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  1. #9691
    Membaa
    Join Date
    Nov 2004
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    Paradise
    Posts
    5,284

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    Quote Originally Posted by Greekwatchdog View Post
    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.

  2. #9692
    Senior Member
    Join Date
    Jul 2020
    Location
    Chrsitchurch
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    858

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    Quote Originally Posted by Baa_Baa View Post
    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

  3. #9693
    Senior Member
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    Jul 2020
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    Chrsitchurch
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    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




  4. #9694
    Junior Member
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    Sep 2023
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    Wellington
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    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

  5. #9695
    Guru
    Join Date
    Aug 2012
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    4,614

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    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 03:55 PM.

  6. #9696
    Senior Member
    Join Date
    May 2007
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    Auckland, , New Zealand.
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    781

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    I got the amount I applied for. But it wasn't a big $ amount (didn't want to say sum....).

  7. #9697
    Junior Member
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    Sep 2023
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    Wellington
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    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

  8. #9698
    Guru
    Join Date
    Aug 2012
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    4,614

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    Quote Originally Posted by Jenny Ruth View Post
    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
    Paywalled.

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