Summerset posts $230.8m net profit in year to December

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The strong housing market has lifted the profits of retirement village operator Summerset.

A Summerset retirement village.

Summerset’s net profit in the year to December was up a third on the year before.
Photo: Summerset

The company posted a net profit of $230.8 million in the year to December, up a third on the year before, as the value of its property portfolio increased by $221.1m.

The rebound was in contrast to its half year report when the residential property market was forecast to fall by up to 10 percent .

Stripping out the property gains, its underlying profit fell by 7.4 percent to $98.3m because of higher costs associated with keeping Covid-19 out of its villages.

Revenue rose 12 percent to $172.4m as the company saw an utpick in interest for its properties after the March/April lockdown as more older people were attracted by the safety and security of retirement villages.

The company had record sales in the December quarter, selling occupation rights for 296 units .

Summerset chief executive Julian Cook said it had been a strong year despite the pandemic.

“This is testament to New Zealand’s effective public health response, the Summerset team, our handling of the pandemic, and the underlying strength of Summerset’s business.”

The company opened three new villages in Tauranga, Napier and New Plymouth and built 356 new units, up from 354 last year and exceeding prior forecasts.

The company had a total of 13 villages under construction and expected to open the main buildings at its Nelson and Christchurch villages this year.

It expected to build between 500 and 550 new units and 50 care beds in the current financial year.

Summerset owns two sites in Australia and expects to open its first village towards the end of the year.

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