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Summerset lifts annual sales 14%

Suze Metherell
Mon, 12 Jan 2015

Summerset Group Holdings [NZX: SUM], the retirement village operator, lifted sales of annual occupation rights 14 percent last year, while its fourth quarter new sales rose to a record after opening four rest homes in the second half of 2014.

Overall, there were 458 sales in the year ended December 31, up from 402 a year earlier, the Wellington-based company said in a statement.

New sales rose 25 percent to 286 while resales slipped to 172 from 174 a year earlier.

In the last quarter of the year total sales rose 47 percent to 458, from a year earlier, a slightly slower pace than the 50 percent gain the company reported in the same quarter a year earlier. New sales rose 88 percent to 113, a record quarterly high, the company said. Resales were unchanged at 51.

"We had four new villages contributing to new sales results in the second half of 2014, with openings in Karaka, Hobsonville, New Plymouth and the Trentham extension," chief executive Julian Cook said.

"Sales momentum for new retirement units over the first quarter of 2015 remains strong, though we do not expect the sales outcome to be at the levels seen this quarter due to the timing of new village openings."

Retirement village companies are acquiring land and preparing for a record building spree in anticipation of increased demand as people born in New Zealand's post-war era start to reach the target age for operators, including Summerset and its larger rivals Ryman Healthcare and Metlifecare.

Last month Summerset was granted resource consent for its $80 million Wigram village, its first in Christchurch, where it says there is a shortage of rest homes.

Shares of Summerset last traded at $2.87 and the stock has fallen some 20 percent in the past 12 months, underperforming the NZX 50 Index's 16 percent gain over the same time. The company is rated an average of 'buy' based on six analysts surveyed by Reuters, with a median price target of $3.40.


Suze Metherell
Mon, 12 Jan 2015
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Summerset lifts annual sales 14%