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Summerset sales on cusp of beating annual IPO target

BUSINESSDESK: Summerset Group, the retirement village operator and developer, is on the cusp of beating forecast annual sales of occupation rights after just nine months of the financial year.

The Wellington-based company increased new sales of occupation rights 41% to 86 in the three months ended September 30 from the same quarter a year earlier, it says.

That has taken year-to-date sales to 257, one short of the annual target in its prospectus. New sales rose 46% to 41 in the quarter and resales climbed 36% to 45.

"Sales within the group continue to the strong," chief executive Norah Barlow says. "Our recent first-half results reflected this and we are pleased to see the momentum continue."

The quarter built on 83 new sales of occupation rights for gross proceeds of $28.8 million and 88 resales, realising gains of $4.2 million.

Ms Barlow expects the company will beat its initial public offering forecast of net profit of $13.3 million and underlying earnings of $9.7 million in calendar 2012.

The shares were unchanged at $1.95 in trading today and have climbed 46% this year. The stock is rated an average "hold" based on four analyst recommendations compiled by Reuters, with a median target of $1.925.