Summerset profit beats forecast

Last updated 09:40 25/02/2013
Norah Barlow
END OF ERA: Summerset chief executive Norah Barlow will retire in the first half of 2014.

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Retirement village operator Summerset has reported a 243 per cent jump in earnings, driven by a second year of record occupation-right sales and care-fee growth.

The Wellington-based firm said net profits for the 12-months ending December 31 was $14.8 million, up from $4.3m a year ago.

On an underlying profit basis (a measure preferred by retirement village operators that strips volatile property value movements) the firm's earnings rose 88 per cent to $15.2m - 56 per cent above the IPO forecast.

The result was driven by a steady improvement in care and service fees, and a second year of record unit sales, with gross sales for the year topping the $100m mark.

Total revenues, including care and village services, management fees and interest received, rose 13 per cent to $38.1m, and sales and resales of village units generated earnings of $15.1m, up from $5.8 in the previous year.

Summerset also completed the construction of 160 units, up 31 per cent on the previous year, putting the firm on track to complete 300 units by the end of the 2015 financial year.

Chief executive Norah Barlow said the firm was increasingly looking to meet growing demand for care in retirement villages through the construction of care apartments.

"Our strong sales of occupation rights, range of quality new sites, and increased efficiency through the in-house management of the development and construction process has increased the rate at which we can expand," she said.

"We have the banking facilities to enable this and are not seeking additional funds from our shareholders." The firm also announced an unimputed dividend of 2.5 cents per share, it's first as a listed company. 

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