Retirement village operator Summerset Group had a strong lift in first half profit on the back of higher unit sales and a rise in property values.
Photo: Summerset
Key facts:
- Net profit after tax - $263.8m six months ended June (compared to $1m a year ago)
- Underlying profit - $75.5m six months ended June ($45m a year ago)
- Property value gains - $260m, portfolio worth $4.4bn - up 27 percent
- Three new sites acquired this year
A booming property market and robust demand and sales have driven Summerset's significant profit lift.
Chief executive Scott Scoullar said the result was being driven by increased demand for the style of living and security offered by retirement villages, which was being highlighted by the Covid-19 lockdowns.
"The first lockdown brought home to many people the advantages of retirement village living and that showed in today's results, which include the highest half year of trading ever for the company."
It had completed 347 new units and sold 545, including resales, during the period.
"To meet growing demand, we will lift our build rate for this year from between 500 and 550 units ... to 550 to 600, plus 52 care beds," Scoullar said.
Summerset has 33 establishments around the country and has just bought a new site in Palmerston North and another in Australia, where it already has three sites.
Scoullar said it now the largest land bank of units in the domestic retirement village sector and it had land to more than double the size of its current New Zealand business.
He said the company has revived its Covid-19 plans by restricting outside access to villages, and ensuring all staff were equipped with protective clothing.
The company continued to struggle to find skilled staff, and while it hoped overseas nurses might be allowed to come in to the country as essential workers, there was no expectation that immigration authorities would help.