It doesn't JAK. But it my surprise the sceptics with increasing costs in the sector. Give them something else to whine about.
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would have thought you would want to gear up in the downturn. i.e. buy up cheap land. build villages when the construction industry has excess supply.
Then pay down debt at the top of the cycle.
Like pretty much what RYM has done in the last cycle but the complete opposite
Let's see what the market thinks about it. This:
• Net profit after tax of NZ$269.1 million, down 50.5% on FY21
all the retirement stocks will be buying up land still to some extent as there models rely on development profits
ryman will still buy land but they have said they will reprioritize buying and development , which means they are being prudent going forward
yes some companies might consider it an competitive advantage buying cheaper land in a down cycle to land bank but in effect it is a risky strategy as no - one knows with certainty when the down cycle will end and prices rise again
summerset sounds like they are hoping the age maturity of there residents will provide a stronger stronger cashflow when they die over the short term but again this is hope strategy as no one knows for sure when someone will die hence they are guessing on these cashflows to save the day why landbanking at the same time. sounds risky to me if it all does not pan out esp heading into a nbigger downturn
you can see the two different strategies being employed now between ryman and summerset be interesting one day in hindsight who is right
Just getting started on the property down turn as well. Good time for SUM to be cautious IMO.
Realised gains (profit / development margin) on new sales increasing nicely over recent prior periods
Average gain last few periods have been H220 $112K / H121 $135k / H221 $159k / H122 $181k / H222 $212k
Mix has some impact but that trend looks pretty healthy to me during a period of declining house prices.
Sum must be doing something right
This a good slide SUM put in their presentation ….steady state cash flow big +ve number should allay punters worry about perceived high debt levels.
market has had time to digest last result
pretty obvious not impressed with stock hitting new lows