SUM - Summerset Group

[macduffy]

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

Yes, indeed! As others have mentioned, SUM is a longterm investment and shouldn't be judged on quarterly numbers.

[trader_jackson]

Yep - headlines with 18% drop in it is pretty dramatic eh

http://www.nzherald.co.nz/business/n...ectid=11929773

Winner, the headline is now even more dramatic than when you posted this last quarter (7 July, share price: $4.69)

And the press release was very short compared to last quarter or the first quarter... I noticed a bit of a change in language to:
2nd quarter contained: "We continue to see strong demand for our retirement units, and presales levels and settlement rates both continue to track positively."
3rd quarter contained: “We are continuing to see good sales and steady settlements across our villages throughout New Zealand, including Auckland."

Doesn't sound quite as 'strong' as previous quarters, and weird that they didn't mentioned in the 2nd quarter update that they weren't expecting things to really go well till 4th quarter..

No worries.... Lets forget about the previous (and most recent) 6 months... the headlines (and the facts supporting those headlines) are all going to turn around for these last 3 months and we'll see a big beefy 4th quarter press release with lots of wonderful words to push the share price towards the $6 mark and finally get off the 0 point something percent 52 week return the NZX website currently mentions.

Hard to believe that old Dog (you know the one) that has been listed for nearly 3 years now is still 'leading the pack' in 52 week returns

[winner69]

t_j me old mate - you left this bit out - A large number of retirement unit deliveries have been late in the third
quarter which will reflect in settlement volumes in the fourth quarter.

Deliveries late is code for things like council being slack in issuing Completion Certificates (or whatever they are called) so SUM couldn't make sales unconditional before Sept 30th. Maybe it was something else but you get the gist eh. I would hazard a guess there are many sales being finalised this week.....or next if the solicitor is back from sick leave (speculation)

Good eh - getting to 450 isnt such a yuge step after all

[Food4Thought]

Yes, indeed! As others have mentioned, SUM is a longterm investment and shouldn't be judged on quarterly numbers.

Long term, to be sure. A pre Christmas buying opportunity presented here. Consequencial impact of election uncertainty. Deferred buying. The sun will come up and the show must go on. Let's see if some big buyers jump in if there is temporary drop back in share price, small holder uncertainty helps with a bit of a sell out. Good work SUM. Tracking along nicely IMO.

[Beagle]

Long term, to be sure. A pre Christmas buying opportunity presented here. Consequencial impact of election uncertainty. Deferred buying. The sun will come up and the show must go on. Let's see if some big buyers jump in if there is temporary drop back in share price, small holder uncertainty helps with a bit of a sell out. Good work SUM. Tracking along nicely IMO.

Quite right mate. All I want for Christmas is SUM more shares...you reading this Mrs Beagle ?

[winner69]

t_j

When ARV floated at $0.95 in December 2014 SUM was $2.70 odd

I know which one I'd prefer to have had over the last 3 years

And SUM haven't asked for more dose either ... how many times for ARV

[JeremyALD]

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.

I think your forecast is very optimist Beagle. That is significantly above their forecasts and there has been no update to it after 3 quarters.

I agree with you that they might exceed - but i was thinking more like 75 - 80 million. Time will tell!

[trader_jackson]

t_j

When ARV floated at $0.95 in December 2014 SUM was $2.70 odd

I know which one I'd prefer to have had over the last 3 years

And SUM haven't asked for more dose either ... how many times for ARV

I love giving money to ARV (just wish they had a DRP!), because every time it has "only been good"... ARV have proven they can select positive opportunities for holders, from the first one at $0.84 (SPP) to the most recent on, being the $1.15 offer (while the share price is $1.24).

You'd think SUM, with the higher debt and higher build targets etc would have smashed ARV out of the park but I know which one I'd rather own over the past 2 years, and it's not SUM.

But lets not let this turn into an ARV thread - SUM finished up today - great stuff.

[hardt]

Hard to lose when you have good positions in ARV SUM + RYM

Nonetheless, these retirement stocks are boring as hell and that is a good thing.

[Beagle]

http://www.sharechat.co.nz/article/6...are-mergerhtml

My view.
Summerset is N.Z.'s fastest growing retirement company with a five year track record of CAGR of 48% in underlying EPS a track record that is soon to extend to six years and I expect the current years growth to be very similar to its historical average.

The current discount to RYM in terms of underlying PE is completely unwarranted given their vastly higher growth rate and proven in-house development capabilities.

SUM has an outstanding land bank of over 6 years of developments, quite considerable financial reserves and banking facilities are extremely well positioned to continue their outstanding record of high growth

MET by comparison is in its infancy with its developement activities and has serious legacy issues with the weather tightness of some of its older villages.
Its track record of EPS growth has been far less spectacular that SUM's.

I would be fundamentally opposed to a merger. If I wanted to invest in MET I would. The fact that I don't hold any shares in MET speaks for itself in terms of what I think of their business model and prospects for profit growth. The fact that Infratil who had representation on the board recently sold down speaks for itself in terms of what they think of MET's medium term prospects.