SUM - Summerset Group

[winner69]

Yup, you know what it is time for. Another picture!

Nice picture mate

[couta1]

Yup, you know what it is time for. Another picture! Nice pic, now where has Balance run off to now that we can see the sky isn't falling.Lol

[winner69]

Nice pic, now where has Balance run off to now that we can see the sky isn't falling.Lol

Even Aucklands median price increased in March from February

[James108]

Sales volumes dropped, not going to help Summerset sell units.

[winner69]

That Julian guy needs to take a leaf out of Luxon’s book and not mention bad things ....he never should have muttered things like a ‘flat property market’ and ‘increased settlement times’ .....big mistake

Just excuses and not owning up to the real issue which was slack performance by his people ....a good tradesman never blames his tools and all that

A couple of demerit points at Julians annual review time I hope.

[winner69]

Sales volumes dropped, not going to help Summerset sell units.

Random variability mate

[James108]

I think there is a clear trend with slowing volume of sales. Summerset even lauded to longer settlement times.

[winner69]

I think there is a clear trend with slowing volume of sales. Summerset even lauded to longer settlement times.

But time to sell fell dramatically in March ...back to almost normal levels

[minimoke]

I think there is a clear trend with slowing volume of sales. Summerset even lauded to longer settlement times.That isnt a problem for people moving into retirement villages - gives them more time to sort through their clutter before the big move.

[Joshuatree]

"In Auckland, the number of properties sold in March fell by -18.2% year-on-year (from 2,451 to 2,006) – the lowest for the month of March since 2008." Need to keep our eye on Auckland as thats where it starts.

[winner69]

"In Auckland, the number of properties sold in March fell by -18.2% year-on-year (from 2,451 to 2,006) – the lowest for the month of March since 2008." Need to keep our eye on Auckland as thats where it starts.



Starting?

Looks like the number of sales has been declining for the last four years

Not my fault no labels on x-axis ...REINZ dont think them necessary

[Beagle]

Reuters Analysts look cheerful enough about SUM. https://www.reuters.com/finance/stocks/analyst/SUM.NZ

Thanks for the link.
So.. Underlying eps for 2018 was 43.7 cps
Average broker forecast for FY19 47.58 cps (growth 9%) - Forward PE 12
Average broker forecast for FY20 54.05 cps (growth 14%).

So.....after 7 years of vastly stronger (more than double) underlying earnings growth than RYM, forecast average growth is declining to RYM level's but SUM trades on ~ half the forward PE. SUM things continue to be nonsensical. Maybe after they have a full decade of growth SUM people will wake up and smell the coffee.

Obviously the "world is ending" in this so called cooling property market lol.

[couta1]

Thanks for the link.
So.. Underlying eps for 2018 was 43.7 cps
Average broker forecast for FY19 47.58 cps (growth 9%) - Forward PE 12
Average broker forecast for FY20 54.05 cps (growth 14%).

So.....after 7 years of vastly stronger (more than double) underlying earnings growth than RYM, forecast average growth is declining to RYM level's but SUM trades on ~ half the forward PE. SUM things continue to be nonsensical. Maybe after they have a full decade of growth SUM people will wake up and smell the coffee.

Obviously the "world is ending" in this so called cooling property market lol. It's all about the Gold Standard benchmark Beagle, nothing else matters remember.Lol

[Joshuatree]

Starting?

Looks like the number of sales has been declining for the last four years

Not my fault no labels on x-axis ...REINZ dont think them necessary

No ones fault W69 a bit slack ehh that x axis.
Auckland is the leading indicator of any price decline etc thats where it starts.Year on year prob more significant then month by month imo. Some surprisingly good stats there too.

[Beagle]

It's all about the Gold Standard benchmark Beagle, nothing else matters remember.Lol

The Couta1 relativity theorem...the GOLD standard :D Yeap, we're right towards the bottom of that range and I am happy to back my own analysis which says BUY, so how could we possibly both be wrong lol

[winner69]

No ones fault W69 a bit slack ehh that x axis.
Auckland is the leading indicator of any price decline etc thats where it starts.Year on year prob more significant then month by month imo. Some surprisingly good stats there too.

In many ways (economically at least) Auckland follows the rest of the country (often not a leading indicator). Theory goes that it takes a while for the real money in NZ (generated from the land eh c) to filter through to Auckland

Aucklanders are so up themselves they can’t see that. They hardly manufacture / make anything and essentially is the most unproductive part of the country. The Auckland economy is driven by services (like making coffee and hamburgers for other Aucklanders and spending time down the casino) and that is only after they have wasted hours sitting in traffic jams.

Jeez but they think they are the centre of the universe but don’t realise they only account for about 30% of the country’s economic activity. Never mind let them live in the dream world.

[winner69]

It's all about the Gold Standard benchmark Beagle, nothing else matters remember.Lol

Correct ...SUM and others will never trade at same multiples as RYM ...I repeat the never

And doesn’t RYM look cheap at these levels

[BlackPeter]

Amazing - if the SP keeps rocketing up with the current velocity (SP $5.80 as I type), we might be back at a $6 handle next week (or later today ;));

Just looked through the last handful of pages on this thread - and there are a lot of really negative and fear mongering posts (I won't call names) accompanying the recent spike downwards. Some read like doomsday is nigh.

Just wondering whether the people who sold out at or slightly above $5.50 are still happy with their decision? Did the fear mongering on threads like this have anything to do with their decision?

For all of us (but particularly for any newbies) an outstanding lesson to take anything said here with a ton of salt ... and yes, while all of us make mistakes - some are particularly good in turning any market jitter into a share market crash!

Ah yes - and obviously the famous Buffett saying "Be greedy when others are fearful" still applies.

Obviously (for the traders amongst us) the current uptrend still might turn into a "dead cat bounce", but for investors I think the fundamentals look pretty convincing at the current price.

Discl: happy holder;

[Beagle]

Amazing - if the SP keeps rocketing up with the current velocity (SP $5.80 as I type), we might be back at a $6 handle next week (or later today ;));

Just looked through the last handful of pages on this thread - and there are a lot of really negative and fear mongering posts (I won't call names) accompanying the recent spike downwards. Some read like doomsday is nigh.

Just wondering whether the people who sold out at or slightly above $5.50 are still happy with their decision? Did the fear mongering on threads like this have anything to do with their decision?

For all of us (but particularly for any newbies) an outstanding lesson to take anything said here with a ton of salt ... and yes, while all of us make mistakes - some are particularly good in turning any market jitter into a share market crash!

Ah yes - and obviously the famous Buffett saying "Be greedy when others are fearful" still applies.

Obviously (for the traders amongst us) the current uptrend still might turn into a "dead cat bounce", but for investors I think the fundamentals look pretty convincing at the current price.

Discl: happy holder;

Good post. A number of posters have been posting their opinion on the future, (in an extremely assertive manner) as though this is already a confirmed historical fact but they've gone very quiet lately.

[winner69]

Amazing - if the SP keeps rocketing up with the current velocity (SP $5.80 as I type), we might be back at a $6 handle next week (or later today ;));

Just looked through the last handful of pages on this thread - and there are a lot of really negative and fear mongering posts (I won't call names) accompanying the recent spike downwards. Some read like doomsday is nigh.

Just wondering whether the people who sold out at or slightly above $5.50 are still happy with their decision? Did the fear mongering on threads like this have anything to do with their decision?

For all of us (but particularly for any newbies) an outstanding lesson to take anything said here with a ton of salt ... and yes, while all of us make mistakes - some are particularly good in turning any market jitter into a share market crash!

Ah yes - and obviously the famous Buffett saying "Be greedy when others are fearful" still applies.

Obviously (for the traders amongst us) the current uptrend still might turn into a "dead cat bounce", but for investors I think the fundamentals look pretty convincing at the current price.

Discl: happy holder;

The fundamentals haven’t really changed of late ..still quite good.

If you are so upset about those who do the ‘fearmongering’ and putting out ‘negative stuff’ you should talk to the man himself ...Julian Cook started it all with his ‘flat market’ talk.

[Beagle]

The fundamentals haven’t really changed of late ..still quite good.

If you are so upset about those who do the ‘fearmongering’ and putting out ‘negative stuff’ you should talk to the man himself ...Julian Cook started it all with his ‘flat market’ talk.

To be fair he singled out Auckland and Chch http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/332995/297965.pdf

[winner69]

BlackPeter

....

Just looked through the last handful of pages on this thread - and there are a lot of really negative and fear mongering posts (I won't call names) accompanying the recent spike downwards. Some read like doomsday is nigh.

Etc etc
....


Go on, be a man and ‘call names’

[Balance]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12221621

"Unsold stock and new listings have ballooned."

Simple - prices are going to continue to drop to meet demand.

[Balance]

Those worried that the Auckland market is in decline might want to read this http://www.sharechat.co.nz/article/8015edf7/auckland-housing-market-rears-its-head-as-sale-prices-new-listings-pick-up-in-august.html?utm_medium=email&utm_campaign=Auckland%20housing%20market%20rears%2 0its%20head%20as%20sale%20prices%20new%20listings% 20pick%20up%20in%20August&utm_content=Auckland%20housing%20market%20rears%20 its%20head%20as%20sale%20prices%20new%20listings%2 0pick%20up%20in%20August+CID_64c7e1e198bc4b5ffa4e1 f12e6faa0cb&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8015edf7auckla nd-housing-market-rears-its-head-as-sale-prices-new-listings-pick-up-in-augusthtml
Labour has already stated that the family home will be exempt from any possible future CGT. I think SUM people, (perhaps currently shut out of the real estate market due to unaffordability) are getting a little over optimistic with their hopes for a 10-15% decline. Besides that if they campaign the next election on the basis of a CGT that's the end of this government's term of "governance"

Hmmmm.....

"Auckland's property market showed signs of waking up from an extended lull in August as sale prices, turnover and new listings all increased, says realtor Barfoot & Thompson."

The ole 'one swallow does not a thirst quenched' comes to mind.

Or is it ' a swallow does not a summer make'? :p

[Balance]

Very cheap rate to lock in funds for 7 years. Plenty of financial grunt to undertake their Australian expansion now and pursue strong growth on both sides of the Tasman :t_up:
Forward PE only 16.5 and average earnings growth rate of 45% since listing and SUM people think its expensive against a forward market PE in the low 20's...go figure.
Some people still don't grasp the very basics of sound investing where the PE is less than the growth rate. https://en.wikipedia.org/wiki/PEG_ratio
Disc: Looking to add SUM more on any slight pullback.

All the bravado talk and then, sp fell from $7.50 + and has kept falling.

Who was right and who was wrong?

All in perspective and all relative to what one wrote before?

[minimoke]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12221621

"Unsold stock and new listings have ballooned."

Simple - prices are going to continue to drop to meet demand.I think it more likely that Auckland is simply in the process of reverting back to norm, rather than the bubble it was in. (Ahh - those were the days when you went to work for the day and your house had gone up more in value that you could earn in a month!)

[winner69]

OMG the most pessimistic of bank commentators Dominic from Westpac sayingbthey have revised UPWARDS their forecast of property price growth to 3.9% for 2019

Hope he’s not ramping something ....newbies might fall for it

https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/New_Zealand/2019/April_2019/NZ_Home_Truths_April_2019.pdf

[winner69]

To be fair he singled out Auckland and Chch http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/332995/297965.pdf

‘flat’ is a rather subjective term .....I get the impression that he only said that for the sake of saying something to explain not so good performance

[couta1]

‘flat’ is a rather subjective term .....I get the impression that he only said that for the sake of saying something to explain not so good performance Yes we'll ,laying flat on the ground is not the same as being flattened by a steamroller.

[Baa_Baa]

Hmmmm.....

"Auckland's property market showed signs of waking up from an extended lull in August as sale prices, turnover and new listings all increased, says realtor Barfoot & Thompson."

The ole 'one swallow does not a thirst quenched' comes to mind.

Or is it ' a swallow does not a summer make'? :p

http://www.stuff.co.nz/business/111988090/auckland-house-sales-fall-nearly-20-per-cent-as-market-stalls?cid=app-iPhone

[Balance]

http://www.stuff.co.nz/business/111988090/auckland-house-sales-fall-nearly-20-per-cent-as-market-stalls?cid=app-iPhone

You have to include this posting from September 2018 to put things in perspective!



Those worried that the Auckland market is in decline might want to read this http://www.sharechat.co.nz/article/8015edf7/auckland-housing-market-rears-its-head-as-sale-prices-new-listings-pick-up-in-august.html?utm_medium=email&utm_campaign=Auckland%20housing%20market%20rears%2 0its%20head%20as%20sale%20prices%20new%20listings% 20pick%20up%20in%20August&utm_content=Auckland%20housing%20market%20rears%20 its%20head%20as%20sale%20prices%20new%20listings%2 0pick%20up%20in%20August+CID_64c7e1e198bc4b5ffa4e1 f12e6faa0cb&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8015edf7auckla nd-housing-market-rears-its-head-as-sale-prices-new-listings-pick-up-in-augusthtml
Labour has already stated that the family home will be exempt from any possible future CGT. I think SUM people, (perhaps currently shut out of the real estate market due to unaffordability) are getting a little over optimistic with their hopes for a 10-15% decline. Besides that if they campaign the next election on the basis of a CGT that's the end of this government's term of "governance"

[Snow Leopard]

Yup, you know what it is time for. Another picture!

So if I ever come back to live, it looks like I will be a Coaster :eek2:

[peat]

my goodness what a lot of banter since a couple of days ago when I last looked!

me. I couldnt resist picking up SUM more at 5:50 the other day, not a full load, but SUM.

[Beagle]

Post #6886 - Been mulling that over this past week or so. No denying that sales have under-performed new build since Q4 last year. Julian Cook is confident of a big Q4 and building 450 units.
I am not especially confident they will sell any more than the ~ 380 they sold last year even with a big Q4. Why are new sales an issue ? We hear the much talked about multi level construction being an issue but one wonders a little seeing as their development margin has expanded to 33% whether they're simply asking too much for some of these new units ?

One could also ponder whether with the royal commission of enquiry going on in Australia and some real negative momentum in Melbourne and Sydney real estate prices whether this is the right time to be spending serious money looking at expanding into Australia ?

macduffy - resales benefiting from the fact that as whole the company has more existing stock to resell, (450 new units built last year). New sales continue to underwhelm but according to Julian Cook its all going to be solved in Q4....we'll see.

Shares have enjoyed a big run this year up 50% from $5.00 in December 2017 against a backdrop of sales underperforming since then. I took some money off the table regarding SUM today. Not because its a bad company fundamentally per se but because I see OCA as a better opportunity. I do note that SUM broke down through its 100 day moving average today so from a TA perspective that's not good. I think RYM are extremely overpriced at the current price and SUM probably fair value but questions about SUM's ability to push through consenting on difficult sites, first Boulcott and now issues with ST John's have me scratching my head a bit.

Why on earth would they propose a 7 level retirement village at St John's when the maximum height there is 3 level's ? In light of OCA's brilliant track record of obtaining consents, see post #2022 on OCA thread, I have been reflecting upon SUM's chequered track record a little lately.

Posted 8/10/2018 - Obviously one Balance missed in his Friday afternoon trolling of old posts I've made. Get a life mate :p
They were a little overpriced in the late $7's and clearly underpriced in the mid $5's this week. Naturally I took the appropriate portfolio actions very close to the right time. I also picked the top for RYM at $14 last year.

[Beagle]

my goodness what a lot of banter since a couple of days ago when I last looked!

me. I couldnt resist picking up SUM more at 5:50 the other day, not a full load, but SUM.

That's what happens when SUM people start posting their opinion of the future as though its a historical fact and then desperately try and cover their butts lol

Congrats on your good timing, I also got my snout into SUM more.

[Balance]

Posted 8/10/2018 - Obviously one Balance missed in his Friday afternoon trolling of old posts I've made. Get a life mate :p
They were a little overpriced in the late $7's and clearly underpriced in the mid $5's this week. Naturally I took the appropriate portfolio actions very close to the right time. I also picked the top for RYM at $14 last year.

Troll?

Stuck out like the proverbial on a dog, mate!

Could not be more wrong about "Disc: Looking to add SUM more on any slight pullback." Sept 2018

[Beagle]

Troll?

Stuck out like the proverbial on a dog, mate!

Could not be more wrong about "Disc: Looking to add SUM more on any slight pullback." Sept 2018

Quarterly sales came out after that and significantly disappointed as noted above. Get with the program mate its not too late, Fisher Funds Management are http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/333327/298391.pdf

Where are all these new immigrants going to live Balance ? http://www.sharechat.co.nz/article/409d5c3d/feb-migration-may-signal-strengthening-inflows-asb.html?utm_medium=email&utm_campaign=Feb%20migration%20may%20signal%20stre ngthening%20inflows%20-%20ASB&utm_content=Feb%20migration%20may%20signal%20stren gthening%20inflows%20-%20ASB+CID_9d4efaf2681da2513bdf50666629d50d&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle409d5c3dfeb-migration-may-signal-strengthening-inflows-asbhtml

Net immigration up from ~ 51,000 per annum last year to ~ 61,000 people per annum. I suppose all these new people brought their own houses with them lol

[Snow Leopard]

my goodness what a lot of banter since a couple of days ago when I last looked!

me. I couldnt resist picking up SUM more at 5:50 the other day, not a full load, but SUM.

Mostly Beagle. Repetition personified!

[Beagle]

Mostly Beagle. Repetition personified!

Says the guy who has repeatedly posted 101 different ways the same message since 2004 that AIR are a very bad company.
Maybe that $1.80 you reckoned AIR were worth the other day was a typo and you meant to post $2.80 :p

[allfromacell]

It's great to see the region's continuing their resilience however Aucklands sales down just shy 20% on March last year and the HPI falling 0.5% in the last month is a concern. Until we see Auckland turn around I won't be celebrating.

[peat]

Mostly Beagle. Repetition personified!
not denying he doesnt reiterate
but a cursory glance does not support your analysis.

[Beagle]

Cat's and Dog's haven't been getting on since Adam was a boy lol

[winner69]

Had another look at that chart showing the number of Auckland house sales over the last five years

While numbers have been declining for about the last three to four years (the slow down hasn’t just started which is interesting) but the trend looks less sad of late (like the decline is slowing down) —that’s not too bad

Doesn’t suggest an impending property collapse in Auckland

[peat]

Had another look at that chart showing the number of Auckland house sales over the last five years

While numbers have been declining for about the last three to four years (the slow down hasn’t just started which is interesting) but the trend looks less sad of late (like the decline is slowing down) —that’s not too bad

Doesn’t suggest an impending property collapse in Auckland

triple bottom?
or descending triangle.
either way if it goes less than a thou, mollywoppy!

[winner69]

I wonder whether it's driven by accounting issues. A cash back might be accounted for as a selling expense and buried in other expenses. Dropping the price would impact the development margin and impact a key operational metric. So how was the development margin calculated on finished but empty units again? Is it on the estimated value less the cost of construction?

Probably is how it works ...important to maintain that development margin

Just take the amount of the cash back off the price would affect margin by a couple of percentage points

Sneaky eh

[Beagle]

Probably is how it works ...important to maintain that development margin

Just take the amount of the cash back off the price would affect margin by a couple of percentage points

Sneaky eh

So no big deal considering their development margin has grown steadily over the years from ~ 12% years 5-6 years ago to ~ 33% in 2018.

[Joshuatree]

It's great to see the region's continuing their resilience however Aucklands sales down just shy 20% on March last year and the HPI falling 0.5% in the last month is a concern. Until we see Auckland turn around I won't be celebrating.

I heard from a builder in tauranga today,he said all the big developer/ house builders have stopped building any more as buyers have dried up.

[value_investor]

I think what we are seeing now is a return to a more pedestrian and dare I say 'normal' property market that has been skewed to the higher end. Which might be a bit scary for some considering how it has been in the past few years and judging from share price a few cages have been rattled.

Well maintained and presented property in good areas will still sell as they are always going to be desirable places to live.

From SUMs point of view, they are a little bit insulated from it but not as much as OCA due mostly because OCA have care as part of their core competency while SUM does not. Hence why I have not added any SUM during this downturn but have on OCA. SUM is not needs based, care is.

[tuaman]

I think what we are seeing now is a return to a more pedestrian and dare I say 'normal' property market that has been skewed to the higher end. Which might be a bit scary for some considering how it has been in the past few years and judging from share price a few cages have been rattled.

Well maintained and presented property in good areas will still sell as they are always going to be desirable places to live.

From SUMs point of view, they are a little bit insulated from it but not as much as OCA due mostly because OCA have care as part of their core competency while SUM does not. Hence why I have not added any SUM during this downturn but have on OCA. SUM is not needs based, care is.

I think SUM is in a better position than OCA in the profitability of business.

We all know care business is very labour intensive business, nearly 50/50 patients/employee ratio.
Cost of employee has been increased sharply for the last couple of years (roughly more than 20%) but the govt has not increased the fee to compensate the cost. And I do not think they will pay the increase for some time or never as current govt's socialism. That is why OCA is changing their business focus to building/selling unit rather than increasing care bed.

Money is in selling units not caring patients. Good care can promote selling units but cost is also increase. That is why I think last OCA profit has dropped.
On the other hand, I think SUM's reduced sale will not affect their profit much because less sales means less seller fee.

I hold both of them plus MET in case, because I can not predict future and I do not want to miss opportunity when I am wrong.

[Beagle]

I heard from a builder in tauranga today,he said all the big developer/ house builders have stopped building any more as buyers have dried up.

A poor tradesman who can't find work always looks to lay blame somewhere else, something I have personally seen among clients and people I know many many times. I think we can take this anecdotal evidence with a grain of salt. Most projects take several years from design and consenting to implementation and the build out of larger projects so it seriously stretches plausibility that they all would stop operations all at once.

I think we have seen the bottom already. Fisher Funds announcing a substantial shareholder notice last week gives the clue that they see value here and with word on the street saying they have 270,000 clients and fresh money coming to the market every month with Kiwisaver and what with it being "so easy" to find high quality growth companies on compelling metrics...you think there might be a "slight" chance they will hoover up any more small panicking reef fish left ?

[peat]

Fisher Funds announcing a substantial shareholder notice last week gives the clue that they see value here

I looked in detail at their transactions in that announcement. It would appear they have no clue on value, buying at the top, selling on the way down. I couldnt find anything amongst those transactions to indicate a savvy investor!!
Still it may not be the whole picture.....

As you know I'm a holder but , I'm not at all sure FF's purchase represents useful information

[BlackPeter]

I looked in detail at their transactions in that announcement. It would appear they have no clue on value, buying at the top, selling on the way down. I couldnt find anything amongst those transactions to indicate a savvy investor!!
Still it may not be the whole picture.....

As you know I'm a holder but , I'm not at all sure FF's purchase represents useful information

Selling on the way down could be a great way for people with deep pockets to test the lows and fill up when they reached them ...

Market dynamics is different for big players - Just saying ...

[Beagle]

Thanks BP, well said. They're probably in for the long haul and playing the long game.

[winner69]

Thanks BP, well said. They're probably in for the long haul and playing the long game.

A year ago they ceased to be a SSH when holding went from 5.2% to 4.8%

Friday’s announcement essentially says they bought and sold since and gone to 5.1%

Just the ebb and flow of their daily/weekly/monthly trading in the larger companies on the NZX ....doesn’t signal a new found conviction for the SUM

You guys see all sort of things that aren’t really there

PS ...if you look back they’ve filed a few becoming and ceasing to
Be SSH over the last few years ...holding around 11 million shares

[Joshuatree]

I heard from a builder in tauranga today,he said all the big developer/ house builders have stopped building any more as buyers have dried up.

Very savvy this builder. He also mentioned one of the big builders ( and gave their name)was still going but building only to order , specs have stopped. Be wary.Check the downtrend, ugly.

[peat]

Market dynamics is different for big players - Just saying ...

Losing is losing though. Just sayin ;+)

And Beagle, I am in for the long game as well.



You guys see all sort of things that aren’t really there


I just think that any single institution buying shouldn't be interpreted necessarily as a positive indication for a stock. Some of them win and some of them lose. Thats not to say that several institutions wouldn't send a clearer signal.
Best signal of all is of course a rising price absolutely indicating that demand exceeds supply :cool:

[couta1]

Losing is losing but when it's not your money it's a little different. Just saying. PS-Losing is a learned art and as long as you make more than you lose by a reasonable amount, does it really matter at the end of the day?

[winner69]

Fisher have had SUM in their portfolio for many years. Makes up about 5% of their NZ portfolio. Interesting they have more invested in Ryman.

Once in their portfolio it’s all about weightings, ratios and watching the squiggly line on the chart while they do a bit of trading (hopefully to maximise/optimise returns)

They have no new conviction about SUM ...probably in their lingo ‘the investment case remains unchanged’

Funny enough if the SUM share price jumps too much they might do a bit more rebalancing and issue a CEASING TO BE A SUBSTANTIAL SHAREHOLDER notice .....jeez punters would be able to jump to conclusions and say omg Fisher Funds believe no more and have sold out.

[Beagle]

Got that yesterday with your post #7557.

[BlackPeter]

Fisher have had SUM in their portfolio for many years. Makes up about 5% of their NZ portfolio. Interesting they have more invested in Ryman.

Once in their portfolio it’s all about weightings, ratios and watching the squiggly line on the chart while they do a bit of trading (hopefully to maximise/optimise returns)

They have no new conviction about SUM ...probably in their lingo ‘the investment case remains unchanged’

Funny enough if the SUM share price jumps too much they might do a bit more rebalancing and issue a CEASING TO BE A SUBSTANTIAL SHAREHOLDER notice .....jeez punters would be able to jump to conclusions and say omg Fisher Funds believe no more and have sold out.

Fair enough - SUM is just an integral part of their growth fund, which is probably reason enough to hold some as well ;):

https://fisherfunds.co.nz/assets/company-profiles/Company-Profiles-KiwiSaver-Growth-Fund.pdf

BTW - great selection of companies ... only Abano looks a bit out of place.

Any buying / selling might just reflect how their clients are shifting money around (e.g. from growth fund to balanced fund to conservative and vs versa);

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/333427/298500.pdf
Their very latest monthly update released this morning might have some insights

Agree 100% BP. I can now disclose I have a significant number of Kingfish warrants. I would like SUM more but I have leaned not to let the cat out of the bag until at earliest, most of the buying is done.

[bull....]

failure to rise back above $6 this week will confirm the breakdown thru support in my analysis. watching for the CGT release soon this could have a big downside risk for these stocks

[BlackPeter]

failure to rise back above $6 this week will confirm the breakdown thru support in my analysis. watching for the CGT release soon this could have a big downside risk for these stocks

I don't think you understand CGT.

Why would you think that any form of CGT would impact on the retirement village providers?

[bull....]

I don't think you understand CGT.

Why would you think that any form of CGT would impact on the retirement village providers?

why because if they introduce a CGT on investment property it will affect the property market by reducing the sales as not as many buyers any more for property. history shows sustained drop in sales leads to lower property prices at some stage.

If anyone doesnt understand property market affects these stocks , i suggest you need to better understand them

[winner69]

why because if they introduce a CGT on investment property it will affect the property market by reducing the sales as not as many buyers any more for property. history shows sustained drop in sales leads to lower property prices at some stage.

If anyone doesnt understand property market affects these stocks , i suggest you need to better understand them

So true mate........and it doesn’t have to be a sustained drop in sales ...the relationship between sales and price intrinsically linked in short / medium term time frames as well

[BlackPeter]

why because if they introduce a CGT on investment property it will affect the property market by reducing the sales as not as many buyers any more for property. history shows sustained drop in sales leads to lower property prices at some stage.

If anyone doesnt understand property market affects these stocks , i suggest you need to better understand them

LOL - The US have a CGT - and property prices in New York are cheap? The UK has a CGT - but only the Brexit circus brought London property prices down. Australia has a CGT (since 1985) ... and yes, more than 30 years after introducing it Sydney property prices start to go down (but not due to the CGT).

Do you have any evidence to offer or is this just your usual down ramping?

[Scrunch]

I don't think you understand CGT.

Why would you think that any form of CGT would impact on the retirement village providers?

The effective tax rate of about zero percent for many retirement village operators means there is always a potential risk if tax laws change. If they build and own but don't sell a CGT based on realised sale profits shouldn't be a problem. The difficulty would be of the sale of occupation rights was classified in such a way it was considered a property sale but I wasn't aware of that being an option on the table.

[minimoke]

why because if they introduce a CGT on investment property There is already a CGT on investment property via the Brightline test.

[Beagle]

LOL - The US have a CGT - and property prices in New York are cheap? The UK has a CGT - but only the Brexit circus brought London property prices down. Australia has a CGT (since 1985) ... and yes, more than 30 years after introducing it Sydney property prices start to go down (but not due to the CGT).

Do you have any evidence to offer or is this just your usual down ramping?

Just his usual bull.

[bull....]

There is already a CGT on investment property via the Brightline test.

brightline is for a defined period after which it is tax free , CGT means you pay tax no matter how long you hold it. very big difference

CGT has very real implications

[BlackPeter]

The effective tax rate of about zero percent for many retirement village operators means there is always a potential risk if tax laws change. If they build and own but don't sell a CGT based on realised sale profits shouldn't be a problem. The difficulty would be of the sale of occupation rights was classified in such a way it was considered a property sale but I wasn't aware of that being an option on the table.

The effective tax rate for gains from retirement villages is not Zero - It is (as soon as it is paid out) as high as the individual tax rate of the share holder. No benefit for the state to shift this tax obligation to the company by creating a special "tax Ryman" or whatever.

Any CGT proposal I have seen so far is on realised gains - and retirement villages don't realise their gains unless they sell their property, which they don't do.

A licence to occupy is not attracting a capital gains tax - and even if it would - its owners lose money. No taxes due for that.

B/S

[LAC]

CGT will have an effect on property prices in the short term, make no doubt about that!
We will see very average property increases thereafter, unlike the crazy increases we have seen in the past. I have a property portfolio because of the advantages from owning it, it is hard work I must admit but there are advantages. At some point adding CGT and then the follow-on to removing the negative gearing.....then for me there will be advantage over owning property.

[bull....]

The effective tax rate for gains from retirement villages is not Zero - It is (as soon as it is paid out) as high as the individual tax rate of the share holder. No benefit for the state to shift this tax obligation to the company by creating a special "tax Ryman" or whatever.

Any CGT proposal I have seen so far is on realised gains - and retirement villages don't realise their gains unless they sell their property, which they don't do.

A licence to occupy is not attracting a capital gains tax - and even if it would - its owners lose money. No taxes due for that.

B/S

you miss the point , property prices fall or flat retirement company units must also reflect the market by falling or flatlining.

who cares if they hold them forever it not how they make there money

[winner69]

you miss the point , property prices fall or flat retirement company units must also reflect the market by falling or flatlining.

who cares if they hold them forever it not how they make there money

Short to medium term reaction to CGT will happen and likely to effect sales and thus price ...but market might settle down in a few years or so

[minimoke]

Here is some light reading on CGT implications for retirement Villages

https://taxworkinggroup.govt.nz/sites/default/files/2019-02/twg-bg-4074124-retirement-villages-and-capital-income.pdf

[BlackPeter]

you miss the point , property prices fall or flat retirement company units must also reflect the market by falling or flatlining.

who cares if they hold them forever it not how they make there money

You miss the point. The introduction of a CGT does not reduce property prices - If anything - it pushes them up.

I gave you a number of examples for countries with CGT and very high property prices, which proves that at least in these countries the introduction of a CGT did not cause property prices to drop. Actually - quite the opposite.

Can you give us examples for countries where property prices dropped due to the introduction of a CGT - or are you just talking about phantasy-land?

[bull....]

You miss the point. The introduction of a CGT does not reduce property prices - If anything - it pushes them up.

I gave you a number of examples for countries with CGT and very high property prices, which proves that at least in these countries the introduction of a CGT did not cause property prices to drop. Actually - quite the opposite.

Can you give us examples for countries where property prices dropped due to the introduction of a CGT - or are you just talking about phantasy-land?

rising property prices could be just to do with credit availability etc and not a cgt so of course it would look like a cgt had no effect in the long term.

[bull....]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12223054

Capital gains tax: Government announcement expected today

[Beagle]

Here is some light reading on CGT implications for retirement Villages

https://taxworkinggroup.govt.nz/sites/default/files/2019-02/twg-bg-4074124-retirement-villages-and-capital-income.pdf

Thanks minimoke. For time poor people here is the tax working group's preference

Group’s preference

If income tax is extended to gains on the sales of shares, the group’s preference is to do nothing particular for this industry as it will be fully taxed on its economic income albeit in a different way to other industries. A taxation of the gains on share sales will align New Zealand’s tax settings of this industry with Australia’s.

[BlackPeter]

rising property prices could be just to do with credit availability etc and not a cgt so of course it would look like a cgt had no effect in the long term.

If it looks like a duck and walks like a duck and quacks like a duck than, maybe - it is a duck :p;

CGT is an outstanding method to increase bureaucracy and compliance cost for everybody without increasing tax take, but there is no evidence at all that it ever reduced property prices.

Why do you keep warming up this old fairy tale? I am sure you know better.

[bull....]

Here is some light reading on CGT implications for retirement Villages

https://taxworkinggroup.govt.nz/sites/default/files/2019-02/twg-bg-4074124-retirement-villages-and-capital-income.pdf

thx minimoke

sums its up well .. this from report

) Unrealised revaluations of the value of the retirement villages. The underlying landand buildings are rarely if ever legally sold. The valuation change comes from apresent value of the expected cashflow from the occupancy advances (or interestfree loans).

they loss lots if cgt comes in

[minimoke]

thx minimoke


they loss lots if cgt comes inI'm have a Thicko Day and dont understand

[BlackPeter]

thx minimoke

sums its up well .. this from report

) Unrealised revaluations of the value of the retirement villages. The underlying landand buildings are rarely if ever legally sold. The valuation change comes from apresent value of the expected cashflow from the occupancy advances (or interestfree loans).

they loss lots if cgt comes in

Funny - I suppose you didn't read the link you posted? Otherwise you would have come across the groups recommendation:


Group’s preference
If income tax is extended to gains on the sales of shares, the group’s preference is to do
nothing particular for this industry as it will be fully taxed on its economic income albeit in a
different way to other industries. A taxation of the gains on share sales will align New
Zealand’s tax settings of this industry with Australia’s.
On this basis nothing particular to this industry needs to be discussed in the interim report.
If, however, such a change to the taxation of capital income does not occur this may need to
be reconsidered.

Nothing will change for them. Your down ramp was the usual proverbial.

[Beagle]

Funny - I suppose you didn't read the link you posted? Otherwise you would have come across the groups recommendation:

Nothing will change for them. Your down ramp was the usual proverbial.

Yeap, agree 100%. We hear you Bull but don't agree and its getting very tiresome. Get back to work on the positive ramping of GNE.

[couta1]

Bulls normal early morning cup of tea scaremongering. PS-Expecting a very weak cup of tea CGT announcement from the Govt.

[minimoke]

The other issue would be determining a base value on Valuation Day (which is clearly going to happen to our shares assuming CGT applies to shares., Which I assume it will since it is only the wealthy who hold this asset class and they need their wealth redistributed)

[bull....]

I'm have a Thicko Day and dont understand

findings say they make lots of there profits from re valuations , if property market not going up then no profits

[Bjauck]

findings say they make lots of there profits from re valuations , if property market not going up then no profits They found that the accounting profit, from which the unimputed dividends are paid, came from the cash gain in the sale of the occupation right after the previous occupier moved out. If the property market stagnates for an extended period this accounting profit may also be affected as the price for the occupation rights will stagnate too.

If any CGT exempts owner-occcupied principal residence, My opinion is that the long term effect of a CGT will have an upward effect on residential housing prices.

[Bjauck]

why because if they introduce a CGT on investment property it will affect the property market by reducing the sales as not as many buyers any more for property. history shows sustained drop in sales leads to lower property prices at some stage.

If anyone doesnt understand property market affects these stocks , i suggest you need to better understand them Home ownership rates have been falling. If investors move out of the market then pent-up demand from first home buyers and other owner-occupiers wishing to trade up may take-over.

With the recent boom in prices, it is easy to forget that, as well as first home buyers, many owner occupiers have been priced out of being able to trade-up the property ladder.

[Timesurfer]

Not sure you will see a great impact. The ones most likely to think twice are traders, investors may just decide they need to buy more houses to cover for the hit to their retirement fund.

[bull....]

Home ownership rates have been falling. If investors move out of the market then pent-up demand from first home buyers and other owner-occupiers wishing to trade up may take-over.

With the recent boom in prices, it is easy to forget that, as well as first home buyers, many owner occupiers have been priced out of being able to trade-up the property ladder.

be less houses for sale to first home buyers as people hold on to them for longer. unless the govt builds cheap sh.t

[Bjauck]

be less houses for sale to first home buyers as people hold on to them for longer. unless the govt builds cheap sh.t
In such a scenario:
In the short term even if there is a drop in the number of non-new properties on the market as a result of investors holding on to their properties (which may not happen as many may sell sooner rather than later, depending on initial price movements) that could well be balanced out by fewer new investors entering the market.

In the long term fewer investors in the market may mean more opportunity for owner-occupiers.

[Bjauck]

Not sure you will see a great impact. The ones most likely to think twice are traders, investors may just decide they need to buy more houses to cover for the hit to their retirement fund.
That is possible or maybe they will think it more worthwhile to diversify their retirement fund into other investments such as KiwiSaver and equities.

[bull....]

In such a scenario:
In the short term even if there is a drop in the number of non-new properties on the market as a result of investors holding on to their properties (which may not happen as many may sell sooner rather than later, depending on initial price movements) that could well be balanced out by fewer new investors entering the market.

In the long term fewer investors in the market may mean more opportunity for owner-occupiers.

your right probably be a certain number of people rush to beat a tax , probably depress prices in the short term at least

[macduffy]

No CGT!

Much ado about nothing.

[bull....]

No CGT!

Much ado about nothing.

lol except the people who got paid they are very happy

[winner69]

No CGT!

Much ado about nothing.

Even Couts with his ‘very weak cup of tea’ prognosis was wrong

Lot of brain power wasted on this thread ...maybe another time

[winner69]

No CGT!

Much ado about nothing.

Based on recent discussion THIS IS GOOD NEWS FOR SUM

[bull....]

oh no they might move on occupation rights still

But Ardern said the Government was looking at other areas where it could move to make the tax system fairer.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12223212

think i mentioned way back on the thread they were already doing work on lease arrangements also they are looking at changing home office deductions now to , my friend tells me

[mondograss]

They'll do some tinkering, possibly look at a land tax on undeveloped residential land to prevent land-banking, possibly a few other things. The TWG report made about 100 recommendations, so expect some of them to come through.

[bull....]

They'll do some tinkering, possibly look at a land tax on undeveloped residential land to prevent land-banking, possibly a few other things. The TWG report made about 100 recommendations, so expect some of them to come through.

winston just said short time ago they going after land bankers , does that mean even retirement operators or supermarkets will get caught from there land banking?

[BlackPeter]

winston just said short time ago they going after land bankers , does that mean even retirement operators or supermarkets will get caught from there land banking?

Absolutely not. What we however urgently would need is a tax on scaremongerers and downrampers! Maybe worthwhile a new working group?

[Beagle]

Absolutely not. What we however urgently would need is a tax on scaremongerers and downrampers! Maybe worthwhile a new working group?

:lol: Post of the Day !!!! Too funny, I nearly split my sides laughing :lol:

[bull....]

Absolutely not. What we however urgently would need is a tax on scaremongerers and downrampers! Maybe worthwhile a new working group?

haha just putting stuff out there , anyway ill be first on the grp if i get paid like cullen

[Blue Skies]

According to those who thought a CGT would depress the real estate market, we will see a swift re-rating upwards of the SUM & other retirement stocks SP's. That be nice :)

[mondograss]

winston just said short time ago they going after land bankers , does that mean even retirement operators or supermarkets will get caught from there land banking?

Possibly, they'll probably just empower local councils to apply some sort of levy against undeveloped land, but even then they'd have to allow some sort of grace period of a couple of years before applying it because it takes that long to get through resource consent. Possibly as long as you have a current resource consent you don't get pinged. It'll be something like that anyway.

[Blue Skies]

Looks like big lift in retirement stocks, immediate effect of that 2pm announcement on no CGT

[minimoke]

A bit of de-risking so it appears. up 3.9% on the day. (along with 2.9% for OCA)

[Scrunch]

And 3.8% for MET. They were fractionally down at 2pm.

[Beagle]

Hope Bull closed out his short position in the nick of time...we can't have our dear friend, (is he a likeable rogue or just a rogue...I really can't decide lol) being taken to the cleaners as natural justice for his tsunami of negativism can we...or can we :D

[winner69]

SUM share price just on 50% of the RYM shareprice

SUM valued about right v the gold standard

Just shows you that PE ratios aren’t a meaningful way of ‘valuing’ stocks in this sector.

[BlackPeter]

SUM share price just on 50% of the RYM shareprice

SUM valued about right v the gold standard

Just shows you that PE ratios aren’t a meaningful way of ‘valuing’ stocks in this sector.

Oh - No, how could you mix up "valuing" and "pricing"?

Market sets the price as it pleases. Price is what you pay.

Value is what you get (in this case with SUM a much nicer PE-ratio and much higher long term earnings).

I prefer value. A (sustainable) PE allows a quite good measure of the latter.

[winner69]

Oh - No, how could you mix up "valuing" and "pricing"?

Market sets the price as it pleases. Price is what you pay.

Value is what you get (in this case with SUM a much nicer PE-ratio and much higher long term earnings).

I prefer value. A (sustainable) PE allows a quite good measure of the latter.

As always you are right BP - the market sets the ‘price’ and ‘value’ is what you get

However ‘value’ is rather subjective and these days seems to be another word for ‘cheap’ or ‘undervalued’

So I got the words all mixed up (my bad) but what I was saying was that I think the current market ‘pricing’ of SUM around $6 is pretty spot on - if there is such a thing it’s about ‘correctly valued’ but not as the other meaning of ‘value’ implies ‘cheap’ at the moment.

I think PE ratios for retirement sector stocks are not appropriate for assessing ‘value’ - whether you are after an ‘intrinsic value’ or that subjective ‘value’ you talk about.

Like your term nicer PE-ratio .....conjures up a picture of a cuddly toy you want to cuddle.

[macduffy]

Sorry to split hairs but it could be argued that the market "values" a company by setting a "price" from time to time. After all, where else does the commonly used term "market value" come from...………..

;)

[winner69]

Sorry to split hairs but it could be argued that the market "values" a company by setting a "price" from time to time. After all, where else does the commonly used term "market value" come from...………..

;)

So true mac,

I sometimes think ‘value’ is a comforting reassurance thing. Like for those who believe in ‘price is what you pay but value is what you get’ it’s like saying/reassuring themselves I’ve got SUM (as an example) at a cheap price ......and it’ll be all honky dory as the ‘value’ I’ve gotten will be unlocked in due course.

Always turns out that way.

[Beagle]

Buying SUM shares for less than half RYM shares - Cunning !

[winner69]

Buying SUM shares for less than half RYM shares - Cunning !

Seems a pretty fair price ...but that cunning?

[Beagle]

Seems a pretty fair price ...but that cunning?

Ask the Gold standard man. He reckons normal range is 50-60% of RYM price with the mid point being 55%.
Anything under 50% is extremely unusual and a great buying opportunity.

[winner69]

Ask the Gold standard man. He reckons normal range is 50-60% of RYM price with the mid point being 55%.
Anything under 50% is extremely unusual and a great buying opportunity.

Since SUM floated average is 50.1% and has spent about half the time and most of the time has been between 40% and 60%

The SUM share price did spend a few months under 40% of RYM (when RYM was outrageously over priced / SUM under priced) and has spent a bit of time last year when SUM share price was over 60% of RYM (when SUM was totally over priced)

So SUM share price about right today v the gold standard.

Saying the gao between the two should close over the next year or two is a pipe dream eh Couts

[Beagle]

Since SUM floated average is 50.1% and has spent about half the time and most of the time has been between 40% and 60%

The SUM share price did spend a few months under 40% of RYM (when RYM was outrageously over priced / SUM under priced) and has spent a bit of time last year when SUM share price was over 60% of RYM (when SUM was totally over priced)

So SUM share price about right today v the gold standard.

Saying the gao between the two should close over the next year or two is a pipe dream eh Couts

Objection...leading the witness :lol: I talked to Coutts the other day about this and as the author of the Couta1 relativity theorem he told me I can completely disregard the time they spent at 40-50% as a temporary aberration and it was always his intention that the Couta1 relativity theory to RYM is that the normal range is 50-60% and anything outside that range is several standard deviations from the norm and to be ignored. Your stat's matter for nought mate :p because he's the author of this theory and I have this 50-60% thing direct from the horses mouth a few days ago !

So going off this Gold standard (which we all know is permanent and nothing else matters, not PE's, cash flow, sales level's balance sheet stat's or anything esle lol) the normal level is 55% and at RYM's closing price of $12.35 therefore we should see SUM gravitate towards $12.35 x 55% = $6.79 so I'm looking forward to that in due course :)

[couta1]

Objection...leading the witness :lol: I talked to Coutts the other day about this and as the author of the Couta1 relativity theorem he told me I can completely disregard the time they spent at 40-50% as a temporary aberration and it was always his intention that the Couta1 relativity theory to RYM is that the normal range is 50-60% and anything outside that range is several standard deviations from the norm and to be ignored. Your stat's matter for nought mate :p because he's the author of this theory and I have this 50-60% thing direct from the horses mouth a few days ago !

So going off this Gold standard (which we all know is permanent and nothing else matters, not PE's, cash flow, sales level's balance sheet stat's or anything esle lol) the normal level is 55% and at RYM's closing price of $12.35 therefore we should see SUM gravitate towards $12.35 x 55% = $6.79 so I'm looking forward to that in due course :) Hey Beagle I reckon you'd make a great Turners car Salesman(Whooos I mean Salesperson keeping with all the PC BS) Dont get too enthusiastic about that 60% mark, the 50-55% mark is the main home for SUM(Currently at 48.5% so a tad undervalued) Winner is right about the gap closing significantly, has been a pipe dream for yonks and will remain so for yonks.Lol

[winner69]

Beagle / Couts

The longer the time frame = more data points = more compelling the REVISED COUTS REVERSION THEOREM that SUM is 50% of RYM share plus / minus A bit but ‘gravitates’ back to 50% on a regular basis. Gravitate another word for reversion

[winner69]

SUM share price just can’t get back to 50% of RYM’s share price so just a fractionally underpriced / undervalued at the moment

We really want RYM to get stronger ....like lead the way up.

[Baa_Baa]

Birdies starting to chirp more loudly about the screwed up Govt remuneration model for rest homes in NZ, making the rich property investors even richer, feeding off the elderlies savings, depriving their progeny of fat inheritances for the sake of fatter investors, citing the underarm bowlers sector review and what might come from that here in due course.

Can't say much more, you get the gist of it. Winds of change are blowing, just a zephyr so far but a breeze may soon follow.

[BlackPeter]

Birdies starting to chirp more loudly about the screwed up Govt remuneration model for rest homes in NZ, making the rich property investors even richer, feeding off the elderlies savings, depriving their progeny of fat inheritances for the sake of fatter investors, citing the underarm bowlers sector review and what might come from that here in due course.

Can't say much more, you get the gist of it. Winds of change are blowing, just a zephyr so far but a breeze may soon follow.

Hmm - you sound angry and poetic at the same time. I must however admit that I have problems to make much sense out of your post. What exactly do you want to convey?

[winner69]

Birdies starting to chirp more loudly about the screwed up Govt remuneration model for rest homes in NZ, making the rich property investors even richer, feeding off the elderlies savings, depriving their progeny of fat inheritances for the sake of fatter investors, citing the underarm bowlers sector review and what might come from that here in due course.

Can't say much more, you get the gist of it. Winds of change are blowing, just a zephyr so far but a breeze may soon follow.

Be a shambles (and not good for shareholders, ie rich property investors) if it did go ahead but seems inevitable something will happen.

Might be just a storm in a teacup but who knows with this lot.

[777]

No more investors then so no more building which then would create a new problem.

[Beagle]

More fuel to fan growth in the housing market, ASB economists reckon https://tmmonline.nz/article/976514720/new-flames-to-fan-housing-market?utm_source=GR&utm_medium=email&utm_campaign=With+CGT+gone%2C+housing+market+expec ted+to+pick+up

[winner69]

Just as well the Auckland well to do don’t sell up and move into retirement villages

Maybe couldn’t afford some of those expensive Summerset apartments

https://www.stuff.co.nz/business/112229257/central-auckland-house-prices-plummet-real-estate-institute-data-shows

[minimoke]

Just as well the Auckland well to do don’t sell up and move into retirement villages

Maybe couldn’t afford some of those expensive Summerset apartments

https://www.stuff.co.nz/business/112229257/central-auckland-house-prices-plummet-real-estate-institute-data-showsunless you lived here:
Prices were up...
Takapuna: 30 per cent
Onehunga: 19.4 per cent
Morningside: 18.9 per cent
Rosehill: 14.7 per cent
Oteha: 14.1 per cent
Milford: 13.6 per cent
Glen Innes: 12.9 per cent
Grafton: 11.6 per cent
Stonefields: 10.5 per cent
Half Moon Bay: 10.4 per cent

[BlackPeter]

Just as well the Auckland well to do don’t sell up and move into retirement villages

Maybe couldn’t afford some of those expensive Summerset apartments

https://www.stuff.co.nz/business/112229257/central-auckland-house-prices-plummet-real-estate-institute-data-shows

Some did win, some did lose. Median sales price per month is as well not terribly significant - sometimes its the more expensive houses which sell, and sometimes the less expensive. Sounds like though the people in Takapuna have plenty of additional money to spend.

Makes no difference to Summerset or any other retirement village from which suburb the well-off buyers come - and I guess not everybody is after the 200 sqm unit with beachfront anyway. Most units would be priced well below the average Auckland house price.

Just one of the hyped up property market articles - no wonder journalists are not paid well, they get what they deserve.

[tipsy]

Just as well the Auckland well to do don’t sell up and move into retirement villages

Maybe couldn’t afford some of those expensive Summerset apartments

https://www.stuff.co.nz/business/112229257/central-auckland-house-prices-plummet-real-estate-institute-data-shows

Damn, pretty surprised by that

Prices were down...
Mt Albert: 31.2 per cent
Royal Oak: 25.4 per cent
Long Bay: 24.8 per cent
Westmere: 22.5 per cent
Kohimarama: 21 per cent
Parnell: 20.8 per cent
Albany: 20.5 per cent
Mt Eden: 20.1 per cent
Herne Bay: 17.2 per cent
Freemans Bay: 17 per cent

Was looking at the 2 bed villas at Summerset Ellerslie, asking 980k

[winner69]

Damn, pretty surprised by that

Prices were down...
Mt Albert: 31.2 per cent
Royal Oak: 25.4 per cent
Long Bay: 24.8 per cent
Westmere: 22.5 per cent
Kohimarama: 21 per cent
Parnell: 20.8 per cent
Albany: 20.5 per cent
Mt Eden: 20.1 per cent
Herne Bay: 17.2 per cent
Freemans Bay: 17 per cent

Was looking at the 2 bed villas at Summerset Ellerslie, asking 980k

That’s one heck of a price for a villa mate

If you live in any of those suburbs listed you might think twice about it - was that what you are saying.

[tipsy]

That’s one heck of a price for a villa mate

If you live in any of those suburbs listed you might think twice about it - was that what you are saying.

Definitely, but that's just me. Does look a very nice development though. I'd probably just grab one of the small apartments if I really needed the facilities.

I have however bought back a small parcel in the 5.50's after selling out near the top. House price weakness doesn't really concern me all that much and any major drop in share price will see me topping up. As always these retirement stocks are long term plays.

[winner69]

Definitely, but that's just me. Does look a very nice development though. I'd probably just grab one of the small apartments if I really needed the facilities.

I have however bought back a small parcel in the 5.50's after selling out near the top. House price weakness doesn't really concern me all that much and any major drop in share price will see me topping up. As always these retirement stocks are long term plays.

Good on you tipsy

There’s always somebody else who’ll pay the $870k for that villa

Good margin in that for Summerset ...maybe $300k odd

[bull....]

failure to rise back above $6 this week will confirm the breakdown thru support in my analysis. watching for the CGT release soon this could have a big downside risk for these stocks

that rejection of price over $6 is savage

[winner69]

that rejection of price over $6 is savage

AGM next week ..might be some grumpy share holders present if share price falls any further.

I’ve voted against the Directors getting a pay rise. Essentially voted NO as i’d just read an article about how careworkers had been given a decent pay rise but the companies were asking them to work shorter hours and take on additional tasks ...like doing heaps more a little more.

[BlackPeter]

that rejection of price over $6 is savage

Your focus on short term jitter is truely amazing ...

Always follow the thick red dotted line:

10498

I'd say they are nicely on track ;);

[winner69]

Your focus on short term jitter is truely amazing ...

Always follow the thick red dotted line:

10498

I'd say they are nicely on track ;);

You are not using ln(price) .....might look slightly different

Thats what snowy would say

[BlackPeter]

You are not using ln(price) .....might look slightly different

Thats what snowy would say

I know ... and you are right - it (obviously) does look slightly different:

10499

Still pointing upwards, but the (linear) support line gone (well, less clear support ;); Maybe more analysts using linear scale than log? Lets not forget that we are here not talking laws of nature, but just self full filling prophecies created by fallible human beings.

[trader_jackson]

Maybe my sub $5.50 buy order will be filled, even then I don't think I'm getting sumthing cheap, just at a more resonable price than the previous year or three

Abano Healthcare had a reasonably nice trend arguably from 2006 till early 2018 (wow thats over a decade - or at least 2012 to 2018) but then things fell apart big time

[winner69]

I know ... and you are right - it (obviously) does look slightly different:

10499

Still pointing upwards, but the (linear) support line gone (well, less clear support ;); Maybe more analysts using linear scale than log? Lets not forget that we are here not talking laws of nature, but just self full filling prophecies created by fallible human beings.

Snowy uses ln(price) which is different than using a log scale

Such methodology makes my long term regression channel chart look rather sick .....gone way below the bottom line ....so thats why I am using the actual numbers which has the current price just inside the channel

[bull....]

Your focus on short term jitter is truely amazing ...

Always follow the thick red dotted line:

10498

I'd say they are nicely on track ;);

is that red line your point to get out if it doesnt hold?

[JoeGrogan]

is that red line your point to get out if it doesnt hold?

:p:p:p:p:p

[Beagle]

Your focus on short term jitter is truely amazing ...

Always follow the thick red dotted line:

10498

I'd say they are nicely on track ;);

Beautiful image mate and shows how well patient long term shareholders have done. There will be those who can see fundamental value here and others that think they can second guess what's happening in the next "5 minutes".

[MauroNZ]

Hi guys this time I'm going to be able to attend the AGM. As is going to be my first time attending one, how long they usually last? Is there also a catch up between the people who are in this forum after the meeting?.

[Beagle]

Hi MauroNZ,
Usually about an hour and a half or so including chatting afterwards with directors and management.
A few of us usually meet up nearby here afterwards for couple of beverages http://www.stjohnsbar.co.nz/

[BlackPeter]

Snowy uses ln(price) which is different than using a log scale



From dark memories of my high school and university years - ln (logarithmus naturalis, i.e. log to the basis of Euler's number) and log (log to the basis of 10) as well as the log to any other base do have a linear relationship to each other. No matter which one you use, you might expand or shrink the graph respectively, but it will make no difference to the shape.

[BlackPeter]

is that red line your point to get out if it doesnt hold?

It certainly would be a good point to review one's strategy ... ;);

[MauroNZ]

Hi MauroNZ,
Usually about an hour and a half or so including chatting afterwards with directors and management.
A few of us usually meet up nearby here afterwards for couple of beverages http://www.stjohnsbar.co.nz/

Thanks Beagle I guess when I see one of the directors being barked would be the sign to where to go :).

[Beagle]

Thanks Beagle I guess when I see one of the directors being barked would be the sign to where to go :).

The barking already started earlier this month lol
I emailed Julian earlier this month and told him I was looking forward to hearing at the annual meeting about plans for how they are going to lift their sales performance.
Look out for more barking at the annual meeting if he's not forthcoming :)

Bit worried about Rob Campbell's workload with plenty of work for him with problems at THL and SKC...shame he's not up for reelection as that would have made for another barking matter...

Directors fees increase looks okay to me considering the massive uplift in underlying earnings since they were last revised years ago...not worth barking about that.
Meeting could have a bit of a subdued atmosphere this year what with the share price where it is. Last year was very positive with the SP up $2 to $7.20 from the previous year. SP still above the price it was two annual meetings ago so I suppose that's something...

Things could get interesting this year if the Union reps get aggressive like they did last time they had a meeting in Wellington 2 years ago....

[couta1]

The barking already started earlier this month lol
I emailed Julian earlier this month and told him I was looking forward to hearing at the annual meeting about plans for how they are going to lift their sales performance.
Look out for more barking at the annual meeting if he's not forthcoming :)

Bit worried about Rob Campbell's workload with plenty of work for him with problems at THL and SKC...shame he's not up for reelection as that would have made for another barking matter... Hope I don't have to bark at any union representatives that happen to turn up spreading poison again. PS-Also hoping that not too many negative/wrongly chosen words are used by Julian like last time the AGM was held in WGTN, the current SP doesn't need that.Lol

[Beagle]

Hope I don't have to bark at any union representatives that happen to turn up spreading poison again. PS-Also hoping that not too many negative/wrongly chosen words are used by Julian like last time the AGM was held in WGTN, the current SP doesn't need that.Lol


You did well last time mate. Union members are now doing very nicely so if they are still grizzling you are going to have to hold me back mate as I'll be looking to really rip into them. If they try and take any more of my food there will be trouble I tell ya https://www.youtube.com/watch?v=8tuBqRHJ-mo
The woman is very lucky to still have her hand in one piece lol

[kiwico]

Hope I don't have to bark at any union representatives that happen to turn up spreading poison again. PS-Also hoping that not too many negative/wrongly chosen words are used by Julian like last time the AGM was held in WGTN, the current SP doesn't need that.Lol

I did find their approach interesting (if that's the right word). I realise the amounts received differ but their approach seemed to be that the cleaners should get more money for doing nothing extra but the directors shouldn't be paid more even through their workload was to be expanded. Talk about double standards.

[davflaws]

I did find their approach interesting (if that's the right word). I realise the amounts received differ but their approach seemed to be that the cleaners should get more money for doing nothing extra but the directors shouldn't be paid more even through their workload was to be expanded. Talk about double standards.

Your post implies that the current relativities are appropriate. I disagree. Cleaners are people too. They need a wage they can live on. That is not a worry for any director I know of (even Mainzeal).

And as for Union reps spreading poison? I wasn't at the meeting and don't know what was said, but I do know that there was a case once where an employer gave the workers a substantial pay rise without being asked. 1927 I think.

The most likely place to find Union Reps spreading poison would be a 1080 operation on the DOC estate. But let's not let our rhetoric get in the way of our politics.

[Beagle]

A lot has happened in terms of wage rates for caregivers since that meeting two years ago and a lot is going to happen in the years ahead with steady increases and significant increases to the minimum wage. A shareholders annual meeting is not the appropriate forum for a debate about the merits of capitalism and socialism and that is the point Couta1 made at the 2017 meeting in response to inappropriate comments from a union member and Couta1's rebuke was well received by other shareholders there including myself and supported by (from memory) the Chairman Rob Campbell saying it was an inappropriate forum for such a discussion.

No such matter was raised at the SUM annual meeting in Auckland in 2018.

I believe SUM is the leader in this industry in terms of a very wide range of staff benefits and encouragement for staff to take part in the share incentive scheme.

Landing at Wellington might be interesting tomorrow morning...Gale force southerlies and a daily maximum of 13 degrees is forecast. This Beagle is a nervous flyer at the best of times so I'll take an extra cup of calming herbal tea for breakfast and tell myself these AIR N.Z. pilots have the worlds best training and are legends and nothing can go wrong lol

[winner69]

A lot has happened in terms of wage rates for caregivers since that meeting two years ago and a lot is going to happen in the years ahead with steady increases and significant increases to the minimum wage. A shareholders annual meeting is not the appropriate forum for a debate about the merits of capitalism and socialism and that is the point Couta1 made at the 2017 meeting in response to inappropriate comments from a union member and Couta1's rebuke was well received by other shareholders there including myself and supported by (from memory) the Chairman Rob Campbell saying it was an inappropriate forum for such a discussion.

No such matter was raised at the SUM annual meeting in Auckland in 2018.

I believe SUM is the leader in this industry in terms of a very wide range of staff benefits and encouragement for staff to take part in the share incentive scheme.

Landing at Wellington might be interesting tomorrow morning...Gale force southerlies and a daily maximum of 13 degrees is forecast. This Beagle is a nervous flyer at the best of times so I'll take an extra cup of calming herbal tea for breakfast and tell myself these AIR N.Z. pilots have the worlds best training and are legends and nothing can go wrong lol

Ha ha ...might be like this morning where some AIRplanes took rather odd flightpaths avoiding the thunderstorms

One thing it’s going to be gale force (the severe gale to about 2am) southerly which means you cone straight in, none of this going half way to Christchurch before heading in.

[minimoke]

Your post implies that the current relativities are appropriate. I disagree. Cleaners are people too. They need a wage they can live on. Wages ought have nothing to do with a persons living expenses.

What they should be is fair recompense for the skills and experience a worker can bring to the employer to help solve a problem the employer has. The more complex the problem the greater the likelihood there will be fewer skilled workers available - thus you would expect to pay a higher wage. The less complex the problem the greater the likelihood of having more workers with the skills available to solve that problem - thus you would expect to pay a lower wage.

Once the employers problem has been solved by the payment of a commensurate wage thats the end of the matter. How a worker chooses to spend their income is entirely up to them.

If a person earns little then it is incumbent on that person to live within their means. If they have aspirations for something greater then they need to change their skills so they can help employers solve higher level problems and thus get paid more.

This simple process isnt helped by governments who dictate the worth of an employee. As currently evidenced by the current government who thinks some school kid working at the local fish and chip shop is worth $17.70 an hour for their after school job. Frying chips takes virtually zero skill, there are thousands of kids who are available to work in a Chippie. Their living costs are virtually nil. Yet through some miracle of modern business management the govt reckons that all comes to $17.70 an hour.

[minimoke]

Landing at Wellington might be interesting tomorrow morning...Gale force southerlies and a daily maximum of 13 degrees is forecast. This Beagle is a nervous flyer at the best of times so I'll take an extra cup of calming herbal tea for breakfast and tell myself these AIR N.Z. pilots have the worlds best training and are legends and nothing can go wrong lolSounds like an excuse for a road trip in new car to me!

[davflaws]

Sounds like an excuse for a road trip in new car to me!

Buckle tight. Feel the aircraft yaw and dip and buck. Look down at the whitecaps covering the harbour. Feel the change as the aircraft comes lower over Evans Bay and the motion becomes more lively. Look to starboard and see Mt Victoria above you. Look to port and see Mapuia Rd and the hills of Miramar above you.

Feel and hear one wheel hit and then almost immediately the other, and feel the aircraft level and stabilise. Hear the engines rev and feel the brakes come on.

You are going to live! - WHAT A BUZZ!

[winner69]

Maybe the rainbow painted at the north end was in expectation of beagles arrival (that’s if the Resene paint hasn’t washed away)

[Beagle]

Buckle tight. Feel the aircraft yaw and dip and buck. Look down at the whitecaps covering the harbour. Feel the change as the aircraft comes lower over Evans Bay and the motion becomes more lively. Look to starboard and see Mt Victoria above you. Look to port and see Mapuia Rd and the hills of Miramar above you.

Feel and hear one wheel hit and then almost immediately the other, and feel the aircraft level and stabilise. Hear the engines rev and feel the brakes come on.

You are going to live! - WHAT A BUZZ!

Thanks for your "calming" words lol

[couta1]

Thanks for your "calming" words lol Yep always a white knuckle landing in WGTN with a strong wind although a strong southerly is preferred over a strong Northerly/Norwest as the wings don't appear to be kissing the ground so much.Lol

[Beagle]

Yep always a white knuckle landing in WGTN with a strong wind although a strong southerly is preferred over a strong Northerly/Norwest as the wings don't appear to be kissing the ground so much.Lol

You'd better bring a bottle of good scotch with you mate...I think I'm going to need a stiff drink immediately after landing as well as probably one for courage before takeoff lol. If I'm slightly drunk on arrival, we'll sober up over lunch before the meeting :)

[artemis]

Safer coming in to Welly than any other NZ airport. Because pilots take super extra care. Because Welly.

[minimoke]

Heres a question for the Floor:

What plans are being made to live stream future AGM's

I'm onlooking forward for an explanation for justifying director remuneration when SP is currently at $5.67 off it 12 month high of $8.00 ( I weary of Directors who pay goes up while shareholder wealth goes down)

[artemis]

Wages ought have nothing to do with a persons living expenses.

What they should be is fair recompense for the skills and experience a worker can bring to the employer to help solve a problem the employer has. The more complex the problem the greater the likelihood there will be fewer skilled workers available - thus you would expect to pay a higher wage. The less complex the problem the greater the likelihood of having more workers with the skills available to solve that problem - thus you would expect to pay a lower wage.

Once the employers problem has been solved by the payment of a commensurate wage thats the end of the matter. How a worker chooses to spend their income is entirely up to them.

If a person earns little then it is incumbent on that person to live within their means. If they have aspirations for something greater then they need to change their skills so they can help employers solve higher level problems and thus get paid more...

Agree, minimoke. And few years back The Treasury reported that the main beneficiaries of the 'living wage' were young single workers living at home, and the government because of reduced transfers (such as WFF and Accommodation Supplement). Same applies to minimum wage increases and relativities.

[Beagle]

Heres a question for the Floor:

What plans are being made to live stream future AGM's That's a good question

I'm onlooking forward for an explanation for justifying director remuneration when SP is currently at $5.67 off it 12 month high of $8.00 ( I weary of Directors who pay goes up while shareholder wealth goes down)

Bit mean MM. Over the years underlying profit growth has been very strong. Lets take a look back to 2015 where underlying profit was just $37.8m, they had 5 directors and annual fees totalled $515K. Fast forward to 2018, Underlying profit was $98.6m, they now have 6 directors and directors fees totalled $627K. Directors fees per director have barely moved and not even kept pace with inflation since 2015 and yet underlying profit is 2.6 times the level in 2015 and assets under management have grown dramatically as well. A $100K increase to a maximum of $750K seems perfectly reasonable to me especially in light of how well the directors have done their job !

Share price decline over the last year is not their fault and not under their direct control.

[mondograss]

Agree, minimoke. And few years back The Treasury reported that the main beneficiaries of the 'living wage' were young single workers living at home, and the government because of reduced transfers (such as WFF and Accommodation Supplement). Same applies to minimum wage increases and relativities.

Ummm, pretty sure that the govt gets its money from taxes, so surely the ultimate beneficiary of reduced transfers are taxpayers?

[BlackPeter]

Ummm, pretty sure that the govt gets its money from taxes, so surely the ultimate beneficiary of reduced transfers are taxpayers?

Not really. the government does not return these funds to the taxpayer buy finds other options to waste them.

[winner69]

Heres a question for the Floor:

What plans are being made to live stream future AGM's

I'm onlooking forward for an explanation for justifying director remuneration when SP is currently at $5.67 off it 12 month high of $8.00 ( I weary of Directors who pay goes up while shareholder wealth goes down)


Bit mean MM. Over the years underlying profit growth has been very strong. Lets take a look back to 2015 where underlying profit was just $37.8m, they had 5 directors and annual fees totalled $515K. Fast forward to 2018, Underlying profit was $98.6m, they now have 6 directors and directors fees totalled $627K. Directors fees per director have barely moved and not even kept pace with inflation since 2015 and yet underlying profit is 2.6 times the level in 2015 and assets under management have grown dramatically as well. A $100K increase to a maximum of $750K seems perfectly reasonable to me especially in light of how well the directors have done their job !

Share price decline over the last year is not their fault and not under their direct control.

But Directors workload probably hasn’t increased that much even though the business is bigger ...hmmm

[Beagle]

But Directors workload probably hasn’t increased that much even though the business is bigger ...hmmm

I know they have been looking extremely hard at all the complexities involved with expanding into Australia so I would have thought their workload has indeed increased and yet the pay rate per director hasn't kept pace with inflation despite underlying profit increasing 260% since 2015...hmmmm.

I can't recall a case for directors fees increasing by a reasonably modest amount that has more merit in it to be quite honest about it.

[winner69]

Heres a question for the Floor:

What plans are being made to live stream future AGM's

I'm onlooking forward for an explanation for justifying director remuneration when SP is currently at $5.67 off it 12 month high of $8.00 ( I weary of Directors who pay goes up while shareholder wealth goes down)


I know they have been looking extremely hard at all the complexities involved with expanding into Australia so I would have thought their workload has indeed increased and yet the pay rate per director hasn't kept pace with inflation despite underlying profit increasing 260% since 2015...hmmmm.

I can't recall a case for directors fees increasing by a reasonably modest amount that has more merit in it to be quite honest about it.

They got extra payments (in addition to standard fees) for looking into Australia (and the bond issue)

Ryman Directors got a pay rise last year. Even after this Summerset Directors will be paid a bit less than the Ryman ones but not by much.

I voted against ...knowing it only a protest vote anyway

[Beagle]

I went back and had a look at Directors fees as a percentage of underlying profit for the last 4 years and here's how the stat's look.
2015 $515K / $37.8m = 1.36%
2016 $488K / $56.5m = 0.86%
2017 $599K / $81.7m = 0.73%
2018 $627K / $98.6m = 0.64%

I think those numbers speak for themselves.

[winner69]

I went back and had a look at Directors fees as a percentage of underlying profit for the last 4 years and here's how the stat's look.
2015 $515K / $37.8m = 1.36%
2016 $488K / $56.5m = 0.86%
2017 $599K / $81.7m = 0.73%
2018 $627K / $98.6m = 0.64%

I think those numbers speak for themselves.

They’re paid to overseer those growing profits ....has their workload trebled?

[Maverick]

Looking forward to the meeting tomorrow and of course also meeting some of you afterwards

[davflaws]

Wages ought have nothing to do with a persons living expenses.

What they should be is fair recompense for the skills and experience a worker can bring to the employer to help solve a problem the employer has. The more complex the problem the greater the likelihood there will be fewer skilled workers available - thus you would expect to pay a higher wage. The less complex the problem the greater the likelihood of having more workers with the skills available to solve that problem - thus you would expect to pay a lower wage.

Once the employers problem has been solved by the payment of a commensurate wage thats the end of the matter. How a worker chooses to spend their income is entirely up to them.

If a person earns little then it is incumbent on that person to live within their means. If they have aspirations for something greater then they need to change their skills so they can help employers solve higher level problems and thus get paid more.

This simple process isnt helped by governments who dictate the worth of an employee. As currently evidenced by the current government who thinks some school kid working at the local fish and chip shop is worth $17.70 an hour for their after school job. Frying chips takes virtually zero skill, there are thousands of kids who are available to work in a Chippie. Their living costs are virtually nil. Yet through some miracle of modern business management the govt reckons that all comes to $17.70 an hour.

You have given us a very good and clear explanation of a neoliberal position in relation to wages. But I think you have stated a position which is on the extreme end of the continuum.

It does not acknowledge the difficulties that come with Capitalism in its extreme and unregulated form. Capitalism is a very good system for creating wealth - the best yet by miles. But it is less successful in ensuring distribution of that wealth. Unless it is restrained and regulated by the power of the state, capitalism inevitably produces marked and growing inequality - to everyone's detriment.

[minimoke]

You have given us a very good and clear explanation of a neoliberal position in relation to wages. But I think you have stated a position which is on the extreme end of the continuum. I thought I was just describing basic supply and demand economics


It does not acknowledge the difficulties that come with Capitalism in its extreme and unregulated form. Capitalism is a very good system for creating wealth - the best yet by miles. But it is less successful in ensuring distribution of that wealth. Unless it is restrained and regulated by the power of the state, capitalism inevitably produces marked and growing inequality - to everyone's detriment.
Wealth should not be distributed . It should be earnt. That is the motivator and the oil that makes a successful world go round smoothly.

The inequality only comes from the difference between those who work to get what they want and those who sit back waiting for someone else to hand them what they want.

Taking peoples hard earned wealth becomes detrimental. It encourages them to use alternative wealth management tools or stops people from striving to be the very best they can be - no point in that if someone else reaps the rewards for the risk and hard labour.

[RTM]

You have given us a very good and clear explanation of a neoliberal position in relation to wages. But I think you have stated a position which is on the extreme end of the continuum.

It does not acknowledge the difficulties that come with Capitalism in its extreme and unregulated form. Capitalism is a very good system for creating wealth - the best yet by miles. But it is less successful in ensuring distribution of that wealth. Unless it is restrained and regulated by the power of the state, capitalism inevitably produces marked and growing inequality - to everyone's detriment.

There was a great article in last Fridays Herald...." Capitalists versus Capitalism" taken from the Financial Times written by Andrew Edgecliffe-Johnson.... on this subject. It appears that some USA Business leaders are concerned about the divisions that Capitalism is creating. Can't find a link in the Herald...sorry.

Well worth a read if you can track it down. I can see it in the Financial Times... April 22. If anyone can access it from there.
https://www.ft.com/andrew-edgecliffe-johnson

Short quote of Ray Dalio….Bridgewater Associates.
"I'm a capitalist and even I think capitalism is broken.....capitalism is at a juncture. Americans could reform it together, " or we will do it in conflict.""

If anyone is really interested...PM me an I'll make it into a PDF that I can email.

Cheers
RTM

[BlackPeter]

fascinating theme ... but probably better discussed on a relevant thread ;);

[MauroNZ]

I guess no one yet here.

[minimoke]

I guess no one yet here.beagle will be unwrapping himself from the sick bag

[MauroNZ]

Is hard trying to guess who is who will see if I'm correct.

[bull....]

looking for sites in victoria , aus

[winner69]

Mystery shopping of sites good initiative and should improve sales efforts

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/333843/299004.pdf

[minimoke]

Seems like there are headwinds confirmed. Dropping property values, longer settlement times and increased staff costs. (along with concerns about there levels of clinical care). Lets hope there commitment to the environment doesn't prove to be a costly distraction.

Just what they expect to achieve by being "carbon Neutral" who knows? It certainly will make zero difference to CO2 concentrations and wont save a single polar bear.

[minimoke]

Back down to $5.61. Must have been an un-inspiring meeting.

[sb9]

Back down to $5.61. Must have been an un-inspiring meeting.


SUMMERSET FEELS PINCH OF SLOWING HOUSING, CONSTRUCTION MARKEThttp://www.sharechat.co.nz/article/8c881a61/summerset-feels-pinch-of-slowing-housing-construction-market.html (http://www.sharechat.co.nz/article/8c881a61/summerset-feels-pinch-of-slowing-housing-construction-market.html?utm_medium=email&utm_campaign=Summerset%20feels%20pinch%20of%20slow ing%20housing%20construction%20market&utm_content=Summerset%20feels%20pinch%20of%20slowi ng%20housing%20construction%20market+CID_7335da4df 70b94130778bb78e3ee04a5&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8c881a61summer set-feels-pinch-of-slowing-housing-construction-markethtml)

[winner69]

Besides the warm fuzzy stuff about doing mystery shopping the really bad bit was confirming that over time ‘development margins to moderate in the 20%-25% range.’

Jeez 20% is a lot less than 32%

I reckon that means one year soon we will see a decline in underlying earnings

Hope the post meeting catchup some are having hasn’t turned into a wake.

[percy]

Besides the warm fuzzy stuff about doing mystery shopping the really bad bit was confirming that over time ‘development margins to moderate in the 20%-25% range.’

Jeez 20% is a lot less than 32%

I reckon that means one year soon we will see a decline in underlying earnings

Hope the post meeting catchup some are having hasn’t turned into a wake.

Thought you and the whole bowling club would have been there.
Nice cup of tea and a scone.

[James108]

I was happy about the 20-25% guidance, previously it had been 17%. I doubt anyone expected it to stay above 30% indefinitely. I wouldnÂ’t be surprised to see a temporary decline in underlying earnings either, still happy to hold though.

[winner69]

Thought you and the whole bowling club would have been there.
Nice cup of tea and a scone.

No Percy ...they not into Summerset but losing heaps on Oceania though

Anyway I reckon tea and scones not their thing

[Snoopy]

Seems like there are headwinds confirmed. Dropping property values, longer settlement times and increased staff costs. (along with concerns about there levels of clinical care). Lets hope there commitment to the environment doesn't prove to be a costly distraction.


"A government review of care funding is underway currently, and results are expected in 2019. Our strategy in the care business is to focus on being a leading provider of quality care, investing in facilities, equipment and people in order to do this. This position ensures we can charge additional service fees for the superior care and accommodation we provide. The strategy has worked well for us and we will continue to pursue it, given constraints on government funding."

"It will come as no surprise that we are also focusing on the availability and capability of nurses in our villages. The country is currently short by around 1,500 nurses. The current government is looking at bringing nurses back onto the long term skill shortage list. Frankly, it is critical for the aged care sector and New Zealand more generally that they do so."


Interesting comments (highlight in bold). Backs up what the CE of Parkwood Retirement Village Mark Rouse said in the Kapiti news article that I quoted on the OCA thread?

SNOOPY

[percy]

No Percy ...they not into Summerset but losing heaps on Oceania though

Anyway I reckon tea and scones not their thing

Investing does not appear to be their thing either.

[winner69]

Investing does not appear to be their thing either.

They trying hard ...very hard .....like holding Turners and Oceania as a long term ‘investment’ even though under water.

They did make a few bob on A2 once ...but should have stuck with them

[percy]

They trying hard ...very hard .....like holding Turners and Oceania as a long term ‘investment’ even though under water.

They did make a few bob on A2 once ...but should have stuck with them

Well they would have received their quarterly fully imputed TRA divie today.4 cps today,5 cps end of July.
I hold both TRA and OCA so they should do well,so long as they hang onto them.

[trader_jackson]

SUMMERSET FEELS PINCH OF SLOWING HOUSING, CONSTRUCTION MARKET

http://www.sharechat.co.nz/article/8c881a61/summerset-feels-pinch-of-slowing-housing-construction-market.html (http://www.sharechat.co.nz/article/8c881a61/summerset-feels-pinch-of-slowing-housing-construction-market.html?utm_medium=email&utm_campaign=Summerset%20feels%20pinch%20of%20slow ing%20housing%20construction%20market&utm_content=Summerset%20feels%20pinch%20of%20slowi ng%20housing%20construction%20market+CID_7335da4df 70b94130778bb78e3ee04a5&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8c881a61summer set-feels-pinch-of-slowing-housing-construction-markethtml)

Not good at all...
"Summerset has said it wanted to increase its build rate to 600 units a year. Chief executive Julian Cook said the company will probably build only about 350 this year"

Previously it was mentioned on here the key points for investing in SUM:
- An amazing, sector leading, development margins (now may only be a bit more than that dog ARV). - An amazing, sector leading, build rate (now cut substantially from previous no matter what way you look at it)

Ironic more so that none of the other listed operators have given such dramatic cuts to previous "gold standard track record", and that maybe (as I have cautioned), past performance is not an indicator of future performance... even worse it would seem when a shareholder has to ask the board to confirm such a bigly gap between units for sale (ie built) and units actually sold, it seems there was sum coverup here as this, rather material gap (of 100+ in the last year) was not made clear to the market at all... until the big reveal (and the big questions) today that is.

Accordinly, I have pulled my buy order. I would think holders will be lucky for it to hold above $5.50 tomorrow as the info is digested overnight.

Hope the food was good enough to reduce the discomfort, because the questions/answers, preso and speech would not have been.

[winner69]

Jeez things must have got a bit heated at the AGM with a grumpy shareholder accusing the company of ‘being misleading’

Should have gone ...nah boring as

Fact if life is companies tell you all the good stuff and when forced too will own up to the really bad stuff ...but things like slow sales in a village are never mentioned.

http://www.sharechat.co.nz/article/8c881a61/summerset-feels-pinch-of-slowing-housing-construction-market.html?utm_medium=email&utm_campaign=Summerset%20feels%20pinch%20of%20slow ing%20housing%20construction%20market&utm_content=Summerset%20feels%20pinch%20of%20slowi ng%20housing%20construction%20market+CID_7335da4df 70b94130778bb78e3ee04a5&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8c881a61summer set-feels-pinch-of-slowing-housing-construction-markethtml

[percy]

Jeez things must have got a bit heated at the AGM with a grumpy shareholder accusing the company of ‘being misleading’

Should have gone ...nah boring as

Fact if life is companies tell you all the good stuff and when forced too will own up to the really bad stuff ...but things like slow sales in a village are never mentioned.

http://www.sharechat.co.nz/article/8c881a61/summerset-feels-pinch-of-slowing-housing-construction-market.html?utm_medium=email&utm_campaign=Summerset%20feels%20pinch%20of%20slow ing%20housing%20construction%20market&utm_content=Summerset%20feels%20pinch%20of%20slowi ng%20housing%20construction%20market+CID_7335da4df 70b94130778bb78e3ee04a5&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8c881a61summer set-feels-pinch-of-slowing-housing-construction-markethtml

I am guessing Couta1 let the Beagle off his lead.
Big mistake...lol.

[Onion]

I am guessing Couta1 let the Beagle off his lead.
Big mistake...lol.

It wasn't Beagle that "accused" that question (it was John Boscawen, former ACT MP, as a proxy holder), but the hound did ask about continuing the build rate (450 per year) when unsold stock increases annually.

Julian's reply suggests they won't be headlining their projected build rates in future and that they will be targeting the building that they do to local markets where they see the best prospects.

[couta1]

I am guessing Couta1 let the Beagle off his lead.
Big mistake...lol. Nah that was a much bigger dog than Beagle and he is well researched and made a good point about the large number of unsold units at one of the sites in particular as being a major concern. PS-Had a great catch up with forum members including some new faces, even the elusive W69 made an appearance.

[Onion]

My thoughts from the AGM...

- The directors all spoke well and described a company that has good governance and good structures
- Housing market uncertainties are leading to longer lead times when selling units -- a consequence is higher stock levels/more unsold units
- The narrowing of the development margin reflects the current and future inability to ramp prices just because of an overheated market (prior high margins were probably opportunistic)

[Onion]

PS-Had a great catch up with forum members including some new faces, even the elusive W69 made an appearance.

I had to get back to work so unfortunately missed the catch up.

[Beagle]

Good to catch up with some old faces, meet the legendary Winner and some new faces too.

[winner69]

It wasn't Beagle that "accused" that question (it was John Boscawen, former ACT MP, as a proxy holder), but the hound did ask about continuing the build rate (450 per year) when unsold stock increases annually.

Julian's reply suggests they won't be headlining their projected build rates in future and that they will be targeting the building that they do to local markets where they see the best prospects.

Not surprising they won’t be headlining build rates in future as Julian’s messages have been getting briefer and briefer and more obtuse over the last year or so.

Summerset maybe losing some of its credibility with the market cap

[bull....]

bollingers suggest 5.25 could be a target soon

[minimoke]

My thoughts from the AGM...

- The directors all spoke well and described a company that has good governance and good structures
- Housing market uncertainties are leading to longer lead times when selling units -- a consequence is higher stock levels/more unsold units
- The narrowing of the development margin reflects the current and future inability to ramp prices just because of an overheated market (prior high margins were probably opportunistic)
My one concern is Rob Campbell and where his energies can best be used. I have major concerns with THL (selling out of that today) as he is facing headwinds in his role in several companies. I see SUM as the safer (but still risky) bet between the two so will leave my money on there for the time being.

[winner69]

SUM share price down to 45% of RYM share price (average since IPO is 50%)

That’s telling you what the market thinks of SUM and Julian’s vagueness

But a sign that SUM could be getting to a level where it’s a reasonable buy (have to be positive)

[MauroNZ]

Nah that was a much bigger dog than Beagle and he is well researched and made a good point about the large number of unsold units at one of the sites in particular as being a major concern. PS-Had a great catch up with forum members including some new faces, even the elusive W69 made an appearance.

Was great to meet you and talk to you as well as with Beagle, Maverick, Artemis and a few other who only read the forum. Thanks for the knowledge shared guys.

I believe Beagle had an anesthesia with the flight as he didn't barked as expected hence why I couldn't identify him.

[Beagle]

My one concern is Rob Campbell and where his energies can best be used. I have major concerns with THL (selling out of that today) as he is facing headwinds in his role in several companies. I see SUM as the safer (but still risky) bet between the two so will leave my money on there for the time being.

Good news is Rob is looking considerably less portly than last year...an inspiration for SUM dog on here me thinks.

350 number is not a concern. I remain a happy holder. Will share more detailed thoughts later.

[macduffy]

Was great to meet you and talk to you as well as with Beagle, Maverick, Artemis and a few other who only read the forum. Thanks for the knowledge shared guys.

I believe Beagle had an anesthesia with the flight as he didn't barked as expected hence why I couldn't identify him.

Must be the nucleus of a new village there. I trust you all put your names on the waiting list?

;)

[Beagle]

Okay, all aboard, pack up your suitcases and jump about this little journey with the Dog.
First lets time travel back 6 years to the time when the annual meeting was held in early 2013 and have a look at a snapshot of how things were as at 31/12/2012 and journey forward from there to 31/12/2018.
Underlying profit $15.2m underlying eps 7.15 cps, NTA $1.10 Net Assets $249m PE 43
Underlying profit $98.6m underlying eps 44.65 cps NTA $4.38 Net Assets $978.9m PE 12.5

But wait I hear the naysayers insist, this growth was over a period of unprecedented growth in real estate prices in N.Z. and cannot possibly be replicated going forward ! Well no I don't think so either. Rather than net assets nearly quadrupling I expect they will simply double or thereabouts.

Auckland is the problem, most of the rest of the country is chugging along just fine.
So what are SUM doing to recalibrate their business model to mitigate this Auckland risk ?
1. They're not buying more land in Auckland at present.
2. They diversifying their villages out into the provinces.
As at 31 December 2018 they held land for development for enough units that exceeds the total units they have on hand already !
Since then they have acquired even more land in the provinces https://www.nzx.com/announcements/332408

So before we extrapolate forward where they might be in six years time from now lets have a little recap on yesterday's meeting.
Very happy with the calibre of the board and senior management. Their track record of very strong underlying eps growth since listing on the NZX is to the best of my knowledge unmatched by any other company including the much revered Ryman.

In a nutshell they recalibrating their business plan with more focus on single level units in the provinces going forward. They will be offering a much wider spread of product over a wider geographical area.

Build target this year is a case of moderating the build rate so as to ensure there isn't an oversupply of stock.
After the meeting Julian advised me:-
Effectively two development blocks that were going to be very late stage FY19 have been shifted into early FY20.
He is confident of underlying profit growth in FY 19 despite the lower build rate this year - remember that underlying profit is based upon sales numbers not build numbers.
Sales last year were just 339 so its quite possible they will be higher in FY19.
Resales are at a historically low level for the number of units on hand.

The business model works well and has been constantly refined and improved over the years. I have gone to every annual meeting since early 2013 covering FY12 year and talked with Julian and the directors afterwards every time. I recall the days when the development margin was just 12% for the FY12 year.

Now lets journey even further back to the bad old days of the GFC. What did we learn from RYM during that time.
1. Their underlying profit improved every year throughout the GFC.
2. The lowest forward PE the company ever traded on was from memory just 12.

Where are we now then in terms of SUM's metrics.
First lets have a look at NTA, because that forms the building blocks of the companies ability to drive underlying profit.
FY12 NTA $1.10 - share price $3.08 at the time of the annual meeting covering this year's operations and historical PE was 43.
NTA has improved from that to ~ $1.20, ~ $1.50, $1.89, $2.49, $3.47 and $4.38 as at 31/12/2018 and I believe it will be just over $5.00 by 31/12/2019.
Fact - Every year I have attended AGM's the share price to NTA has been a minimum of double the NTA and at times nearly triple, (apart from yesterday when it was just 1.28 times NTA).

I believe the NTA will be ~ $5.20 at year end and the shares are extremely well supported at that level technically.
The historic PE has come down from 43, to 33.9, 30.7, 25.4, 20, 18.7 and was just 12.5 yesterday.
I am forecasting approx. ~ $110m underlying profit for FY19, underlying eps of ~ 50 cps. Forward PE just 11.2 at $5.60.

I think this is very close to a bottom for SUM.
Looking forward I expect more like RYMesque type growth in underlying earnings going forward as the business has been through a super normal 7 years of growth and is more mature. Extremely favourable long term demographics and a well proven development model concentrating primarily on their well proven single level developments going forward mostly in the provinces, (along with strongly growing resales in future years capturing previous years huge IFRS revaluation profits) should see them able to sustainably grow underlying eps at circa 15% per annum on average. 15% compound growth as we know doubles underlying earnings every 5 years.

Six years from now I think SUM's underlying earnings will be somewhere in the vicinity of $1 per share and even on a somewhat normal but quite conservative PE for a company growing earnings at this rate of say 15 this should see the share price in the region of $15, 5-6 years hence. I think the shares are currently at, or very very close to the bottom and the downside risk is very minimal and extremely modest compared to the upside potential over the medium term

Finally the 350 v 600 build rate thing which has seemed to cause some confusion.
600 build rate was always a 3 year target, up from 450 last year. As mentioned earlier late stage development blocks from FY19 and being shifted into FY 20 for planning and other reasons. I think the build rate for FY20 should be somewhere in the 450-500 zone and FY21 an uplift from there.
FY22 could see it in the 550-600 zone as their well proven business development model is rolled out through a wide range of locations in regional N.Z.

I think SUM makes a very good case for itself as a value growth company trading on compelling metrics.
I have 100% confidence in the board and senior management.

I think we should see about a 15% increase in the share price in the year ahead consistent with earnings growth, (I think the PE has already bottomed out)
By way of independent cross check of my expectations the average analyst 12 month price target is $7.00. https://www.marketscreener.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/

Happy holder and happy to add SUM more on any more irrational weakness.

[macduffy]

Thanks for your thoughts, Beagle, and for braving the hazards of Hurricanes country to get them!

Without putting hard numbers to it I agree with your conclusions.

Another happy holder.

:)

[Maverick]

Fabulous summary Beagle! Thank you for taking the time to type all that up. I managed to spend plenty of time myself driving home today chewing over yesterdays information/opinions gained pre, during and post the meeting also.
I spoke to a good mate on the way home and my own conclusions to him were almost identical with your well written summary. The only exception is I think their FY20 underlying profit will be more like $115-125 million.

One thing of value I learned yesterday is that when these large developments get finished it takes a long time for the community (usually within 5 km radius) to "digest" the empty rooms. (this will be particularly relevant to OCA). Julian said there is no evidence of any oversupply, basically sales just take time. He said it is better to use resales in an established complex (rather than new sales) as a oversupply barometer. Of which are healthy for SUM.

My overall conclusion is that SUM is doing just fine but just need time to do keep their job. As a result of yesterday I have since bought more SUM and will continue to do so. (by the way I am not selling OCA)

It was great to meet in person Couta, Beagle, Artemis,Winner, John Boscawen and MauroNZ

[winner69]

Thanks for your thoughts beagle ...well thought out


One thing for certain ...Summerset not going broke ...and will continue to make good profits into the future.

[Ggcc]

Okay, all aboard, pack up your suitcases and jump about this little journey with the Dog.
First lets time travel back 6 years to the time when the annual meeting was held in early 2013 and have a look at a snapshot of how things were as at 31/12/2012 and journey forward from there to 31/12/2018.
Underlying profit $15.2m underlying eps 7.15 cps, NTA $1.10 Net Assets $249m PE 43
Underlying profit $98.6m underlying eps 44.65 cps NTA $4.38 Net Assets $978.9m PE 12.5


But wait I hear the naysayers insist, this growth was over a period of unprecedented growth in real estate prices in N.Z. and cannot possibly be replicated going forward ! Well no I don't think so either. Rather than net assets nearly quadrupling I expect they will simply double or thereabouts.

Auckland is the problem, most of the rest of the country is chugging along just fine.
So what are SUM doing to recalibrate their business model to mitigate this Auckland risk ?
1. They're not buying more land in Auckland at present.
2. They diversifying their villages out into the provinces.
As at 31 December 2018 they held land for development for enough units that exceeds the total units they have on hand already !
Since then they have acquired even more land in the provinces https://www.nzx.com/announcements/332408

So before we extrapolate forward where they might be in six years time from now lets have a little recap on yesterday's meeting.
Very happy with the calibre of the board and senior management. Their track record of very strong underlying eps growth since listing on the NZX is to the best of my knowledge unmatched by any other company including the much revered Ryman.

In a nutshell they recalibrating their business plan with more focus on single level units in the provinces going forward. They will be offering a much wider spread of product over a wider geographical area.

Build target this year is a case of moderating the build rate so as to ensure there isn't an oversupply of stock.
After the meeting Julian advised me:-
Effectively two development blocks that were going to be very late stage FY19 have been shifted into early FY20.
He is confident of underlying profit growth in FY 19 despite the lower build rate this year - remember that underlying profit is based upon sales numbers not build numbers.
Sales last year were just 339 so its quite possible they will be higher in FY19.
Resales are at a historically low level for the number of units on hand.

The business model works well and has been constantly refined and improved over the years. I have gone to every annual meeting since early 2013 covering FY12 year and talked with Julian and the directors afterwards every time. I recall the days when the development margin was just 12% for the FY12 year.

Now lets journey even further back to the bad old days of the GFC. What did we learn from RYM during that time.
1. Their underlying profit improved every year throughout the GFC.
2. The lowest forward PE the company ever traded on was from memory just 12.

Where are we now then in terms of SUM's metrics.
First lets have a look at NTA, because that forms the building blocks of the companies ability to drive underlying profit.
FY12 NTA $1.10 - share price $3.08 at the time of the annual meeting covering this year's operations and historical PE was 43.
NTA has improved from that to ~ $1.20, ~ $1.50, $1.89, $2.49, $3.47 and $4.38 as at 31/12/2018 and I believe it will be just over $5.00 by 31/12/2019.
Fact - Every year I have attended AGM's the share price to NTA has been a minimum of double the NTA and at times nearly triple, (apart from yesterday when it was just 1.28 times NTA).

I believe the NTA will be ~ $5.20 at year end and the shares are extremely well supported at that level technically.
The historic PE has come down from 43, to 33.9, 30.7, 25.4, 20, 18.7 and was just 12.5 yesterday.
I am forecasting approx. ~ $110m underlying profit for FY19, underlying eps of ~ 50 cps. Forward PE just 11.2 at $5.60.

I think this is very close to a bottom for SUM.
Looking forward I expect more like RYMesque type growth in underlying earnings going forward as the business has been through a super normal 7 years of growth and is more mature. Extremely favourable long term demographics and a well proven development model concentrating primarily on their well proven single level developments going forward mostly in the provinces, (along with strongly growing resales in future years capturing previous years huge IFRS revaluation profits) should see them able to sustainably grow underlying eps at circa 15% per annum on average. 15% compound growth as we know doubles underlying earnings every 5 years.

Six years from now I think SUM's underlying earnings will be somewhere in the vicinity of $1 per share and even on a somewhat normal but quite conservative PE for a company growing earnings at this rate of say 15 this should see the share price in the region of $15, 5-6 years hence. I think the shares are currently at, or very very close to the bottom and the downside risk is very minimal and extremely modest compared to the upside potential over the medium term

Finally the 350 v 600 build rate thing which has seemed to cause some confusion.
600 build rate was always a 3 year target, up from 450 last year. As mentioned earlier late stage development blocks from FY19 and being shifted into FY 20 for planning and other reasons. I think the build rate for FY20 should be somewhere in the 450-500 zone and FY21 an uplift from there.
FY22 could see it in the 550-600 zone as their well proven business development model is rolled out through a wide range of locations in regional N.Z.

I think SUM makes a very good case for itself as a value growth company trading on compelling metrics.
I have 100% confidence in the board and senior management.

I think we should see about a 15% increase in the share price in the year ahead consistent with earnings growth, (I think the PE has already bottomed out)
By way of independent cross check of my expectations the average analyst 12 month price target is $7.00. https://www.marketscreener.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/

Happy holder and happy to add SUM more on any more irrational weakness.

Thanks for the feedback and it is much appreciated. I am a happy long term holder that will remain holding for the long term. I see the similar view as this share price is an optimistic position to get into now for the longterm. Again thanks for your feedback

[Timesurfer]

Heard a good report today about what SUM is doing with moving toward clean and green and carbon neutral.
Wonder if they are recycling residents emissions?

[Baa_Baa]

Resales are at a historically low level for the number of units on hand.

remember that underlying profit is based upon sales numbers not build numbers.

Thanks @Beagle for the comprehensive summary and your thoughts.

Notwithstanding the focus on moderating build numbers, it seems they acknowledge the underlying problem, of ongoing declining sales as a % of total stock. In real terms their sale performance is what keeps my holding very modest, whereas I would acquire a lot more if I had some confidence that they had a remedy for improving sales performance.

Was there anything said that gave you confidence that sales performance improvement per se is in their sights, as opposed to just building less stock?

TIA.

[Blue Skies]

Thanks for sharing your thoughts & analysis Beagle, very much appreciated.

Wishing you a smooth return flight.

Long term holder (and OCA).

[pierre]

I'm writing on this thread because Beagle's superb analysis following the SUM ASM stimulated some thinking about my holdings in the Retirement sector generally. I would appreciate some opinions and recommendations about what to do. (Let me know if this should be moved to another thread.)

I have a reasonably substantial and mostly diversified share portfolio and generally, I am a long term
patient investor - not a trader. (I must be patient - I've been holding and adding to BLT since 2005!) I'm happy to have some income from my investments but that's not my prime motivation - I'm more interested in SP growth over a 5+ year time frame.

15% of my portfolio (by $value) is in Retirement stocks. That's bit high, but
I like the sector and feel that there are sound reasons for my holdings in it to be slightly overweight.

The 15% is spread over 3 companies - OCA (70%) , SUM (18%) and RYM (12%) in order of current value. I'm showing good gains on RYM and to a lesser extent on SUM - having been in and out of the latter a couple of times - but I've held them both for 7+ years. OCA is a relatively recent investment and is just at break even today.

Beagle's forecast suggests around 250% growth for SUM over the next 5-6 years. I would be more than happy with that if it comes to pass. A similar growth rate for the other two companies would see RYM at around $30 and OCA at about $2.70 in 2024/25. Will that happen?

I'm tossing up whether to reallocate my funds in this sector so my questions are:
a) which of my three companies do you think has the greatest growth potential over the next 5-6 years?
b) in which order would you rank the other two?
c) is there another listed retirement sector business which you think will outperform all three of my companies.

Thoughts and comments are welcome.
Merci beaucoup
Pierre

[minimoke]

Pierre

You sound like you have a similar plan as I have.

In value the most I hold in $ is ryman. Bought them at IPO and have sat on them ever since and doing very nicely thankyou. These are in my "safe" (no meddling) portfolio. I see these as steady as you go and potentially the least growth shares

In my "risk" portfolio I hold both SUM and OCA. On current values I hold roughly 3 x more OCA than SUM.

I see OCA having more growth potential than SUM based on age of company and enhanced "care" focus.

These shares are part of a retirement plan. The plan involves hitting a financial value each year with an expectation it will have a certain value on retirement day. My expectation is the higher the capital value at that point the better the dividend yield for my income.

Three shares in the retirement sector is enough for me. I see these three delivering the best opportunity for meeting financial targets.

If OCA or SUM hit my stop loss I will sell. I've been stung already by SUM and see them as most likely candidate for disappointing me again. Portfolio is due a full review shortly so I may adjust stop loss settings as at the moment I am well ahead of target

[winner69]

Rob said at the AGM “The board receives weekly reports on sales and resales and “we review village by village in a lot of detail.”

Some might say that’s good and keeping the finger on the pulse ...but weekly a bit of an overkill? They deserve even more Directors fees if they review things in a lot of detail each week

Wonder if they get weekly updates on the mystery shopping.

[RTM]

Thanks for the summary from the meeting Beagle. Much appreciated and longer term sounds encouraging. SUM are a small % of my portfolio...2.8%. I think I’ll just sit on what I have for now, will consider buying more if the price has a 4 in the front of it. I’d be more interested at current price if the dividend yield was a bit higher.....

[Beagle]

Baa Baa - Julian Cook made some comments on sales initiatives in his address to the annual meeting, herewith an extract
Sales results for the business were pleasing in 2018. Since that time we have seen some slowing of settlements in Auckland and Christchurch. Since the appointment of Fay French as our GM Sales we have been working on a number of improvements to our sales and marketing approach. We have introduced increased training for sales managers, mystery shopping of our own sites to ensure quality control and customer service standards, improved measurement and reporting of inquiry numbers, conversion rates, and key sales statistics.
We have an enhanced incentive structure for sales managers, more responsive marketing, and an increased focus on engaging with local communities. In response to the slowing in settlement times we have put increased focus and emphasis on marketing and sales conversion in the Auckland and Christchurch markets.


Pierre I'm tossing up whether to reallocate my funds in this sector so my questions are:
a) which of my three companies do you think has the greatest growth potential over the next 5-6 years?
b) in which order would you rank the other two?
c) is there another listed retirement sector business which you think will outperform all three of my companies.
SUM's proven track record of growth is unmatched on the NZX even by the much revered RYM and I also noted therein that RYM's forward PE never went under 12 during the GFC and that SUM's current forward PE is less than that.
I believe SUM is currently very very cheap compared to RYM.
I also believe SUM is very cheap relative to OCA and I would reiterate my horse racing analogy that while OCA is a very young filly showing considerable promise at the trials SUM is a well proven thoroughbred with an impeccable winning record.
My rating in this sector is
1. SUM
2. OCA
3. ARV
I don't rate RYM at the current price and believe shareholders are in for disappointment as they find that RYM is exposed to the same market dynamics as SUM but is trading on almost exactly twice the forward PE despite its slower growth rate and material exposure to the fast declining Australian property market.
I think RYM makes a great sector "short" at ~ $12 for those that want to increase their holding of one of the above but ameliorate their sector risk.

The answer to part c of your question is in my opinion, NO. I don't rate MET's prospects well at all.

[couta1]

From my inside knowledge of the sector I rate both RYM and OCA ahead of SUM others. PS-I can't comment on ARV.

[Beagle]

As an accountant I stick to the numbers and what's best for me and leave the emotional feel good stuff to others but for what its worth I think a 97% customer care satisfaction survey is more than convincing enough for me that the board and management are NOT a bunch of ruthless cold hearted people.

[couta1]

As an accountant I stick to the numbers and what's best for me and leave the emotional feel good stuff to others. No worries mate but remember people are emotional beings especially the elderly.

[winner69]

No worries mate but remember people are emotional beings especially the elderly.

Also he needs to take an interest in ‘statistics’ and ‘mean reversion’ eh Couts

SUM share price will remain about 50% of RYM

[couta1]

Also he needs to take an interest in ‘statistics’ and ‘mean reversion’ eh Couts

SUM share price will remain about 50% of RYM It sure will, that will never change it's the Gold standard measurement tool. PS- Results of customer satisfaction surveys shouldnt be given too much credence as often the % of the total number of facility residents filling them out is often low.

[Beagle]

No worries mate but remember people are emotional beings especially the elderly.
You know me mate, I'm not a totally number obsessed person and it definitly matters to me that SUM are trying to improve their care standards.
I think its a very good thing that of the 6 directors two, Dr Marie Bismark and Dr Andrew Wong are extremely well credentialed and obviously very well respected in their field of expertise


Also he needs to take an interest in ‘statistics’ and ‘mean reversion’ eh Couts

SUM share price will remain about 50% of RYM

LOL I'll keep humouring your guys as my good mates that this is relevant until one day this "old wives tale" :p disappears into the annuals of history as the stuff of former legend but I do note that 55% of $12.20 for RYM is about $6.70 which is about my price target for SUM for one year out so you guys might be all good for another year lol

[Raz]

Baa Baa - Julian Cook made some comments on sales initiatives in his address to the annual meeting, herewith an extract...
Sales results for the business were pleasing in 2018. Since that time we have seen some slowing of settlements in Auckland and Christchurch. Since the appointment of Fay French as our GM Sales we have been working on a number of improvements to our sales and marketing approach. We have introduced increased training for sales managers, mystery shopping of our own sites to ensure quality control and customer service standards, improved measurement and reporting of inquiry numbers, conversion rates, and key sales statistics.
We have an enhanced incentive structure for sales managers, more responsive marketing, and an increased focus on engaging with local communities. In response to the slowing in settlement times we have put increased focus and emphasis on marketing and sales conversion in the Auckland and Christchurch markets.

This is the key takeout from my perspective, I know about Auckland and Christchurch markets and that is in essence 50% of the NZ market place and why the sector is struggling.

[winner69]

You know me mate, I'm not a totally number obsessed person and it definitly matters to me that SUM are trying to improve their care standards.
I think its a very good thing that of the 6 directors two, Dr Marie Bismark and Dr Andrew Wong are extremely well credentialed and obviously very well respected in their field of expertise



LOL I'll keep humouring your guys as my good mates that this is relevant until one day this "old wives tale" :p disappears into the annuals of history as the stuff of former legend but I do note that 55% of $12.20 for RYM is about $6.70 which is about my price target for SUM for one year out so you guys might be all good for another year lol

But 50% of $12.20 is $6.10 so you might get some way to your very optimistic target.

[Beagle]

This is the key takeout from my perspective, I know about Auckland and Christchurch markets and that is in essence 50% of the NZ market place and why the sector is struggling. Its nothing like 50% of SUM's market and will decrease even further over time and that's the point a lot of people are not understanding.
The time to sell was ~ $7.80 after Q3's results in early October 2018, (and those that did should give themselves a good pat on the back).
The current price is an overreaction to already known factors that were quite clear in late 2018.

[winner69]

Last 6 year’s SUM NTA/Book Value increased at 25% pa - share price up 27% pa

All seems in order ....market knows what it’s doing (even rerating SUM up a bit)

[Raz]

Its nothing like 50% of SUM's market and will decrease even further over time and that's the point a lot of people are not understanding.
The time to sell was ~ $7.80 after Q3's results in early October 2018, (and those that did should give themselves a good pat on the back).
The current price is an overreaction to already known factors that were quite clear in late 2018.

People understand more than you give them credit for. I think most people know the timing and reason why the share price moved. Different competitors are mixing up their offering depending where their portfolio of inventory is across the country. This is working against pressed margins. If you are depending on the regions for NZ sector performance you are a real optimist!

[Beagle]

People understand more than you give them credit for. I think most people know the timing and reason why the share price moved. Different competitors are mixing up their offering depending where their portfolio of inventory is across the country. This is working against pressed margins. If you are depending on the regions for NZ sector performance you are a real optimist!

Tell that to Iceman after you ask him how Marlborough and Nelson real estate has been booming.
I am sure those living in the Manawatu and Hawkes Bay would have a different view to yours as well
https://reinz.co.nz/residential-property-data-gallery

[peat]

I am sure those living in the Manawatu and Hawkes Bay would have a different view to yours as well
https://reinz.co.nz/residential-property-data-gallery

I had the real estate agent call me today - the one who we bought the house through, here in Whanganui only just a year ago - she wanted me to know prices have risen already, but I said I bought it to live in.
But yeh timed my exit out of the 09 pretty well if I was a speculator. builders are busy here too. its been a month since I asked for a quote on a small piece of work I want done.

Also re the regions - aren't all farmers doing pretty well at the moment? I heard on Country Calendar that sheep and beef farmers are getting good prices. This will support the regions if its true.

[Raz]

Tell that to Iceman after you ask him how Marlborough and Nelson real estate has been booming.
I am sure those living in the Manawatu and Hawkes Bay would have a different view to yours as well
https://reinz.co.nz/residential-property-data-gallery


I have a number of properties in Nelson and Marlborough. I know the market well. Two key elements are , lack of depth in the market place, these are not large markets. Secondly the medium prices are now just getting close to prices for new units. Hardly a sure thing. Still I have made my point and anyone can look at the numbers in the regions for themselves.

[winner69]

Hey beagle - an old chart updated for you

You might get your wish and see SUM re-rated up slightly

Maybe 1.5 / 1.6 times Net Assets (BV) is on the cards over the next year.

But the multiple shown is essentially a sentiment measure (like your PE multiple on those fandangled underlying earnings) and reflects how the market per se feels about both the retirement sector in general and Summerset in particular


The multiple been steadily getting lower eh ......what’s going to change that sentiment?


PS - yes selling at close to 8 bucks was clever. It was outrageously over priced at that time

[Beagle]

Nice work there Winner, much appreciated.

Yes, I think a lot of people have forgotten that SUM has already corrected 30% in the last ~ 9 months and during that time underlying eps growth has been ~ 21% so about a 50% reduction in share price relative to underlying earnings and a lot more people don't remember or simply weren't around when RYM grew underlying earnings throughout the GFC.

[winner69]

Nice work there Winner, much appreciated.

Yes, I think a lot of people have forgotten that SUM has already corrected 30% in the last ~ 9 months and during that time underlying eps growth has been ~ 21% so about a 50% reduction in share price relative to underlying earnings and a lot more people don't remember or simply weren't around when RYM grew underlying earnings throughout the GFC.

Mind you SUM will never be rated as highly as RYM

Just for interest sakes the comparison of PB multiples .....RYM loved heaps more by the market ...and will always be so

[Beagle]

SUM are making every effort to be carbon neutral so that will make a "huge" difference lol

[BlackPeter]

Mind you SUM will never be rated as highly as RYM

Just for interest sakes the comparison of PB multiples .....RYM loved heaps more by the market ...and will always be so

Hmm - not hard to see that markets rate Ryman at this stage higher than SUM. So, yes - this wee bit in your post is a fact.

However - you make some future pointing statements which sound like facts, but purely express your opinion (to which you are obviously entitled to).

Why do you think that markets will rate Ryman always higher than SUM without knowing how the future looks like - or do you?

A lot of things can happen ... Ryman might stumble - e.g. starting with Rymans Australian adventure going pear shaped. Would not be the first NZ company fetching a bloody nose over there.

Or SUM might just keep outperforming RYM in terms of growth rates. At some stage the markets will notice.

[winner69]

Hmm - not hard to see that markets rate Ryman at this stage higher than SUM. So, yes - this wee bit in your post is a fact.

However - you make some future pointing statements which sound like facts, but purely express your opinion (to which you are obviously entitled to).

Why do you think that markets will rate Ryman always higher than SUM without knowing how the future looks like - or do you?

A lot of things can happen ... Ryman might stumble - e.g. starting with Rymans Australian adventure going pear shaped. Would not be the first NZ company fetching a bloody nose over there.

Or SUM might just keep outperforming RYM in terms of growth rates.At some stage the markets will notice.

BP says ‘at some stage the markets will notice’ ....presumably hoping SUM and RYM might one day be ‘rated’ about the same ....not a fact, just his opinion ...which BP is entitled to just as much as I am entitled to my opinions

[BlackPeter]

BP says ‘at some stage the markets will notice’ ....presumably hoping SUM and RYM might one day be ‘rated’ about the same ....not a fact, just his opinion ...which BP is entitled to just as much as I am entitled to my opinions

Absolutely. The difference between our opinions is that there are some (I think good) arguments supporting my view (SUM has clearly cheaper fundamentals than RYM as discussed on this thread ad infinitum) and in the long run markets recognise value (otherwise there would be no point in being a "patient" investor).

I hoped you might show us some arguments supporting your opinion that markets will always favour RYM over SUM. "Always" is a long timeframe - and in terms of supporting arguments - is above post really the best you can do? That's not your usual standard - or is it?

[winner69]

No need to get personal now BlackPeter ...not becoming of you as usually you come across as being a decent guy ....but I won’t get offended

Whatever I’m looking forward to SUM increasing its book value by 18% (or more) this year which indicates its share price should get to 620 and if re-rated to 1.5 times book value the share price would be around 770 ....punters please note this is my opinion only and not substantiated by any facts

[Food4Thought]

More fuel to fan growth in the housing market, ASB economists reckon https://tmmonline.nz/article/976514720/new-flames-to-fan-housing-market?utm_source=GR&utm_medium=email&utm_campaign=With+CGT+gone%2C+housing+market+expec ted+to+pick+up

New Zealand is high in demand dream location. Own some or portions of some beforewe get priced out. People from all over the world have their eyes on living in Aus or New Zealand. New Zealand is to the Pacific what Noosa is to Australia.

Disc. Own portfolio propotionate large number of SUM and OCA. Long term 10+ potential is IMO very good and achievable... even with some possible hurdles (that's business)

[LAC]

Whatever slows down the sales of units in SUM will do the same for RYM, I know there's talk about RYM being cream of the crop etc. it still comes down to the growth rate. If SUM have an annual growth rate better than RYM it is inevitable that SUM SP will creep up an close the gap or pass RYM. However it has been suggested that SUM will be getting to the average 15%pa as is what RYM aims for, in that case Couta1's theory may stand the test of time. Regardless SUM, OCA and RYM are all winners for shareholders in the long term:)

[macduffy]

Yes, good old anno domini -working both for and against us all.

:ohmy:

[Timesurfer]

Plenty of competition https://www.stuff.co.nz/national/health/112340330/retirement-villages-on-rise-in-nelson-region-with-1000-extra-units-planned