The quarter sale results soon will be VERY interesting and telling. All here will know I've gone ballistic on analyzing a certain other retirement company but I've also got sheets on this one too. The macro metrics are the same to all in the sector.
I'm expecting a total sales volume (new and resales total) in this update of 205 (PCP was 165). This large leap will be impressive if delivered.
But this figure is only in keeping with normal sales then adjusted up for the gang buster monthly sales published by REINZ. Then its fine tuned for SUMs 28 % stock in Auckland , the rest ex Auckland. Sales growth in the last 3 months were almost double in Auckland than the rest of NZ- go MET (that should set Beagle off) and OCA with loads more %stock in Auckland.
IMO;
If the actual figure is lower than 205 then SUM has a worsening overstocking problem.
If it's about 205 then they are simply riding the market in keeping with everyone else and their overstocking remains.
If it is above 205 then SUM will be de-stocking it's excessive empty units at last .
No point getting too clever before the result but I'm just saying what will surely appear as a fantastic result won't necessarily mean it's all roses ahead.
I have said before, my opinion is SUM has had a build up of too much empty stock due to its growth plan of “ build even more than last year” which seems to have reached a NZ saturation point ( hence them spreading to Aussy).
Ironically , it's that very weakness of excessive unsold stock and empty paddocks that is now a strength as houses and land skyrocket.( Perhaps temporary , perhaps not...you make your own mind up on that one.)
Disc ,not holding but used to.. I'm neutral on SUM at $9.00, short term it is now becoming more dependent on property values for growth and looking further ahead their Aussy soiree makes me nervous. I believe it will still grow but nothing like it's fabulous CAGR of the past.
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Originally Posted by winner69
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