Summerset, the country's third-largest retirement village developer and operator, has posted a more than 50% increase in full-year profits, as well as announcing a major step-up in its annual construction target.
For its full-year trading to December, Summerset booked a 31% lift in total asset value to $1.36billion, with after-tax profit up 56% to $84.2million.
Summerset set a final dividend of 3.4c, with its shares up more than 1% to $4 after the announcement.
Craigs Investment Partners broker Peter McIntyre said the ‘‘strong result'' was driven by development profits, which were up 56% to $26.1million, following an improvement in margins, up from 15.7% a year ago to 19.9%.
‘‘Clearly demand for Summerset's product is strong and continues to improve, with the company selling more units in full-year 2016 than were developed,'' he said.
Mr McIntyre said it was ‘‘encouraging'' that resale profits also rose 56%, to $12.1million, with margins a little better than expected.
Chief executive Julian Cook said Summerset wanted to accelerate its building programme from 300 units last year to 400 in 2016.
‘‘While we are always looking for opportunities across New Zealand, Auckland is clearly constrained for living and care services for older people.''
As at December 2015, Summerset had 2419 units and 616 care beds across 20 sites, while its total land bank represented 2414 retirement units and 406 care beds.
Forsyth Barr broker Suzanne Kinnaird said the strong ebitda increase was driven by growth across all parts of the business, record occupancy levels and a large increase in the new sales volumes, plus margins rising from 15.7% to 19.9%.
‘‘It should be noted that [by comparison] first-half 2014 was a relatively soft period for Summerset with a low level of new stock delivery and resales turnover,'' she said.
Mr Cook said Summerset's financial performance reflected its continued focus on expansion across New Zealand.
‘‘Our growing presence in Auckland, coupled with strong demand across our other villages resulted in a record 578 retirement unit sales,'' he said.
Summerset opened its first village in Christchurch, Summerset at Wigram, three village and care centres in the North Island and started construction on the Ellerslie village in Auckland.
‘‘We also delivered a record 303 retirement units across the country and secured three new sites, which sets us up for continued expansion growth into the future,'' Mr Cook said.
Last year was the fifth in a row Summerset had increased its occupation-right sales, up 26% from sales in 2014.
Proceeds from those sales totalled $208million, compared with $161million in 2014, a 29% increase, Mr Cook said.
