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Summerset Group, the retirement village operator and developer, is on the cusp of beating forecast annual sales of occupation rights after just nine months of the financial year. The operator of integrated residential care and rest home care affordable retirement living increased new sales of occupation rights by 41% to 86 in the three months ended September 30 from the same quarter a year earlier. That has taken year-to-date sales to 257, one short of the annual target in its prospectus. New sales rose 46% to 41 in the quarter and retirement village re-sales climbed 36% to 45. "Sales within the group continue to the strong," chief executive Norah Barlow says. "Our recent first-half results reflected this and we are pleased to see the momentum continue." The quarter built on 83 new sales of occupation rights for gross proceeds of $28.8 million and 88 re-sales, realising gains of $4.2 million. Summerset believes that the performance so far has a lot to do with their independent living retirement village model. Taking feedback and consumer desires over the years of operation has given the company an opportunity to provide a well-rounded set of services that suit almost each level of retirement living. Retirees are wanting integrated care in a home environment, not to be forced to live somewhere that resembles a clinic. Rest home care should be a series of choices integrated with residential care and independent living. It should be seen as a new direction in lifestyle and not the only place left. An aging population in Australasia is forcing retirement village operators to revalue service and facility provisions. Retirees are seeking integrated care; discreet rest home care in a residential community environment. Summerset constantly seeks to align their rest homes and retirement villages with the wants and needs of their consumers. This has enabled the company to leverage a new style of affordable retirement living against the increase in demand. Whereas an older financial model would have so raised prices incrementally with demand, recent years have shown that maintaining a reasonable price-point and moving with socio-geographical economic demands does have a positive impact on a company’s earnings. Ms Barlow expects the company will beat its initial public offering forecast of net profit of $13.3 million and underlying earnings of $9.7 million in calendar 2012. The shares were unchanged at $1.95 in trading today and have climbed 46% this year. The stock is rated an average "hold" based on four analyst recommendations compiled by Reuters, with a median target of $1.925. company: Summerset Retirement complete address: Level 12, State Insurance Tower 1 Willis Street, Wellington PO Box 5187, Lambton Quay, Wellington email: reception@summerset.co.nz contact: 04 894 7320
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