Summerset Group Holdings Limited · NZX:SUM
Summerset — H1 2016 Earnings Presentation
35 slides from Summerset's earnings presentation, Aug 29, 2016
Slide 1: Half Year Results Presentation
HALF YEAR RESULTS PRESENTATION SIX MONTHS ENDED 30 JUNE 2016 SUMMERSET GROUP HOLDINGS LIMITED 29 August 15 February 2016 2012 0
Slide 2: Agenda
AGENDA 2 1H16 Result Highlights 6 Business Overview 21 Financial Results 28 Interim Dividend 32 Appendix 1
Slide 3: 1H16 Result Highlights
1H16 RESULT HIGHLIGHTS 2
Slide 4: Record retirement unit delivery and underlying profit
1H16 RESULT HIGHLIGHTS RECORD RETIREMENT UNIT DELIVERY AND UNDERLYING PROFIT 1H16 Actual vs. 1H15 1H16 Actual 1H15 Actual FY15 Actual Actual* New sales of occupation rights 183 160 14.4% 333 Operational Resales of occupation rights 123 110 11.8% 245 Total sales 306 270 13.3% 578 New retirement units
Slide 5: Record retirement unit delivery and underlying profit
1H16 RESULT HIGHLIGHTS RECORD RETIREMENT UNIT DELIVERY AND UNDERLYING PROFIT ■ 1H16 underlying profit of $24.7m, up 44% on 1H15 ■ 1H16 net profit after tax (NZ IFRS) of $50.6m, up 42% on 1H15 ■ New sales 14% higher than 1H15 – highest level of sales in a six month period ■ Resales 12% higher than 1H
Slide 6: Strong trends continue across the business
1H16 RESULT HIGHLIGHTS STRONG TRENDS CONTINUE ACROSS THE BUSINESS TOTAL ASSETS UNDERLYING PROFIT $1700m $30m $1500m $25m $1300m $20m $1100m $15m $1521m $24.7m $900m $1364m $10m $20.7m $1161m $17.1m $1043m $15.0m $700m $921m $5m $9.4m $500m $m 1H14 2H14 1H15 2H15 1H16 1H14 2H14 1H15 2H15 1H16 Total a
Slide 7: Business Overview
BUSINESS OVERVIEW 6
Slide 8: Record underlying profit of $24.7m in 1H16
1H16 REVIEW RECORD UNDERLYING PROFIT OF $24.7M IN 1H16 ■ Delivered 190 retirement units in 1H16, a record for Summerset, and 35% more than 1H15 ■ On track for delivery of 400 retirement units in FY16 ■ New village centre opened in Hobsonville ■ Serviced apartment buildings opened in Nelson and Warkw
Slide 9: Summerset Snapshot
SUMMERSET SNAPSHOT FASTEST GROWING RETIREMENT VILLAGE PROVIDER IN NEW ZEALAND ■ 2,609 retirement units (villas, apartments and serviced apartments) ■ 621 care beds ■ More than 3,800 residents ■ 190 retirement units delivered in 1H16 ■ 19 years of consistent delivery and growth ■ 21 villages complete
Slide 10: Summerset Strategy
SUMMERSET STRATEGY SUMMERSET BUILDS, OWNS AND OPERATES RETIREMENT VILLAGES IN NZ ■ Focus on continuum of care model ■ Opening our first dementia facility later this year in Levin ■ High quality care and facilities within every village ■ Village designed to integrate into local communities ■ Internal
Slide 11: Operations and Staff
OPERATIONS AND STAFF FOCUS ON CLINICAL QUALITY AND STAFF TRAINING ■ Continued Careerforce training programme participation, and qualification attainment ■ 92% industry leading care customer satisfaction rating and 95% village customer satisfaction rating ■ Excellent certification audit results conti
Slide 12: Operations and Staff
OPERATIONS AND STAFF FOCUS ON CLINICAL QUALITY AND STAFF TRAINING ■ Launched an all staff share scheme with over 80% of our employees signing up ■ Recently announced that we will shout the weekly happy hour across all our villages ■ Continue to invest in our older villages with the extension of recr
Slide 13: Demographics
DEMOGRAPHICS POPULATION OVER 75 YEARS FORECAST TO GROW 230% FROM 2015 TO 2065 POPULATION GROWTH 75 YEARS AND OVER PER ANNUM POPULATION GROWTH 75 YEARS AND OVER 25 1,200,000 18% 16% 1,000,000 20 14% 800,000 12% 15 10% Thousands 600,000 8% 10 400,000 6% 4% 5 200,000 2% 0 0% 0 2015 2018 2023 2028 2033
Slide 14: Summerset Growth: Years of Consistent Delivery and Growth
SUMMERSET GROWTH 19 YEARS OF CONSISTENT DELIVERY AND GROWTH SUMMERSET BUILD RATE 3,000 2,609 2,500 2,419 190 303 2,116 2,000 1,855 261 Retirement Units 1,646 209 1,486 160 1,500 1,352 122 1,272 80 1,109 163 2,419 983 921 126 2,116 1,000 62 1,855 795 732 126 1,646 652 63 1,486 80 1,364 528 1,272 470
Slide 15: Development Activity
1H16 DEVELOPMENT ACTIVITY DELIVERY OF 190 RETIREMENT UNITS IN 1H16 ACROSS NINE SITES Unit Delivery 1H16 Villas Apartments Serviced Apartments Total Care Beds Hamilton 18 0 0 18 0 Hobsonville 16 13 0 29 0 Karaka 9 0 0 9 0 Katikati 14 0 0 14 0 Nelson 12 0 30 42 0 New Plymouth 12 0 0 12 0 Trentham 16 0
Slide 16: Development Activity
1H16 DEVELOPMENT ACTIVITY DELIVERY OF 190 RETIREMENT UNITS IN 1H16 ACROSS NINE SITES Hamilton Hobsonville Karaka Katikati Nelson New Plymouth 15
Slide 17: Development Activity
1H16 DEVELOPMENT ACTIVITY DELIVERY OF 190 RETIREMENT UNITS IN 1H16 ACROSS NINE SITES Trentham Warkworth Wigram Ellerslie Ellerslie New Plymouth 16
Slide 18: Future Development
FUTURE DEVELOPMENT LAND BANK OF 2,818 RETIREMENT UNITS AND 485 CARE BEDS Land Bank - as at 30 June 2016* Villas Apartments Serviced Apartments Total Retirement Units Care Beds Casebrook 182 0 83 265 40 Ellerslie 42 221 57 320 58 Hamilton 35 0 30 65 0 Hobsonville 30 60 50 140 52 Karaka 107 0 49 156 1
Slide 19: Development Margin
DEVELOPMENT MARGIN REALISED DEVELOPMENT MARGIN OF $15.6M ■ Realised development margin of $15.6m, up 38% from $11.3m in 1H15 ■ Development margin of 20.3% in 1H16, this is up from 18.4% in 1H15 ■ Development margin has consolidated with 1H16 being the second period we have achieved a development mar
Slide 20: New Sales of Occupation Rights
NEW SALES OF OCCUPATION RIGHTS NEW SALES GROSS PROCEEDS UP 24% ON 1H15 TO $77M ■ 1H16 lift in sales associated with continued build New Sales 1H16 Actual 1H15 Actual 1H16 Actual vs. FY15 Actual programme with an additional 49 retirement units 1H15 Actual * delivered compared to 1H15 Gross proceeds (
Slide 21: Resales of Occupation Rights
RESALES OF OCCUPATION RIGHTS RESALES OF 123 OCCUPATION RIGHTS IN 1H16, UP 12% ON 1H15 1H16 Actual vs. ■ Gross proceeds of $41.7m, up 24% on 1H15 Resales 1H16 Actual 1H15 Actual FY15 Actual 1H15 Actual * ■ Realised resale gains up to 19.8% driven by a Gross proceeds ($m) 41.7 33.5 24.4% 77.0 strong u
Slide 22: Financial Results
BUSINESS FINANCIALOVERVIEW RESULTS 21
Slide 23: Reported Profit (IFRS)
1H16 REPORTED PROFIT (IFRS) NET PROFIT AFTER TAX UP 44% VERSUS 1H15 1H16 Actual vs. ■ NPAT up $14.9m relative to 1H15 NZ$m 1H16 Actual 1H15 Actual FY15 Actual 1H15 Actual * ■ 1H16 total revenue up 23% versus 1H15 Total revenue 40.0 32.6 22.8% 68.8 ■ 1H16 total expenses up 21% versus 1H15 Fair value
Slide 24: Underlying Profit
1H16 UNDERLYING PROFIT UNDERLYING PROFIT UP 44% ON 1H15 ■ Record half year underlying profit of $24.7m, up 44% NZ$m 1H16 Actual 1H15 Actual 1H16 Actual vs. FY15 Actual on 1H15 1H15 Actual * Reported profit after tax 50.6 35.7 41.6% 84.2 ■ Realised development margin of $15.6m achieved in 1H16, a rec
Slide 25: Cash Flows
1H16 CASH FLOWS CONTINUED INVESTMENT IN NEW VILLAGE BUILDS 1H16 Actual vs. ■ Net operating cash flow of $84.4m for NZ$m 1H16 Actual 1H15 Actual FY15 Actual 1H15 Actual * 1H16, up 33% on 1H15 Care fees and village services 26.4 21.7 21.8% 46.4 ■ Positive cash flow increases in both Interest received
Slide 26: Balance Sheet
1H16 BALANCE SHEET TOTAL ASSETS OF $1.5B, UP 31% FROM $1.2B IN 1H15 ■ Total assets of $1.5b, up 31% on 1H15 1H16 Actual NZ$m 1H16 Actual 1H15 Actual vs. 1H15 FY15 Actual ■ Investment property valuation of $1.4b, up 33% on 1H15 Actual * ■ Other assets include land and buildings (primarily care facili
Slide 27: Gearing Ratio
GEARING RATIO GROSS DEBT OF $263M AND GEARING RATIO OF 36.1% ■ Gross debt of $262.7m as at 30 June 2016, up $14.5m from 1H16 Actual vs. 31 December 2015 NZ$m 1H16 Actual FY15 Actual FY15 Actual * ■ Uplift of $14.5m in gross debt driven primarily by large builds Bank loans 262.7 248.2 5.9% in Ellersl
Slide 28: Metrics Summary
4 YEAR METRICS SUMMARY UNDERLYING PROFIT UP $7.5M OR 44% ON 1H15 5 Year CAGR* 1H16 2H15 1H15 2H14 1H14 2H13 1H13 New sales of occupation rights 28% 183 173 160 181 105 112 116 Resales of occupation rights 15% 123 135 110 82 90 101 73 Operational Total sales 22% 306 308 270 263 195 213 189 New units
Slide 29: Interim Dividend
INTERIM DIVIDEND 28
Slide 30: Summerset Board Declares 1H16 Interim Dividend
1H16 INTERIM DIVIDEND SUMMERSET BOARD DECLARES 1H16 INTERIM DIVIDEND ■ The Summerset Board have declared a interim dividend of 2.6 cents per share, unimputed. This compares to a 2015 interim dividend of 1.85 cents per share ■ This represents a pay-out for the first half of 2016 of approximately $5.7
Slide 31: Questions?
BE SUMMERSET SURE QUESTIONS?
Slide 32: Disclaimer
DISCLAIMER This presentation may contain projections or forward looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward looking stat
Slide 33: Appendix
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Slide 34: Portfolio as at 30 June 2016
PORTFOLIO AS AT 30 JUNE 2016 2,609 RETIREMENT UNITS AND 621 CARE BEDS Existing Portfolio – as at 30 June 2016 Village Villas Apartments Serviced Apartments Total Retirement Units Care Beds Aotea 96 33 38 167 0 Dunedin 61 20 20 101 41 Hamilton 148 0 20 168 49 Hastings 146 5 0 151 0 Havelock North 94
Slide 35: Land Bank as at 30 June 2016
LAND BANK AS AT 30 JUNE 2016 LAND BANK OF 2,818 RETIREMENT UNITS AND 485 CARE BEDS Land Bank - as at 30 June 2016* Villas Apartments Serviced Apartments Total Retirement Units Care Beds Casebrook 182 0 83 265 40 Ellerslie 42 221 57 320 58 Hamilton 35 0 30 65 0 Hobsonville 30 60 50 140 52 Karaka 107
Summerset Group Holdings — H1 2016 Earnings Presentation on 6ix