Summerset lifts fourth-quarter sales 31% as strong resales bolster annual figure
Summerset Group lifted fourth-quarter sales by 31 percent, setting a quarterly record for the retirement village operator and developer, due largely to a jump in the resale of occupation rights.
The Wellington-based company increased sales of occupation rights to 204 in the three months ended Dec. 31 from 156 a year earlier, of which new sales were flat at 106 while resales almost doubled to 98. That took annual sales to 682, a 3.6 percent gain from 2016, of which new sales shrank 7.7 percent to 382 while resales rose 23 percent to 300.
"The fourth quarter saw the highest new sales quarter of the year and we also saw high demand for resale units which contributed to the strong result," chief executive Julian Cook said in a statement. "We continue to see good demand for our retirement units and presales and waitlist levels both continue to track positively."
Last month Summerset raised annual earnings guidance on the strength of resale volumes and margins, projecting underlying profit of between $77 million and $79 million in calendar 2017, up from a previous forecast of $72 million-to-$75 million. Summerset's 2016 underlying earnings, which strips out property revaluations, rose 50 percent to $56.6 million.
Summerset has 22 retirement villages completed or in development across the country. It also has seven development sites in different parts of the country and provides a range of living options and care services to more than 4,400 residents.
The shares last traded at $5.52 and are up 19 percent from a year earlier.