Summerset Group Holdings Limited · NZX:SUM
Summerset — H1 2014 Earnings Presentation
31 slides from Summerset's earnings presentation, Aug 29, 2014
Slide 1: Half Year Results Presentation
HALF YEAR RESULTS PRESENTATION SIX MONTHS ENDED 30 JUNE 2014 SUMMERSET GROUP HOLDINGS LIMITED 29 August 12 February 2014 2012 0
Slide 2: Agenda
AGENDA 2 1H14 Result Highlights 6 Business Overview 19 Financial Results 24 Interim Dividend 28 Appendix 1
Slide 3: 1H14 Result Highlights
1H14 RESULT HIGHLIGHTS 2
Slide 4: Strong Summerset growth continues
1H14 RESULT HIGHLIGHTS STRONG SUMMERSET GROWTH CONTINUES 1H14 Actual vs. 1H14 Actual 1H13 Actual FY13 Actual 1H13 Actual * New sales of occupation rights 105 116 -9.5% 228 Operational Resales of occupation rights 90 73 23.3% 174 Total sales 195 189 3.2% 402 New retirement units delivered 136 102 33.
Slide 5: On track for retirement units in FY14
1H14 RESULT HIGHLIGHTS ON TRACK FOR 250 RETIREMENT UNITS IN FY14 ■ 136 new retirement units delivered, up 33% on 1H13 – on track for delivery of 250 retirement units in FY14 ■ New sales 9% lower than 1H13, due to timing of delivery ■ Expect higher new sales in 2H14 driven by new villages – Karaka, H
Slide 6: Positive trends continue
1H14 RESULT HIGHLIGHTS POSITIVE TRENDS CONTINUE $16m NET PROFIT AFTER TAX (IFRS) $1000m TOTAL ASSETS $900m $12m $800m $8m $15.3m $700m $921m $10.8m $4m $764m $600m $3.9m $645m $m $500m 1H12 Actual 1H13 Actual 1H14 Actual 1H12 Actual 1H13 Actual 1H14 Actual 140 RETIREMENT UNIT DELIVERY 120 100 136 80
Slide 7: Business Overview
BUSINESS OVERVIEW 6
Slide 8: Continued focus on growth and delivery of build programme
1H14 REVIEW CONTINUED FOCUS ON GROWTH AND DELIVERY OF BUILD PROGRAMME ■ Delivered 136 retirement units in 1H14, a record for Summerset, and 33% more than 1H13 ■ On track for delivery of 250 retirement units in FY14 ■ Karaka and Hobsonville villages opened in 1H14 ■ Two new village centres opened in
Slide 9: Summerset Snapshot
SUMMERSET SNAPSHOT THIRD LARGEST OPERATOR, SECOND LARGEST DEVELOPER ■ 1,991 retirement units (villas, apartments and care apartments) ■ 483 care beds ■ More than 2,900 residents ■ 136 retirement units delivered in 1H14 ■ Build rate of around 250 retirement units in FY14 ■ Build rate guidance of 300
Slide 10: Summerset Strategy
SUMMERSET STRATEGY SUMMERSET BUILDS, OWNS AND OPERATES RETIREMENT VILLAGES IN NZ ■ Focus on continuum of care model ■ Internal development model ■ Nationwide brand offering ■ Customer centric philosophy – “we love the life you bring to us” ■ Respect for everyday New Zealanders 9
Slide 11: Demographics
DEMOGRAPHICS POPULATION OVER 75 YEARS FORECAST TO TRIPLE FROM 2011 TO 2051 POPULATION GROWTH 75 YEARS AND OVER 900,000 16% 800,000 14% 700,000 12% 600,000 10% 500,000 8% 400,000 6% 300,000 4% 200,000 100,000 2% 0 0% 2011 2016 2021 2026 2031 2036 2041 2046 2051 NZ population 75+ (left hand axis) % of
Slide 12: Summerset Growth: years of consistent delivery and growth
SUMMERSET GROWTH 17 YEARS OF CONSISTENT DELIVERY AND GROWTH SUMMERSET PORTFOLIO GROWTH 2,500 1,991 2,000 1,855 136 1,646 209 Retirement Units 1,486 160 1,500 1,352 122 1,272 80 1,109 163 983 921 126 *2011 existing stock includes 12 units acquired 1,000 62 795 1,855 732 126 1,646 as part of the Nelso
Slide 13: Development Activity
1H14 DEVELOPMENT ACTIVITY DELIVERY OF 136 RETIREMENT UNITS IN 1H14 ACROSS SIX SITES ■ 136 retirement units delivered across six villages Care Unit Delivery 1H14 Villas Apartments Total Care Beds Apartments ■ First retirement units in Karaka and Hobsonville delivered Dunedin - 20 20 40 41 ■ Dunedin v
Slide 14: Development Activity
1H14 DEVELOPMENT ACTIVITY DELIVERY OF 136 RETIREMENT UNITS IN 1H14 ACROSS SIX SITES Nelson Dunedin Hobsonville 13 Katikati Warkworth Karaka
Slide 15: Future Development: land bank
FUTURE DEVELOPMENT LAND BANK OF 2,001 RETIREMENT UNITS AND 587 CARE BEDS ■ Land bank of 2,001 retirement units spread across Land Bank - as at 30 June 2014 * brownfield and greenfield sites Total ■ Additional pipeline of 587 care beds across existing Care Villas Apartments Retirement Care Beds sites
Slide 16: Development Margin
DEVELOPMENT MARGIN REALISED DEVELOPMENT MARGIN $4.9M REALISED DEVELOPMENT MARGIN ■ Development margin continues to trend up ■ Development margins on sites with internal construction management $6m in line with medium term target of 17%+ 13.6% 14.0% 12.4% ■ Construction on all sites managed by Summer
Slide 17: New Sales of Occupation Rights
NEW SALES OF OCCUPATION RIGHTS 105 NEW SALES FOR 1H14 ■ 2H14 lift in sales expected associated with continued 1H14 Actual 1H13 Actual 1H14 Actual vs. FY13 Actual build programme and new villages opening 1H13 Actual * Gross proceeds ■ New sales of occupation rights down versus 1H13: 36.5 39.9 -8.4% 7
Slide 18: Resales of Occupation Rights
RESALES OF OCCUPATION RIGHTS RESALES OF 90 OCCUPATION RIGHTS VERSUS 1H13 OF 73 ■ Realised resale gains up on 1H13: 1H14 Actual 1H13 Actual 1H14 Actual vs. FY13 Actual 1H13 Actual * ■ Gross proceeds: $28.9m, up 36% on 1H13 Gross proceeds 28.9 21.2 36.4% 51.6 ■ DMF realisation: $3.1m, up 29% on 1H13 (
Slide 19: Operations and Staff
OPERATIONS AND STAFF FOCUS ON CLINICAL QUALITY AND STAFF TRAINING ■ Further pay increases for care staff aligned to qualifications - enhancements to Stepping Up programme ■ Continuing focus on a strong clinical quality framework, including additions to the clinical quality team ■ New clinical qualit
Slide 20: Financial Results
BUSINESS FINANCIALOVERVIEW RESULTS 19
Slide 21: Reported Profit (IFRS)
1H14 REPORTED PROFIT (IFRS) NET PROFIT AFTER TAX UP 42% VERSUS 1H13 ■ NPAT up $4.5m relative to 1H13 1H14 Actual vs. NZ ($m) 1H14 Actual 1H13 Actual FY13 Actual 1H13 Actual * ■ 1H14 total revenue up 19% versus 1H13 Total revenue 25.2 21.2 19.3% 45.2 ■ 1H14 total expenses up 18% versus 1H13, which in
Slide 22: Underlying Profit
1H14 UNDERLYING PROFIT UNDERLYING PROFIT $9.4M FOR 1H14 ■ Continuing strong underlying profit performance 1H14 Actual vs. NZ ($m) 1H14 Actual 1H13 Actual FY13 Actual 1H13 Actual * ■ Underlying profit of $9.4m includes costs related to new village starts and the start-up phase of new Reported profit
Slide 23: Cash Flows
1H14 CASH FLOWS STRONG INVESTMENT IN NEW VILLAGE BUILDS 1H14 Actual 1H13 NZ ($m) 1H14 Actual vs. 1H13 FY13 Actual ■ Net operating cash flow of $36.5 million for 1H14 Actual Actual * ■ Expect an increase in net operating cash flow in 2H14 in line Care fees and village services 16.7 14.2 17.2% 31.8 wi
Slide 24: Balance Sheet
1H14 BALANCE SHEET TOTAL ASSETS OF $921M, UP 21% FROM $764M IN 1H13 ■ Net asset growth of 14% from 1H13 1H14 Actual vs. NZ ($m) 1H14 Actual 1H13 Actual FY13 Actual 1H13 Actual * ■ Investment property valuation of $845m Investment property 844.6 706.2 19.6% 776.6 ■ Other assets include land and build
Slide 25: Interim Dividend
INTERIM DIVIDEND 24
Slide 26: Interim Dividend
1H14 INTERIM DIVIDEND SUMMERSET BOARD DECLARES 1H14 INTERIM DIVIDEND ■ The Summerset Board have declared an interim dividend of 1.4 cents per share, unimputed ■ This represents a total pay-out of approximately $3.0m ■ The board has announced Summerset will now pay an interim and final dividend. Ther
Slide 27: Questions?
BE SUMMERSET SURE QUESTIONS?
Slide 28: 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 29: Appendix
‘} APPENDIX W ~ SF
Slide 30: Portfolio as at 30 June 2014
PORTFOLIO AS AT 30 JUNE 2014 1,991 RETIREMENT UNITS AND 483 CARE BEDS Existing Portfolio – as at 30 June 2014 Total Retirement Villas Apartments Care Apartments Care Beds Units Aotea 96 33 38 167 - Dunedin 61 20 20 101 41 Hamilton 74 - 10 84 30 Hastings 146 5 - 151 - Havelock North 94 28 - 122 41 Ho
Slide 31: Land Bank as at 30 June 2014
LAND BANK AS AT 30 JUNE 2014 LAND BANK OF 2,001 RETIREMENT UNITS AND 587 CARE BEDS Land Bank - as at 30 June 2014 * Total Retirement Villas Apartments Care Apartments Care Beds Units Casebrook 195 - 38 233 80 Ellerslie 50 150 50 250 80 Hamilton 113 - 25 138 46 Hobsonville 114 70 30 214 90 Karaka 184
Summerset Group Holdings — H1 2014 Earnings Presentation on 6ix