Summerset annual earnings rise 50% as expansion accelerates

Thursday 23 February 2017 09:18 AM

Summerset annual earnings rise 50% as expansion accelerates

By Tina Morrison

Feb. 23 (BusinessDesk) - Summerset Group boosted annual earnings 50 percent after opening more retirement villages and improving its margins.

Underlying earnings, which excludes property revaluations, increased to $56.6 million in calendar 2016, from $37.8 million a year earlier, the Wellington-based company said in a statement. That's ahead of its forecast for earnings of between $53 million and $55 million.

Net profit jumped 73 percent to $145.5 million, as the value of the company's investment properties increased by $143.5 million, compared with an $83.5 million gain a year earlier.

Summerset invested $200 million in new and existing villages in 2016. The company delivered a record 409 retirement units during the year, 35 percent more than in 2015, and it raised its target for 2017 to around 450 units. It improved its development margin to 22.2 percent from 20 percent.

"As one of the country’s largest retirement village developers and operators, we have established an offering that sees us develop new villages efficiently and operate them well," said chief executive Julian Cook. "Our focus for FY17 will be on continuing to grow Summerset as well as continuing to refine and improve our customer offering. This should mean continued earnings growth for shareholders."

The company will pay a final dividend of 5.1 cents per share on March 22, taking the annual dividend to 7.7 cents, ahead of the 5.25 cent dividend paid in the first half of the previous year.

Summerset shares last traded at $4.91 and have gained 26 percent the past 12 months.

(BusinessDesk)

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