Announcement
FLLYR: SUM: Financial Results for the Year Ended 31 December 2018
08:32am
SUM
22/02/2019 08:32
FLLYR
PRICE SENSITIVE
REL: 0832 HRS Summerset Group Holdings Limited
FLLYR: SUM: Financial Results for the Year Ended 31 December 2018
NZX & ASX RELEASE
22 FEBRUARY 2019
21% FY18 UNDERLYING PROFIT GROWTH, TWO SITES ACQUIRED
o Underlying profit for FY18 of NZ$98.6 million, up 21% on FY17
o Net profit after tax of NZ$214.5 million, down 11% on FY17
o Total assets of NZ$2.8 billion, up 24% on FY17
o 640 total sales of occupation rights, down 6% on FY17
o 454 new retirement units delivered, up 1% on FY17
o Land bank total of 3,910 retirement units and 540 care beds
o Final dividend of NZ 7.2 cents per share
o Development margin of 33.2%, up from 27.3% for FY17
o New land acquired in Milldale and Waikanae
Retirement village operator Summerset Group Holdings Limited has announced a
net profit after tax for the year ending 31 December 2018 of NZ$214.5
million, down 11% on FY17.
Underlying profit, which excludes the impact of unrealised movements in the
fair value of investment property was NZ$98.6 million, up 21% on the same
period last year. Annual growth in underlying profit has averaged 43% in the
seven years since the company listed on the NZX in November 2011.
Summerset CEO Julian Cook said "Summerset's performance continues to be sound
with the 21% growth in underlying profit achieved in an environment where
property price growth in key markets such as Auckland has moderated compared
to prior years. This reflects good progress made throughout the business and
the consistent demand for what we offer residents."
Net profit after tax was NZ$214.5 million, down 11% on the previous year,
impacted by the fair value movement on investment property. The lower fair
value movement versus the corresponding period in 2017 largely reflects the
more moderate property market in some areas of the country.
Mr Cook said Summerset was the fastest growing retirement village operator in
New Zealand. "In 2018 we built 454 new homes, in line with our guidance of
450 retirement units. This made Summerset the largest builder in New Zealand
of retirement units in the 2018 financial year. This has never been a goal of
the company but is indicative of the strong growth in the business since
listing."
"In 2018 we completed villages in Wigram, Trentham, Katikati and Karaka. In
2019, we will continue construction work on our Ellerslie, Hobsonville,
Rototuna, Casebrook, Richmond, and Avonhead villages, and commence
construction in both Kenepuru, Wellington and Te Awa, Napier."
Summerset now has 25 villages completed or in development, and a land bank of
nine properties, including two new land purchases. The new sites are in
Milldale, north of Auckland and Waikanae on the Kapiti Coast, north of
Wellington.
Mr Cook said the new sites are in areas with strong demographics and he
expects the villages to be popular.
[See attached table]
Summerset's care business continued its strong performance over 2018 with
occupancy at 96.5% in established care centres. Resident satisfaction was
also steady at industry-leading levels of 97% for care residents and 95% for
retirement village residents. This satisfaction result was independently
reviewed by KPMG.
Mr Cook said Summerset started work this year to become New Zealand's first
retirement village operator with Dementia Friendly Accreditation.
Summerset has partnered with Dementia New Zealand and has a three year
programme to help educate New Zealanders about dementia, and to reduce the
stigma of having the degenerative brain disease.
Mr Cook said he was also pleased with the higher retention rate for staff
this year, given traditionally high levels of turnover in the aged care
industry.
"We are continuing to invest in our people and in the technology they use,"
he said.
"All of our village staff are now using VCare, a resident management system
on iPads. This allows them to see vital resident information at the touch of
a button, and provides much improved data which we analyse for trends and
improvements."
Staff engagement increased again to 69% in 2018. This puts Summerset in the
top quartile of the Aon Hewitt engagement survey which includes around 700
companies in New Zealand and Australia.
Looking ahead, Mr Cook said Summerset's focus in 2019 will be to continue
delivering high quality retirement living around New Zealand, and to further
plans to set up across the Tasman.
"We've continued to progress in Australia and are now seeking land
opportunities. We are mindful of the property market conditions in the wider
Melbourne area, which is our main area of interest. We will apply the
appropriate safety buffers to our financial feasibilities on any sites
acquired. We believe underlying demand for quality retirement village and
aged care is strong. Any site we acquire now would not be selling retirement
units until two to three years from now, by which time property market
conditions will most likely have improved," Mr Cook said.
The board has declared an unimputed final 2018 dividend of NZ 7.2 cents per
share. The record date will be Friday 8 March 2019 and the payment date
Thursday 21 March 2019. This brings the total dividend payment for 2018 to
NZ 13.2 cents per share, up 20% on 2017. The dividend reinvestment plan will
apply to the dividend, with a discount of 2% applicable to those shareholders
participating in the plan.
ENDS
For investor relations enquiries:
Scott Scoullar
Deputy CEO and CFO
scott.scoullar@summerset.co.nz
04 894 7320 or 029 894 7317
For media enquiries:
Jenny Bridgen
Communications Manager
jenny.bridgen@summerset.co.nz
04 830 1106 or 021 408 215
End CA:00330947 For:SUM Type:FLLYR Time:2019-02-22 08:32:34
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