SUM
24/02/2015 08:40
FLLYR
PRICE SENSITIVE
REL: 0840 HRS Summerset Group Holdings Limited
FLLYR: SUM: Financial Results for the Year Ended 31 December 2014
NZX, ASX & MEDIA RELEASE
24 FEBRUARY 2015
SUMMERSET REPORTS RECORD UNDERLYING PROFIT, UP 10%
- Underlying profit for FY14 of NZ$24.4 million, up 10% on FY13
- Net profit after tax of NZ$54.2 million, up 58% on FY13
- Total assets reach NZ$1.0 billion, up 23% on FY13
- Net operating cash flow of $110.4 million, up 25% on FY13
- Total sales of occupation rights up 14% on FY13
- 261 retirement units delivered, 25% increase on FY13 delivery
- 2014 final dividend of NZ 2.1 cents per share announced
Retirement village and aged care operator Summerset Group today announced
underlying profit for the 2014 financial year of NZ$24.4 million, a record
for the company.
The 10% increase on the prior year reflects another year of continued strong
growth for the company, which has 20 villages across New Zealand, as well as
three quality land sites.
Net profit after tax for FY14 was NZ$54.2 million, 58% higher than FY13. This
figure includes unrealised valuation gains in the fair value of investment
properties and land and buildings.
The value of the company's total assets has grown 23% to NZ$1.0 billion, up
from NZ$845 million in 2013, reflecting the significant growth in the
business.
Chief Executive Officer Julian Cook said 2014 was a year of investment in
future growth.
"In 2014 we celebrated completion of our 2,000th retirement unit, and now
have over 3,000 residents living with Summerset. We have seen a record profit
and strong increase in development margins across the group in 2014. We have
opened four new villages in Karaka, Hobsonville, New Plymouth and Trentham
(village extension), and had three new care centres in Nelson, Dunedin and
Hamilton. We delivered 261 retirement units across the country, up from 209
in the prior year.
"Overall we are happy with the profit growth of 10% on the prior year,
particularly as this was achieved whilst opening four new villages and three
new care centres. We expect the level of investment in 2014 to support a
higher level of earnings growth in the future."
The company saw its fourth year of record occupation right sales, with a 25%
increase in the new sales of occupation rights in 2014. Gross new sales of
286 retirement units saw sale proceeds reaching more than NZ$106 million.
This compares with gross new sales of $79 million in FY13, a 34% increase.
Mr Cook said demand was strong across the portfolio of villages. Summerset
was working to meet that demand by supplying new retirement units quickly and
had brought development forward in a number of cases. Mr Cook said the
company was well placed to achieve its target of building 300 retirement
units in FY15.
The development margin on new retirement units sold increased to 15.7% in
2014, up from 13.2% in the prior year. Development margin achieved in the
second half of the 2014 financial year was 16.6%.
"We expect to meet or exceed the development margin target of 17% in the 2015
financial year. This is earlier than we had forecast at the time of our IPO
and is driven by better than expected results of in-house development and our
continuing reputation as one of New Zealand's leading retirement village
operators," Mr Cook said.
During 2014, Summerset received resource consent approval for its Ellerslie
and Wigram villages, and commenced construction on its Wigram site. An
extension of the existing Karaka site was also announced.
Summerset is working through the planning process for its Lower Hutt village
at Boulcott, as well its Casebrook site in Christchurch, which will make a
strong contribution to the city's rebuild. These new sites all contribute to
Summerset's land bank of around 1,900 retirement units and 550 care beds.
Summerset is also examining potential new sites across the country.
Mr Cook said Summerset's care offering was a key focus for the company.
"The strength of our care offering is central to our ability to meet the
needs of our residents and make a positive difference in their lives.
"In 2014 we received a 97% resident satisfaction rating in our villages, and
a 93% rating from our care centre residents and their families. These are
industry-leading results but we are always seeking ways in which we can
improve.
"We are always focusing on enhancing quality in our care offering. To this
end, the Board has established a Clinical Governance Committee, and we have
also continued to strengthen our quality control, internal audit, clinical
oversight and education programmes.
"Our staff all play a key part in making a real difference in the lives of
our residents. Last year Summerset increased caregiver wages by between 2.4%
and 7.5%, with the higher increases rewarding staff for training and
qualifications gained throughout the year. All caregivers with qualifications
higher than the entry level received pay increases averaging 7%. This was
well above the increase in government funding in the sector. We are committed
to being an industry leader in terms of the quality of care we offer," he
said.
Summerset chairman Rob Campbell said Summerset continued to grow and perform
strongly.
"Demand for our villages is strong across the country and our ability to
continue to deliver against this demand, as shown by this year's results,
means we are well set up for ongoing future success.
"Summerset is strongly positioned as a major force in this rapidly growing
sector, playing a leading role in providing vibrant communities, support and
care to older New Zealanders."
Summerset has announced a final 2014 dividend for shareholders of 2.1 cents
per share. This brings the total dividend payment for FY14 to 3.5 cents per
share, and a total of $7.6 million. The dividend reinvestment plan will apply
to the FY14 final dividend, with a discount of 2% applicable to those
shareholders participating in the plan.
ENDS
For investor relations enquiries:
Scott Scoullar
Chief Financial Officer
[email protected]
04 894 7320 or 029 894 7317
For media enquiries:
Katy Sweetman
Senior Communications and Marketing Advisor
[email protected]
04 894 6993 or 027 601 2001
End CA:00261038 For:SUM Type:FLLYR Time:2015-02-24 08:40:18
