SUM
11/08/2015 08:31
HALFYR
PRICE SENSITIVE
REL: 0831 HRS Summerset Group Holdings Limited
HALFYR: SUM: Financial Results for the Half Year Ended 30 June 2015
NZX, ASX AND MEDIA RELEASE
11 AUGUST 2015
UNDERLYING PROFIT UP 81% AND INCREASED BUILD RATE FOR FY16
o Underlying profit for 1H15 NZ$17.1m, up 81% on 1H14
o Net profit after tax of NZ$35.7m, up 134% on 1H14
o Total assets of NZ$1.2b, up 26% on 1H14
o 270 total sales of occupation rights, up 38% on 1H14
o 141 new retirement units delivered
o Interim dividend of NZ 1.85 cents per share announced
o Development margin of 18.4%, up from 15.7% for FY14
o FY16 build rate target increased to 400 retirement units, up from 300 for
FY15
Retirement village operator Summerset Group Holdings Limited has announced
underlying profit of NZ$17.1 million for the half year to 30 June, up 81% on
the same period last year.
Net profit after tax for the first half of 2015 was NZ$35.7 million, an
increase of 134% on the same period last year. This figure includes
unrealised valuation gains of NZ$17.6 million in the fair value of investment
properties, land and buildings.
Summerset's operating cashflow has grown to NZ$66.5 million for the half
year, up from NZ$36.5 million for the six months to June 2014. The total
value of assets also grew to NZ$1.2 billion, 26% higher than 1H14.
"The trading period for the six months to June 2015 has been positive. We
have seen record sales of occupation rights and profit, as well as an
increased number of retirement units delivered," said Summerset chief
executive officer, Julian Cook.
"Summerset is experiencing good demand across the country for our living and
care options. We are delighted to see more people are choosing us and that
what we provide is highly regarded by our residents, with Summerset receiving
a 97% customer satisfaction rating from retirement village residents and an
industry-leading 93% rating from care centre residents and their families. We
are firmly committed to being a high quality operator providing great service
to our residents.
"A large contributor to the growth seen in this period relates to the four
new villages opened in the second half of 2014. We are very much focussed on
continuing to expand our offering around the country and to continue to find
ways to improve in service delivery for residents. The company is well
funded, has a good land bank in place for future growth and is well
positioned to continue to meet the living, community and care needs of the
growing number of older New Zealanders," Mr Cook says.
New sales of occupation rights increased 52% on the first half of 2014.
Resales of occupation rights were also high, with a 22% increase on the same
period last year.
The company built 141 retirement units in the first six months of 2015 across
six sites. In the second half of this year Summerset will open its Wigram
village, its first in Christchurch and the 20th village for the Group.
Construction has commenced in Ellerslie, which will become the Group's 21st
village. It will also open a village centre and a care centre in its Karaka
and New Plymouth villages, as well as a care centre in its Katikati village.
A development margin of 18.4% was achieved in this six-month period, up from
15.7% over the 2014 year. This exceeds the company's target development
margin of 17% which was indicated when Summerset listed on the NZX in
November 2011. This target has been achieved one year earlier than expected.
"This result is especially pleasing as we have been able to achieve it while
maintaining the highest standards and level of quality for our retirement
units. Based on the gains we have made to date and further gains which we
expect to be realised, we believe there is potential for the development
margin to further increase to around 20% over time," Mr Cook said.
Summerset's recent acquisitions of three Auckland land sites in St Johns,
Parnell and adjacent to the existing village in Warkworth also put the
company in a strong position to meet increasing demand across the Auckland
region.
"Our strong sales of occupation rights, the range of new sites and increased
efficiency through the in-house management of the development and
construction process has increased the rate at which we can expand," said Mr
Cook.
Summerset has also announced updated guidance to its build rate, raising its
target for FY16 and beyond to 400 retirement units per annum, up from 300 in
FY2015. This represents an increase of 60% on the FY16 build rate guidance of
250 units given at time of IPO in November 2011.
To fund this increased growth rate, Summerset has secured additional bank
funding lines, increasing these from NZ$255 million to NZ$450 million.
"Our debt at 30 June was NZ$160 million. We do not expect to draw the full
amount but believe it is prudent for the business to have additional funding
lines over and above what we expect to utilise. We are confident that the
business will remain prudently geared as we are seeing strong growth in
earnings and the business' equity position," Mr Cook said.
"Looking ahead to the second half of 2015 we anticipate trading conditions
broadly in line with the first half of this year and are on track to deliver
our target of 300 retirement units in 2015.
"With the opening of our Wigram village and three new care centres, we will
also see some additional costs associated with the start-up stage of these
facilities falling in the second half of 2015."
Last month Summerset provided earnings guidance for the 2015 year, advising
that underlying profit is forecast to be in the range of NZ$32 million to
NZ$34 million. The Board of Directors reaffirms this guidance at this time.
The Board has declared an interim dividend of NZ 1.85 cents per share, to be
paid on 7 September. The dividend policy remains 30% to 50% of underlying
profit for the full year period. As previously indicated, dividend payments
are likely to continue to be at the bottom end of this range given the growth
opportunities present for the business at this time.
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:00268186 For:SUM Type:HALFYR Time:2015-08-11 08:31:55
