SUM - Summerset Group

[couta1]

SUM closed week at $8.00 - that’s good

Wonder what RYM closed at? Haha exactly $16 of course, cant beat that ratio aye.

[Baa_Baa]

SUM closed week at $8.00 - that’s good

$8.00 also an ATH closing price.

[Beagle]

Haha exactly $16 of course, cant beat that ratio aye.

I'm waiting for that 1 SUM = 1 MET to come good :)...and I'm pretty sure Maverick is hanging out for the 1 RYM = 10 OCA, heck that's $1.60 :p

[winner69]

I'm waiting for that 1 SUM = 1 MET to come good :)

No no Beagle - MET reverts to the mean with RYM

Yep,even better when MET reverts as well.

[Beagle]

How could one not be happy. Its nearly Christmas and both SUM and MET have moved up to the point where they're both only 20% undervalued now. Happy days :D
SUM $10+ in 2020, you read it from me first :)

[winner69]

Beagle post from another thread



A Bullish case for SUM based on superior growth and very realistic PE

Is more than a little spooky. The other day I noted way back in 2011 when SUM first listed the situation prevailed even then.

Thankfully the past no matter how sticky is not always a good guide to the future and I note for many years the two stocks traded on not dissimilar underlying PE's.

That situation is vastly different today.

At the mid point of RYM's forecast 31/3/20 underlying profit of $257.5m RYM trades on a forward earnings of 51.5 cps = forward PE at $16 of 31.

If SUM make $117m underlying for 31/12/19 that's also 51.5 cps, that's right folks exactly the same, and SUM's only a forward PE of just 15.5.

SUM trading at half the PE is not common over the years comparing these two and reflects the fact that SUM's earnings have grown much faster than RYM's over the 8 years since its listed that we can compare these two.

Heck, if SUM lifts its build rate in 2020 and the real estate market is strong so we get a ~ 25% lift in underlying profit for 2020 to 64.4 cps at $8 (even though this is a fresh all time high), SUM could be trading on a forward PE for 2020 of just 12.4 times earnings. WOW, that is stupidly cheap and this sector is going to be on fire and flush with well over $1.5 billion dollars of capital looking for a new home after the probable MET takeover. SUM were nearly $8 way back in August 2018 so in relative terms has done very little in gains for well over a year.

2020 could be SUM's year and with a resurgent real estate market there's no logical reason why we shouldn't see some PE expansion up towards the market median PE of 19.

How good could it get for SUM in 2020 ?. 19 x 64.4 cps underlying earnings = $12.23. We could see 50% added to SUM's price in 2020 in a favourable rerating scenario. One day the market will wake up to what a phenomenal growth story SUM has been since it listed, maybe after a decade of fantastic growth, heck that's late 2021, not that far away and could be $15 by then. I think its time to add SUM more to my position.

[winner69]

Still a few who think property prices don’t matter that much for retirement sector valuations

MET said the other day - The valuation of the company is particularly sensitive to house price inflation (HPI) and construction cost inflation

[Beagle]

I topped up with some more SUM today. Takeover of MET almost certain to go ahead in my opinion and over one and half billion dollars will be looking for another home, much of it in the retirement sector as institutions rebalance their portfolio's. SUM is not expensive as pointed out with fundamental analysis above and from a technical analysis point of view the chart looks very encouraging.

Institutions will be looking for a well proven performer in this sector trading on compelling metrics to replace their MET shares with and SUM really stands out based on its long proven performance and exceptionally high average annual eps growth rate. The other thing is, if private equity sees value in MET, who's next ?

[winner69]

Topped up as well beagle

Broker made comment jeez winner you paying heaps more now than that first lot you got at $1.78 years ago

Told him you will be saying that again in years to come.

[Beagle]

Topped up as well beagle

Broker made comment jeez winner you paying heaps more now than that first lot you got at $1.78 years ago

Told him you will be saying that again in years to come.

Good on ya mate. Don't forget to tell your broker its on half the PE now that it was when you first bought so effectively with earnings growth over the years you're buying double the value you were back then. WOW, that's quite a SUM of compound earnings growth over the years eh mate.

[winner69]

SUM share price doing well today ....could get to $8.50 by Christmas ...this year that is.

[Beagle]

SUM share price doing well today ....could get to $8.50 by Christmas ...this year that is.

LOL as if there was any doubt which Christmas. At this rate we might get to $10 very early in 2020 as the MET takeover deal is completed and a billion and a half dollars gets mostly reinvested back into this sector. $10 by reporting day in late February 2020 would be nice :)

[winner69]

Not far to 4th quarter sales report

I reckon strong sales have been recorded this quarter .....and margins will have been so good they’ll have to give profit guidance ....like underlying earnings $117m-$120m

All those abnormal / extraordinary revaluations of 2016/2017 to be realised this and next year

[Beagle]

Not far to 4th quarter sales report

I reckon strong sales have been recorded this quarter .....and margins will have been so good they’ll have to give profit guidance ....like underlying earnings $117m-$120m

All those abnormal / extraordinary revaluations of 2016/2017 to be realised this and next year

Dead right mate, I agree 100%. My early guess is for underlying profit of $150m for FY20 giving about 65 cents per share. Put a market median PE of 19 on that and we're off to the races at over $12, maybe even more as institutional money from the MET takeover pours into SUM. You might even feel compelled to attend the annual meeting in April 2020 this time and hear about the excellent growth prospects :)

[winner69]

Dead right mate, I agree 100%. My early guess is for underlying profit of $150m for FY20 giving about 65 cents per share. Put a market median PE of 19 on that and we're off to the races at over $12, maybe even more as institutional money from the MET takeover pours into SUM. You might even feel compelled to attend the annual meeting in April 2020 this time and hear about the excellent growth prospects :)

Summerset ASM are boring as anything ....mainly for punters to give themselves the warm fuzzies.

[couta1]

Summerset ASM are boring as anything ....mainly for punters to give themselves the warm fuzzies. Mainly just to catch up with ST mates and drink at the local plus do a bit of trading during the meeting.

[winner69]

Mainly just to catch up with ST mates and drink at the local plus do a bit of trading during the meeting.

Yep, just a social Get together - not to hear about ‘amazing growth prospects’

[Beagle]

Summerset ASM are boring as anything ....mainly for punters to give themselves the warm fuzzies.

I always enjoy having a chat with Julian afterwards and asking as many questions as come to mind.
Its also a real pleasure catching up with friends.

[King1212]

How are u going to top up if u had no more money left?

[Beagle]

Not sure if you're asking me that question but for what its worth I almost always have at least a 10% portfolio allocation to cash so I can take advantage of special opportunities as they arise. Once its expended I replace it by reducing something that is already, or very close to already being fully valued by the market.

I guess for those that don't have enough exposure to the retirement sector and are already fully invested maybe they should reduce one or more of their other lower conviction or more fully valued positions and recycle that capital.

[Jay]

Dead right mate, I agree 100%. My early guess is for underlying profit of $150m for FY20 giving about 65 cents per share. Put a market median PE of 19 on that and we're off to the races at over $12, maybe even more as institutional money from the MET takeover pours into SUM. You might even feel compelled to attend the annual meeting in April 2020 this time and hear about the excellent growth prospects :)

So according to a certain person's theory that would put RYM at $20-24, which could well be given as you say with funds lying around with somwhere to go:)

[Beagle]

Could well be by the end of 2020 as people consider RYM's profit for 31/3/21. I think the whole sector is in for a very good year in 2020.

[Beagle]

Decided to give myself another early Christmas present, one I know will give me much pleasure in the long run, SUM more SUM shares this morning, (bought more yesterday as well).
I have 100% confidence in the board and senior management and believe they will add tremendous value over time.
This is still trading well below the median PE for the NZX50 and doesn't deserve to be given its extraordinary track record of growth over the last 8 years.
Forward metrics for FY20 based on my best guess of earnings show this as outstanding value and will likely break through the $10 barrier sooner rather than later in 2020.
A ten dollar something price by the time of the next annual meeting in April 2020 wouldn't surprise me in the slightest.
I think a significant amount of cash from the MET takeover is going to be reallocated to SUM and if you wait until after the cash is released from that takeover SUM shares won't start with an 8 handle. Better to buy before the reallocation into SUM if you're in a position to do so, in my opinion.

[winner69]

Decided to give myself another early Christmas present, one I know will give me much pleasure in the long run, SUM more SUM shares this morning, (bought more yesterday as well).
I have 100% confidence in the board and senior management and believe they will add tremendous value over time.
This is still trading well below the median PE for the NZX50 and doesn't deserve to be given its extraordinary track record of growth over the last 8 years.
Forward metrics for FY20 based on my best guess of earnings show this as outstanding value and will likely break through the $10 barrier sooner rather than later in 2020.
A ten dollar something price by the time of the next annual meeting in April 2020 wouldn't surprise me in the slightest.
I think a significant amount of cash from the MET takeover is going to be reallocated to SUM and if you wait until after the cash is released from that takeover SUM shares won't start with an 8 handle. Better to buy before the reallocation into SUM if you're in a position to do so, in my opinion.

Good on you

Somebody has to keep the volume ticking over seeing most have gone on holidays already

I take it NZX closes down at 1 o’clock

[Beagle]

Yeap, 1 p.m. close today mate and then we look forward to unwrapping our MET present on Friday morning. All other Christmas presents this year will pale by comparison :)

[couta1]

Yeap, 1 p.m. close today mate and then we look forward to unwrapping our MET present on Friday morning. All other Christmas presents this year will pale by comparison :) Yeah I'm looking forward to unwrapping that Christmas present also and then putting it up for sale to the highest bidder.:eek2:

[peat]

you must be up to the gunnels by now Beagle and good on ya
However I've reduced just a little.

[Beagle]

you must be up to the gunnels by now Beagle and good on ya
However I've reduced just a little.

Thanks mate. I really do think its a $10 stock in 2020, (am strongly inclined to believe my own B.S, especially after a very good and likely to be very successful MET foray).
Pretty sure I am not done yet. When you zoom out and take a 5 year view the SUM's look quite startling.
Year ended 31 Dec 2014 they made $24.4m underlying profit. If they make say $115m this year that's an average compound growth rate of 37% per annum !

Even if they grow underlying profit at just 15% in 2020, which really is a base case my estimate that's $132m on 226.8m shares gives 58 cps.
At $8.50 that's a FY20 PE of 14.7. That's a PEG ratio based on historical growth of only 14.7 / 37 = just 0.4 and has me wondering if SUM itself is not vulnerable to a takeover ?

Even if we have entered a new more mature phase of growth for the company and RYM type growth of 15% per annum is the new normal using my no growth PE of 11 for the ultra low interest rates and 1g where g is the sustainable growth rate estimated for the next 7-10 years I get a fair PE of 26 and valuation numbers vastly north of the current share price. I know $15 sounds "whacky" talking about it now...a 76% potential gain in the next 2-3 years is highly likely in my opinion as the value is there.

Even if the PE just rerates to the market median of 19 and why wouldn't it with their track record... and underlying growth continues at 15% for the next 3 years I get 51.5 cps for FY19 growing to 78.3 cps earnings in 2022 x 19 = ~ $15 in 2022.

I would be very disappointed in SUM becomes a takeover target as I honestly believe the company has a fantastic future and will be a very powerful force for creating shareholder value over the long run. They have a very experienced and highly articulate senior management team and an excellent board and I know the CEO and CFO are very intelligent and highly motivated guys.

[winner69]

Who would have thought SUM would be $9 by the end of the year (2 days trading to go)

Still relatively outrageously cheap

Beagle needs to revise his expectations

[Raz]

Who would have thought SUM would be $9 by the end of the year (2 days trading to go)

Still relatively outrageously cheap

Beagle needs to revise his expectations

I think we all will, been buying plus another stock..not too many compelling propositions on the NZX currently...

[Beagle]

Who would have thought SUM would be $9 by the end of the year (2 days trading to go)

Still relatively outrageously cheap

Beagle needs to revise his expectations

Bull case, suppose 51.5 cps ($117m) this year grows by an average of 30% per year for the next 3 years, (this is still a slower growth rate than their average of 37% per annum over the last 5 years) = $1.13 eps in 2022. Put even a market median PE of 19 on that you get $21.50 !

Revise that up as SUM's track record would then be longer than a decade and it might finally get SUM recognition as one of the NZX's preeminent growth stocks to a PE of 24 and you get $27. My bullish case is the share price could triple from here over the next 3 years.

[SailorRob]

Hi Beagle, thanks for all your insight on Sharetrader in general.

Wondering how you value the two other factors of these businesses, one being the change in value of property already built (which is at the whim of the market ultimately) and the other being the fact that they are creating value by developing new property, which is down to their efficiency. It seems like most of the analysis goes to the underlying business and not much to the development side, which when taken into account just makes things better. I mean when you crunch the numbers on the total income rather than underlying they are incredible.

Also your current no growth PE of 11, it being 8.5 in Benjamin Graham's day (say 1970) priced off bond yields etc.. 11 would be pretty conservative today would it not? Implying a 9% earnings yield and some going to (non growth) re investment and some for the risk, I guess the no growth yield could in fact be even higher today?

Thanks again.

[Beagle]

Hi Beagle, thanks for all your insight on Sharetrader in general.

Wondering how you value the two other factors of these businesses, one being the change in value of property already built (which is at the whim of the market ultimately) and the other being the fact that they are creating value by developing new property, which is down to their efficiency. It seems like most of the analysis goes to the underlying business and not much to the development side, which when taken into account just makes things better. I mean when you crunch the numbers on the total income rather than underlying they are incredible.

Also your current no growth PE of 11, it being 8.5 in Benjamin Graham's day (say 1970) priced off bond yields etc.. 11 would be pretty conservative today would it not? Implying a 9% earnings yield and some going to (non growth) re investment and some for the risk, I guess the no growth yield could in fact be even higher today?

Thanks again.

Hi SailorRob. Thanks for your questions. International financial reporting standards (IFRS) captures the full profit of the company for the year, inclusive of all increases in property values for that year. Most analysts tend to focus on underlying profit (which is what I do) which captures the realised portion of IFRS profit, knowing that the difference is carried forward and represents the embedded value, i.e. value embedded within the books ready to be released when existing units are resold to new incoming residents. Hope that makes sense mate.

As you quite rightly point out if one starts to simply look at the total profit each year, (the IFRS profit including revaluation of all properties) the numbers become quite extraordinary. Ultimately the total IFRS profit is realised at some point down the track as the life cycle of each unit gets recycled so there is some validity in crunching the numbers based on headline total profit but I tend to stick with underlying profit as its far more conservative.

I continue to like my own version of Ben Graham's valuation methodology and as you may know use 1g as opposed to 2g that Ben used. Back then the risk free 10 year Government stock was 4% and its currently ~ 1.5% here so I add 2.5% or a PE of about 2.5 to his no growth PE of 8.5 to get 11. This implies an earnings yield of 1/11 = 9.1% compared to a 1.5% risk free rate or a 7.6% risk premium for the market as a whole. In his day it was 1/8.5 11.76% - 4.0% = 7.76% so about the same and I am comfortable with a PE of 11 for a no growth company.

Adding 1g to that (where g is a very conservative average 15% growth rate for SUM for the next 7-10 years which I note is well under half their average growth rate of the last 5 years which ahs averaged 37%) gives me a fair PE of 11 + 15 = 26.

Using that PE and some moderately bullish eps growth numbers for the next 3 years you can pretty easily build a case for the share price tripling over the next few years.
I believe SUM's growth rate is being significantly under appreciated by the market. One day the market will really wake up...

[winner69]

Beagle - last SUM press has underlying earnings 8 year growth at 36% pa

But real profit has been 60% pa in those 8 years

Pretty good eh.

[Beagle]

Thanks for pointing that out mate. Its more than pretty good and gives an interesting insight into future underlying profit growth.

[winner69]

Beagles pretty excited about past SUM financials and how they’ll probably continue into the future for years to come

You can’t but be impressed by the numbers in column headed 8 Year CAGR in this slide from half year result.

Most impressive

[winner69]

And in those 8 years the share price has increased at 27% pa as well

That’s pretty good.

[Beagle]

Much better numbers than RYM over the last 8 years.
SP has not grown at anything like the rate of earnings growth, YET. Share prices eventually follow earnings as in the long run the market is a weighing machine, not a voting machine.
SUM has a massive and geographically very well spread land bank and is also expanding into Australia. The size of their land bank provides a valuable clue as to their expected future growth rate.

SUM's long proven track record of very strong growth, (easily the fastest average eps growth rate in the sector over the last 8 years), is still not reflected in the current $8.90 share price.

[SailorRob]

Thanks Beagle, all makes sense :)

[Baa_Baa]

Has always been a great time buy SUM when share price <40% of RYM

Traders would have sold when it reached 60% ....that’s a really healthy trade

This for Winner69, you'll see that the 60% sell 40% buy is not a reliable trade indicator, you'd have made a couple of $ between 2014-2016 then be out and have missed all the action with no subsequent buy signals.

Try as you might, and I have, there appears to be no reliable recurring % sell indicator, and there's no corresponding buy % extreme that is reliable either.

A fun fact about reversion to the mean, but as a buy/hold/sell indicator, more a curiosity than anything particularly useful.
:(

10925

[Beagle]

This for Winner69, you'll see that the 60% sell 40% buy is not a reliable trade indicator, you'd have made a couple of $ between 2014-2016 then be out and have missed all the action with no subsequent buy signals.

Try as you might, and I have, there appears to be no reliable recurring % sell indicator, and there's no corresponding buy % extreme that is reliable either.

A fun fact about reversion to the mean, but as a buy/hold/sell indicator, more a curiosity than anything particularly useful.
:(

10925

Thank you for factually debunking what I know are factually unsound theories of price relativity. I'm sure Coutta will be along to point to the history of his theory holding water but I couldn't care less. Thankfully I have my own nose for a feed to follow backed up with very thorough analysis.
I see we're over $9 today. My call of $10+ by the time of the annual meeting in April 2020 is looking very good !

[winner69]

Baabaa - what a mess you’ve made off what should have been a nice simple chart ...did you apply some if TA skills to a reversion to the mean theory ...nuts if you have

You are worse than beagle - make a good combo you two -you;) complicating charts and beagle with his ratios. Suppose one / anybody can ‘debunk’ anything if one tries hard enough

I do like your normal nice clean and clear charts ...this one lets yourself down. ;):(:D:t_up::mellow: (as you can tell I have no idea what these smiley things mean)

[Baa_Baa]

Thank you for factually debunking what I know are factually unsound theories of price relativity. I'm sure Coutta will be along to point to the history of his theory holding water but I couldn't care less. Thankfully I have my own nose for a feed to follow backed up with very thorough analysis.
I see we're over $9 today. My call of $10+ by the time of the annual meeting in April 2020 is looking very good !

No worries, better to stick with good FA and projections to pick a company, then as long as fundamentals don't change too much, use SP TA to time buys & sells. A good dose of detailed understanding of a company (FA) and its price action TA (market sentiment / momentum) is way better than making buy/hold/sell decisions based on any comparison with any other company, even in the same sector. jmho.

SUM has very bright future, the sell off on property market jitters was a godsend buy-in/accumulate opportunity. My best performer for 2019. Eyes on sales performance for 2020, this could really fly.

[Baa_Baa]

Baabaa - what a mess you’ve made off what should have been a nice simple chart ...did you apply some if TA skills to a reversion to the mean theory ...nuts if you have

You are worse than beagle - make a good combo you two -you;) complicating charts and beagle with his ratios. Suppose one / anybody can ‘debunk’ anything if one tries hard enough

I do like your normal nice clean and clear charts ...this one lets yourself down. ;):(:D:t_up::mellow: (as you can tell I have no idea what these smiley things mean)

Ha ha Winner, the chart is simple, it's the narrative that confounds the myth. No one I think is saying that reversion to the mean isn't real (long term rolling SUM % of RYM is ... almost exaccery 50%), all we're saying is that the relative % per se is not a buy sell hold indicator, or not a consistently reliable indicator. I'll reflect on being "worse than Beagle", being worse than a very very high bar could still be a good thing.

Happy holidays everyone. It's been an enjoyable and profitable year with SUM, all the best for 2020.
BAA

[Beagle]

No worries, better to stick with good FA and projections to pick a company, then as long as fundamentals don't change too much, use SP TA to time buys & sells. A good dose of detailed understanding of a company (FA) and its price action TA (market sentiment / momentum) is way better than making buy/hold/sell decisions based on any comparison with any other company, even in the same sector. jmho.

SUM has very bright future, the sell off on property market jitters was a godsend buy-in/accumulate opportunity. My best performer for 2019. Eyes on sales performance for 2020, this could really fly.

Thanks. I couldn't agree more ! I think a 1:1 scrip bid for MET is a real chance and I'd back SUM management to make a lot more out of MET assets than MET management have !

[couta1]

Baabaa - what a mess you’ve made off what should have been a nice simple chart ...did you apply some if TA skills to a reversion to the mean theory ...nuts if you have

You are worse than beagle - make a good combo you two -you;) complicating charts and beagle with his ratios. Suppose one / anybody can ‘debunk’ anything if one tries hard enough

I do like your normal nice clean and clear charts ...this one lets yourself down. ;):(:D:t_up::mellow: (as you can tell I have no idea what these smiley things mean) The main thing here winner is that we have proven history on our side rather than Beagle trying to will the SUM sp higher because SUM ratio says it should be, the Couta theorum was not designed as a buy/sell indicator but simply to prove that the SUM sp would always gravitate to half that of RYM which it has stubbornly proven to do so. PS-Doesnt matter if and when the SUM sp hits $10 as all that's means is that the RYM sp will be $20 so punters really no better off buying one over the other aye.

[Beagle]

SUM up 65% from the lows of $5.50 mid year. The barking was very clear and persistent and anyone that listened should be very well pleased.
Its not done yet by any stretch of the imagination and 2020 could be a huge year for SUM. The company is still trading on a PEG of less than 0.5 based on its CAGR over the last 5 years.

There is serious money to be made when thorough fundamental analysis shows a compelling investment case and then technical analysis starts firing off clear buy signals.

Hey Coutts...if you believed your own theory why didn't you buy in the mid $5 range when SUM were about 42% of RYM and you could also be up 65% ?
Missed opportunity because of your "enthusiasm" with ATM ? 10926 Ouch !!

[LAC]

Wow this got Above $9 today, OCA had a great day as well, sector is looking good going forward but this sudden jump is sure to fade away. Long term holder though so don’t really care about the ups and downs in the short term. I really do think thy OCA will get their spending sorted over the next couple years hence the most bang for buck from that MET sale will end up in OCA

[couta1]

SUM up 65% from the lows of $5.50 mid year. The barking was very clear and persistent and anyone that listened should be very well pleased.
Its not done yet by any stretch of the imagination and 2020 could be a huge year for SUM. The company is still trading on a PEG of less than 0.5 based on its CAGR over the last 5 years.

There is serious money to be made when thorough fundamental analysis shows a compelling investment case and then technical analysis starts firing off clear buy signals.

Hey Coutts...if you believed your own theory why didn't you buy in the mid $5 range when SUM were about 42% of RYM and you could also be up 65% ?
Missed opportunity because of your "enthusiasm" with ATM ? 10926 Ouch !! You know me I like to keep a narrow focus so my enthusiasm is and has been for ATM for quite some time now and will be for a good while going forward, not a missed opportunity just a different opportunity. PS- You might like to run your graph for SUMVATM back a couple more years and see which one looks better or better still from the time of SUMs listing in 2011 against ATM until now.

[winner69]

You know me I like to keep a narrow focus so my enthusiasm is and has been for ATM for quite some time now and will be for a good while going forward, not a missed opportunity just a different opportunity. PS- You might like to run your graph for SUMVATM back a couple more years and see which one looks better or better still from the time of SUMs listing in 2011 against ATM until now.

Think milk wins

[winner69]

Never one to work out how much I’ve made on the markets but today made a horrible discovery

My first purchases of SUM were Sept 2012 and they cost about $2 each, I remember at the time resisting the urge to sell my RBD holdings to put into this new fantastic thing called SUM ....and raided elsewhere to fund SUM

The horrible discovery .....since Sept 2012 it looks like I’ve made twice as much on the RBD shares I kept than the SUM ones I bought (think it’s 420% v 220% over 7 years)

Pretty cool eh .....fancy doing much much better over 7 years backing something selling greasy chicken and pizzas than something that’s going to creme it with the grey tsunami wanting somewhere to live.

(Just back of envelope sums but I think they’re about right)

Might need to update this from September .....but I think greasy chicken still way out in front

[Beagle]

.................

[Beagle]

The horrible discovery .....since Sept 2012 it looks like I’ve made twice as much on the RBD shares I kept than the SUM ones I bought (think it’s 420% v 220% over 7 years)
Might need to update this from September .....but I think greasy chicken still way out in front

SUM $1.95 in Sept 2012, now $9.05 that's 4.64 times your money. That's quite SUM update for ya...but yes RBD been going gangbusters too. Maybe old folks eat lots of greasy chickens :)

[winner69]

SUM share price over 9 bucks - driven by general positive market sentiment and the euphoria in the retirement sector. Seems punters just have to buy things - anything


Nothing to do with fundamentals or ratios - just buy things is the game


But let’s hope the fun continues ....but memories of pretty seductive beauties and hay are still with me.

[King1212]

Shut up winner....let people keep buying....n let SP keeps going up..enjoy the ride

[winner69]

Shut up winner....let people keep buying....n let SP keeps going up..enjoy the ride

OK mate

Let the euphoria continue eh

Sales announcement next week

[winner69]

Ben Graham once said the stock market can become nothing more than a beauty pageant. .hence his famous phrase ““In the short run the market is a voting machine, but in the long run it is a weighing machine.”

Seems Summerset is the prettiest and most seductive and everybody is voting for her at the moment ......slapping high price to earnings ratios and and valuations on her.

No doubt the market will soon revert to be a ‘weighing machine’ and all this current nonsense will stop.

But let’s make hay while the sun shines

[Beagle]

Tomorrow is the start of SUM's FY20 year and investors will start pondering their prospective FY20 earnings of maybe $140m giving 62 cps. $9.05 / 0.62 = forward PE of just 14.6 for a company with average compound growth of 37% per annum.

Why should this trade on less than the median forward PE of 19 given they have the highest average compound growth rate of any stock listed on the NZX for the last 8 years ?

You can very easily make the case SUM is stupidly cheap. When a compelling fundamental investment case exists and technical analysis supports this there's usually a LOT of money to be made. I might buy SUM more when we see the quarterly sales stat's next week.

Just as well Rob Campbell chairs SUM eh Winner, that way we know Summerset isn't one of the companies that's a major cause of most of the evil's in society.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12297215 So...not only is FA great but so is TA and SUM ticks all the ESG boxes too !

No new year's awards for the dog...need to keep my snout and paws busy for another decade and then I might get a pat on the back.

[Davexl]

Tomorrow is the start of SUM's FY20 year and investors will start pondering their prospective FY20 earnings of maybe $140m giving 62 cps. $9.05 / 0.62 = forward PE of just 14.6 for a company with average compound growth of 37% per annum.

Why should this trade on less than the median forward PE of 19 given they have the highest average compound growth rate of any stock listed on the NZX for the last 8 years ?

You can very easily make the case SUM is stupidly cheap. When a compelling fundamental investment case exists and technical analysis supports this there's usually a LOT of money to be made. I might buy SUM more when we see the quarterly sales stat's next week.

Just as well Rob Campbell chairs SUM eh Winner, that way we know Summerset isn't one of the companies that's a major cause of most of the evil's in society.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12297215 So...not only is FA great but so is TA and SUM ticks all the ESG boxes too !

No new year's awards for the dog...need to keep my snout and paws busy for another decade and then I might get a pat on the back.

I'm convinced Beagle. Trying to buy a few thou on the liquidity dip before the New Year of SUM and have my large stash of OCA too. Roll on New Years!

[Davexl]

I'm convinced Beagle. Trying to buy a few thou on the liquidity dip before the New Year of SUM and have my large stash of OCA too. Roll on New Years!


Got 'em! Think I'll enjoy Elton John tonight especially well to bring in the New Year...:)

[Beagle]

Got 'em! Think I'll enjoy Elton John tonight especially well to bring in the New Year...:)

Congrats, stick those in the bottom drawer for quite SUM years and you'll reflect back on this last day of the decade and be able to give yourself a very big pat on the back.

I have quite a SUM of SUM shares already so am very well positioned for the 2020's :t_up: :t_up:

[couta1]

Congrats, stick those in the bottom drawer for quite SUM years and you'll reflect back on this last day of the decade and be able to give yourself a very big pat on the back.

I have quite a SUM of SUM shares already so am very well positioned for the 2020's :t_up: :t_up: I dont own any or in fact any retirement stocks for that matter yet I'm also feeling very well positioned.:cool:

[Beagle]

I dont own any or in fact any retirement stocks for that matter yet I'm also feeling very well positioned.:cool:

I take it you're hoping MET shareholders don't get a counter offer at $8 then :p Its a shame you haven't got a ticket to the MET barking show, its going to be quite a show !

[couta1]

I take it you're hoping MET shareholders don't get a counter offer at $8 then :p Too many unknowns to worry about but I reckon $7 is your lot, meanwhile I'm feeling rather bloated and can now take a rest from making milkshakes until the time is right to open up the dairy and start dispatching lots of them.

[Beagle]

Speaking of being bloated I'm hoping that the MET offer expands just as quick as my waistline has over Xmas
https://www.bing.com/videos/search?q=fat+beagle&qs=PF&cvid=a89d24d11e7a44538163bca11c83175e&refig=a748e81bbea64ccf894fb916d06036bf&cc=NZ&setlang=en-US&plvar=0&ru=%2fsearch%3fq%3dfat%2bbeagle%26form%3dEDGTCT%26 qs%3dPF%26cvid%3da89d24d11e7a44538163bca11c83175e% 26refig%3da748e81bbea64ccf894fb916d06036bf%26cc%3d NZ%26setlang%3den-US%26plvar%3d0&view=detail&mmscn=vwrc&mid=2E3D2704502A495FD9DF2E3D2704502A495FD9DF&FORM=WRVORC :lol: :lol:

[Davexl]

Congrats, stick those in the bottom drawer for quite SUM years and you'll reflect back on this last day of the decade and be able to give yourself a very big pat on the back.

I have quite a SUM of SUM shares already so am very well positioned for the 2020's :t_up: :t_up:


Thanks heaps for your analysis over the last year or so Beagle. It's been a tough one for me and I am a lot more skeptical these days but next year looks promising. Just have to survive Kim Jong Un, China & the South China Sea and Donald Trump and things might be OK. Happy New Year people!;)

[winner69]

Australian property prices rocketing up

From Westpac report:
The recovery in Australian dwelling prices that began in mid-2019 accelerated in the final quarter, sustaining a robust pace into year end. The CoreLogic home value index, covering the eight major capital cities, rose 1.2% in the Dec month following a very strong 2.0% gain in Nov and a 1.4% rise in Oct, giving a 4.7% gain for the final quarter. Prices rose 3% for the year as a whole – a 7% rebound in the second half more than offsetting a 3.8% decline in the first.

[Beagle]

Gotta say that those bushfires look the worst I have ever seen. Even though the Australians have been very tough on Kiwi's with some of their recently changed policies, I feel sorry for them, those fires are profoudly shocking. Someone made a comment about global warming and Australians crossing the ditch to retire here a while back and suggested that even if 1% did that it would make a big difference to demand for retirement village living here. I think that 1% guesstimate is starting to look a little bit conservative. Fire risk aside as a separate issue, its simply getting too hot over there...

[winner69]

Tomorrow is the start of SUM's FY20 year and investors will start pondering their prospective FY20 earnings of maybe $140m giving 62 cps. $9.05 / 0.62 = forward PE of just 14.6 for a company with average compound growth of 37% per annum.

Why should this trade on less than the median forward PE of 19 given they have the highest average compound growth rate of any stock listed on the NZX for the last 8 years ?

....

You being unusually conservative / bearish on that $140m F20 earnings.....only 16% earnings growth

Remember we’ve got all those abnormal / extraordinary revaluation gains from 2017/2018 yet to be realised to be

No doubt when we (should) get a real positive earnings guidance for F19 next week

[Beagle]

It'll probably be more, just a little early to make that call. $150m for Fy20 wouldn't surprise me and as much as $200m in FY21 when their development program hits high gear. Fabulous stock to hold long term and just let compound earnings growth do its magic.

[winner69]

Q4 sales out this week

As long as there are more than 200 sales in the quarter we'll be more than OK

They will need to provide guidance as to FY19 earnings I reckon as the realised gains in F19 will be hugew as thas extraordinary abnormally high revaluations in 17/18 start coming out

[Bjauck]

193 sales for the Dec/2018 quarter. Would there need to be a significantly higher number to maintain the current share price? Annual figures would only be marginally ahead of last year.

There were 204 sales in 4thQ Dec/2017.

[winner69]

193 sales for the Dec/2018 quarter. Would there need to be a significantly higher number to maintain the current share price? Annual figures would only be marginally ahead of last year.

There were 204 sales in 4thQ Dec/2017.

But remember what Julian said after Q3 about new sales maintaining the momentum reported in the first half.——code for we still going backwards at the same rate

What’s important at the moment is how much they realise on each sale. With extraordinary valuation gains made in 17/18 starting to be realised expect the average gains per sale to be significantly higher in F19 v F18. So even if sales are only marginally ahead of pcp underlying earnings will be significantly ahead - around $120m I reckon.

[Beagle]

I'm sticking with ~ $115m underlying profit for FY19. Share price is always forwards looking Bjauck and is pricing in a full year of more vibrancy in the housing market in 2020, more sales as well as possibly higher numbers of units to be built in 2020, more development margin and resales as Winner mentioned will be at much higher prices realising huge previous years valuation gains. $150m is my current best guess for underlying profit for 2020 which gives underlying eps on 226.8m shares of 66 cps.
A forward 2020 PE of just 13.6 is much too cheap for a company with the history of growth SUM has. Its going materially higher in 2020 is my prognosis.

[winner69]

Beagle - $115m would be a pretty slack year (historically)

[Lease]

But remember what Julian said after Q3 about new sales maintaining the momentum reported in the first half.——code for we still going backwards at the same rate

What’s important at the moment is how much they realise on each sale. With extraordinary valuation gains made in 17/18 starting to be realised expect the average gains per sale to be significantly higher in F19 v F18. So even if sales are only marginally ahead of pcp underlying earnings will be significantly ahead - around $120m I reckon.

underlying earnings $120M. Wow, it's very bold guess. If SUM could earn $100M, I would be more than happy.

[winner69]

underlying earnings $120M. Wow, it's very bold guess. If SUM could earn $100M, I would be more than happy.

F18 was $98.6m which was up 21% on pcp even though sales were down 6%.... all because average realised gain per sale up significantly. That’s the important bit

So F19 sales about the same (not down like F18) and a significantly higher average gain per sale it looks $120m on cards

[Beagle]

Beagle - $115m would be a pretty slack year (historically)

About 20% earnings growth. Most of the year the Auckland market was quite subdued so that will weigh a bit on the annual result for 2019.
2020 a different story though. Resales another area which has been tracking at much lower than normal levels for the increased number of units in their portfolio.

I expect a solid gain in the number of resales with very fat realisation of previous IFRS profits in 2020 and beyond.

[Maverick]

Beagle - $115m would be a pretty slack year (historically)
If there is a sweepstake developing here Beagle and Winner, then my spreadsheets of science and magic are saying the underlying profit will be between 115.4-117 million.

[winner69]

If there is a sweepstake developing here Beagle and Winner, then my spreadsheets of science and magic are saying the underlying profit will be between 115.4-117 million.

Hey Maverick - if I do a +/-$2m to my $120m we could almost agree on $117m eh

Knowing that the way we view Summersets financials are pokes apart and our forecasting models are very different I think getting about the same number is pretty amazing

Must be about right that $117m (plus of course)

[Beagle]

https://www.stuff.co.nz/business/118622563/recordbreaking-end-to-2019-for-property-market-realestateconz-says?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+7+J anuary+2020

I've upgraded my forecast seeing as the year ended so strongly from $115m to $117m :D

[winner69]

https://www.stuff.co.nz/business/118622563/recordbreaking-end-to-2019-for-property-market-realestateconz-says?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+7+J anuary+2020

I've upgraded my forecast seeing as the year ended so strongly from $115m to $117m :D

Your (our) $117m is earnings growth of 18% ...but seeing on 6% up at half year amazing result

Bit below average eh Beagle

[Beagle]

Yes Winner, 18.6% to be precise but yes, for most of 2019 the Auckland real estate market was slow and in the doldrums so the effect of that will show up in the forthcoming historical financial results and more especially the slowing of their development program to "fit" the slower market but the outlook for 2020 is looking very bright and I would think they will be ramping their development program back up. $150m+ on the cards for 2020 :t_up:

[LAC]

2020 will be a great year imo, all the ducks line up as of now.
2019 anything around $107m will be pleasing.

[winner69]

Been a bad couple days for the SUM share price - at least it didn’t close on the low for the day

Those sales numbers coming out soon better be pretty good ....or else we could see the 700’s again

[King1212]

Better be good Winner...all my chips are in SUM now...so...black or red tomorrow....ding ding ding....no more bet please.....

[King1212]

https://i.stuff.co.nz/business/property/118569686/house-prices-will-continue-their-steady-growth-in-2020-but-lets-wait-and-see-about-this-election

[Balance]

Been a bad couple days for the SUM share price - at least it didn’t close on the low for the day

Those sales numbers coming out soon better be pretty good ....or else we could see the 700’s again

Lag effect of property price increases.

Look for next quarter, I would have thought - not this quarter?

[peat]

you've got to admit its been a good six months and the last blow-off is probably overdone at this point.
10935

anything more than a 45 ° line usually has to take a breather.
I still have most of my holding

[LAC]

SUM is one of those buy and look at it in 10 years stocks:) Dont worry too much about the small ups and downs, just remember that at some point in the future they will have to increase their build rate to 600+, not sure when but they will....

[Maverick]

The result I'm hoping/expecting today with sales, if they come out today, that tells everything is steaming along nicely are:
new sales 110-115
resales - 80-90

[Davexl]

Would love to know the reason for that 40c drop in price yesterday on 150,000 odd shares. Beagle what do you think is going on there - just profit taking?

[couta1]

Would love to know the reason for that 40c drop in price yesterday on 150,000 odd shares. Beagle what do you think is going on there - just profit taking? Either you've been having a long sleep or havent read the news.Lol

[Davexl]

What - you think Iran did it? Like SUM would give a rats...OCA hardly moved...

[couta1]

What - you think Iran did it? Like SUM would give a rats...OCA hardly moved... OCA dropped near 10% over the last week, there will always be the odd outlier stock but overall sentiment rules whether negative or positive.

[Beagle]

Would love to know the reason for that 40c drop in price yesterday on 150,000 odd shares. Beagle what do you think is going on there - just profit taking?

Gidday mate. Must admit I went for a nice drive yesterday to see the gannets at Murawai, (good at this time of year when a lot of Aucklanders are out of town and not so busy as normal) and came back in the late afternoon to quite a surprise with the escalation of tensions in the middle east.

Fear and greed have always been the two biggest motivators in the market and always will be. I think in the context of a very strong rally in recent weeks it was simply some people deciding to take some chips off the table.

With the incredible amount of tension in the middle east I got to thinking yesterday evening (in a rather sad and sombre mood) as most of the sun made its way through the light smoke that's still drifting through the atmosphere from the Australian bush fires and what sun there was shone on me, how incredibly fortunate we are to live in New Zealand free from war and strife and for the most part at not much risk from the awful bushfires ravaging Australia, in a warm temperate climate that's not too hot or too cold, free of religious persecution. We're very blessed to live here with ample food and water and overall a very good standard of living.

Pretty nice place to retire isn't it :) I know the senior management team at SUM are very sharp and very motivated...very good place to invest over the long term.
No stock is free of the odd bit of turbulence from time, to time. Long term...you can't go wrong...

Hopefully things settle down in the middle east. Surely all nationalities want a nice safe place for their kids and grandkids to grow up.

[Davexl]

Cheers for that Beagle - yes we are very lucky here in NZ, I just don't like seeing sudden uncorrelated moves on the market where one stock in the sector can move from just under $8.90 to a low of 8.35 and back slightly, on high volume, without understanding why. Especially when I have just bought into it! Cheers...

[couta1]

Cheers for that Beagle - yes we are very lucky here in NZ, I just don't like seeing sudden uncorrelated moves on the market where one stock in the sector can move from just under $8.90 to a low of 8.35 and back slightly, on high volume, without understanding why. Especially when I have just bought into it! Cheers... Your talking as if the market is rational, it's not, it's completely Schitzo.

[Davexl]

Well not "completely" else what would be the point!

[couta1]

Well not "completely" else what would be the point! Like any person with a mental illness you have to understand the triggers and reactions of the particular condition.PS-Have worked amongst people with every imaginable mental illness for a long time, although not so much now although I still find more sanity when I do oftentimes than working on the market.Lol

[Davexl]

Well not "completely" else what would be the point!
:)

[winner69]

The result I'm hoping/expecting today with sales, if they come out today, that tells everything is steaming along nicely are:
new sales 110-115
resales - 80-90

So annual sales for year will be about more or less the same as last year

[Davexl]

Oops!:mellow:

[Davexl]

Well not "completely" else what would be the point!
:)

If Iran sentiment had been an issue with this one stock, would have thought there was more of a relief rally in the market this morning. Looks like escalation isn't going to occur based on Trumps speech this morning...

[Beagle]

you've got to admit its been a good six months and the last blow-off is probably overdone at this point.
10935

anything more than a 45 ° line usually has to take a breather.
I still have most of my holding



Makes sense to me and some volatility after the recent very strong run is to be expected. Best thing newbies can do is throw it in the bottom drawer and hold for 5 years plus and let compound earnings growth work its magic. Easier said than done because I look at the share price at least a couple of times most days lol

[LAC]

Best thing newbies can do is throw it in the bottom drawer and hold for 5 years plus and let compound earnings growth work its magic. lol
Words from a wise man..

[King1212]

Was a good buy yesterday

[JW Invests]

Going by last years timing, Q4 sales should be released tomorrow. Sales numbers above 200 should be good news.

[Ggcc]

Going by last years timing, Q4 sales should be released tomorrow. Sales numbers above 200 should be good news.
Your prayers have been answered 209 sales

[LAC]

209;)
Pleasing result...slowly but surely SUM delivers.

[Lease]

Excellent result!!!

[King1212]

Great..209....I was a bit worried yesterday....all my eggs are with SUM....

[winner69]

Main thing the number was over 200

Total sales for year up 12 on last year .....that will add a couple million or so to earnings (v 2018) and add the huge revaluation increases from 16/17 to be realised this year the average earnings per sale will skyrocket

Up my earnings number for 2019 to $120m as a minimum

Might even get an earnings guidance later in the day

[Beagle]

The result I'm hoping/expecting today with sales, if they come out today, that tells everything is steaming along nicely are:
new sales 110-115 (Actual 116)
resales - 80-90 (Actual 93)
Better than you were hoping for Maverick. Well done with your estimates.

We should see the better momentum in the real estate market, (as demonstrated in these numbers in Q4), build and continue into the current year.

[LAC]

Main thing the number was over 200

Total sales for year up 12 on last year .....that will add a couple million or so to earnings (v 2018) and add the huge revaluation increases from 16/17 to be realised this year the average earnings per sale will skyrocket

Up my earnings number for 2019 to $120m as a minimum

Might even get an earnings guidance later in the day

I must agree, my est of sub $110m is looking slim now!

[Beagle]

You can see how the real estate market changed during 2019 with quite a bifurcation between the two halves.
First half SUM sold 278 units
Second half SUM sold 374 units.

Augers extremely well for second half profit and when we see that momentum carry over into 2020, prospects look good for the current year.

What shareholders might enjoy is a virtual tour around the various villages. Their website now details the facilities available at each village and the types of units available and in most cases has pricing. Heaps more information here https://www.summerset.co.nz/find-a-village/

Just click on the village headline and heaps more info comes up, e.g. https://www.summerset.co.nz/find-a-village/summerset-at-aotea/

I really like the Clark Coastals at my closest village in Hobsonville, more here https://www.summerset.co.nz/find-a-village/summerset-at-monterey-park/

[trader_jackson]

Now to FY19: First half SUM sold 278 units, second half SUM sold 374 units - 652 units total (329 higher margin new sales)
Lets look at FY18: First half SUM sold 299 units, second half SUM sold 341 units - 640 units total (339 higher margin new sales)
Lets look at FY17: First half SUM sold 323 units, second half SUM sold 374 units - 682 units total (382 higher margin new sales)
Lets look at FY16: First half SUM sold 306 units, second half SUM sold 352 units - 658 units total (414 higher margin new sales)
Lets look at FY15: First half SUM sold 270 units, second half SUM sold 308 units - 578 units total (333 higher margin new sales)

There's a track record for you: 4 years of decreasing higher margin new sales
(and the lowest new sales in 5 years, and there is always a jump in the 2nd half, this year only happens to be a bit more than previous years and may be simply due to timing - not a big turn around in SUM's property prospects).

[King1212]

Summerset CEO Julian Cook said the results were pleasing with new sales for
the quarter being the strongest in three years and the second highest ever
for the Group.

[winner69]

Now to FY19: First half SUM sold 278 units, second half SUM sold 374 units - 652 units total (329 higher margin new sales)
Lets look at FY18: First half SUM sold 299 units, second half SUM sold 341 units - 640 units total (339 higher margin new sales)
Lets look at FY17: First half SUM sold 323 units, second half SUM sold 374 units - 682 units total (382 higher margin new sales)
Lets look at FY16: First half SUM sold 306 units, second half SUM sold 352 units - 658 units total (414 higher margin new sales)

There's a track record for you: 4 years of decreasing higher margin new sales
(and the 2nd weakest year overall in the past 4 years)

TJ me old mate - You should know by now that 3 or 5 year trends are meaningless;) ...usually a lot of crock.

All that matters is the last reporting period and how that impacts the next few periods

[Beagle]

374 units for the second half is still the equal highest for any second half and shows the momentum is strong.
T.j. keeps saying new units are "higher margin" but actually with strong valuation increases over the last 7 years (average cycle of resales), resales will have MUCH stronger margins than new sales.

[winner69]

New sales F19 were 329

Still quite a long way off the peak of 382 (rolling 4 quarter) of March 2017

Q$19 was first quarter for some time when new sales were ahead of pcp - thats good. the rot has stopped


but heck - lets worry about the future

[Beagle]

For most of 2019 the real estate market in Auckland was quite subdued. Things are very different now.

I attended the annual meeting in April. If I hadn't of asked the question as to the 2019 build program nobody would have known.
Julian advised they planned to build about 350 new homes for 2019. Yet again they have done what they said they would do and slightly beaten that
"Summerset's 2019 build programme delivered 354 retirement units".

I've lost count of how many years now they have accurately predicted the number of new units they will build for the year and slightly beaten it.
My point is this is a company that can be trusted to do what it ways its going to do. They make results, not excuses.

Yet again, we will see strong growth in underlying profit for the year just finished and strong growth going forward and yet this company continues to trade at well below the market average PE. Go figure...

[trader_jackson]

For most of 2019 the real estate market in Auckland was quite subdued. Things are very different now.

I attended the annual meeting in April. If I hadn't of asked the question as to the 2019 build program nobody would have known.
Julian advised they planned to build about 350 new homes for 2019. Yet again they have done what they said they would do and slightly beaten that
"Summerset's 2019 build programme delivered 354 retirement units".

I've lost count of how many years now they have accurately predicted the number of new units they will build for the year and slightly beaten it.
My point is this is a company that can be trusted to do what it ways its going to do. They make results, not excuses.

Yet again, we will see strong growth in underlying profit for the year just finished and strong growth going forward and yet this company continues to trade at well below the market average PE. Go figure...

They make results, not excuses...
"Previously, 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 as the company tailors its building programme to meet demand."
... shifting goal posts at its best, certainly sounds like an excuse to me;)

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12226636

But hey, forget the facts, SUM share price riding high so lets all enjoy it

[winner69]

“They make results, not excuses”

Like that phrase

[winner69]

Talking about delivering new units

2017 delivered 450 sold 382
2018 delivered 454 sold 339
2019 delivered 354 sold 329

Hope the development team isn’t getting paid heaps more to deliver less.

[winner69]

One thing I like about Summerset performance is they can make heaps more profit by selling more or less the same number of units compared to Oceania who seem to sell heaps more units but make stuff all more profit

[tipsy]

Nice, 2020 shaping up very well!

[Beagle]

T.J. He said he would ramp up the build rate over the next few years to 600 units per annum, try not to let your own viewpoint colour what was actually said.
I believe we will see the build rate materially increase in 2020 compared to 2019.
Assuming $117m underlying profit this year and conservatively just another 20% growth for 2020 I have them on a preliminary estimate of $142m underlying for 2020, (and I do think that's quite conservative), for a forward PE of just 13.9. Market median PE is about 19 and market average about 30 and yet SUM is the preeminent growth stock on the NZX.

Great long term hold.

[Dlownz]

Ahh yes but look at Oceanias potential plus dividend yield. Plus the 20% I'm up. With a possible good result to come.

[Beagle]

Ahh yes but look at Oceanias potential plus dividend yield. Plus the 20% I'm up. With a possible good result to come.

You are comparing a promising Filly with a somewhat chequered track record with a proven well proven Thoroughbred. When you're looking at competing in the grand national steeplechase (an endurance race anyone that doesn't know), which horse would you rather be on ?

[Dlownz]

One thing I like about Summerset performance is they can make heaps more profit by selling more or less the same number of units compared to Oceania who seem to sell heaps more units but make stuff all more profit


You are comparing a promising Filly with a somewhat chequered track record with a proven well proven Thoroughbred. When you're looking at competing in the grand national steeplechase (an endurance race anyone that doesn't know), which horse would you rather be on ?

LOL. Just poking the bears.

[LAC]

Tough crowd to please....
Today's numbers were great imo. Long term its looking good guys.

[Cadalac123]

Perhaps the recent rally of buying into retirement stocks led to an exhaustion of buyers..

[Maverick]

T.J. He said he would ramp up the build rate over the next few years to 600 units per annum, try not to let your own viewpoint colour what was actually said.
I believe we will see the build rate materially increase in 2020 compared to 2019.
Assuming $117m underlying profit this year and conservatively just another 20% growth for 2020 I have them on a preliminary estimate of $142m underlying for 2020, (and I do think that's quite conservative), for a forward PE of just 13.9. Market median PE is about 19 and market average about 30 and yet SUM is the preeminent growth stock on the NZX.

Great long term hold.
I totally agree there Beagle with all your maths and thinking. I recall you and I speaking with Julian after the AGM and he was quite unconcerned about meeting exact annual build targets as he said some get delivered this side of the FY and others slightly into the next FY. I know you've said it plenty but it should not be overlooked that SUM aim for ~400 pa and intend to ramp that up to 600 in a year or two.


I'm quite surprised the share price hasn't reflected this very solid evidence yet. This is asurperb result confirming everything is better than hummming along.Perhaps it will once the Aussy markets get cranking.

If I wasn't so convinced that OCA will have Superb result in a few weeks , I'd be buying a few more SUM for the long term.

Disc:hold a ton of OCA, some SUM , some MET (just for the ride), but no ARV or RYM

[Beagle]

Thanks Maverick. Like you I am very confident about the prospects going forward and see a good ramp up in the build rate in 2020 and further out.
Maybe some people have forgotten they are expanding into Australia as well ?
The other day I quipped about building a retirement village at Dunedin to stave off climate change for many years, (was just tongue in cheek) and then yesterday I realised that although I thought I knew SUM inside and out they already have one there lol.

Pretty cheap to retire there and beat the effects of climate change https://www.summerset.co.nz/find-a-village/summerset-at-bishopscourt/

[winner69]

Thanks Maverick. Like you I am very confident about the prospects going forward and see a good ramp up in the build rate in 2020 and further out.
Maybe some people have forgotten they are expanding into Australia as well ?
The other day I quipped about building a retirement village at Dunedin to stave off climate change for many years, (was just tongue in cheek) and then yesterday I realised that although I thought I knew SUM inside and out they already have one there lol.

Pretty cheap to retire there and beat the effects of climate change https://www.summerset.co.nz/find-a-village/summerset-at-bishopscourt/

Property prices in Dunedin growing faster than most other places - one commentator used words like unprecedented and out of control. That’ll heal the revaluation gains

See Dunedin has an exercise room for you Beagle if relocating there

[Blue Skies]

Perhaps the recent rally of buying into retirement stocks led to an exhaustion of buyers..


Let's not forget SP has had a massive run up since late June (542 - 869) approx 60% gain, & went over 900 at one stage, so there's been a heck of a lot of optimism already built in & probably only just meeting expectations.

[King1212]

It is Friday...traders are wrapping up...wait till next week...imo...good time to top up today for those looking for solid company to invest

[Beagle]

Let's not forget SP has had a massive run up since late June (542 - 869) approx 60% gain, & went over 900 at one stage, so there's been a heck of a lot of optimism already built in & probably only just meeting expectations.

Well, yes, and congrats to all who bought in the mid $5's, mid year, (pat on back for myself too), but let's not lose sight of the fact that the shares were $8 in mid 2018 so have significantly underperformed the market in the last 18 months.

An estimated forward FY20 PE of just 13.9 for N.Z.'s proven fastest growing retirement stock is a very compelling valuation so fundamentally this looks very good and technically this is in a very nice uptrend.

Excellent hold based on compelling metrics and a strong outlook, in my opinion.

[Snow Leopard]

...try not to let your own viewpoint colour what was actually said...

Plank :t_up:

[Beagle]

Welcome to the forum Mogul.

If they get $118m underlying this year and on average just grow underlying earnings at just 15% average per annum for the next 10 years, (i.e. Ryman type growth which has been proven to be sustainable for them), the power of 15% compounding for 10 years gives underlying profit of $477m in 2029 by my calculations.

The cool thing about the business model is it encourages compounding growth through them clipping the ticket over and over and over again on the same properties as well as building new ones so the pool of properties for repeat ticket clipping gets ever bigger and bigger and more valuable and each time they clip the ticket its on the higher price through increase in each units value. All very tax efficient too.

If you started with a clean sheet of paper you'd struggle to come up with a more cunning business plan if your life depended on it :)

[peat]

assuming constant compounding growth over long periods is unrealistic for many reasons

350 this last year. Mav says 400 as a goal, Beagle talks 600 and now a 1poster is throwing 800 around. Do I hear a k? Anyone?

Its great to have aspirations n all but before we start counting our retirees before they've even left university lets stay a bit calm and remind ourselves of sectoral balance and consider things patiently with due regard to business cycles, resource contraints, competition, demand, land availability, regulation, etc etc.
Plus a somewhat asymptotic looking chart. Remember what MET has actually shown us so far - that NTA is the best the market can do?
Even if this particular business goes perfectly to plan the market could change and mid-teens start to become considered a high PE. It does happen

(trying to play the voice of reason)

[kiora]

Now there is someone I would listen to.Assumptions are the mother of all FU's
And this
https://www.interest.co.nz/personal-finance/103187/kernels-dean-anderson-challenges-kiwi-fascination-investing-residential

[winner69]

......

Remember what MET has actually shown us so far - that NTA is the best the market can do?
Even if this particular business goes perfectly to plan the market could change and mid-teens start to become considered a high PE. It does happen


(trying to play the voice of reason)



Good post Peat

Yes Peat, when markets are at all time highs and rather euphoric one should consider the voice of reason.

MET was touted around the world, the for sale sign was up. As you say when it came down to fronting up with hard cash (real money) NTA was the best they could achieve. Has to be a lesson in that.

The buyer wants a reasonable medium to long term return on his investment. Paying say 1.5 times NTA would have diluted those returns quite significantly ...the old adage is buy at high multiples and expected long term returns diminish.

Yes mid teens could one day (maybe sooner than we think) be considered a high PE

I sometimes ask myself if I had $2 billion and bought Summerset what am I getting for my bucks besides $1 billion of assets and how will ever make a decent return on that $2 billion investment.

[winner69]

Good question. For your $2b you are getting around $64 m per year of development margin p.a. which I forecast will at least double over the next decade plus all the capital gains on investment property of $2.82 b, so if capital gains moderated to 3 % p.a. (much higher currently), that would be $85 m per year tax free taking an IFRIS view. Also would expect this normalised capital gain to double as the asset base doubles over the next 8-10 years. Hard to see much money being made in care but essential service in my view.

The MET comparison is interesting. Has been a poor performer over many years and the Board seems to have waived the white flag at what appears to be a bargain price. SUM seems more comparable to RYM to me (not quite as strong operationally and brand wise but less expensive at today’s share price).

Disc. Hold SUM, RYM and OCA

Understand all that but at sometime in the future won’t I still need a ‘greater fool’ to buy all those assets at 2 times book value to make the $2 billion investment I make now worth while?

[Beagle]

assuming constant compounding growth over long periods is unrealistic for many reasons

350 this last year. Mav says 400 as a goal, Beagle talks 600 and now a 1poster is throwing 800 around. Do I hear a k? Anyone?

Its great to have aspirations n all but before we start counting our retirees before they've even left university lets stay a bit calm and remind ourselves of sectoral balance and consider things patiently with due regard to business cycles, resource contraints, competition, demand, land availability, regulation, etc etc.
Plus a somewhat asymptotic looking chart. Remember what MET has actually shown us so far - that NTA is the best the market can do?
Even if this particular business goes perfectly to plan the market could change and mid-teens start to become considered a high PE. It does happen

(trying to play the voice of reason)



Expanding into Australia. RYM have enjoyed mid teens growth or thereabouts for more than 2 decades.

Each to their own. My model tells me a fair PE for a no growth company is presently 11. Forward PE of 14 given SUM's superb track record of growth since it listed is a compelling metric. Technically its in a nice uptrend and while I grant you that's steepened lately there are very good reasons for that including a resurgent Auckland property market and the pending reallocation of ~ 1.5 Billion from the MET takeover.

$8.70 looks expensive relative to where it was six months ago, (well done to those that bagged themselves an exceptional bargain in the mid $5's in winter 2019, called and actioned as such by myself and other astute investors), but it looks very cheap relative to the $8 eighteen months ago and the forward PE speaks for itself. I think the outlook for the foreseeable future is very positive and has significantly improved since last winter.
For what its worth I am right on my maximum self imposed limit of 10% portfolio allocation (to any one share), and my intention is to let that ride, long term.

Might be a bit bumpy but buckle up and enjoy the ride https://www.interest.co.nz/personal-finance/103205/after-three-years-lackluster-capital-gains-there-are-signs-countrys-housing?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+11 +January+2020

__________________________________________________ __________________________________________________ ____________________

MET - Interested parties approached them, not touted per se. We'll see what happens there, $7 looks too cheap to me even with their somewhat chequered track record.

[winner69]

Property market on fire

Even higher record prices

Best bit is the surge in activity ....generally increasing sales numbers means increasing prices

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2019/Residential/December/REINZ%20Residential%20Press%20Release%20%20-%20December%202019.pdf

[Beagle]

Bindi Norwell CEO of REINZ says a real shortage of houses now. "With insufficient properties on the market to satisfy buyer demand, it suggests that buyers are being more definitive when it comes to purchasing as they are aware of the need to move quickly on properties and areas with high demand. This is backed up by the decrease in the median number of days to sell which is at its lowest point for 3 years".

SUM shareholders can feel proud that their company is one of the biggest developers in the country provided much needed housing for older folk thus freeing up houses for others. I am expecting very strong conditions for the foreseeable future.

[trader_jackson]

Forsyth increased SUM's target price from $7.20 to $8.90 with outperform rating and "do not view as expensive on a 16x PE" Beagle must have helped right the report
They were right to call ARV's share price at $1.78 (when it was sub $1.30 just over 6 months ago), maybe they'll be right about sum other operators as well? Then again with the share price already in the high $8, intriguing they can give it an outperform rating

[macduffy]

Forsyth increased SUM's target price from $7.20 to $8.90 with outperform rating and "do not view as expensive on a 16x PE" Beagle must have helped right the report
They were right to call ARV's share price at $1.78 (when it was sub $1.30 just over 6 months ago), maybe they'll be right about sum other operators as well? Then again with the share price already in the high $8, intriguing they can give it an outperform rating

Outperform the market, that is.

[Beagle]

Forsyth increased SUM's target price from $7.20 to $8.90 with outperform rating and "do not view as expensive on a 16x PE" Beagle must have helped right the report
They were right to call ARV's share price at $1.78 (when it was sub $1.30 just over 6 months ago), maybe they'll be right about sum other operators as well? Then again with the share price already in the high $8, intriguing they can give it an outperform rating

I gave up on Forsyth Barr about a decade ago. Mostly in my experience with them their analysts just follow other analysts or follow the market up. Very few insights and certainly not enough worth paying full service brokerage rates for. Company is worth $9 now and will be worth ~ 30-35% more a year from now after that much earnings growth in 2020. A year from now Forbar will raise their price target to $12.00 after its already there lol

$15 is on the cards for sometime in 2021 or early 2022...you read it from the Beagle, first :)

[Lease]

Forsyth increased SUM's target price from $7.20 to $8.90 with outperform rating and "do not view as expensive on a 16x PE" Beagle must have helped right the report
They were right to call ARV's share price at $1.78 (when it was sub $1.30 just over 6 months ago), maybe they'll be right about sum other operators as well? Then again with the share price already in the high $8, intriguing they can give it an outperform rating

SP has already at around $8.8, and they just increased TP to $8.9. What's the point to follow them?

[MauroNZ]

SP has already at around $8.8, and they just increased TP to $8.9. What's the point to follow them?

Same thing I was questioning with Craigs.

[winner69]

Lot been said about how good Julian and Earl are (even if different ways)

Question: how good is Gordon then?

[forest]

Gordon, I think a league or 2 above Julian and Earl.
Unfortunately the league he play in has very few players in NZ.

[Beagle]

Gordon, I think a league or 2 above Julian and Earl.
Unfortunately the league he play in has very few players in NZ.

Not reflected in the growth rate of RYM in recent years. I think Julian and his right hand man, deputy CEO / CFO Scott Scoullar are a lot smarter than you're giving them credit for. Earl a lovely guy, the sort of CEO you'd love if you were a resident as he is laser focused on pleasing people, residents and staff. Good for shareholders though ?

[forest]

Not reflected in the growth rate of RYM in recent years. I think Julian and his right hand man, deputy CEO / CFO Scott Scoullar are a lot smarter than you're giving them credit for. Earl a lovely guy, the sort of CEO you'd love if you were a resident as he is laser focused on pleasing people, residents and staff. Good for shareholders though ?

Beagle, I agree with you that julian and his team are very good. I just think Gordon and his team are exceptional.
Gordon explained in the past at meetings that the company aim is to grow underlying profits at app 15%. They could grow faster but 15% growth RYM considers a manageable long term realistic goal.
After Gordon's team has put the energie in for the 15% growth, management time is allocated to work improvements for staff and improvements for residence.
RYM is very aware that the company has 3 types of stakeholders, shareholders, employees and residence. Very important not to favour the shareholders above the other stakeholders. If they would the shareholders would get a set back in time anyway.
That is the way I see it.

[Beagle]

You know me Forest, I'm a numbers man.

RYM average growth rate in the last five years 14% per annum.
SUM average growth rate in the last five years 36% per annum, assuming they make at least $114m in 2019 to be reported in February 2020.

Each to their own but I reckon those numbers speak for themselves.

[macduffy]

Each to their own but I reckon those numbers speak for themselves.

Yes and no. RYM have been listed for longer than SUM. It gets harder to maintain a high growth rate as the company grows i.e. the law of large numbers.

I hold them both - and MET and OCA and ARV! A retirement village company junkie?

[forest]

You know me Forest, I'm a numbers man.

RYM average growth rate in the last five years 14% per annum.
SUM average growth rate in the last five years 36% per annum, assuming they make at least $114m in 2019 to be reported in February 2020.

Each to their own but I reckon those numbers speak for themselves.

Yea, when you put it that way SUM has done a lot better.
What is your prediction for SUM underlying growth rate in the next 5 years?

[limmy]

You know me Forest, I'm a numbers man.

RYM average growth rate in the last five years 14% per annum.
SUM average growth rate in the last five years 36% per annum, assuming they make at least $114m in 2019 to be reported in February 2020.

Each to their own but I reckon those numbers speak for themselves.
Mr. Beagle, which financial metric do you calculate the growth rate from ? Is it the growth in operating revenue ? I'm trying to learn how to calculate intrinsic value, and the formulae available from my Google search mention growth rate. However these explanations don't say which measure. I'm assuming it's the growth in revenue rather than NTA, or other measures like growth in the EPS.

(Please excuse this Engineer trying to learn about Financial calculations) Thanks.

[Beagle]

Yea, when you put it that way SUM has done a lot better.
What is your prediction for SUM underlying growth rate in the next 5 years?

Good question and thank you for asking it. Headlights on full beam, so too speak, my thoughts are:-
SUM have a vast land bank well spread geographically throughout N.Z. and they are expanding into Australia. They have stated they want to increase the build rate to 600 per annum here with the next 2-3 years from 354 last year. Expansion into Australia is on top of that. They have substantial embedded value in their existing villages and I expect resale volumes and resale profits per unit to climb significantly in the years ahead. Development margins as per the company's view are expected to moderate in the years ahead.

Overall going forward I expect them to continue to outpace RYM's growth over the next 5 years, but not buy as much as the last 5 years. I think an average growth rate of 20%-25% is attainable for the next 5 years. SUM are on a forward 2020 PE by my estimate of just 14 and RYM are on a forward PE of 31.

[forest]

OK, in 2017 SUM delivered 68 more residences than they sold, in 2018 they delivered 115 more residences than they sold and just in 2019 there were 25 more build than sold.
So as a numbers man are you not concerned about the imbalance of new builds compared with new sales?

[Beagle]

OK, in 2017 SUM delivered 68 more residences than they sold, in 2018 they delivered 115 more residences than they sold and just in 2019 there were 25 more build than sold.
So as a numbers man are you not concerned about the imbalance of new builds compared with new sales?

That is my one area of concern with SUM. On the other hand the vacancy rate at all their existing villages remains very low.
Real estate market only really accelerated in Q4 in 2019 and properties don't always settle for a period of a few weeks. I am hoping for strong sales numbers in Q1 2020 from people who sold their homes in late 2019. That said one or two of SUM's villages do not appear to be very fast sellers. To what extent one lets that detract from their otherwise stellar results is for each shareholder to decide for themselves.

Poking the finger around the other way, its clear RYM's profit growth has been below their stated mid term objective of 15% per annum by a material amount, (just 11.5% last year and not the first time they have missed by any means) and is forecast, (at mid point of forecast) to be just 13% in 2020 as well so maybe they aren't building enough units ?

Looking at their respective growth rates which seems to be the best approach ?

[forest]

That is my one area of concern with SUM. On the other hand the vacancy rate at all their existing villages remains very low.
Real estate market only really accelerated in Q4 in 2019 and properties don't always settle for a period of a few weeks. I am hoping for strong sales numbers in Q1 2020 from people who sold their homes in late 2019. That said one or two of SUM's villages do not appear to be very fast sellers. To what extent one lets that detract from their otherwise stellar results is for each shareholder to decide for themselves.

Poking the finger around the other way, its clear RYM's profit growth has been below their stated mid term objective of 15% per annum by a material amount, (just 11.5% last year and not the first time they have missed by any means) and is forecast, (at mid point of forecast) to be just 13% in 2020 as well so maybe they aren't building enough units ?

Looking at their respective growth rates which seems to be the best approach ?


Depending which growth rates you are looking at, new sales for both SUM and RYM have been going backwards since 2017.
RYM has given a plausible explanation for that reduced new build, not to sure about how plausible SUMs is.
However resales for RYM have been going up app 14% since 2017 and 7% for SUM.
This 7% increase over 2 years makes me wonder if the churn is lower than expected.

I like the RYM approach a little better, controlled steady growth. Often promoting long term employees to management level. Having as much expertise in house as possible. Maybe boring as the name of this thread would suggest but predictable.

[Beagle]

RYM average growth rate in the last five years 14% per annum.
SUM average growth rate in the last five years 36% per annum, assuming they make at least $114m in 2019 to be reported in February 2020.

For the sake of complete clarity, (as I am sure you probably already know), this is the growth rate in underlying earnings per share for the last 5 years.
Yes I think the churn has been a lower than expected and I am expecting this to revert to normal level's going forward and with quite substantial IFRS valuation gains in previous years, growth in resales both in volume and realised profit per unit will be a key driver of SUM's ongoing strong growth in underlying profit in the years ahead.

To me as a numbers man, the number that really matters is underlying earning per share and the rate of growth in same. RYM's growth in eps in recent years is something I find quite underwhelming to be honest and certainly not something I would pay a forward PE of 31 for. I think SUM is dirt cheap on a forward PE of about 14, (market average is about 30 and market median about 19) with a future average expected growth rate in the 20-25% rate for the years ahead. Hope SUM are not next cab off the rank for a takeover offer, that would be very disappointing.

Even if SUM's growth rate slows to an average of 15% per annum average for the next 5 years on a forward PE of 14 they're still a bargain at a PEG ratio of just on 1.

[forest]

RYM average growth rate in the last five years 14% per annum.
SUM average growth rate in the last five years 36% per annum, assuming they make at least $114m in 2019 to be reported in February 2020.

For the sake of complete clarity, (as I am sure you probably already know), this is the growth rate in underlying earnings per share for the last 5 years.
Yes I think the churn has been a lower than expected and I am expecting this to revert to normal level's going forward and with quite substantial IFRS valuation gains in previous years, growth in resales both in volume and realised profit per unit will be a key driver of SUM's ongoing strong growth in underlying profit in the years ahead.

To me as a numbers man, the number that really matters is underlying earning per share and the rate of growth in same. RYM's growth in eps in recent years is something I find quite underwhelming to be honest and certainly not something I would pay a forward PE of 31 for. I think SUM is dirt cheap on a forward PE of about 14, (market average is about 30 and market median about 19) with a future average expected growth rate in the 20-25% rate for the years ahead. Hope SUM are not next cab off the rank for a takeover offer, that would be very disappointing.

Even if SUM's growth rate slows to an average of 15% per annum average for the next 5 years on a forward PE of 14 they're still a bargain at a PEG ratio of just on 1.

We started of discussing which was the better company, and I said I like Gordon from RYM a little better.
I agree with you that at current share prices SUM could well be a better investment in the near future.

[winner69]

We started of discussing which was the better company, and I said I like Gordon from RYM a little better.
I agree with you that at current share prices SUM could well be a better investment in the near future.

Maybe I should just asked ‘Who has the greater halo effect’ - Earl, Gordon or Julian

[Beagle]

Just rounding out this discussion, here is the six year summary of RYM's results and you will see new sales for them are quite underwhelming in 2019, in fact considerably lower than 3 years ago and lower even than 6 years ago ! Gearing is steadily increasing over the years too. https://www.rymanhealthcare.co.nz/about-us/investors/financial-information, scroll down a bit to the 6 year summary, which I find most underwhelming.

On the leadership thing they broke the mould when Simon Challis became CEO and there's unlikely to be another one as good as him, ever.

There's nothing in RYM business plan, growth rates or any other aspect of them, that on the FACTS, justifies a higher PE than SUM.
SUM's vastly higher underlying eps growth rate on the other hand does justify a higher PE than RYM.

I stick to the numbers and facts and leave the "which is the better company for ESG reasons" to others. This has been a good debate because it got me looking at RYM's 6 year history and honestly, there is nothing in there that impresses me. Even total numbers of units sold including resales have only marginally increased from 5 years ago ! No wonder their average underlying profit growth in the past five years has been so miserable, lower even that MET. If all MET who have been growing underlying earnings faster than RYM are worth is last years NTA, then what is RYM really worth ? :eek2:
RYM massively overrated by the market in my opinion.

The results under Julian Cook's leadership speak for themselves. I like CEO's who deliver results.

[winner69]

With all this discussion re SUM growth etc I was waiting for t_j to remind us that H1 NPAT was down 4% on prior year and from their reports RYM was up 11% and ARV was up 47%

[LAC]

Depending which growth rates you are looking at, new sales for both SUM and RYM have been going backwards since 2017.
RYM has given a plausible explanation for that reduced new build, not to sure about how plausible SUMs is.
However resales for RYM have been going up app 14% since 2017 and 7% for SUM.
This 7% increase over 2 years makes me wonder if the churn is lower than expected.

I like the RYM approach a little better, controlled steady growth. Often promoting long term employees to management level. Having as much expertise in house as possible. Maybe boring as the name of this thread would suggest but predictable.

I have to agree with that Ryman is better at everything than the others, they lead the pack BUT the only thing that I don’t agree with is the SP of Ryman, SUM is a better buy in terms of value. If I was just buying Shares to pass it on from generation to generation with never ever selling them for 250years, I would buy Ryman. But I think in my 25-30year timeframe, SUM will get me better returns.

[BlackPeter]

I have to agree with that Ryman is better at everything than the others, they lead the pack BUT the only thing that I don’t agree with is the SP of Ryman, SUM is a better buy in terms of value. If I was just buying Shares to pass it on from generation to generation with never ever selling them for 250years, I would buy Ryman. But I think in my 25-30year timeframe, SUM will get me better returns.

Hmm - 250 years is an interesting investment time frame. Not too many companies I can think of who survived such a long time, with the exception of the Catholic Church (i.e. faith industry) who have a quite unique business model (take money now and deliver only when customers are not anymore able to complain ...).

Back to retirement villages ... I'd say that it might be possible to model perhaps the next 25 to 30 years (based on population growth and similar, though even this is difficult. We might have in 2050 ways more old people than what we expect (if e.g. all the Australians hop across the ditch because they don't like to be roasted) or we might have much less (e.g. if our economy goes for some unknown reason kaput).

If we look however into the next decade, than I agree ... while I expect both RYM and SUM to do well, I'd expect as well better growth from SUM.

[Davexl]

LAC,

Agree with your synopsis. My models have RYM and SUM converging on a valuation of $36 per share in a decade based on reasonable growth, new sales margins reverting to 24%, investment property gains reducing to 3% p.a. in the long run and respective PE’s converging to 20 and 18 times forecast Comprehensive Income (lower than current RYM multiple of 24 and much higher than current SUM multiple.

Happy to own both (and OCA) as long term holds delivering increasing dividend income and value.

Like your thinking Mogul. Currently a major OCA minor SUM holder looking to get the configuration right, but need income (hence OCA) as a primary focus (with the capital gain)

[Food4Thought]

Like your thinking Mogul. Currently a major OCA minor SUM holder looking to get the configuration right, but need income (hence OCA) as a primary focus (with the capital gain)

Agree with this.

At what Ratio...

1 SUM: 6 OCA

Dividend long term play. Both good if you buy at the right price... bit of a waiting game after that.

[pierre]

Agree with this.

At what Ratio...

1 SUM: 6 OCA

.

Perfect. I hold both in almost exactly that ratio.
Also hold RYM but sold my MET to top up SUM.
Happy to watch the action unfold over the next few years from the sideline.

[ratkin]

Corona virus causes world market selloff, SUM holders not bothered.

[Beagle]

Corona virus causes world market selloff, SUM holders not bothered.

Clearly not with it roaring up to a fresh all time high today.

[peat]

Got to admit you've picked this one Beagle.
It is skyrocketing and I wont sell anymore because then it wont be a long term hold. And it may never come back.
Well done sir

[troyvdh]

Your very brave Peat...as J Ryder has said...if you dance be very close to the door...

[Beagle]

Thanks Peat.

It still looks dirt cheap to me on fundamental's. Assuming $117m underlying to be reported next month and an estimate of 25% profit growth for FY20 as they ramp their development program back up that gives $146m underlying for FY20 which is 64 cps. At $9.25 that's a forward PE of just 14.4

That's right towards the bottom end of their own PE range over the last 8 years and the sector overall and that for the company which has clearly demonstrated its the fastest growing company in this sector on the NZX. Pretty easy with a far more robust real estate market to make a case for a NZX median forward PE of 19 suggesting 19 x 64 = $12.16 is a fair and reasonable price target.

[peat]

Your very brave Peat...as J Ryder has said...if you dance be very close to the door...

my cash ratio is very high. as in 4:1 cash vs equities both through reductions in holdings and a cash injection so I don't really need to be near the door at all - in fact I am at the front of the dancefloor with girls all around shaking my stuff, and to be honest will probably order another magnum at this point of the night.

[troyvdh]

Excellent post peat.Ive never ever held cash in 40 odd years..Well I have kinda have with PFI which Ive always viewed as a kind of bank..i.e. 8-9 % for about 25 years.Anyways enjoy your stuff being shooken up by all the girls.Cheers troy

[King1212]

All residents will be die because of corona virus.....SUM will be damned..gosh....great time to buy an not have enough of SUM!

[King1212]

https://www.landlords.co.nz/article/976516217/why-house-price-growth-will-continue?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+2 9+January+2020

[Benny1]

Had a tour around a Summerset village before Christmas last year.
Some aspects were quite nice definitely nicer than the older MET village they still have their name down on the waiting list for ( I think!).
Guy showing us around mentioned SUM maybe moving to a fixed weekly fee for life model as this is the way the industry is going..
I know my parents and few others are looking around at village options at the moment are particularly put off SUM due their weekly fee not being fixed for life.

[Beagle]

Had a tour around a Summerset village before Christmas last year.
Some aspects were quite nice definitely nicer than the older MET village they still have their name down on the waiting list for ( I think!).
Guy showing us around mentioned SUM maybe moving to a fixed weekly fee for life model as this is the way the industry is going..
I know my parents and few others are looking around at village options at the moment are particularly put off SUM due their weekly fee not being fixed for life.

I've been barking at Julian about making that change for years. He's as stubborn as an old mule. Please ensure your parents are very vocal about telling the SUM salesman what they think about it not being fixed as Julian consistently tells me that they don't get any negative feedback. Please tell the salesman in no uncertain words, words and intentions are cheap mate, change it to fixed fees for life and I will buy, don't change it and I wont.

You'd think at over $1m for this villa they could afford to fix the weekly fee for life https://www.trademe.co.nz/property/retirement-villages/auction-2449230573.htm?rsqid=2736d17068b14ce69fb8aabd16ffd 006-003

[Blue Skies]

What the heck's going on with SUM, it was 930 last thurs and down 5% to 883 today with flimsy bid support above 865.

Surely hasn't caught the Coronavirus ?

Disc, holder

[couta1]

What the heck's going on with SUM, it was 930 last thurs and down 5% to 883 today with flimsy bid support above 865.

Surely hasn't caught the Coronavirus ?

Disc, holder Was overpriced.

[Beagle]

Was overpriced.

Everything is overpriced except ATM eh mate :p

Institutions probably clobbering together funds for OCA placement which at ~ $1.20 will be 12-13% down from the peak.

[macduffy]

What the heck's going on with SUM, it was 930 last thurs and down 5% to 883 today with flimsy bid support above 865.

Surely hasn't caught the Coronavirus ?

Disc, holder

No, but it's caught the backlash of other corporate action. All the attention - and spare cash - is on OCA at present.

[DazRaz]

There were quite a few larger trades and the end of day volume is higher than normal. I think its just a bit of profit taking while the uncertainty around corona virus is dropping NZX SPs overall. It's still higher than 2 weeks ago so it isn't really much of a drop. Less than a month till then annual figures and less than 2 months till dividend. The financial results should be the thing that balances it all out.

[troyvdh]

Blue Skies..you're NDP says it all...life will teach you blue skies do indeed exist..however...not every day...and we celebrate when they do.Have a look again at the 5 year SUM chart..and the 3 yr 50 Index ..I with DB....me thinks we may have a few cloudy days...cheers

[BlackPeter]

Just for light entertainment :sleep::

https://www.marketscreener.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/

As per today marketscreeners

consensus analyst recommendation for SUM is "outperform" (7/10);
consensus 12 month forecast is $7.75;
and today's share price for SUM is $8.92;

I read that in the following way:

The five analysts involved say that the SUM share price will drop over the next 12 months by 15% (which well might be, if the biggie arrives) and they say as well that this stock (while dropping by 15%) will outperform the NZX 50 over the coming year.

Ouch. Maybe not that light entertainment after all ...:eek2:

[Beagle]

Nice bounce off the red 30 day MA support line. Technically this is also looking very attractive. 11007

[Food4Thought]

Wonder when the 1 SUM to 1 RYM will happen. Clearly remember RYM at $2.25 some years ago.

[couta1]

Wonder when the 1 SUM to 1 RYM will happen. Clearly remember RYM at $2.25 some years ago. About the same time the Sun runs out of energy or when RYM does another share split, whatever happens first.

[dabsman]

Ryman will split soon me thinks... thou I have been saying that for about a year...

[winner69]

About the same time the Sun runs out of energy or when RYM does another share split, whatever happens first.

Amazing that most punters think that this law of nature will be broken eh

Gravity will keep man attached to the earth ...Newton worked that out just that you worked out that whatever happens forces will ensure there’s reversion to the mean of the SUM share price

[winner69]

Wise people were pretty convinced the earth was flat for a while too.

....still are aren’t they ;)

[BlackPeter]

....still are aren’t they ;)

people - yes, but "wise" people - not so sure.

[Beagle]

I forecast this will happen within a decade with Ryman generating good returns and Summerset great returns over this time frame.

Nicely summed up.

[Snow Leopard]

You guys should really be looking at the future winners in this sector ARV & OCA. :p

[Maverick]

I recon SUM might be ready to disappoint a little later this month.
With greater understanding from my recent OCA wrangle I've run my updated spreadsheets back over SUM.

The general consensus here seems to be an underlying profit of 115-118m. (I was one of them too). Now I'm changing my forecast down to around 111 m.

Thats basically a PE of 18.5 at $9 and an underlying YOY growth of 13%.

So good value for sure but the growth has substantially tailed off from its stunning previous YOY growth rates.

Basically SUM's built rate has plateaued to around 400 units per year but what really hurts is they are selling much slower . Although the average sale price per unit is heaps more it still isn't enough to keep the growth at the level it has been.

Looking ahead I personally question wether their target of 600 units PA is wise until we see increasing new sales. I suspect SUM have already been choking the built rate.

I anticipate their annual underlying earnings growth will be more inline with RYM from here (who obviously had to go over to Aussy to maintain their ever increasing build rates)

Snow Leopard seems on the money here saying OCA and ARV are the new kids to deliver high growth rates.( I obviously pick OCA way ahead of ARV, no surprise there)

Anyway, you all know I've been wrong before , just the results of my workings for those interested.

[peat]

Technically it would make a lot of sense for a correction back to $8 or thereabouts.
It has put on 72% in the last 8 months. without a significant retracement.

[dreamcatcher]

Fisher Funds Management reduced holding from 14m to 11.2m to 4.95% ...... may be a worry for recent buyers

[winner69]

Technically it would make a lot of sense for a correction back to $8 or thereabouts.
It has put on 72% in the last 8 months. without a significant retracement.

Probably just a bit of rebalancing as a result of SUM value rocketing up

Be a worry though if Kingfish reduced their holding ...that would signal lower level of conviction

[Beagle]

Good bounce off the 30 day MA the other day and technically its looking very strong. Never count out Julian and his team to deliver surprisingly good earnings growth.

Fishers said in their Kingfish monthly report they had trimmed their position after adding several times last year. Still 8% of their portfolio.

I believe they can do ~ $140-150m underlying profit this year and have them on underlying eps of 64 cents for FY20, forward underlying PE of just 14.

Compelling fundamental value considering their long track record of being the fastest growing retirement company on the NZX.

[winner69]

Wow property market on fire big time


Busiest January for a while

Median price up 11% on January last year and even the price index reaches new highs

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2020/January/Residential/REINZ%20Residential%20Press%20Release%20%20-%20January%202020.pdf

[Beagle]

Good current info, thanks for sharing. Even Auckland is on fire ! MET is being sold way too cheap and less than current NTA eh. Who cares though, SUM is where the really strong underlying eps growth is...other retirement companies have "pup" eps growth by comparison.

[BlackPeter]

Not that exciting ... but today SUM's number came up to check consensus forecast and recommendation:

So - how good are analyst consensus predictions?

SUM had in January 2019 a (peak) share price of $6.50 and analysts (consensus) forecast for January 2020 was $7.75; The share price in January 2020 however actually peaked at $9.25;

Analyst consensus predicted the SP to rise by 19% and rise it did, however consensus significantly underestimated the amount of the actual rise (42%).

Looking into the consensus buy recommendation - SUM's Buy recommendation in January 2019 was a "Hold"(5/10) - i.e. analysts said that the share will roughly move with the NZX. This was no quite right, because SUM outperformed the NZX50 over the last 12 months by 15%.

Both analyst consensus prediction and recommendation has been ways too pessimistic to be useful, i.e. for my wee exercise I call them both "FAIL".

I am doing this exercise as well with other NZX listed stocks - the overview is here:
https://www.sharetrader.co.nz/showthread.php?11721-How-good-are-the-forecasts-of-stockmarket-analysts

8 stocks checked so far (checking for each consensus and buy recommendation);
Consensus shareprice forecasts correct: 1/8; analyst hitrate: 12.5%
Consensus recommendation vs NZX50 correct: 2/8; analyst hitrate: 25%

[couta1]

Not that exciting ... but today SUM's number came up to check consensus forecast and recommendation:

So - how good are analyst consensus predictions?

SUM had in January 2019 a (peak) share price of $6.50 and analysts (consensus) forecast for January 2020 was $7.75; The share price in January 2020 however actually peaked at $9.25;

Analyst consensus predicted the SP to rise by 19% and rise it did, however consensus significantly underestimated the amount of the actual rise (42%).

Looking into the consensus buy recommendation - SUM's Buy recommendation in January 2019 was a "Hold"(5/10) - i.e. analysts said that the share will roughly move with the NZX. This was no quite right, because SUM outperformed the NZX50 over the last 12 months by 15%.

Both analyst consensus prediction and recommendation has been ways too pessimistic to be useful, i.e. for my wee exercise I call them both "FAIL".

I am doing this exercise as well with other NZX listed stocks - the overview is here:
https://www.sharetrader.co.nz/showthread.php?11721-How-good-are-the-forecasts-of-stockmarket-analysts

8 stocks checked so far (checking for each consensus and buy recommendation);
Consensus shareprice forecasts correct: 1/8; analyst hitrate: 12.5%
Consensus recommendation vs NZX50 correct: 2/8; analyst hitrate: 25% Which just goes to prove that coin tossing is a far more accurate method than following analyst predictions.

[BlackPeter]

Which just goes to prove that coin tossing is a far more accurate method than following analyst predictions.

You might be right .... though my results so far might well prove that analyst recommendations might be useful - as long as you bet against them.

The only problem is - while it seems to be more likely that they are wrong (obviously - depending on the definition of "wrong"), you can't rely on them to be wrong, sometimes they are not ;):

[Beagle]

Better off to DYOR. "Past performance is no guarantee of future performance" But think about this. How many times in your life have you read that disclaimer ?
Have you ever read this one that I have long believed is the truth "Past performance is no guarantee of future performance but it is the very best guide we have" ?

Reason for this rant. DYOR is not that hard, just look at a companies history and extrapolate things out and adjust for known current economic factors.
All that suggests to me is SUM is on for a cracker year in 2020. Maybe $150m underlying profit ?

Shares were ~ $8 in mid 2018. Are they really that expensive now given the real estate pendulum has swung so dramatically towards growth again compared to back then ?...or maybe they are really cheap ? $150m would give eps of 66 cps and put SUM on a forward PE of just 13.6 at $8.98.

13.6 with their track record of eps growth. Hmmmm

[Baa_Baa]

Couta theorem is weighing heavily on SUM SP, stuck on 53%. All you need to know, FA, TA, analysts, dyor, all worthless useless waste of time. Lol.
;)

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12309458

LOL Baa Baa I will stick with FA and TA...others are welcome to use Coutts theorem if they like.

[MauroNZ]

Just as fyi, last weekend there was an open home at Kenepuru village, I couldn't go as per family activities.

[winner69]

Couta theorem is weighing heavily on SUM SP, stuck on 53%. All you need to know, FA, TA, analysts, dyor, all worthless useless waste of time. Lol.
;)

Yes FA and TA just a lot of mumbo jumbo / sorcery or whatever you want to call it .....and not backed up with any scientific evidence.

Couta ReversionTheorem is a Law of Nature so very meaningful ...just like gravity keeps man firmly planted on earth

[Beagle]

Yes FA and TA just a lot of mumbo jumbo / sorcery or whatever you want to call it .....and not backed up with any scientific evidence.

Couta ReversionTheorem is a Law of Nature so very meaningful ...just like gravity keeps man firmly planted on earth

I rate that post BBB - Best Beagle Bait I have ever seen :lol: Actually speaking of things BBB - wonder when HGH might get a credit rating upgrade ? opps didn't realise where are on SUM other thread :lol:

[Beagle]

Fair enough mate. Central to any bull case is a sell down of existing inventory and a lift in the build rate this year.
Resale volumes should start increasing nicely in the years ahead and if the N.Z. real estate market is going up 10% this year we are going to see some very strong gains on resales.

Probably too early to predict with any degree of accuracy what 2020 looks like but certainly the real estate market has started off with a hiss and a roar so the early signs are encouraging.

You and Maverick are both around that $110m mark. I'm sticking with $115m or thereabouts for FY19.

[trader_jackson]

Better hope forsyth are wrong by miles... they saying underlying EPS growth of +7% for FY19...and, perhaps worse still, EPS growth expected to continue to grow slower than sum others (1 in particular I like) for FY20 and FY21... WOW!
With growth of +7%, +16.7%, + 15.5% this is far below the previously trumpeted CAGR of 30 something percent for the past several years... I suppose past performance really is not an indicator at all of future performance.

EPS growth is gonna be really high they say, but sum are saying it is only going to be 7% (meanwhile on sum other threads EPS growth of "high single digits" was rubbished)

No worries - although they still have an outperform rating on it, Forsyth are gonna be wrong by miles and we're gonna see something close to that CAGR rather than terrible "high single digits" growth rate.

[Beagle]

I stopped listening to forbar analysts about a decade ago. Some of them wouldn't know preferred stock from livestock.

The company itself has said past super high growth rates will not be sustained going forward at last year's annual meeting. Be a good chap and try and keep up :p

[King1212]

Result tomorrow..

[winner69]

Result tomorrow..

...and what an awesomely stunning result it’s going to be

Can’t wait.

[Maverick]

I`ve got an technical question that I`m hoping the accountant guru`s among us , Beagle, Mogul, Winner etc might know the answer....

Firstly, I`m confident with all of my SUM workings and still see SUM around 111m underlying NP tomorrow. That`s a dramatic fall in historical growth to 13% and if this proves true then this will be a big fat red flag for me that this will be the new growth rate form here on until they increase (and also sell) their current build rate.

Back to the question.. the area I`m confused on is their depreciation,

Up until 2015 there was no depreciation/amortization (D/A) then FY14-0m...FY15-3.7m...FY16-3.7m..FY17-4.6m...FY18-6.7m

So, why does D/A go from nothing to rapidly rising when in fact there new sales have been falling slightly towards the end of this time frame?

I know OCA`s D/A is also rapidly rising but they have been spending big on computer systems which depreciates real fast. So wondering if SUM has a similar thing going on or whether accounting methods has changed recently. (i.e IFRS16, whatever that is?)

I`m not motivated enough to look into it (the numbers are too small and its a non cash expense anyway) but by any chance is there a simple answer someone already has the answer to?

[Beagle]

Sorry mate I have no quick answers for you and have been flat out today.
I will review SUM's result as best as time allows tomorrow and get deep inside the numbers later this week or early next week when time allows.
SUM did well to hold up today in a market down ~ 2% so hopefully that augers well for tomorrow.

[James108]

Things like roads and community centres are capitalised (and not included in underlying profit, so margin for a total village is less than reported for individual units) so there should definitely be some depreciation. I’m not sure why it wasn’t there before 2014.

[Maverick]

Thanks Beagle, James and Mogul for responding.
Obvious to me know now, FY14 depreciation of 0, was a non-number I chucked in there in my earlier days to fill the original spreadsheets (I had a real job back then). Now I see the overall depreciation is in fact a predictable ratio to assets where one would expect.

Thanks again for helping

[King1212]

Dow down 1000p points...no matter how good is the result....the SP will be also squashed!

[winner69]

Nearly all us were out in out in a forecasts of underlying earnings

But heck they made $175m real profit ..pretty good that is

But no worries as Julian says ”Annual growth in underlying profit has averaged 38% since the company listed on the NZX in November 2011.”

Good of him to remind us

[trader_jackson]

Nearly all us were out in out in a forecasts

But no worries as Julian says ”Annual growth in underlying profit has averaged 38% since the company listed on the NZX in November 2011.”

Good of him to remind us

NPAT down yet again winner...

FY20 build rate only 400 units - where was the talk of the 600+ gone?

Development margin falling as well...

Available new sales uncontracted stock as a % of portfolio increasing for the 4th consecutive year (not a good track record to have) Resales also up on pcp

Trying to distract us with talk of Australian growth yet the growth story in NZ is faltering big time... no worries nice of him to talk about the past as you point out winner (might as well start reminiscing on Kodak, blockbuster and Lehman brothers while we're at it - talking about the past didn't seem to help them much)

[Ggcc]

Nearly all us were out in out in a forecasts

But no worries as Julian says ”Annual growth in underlying profit has averaged 38% since the company listed on the NZX in November 2011.”

Good of him to remind us
I can see it head back down to below $8 after these results, adding that the dow dropping so hard as well.

[winner69]

I think Julian has mislead Beagle about build rates and other things.

Might be angry Beagle at ASM ...no Julian will be safe as most punters not flying or going to crowded meetings in April.

[trader_jackson]

Worst bit of announcement is this:

Looking ahead, Mr Cook said the business was [/B]not expecting underlying profit growth in 2020, [/B]largely due to the investment in care wages and development margins returning to the medium- term guidance of 20% to 25%.

That’s not so good is it Beagle ....Summerset not a growth company

It is what I've been saying all along - they need care, they can't just ignore it and pump out units otherwise they'll find demand (as people get older and desire increased continuum of care) will drop... finally they've bitten the bullet (rather than nibbling at it over the last few years like other operators (RYM, ARV, OCA).

[winner69]

I can see it head back down to below $8 after these results, adding that the dow dropping so hard as well.

Back into the 7’s I reckon.

[winner69]

book Value up 16%

Company worth heaps more than a year ago

That’s good.

[Ggcc]

Look at the photos on Page 52 and 53 of the AR ...Senior Management Team

They all have a funny disease and look like dorks ...or my laptop playing up.
Your computer is fine haha

[trader_jackson]

hey winner, there is one good thing about SUM's FY19 results today... it makes ARV look really good!

[Leftfield]

hey winner, there is one good thing about SUM's FY19 results today... it makes ARV look really good!

trader you have called it right..... well done you!

[winner69]

hey winner, there is one good thing about SUM's FY19 results today... it makes ARV look really good!

Agree ....SUM is an also ran as they say at the races.

The much admired hard nosed Julian has disappointed us.

[Valiant]

So OCA aren't the only one getting hit in the pocket by increased care wages...

Disc: hold OCA and SUM

[winner69]

...and what an awesomely stunning result it’s going to be

Can’t wait.

Maybe 8% growth is underlying earnings and 16% increase in Book Value is awesomely stunning

[couta1]

Well looks like it's not only my pet share that's going to get SUMwhat of a hammering, hey Beagle you still got these? That reversion to the mean not to be messed with aye winner.

[LAC]

2020 will be a great year imo, all the ducks line up as of now.
2019 anything around $107m will be pleasing.
Was pretty close. Still a good result overall but not as I expected. SP should head down again today

[winner69]

Well looks like it's not only my pet share that's going to get SUMwhat of a hammering, hey Beagle you still got these? That reversion to the mean not to be messed with aye winner.

You would have to think that reversion to the mean will play out today or tomorrow.

Yep, Laws of Nature not to be messed with

RYM down today would put SUM at 800

And general undershoots on down side just like it has overshot on the upside.

[Snow Leopard]

Much as I meditate on the way of SUM I fail to comprehend how they continue to under-perform on their potential.


38% is so the day before yesterday.

[King1212]

Mayday...mayday...mayday!

[Beagle]

No question the result was a bit disappointing and the outlook for no underlying profit growth in FY20 extremely disappointing, especially against a backdrop of what will likely be a full year of strong residential property price growth.

Despite all the sugar coating of talk of "investment" in staff...really I am over this so called "investment" in staff, why don't they just call it what it is, we faced substantial cost increases with staff.

Unsold new stock keeps rising year on year on year as does resale stock. Debt level's keep rising and rising and their land bank is actually looking quite excessive now for their build rate...I have to look at the numbers some more but something like 12 years land bank at the FY20 build rate is really looking excessive.

The expansion into Australia with all the necessary resources marked a major turning point in the growth rate of RYM and really has acted as a headwind for years for them. I expect the FY20 outlook reflects the human resource cost increase over there for SUM and I expect Australian development will be a big drag on earnings growth in FY21 as well.

To me it seems all the retirement companies are struggling to a greater or lesser extent to sell their units and I suspect the market is actually quite over supplied.

I have been on at Julian Cook for years that they need to change to a fixed fee for life model and he won't listen.

Bulcott Street hearing in June 2019 at the Environment court...they are still waiting on a decision. To me the system is broken when the Environment court takes more that 7 months to even make a decision...that's beyond ridiculous.

I have made major changes to my expectations of growth rates going forward and now see this growing in the 10-15% rage, similar to RYM going forward from FY21 onward.

Based on no growth in FY20 earnings this gives eps of 46.7 cps in FY20. It's clear this is not a $9 stock anymore so I am glad I sold two thirds of my stake in the last week for ~ $9 and the rest this morning.

I initial sense is I see fair value somewhere around $7 after a major reassessment of expected growth rates in the long term and no growth in FY20.
To say I am disappointed would be a considerable understatement.

Disc: No shares left :( :(

[couta1]

The Beagle has exited stage left, or is that stage right.:cool:

[Mr Slothbear]

8% up not terrible but that outlook for 2020 is abysmal. Glad my holding is only small.

i’ve even noticed Ryman having ads on youtube so sales must be getting more competitive. Theres a lot of new units being built by a lot of players so looks like those supernormal profits are thing of the past

[LAC]

No question the result was a bit disappointing and the outlook for no underlying profit growth in FY20 extremely disappointing, especially against a backdrop of what will likely be a full year of strong residential property price growth.

Despite all the sugar coating of talk of "investment" in staff...really I am over this so called "investment" in staff, why don't they just call it what it is, we faced substantial cost increases with staff.

Unsold new stock keeps rising year on year on year as does resale stock. Debt level's keep rising and rising and their land bank is actually looking quite excessive now for their build rate...I have to look at the numbers some more but something like 12 years land bank at the FY20 build rate is really looking excessive.

The expansion into Australia with all the necessary resources marked a major turning point in the growth rate of RYM and really has acted as a headwind for years for them. I expect the FY20 outlook reflects the human resource cost increase over there for SUM and I expect Australian development will be a big drag on earnings growth in FY21 as well.

To me it seems all the retirement companies are struggling to a greater or lesser extent to sell their units and I suspect the market is actually quite over supplied.

I have been on at Julian Cook for years that they need to change to a fixed fee for life model and he won't listen.

Bulcott Street hearing in June 2019 at the Environment court...they are still waiting on a decision. To me the system is broken when the Environment court takes more that 7 months to even make a decision...that's beyond ridiculous.

I have made major changes to my expectations of growth rates going forward and now see this growing in the 10-15% rage, similar to RYM going forward from FY21 onward.

Based on no growth in FY20 earnings this gives eps of 46.7 cps in FY20. It's clear this is not a $9 stock anymore so I am glad I sold two thirds of my stake in the last week for ~ $9 and the rest this morning.

I initial sense is I see fair value somewhere around $7 after a major reassessment of expected growth rates in the long term and no growth in FY20.
To say I am disappointed would be a considerable understatement.

Disc: No shares left :( :(

Wow, that was fast