SUM - Summerset Group

[hardt]

Not a great quarter and not a bad quarter, hopefully they deliver in Q4.

"The group is on track to deliver 450 retirement units for the year. A large number of retirement unit deliveries have been late in the third quarter which will reflect in settlement volumes in the fourth quarter”.

SUMMERSET GROUP HOLDINGS	FY16A	FY17F	FY18F
Average number of retirement properties	2624	3053	3500
* Average resale margin on new and existing properties ($)	82,640	90,250	95,500
* Average management and membership fees generated per retirement property ($)	10,686	11,000	11,300
Sales of Occupation Rights - Units	658	638+	?

[winner69]

Numbers are pretty awful

In spite of reiterating the 450 new sales for the year (Q4 is going to be a real boomer) might push the share price down to 450/470

That be good ...as long as it stays in the bounds of the long up trending regression channel

[bull....]

More people dying in the summer than winter (or is there a lag to when the units are resold) ...

hard to see any trend in seasonals, it would be good if the company could split resales up into categories

people dying
resales into other units
resales of people who outright left

then we could make better assumptions on a number of factors

[Beagle]

No worries, Q4 is going to be an absolute boomer with unprecedented numbers of settlements. The key statement is we're on track to deliver 450 new sales.

[hardt]

No worries, Q4 is going to be an absolute boomer with unprecedented numbers of settlements. The key statement is we're on track to deliver 450 new sales.

I thought it said new units*
which means units available for sale.

[trader_jackson]

What's going on? I thought the 2nd half was meant to be much better than the first half? Going to have to be a yuge quarter 4.

[Beagle]

I thought it said new units*
which means units available for sale.

"The group is on track to deliver 450 retirement units for the year. A large number of retirement unit deliveries have been late in the third quarter which will reflect in settlement volumes in the fourth quarter”.

I believe Julian is referring to new units. He's confirming yet again their target of 450 new units will be met. One thing I have learned the hard way with this stock that I will pass on. Whatever you do, do not let a single quarters sales metrics unduly influence your view of this stock. Keep you eye on the annual total and the even longer game than that.

[winner69]

I believe Julian is referring to new units. He's confirming yet again their target of 450 new units will be met.

Yep - 450 brand new units recently completed is what it means

Add resales to that number

Latest property data suggests they will getting pretty good prices for them as well

Will be making heaps more than last year

[Beagle]

Yep - 450 brand new units recently completed is what it means

Add resales to that number

Latest property data suggests they will getting pretty good prices for them as well

Will be making heaps more than last year

Yeap all good, no worries. I see no reason to change my full year forecast of $85-90m underlying profit. My core expectations for 2017 house prices built into that model were zero house price growth for Auckland and 3% for the rest of the country. Rest of the country where SUM has the vast bulk of its villages is tracking well ahead of my expectations.

P.S. Yes there is a lag. As residents succumb to winter flu's and other illnesses exacerbated by winter its take a little while to refurbish their units before resale over spring and summer.

P.P.S. You know that share price relativity thing with RYM that Couta1 used to reefer too, well we are pushing the outer limits of that with RYM SP 1.85 times SUM SP.
Expecting that to tighten into 1.5 next year. SUM $7 sometime in FY18.

[BlackPeter]

P.P.S. You know that share price relativity thing with RYM that Couta1 used to reefer too, well we are pushing the outer limits of that with RYM SP 1.85 times SUM SP.
Expecting that to tighten into 1.5 next year. SUM $7 sometime in FY18.

Magic ... we are well positioned - aren't we?