SUM - Summerset Group

[Beagle]

Confused . Is this the same beagle who told me off some weeks ago when I mentioned that SUM share price around $9 feels to get a bit ahead of itself? I sold at that stage part of my holding.

Looking into the report - revenue is pretty spot on where the analysts expected it to be and revenue (the real one - not the underlying) is even well ahead of analyst expectations.

NPAT kept climbing nicely and a RoE of above 15% looks good to me as well.

Industry has increasing tailwind (just look at these nice graphs with above 75's) ... and yes, while the talk about "investment into staff" might be as well some PC PR exercise, it is good to see their staff retention improving. This actually will save money. Recruitment and staff training is expensive.

Glad to see SP somehow de-hyped and moving towards fair value - if SUM behaves as in previous events there even might be soon some specials with a $6 handle available.

Looking forward to re-fill my boots again at the end of this dip ... good company, just a pity the share price is that much pushed around by traders.

No need to be confused. A lot has changed in the market in very recent times. Some people have made major portfolio changes due to market risk perceptions around the virus and others are hoping it all blows over, I am in the former category.. right up to 4.50 yesterday afternoon I held a 2/3rds position after selling a one third position due to virus risk management a couple of days prior and then the Dow futures were very ugly and I shifted to a one third position on a hunch on the close yesterday.....some would say good proactive risk management of one's portfolio.....and then there was today's result and in particular outlook statement which made it crystal clear my assumptions around FY20 underlying profit, (the real one) were far too optimistic so I sold the remaining third.
Just good risk and capital management in my view. I think this is likely to have a 6 handle at some stage, agree with you on that.
Good on you for letting some go at ~ $9..of course I was going to bark, I hadn't sold any at that stage
I've been told off all day...I must be a naughty dog.

[BlackPeter]

Normally I would agree with you, and if it was not for this damn virus I would never have even considered selling my shares today. However there are just so many massive unknowns at present, and the price is going to be driven by factors beyond SUMs control. Technically I would not have sold until it got somewhere near your yellow line, but with everything that is happening I guess fear/greed/relief at selling took precedence

That's what gets the SP down - fear.

Still unsure, though how the virus is supposed to depress the business model of any retirement village.

Their profit is linked to the property prices - and these won't be impacted in the long term, even if the virus hits us with the fullest brunt our resident scaremongers can imagine.

Just do the numbers ... say 15% of the population catch the virus (which would be pretty much worst case and consistent with the 2009 swine flu) - and roughly 1% of the infected are dying (which is consistent with the current mortality rate outside of China - and btw most of the fatalities well above retirement age). This would be 0.15% of the total population. What exactly would this do to a country with roughly 2% population growth per year (over the last decade). Right.

It might reduce a bit New Zealand's super payments, and it would increase the DMF capital return to the relevant retirement village. While obviously from a human perspective sad, it even would improve the books.

SUM might be at the moment still a bit dear, but the virus has certainly no negative impact on its (or any other retirement villages) fundamentals.

But sure - the scaremongers might make a dent in the flow of hype ... i.e. temporary share price swings are well possible.

[percy]

Love it. Maybe it should be over for the sales team. Let’s get some people in there who know how to sell newly built units.

The gridlock for sales in ChCh is because of the lack of Chinese buyers for the houses, the people who need to sell, before they can settle on their retirement village unit,.

[Beagle]

Love it. Maybe it should be over for the sales team. Let’s get some people in there who know how to sell newly built units.

Not sure they're the issue. SUM not the only one struggling to sell their units by any means. All the listed operators seem to be struggling. Many players now and not all of them are listed. Market appears to be totally saturated with supply.

[Beagle]

That's what gets the SP down - fear.

Still unsure, though how the virus is supposed to depress the business model of any retirement village.

Their profit is linked to the property prices - and these won't be impacted in the long term, even if the virus hits us with the fullest brunt our resident scaremongers can imagine.

Just do the numbers ... say 15% of the population catch the virus (which would be pretty much worst case and consistent with the 2009 swine flu) - and roughly 1% of the infected are dying (which is consistent with the current mortality rate outside of China - and btw most of the fatalities well above retirement age). This would be 0.15% of the total population. What exactly would this do to a country with roughly 2% population growth per year (over the last decade). Right.

It might reduce a bit New Zealand's super payments, and it would increase the DMF capital return to the relevant retirement village. While obviously from a human perspective sad, it even would improve the books.

SUM might be at the moment still a bit dear, but the virus has certainly no negative impact on its (or any other retirement villages) fundamentals.

But sure - the scaremongers might make a dent in the flow of hype ... i.e. temporary share price swings are well possible.

SUM don't need any help from scaremongers, just look at their numbers. Its clear they can't sell what they are building even at the vastly reduced build rate of 350 units per year. Growth has never been slower and is forecast to stall in 2020 in a booming real estate market when Westpac are forecasting a whopping 10% increase in the national average price. WTF ???? Without a single word of exaggeration, I can tell you I am profoundly shocked by their FY20 outlook.
Just go back and have a look how unsold stock both new and units come up for resale have steadily tracked up year on year on year...along with debt...that's where the real growth has been. How many years in a row now that cash flow has only grown at single figures ?

[winner69]

I thought the mystery shoppers were going to fix the sales problem ... Julian was so proud of them when he talked about them at the ASM

[winner69]

SUM don't need any help from scaremongers, just look at their numbers. Its clear they can't sell what they are building even at the vastly reduced build rate of 350 units per year. Growth has never been slower and is forecast to stall in 2020 in a booming real estate market when Westpac are forecasting a whopping 10% increase in the national average price. WTF ???? Without a single word of exaggeration, I can tell you I am profoundly shocked by their FY20 outlook.
Just go back and have a look how unsold stock both new and units come up for resale have steadily tracked up year on year on year...along with debt...that's where the real growth has been. How many years in a row now that cash flow has only grown at single figures ?

Talking of cash flow Free Cash Flow was negative $90m (cash burn in other words) ...they paid $20m out in divies ....and paid $15m in interest

All that $125m funded from more debt

[Beagle]

Talking of cash flow Free Cash Flow was negative $90m (cash burn in other words) ...they paid $20m out in divies ....and paid $15m in interest

All that $125m funded from more debt

"Fabulous"

[winner69]

The future looks bright for Summerset irrespective of what people think of today’s announcement

[King1212]

well...like i said...market is resilient!!! back to normal at no time....and record high....

dangerous world out there....