SUM - Summerset Group

[bull....]

Summerset Group Holdings said a flatter property market is providing smaller valuation gains for the retirement village operator and developer.

http://www.scoop.co.nz/stories/BU1808/S00425/summerset-notes-flattening-property-market-as-earnings-rise.htm

[winner69]

Long term holders will continue to do well... just maybe not as well as previous years - game changes if they do expand into aussie successfully, just doesn't help that houses prices are definitely going down in aussie.
ARV had 43% margin in 1H18

Wow 43% Margin — incredible

But how did they manage that when full year Development Margin was only 19%?

[trader_jackson]

Wow 43% Margin — incredible

But how did they manage that when full year Development Margin was only 19%?

Not sure, like sum other companies, they mentioned that woulnd't be sustainable (or words to that effect)... I would hate to think if sum other companies dropped that much, or (given sum other track records) dropped even a small fraction of that much.

And while you mention it, Wowee 19% margin for a dog that is more focused on care than development and priced at barely 1.1x NTA as a result (was 1.0 something until recently)... and the smart guys at sum other companies (a few years back) were getting excited when it got to 17% (and their focus was virtually only on development - so much so that their care division was and still is subsidised by their

developments...)

[Beagle]

SUM companies have worked very hard to get steadily increasing development margins every year for many years now while others might fluke it from time to time...like I said every dog has its day...

[winner69]

Not sure, like sum other companies, they mentioned that woulnd't be sustainable (or words to that effect)... I would hate to think if sum other companies dropped that much, or (given sum other track records) dropped even a small fraction of that much.

And while you mention it, Wowee 19% margin for a dog that is more focused on care than development and priced at barely 1.1x NTA as a result (was 1.0 something until recently)... and the smart guys at sum other companies (a few years back) were getting excited when it got to 17% (and their focus was virtually only on development - so much so that their care division was and still is subsidised by their

developments...)

Sussed it mate ...that H118 dev margin of 43% was from 3 sales ....something to be proud off eh

H218 and FY dev margin was 19% ......on FY sales of 79 new units

What was SUMs margin again? And they were both playing in the same property market.

You were a bit naughty skiting about that 43% margin eh

Have you ever considered that being more care orientated means ARV is less ‘exciting’ and will be valued as such by the market.

[trader_jackson]

Sussed it mate ...that H118 dev margin of 43% was from 3 sales ....something to be proud off eh

H218 and FY dev margin was 19% ......on FY sales of 79 new units

What was SUMs margin again? And they were both playing in the same property market.

You were a bit naughty skiting about that 43% margin eh

Have you ever considered that being more care orientated means ARV is less ‘exciting’ and will be valued as such by the market.

ARV and even OCA are far less exciting... that is why sum others are valued waay higher on sum if not most ratios (eg Price to NTA)... what worries me is that there doesn't seem to be too many excited people on this thread today either... yet for sum operators it is that excitement of 40%+ NPAT AND Underlying profit growth since listing that has propelled the share price so high.
But NPAT nor underlying profit hit close to 40% in 1H18

[Patient Panda]

Interesting about the lack of staffing in the retirement sector in general due to previous government allowing fewer overseas people into the sector.... Are kiwis just no good in this sector? Lack of, or lower amount of empathy? I have found that kiwis in general could improve a lot on their work ethics, but I have no idea in the retirement sector.

it has nothing to do with work ethic...

it has to do with most retirement operators including SUM paying mcdonalds wages for more demanding work. Would you really be interested in doing it yourself? Lifting heavy old people and helping them bathe for more or less min wage.

Kiwis are mostly going to be looking at more attractive jobs regardless of their level of empathy. Foreigners do it to get their visa sponsored.

i think getting good quality employees is going to continue to become more difficult for SUM with increased competition sector wide and a govt crackdown on immigration. They’re at least improving employee benefits slightly but I think they’re going to need more carrots than that.Wouldn’t be surprised to see more horror story news articles in future similar to the couple we’ve seen lately.

At least they have some great development margins

[Ggcc]

it has nothing to do with work ethic...

it has to do with most retirement operators including SUM paying mcdonalds wages for more demanding work. Would you really be interested in doing it yourself? Lifting heavy old people and helping them bathe for more or less min wage.

Kiwis are mostly going to be looking at more attractive jobs regardless of their level of empathy. Foreigners do it to get their visa sponsored.

i think getting good quality employees is going to continue to become more difficult for SUM with increased competition sector wide and a govt crackdown on immigration. They’re at least improving employee benefits slightly but I think they’re going to need more carrots than that.Wouldn’t be surprised to see more horror story news articles in future similar to the couple we’ve seen lately.

At least they have some great development margins

Have you forgotten that all caregivers have had wage increases passed on through government legislation? $22-27 per hour I think is about correct. Not $16.50 per hour. Sorry but that is not peanut money... The job is difficult, but every job has its problems.

I could not do it as it does not interest me to do that work, but the money is enough for me to live off

[Patient Panda]

Yes new min has become $19 an hour https://www.health.govt.nz/new-zeala...ity-settlement

I have not checked but believe sum pay the min.

Govt sector subsidisation should ammeliorate things a bit but the retirement operaters are still going to be scrapping it out for the best ones.

[couta1]

Yes new min has become $19 an hour https://www.health.govt.nz/new-zeala...ity-settlement

I have not checked but believe sum pay the min.

Govt sector subsidisation should ammeliorate things a bit but the retirement operaters are still going to be scrapping it out for the best ones.

$19 is for a newbie caregiver with no experience or qualification, currently those with more experience are on up to $23.50 and this includes SUM workers, the rate will rise to $27 over the next three years.Those with a heart for the job and love for the elderly do well, unfortunately a lot of kiwi job seekers don't fit that criteria, many would rather sit on the benefit system at the end of the day.