SUM - Summerset Group

[Beagle]

This closure appears to be just the very tip of the iceberg as caregiver rates have only just started to increase on 1 July 2017.
SUM companies with a well funded structure and very strong balance sheet are probably best placed to work this to their commercial advantage.

[mondograss]

Interesting:



So - actually - they made (as the other retirement providers) another fat paper gain. Asset rich but cash poor - as many of their residents.

Obviously - this situation is not sustainable. Clearly - for the government to just increase the pay rates without properly increasing the funding is a no go and will only kill off our age care sector.

I think however that the financial situation of the big four is different - given that they can capitalise their valuation gains (using the DMF) and not just sit on them (as this fund apparently did).

Actually I was referring to the likelihood the big 4 would go after the large, prime Remuera site that the rest home currently occupies. But yes you make an interesting point too, that the charitable trust rest homes will struggle if they are in an asset rich, cash poor position and can't monetise the assets. One would think that would apply to many of those rest homes run by religious orders.

[Raz]

This closure appears to be just the very tip of the iceberg as caregiver rates have only just started to increase on 1 July 2017.
SUM companies with a well funded structure and very strong balance sheet are probably best placed to work this to their commercial advantage.

The rest home sector short term future I believe is open to political risk, if national gets in with it current proposed bill then all will be good for the caregiver cost element..take a look at the detail :-). If not then they have a problem. Pick the election and you can pick the share price trend for the sector.

[aajm1490]

Hi all,

Apologies for being slightly off-topic; I'll keep this as short as possible.

Colmar Brunton is conducting some research on behalf of the Financial Markets Authority (FMA) about what information investors find most helpful to make informed decisions about particular investments. This will help the FMA improve product disclosure documents to make them more useful for investors. We're looking for people to take part in paid research interviews at our Auckland and Wellington offices in late August.

We'd like to talk with you if you have recently invested, or seriously considered investing, in the Summerset fixed rate 6 year bond offer.

Your contact details and the feedback you provide in interviews will be completely annonymised and will not be used for any other purpose. If you are interested in taking part, please email ali.ajmal@colmarbrunton.co.nz with your contact details including a phone number.

Cheers

PS: If you're interested, please get in touch via the email above as direct messages on ST won't be acknowledged.
PPS: This message was cleared with an ST Admin before being posted.

[bull....]

looks like a double top is in

[J9jcm50]

[QUOTE=Beagle;676568]Well said. SUM people need to get over the sensationalist Australian newspaper reports which have nothing to do with SUM as they don't operate there. SUM have a 94% resident satisfaction survey which they are very proud of which is in line with the same very high resident satisfaction survey they did the previous year so they must be doing a LOT of things very well !

My guess is a lot of the younger generation are a bit miffed they will inherit a lot less, (no capital gain and the DMF) but here's a free heads up, old folks don't care. What they care about is being happy and living in a well supported, safe and caring community environment.
It's their money and they are free to do with it what they please.

Overall the penetration rate for retirement village living in terms of old folks housing needs has been steadily rising in N.Z. so there's obviously increasing level's of satisfaction from our elderly folks.

P.S. Good day for the sector overall. I think some investors took comfort from the fact that despite all the much hyped talk of a property crash the very latest national average data shows the housing market increased 0.348% from June to July 2017 i.e. an average annual rate of just over 4% per annum.
http://www.interest.co.nz/property/8...ristchurch-now
Still a supportive environment for retirement companies and in line with my price model assumptions.

[i love this blog. The younger generation need to get a grip that the parents are well looked after and happy. If they get an inheritance then great but it's not a right it's a privilege. ]

[Bjauck]

...
My guess is a lot of the younger generation are a bit miffed they will inherit a lot less, (no capital gain and the DMF) but here's a free heads up, old folks don't care. What they care about is being happy and living in a well supported, safe and caring community environment.
It's their money and they are free to do with it what they please....

[i love this blog. The younger generation need to get a grip that the parents are well looked after and happy. If they get an inheritance then great but it's not a right it's a privilege. ]

Lucky for youngsters with a caring and rich land-owning family! The NZ land-owning us-and-them aristocracy is developing.

In my opinion, I think the Silent Generation (those born pre 1945) do care about the problems facing the younger generation. Perhaps your comment that the "old folks" do not care may refer to Baby boomers. In which case, you may well have a point. Maybe they are "the entitled generation" who enjoyed their education without being saddled with enormous student debt as well as enjoying windfall capital gains (as a result of the shift to low interest rates) on their leveraged real estate. Maybe they now wish to guard those gains against a younger generation who struggle to get on the first rung of the property ladder as a result of prices being umpteen multiples of average incomes...

I think that most of the folks moving into Retirement villages are still from the Silent Generation. So maybe they can make such a move with the knowledge that their middle-aged children are already in homes in which they already have a large amount of leveraged equity.

Of course this is a generalisation.

[thestg]

SUMMERSET REPORTS STRONG PROFIT GROWTH FOR FIRST HALF OF 2017
• Net profit after tax of NZ$90.3m, up 78% from 1H16
• Underlying profit for 1H17 NZ$35.7m, up 45% on 1H16
• Total assets of NZ$1.9b, up 27% on 1H16
• 323 total sales of occupation rights, up 6% on 1H16
• 171 new retirement homes delivered
• Interim dividend of NZ 3.9 cents per share
• Record development margin of 28%

[percy]

Absolute cracker.
That development margin is a pleasant big surprise.

[couta1]

WOW, that result should silence the naysayers. Development margin in a so called challenging period is outstanding.