SUM - Summerset Group

[couta1]

I thought Oceania and Arvida were the only 'true' retirement/care like companies (that are listed)... and the rest were all property development companies?

They all deal in property, it's just that SUM have more exposure, hence more potential.

[Oliver Mander]

They all deal in property, it's just that SUM have more exposure, hence more potential.

...or more risk.

[couta1]

...or more risk.

Goes hand in hand. PS-More care centre as a proportion of total beds is even riskier.

[Oliver Mander]

Goes hand in hand. PS-More care centre as a proportion of total beds is even riskier.

interesting couta. Why is it riskier? would have thought an underlying business fed by a constant stream of people getting older and living longer is less risky...

[couta1]

interesting couta. Why is it riskier? would have thought an underlying business fed by a constant stream of people getting older and living longer is less risky...

The only advantage of having care centres for the likes of SUM is that it offers the attraction of the continuum of care model. By and large care centres are loss making, or at best break even ventures, especially with the recent pay equity settlement, which contrary to popular belief on this forum is only adding to sector woes for the majority of players. PS-A recent survey on the pay equity settlement, asking the question, Does funding cover the extra wages? Thirty providers responded, 10% said yes(One with the proviso of 100% occupancy) 90% said NO.

[Elles]

Nice to see the SP up today. It sounds like a few on here are waiting to buy in or top up once the downtrend reverses. What criteria do you use to determine when to buy?

[Joshuatree]

Basically when everyone is happy to be buying and saying things like "i loaded up on this baby today" and "me too toot toot" and "back up the truck" and "$6.00 soon "etc. That could be a signal to.......... sell.

[macduffy]

The only advantage of having care centres for the likes of SUM is that it offers the attraction of the continuum of care model. By and large care centres are loss making, or at best break even ventures, especially with the recent pay equity settlement, which contrary to popular belief on this forum is only adding to sector woes for the majority of players. PS-A recent survey on the pay equity settlement, asking the question, Does funding cover the extra wages? Thirty providers responded, 10% said yes(One with the proviso of 100% occupancy) 90% said NO.

Is there also an additional risk factor in that the care centre part of the business is more exposed to future govt policy/funding decisions?

[couta1]

Is there also an additional risk factor in that the care centre part of the business is more exposed to future govt policy/funding decisions?

Absolutely, when you consider the sector was underfunded to the tune of 600mill before the pay equity settlement, you can see the effect any further underfunding would have on the viability of pure care centres.

[Lewylewylewy]

Breaks the business model big time.
Young people would be in for far too long and the company wouldn't be able to recycle the unit quickly enough.
I'm sure that's why RYM have a age limit of 70 to get in - less time in. Ideally you want people to stay just as long as the time for the maximum 'deferred maintenance' fee to kick in - less refurbishment costs and quicker turnover.

I'm thinking when baby boomers die off and the next generation of old people are fewer. Years away, as I suggested, but a possibility depending on immigration policy, industry saturation, etc. Lots of property required for this use, then suddenly lots of redundant homes.