and close on 6 July. There’s no public pool.

Attribution: Company release.

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Summerset announces $100 million bond offer

Summerset Group Holdings Ltd lodged its product disclosure statement today for an offer of $100 million of 6-year bonds.

The retirement village developer & operator is offering up to $75 million of unsubordinated fixed-rate bonds, with the ability to accept up to $25 million in oversubscriptions, to New Zealand institutional & retail investors. There’s no public pool. Summerset will provide a guarantee & security package with the bonds.

It expects the offer to open on Thursday 15 June and close on Thursday 6 July.

Summerset has appointed ANZ Bank NZ Ltd as arranger, and ANZ, Deutsche Craigs Ltd, First NZ Capital Securities Ltd & Forsyth Barr Ltd as joint lead managers.

Link: Summerset bond product disclosure statement

Attribution: Company release.

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Summerset considers Australia & widening services

Retirement village company Summerset Group Holdings Ltd chair Rob Campbell told the company’s annual meeting yesterday expansion into Australia was being considered but was not imminent.

Summerset has 21 villages in New Zealand providing a range of living options & care services to 4200 residents, and has 6 sites for development – Richmond, Rototuna, Casebrook & Lower Hutt and 2 in Auckland, in St Johns & Parnell.

At the end of 2016, the company’s landbank represented 2609 retirement units & 366 care beds – about 6 years’ supply based on Summerset’s intended build programme for retirement units in 2017 of about 450 units.

Mr Campbell added: “ It is our intention to add further sites in the main centres and in provincial locations where we will develop villages on our current model, evolving over time to meet the demands of the market. We face strong ongoing demand.

“In addition to this what might be described as Summerset ‘business as usual’, we are contemplating how the core model might expand over time. This contemplation includes the possibility of expansion into Australia. This requires the careful & extended research & consideration which it is getting. No decisions have been made in this respect, nor are they imminent.

“The second area of forward thinking is around the wider range of services which we could provide around retirement living & aged care. Again, decisions are neither made nor imminent but we are undertaking work on the options, the demand & commercial viability of a wider range of services.

Attribution: Annual meeting speechnotes.

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Summerset lifts sales

Retirement village developer, owner & operator Summerset Group Holdings Ltd lifted sales & resales of occupancy rights by 41% in the first quarter of the year, compared to the March 2016 quarter.

Chief executive Julian Cook said on Wednesday the 171 sales for the quarter were up by 50 on the figure a year ago – 97 new sales (75 a year ago), 74 resales (46).

Summerset recently completed a $600 million syndicated loan facility refinance to allow the group to continue to fund growth.

“The outlook for the balance of the year looks positive, with good presale levels on projects delivering through this year. We note that our construction programme sees retirement unit deliveries weighted to the second half of the year and we expect the split of new sales across the year to be in line with this.”

Attribution: Company release.

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Summerset profit soars again and build rate lifted

Summerset Group Holdings Ltd improved its underlying profit by 50% in 2016 to $56.6 million. Chief executive Julian Cook said growth on this measure had averaged 48%/year since the company listed in November 2011.

Highlights:

  • Net profit after tax up 73% to $145.5 million
  • $200 million invested into new & existing villages
  • Total assets up 25% to $1.7 billion
  • 658 total sales of occupation rights, up 14%
  • 414 new sales of occupation rights, up 24%
  • 409 new retirement units delivered, up 35%
  • Final dividend of 5.1c/share
  • Development margin of 22.2%, up from 20.0%

Mr Cook said the build rate target had been increased for 2017 from 400 last year to 450.
The company has over 4200 residents living at its 21 villages, 700 more than a year ago: “During 2016 we accomplished a number of milestones, including 658 new sales & resales of occupation rights, a 14% increase on the year before, and it is the sixth year in a row that we have increased our occupation rights sales.

“We also now have more than 1000 staff across the country, up 200 on the same time last year.

“The delivery of a record 409 retirement units across the country was in line with our 2016 build rate target of 400. We also delivered 121 care beds in 2016, bringing the number of care beds across our villages to 748.”

At the end of 2016, Summerset’s total land bank represented 2609 retirement units & 366 care beds, a total of around 6 years’ supply.

Link:
Summerset

Attribution: Company release.

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Summerset lifts retirement village unit sales by 14%

Retirement village owner & operator Summerset Group Holdings Ltd said yesterday it lifted sales of occupation rights by 14% in 2016.

It made 156 sales in the December quarter – 106 new & 50 resales. That took the year’s total to 658, up from 578 in 2015.

Resales for the year were down by one to 244, while new sales rose 24%, from 333 to 414.

Chief executive Julian Cook said the 2016 total was the group’s highest and reflected the decision to lift the build rate from 300 units in 2015 to just over 400 in 2016.
Mr Cook said demand remained strong for both new & resale stock, and development continued at 10 villages. Only 29 unsold resale units were available at the end of the year.

Attribution: Company release.

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Propbd on Q Sn30Oct16 – Auckland Airport & Air NZ bonds, Summerset forecast, Kirkcaldie takeover complete

Auckland Airport issues $225 million of bonds
Air NZ issues $50 million of bonds
Summerset looking at 40-46% profit lift
Brierley completes Kirkcaldie takeover

Auckland Airport issues $225 million of bonds

Auckland International Airport Ltd has closed its 7-year bond issue after a bookbuild with $225 million of bonds issued.

The interest rate for the fixed rate bonds is 3.97%/year, reflecting a margin of 1.35% over the underlying swap rate. The offer opened on Wednesday with a margin of 1.4%/year indicated.

The bonds will be issued on Wednesday. There was no public pool for the offer but they’ll be listed on the NZX debt market.

Air NZ issues $50 million of bonds

Air NZ Ltd allocated $50 million of bonds in its 6-year unsecured, unsubordinated, fixed-rate issue on Friday. The interest rate is 4.25%/year.

The funds will be used for general business purposes, including repaying some of the bonds which mature on 15 November.

Summerset looking at 40-46% profit lift

Summerset Group Holdings Ltd said on Friday it was forecasting underlying profit for the year to December in a range of $53-55 million, which would be a 40-46% increase on the $37.8 million last year.

Chief financial officer Scott Scoullar said it reflected positive trading conditions across all its villages: “Occupation right sales have been strong since the half year, and are the key driver of the underlying profit forecast.”
The company didn’t provide 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.

The directors provide an underlying profit measure to show realised & unrealised components of fair value movement of investment property & tax expense.

Brierley completes Kirkcaldie takeover

The former Kirkcaldie & Stains Ltd, renamed Wellington Merchants Ltd in July, will be delisted and its shares will cease to be quoted from close of business on Friday 11 November, following completion of the $3.45/share takeover by Sir Ron Brierley’s Mercantile Investment Co Ltd on Wednesday.

Kirkcaldie’s sold its Harbour City Centre building in Wellington 2 years ago, and its department store across the road last year to Australian retailer David Jones Ltd, which is owned by South African retailer Woolworths Holdings Ltd.

Earlier stories:
12 September 2016: Cashed-up retailer’s directors approve new Brierley bid
5 June 2015: Kirkcaldie & Stains to become a David Jones store
24 September 2014: Harbour City Centre sale approved

Attribution: Company releases.

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Summerset lifts quarterly sales 21%

Retirement village developer & operator Summerset Group Holdings Ltd said last week it reached a new high in sales in the September quarter – 125 new sales, 71 resales for a total 196.

Chief executive Julian Cook said the total was 21% higher than for the September quarter last year. Wigram village’s main building in Christchurch opened in September, contributing to strong third-quarter sales.

The resales left only 21 unsold resale stock at 30 September.

The first residents at Summerset’s Ellerslie village in Auckland will move in this month.

Attribution: Company release.

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Summerset lifts returns & dividend as it aims for 400 homes/year

Retirement village operator Summerset Group Holdings Ltd lifted its underlying profit for the June half by 44% to $24.7 million ($17.1 million). The company has delivered average annual growth of 44% every year since it listed in 2011.

Underlying profit excludes fair value movements, includes the realised gain on resales & realised development margin.

Chief executive Julian Cook said on Monday the result was a record for any half-year period for the group and strengthened its position as the fastest growing retirement village provider in New Zealand. Summerset grew both sales & available stock.

It grew pretax profit by 47% to $51 million ($34.7 million), net profit after tax by 42% to $50.6 million ($35.7 million), total comprehensive income by 27% to $43.7 million ($34.4 million), operating cashflow by 33% to $84.4 million ($63.6 million) and total assets by 31% to $1.52 billion ($1.16 billion).

Summerset increased basic earnings/share by 41% to 23.3c/share (16.53c/share), diluted earnings/share by 41% to 22.97c/share (16.33c/share), net assets by 23.4% to $448.7 million ($363.7 million), net tangible assets/share by 23% to 206.06c/share (167.53c/share).

The company added $104.8 million of assets to its portfolio in the half-year ($74.4 million) and showed $23.8 million of realised fair value movements ($16.9 million), unrealised $26.3 million ($17.6 million).

The board has declared an interim dividend of 2.6c/share (1.85c/share), payable on 9 September.

“We expect this growth to continue, as the first stage of our Ellerslie village (image of construction above) opens in September and we focus on further developing our Wigram & Hobsonville villages and extending our existing Trentham & Warkworth villages.”

The 183 (160) new sales of occupation rights were 14% higher and the 123 (110) resales 12% higher than the first half of 2015. The company delivered 190 (141) homes in 9 villages, a new half-year build record which put Summerset on track to meet its build rate target of delivering 400 homes in 2016 (303 delivered in 2015).

At 30 June, Summerset’s land bank represented 2818 retirement homes & 485 care beds – 7 years’ supply at the present build rate.

The company achieved a 20.3% development margin, in line with its target of 20%.

On overall performance, Mr Cook said: “We also continue to invest in our older villages, with the extension of recreation areas at the Levin, Wanganui & Hastings villages under way and a new village centre at Trentham currently under construction.

“We are growing our offering to residents, with the introduction of an exercise programme in the last 6 months as well as shouting the happy hour drinks each week across all our villages.”

He said Summerset would continue to focus on developing its sites, including the opening of a dementia centre at the Levin village this year: “We believe the level of facilities which will be offered in Levin will be a first for New Zealand. Dealing with dementia is difficult for those affected & their families, and we are focused on making life easier & more meaningful for everyone involved. This will be Summerset’s first dementia facility and it is intended that new villages will incorporate dementia capability.”

At Ellerslie, construction of the first stage is almost complete and the first homes will open next month. At Wigram, the village centre, care centre & serviced apartments will open next month.

Attribution: Company release.

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