Summerset 1H profit beats estimates on fatter development margins
By Paul McBeth
Aug. 21 (BusinessDesk) - Summerset Group, the retirement village operator and developer beat first-half profit estimates as it squeezed a fatter margin from its developments, which have largely been brought in-house.
Net profit was $3.9 million, or 1.85 cents per share, in the six months ended June 30, compared to a loss of $1 million, or 0.67 cents per share, a year earlier, the Wellington-based company said in a statement. That beat Forsyth Barr analyst Jeremy Simpson's forecast of $1.3 million reported profit with earnings per share of 0.6 cents.
The profit came from better development margins as Summerset conducted its own project and cost management, design, and a growing percentage of its construction management. The development margin was 11.9 percent in the period, beating the initial public offering forecast of 10.5 percent, and well ahead of the 6.9 percent achieved in the 2011 financial year.