Thanks Mav for your precise and deep insights ....always appreciated .
For me if it comes in between 87 -95 ie say 91 M then it will be perfect ....:p
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82.5 M seems below both estimates ...but overall its a good result ...under the circumstances ...:D
Not to worry, that’s still an excellent result considering all the difficulties in the period.
The commentary is the key , waiting lists, empty stock levels , sales and prices holding up nicley. The other big takeaway is the comment “demand doesn’t appear to be teathered to the property market.”
In fact the commentary is borderline outstanding.
Seems all the doom and gloom priced in by Mr Market has well and truly been over done. If I wasn’t so certain of another particular RV companies prospects I’d be very comfortable loading up on these at these prices.
Just saw this on my Facebook feed. Why would they be offering a "special" given their decent result?
Link won't paste for some reason. Reduced entry fees for serviced apartments in Christchurch, for limited time.
They're advertising it here https://www.summerset.co.nz/flexiblepricing/ read the T&C's.
Interesting in the presentation they break Operating Cash Flow into two components - being “Net operating business cash flow” and “Receipts for residents' loans - new sales”
And good to see the “Net operating business cash flow” is positive, although not as high as pcp
Means they are actually generating cash from actually caring and looking after people and running villages - not all in sector can show this to be positive.
I’ve looked at this way for years ….wonder what made them change their approach (I think) …good on them
I'm kind of Surprised that after the result there hasn't been more chit-chat here. I guess there's a lot of other company news going on. This result is noteworthy that seems to have gone under the radar. The significance is the steadiness of the result within peak omicron, building shortages, significant cost increases , labour shortages , falling public confidence and falling prices of the housing market and all done with an increasing supply ( which should, but isn`t, result in growing unsold stock.)
Basically my half year expected result was $4.5m too high because I just lazily halved the full year expected result which I'd previously carefully worked out a few months ago.
My workings with SUM are always done in full years without breaking down into half years.
I don't own any so aren't willing to go through the chore of all that extra work.
So it turns out I should have tilted more of the profit towards the HY2 based on sales figures already known and with the higher deliveries due in HY2 ( in fact 60% more new deliveries of which will have many pre-sales). Essentially the excess $4.5m I was expecting in HY1 will simply show up in HY2.
Obviously with SUM giving us a quantity of sales updates so the final figure can easily be fine tuned before the FY22 result.( last FY I forecast $141m here and the actual result was 141.1m - just demonstrating this company , outside of covid, is predictable)
I have put more effort in since the result to see where I went wrong and reworked things now using the previously known sales /supply specifics tailored to both half years. I'm still happy my full year is still correct enough.
That's a profit of $174m or up 23% YOY.
Putting it on an anticipated PE of 15.3 on today's SP.
To me that's great value for a company with such a strong track record and strong pipeline.
There were concerns about SUM noted here pre-covid as it was amassing a lot of unsold stock. It looked like it was oversupplying and Winner rightly posted many sad looking graphs on this at the time. I even visited Rototuna- Hamilton to get an insight as to why. The sales lady said the villas don't really sell well until the core community facilities are up and running ( which they weren't at the time). Turned out she “speaketh the truth” because SUM are having no trouble selling their product now even as they produce them in greater numbers than ever.
It will be well known here that I'm probably OCAs biggest fan and I still claim they have a tidal wave of value about to wash through over the next few years and beyond. Plus I love their expertise in the high end market and their point of difference. That's enough of that on this SUM thread.…
So while I'm still not personally going to switch to SUM, IMO it clearly offers high value. This company has a ton of history, plenty of pipeline and can be understood without too much work. ( no new share issues, or acquisitions to worry about). I can't see any reason SUM can't keep doing these high 15-20% CAGRs for at least a few years yet. Apart from a big rise in new build rate , they also have clearly increased their existing pricing looking at the jump in embedded value. That will flow through for many years yet
Just saying that SUM continues to be an outstanding company at very good value.
Their margins remain surprisingly high considering the conditions and their sales are unfaltering. The beauty of this company is its ever increasing profit is smooth and predictable. Got to love just doing green field developments for that.
Not often you see the CEO unload 150,000 shares, must know something we don't, or has a very large new deck to build. $1,643,564 is quite a payout. I remember when he was second fiddle finance guy at IRD, probably on less than $200k. What a successful career he has had and stlll enjoys, all well deserved.
https://www.newshub.co.nz/home/new-z...greements.html
A risk for the sector
Paying outgoing residents in a more timely manner would be simply good business practice. Whilst it doesn't help the RV cashflow it would have minimal impact upon profitability. The current policies could be described as mean spirited, and IMO such complaints are warranted.
And while it would have an as yet undetermined impact on cash flow or profit, it is still very unclear whether any/all of the listed RV's are implicated or if they are, to what extent they are implicated. I would think they are not, or if they were they would voluntarily revise their contracts, as only a very very small percentage of exiting residents are affected given their prolific turnover of property. In any event the listed RV's are all so large that this is a sideshow imo, it's far more serious for the smaller private RV's and charities that run on the skin of their bones and engineer contracts that claw back any small financial advantage they can get away with.
Very well said both of you. ( great to see you posting here again Ferg, your insights are always classy)
Totally agree that this will be just a sideshow to the " big 6" who surely will already be doing things ethically anyway. For example RYM , SUM, and OCA voluntarily paid their covid subsidies back, even though they were certainly entitled to them. Dont think ARV though did they Trader.J- I'm not sure?
I suspect with all this RV chat in the mainstream news, that it will just further spruik interest and cement the new normality of the retirement village lifestyle to Joe public.
It will also be softly educating them about ORAs and that they are the industry standard now.
Thirdly, any anxiety that prospective clients get from all this will drive them to the perceived safety of large national operators.
Can only see this free coverage and the overhaul as good for the industry.