Summerset Group (SUM) H1 2024 earnings summary

Executive summary

• Underlying profit rose 3% to $89.9m, driven by strong sales and at the upper end of guidance.

• Net profit after tax (IFRS) was $102.2m, down 23% year-over-year due to higher tax expense and lower property value increases.

• 588 occupation rights sold (290 new, 298 resales), the highest first-half sales on record.

• 352 units delivered in H1 2024; full-year delivery expected at lower end of 675–725 unit range.

• Interim dividend of 11.3 cents per share declared, representing 29.6% of underlying profit.

Financial highlights

• Underlying profit: $89.9m (up 3%); Net profit after tax: $102.2m (down 23%).

• Operating cash flows: $191.6m (up 31%); Total revenue: $151.6m (up 18%).

• Total assets: $7.4b (up 17%); Net tangible assets per share: $11.43 (up 16%).

• Realised development margin: $51.7m (28% margin); Resale gain: $45.7m (up 32%).

• New sales of occupation rights: 290 (+20%); resales: 298 (+23%).

Outlook and guidance

• FY24 build rate expected at the lower end of 675–725 units in New Zealand.

• Year-end result depends on uplift in new sales in H2; management confident as new stock comes online.

• Economic outlook constrained by high interest rates and weak property market, but retirement living demand remains strong.

• Forecast net cash position from NZ villages under development of over $245m.

• Continued focus on cost efficiencies and robust sales performance despite market uncertainty.