Summerset says 2017 underlying earnings may rise as much as 33% on new sales to baby boomers
The company didn't provide a net profit forecast.
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Hawke’s Bay
Summerset Group, the best-performing retirement village stock in the past 12 months, said 2017 underlying earnings may rise as much as 33 percent, driven by new sales of occupation rights to its units.
"We are continuing to see strong development margins from new sales of occupation rights, a key driver of the underlying profit forecast," the Wellington-based company said in a statement. Underlying earnings, which exclude property revaluations, are forecast at $72 million to $75 million in calendar 2017, from $56.6 million in 2016, when profit jumped 50 percent.
The company didn't provide a net profit forecast, saying that was "due to the inherent uncertainty in fair value movement of investment property, a key component of this profit measure."
Summerset shares last traded at $4.65 and have gained 8.4 percent in the past 12 months, outpacing Metlifecare's 1.1 percent gain and Ryman Healthcare's 6.2 percent decline.
New Zealand retirement village operators are acquiring land and preparing for a record building spree in anticipation of increased demand as people born in the country's post-war era reach the target age for operators, including Summerset and its larger rivals. Summerset had a land bank of about 2,609 retirement units and 366 care beds, and expects the population aged over 75 to grow 239 percent from 2016 to 2068, it said in February.
(BusinessDesk)
Jonathan Underhil
Wed, 28 Jun 2017
Wed, 28 Jun 2017
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Summerset says 2017 underlying earnings may rise as much as 33% on new sales to baby boomers
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