Summerset's 3Q sales up 11.5% on the year

Tuesday 8th October 2019

Summerset Group’s third-quarter sales were up 11.5 percent from a year earlier as resales lifted and new sales remained firm.

Summerset said it sold 165 occupation rights in the three months to Sep. 30, versus 148 in the same period a year earlier.

Of those, 77 were new sales while resales numbered 88. In the same period a year earlier, 82 were new sales while 66 were resales.

Summerset chief executive Julian Cook said total sales were aligned with expectations for the third quarter and resales were performing very well.

Total sales in the first nine months of the year were 443 versus 447 a year earlier.

Earlier this year, Summerset scaled back its development programme temporarily due to the slowdown in the housing market, particularly in Auckland and Christchurch.

Previously, Summerset had said it wanted to increase its build rate to 600 units a year. At the end of April this year, Cook said the company will probably build only about 350 this year as the company tailors its building programme to meet demand.

Today, Cook said demand for Summerset’s retirement living remains at good levels across the country and village occupancy in completed villages remains high.

“We have seen the opening of new villages in Avonhead (Christchurch) and Richmond (Nelson/Tasman) this quarter. There are strong pre-sales for our new village in Kenepuru (Wellington) and we look forward to welcoming residents there in the fourth quarter.”

Last month, the retirement village owner and operator said it was moving ahead with its expansion plans across the Tasman and had purchased its first land in Australia.

There are also signs that the housing market is starting to pick up, which may also be helping to support demand.

The latest data from the Real Estate Institute of New Zealand showed some signs of house price inflation, although sales volumes remain low.

The Real Estate Institute of New Zealand's house price index rose 2.9 percent in the year ended August, up from the 1.5 percent annual pace in July.

But only 5,959 homes sold in August, down from 6,118 in July and 6,346 in August last year.

Summerset shares last traded at $6.41 and have been virtually flat, rising just 0.6 percent so far this year.

(BusinessDesk)

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