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26-02-2024, 06:41 PM
#9691
Originally Posted by Greekwatchdog
Bull, There is a big difference between screwed and negotiate. You said "screwed".
And then you go on to say the "contractors cut corners to control their margins".
Go show me contractors cutting corners to save on margins??? They can't quality is very important and in building it all always shows.
Hey GWD, there was only one mention of 'supplier' "improved margins across all unit types which continue to benefit from long-term supplier relationships and well managed procurement contracts". Like who reads that as "screwed", no one .. well, one maybe.
Bullsh1t just likes hating on shares that he's missed the big run-ups, and showboating his ego. The negative nancy will never have anything positive to say about any of the RV's and has a very long reputation of slagging anything that he's missing out on. What's the opposite of 'rose coloured spectacles'?
SUM just posted an outstandingly good result, on top of a previous excellent result, and the market are showing their appreciation. Literally.
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26-02-2024, 06:54 PM
#9692
Originally Posted by Baa_Baa
Hey GWD, there was only one mention of 'supplier' "improved margins across all unit types which continue to benefit from long-term supplier relationships and well managed procurement contracts". Like who reads that as "screwed", no one .. well, one maybe.
Bullsh1t just likes hating on shares that he's missed the big run-ups, and showboating his ego. The negative nancy will never have anything positive to say about any of the RV's and has a very long reputation of slagging anything that he's missing out on. What's the opposite of 'rose coloured spectacles'?
SUM just posted an outstandingly good result, on top of a previous excellent result, and the market are showing their appreciation. Literally.
Thanks Baa Baa, Your right on all counts. Good to be a holder in one RV stock out of 3 that is going the right way. ARV and OCA have work to do
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27-02-2024, 07:32 AM
#9693
For Bars review of the result for those interested.
Summerset Group (SUM) reported strong FY23 underlying earnings and annuity EBITDA, driven by robust resale and new sale gains, partly offset by higher costs. All time high resale margins were the stand out, an extraordinary achievement given the weak housing market. SUM guided for >+10% growth in unit deliveries for FY24. Strong margins and an increased build rate suggests high demand for SUM's product. The result was not without negatives; cash conversion was even lower than we had expected, SUM delivered negative cash flow from ongoing operations before funding costs and net debt increased by +35%, or +NZ$350m over FY23. We see SUM as well placed to deliver strong growth but at >30x FY25 EV/Annuity EBITDA we see better value elsewhere. We retain NEUTRAL with an unchanged target price of NZ$10.70.
What's changed?
Earnings: Underlying earnings up +3% to +6% and annuity EBITDA down -3% to -7% across FY24 to FY26.
Strong result...
SUM reported a strong result, with annuity EBITDA up +16% year-on-year. The strength was concentrated in resale margins, which were up ~3pp in 2H23 to ~29% sequentially, matching the all-time high achieved in 2H21. This is an extraordinary result considering the weak housing market and relatively stable prices as tracked by our aged care pricing index. A combination of a higher proportion of villas and higher average tenure likely contributed. The strong resale gains was largely offset by higher opex versus our estimates.
...weak cash
SUM reported its second consecutive year of negative cash flow from ongoing operations; driven by increased opex, expensed interest and (by SUM's high standards) weak cash conversion of sales, primarily carried through from 1H23. Even excluding funding costs, SUM's business cash flow from ongoing operations turned negative for the first time. The glass half full interpretation is that SUM is investing ahead of strong growth, as it should. The glass half empty interpretation would suggest that SUM is struggling to generate enough cash from its mature villages to support a growing corporate centre. We believe there is some truth to both.
New metrics... same old
SUM introduced a new metric called ‘Summerset free cash flow’. This metric reflects net operating business cash flow and deducts BAU capex and expensed funding costs — very similar to Forsyth Barr's cash flow from ongoing operations. SUM changed the definition of net operating business cash flow to include 25% of new sales cash flow, reflecting the DMF proportion. There is some logic to this but the change is quite dramatic, increasing net operating business cash flow in FY21–23 by a factor 3x to 5x. It all adds up to the same but we prefer to analyse cash flow from ongoing operations, separate from development activities, and continue to do so.
link
NZX Code |
SUM |
Share price |
NZ$11.12 |
Target price |
NZ$10.70 |
Risk rating |
Medium |
C&ESG rating |
A- |
Market cap |
NZ$2,571m |
Avg daily turnover |
250.0k (NZ$2,405k) |
link
Financials: Dec/ |
23A |
24E |
25E |
26E |
Rev (NZ$m) |
481.5 |
529.5 |
580.3 |
641.1 |
NPAT* (NZ$m) |
190.2 |
188.6 |
195.2 |
210.2 |
EPS* (NZc) |
81.9 |
80.9 |
83.7 |
90.1 |
DPS (NZc) |
24.5 |
18.0 |
19.0 |
20.0 |
Imputation (%) |
0 |
0 |
0 |
0 |
*Based on normalised profits |
link
Valuation (x) |
23A |
24E |
25E |
26E |
PE |
13.6 |
13.8 |
13.3 |
12.3 |
EV/EBIT |
17.4 |
18.3 |
17.6 |
15.5 |
EV/EBITDA |
16.2 |
16.9 |
16.2 |
14.3 |
Price / NTA |
1.0 |
0.9 |
0.9 |
0.8 |
Cash div yld (%) |
2.2 |
1.6 |
1.7 |
1.8 |
Gross div yld (%) |
2.2 |
1.6 |
1.7 |
1.8 |
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27-02-2024, 11:24 AM
#9694
Member
For those who are interested, my latest column published on my Substack, Just the Business, is headlined: The volatility in Summerset's reported net profit doesn't serve investors.
I'm not criticising Summerset but the reporting rules. You can find it here: https://justthebusinessjennyruth.substack.com/p/the-volatility-in-summersets-reported
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01-03-2024, 04:54 PM
#9695
The latest Summerset bond issue was oversubscribed. My application was scaled back to 85% of what I applied for. It was issued at 6.43% interest rate.
Last edited by Bjauck; 01-03-2024 at 04:55 PM.
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01-03-2024, 06:48 PM
#9696
I got the amount I applied for. But it wasn't a big $ amount (didn't want to say sum....).
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05-03-2024, 07:48 AM
#9697
Member
Hi all. My latest column published on my Substack, Just the Business, looks at Summerset's problem with cash under the headline: Summerset develops a “tin ear” on presenting cash flows
You can find it here: https://justthebusinessjennyruth.sub...-on-presenting
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06-03-2024, 08:55 AM
#9698
Originally Posted by Jenny Ruth
Paywalled.
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09-04-2024, 08:33 AM
#9699
Update below...
1Q24 METRICS – SALES OF OCCUPATION RIGHTSSummerset Group reported 255 sales for the quarter ending 31 March 2024, comprising 134new sales and 121 resales.“Total sales for Q1 this year were 21 per cent higher than the same time last year, with both newand resales increasing year-on-year,” says Summerset CEO Scott Scoullar.“Our highest selling villages of the quarter were Te Awa (Napier), Papamoa and Bell Block (NewPlymouth). All three villages have had their main building open in the last six months and areselling very well.Mr Scoullar said the company remains on track to deliver the 675-725 homes in 2024 includingsignificant deliveries such as its Papamoa village main building which opened in Q1 and theopening of the St Johns village in the second half of the year.“We also remain on track to deliver the main building at our Boulcott (Lower Hutt) village laterthis year. The building will include an indoor pool overlooking the Boulcott Farm Heritage GolfCourse.”Summerset hit a major milestone in Q1 with the first Australian residents moving into SummersetCranbourne North (Melbourne, Victoria) in March and more contracts expected to settle at thevillage in Q2.“Welcoming our first residents was a major step for the Australian team,” says Mr Scoullar.
Last edited by Greekwatchdog; 09-04-2024 at 08:35 AM.
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23-04-2024, 10:15 PM
#9700
Member
anyone attending to the AGM in person?.
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