Summerset lifts unit build rate, increases bank funding
Summerset Group, the rest-home operator whose shares have jumped 49% this year, says it has lifted its long-term annual build rate for new retirement units and agreed to an increase in its bank facilities to help fund the expansion.
The Wellington-based company is now aiming to build 300 units a year by 2015 compared to a target in the prospectus for its initial public offering last year of 250 units a year by 2016.
Summerset has increased its banking facilities by $30 million to $180 million and says it does not plan to tap shareholders for more funds to expand.
The shares last traded at $1.97, valuing the company at $427 million. They are rated a "hold" based on the consensus of four recommendations compiled by Reuters, with a price target of $1.95.
The company says it is on track to deliver its IPO forecast of 155 retirement units in the 2012 financial year and now plans to build at least 200 in the 2013 financial year. It currently has 1554 units.
"Our strong sales of occupation rights, range of quality 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," chief executive Norah Barlow says in a statement.
The company also says it has bought a 3.8ha development site in the Auckland suburb of Ellerslie which will become its 19th retirement village.