Summerset says first-half underlying profit rose as much as 26% on stronger development margins

Summerset Holdings Limited is a New Zealand retirement village and aged care service provider.

Summerset Group said first-half profit rose as much as 26 percent as stronger development margins made up for a lower volume of new sales.

Underlying profit, which excludes unrealised valuation gains in the fair value of investment property, was between $43 million and $45 million in the six months ended June 30 from about $36 million a year earlier, the Wellington-based company said in a statement. Earnings grew 45 percent in the first half of last year. Summerset will release its detailed results for the first half on Aug. 14.

“We are also seeing good levels of sales contracts and presales on homes which will be completed and delivered over the remainder of the year," chief executive Julian Cook said. "Our resales volumes continue to track well, with the realised gains associated with these sales strong across all regions of the country for the first half of 2018."

While new sales volumes were lower than in the first half of 2017, "the company has seen strong development margins on the homes that have settled over the first half of 2018," he said.

Summerset also said it had sales of 156 units in the three months ended June 30, made up of 77 new units and 79 resales. In the same period last year sales were 152, with 82 new and 70 resales.

"Resales also remain strong across all villages and are at levels consistent with 2017, with no sign of impacts from any changing property market conditions," Cook said.

The shares last traded at $7.53 and have gained 58 percent in the past 12 months.