SUM Summerset Group

[Left Field]

Results out..... I'll leave it for others to comment

https://www.nzx.com/announcements/436785

SUMMERSET FIRST HALF UNDERLYING PROFIT $89.9M, UP 3%
 
 - Underlying profit for 1H24 of NZ$89.9m, up 3% on 1H23
 - Reported (IFRS) profit after tax of NZ$102.2m
 - Total assets of NZ$7.4 billion, up 17% on 1H23
 - Gearing ratio of 36.2%
 - 352 new units delivered
 - 588 sales of occupation rights for the half
 - Development margin of 28.3%
 - New site acquired in New Zealand
 

[Basil]

Excerpt.

Health New Zealand's most recent offer of a 3.2% increase in aged care funding is well below the 11% required to simply cover aged care providers' rising costs over the last 12 months.

"We'll continue to provide care, as it's highly valued by our residents, but with the funding model the way it is we are focusing our care offering on smaller care facilities that are targeted at our village residents only.

"The wider aged care sector faces systemic challenges with over 60% of aged care provided by not-for-profits or charities, many of which are closing or reducing aged care beds. We will continue to strongly support the New Zealand Aged Care Association's work to highlight the underfunding of aged care and the consequences for us all."

Serious implications for those with a large degree of care in their business model.

[Shareguy]

Craig's latest

When the going gets tough...
SUM delivers acceptable 1H24 result
Price at 26 Aug 2024 Price target - 12mth
11.69 13.29
 SUM delivered 1H24 uNPAT of $90m, up 3% on pcp and in line with guidance, with record resale gains largely offset by a decline in development margin. Operating cashflows improved, but net debt stepped-up (as expected) as the first stage of its flagship c.$500m St Johns village neared completion. NTA increased 3% HoH to $11.43/share, and an 11.3cps dividend was declared.
2H24 outlook softens
SUM reiterated that it will build towards the lower end of its 675-725 target range in NZ given an increase in unsold stock in some locations, implying it will complete c.720 units in FY24 in total (i.e. c.680 in NZ and c.40 in Victoria), up 12% YoY. The largest 2H24 delivery will be 196 units at St Johns, where tough market conditions has seen pre-sales shrink from c.$100m in Feb to c.$90m now. Accordingly, we cut FY24e uNPAT 2% to $206m. While St Johns may be off to a slower start than hoped, we note SUM still expects to generate a cash margin of 18% on the project - 11% above portfolio aver

[Basil]

No need to change reporting standards for honest companies that comply with them like SUM.

Good result for SUM in challenging conditions.

[BlackPeter]

Excerpt.
Serious implications for those with a large degree of care in their business model.

I guess you can see anything either as a problem or as an opportunity.

If people are hungry and food is running low - what happens? Right, food prices go up ... just look at what happened to the price of grain after Putlers attack on the Ukraine.

If people need care services and more and more providers go out of business (i.e. care places running low) - what exactly do you think is going to happen?

I guess sure - the Indian model comes to mind with poor old and sick people simply dying in the streets. Works perfectly fine. However - given that people here do have money (and just chose not to spend it for care ... maybe they change their priorities if they have to?

The old Palestinian adage comes to mind: If Apricots are cheap, plant apricot trees.

Care services currently are clearly too cheap.

[Greekwatchdog]

Solid update.

3Q24 METRICS – SALES OF OCCUPATION RIGHTS

Summerset Group reported 289 sales for the quarter ending 30 September 2024, comprising 129 new sales and 160 resales.

Summerset CEO Scott Scoullar said "Total sales for Q3 were up 11 percent on the same time last year, with resales increasing 26 percent year-on-year."

Mr Scoullar said Summerset continues to sell homes despite the challenging economic conditions and is assisted by having 15 villages selling new homes across different locations in New Zealand.

"We are seeing a good balance of sales throughout the country with 55 percent of sales coming from outside Auckland, Wellington and Christchurch during this quarter.

"The economy was still extremely difficult in Q3, with a slow property market, weak consumer confidence and inflation continuing to have an impact. Despite this we've continued to manage through.

"Our sales show that we still have highly motivated prospective residents, and we've worked hard to bring them into our villages. We're seeing positive signs too with an interest rate cut (and further cuts anticipated) bringing more optimism to the market."

The first stage of Summerset's flagship St Johns village was delivered on time as expected this quarter, a major milestone for the company.

"The first of the St Johns' buildings was handed over in August, and the second building (which includes the care centre, café, bar, theatre and other resident amenities) was completed at the end of September.

"We are delighted to have welcomed our first residents into Summerset St Johns in October too. We're looking forward to introducing this premium village experience to our residents," said Mr Scoullar.

[Buzz]

Another outstanding result, continuing the theme that SUM isn't as affected by the economy/property market as common thinking suggests.

[BlackPeter]

Solid update.

3Q24 METRICS – SALES OF OCCUPATION RIGHTS

Summerset Group reported 289 sales for the quarter ending 30 September 2024, comprising 129 new sales and 160 resales.

Summerset CEO Scott Scoullar said "Total sales for Q3 were up 11 percent on the same time last year, with resales increasing 26 percent year-on-year."

Mr Scoullar said Summerset continues to sell homes despite the challenging economic conditions and is assisted by having 15 villages selling new homes across different locations in New Zealand.

"We are seeing a good balance of sales throughout the country with 55 percent of sales coming from outside Auckland, Wellington and Christchurch during this quarter.

"The economy was still extremely difficult in Q3, with a slow property market, weak consumer confidence and inflation continuing to have an impact. Despite this we've continued to manage through.

"Our sales show that we still have highly motivated prospective residents, and we've worked hard to bring them into our villages. We're seeing positive signs too with an interest rate cut (and further cuts anticipated) bringing more optimism to the market."

The first stage of Summerset's flagship St Johns village was delivered on time as expected this quarter, a major milestone for the company.

"The first of the St Johns' buildings was handed over in August, and the second building (which includes the care centre, café, bar, theatre and other resident amenities) was completed at the end of September.

"We are delighted to have welcomed our first residents into Summerset St Johns in October too. We're looking forward to introducing this premium village experience to our residents," said Mr Scoullar.

The trend looks good (12 months rolling window):



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[Basil]

Another outstanding result, continuing the theme that SUM isn't as affected by the economy/property market as common thinking suggests.

Correct because they are selling what the market really wants.  On the other hand others...

[KW]

Summerset Group reported 289 sales for the quarter ending 30 September 2024, comprising 129 new sales and 160 resales.

Summerset CEO Scott Scoullar said "Total sales for Q3 were up 11 percent on the same time last year, with resales increasing 26 percent year-on-year."

26% growth in resales - are more people dying? Anyone got a graph tracking their new sales and resales?  

[winner (n)]

26% growth in resales - are more people dying? Anyone got a graph tracking their new sales and resales? 

BP put a graph up earlier ...not to be outdone here's my graph

Funny I also thought more people must be dying  ...especially when you mentioned mortality rates the other day

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[Basil]

Looks like the trend line is getting steeper in recent times.  All the others must be scratching their heads and wondering how SUM do it.

[KW]

Looks like the trend line is getting steeper in recent times.  All the others must be scratching their heads and wondering how SUM do it.

Funny I also thought more people must be dying  ...especially when you mentioned mortality rates the other day

More people are dying.  Sadly, Stats NZ are no longer publishing the weekly figures so I cant track them.  But PFP.ASX is very optimistic on the outlook for their business lol  (which I own).

Fortunately the Australian Govt still publishes their deaths on a reasonably up to date basis. As you can see, 2024 deaths are approaching the record 2022 (Covid) death levels. 

As Lorraina likes to say, "I am well positioned"  

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[KW]

Actually, Stats NZ has published the numbers up to June 2024.  As you can see, we are not far off the record either.  Note that a grand total of 4.435 people have died from covid in total since the pandemic began - these are mostly in the latter quarter of 2022 and first 2 quarters of 2023, distributed differently to Australia which was mostly all in 2022 due to them reopening the border 7 months earlier)

Death by numbers - June year ending 2010 to 2024

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[BlackPeter]

More people are dying.  Sadly, Stats NZ are no longer publishing the weekly figures so I cant track them.  But PFP.ASX is very optimistic on the outlook for their business lol  (which I own).

Fortunately the Australian Govt still publishes their deaths on a reasonably up to date basis. As you can see, 2024 deaths are approaching the record 2022 (Covid) death levels.

As Lorraina likes to say, "I am well positioned"   

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Now - your interest in some undertaker (PFB) is obviously absolutely irrelevant for this thread. However - in your defence - a higher death rate is good for retirement villages as well - for all of them, but presumably better for the villages with a higher proportion of care-cases than SUM.