Summerset lifts annual earnings guidance as sales jump 64% in third quarter
By Paul McBeth
Oct. 7 (BusinessDesk) - Summerset Group, the retirement village developer and operator, raised annual earnings guidance after sales climbed 64 percent in the third quarter and in anticipation of increased activity in the final three months of the year, when residents move into its new Wigram village.
The Wellington-based company expects underlying profit of between $36 million and $39 million in calendar 2015, up from a previous range of between $32 million and $34 million and more than the $24.4 million reported in 2014. The retirement village operator increased total occupation rights sales to 162 in the three months ended Sept. 30, from 99 a year earlier. Of that, new sales rose 22 percent to 83 and resales more than doubled to 79.
"These were driven by a continued steady sell down across developing sites as well as higher levels of resale stock available for use," chief executive Julian Cook said in a statement. "Our new Wigram village in Christchurch saw its first residents move in during September, and settlements at this village will contribute to new sale in the fourth quarter."
Last month, Summerset was granted consent for a $100 million village in the Christchurch suburb of Casebrook to build a 237-home site with a 49-bed care centre.
The company's year-to-date sales rose 47 percent to 432, of which new sales up 40 percent to 243 and resales gaining 56 percent to 189.
New Zealand retirement village operators are acquiring land and preparing for a record building spree in anticipation of increased demand as people born in New Zealand's post-war era reach the target age for operators.
The shares last traded at $3.60, and have gained 30 percent this year.