SUM - Summerset Group

[winner69]

Not as strong as I hoped but still very solid numbers

https://www.nzx.com/files/attachments/251222.pdf

Summerset keep on doing better what they say they will do - that's good

[trader_jackson]

https://nzx.com/companies/SUM/announcements/295299

It would seem there is SUM growth, but it is certainly slowing... while borrowing likely continues to skyrocket (and interest rates are moving upward ... will be interesting times that is for sure)

[couta1]

https://nzx.com/companies/SUM/announcements/295299

It would seem there is SUM growth, but it is certainly slowing... while borrowing likely continues to skyrocket (and interest rates are moving upward ... will be interesting times that is for sure)

They have hit all their targets and then Sum, good enough for me, you should have worked out by now tj that quarter metrics vary and Q4 is traditionally a subdued one.

[percy]

They have hit all their targets and then Sum, good enough for me, you should have worked out by now tj that quarter metrics vary and Q4 is traditionally a subdued one.

Good commentary.
I too thought it was good.

[BlackPeter]

They have hit all their targets and then Sum, good enough for me, you should have worked out by now tj that quarter metrics vary and Q4 is traditionally a subdued one.

market seems to be stunned ... or - more likely - take the results as non-event.

Still - SUM (as the other two) is in my view a good company and probably a good long term investment. However - in the short and medium term I'd expect them to move more in a sidewards channel (and potentially further drop) until after the next bear and the interest rates come down again ;

As well - for REIT's would be a change of the immigration policy after the next election a real thread. While I don't expect too many immigrants to get immediately into a retirement home - less pressure on the housing market reduces the flexibility of old people (owning a home) who want to.

[couta1]

Market still in holiday mode BP, not a lot of volume moving anywhere atm, will be over $5 before the end of year results come out late Feb.

[Beagle]

Somewhat underwhelmed. Low resale's didn't help and new units undershot my expectations too in what is traditionally a good quarter for SUM.
SUM have gone on record with their forecast and its already widely understood by the market and fully priced in. I think Q4 results probably puts it at the bottom end of their guidance.
Some think there's risk to this sector long term from rising interest rates, and a new much lower immigration policy going forward potentially together having a material medium term effect of housing values leading to some compression of development margins as they struggle to achieve premium pricing for units because real estate values overall are under pressure and I have some sympathy with this point of view. Also the companies own growing debt burden put them under sum more pressure in terms of costs going forward.

FA looks okay and long term its soundly managed in a growth sector with strong long term tailwinds but TA doesn't line up so until they can break through the 100 day MA to the upside I'll remain on the sidelines.
I find it curious that the market almost anticipated this lack luster result with the SP performance being most underwhelming in recent months. Its almost like the big institutions that have been regularly offering up large chunks of the sell side, usually towards the close of business on the day had a heads-up that this quarters sales would be somewhat underwhelming.

[BlackPeter]

Roger, great SUM-mary

[iceman]

Somewhat underwhelmed. Low resale's didn't help and new units undershot my expectations too in what is traditionally a good quarter for SUM.
SUM have gone on record with their forecast and its already widely understood by the market and fully priced in. I think Q4 results probably puts it at the bottom end of their guidance.
Some think there's risk to this sector long term from rising interest rates, and a new much lower immigration policy going forward potentially together having a material medium term effect of housing values leading to some compression of development margins as they struggle to achieve premium pricing for units because real estate values overall are under pressure and I have some sympathy with this point of view. Also the companies own growing debt burden put them under sum more pressure in terms of costs going forward.

FA looks okay and long term its soundly managed in a growth sector with strong long term tailwinds but TA doesn't line up so until they can break through the 100 day MA to the upside I'll remain on the sidelines.
I find it curious that the market almost anticipated this lack luster result with the SP performance being most underwhelming in recent months. Its almost like the big institutions that have been regularly offering up large chunks of the sell side, usually towards the close of business on the day had a heads-up that this quarters sales would be somewhat underwhelming.

Good summary Roger. I however am pleased with the announcement and believe this is a good long term investment, but accept it may go sideways for awhile now. There has been a lot of discussion of the effect of slowing of house prices or as some expect, a reduction is prices although I think that will be mainly contained in Auckland. But couldn' t it also be argued that if people considering moving into a retirement unit start believing there is little upside potential for the price of their homes, that they may be more interested in selling up and make the move into retirement villages ? I think many are currently holding onto their homes and delaying moving while they enjoy the huge growth in property values. Remember most retirees are downsizing when they move.

[Beagle]

SUM more heat coming out of the Auckland market Down two months in a row now. http://www.sharechat.co.nz/article/7...roperties.html Is this the start of a new trend or simply a short term aberration ?

Hi Iceman, absolutely mate there's quite a gap between the average value of retiree's home sales and the cost of the average occupation license because of the downsizing. I think Vaygor1 posted some good info on that in the RYM threads a while back and there's a price difference of circa 30-35% so absolutely there is plenty of cushion there which I think many use to update their vehicle and have a nice world trip as well as investing the net proceeds to have a more comfortable retirement. I guess the risk is more long term if we see a sustained downward movement in real estate prices we could see a material erosion in the amount of capital retiree's free-up through the process making the prospects of community retirement living slightly less attractive for retiree's. (freely acknowledge most retiree's move into these center's for reasons not usually to do with money, (lifestyle, community spirit e.t.c. are more common reasons by far). How this play's out in terms of possible development margin compression its hard to say but fair to say the prospect of a material housing correction is a headwind the company could face in the foreseeable future. Maybe its started already ?