SUM Summerset Group

[Basil]

You must be happy with the update Basil.

289 in 3Q 2024 sales v 420 3Q 2025.

Solid update no question although its worth noting a lot of the increase was in lower value care units.
Caution is warranted in drawing any conclusions from this data release in terms of how others in this sector are going as SUM has a very long track record of performing well while others in this sector are struggling.

[Greekwatchdog]

For Bar Update

We upgrade our rating on Summerset (SUM) from NEUTRAL to OUTPERFORM with an increased target price of NZ$14.30. We expect SUM to sustain its sector-leading asset growth over the next decade, given: (1) its best-in-class development engine already delivering ~700 units per year; (2) NZ retirement village consents at the lowest level in a decade; and (3) key competitors significantly scaling back development. While SUM's balance sheet has been a key market focus, our analysis suggests its current growth trajectory is sustainable. We expect the build-up of net debt to slow from 1H26 as capital is released from eight developments currently at or near peak capital intensity. This should provide SUM optionality to capitalise on any recovery in the NZ housing market over the next 12 to 24 months, enabling it to adjust delivery volumes in line with market conditions.

What's changed?
Earnings: Annuity EPS falls -8% in FY25 but rises +13% in FY26 and FY27 on higher care fees and lower interest.
Target price: Rises to NZ$14.30 on earnings changes and the incorporation of a discounted cash flow (DCF) valuation.
Rating: Upgraded to OUTPERFORM from NEUTRAL.
Best-in-class development engine poised to capitalise on increasingly favourable supply–demand dynamics
SUM has delivered NTA growth of ~+23% per year over the last decade, largely through disciplined execution of a simple and repeatable development strategy: building broadacre sites on ~10ha parcels of land. Looking ahead, SUM has the largest land bank in the sector and a mature development engine delivering ~700 units per year. This gives it significant optionality to capitalise on a more favourable competitive backdrop over the next three to five years as the volume of new stock coming to market reduces significantly.

Net debt growth to slow as capital intensive developments wind down
SUM's net debt has risen by more than NZ$1bn since FY20. Our analysis of village accounts suggests this has largely been driven by land purchases (partly to support Australian expansion) and spend on eight developments currently at or near peak capital intensity, including high-cost projects St Johns and Boulcott. We expect net debt growth to moderate from 1H26 as spend on these developments slows and new stock sells through, even as Australian deliveries ramp towards ~250 units per year from FY27.

SUM is highly levered to an improving NZ housing market
The likelihood of a recovery in the NZ housing market over the next 12 to 24 months appears to be improving, underpinned by: (1) falling interest rates; (2) affordability back to long-run average levels; and (3) rising sales activity. We see SUM as the most levered to improving market conditions, given its development capacity and flexibility to scale up deliveries as necessary.

Earnings revisions
We make several changes to our earnings forecasts, including a modest reduction in ILU new sales volumes and lower interest (lower average interest rates). We have factored in weaker cash conversion of new sales in the near to medium term to reflect the working capital impact of SUM's ongoing transition to care beds sold under an occupational rights agreement (ORA). However, our net debt forecasts are largely unchanged in FY26 and FY27, as this is offset by: (1) lower capex following our analysis of SUM's development spend; and (2) lower dividend cash outflows due to modelling out of SUM's dividend reinvestment plan (DRP).

We have also modelled Australian care revenue independently for the first time, given recent changes to government funding and the introduction of RAD retentions from 1 November 2025. This leads to higher care revenue across our forecast horizon and the incorporation of RAD cash flows from FY26 onwards.

[winner (n)]

A Newsroom article about the country's biggest home builder ..Summerset of course

Even mentions AI

https://newsroom.co.nz/2025/12/12/a-new-wave-of-retirement-village-development/?utm_source=Newsroom&utm_campaign=0f2d4cd166-Daily_Briefing+12.12.2025&utm_medium=email&utm_term=0_71de5c4b35-0f2d4cd166-97970805&mc_cid=0f2d4cd166&mc_eid=f260d735f1

[Ferg]

What is the gist of the article?  Can it be summarised in 1-2 sentences?

[Greekwatchdog]

What is the gist of the article?  Can it be summarised in 1-2 sentences?

How about a Tsunami of residents coming and that the sector and Govy are not prepared for it.

Feel like I have said this before

[Hectorplains]

What is the gist of the article?  Can it be summarised in 1-2 sentences?

The "article" is written, "in partnership with Summerset."  It's a puff piece masquerading as journalism.

[Basil]

LOL yes it is mate but that shouldn't detract from the superb job SUM have done building shareholder value over the last 14 years.  Makes others performance in the sector over that timeframe look disgraceful to say the least. 

[Greekwatchdog]

LOL yes it is mate but that shouldn't detract from the superb job SUM have done building shareholder value over the last 14 years.  Makes others performance in the sector over that timeframe look disgraceful to say the least. 

How is it disgraceful, yeah with RYM plainly obvious. OCA just been a tad frustrating just never meet your short term momentuem trade philosophy

Do you really want to do history? Yours maybe hazy given your age?

Remember "you" rated OCA as a home run and told everyone to go all in (I have this from several investors)

OCA was always a 10 year project before we get returns which you advertised when the naysayers at the time were telling you otherwise who you told they didn't know what they were doing.

I remember you complaining they werent building enough so when they signaled they were stepping up you were happy, needless to say you then complained about debt levels. So OCA couldn't win either way with you.

OCA was never going to make big returns in a short time and certainly the Covid Bubble caused alot of issues for them due to soaring coats associated with their Care side.

Makes me wonder what "you" were researching way back them when you were highlighting them as a good thing.

Beggars beleif TBH.

Anyway back to SUM

[Basil]

OCA was always a 10 year project

IPO investors were promised a 6 year point of inflection from which returns would grow.  In the first full year after listing the company made 8.5 cps underlying profit.  Nearly 9 years after listing investors are still waiting for this so called point of inflection and those earnings per share to grow.

The "you can't have too many" was a bit of a catch-cry at one of our annual get-togethers in the viaduct many years ago, yes, when we were drunk and having a good time.  Back then we all thought and were assured the business model would generate huge returns from the 6 year point.  I can't recall my PF allocation back then but I do recall having 300K at one point which was a fair bit of my portfolio value at that point in time.  At no point did I ever suggest to anyone they really go "all in" as you allege.  That's never been me, see my signature line on the other forum.

Investors were sold a pup full of old care villages with little prospect for successful development.  Nobody knew this at the time.  The care suite model that we were assured would be earnings transformative hasn't been.  Its a failed experiment as EBITDA returns per bed are still lower than at the IPO but company management still go on ad museum every year assuring shareholders they're invested in a growth company, and all the while EPS has been stagnant or declining and down a whopping 30% in inflation adjusted terms.

I woke up and smelled the coffee and sold most of my shares many years ago at $1.40 very close to the time Greg Tomlinson took a big stake at that price.  I took a great deal of trouble on the other channel to explain why I sold down.  Nobody could reasonably ask for a more fulsome explanation of why I changed my investment position.  There were many dozens of posts.

The shares need to get to $1.28 just to match the IPO price in inflation adjusted terms and remember this is a property company so its supposed to go up, not down.  The company hasn't paid a dividend in years but senior management are paid twice what they were at the time of the IPO and frankly are masters of information obfuscation.

Meanwhile SUM is nearly 10 times its IPO price 14 years ago, (let me say that again, nearly ten times your money) while the OCA share price languishes and RYM's share price has collapsed over that timeframe under the weight of extremely poor management and highly creative and disingenuous accounting policies as well as a raft of other extremely poor decision making.

So yeah, I stand by my comment above that SUM has made others in this sector look disgraceful / pathetic / ridiculously weak, pick whatever adjective you prefer or some combination of the three.

[Greekwatchdog]

IPO investors were promised a 6 year point of inflection from which returns would grow.  In the first full year after listing the company made 8.5 cps underlying profit.  Nearly 9 years after listing investors are still waiting for this so called point of inflection and those earnings per share to grow.

The "you can't have too many" was a bit of a catch-cry at one of our annual get-togethers in the viaduct many years ago, yes, when we were drunk and having a good time.  Back then we all thought and were assured the business model would generate huge returns from the 6 year point.  I can't recall my PF allocation back then but I do recall having 300K at one point which was a fair bit of my portfolio value at that point in time.  At no point did I ever suggest to anyone they really go "all in" as you allege.  That's never been me, see my signature line on the other forum.

Investors were sold a pup full of old care villages with little prospect for successful development.  Nobody knew this at the time.  The care suite model that we were assured would be earnings transformative hasn't been.  Its a failed experiment as EBITDA returns per bed are still lower than at the IPO but company management still go on ad museum every year assuring shareholders they're invested in a growth company, and all the while EPS has been stagnant or declining and down a whopping 30% in inflation adjusted terms.

I woke up and smelled the coffee and sold most of my shares many years ago at $1.40 very close to the time Greg Tomlinson took a big stake at that price.  I took a great deal of trouble on the other channel to explain why I sold down.  Nobody could reasonably ask for a more fulsome explanation of why I changed my investment position.  There were many dozens of posts.

The shares need to get to $1.28 just to match the IPO price in inflation adjusted terms and remember this is a property company so its supposed to go up, not down.  The company hasn't paid a dividend in years but senior management are paid twice what they were at the time of the IPO and frankly are masters of information obfuscation.

Meanwhile SUM is nearly 10 times its IPO price 14 years ago, (let me say that again, nearly ten times your money) while the OCA share price languishes and RYM's share price has collapsed over that timeframe under the weight of extremely poor management and highly creative and disingenuous accounting policies as well as a raft of other extremely poor decision making.

So yeah, I stand by my comment above that SUM has made others in this sector look disgraceful / pathetic / ridiculously weak, pick whatever adjective you prefer or some combination of the three.

More Yadda Yadda from you.

Just for the record we have never met, so whatever discussions you and others were having at your outings were for you only, I couldn't care less.

So perhaps when you go on one of your a 'Bull rampage's" maybe you should fully do your research before gas lighting a stock.

[Basil]

I think you're bitterly disappointed you backed the wrong horse.

[Greekwatchdog]

I think you're bitterly disappointed you backed the wrong horse.

Waiting for that. Nope on the contrary. Been in SUM since they annouced push into Care. Paid $9.07

So your barking up the wrong tree. Besides Basil, don't get emotional about money, take your losses as you take your wins, empathy and humility something you lack.

Right time to get dressed up and spend some of my divvie at Casino..

Not fat from SUM's next update so no need to comment until then

[winner (n)]

Waiting for that. Nope on the contrary. Been in SUM since they annouced push into Care. Paid $9.07

So your barking up the wrong tree. Besides Basil, don't get emotional about money, take your losses as you take your wins, empathy and humility something you lack.

Right time to get dressed up and spend some of my divvie at Casino..

Not fat from SUM's next update so no need to comment until then

How did Casino go gwd

If it was a gambling casino no doubt came home with heaps more than you took.

[Greekwatchdog]

How did Casino go gwd

If it was a gambling casino no doubt came home with heaps more than you took.

Hey Winner, (Yes) didn't end up going as I had visitors arrive that I weasn't expecting so entertained them.

Divvie still there, so next time, hmm maybe tonight after Te Rapa races...

GWD

[Shareguy]

Gosh look-through total sales for FY25 up 16% YoY, driven by strong Serviced Apartment resales in 4Q25. SUM's strong finish to the year, slight dip in unsold inventory, and positive commentary on pre-sales demand at its second village in Australia (Chirnside Park) are encouraging.

Disc. I'm back in. Ryman still my larger aged care stock.

https://www.nzx.com/announcements/466132