No way.... It's problems like yesterdays when the thinking and understanding goes up another notch. Makes the journey far more interesting.
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One thing I like about Summerset is that they haven’t been selling that many more units but have been making heaps more money (Profit)
Not like Oceania who sold heaps more units (like 52 more last year) and made no more money than the year before.
Not sure sure about those figures Winner but there are plenty to choose from.
OCA sold 77 more units FY18 than FY17 and its underlying npat was up from 34 million to 52.1 million.
It will be OCAs turn for some attention in a few months with its new numbers. At today's sp, it will be very hard for it to disappoint the market.(thanks for that SUM:p)
I do not accept SUM's explanation of an increase in 'Average days to settle' after construction is complete. Why aren't they selling them down before construction has even started?... let alone 1/2 way finished? Other companies sell down their entire village off the plans. I treat this part as a poor excuse and put it down to a slack sales team. I am satisfied that the housing market plays virtually no part in this.
However, looking at resales, one must remember the average tenure of residents:
Attachment 10447
From page 19 of the presentation, number of villas = 1669, number of apartments = 993, number of serviced and memory care apartments = 958. I don't know how the reported figures work when say a person moves from a villa into a serviced and memory care apartment, however, numbers reported by other NZ retirement companies state the average tenure to be a little over 6 years for the vast majority of their retirees. Is it only 5 for SUM? I hope not, otherwise someones putting arsenic in the tea.
I don't do a lot of analysis on SUM as I comparatively don't hold nearly as much SUM stock-value as I do other villages, but using 6 years as an average tenure, then surely one needs to see the state-of-play from 6 years ago to determine the number of units coming up for resale today.
If the number of new-builds 6 years ago was somewhat stagnant (compared to todays new-build rate), then so will be the resales 6 years later, I would think? I am outside of NZ at present & haven't looked back 6 years on a SUM report to see if this might be true. I am sure some of the contributors here will do this and report back to the thread. I would be interested to know if there is a correlation here.
I tending to agree with you vaygorQuote:
Vaygor1
I do not accept SUM's explanation of an increase in 'Average days to settle' after construction is complete. Why aren't they selling them down before construction has even started?... let alone 1/2 way finished? Other companies sell down their entire village off the plans. I treat this part as a poor excuse and put it down to a slack sales team. I am satisfied that the housing market plays virtually no part in this.
The announcements aren’t as transparent as they used to be
Surely the 'housing market' feeds into the Retirement Village sector ?
If people can't sell or are taking longer to sell (compared to 12 months ago) their own homes, they can't purchase or settle on a Retirement home.
How many people fund their Retirement Village home solely from shares or bank deposits?
However, once the gap between vendors & buyers expectations closes, normal sales levels will resume, feeding into higher levels of sales & shorter settlements for the Retirement sector.
That's the way I see it anyway.
https://www.nzherald.co.nz/business/...ectid=12219508
Record low interest rates might help.
I can't reconcile the low current number or resales and low resale stock level with those claims of average length of occupancy for which you kindly provided a link. For example in 2014 they has 2116 units and 2013 1855, average just on 2000. If those are on average recycled every 5 years we should be seeing 400 resales a year by now ? In the current quarter we had just 66 resales and of these resales as per the announcement this reduced resale stock by 13 units, so only net 53 resales, or an annual rate of 212 which is just on half the prima facie level they should theoretically be ?
Further, it is interesting to note that way back in 2015 when the company had just 2419 units, resale level was 245 per annum.
Worth noting that there were 101 contracted units as at 31 December 2018. Yes I think they could do better selling more off the plans and they could also do better by fixing their weekly fees for life. I will raise this matter with the board again at the annual meeting.
Julian Cook is a very motivated guy and I think he's supported by some other very good management and a very well respected board. They've made a LOT of land acquisitions which point to a very strong growth path in the future and they have plans to increase their build rate to 600 units per annum over the next 2-3 years. I think the metrics are compelling and in the medium term the resale rate will double as will the new sales rate.
I look forward to the annual meeting and discussing matters with the board and senior management. This will give me more of a feel for where the company is going in the next 2 years.
Latest national real estate stat's had the national average price increasing 2.5% year on year to March 2019. This is in quite stark contrast to the rate at which Melbourne is falling which will of course affect RYM to some degree. This week saw the introduction of interest rates at low level's the likes of which I have never seen before which I think should be stimulatory as will cut(s) to the OCR this year.
I think Friday's SP reaction is overdone but acknowledge sentiment is negative and the sales number was disappointing so in the short run the naysayers might carry the day for a bit longer. Long term I remain very confident in this company, its management and the board.