SUM - Summerset Group

[LAC]

this is not good for retirement stocks hence why all of them are getting sold off today.

Not good today and maybe next week, next month.....
But in 10 years I would stock up big time if I were a betting man....and I am

[minimoke]

Aged care is scarcely profitable and the Government will make sure it stays that way which leaves SUM and the other retirement outfits as real estate companies. QV reports show the housing market is cooling off nationally, with a fall-back in Auckland. I think there is worse to come yet but that it will be a trend and not a rush.

I've stolenm this off a HGH presentation

"Over 20,000 Australians turn 65every month and the number ofNew Zealanders aged 65+ isexpected to increase by 80%between 2016 - 2036" - that is a lot of demand for retirement sector housing.

[winner69]

No mention of how new units unsold.

What puzzles me that over H217, H118 and H218 (the last three half years) the number of new units delivered exceeded the number of new sales by 191. Maybe 71 of these sold in the last quarter but I also wonder how many new units were delivered in the quarter as well.

Seems to suggest that at least 120 new units (more if any delivered in the last quarter) remain in limbo and unsold.

Maybe what’s counted as new sales isn’t the same as new deliveries....I have no idea

Julian’s quarterly announcements are getting more obtuse as time marches on

[Maverick]

Just wondering - is it really a "truck load" of new stuff which is vacant?

They did build last year 454 new units and sold from Q2 2018 to Q1 2019 342 new units. If we assume an average sell time of 90 days (I read that somewhere), than there are now 112 of these units still unsold. This is roughly 3% of all of their units. Sounds like they managed as well to reduce during this quarter the number of re-sell units available. End of last year they had 1.4% of their restock uncontracted (annual report), which would add up to 52 units, now they have only 40.

Hi BP and Winner,
Check out page 23 of FY18 report;
un-contracted new builds ;stock FY16 =136, FY17=204. FY18=319.
We are told the late deliveries of a bunch of units (133) was why the apparent blowout of empty new builds, sounds very reasonable.
I was hoping for a good lot of these units to be sold this quarter but it obviously has not happened. Julian has said that its taking longer for people to sell their homes.
I`ve done a quick search on house sale times and blow me down, he`s totally right.
Average days to sell a house in Auckland, 2016=30 days, 2017=35 days, 2018= 40 days, so far this year 55 days. I live in Wanganui where house seem to be selling withing a week or 2 (its booming down here-but SUM arn`t trying to sell their new builds here- perhaps that explains why resales are doing ok , they might be more in the provinces)
So clearly the average time to sell a new unit of 3 months has changed. Plus I noted that in the first quarter of any year the "sales days required" really spike- like double. (this is reflected in the SUM sales starting slow and consistently increasing later in the year.
With this information, unloading the late delivery stock was never going to happen in just 1 quarter-especially the first one. The historical 3 months ave to sell a unit should now be pushed out to out say 4 -6 months , depending on the time of year.
Sooo.... I fully accept Julian's reason for the FY18 stock over hang and these poor sales figures. I do not think the wheels are falling off, but will be looking extremely closely at the next sales figures.

[limmy]

39c drop or 6% as of now, appears to show that they was huge prior speculation of a strong sales update, which didn't occur. I'm in SUM and the other main retirement companies for the long term, so a daily fluctuation doesn't really concern me. I believe like many others in our chat group that the tail winds will come to the industry as more and more baby boomers reach retirement.

[winner69]

Hi BP and Winner,
Check out page 23 of FY18 report;
un-contracted new builds ;stock FY16 =136, FY17=204. FY18=319.
We are told the late deliveries of a bunch of units (133) was why the apparent blowout of empty new builds, sounds very reasonable.
I was hoping for a good lot of these units to be sold this quarter but it obviously has not happened. Julian has said that its taking longer for people to sell their homes.
I`ve done a quick search on house sale times and blow me down, he`s totally right.
Average days to sell a house in Auckland, 2016=30 days, 2017=35 days, 2018= 40 days, so far this year 55 days. I live in Wanganui where house seem to be selling withing a week or 2 (its booming down here-but SUM arn`t trying to sell their new builds here- perhaps that explains why resales are doing ok , they might be more in the provinces)
So clearly the average time to sell a new unit of 3 months has changed. Plus I noted that in the first quarter of any year the "sales days required" really spike- like double. (this is reflected in the SUM sales starting slow and consistently increasing later in the year.
With this information, unloading the late delivery stock was never going to happen in just 1 quarter-especially the first one. The historical 3 months ave to sell a unit should now be pushed out to out say 4 months.
Sooo.... I fully accept Julian's reason for the FY18 stock over hang and these poor sales figures. I do not think the wheels are falling off, but will be looking extremely closely at the next sales figures.

I don’t think the numbers on page 23 provides the answer to my quandary ...but I just might be really stupid.

[winner69]

Oceania and Summerset have much different year ends (one in winter and one in summer) but both rave on about things being weighted to the second half of the year

Building and sellingbthings things obviously not afected by seasonal (as in weather) things

[Beagle]

I don’t think the numbers on page 23 provides the answer to my quandary ...but I just might be really stupid.

Come along to the annual meeting and have a chat with Julian afterwards. You'll find he's a straight shooter no B.S. kind of guy.
Good post Maverick. I have learned from experience not to get too hung up on any one quarter's sales result. I am just over 90% invested in the market which is about as high as I ever want to get, (I like having a minimum of 10% in cash), but if I had some spare cash I would be topping up on OCA and SUM today.

[winner69]

I don’t think the numbers on page 23 provides the answer to my quandary ...but I just might be really stupid.

Maverick, I think some words Summerset use, like ‘new’, have different meanings depending on what they are talking about.

[BlackPeter]

Oceania and Summerset have much different year ends (one in winter and one in summer) but both rave on about things being weighted to the second half of the year

Building and sellingbthings things obviously not afected by seasonal (as in weather) things

Interesting. I used to work in a quite large NZ company with mainly international sales - and we didn't sell retirement units but high tech stuff. Our second half was always much stronger than our first - even after shifting the end of the FY by 6 months! Put it to people being motivated by achieving agreed end of the financial year targets - I am sure there are as well in SUM SUM bonuses dependent on the Eoy figures. Positive motivation is always good ;