Ann: ADDRESS: SUM: Annual Meeting - Chairman and

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SUM
30/04/2013 13:00
ADDRESS

REL: 1300 HRS Summerset Group Holdings Limited

ADDRESS: SUM: Annual Meeting - Chairman and CEO Addresses

NZX RELEASE

30 APRIL 2013

SUMMERSET ANNUAL MEETING - CHAIRMAN AND CEO ADDRESSES

Chairman's Address

Shareholders - welcome to the Annual General Meeting of Summerset.

2012 was a positive year for Summerset, in which the business met its
performance objectives and built the foundations for future growth. We intend
to be a reliable business going forward with clear objectives which we meet
and, where conditions allow, we exceed.

Summerset's underlying profit of $15.2 million for the year to 31 December
2012 is nearly double the 2011 result and 56% above the IPO forecast. Our net
profit after tax for the year ending 31st of December 2012 increased 243%
compared to a year earlier.

Total sales of occupation rights surpassed $100 million for the year. Across
the group, we saw a 55% increase in the sale of new occupation rights and a
third more re-sales compared to the preceding year.

Summerset's positive performance has continued during the first quarter of
2013. More importantly, the business has continued to build the resources
needed for future growth.

With New Zealand's older population set to double over the next twenty years,
the market for retirement and aged care facilities is likely to expand
substantially. In our view, Summerset is well positioned to participate in
this growth.

We continue to focus on building and operating quality, affordable facilities
in areas of high demand. During 2012, we began construction on two new
villages, in the Bay of Plenty town of Katikati and in Dunedin.

By bringing development and design in-house, we have better control over
quality and the speed and flexibility with which we can deliver new units to
match demand. This also improved the development margin to 12% which was a
significant driver of earnings. We repeat our earlier guidance that we can
see our realised development margin increasing to mid to late teens as the
product we are now building is sold. Our build rate guidance has also
increased to 300 retirement villages units per annum by 2015 - our previous
target was 250 per annum by 2016.

In the past year we also acquired two new sites in the important Auckland
market. Hobsonville and Ellerslie will both have a high development value.

We continue to work towards resource consent at Hobsonville. While we are
disappointed at the initial rejection of our Hobsonville proposals, we are
currently appealing the decision and also working closely with Auckland
Council. We hope to resolve the outstanding issues in 2013 and, subject to
this, commence construction of this highly-sought after village early next
year.

Our growth in 2012 was reflected in the Summerset stock reaching the NZX Top
50 New Zealand companies in New Zealand in December. The financial result
meant we were able to declare a final dividend for 2012 of 2.5 cents per
share. This was 25% above the amount forecast at the time of the IPO.

The intention of the board is to maintain growth, subject to market
conditions, at a strong level while preserving the ability to pay dividends
on a sustainable basis. It is our expectation that the business will continue
to grow in 2013 and beyond, and when we set targets, they will be achieved.

It will be evident to shareholders that the aged care component of our
business is increasing and we expect this to continue. This does not negate
the continued growth of the villa and apartment market but is fully
complementary. In the future there will be opportunities for more specialised
care facilities to be provided, along with the co-location of ancillary
services. It is our intention to participate in these opportunities where the
financial returns justify.

On our current trading, the business continues to perform well.  We announced
sales of occupation rights for the first quarter of 2013 of 64 new sales and
25 resales.  We have seen trading in April continue to improve with this and
forward prospects look positive.

I look forward to a future of growth, innovation and development across
Summerset.

Finally, I want to take this opportunity to thank you - our shareholders -
for your ongoing support and commitment to this business.

CEO Address

Ladies and gentlemen - it is a pleasure to be here today. Welcome to our
second Annual Meeting and thank you for coming.

We have now passed the important milestone of our first full year listed on
the New Zealand Stock Exchange - a year which saw our inclusion in the NZX50.

Our record results for the year to December saw Summerset posting a net
profit of $14.8 million - 243% higher than a year earlier. The business's net
operating cash flow was $66.3 million, up 27% on IPO forecast and 52% on
2011, and our total assets grew to $702 million.

Our results for 2012 reflect the hard work of all of our leadership team and
our great village staff who are committed to making Summerset villages the
best they can be.

During this year we have continued to build more retirement units and acquire
more key sites which will secure our ongoing growth in the future.

In December, we began work on our sixteenth village - That's 16 villages in
16 years.

We've worked hard over those 16 years to get to where we are now. These
results are not a mere flash in the pan. Since we began, we have consistently
delivered growth - every single year.  Summerset now has a land bank to
enable us to build an additional 1,400 retirement village units and more than
400 care beds. We are well on track to add another 200 retirement units and
70 care beds this year.

We have a strong land-bank and will continue to add to this as opportunities
arise.

So, why have we been successful? There are a multitude of answers to this
question - our product, our team, the strong demographic tailwind, a
supportive Board.  I would also add that we base our business on quality and
innovation. They're the same reasons that we're also seeing rapid
acceleration in growth. We're always looking for better ways of doing what we
do. We are working hard to make sure that we can continue to provide the best
possible product to older people around the country.

I see Summerset in its sixteenth year, as not unlike a teenager. We've had a
growth spurt, we've proven our ability but we've also got plenty more
potential to grow.  Being like a teenager means we're still adaptable and
innovative too.

We know that potential residents choose their new home based on the ability
of a village to support them and their partner as needs change. We know this
is a key part of the decision-making process. And we know that in the future
we need to be able to provide the scale necessary and the level of care
desired, in order to succeed.

Incorporating aged care in the build of our retirement villages puts us in a
strong market position.  At present we provide rest home and hospital level
care, which meets the vast majority of care needs in New Zealand. Demand for
these services is continuing to rise as the demographic profile of New
Zealand changes.

We are often asked about dementia, and we can advise that we are working
towards providing dementia care in some villages. Although the current need
is lower than for other services, at around only 9%, we have all seen the
figures which show that as the population over 75 increases, the incidence of
dementia will also increase.

It should be noted that traditionally dementia care beds have not been well
subsidised through DHBs, but recently we have started to see greater
Government recognition of the need.

Dementia is a terrible issue for those suffering from it, and for their
families.  When we do provide residential care for dementia, we are committed
to doing this in the best way we can for those who need it.

It is, however, interesting to note that a lot of dementia can be
successfully managed without a lock up unit, either within the village or
with hospital level care.  All of our staff are trained to manage those
levels quite successfully, and can do this until the needs get too great.
This provides a great solution for the husband or wife who simply do not want
to be apart, but need some support to assist them, at home.

We are also working towards providing larger size care facilities.
Traditionally we have provided care of up to 52 beds with add-on care
apartments.  This size is good for us. It is not so institutional, and it
well satisfies the villages' needs.

However, we can all see aged care demands getting higher, with tight fiscal
constraints on aged care being exercised by successive governments.  This
will see the need to develop larger scale buildings.

Summerset also provides a middle road in aged care. Our care apartments
provide rest home level care and independent living. Apartments are held by
the resident through a licence to occupy but we are certified through the
DHBs to provide care, with a subsidy, should a resident financially qualify.
This is in response to the desire for older New Zealanders to stay in their
homes while also receiving the highest standard of professional rest
home-level care and enjoying visits from friends and family.

This type of innovation will drive profitability in the future.

To provide this care we employ around 500 truly great staff.  This team is a
critical part of making the company what it is. That's why we are committed
to having all of our caregivers qualified - which we are well on the way to
achieving.  We are supporting our staff to gain qualifications through on the
job training for National Certificate and we're also supporting them to
achieve higher levels of qualification, should they desire that. At all times
we aim to have every one of our staff committed to doing the best job they
can rather than just doing a job.

In talking about staff, it is appropriate to note that that on average our
staff are paid above the average pay rates for the sector.  It is well
recognised that we would like this to be higher, and we are actively working
with other providers, with staff, with Careerforce (our training
organisation), and with Government, on how to make this happen.

The number of New Zealanders living in retirement villages continues to
increase rapidly. Among over 75 year olds, the number of people who call a
retirement unit 'home' has grown from 5% in 1998 to 9% in 2011.  If that
growth rate continues New Zealand will need more than 21,000 extra retirement
units and 20,000 aged care beds by 2031.

We're well prepared to meet the future demands.

We decided three years ago to bring our design and development teams in
house. This has been very successful.  Sites are now run more efficiently
by Summerset construction managers, who are focussed solely on the delivery
of our product within the right timeframe.

Summerset at Bishopscourt in Dunedin is an example of how this has worked
well. Construction began in mid-last year. By December the first stage of the
village was ready for occupation. We welcomed our first residents in the
first week of January this year. We have already started the next stage of
our village, our care centre and recreation amenities. This is looking to be
our fastest build to date.

The construction of a village in Katikati, in the Bay of Plenty, began at the
end of 2012. The village is located on a waterfront site with views across to
Matakana Island. We expect the residents to be in their homes by mid-2013.
Construction of the first homes is moving fast and sales have started well.

In the years ahead we will continue to have a focus on the Auckland market,
and we all know that Auckland's population is growing faster than any other
region.

As Rob mentioned, last year Summerset purchased two key development sites in
Auckland - 7.6 hectares in the high urban growth area of Hobsonville and 3.9
hectares in the already densely populated Ellerslie.  We are also working
through the resource consent process to begin building at Karaka - another
part of Auckland experiencing rapid urban growth. The region it will serve -
Counties Manukau - is facing a 150% increase in the over 75 population by
2031: the largest in the country.

We now have the capacity to provide more than 700 new retirement units and
240 care beds to the Auckland market, and we will be doing so in the coming
years.

But despite our growing focus on Auckland, we know this is just part of the
equation.

The need for high quality retirement villages is apparent the length and
breadth of New Zealand.  One such area is the Hutt Valley, where we recently
announced the purchase of land from Boulcott's Farm Heritage Golf Club.  This
land will become home to over 200 people, and many of the apartments will
have views over the golf course.  This site is well located in the Hutt, with
easy access to the hospital and shops. We are beginning the resource consent
process for this site now.

Summerset is a place that we want people to be able to call home, where they
can enjoy a vibrant community. I know that if it was my mother or father that
they would want a place where they can be independent, but that good quality
care is available nearby when it is needed.

We have a clear vision of where we want to be and what will differentiate a
Summerset home from other retirement villages.

And there's a growing awareness among our customers of what makes us
different. We stand and fall on the strength of the Summerset brand - which
is why we take such care to ensure that what we do and how we do it, is of
the best possible quality across all of our villages.

Our focus is always on the people who choose to live and work in our
villages. Our residents make our company great. What we say at Summerset is
"we love the life you bring to our village and we are privileged to share the
next stage with you".  We are always trying to learn from our residents how
we can continue to make their lives as good as they possibly can be. This
helps us to provide the best product we can to them.

And our staff  work hard every day, to make the desires, needs and dreams of
our residents come true.

We see ourselves as the solution to both the public question of how we look
after people as they age and the individual's quest to continue to live life
to the full.  We are the quiet achiever, who is well placed for further
growth and I thank you for recognising that.

After our first full year as a listed company our results prove that we have
a very bright future ahead. We think this is just the beginning - and our aim
for the next year is to show you that there is much more potential ahead.

Thank you to the Summerset team for all of your hard work in 2012. Our
strength comes from our people and their commitment to provide exceptional
service to this company.

And to our shareholders - we are confident that over the next few years we
can continue to grow and together achieve great things.  Thank you once again
for coming today.

ENDS

For investor relations enquiries:

Julian Cook
Chief Financial Officer
[email protected]
04 894 7310 or 029 894 7310

For media enquiries:

Tristan Saunders
General Manager, Sales and Marketing
[email protected]
04 894 7313 or 029 894 7313
End CA:00235666 For:SUM    Type:ADDRESS    Time:2013-04-30 13:00:04