Archive | Summerset

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.

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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.

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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.

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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.

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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.

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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.

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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.

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Summerset buys at Porirua for 5th Wellington village

Retirement village developer Summerset Group Holdings Ltd said today it had bought a 6ha site, price undisclosed, in the Kenepuru Landing development at Porirua for its 5th village in the Wellington region.

Kenepuru Landing is a joint residential housing project between developer Carrus Corp Ltd & local iwi Ngati Toa.

Summerset chief executive Julian Cook said the proposed village on Bluff Rd would have over 290 homes, including 2- & 3-bedroom villas & apartments, one-bedroom serviced apartments and resthome & hospital care. The village would also include Summerset’s memory care centre concept, offering 20 one-bedroom apartments in a safe environment for people with dementia.

The company expects to build 450 retirement units nationally this year.

Attribution: Company release.

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Summerset lifts profit by 78% – or 45% minus revaluations

Retirement village operator Summerset Group Holdings Ltd increased June half-year net profit after tax by 78% to $90.3 million ($50.6 million in the June 2016 half).

Take away the unrealised valuation gains – $87.1 million for the latest period, $50.2 million last year – and add in realised gains on resales, development margin and a small amount of deferred tax credit – and the underling profit is up 45% to $35.7 million ($24.7 million).

That sounds less glaringly over the top, but those valuation gains do have a use. They’re on the balance sheet and they add to the company’s ability to use money.

As with all the listed retirement village companies, Summerset’s occupants buy a licence to occupy, not a title. That remains with the company.

Summerset’s investment property portfolio rose by $390 million (28%) from a year ago, from $1.416 billion to $1.806 billion, and total assets rose $411 million (27%) to $1.932 billion. Residents’ loans, on the debit side, rose 22% to $867 million ($711 million). The company’s net assets were up 40% to $627.6 million ($448.7 million).

The embedded value of the company’s stock of units rose 57% to $418.9 million ($267.6 million), or $140,000/unit, after setting $274.2 million of resale gains against $144.8 million of deferred management fees.

Net tangible assets/share rose 39% to 285.7c (206.1c).

Summerset chief executive Julian Cook said the company experienced a strong 6-month period, with good sales levels and a record development margin of 28%: “This is particularly pleasing. We have previously signalled we are seeing cost pressure in the Auckland construction market, and despite this we have delivered our strongest development margin for any 6-month period ever. This has been driven by our in-house construction model and strong demand for our homes.”

The company delivered 171 homes and lifted the combined new sales & resales by 6%. Mr Cook said the development pipeline was weighted towards the second half of the year: “We are on track to build about 450 retirement units across our villages in 2017 and expect new sales levels over each half of the year to reflect this.”

Summerset’s total current land bank represents about 2670 retirement homes and 412 care beds, inclusive of recently purchased land in Avonhead, Christchurch. This is a total of about 6 years’ supply at Summerset’s current build rate.

Attribution: Company release.

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Summerset buys third Christchurch site

Summerset Group Holdings Ltd said today it had bought a 9.5ha property in the suburb of Avonhead for its third Christchurch retirement village & fourth dementia care centre.

Chief executive Julian Cook said the company intended to build 240 homes on the Hawthornden Rd property, near the Russley golfcourse & other recreational areas.

It will have 2- & 3-bedroom villas, apartments & serviced apartments, rest-home & hospital care and a memory care centre – a new dementia care concept in New Zealand offering residents living with dementia their own one-bedroom apartment in a secure environment.

Mr Cook said: “We are the first in New Zealand to launch this style of apartment living for those living with dementia. Our first memory care centre opened in Levin last November and has been warmly received by residents & their families.

“We are building 2 further memory care centres in Rototuna (Hamilton) & Casebrook (Christchurch). These centres provide residents with the dignity & respect of having their own home within a secure centre, which is purpose-designed for their needs. We will bring this latest thinking in memory care centres to our Avonhead development.”

Mr Cook said Summerset’s first Christchurch village, at Wigram, was one of its fastest selling: “We are working on the final villa stages now and these will be complete next year. This will mark a 3-year selldown for the village. We are also seeing strong inquiry for our Casebrook village, currently under construction.”

Summerset expects to build 450 retirement units this year. Avonhead takes its greenfield sites to 7. The others are Casebrook, Richmond (Nelson), Rototuna (Hamilton), St Johns & Parnell (Auckland) & Lower Hutt.

Attribution: Company release.

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