SUM Summerset Group

[Buzz]

See the thread on possible refloat of MET.  I think the overhang will put pressure on the pricing of the entire sector until its dealt with.  EQT are "brave" to try and relist MET in the prevailing environment for the sector on the NZX.   They're probably sick of the pathetic return they've got on assets employed by MET and want to give others the "opportunity" to be involved.  I see it as an attempted "hospital pass"  Who wants to be left holding the baby with shitty nappies ?

Can you provide some detail on MET's "pathetic return" since they delisted?

[Basil]

They still report on the NZX because the MET010 bonds are still listed. Reporting over the years is all there on the NZX under that ticker.

[Minimoke]

Fill year results just announced
SUMMERSET POSTS $234.2M FULL YEAR UNDERLYING PROFIT

• Underlying profit for FY25 of NZ$234.2m, up 13% on FY24
• IFRS net profit $259.7m down 22% on FY24
• Total revenue of NZ$361.8m up 13% on FY24
• Total assets of NZ$9.2b, up 15% on FY24
• 1,560 total sales of occupation rights, up 26% on FY24
• 693 new homes delivered under occupation right agreement (ORA) (637 in New Zealand and 56 in Australia)
• Land bank total of 5,499 retirement homes and 1,173 care homes across NZ and Australia
• Uncontracted NZ stock decreased 7% compared to 1H25
• Development margin of 27.8%
• Final dividend of NZ13.2 cents per share
• Village and care resident satisfaction 91% and 89% respectively
• Staff retention 84% up 3% on FY24

[Dolcile]

Anyone got a view on why the SP is down in the low $10's.  Down a couple of bucks in the last 2 months. 

The year end report looks good to me.

[entrep]

There's another thread here, but Basil mentioned that it's possibly due to funds selling down to purchase, I think, Metlife Care, possible listing. https://stocktalk.co.nz/index.php?topic=408.0

[Turkey]

Anyone got a view on why the SP is down in the low $10's.  Down a couple of bucks in the last 2 months. 

The year end report looks good to me.

I'm not aware of anything specific to SUM but maybe the subdued outlook for NZ residential property market and the sharp reversal from last years forecast of dropping OCR to rising.

I think some of the analyst might have a view they can't keep growing at the pace without increasing their debt levels which are already on the high side.
All the listed RVs are down similar amount YTD

OCA -12%
RYM -14%
SUM -14%


SUM are the NVIdia of the sector...keeps on delivering and market still chooses to mark it down.

Probably good long term buying if you believe in the sector and their NTA uplift from today +$12 and your patient..lol

[Basil]

https://api.nzx.com/public/announcement/468297/attachment/463399/468297-463399.pdf

Very good result, as usual.  An extremely well managed company with a well proven track record of growth extending all the way back to when it first listed in late 2011.  Underlying profit was just $38m in 2015, now $234m.  10 year underlying EPS CAGR 18% !

I see underlying EPS of 95 cps for FY25  NTA 10 years ago was $1.89, now $13.75.  Embedded value of just on $8 per share.

Has been an outstanding performer ever since it listed.

I had a brief foray into SUM in 2025 in a very small way and got stopped out on a 10% stop loss limit I apply to all new positions.  Only lost a few thousand dollars.  Before that I sold out a decent sized holding at $9 in early 2020 just before Covid hit as a capital preservation measure.  Happy with that decision as my portfolio performance in the last 6 years has vastly outstripped the share price performance of SUM..

So with the above outstanding metrics and the company performing in a completely different league to its peers, 1. why is the share price going nowhere and has basically done a round trip to nowhere since I sold out 6 years ago and 2, why am I not a holder now ?

The first is a very difficult question to answer, the second is simple, this simply doesn't fit my investment parameters now in that being close to retirement I need a decent dividend yield with the vast majority of my portfolio.

Possibly answers to question 1 in my opinion in order of importance include:
a) The endless malaise the housing market is stuck in and the outlook appears to be for more of the same
b) Greatly increased competition in the sector from listed and unlisted companies making many parts of the retirement market over supplied
c) Their relatively slow start with their Australian growth plans and very modest development margin of 8-10% over there suggesting there's quite considerable work to be done on development efficiencies there
d) The popularity of this sector has been very badly tarnished by horrific value destruction by RYM over the last 10 years, (was $8.50 a decade ago), and endless lackluster performance from OCA
e) The pitiful unimputed dividend yield makes this extremely unattractive for retiree's who need income.
f) possible overhang of stock in this sector from a possible listing of MET.

Opportunity knocks for long term capital appreciation for younger investors.
The housing market will not stay in the doldrums forever but a protracted period of sideways type price movement (declining in real terms by 2-3% per annum), in my opinion should be expected.  The almost endless malaise of house prices could easily extend through the remainder of this decade and possibly even longer
For long term investors who don't need yield, I think SUM makes a compelling case to be included as part of a well diversified portfolio.  I don't see any reason at all to own anything else in this sector other than SUM for those investors.  Others in this sector have not earned and don't deserve the trust of investors in my opinion.  SUM have well and truly earned the respect of the investment community, its just that this sector is so badly out of favour with investors.