Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Summerset 1H profit almost triples as it sold more rights

Summerset 1H profit almost triples as it sold more rights and land value doubled, shares gain

By Tina Morrison

Aug 13 (BusinessDesk) – Summerset Group, New Zealand’s third-largest listed retirement village operator, almost tripled first half profit as it sold more occupation rights and the value of its investment property more than doubled.

Summerset’s net profit rose 174 percent to $10.8 million in the six months ended June 30, as revenue rose 16 percent, the Wellington-based company said in a statement. The shares rose 3.3 percent to $3.10.

Summerset, whose shares have surged 57 percent in the past year, completed 102 new retirement units in the first half and is on track to complete at least 200 by the end of the year, the company said today. Summerset has secured two new land sites, taking the total purchased this year to three and increasing its land bank to six years, based on an annual build target of 300 retirement units per annum by 2015.

“With six villages under development and three main buildings under construction, we are in a good position to reach our full year target,” managing director Norah Barlow said in the statement. “We have plenty of development projects in the pipeline and plenty of scope for growth.”

The company said Barlow will step down as chief executive in the first half of 2014 after 12 years at the helm, but will remain a director on the board. Chief financial officer Julian Cook will replace Barlow after three years in his current role.

Retirement village stocks are among the 15 best performing companies on the New Zealand stock exchange the past year as investors anticipate growth supported by an ageing population. The nation’s population over 75 years is forecast to double between 2011 and 2031, Summerset said in presentation notes accompanying its earnings today.

Summerset said it expects to pay a full-year dividend in line with policy, which is detailed in its prospectus as an intention to distribute 30 to 50 percent of underlying profit. The company’s underlying profit, which strips out unrealised movement in the value of its properties, increased 45 percent in the first half to $10 million.

In the first half, the company sold 116 new occupation rights, 40 percent ahead of the year earlier period driven by its bigger portfolio and good demand. Resales of occupation rights fell 17 percent to 73 as it had less stock available, while the number of new units rose 50 percent to 102.

“We have seen sales of occupation rights grow strongly in the first half of the year and are seeing good waitlists in all of our villages,” Barlow said.

First-half profit was boosted by better development margins as Summerset conducted its own construction management and design, and will this year for the first time manage the construction on a majority of its building sites, Barlow said.

The first half development margin was 12.4 percent, up from 11.9 percent in the year earlier period. Development margins on sites with internal construction management are in line with the company’s medium term target of at least 17 percent and the company is beginning to explore buying its own materials and employing its own labour on sites.

The value of the company’s property more than doubled to $10.1 million from $4.4 million in the year earlier.

Summerset said it continues to investigate potential opportunities which will increase its land bank.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 



BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>


Serious Fraud Office: Commences Enquiries Into Allegations Of COVID-19 Wage Subsidy Fraud
The Serious Fraud Office has commenced a number of enquiries into alleged abuse of the Government’s COVID-19 Wage Subsidy. Director Julie Read said the allegations relate to multiple complex cases of potential fraud that have been referred to the agency following extensive investigations ... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>



Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>


Transpower: Releases Independent Report Into Events Of August 9
Transpower’s Chief Executive Alison Andrew has today released an independent report into the grid emergency of August 9 when insufficient generation was available to meet demand, leading to some customers being disconnected... More>>