Summerset Group Holdings Limited · NZX:SUM
Summerset — FY2016 Earnings Presentation
36 slides from Summerset's earnings presentation, February 2017
Slide 1: Full Year Results Presentation
FULL YEAR RESULTS PRESENTATION YEAR ENDED 31 DECEMBER 2016 SUMMERSET GROUP HOLDINGS LIMITED 29 February 2017 23 2012 0
Slide 2: Agenda
AGENDA 2 FY16 Result Highlights 6 Business Overview 20 Financial Results 29 Final Dividend 33 Appendix 1
Slide 3: FY16 Result Highlights
FY16 RESULT HIGHLIGHTS 2
Slide 4: Record retirement unit delivery and underlying profit
FY16 RESULT HIGHLIGHTS RECORD RETIREMENT UNIT DELIVERY AND UNDERLYING PROFIT FY16 Actual vs. FY15 FY16 Actual FY15 Actual FY14 Actual Actual* New sales of occupation rights 414 333 24.3% 286 Operational Resales of occupation rights 244 245 -0.4% 172 Total sales 658 578 13.8% 458 New retirement units
Slide 5: Another record retirement unit delivery and underlying profit
FY16 RESULT HIGHLIGHTS ANOTHER RECORD RETIREMENT UNIT DELIVERY AND UNDERLYING PROFIT ■ FY16 underlying profit of $56.6m, up 50% on FY15 ■ FY16 net profit after tax (NZ IFRS) of $145.5m, up 73% on FY15 ■ New sales 24% higher than FY15 – highest level of sales in a full year ■ Resale gain of 18.6%, up
Slide 6: Strong trends continue across the business
FY16 RESULT HIGHLIGHTS STRONG TRENDS CONTINUE ACROSS THE BUSINESS TOTAL ASSETS UNDERLYING PROFIT $1900m $60m $1700m $50m $1500m $40m $1300m $30m $56.6m $1100m $1707m $1364m $20m $37.8m $900m $1043m $22.2m $24.4m $700m $10m $845m $15.2m $617m $702m $8.1m $500m $m FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY
Slide 7: Business Overview
BUSINESS OVERVIEW 6
Slide 8: FY16 Review
FY16 REVIEW 409 RETIREMENT UNITS DELIVERED, TARGETING 450 DELIVERIES FOR FY17 ■ Delivered 409 retirement units in FY16, a record for Summerset, and 35% more than FY15 ■ Targeting delivery of 450 retirement units in FY17. All deliveries are from existing sites ■ Delivered our first retirement units i
Slide 9: Summerset Snapshot
SUMMERSET SNAPSHOT FASTEST GROWING RETIREMENT VILLAGE PROVIDER IN NEW ZEALAND ■ 2,828 retirement units (villas, apartments, serviced apartments and care suites) ■ 748 care beds ■ More than 4,200 residents ■ 409 retirement units delivered in FY16 ■ 19 years of consistent delivery and growth ■ 21 vill
Slide 10: Summerset Strategy
SUMMERSET STRATEGY SUMMERSET BUILDS, OWNS AND OPERATES RETIREMENT VILLAGES IN NZ ■ Focus on continuum of care model ■ High quality care and facilities within every village ■ Village designed to integrate into local communities ■ Internal development model ■ Nationwide brand offering ■ Customer centr
Slide 11: Operations and Staff
OPERATIONS AND STAFF FOCUS ON CLINICAL QUALITY AND STAFF TRAINING ■ 94% care customer satisfaction rating and 94% village customer satisfaction rating ■ Opened our first dementia facility in Levin and we will incorporate dementia into the design of new villages ■ Launched an all staff share scheme w
Slide 12: Demographics
DEMOGRAPHICS POPULATION OVER 75 YEARS FORECAST TO GROW 239% FROM 2016 TO 2068 POPULATION GROWTH 75 YEARS AND OVER PER ANNUM POPULATION GROWTH 75 YEARS AND OVER 1,200,000 18% 25 16% 1,000,000 20 14% 800,000 12% 15 Thousands 10% 600,000 8% 10 400,000 6% 4% 5 200,000 2% 0 0% 0 2016 2018 2023 2028 2033
Slide 13: Summerset Growth
SUMMERSET GROWTH 19 YEARS OF CONSISTENT DELIVERY AND GROWTH SUMMERSET BUILD RATE 3,000 2,828 409 2,500 2,419 303 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 14: Development Activity
FY16 DEVELOPMENT ACTIVITY DELIVERY OF 409 RETIREMENT UNITS IN FY16 ACROSS 11 SITES Unit Delivery FY16 Villas Apartments Serviced Apartments Care Suites Total Care Beds Ellerslie 12 0 0 0 12 0 Hamilton 39 0 0 0 39 0 Hobsonville 28 13 0 0 41 0 Karaka 12 0 10 0 22 19 Katikati 30 0 10 0 40 19 Levin 0 0
Slide 15: Development Activity
FY16 DEVELOPMENT ACTIVITY DELIVERY OF 409 RETIREMENT UNITS IN FY16 ACROSS 11 SITES Ellerslie Hobsonville Karaka Ellerslie Hamilton Katikati 14
Slide 16: Development Activity
FY16 DEVELOPMENT ACTIVITY DELIVERY OF 409 RETIREMENT UNITS IN FY16 ACROSS 11 SITES Nelson Trentham Warkworth Wigram Levin New Plymouth 15
Slide 17: Future Development
FUTURE DEVELOPMENT LAND BANK OF 2,609 RETIREMENT UNITS AND 366 CARE BEDS Land Bank - as at 31 December 2016* Serviced & Dementia Village Villas Apartments Total Retirement Units Care Beds Apartments Casebrook 197 0 76 273 43 Ellerslie 30 221 57 308 58 Hamilton 14 0 30 44 0 Hobsonville 18 60 52 130 5
Slide 18: Development Margin
DEVELOPMENT MARGIN REALISED DEVELOPMENT MARGIN OF $39.0M ■ Realised development margin of $39.0m, up 49% from $26.1m in FY15 ■ Development margin of 22.2% in FY16, this is up from 20.0% in FY15 ■ Development margin of 23.6% in 2H16, this is up from 20.3% in 1H16 and 21.4% in 2H15 REALISED DEVELOPMEN
Slide 19: New Sales of Occupation Rights
NEW SALES OF OCCUPATION RIGHTS NEW SALES GROSS PROCEEDS UP 34% ON FY15 TO $176M ■ FY16 lift in sales associated with continued build New Sales FY16 Actual FY15 Actual FY16 Actual vs. FY14 Actual programme with an additional 106 retirement units FY15 Actual * delivered compared to FY15 Gross proceeds
Slide 20: Resales of Occupation Rights
RESALES OF OCCUPATION RIGHTS RESALES OF 244 OCCUPATION RIGHTS IN FY16 ■ Gross proceeds of $83.1m, up 8% on FY15 FY16 Actual vs. Resales FY16 Actual FY15 Actual FY14 Actual FY15 Actual * ■ Realised resale gains up to 18.6% driven by a Gross proceeds ($m) 83.1 77.0 7.9% 54.9 strong underlying property
Slide 21: Financial Results
BUSINESS FINANCIALOVERVIEW RESULTS 20
Slide 22: Reported Profit (IFRS)
FY16 REPORTED PROFIT (IFRS) NET PROFIT AFTER TAX UP 73% VERSUS FY15 ■ NPAT up $61.2m relative to FY15 FY16 Actual NZ$m FY16 Actual FY15 Actual vs. FY15 FY14 Actual ■ FY16 total revenue up 25% versus FY15 Actual * ■ FY16 total expenses up 23% versus FY15 Total revenue 86.1 68.8 25.2% 54.3 ■ FY16 expe
Slide 23: Underlying Profit
FY16 UNDERLYING PROFIT UNDERLYING PROFIT UP 50% ON FY15, 48% CAGR OVER LAST 5 YEARS ■ Record full year underlying profit of $56.6m, up 50% FY16 Actual vs. NZ$m FY16 Actual FY15 Actual FY14 Actual on FY15 FY15 Actual * ■ Record half year underlying profit of $31.9m, up from Reported profit after tax
Slide 24: Cash Flows
FY16 CASH FLOWS CONTINUED INVESTMENT IN NEW VILLAGE BUILDS FY16 Actual vs. ■ Net operating cash flow of $192.6m for NZ$m FY16 Actual FY15 Actual FY14 Actual FY15 Actual * FY16, up 37% on FY15 Care fees and village services 57.2 46.4 23.2% 36.2 ■ Positive cash flow increases primarily Interest receiv
Slide 25: Balance Sheet
FY16 BALANCE SHEET TOTAL ASSETS OF $1.7B, UP 25% FROM $1.4B IN FY15 ■ Total assets of $1.7b, up 25% on FY15 NZ$m FY16 Actual FY15 Actual FY16 Actual vs. FY14 Actual FY15 Actual * ■ Retained earnings have increased by 84% to $289.1m as Investment property 1,591.4 1,261.2 26.2% 958.2 at 31 December 20
Slide 26: Gearing Ratio
GEARING RATIO GROSS DEBT OF $274M AND GEARING RATIO OF 32.7% ■ Gross debt of $274.0m as at 31 December 2016, up $11.3m 2H16 Actual vs. NZ$m 2H16 Actual 1H16 Actual FY15 Actual from 30 June 2016 1H16 Actual * ■ Uplift of $11.3m in gross debt principally due to land and Bank loans 274.0 262.7 4.3% 248
Slide 27: Project Cash Profits
PROJECT CASH PROFITS DELIVERING SIGNIFICANT POSITIVE CASH FLOW VILLAGES ■ Positive cash flows allow us to recycle our capital into future deliveries Forecast Capital Forecast Net Cash Village Investment ($m) Position* ($m) ■ Our Auckland sites require a large amount of capital but are forecast to de
Slide 28: Asset Backing
ASSET BACKING STRONG ASSET BACKING TO NET DEBT NET DEBT TO UNDERLYING ASSETS ■ We adopt a prudent approach to debt. All our debt relates to Net Debt Undeveloped Land Development WIP Unsold Stock development projects with our net debt of $265m primarily made up of undeveloped land, vacant new sale st
Slide 29: Year Metrics Summary
5 YEAR METRICS SUMMARY UNDERLYING PROFIT 5 YEAR CAGR OF 48% 5 Year CAGR* FY16 FY15 FY14 FY13 FY12 FY11 New sales of occupation rights 31% 414 333 286 228 167 108 Resales of occupation rights 15% 244 245 172 174 164 123 Operational Total sales 23% 658 578 458 402 331 231 New units delivered 27% 409 3
Slide 30: Final Dividend
FINAL DIVIDEND 29
Slide 31: Final Dividend
FY16 FINAL DIVIDEND SUMMERSET BOARD DECLARES FY16 FINAL DIVIDEND ■ The Summerset Board have declared a final dividend of 5.1 cents per share, unimputed. This compares to a 2015 final dividend of 3.4 cents per share ■ This represents a total pay-out for the second half of 2016 of approximately $11.3m
Slide 32: Questions?
BE SUMMERSET SURE QUESTIONS?
Slide 33: 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 34: Appendix
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Slide 35: Portfolio as at 31 December 2016
PORTFOLIO AS AT 31 DECEMBER 2016 2,828 RETIREMENT UNITS AND 748 CARE BEDS Existing Portfolio – as at 31 December 2016 Total Retirement Village Villas Apartments Serviced Apartments Care Suites Care Beds Units Aotea 96 33 38 0 167 0 Dunedin 61 20 20 0 101 42 Ellerslie 12 0 0 0 12 0 Hamilton 169 0 20
Slide 36: Land Bank as at 31 December 2016
LAND BANK AS AT 31 DECEMBER 2016 LAND BANK OF 2,609 RETIREMENT UNITS AND 366 CARE BEDS Land Bank - as at 31 December 2016* Serviced & Dementia Village Villas Apartments Total Retirement Units Care Beds Apartments Casebrook 197 0 76 273 43 Ellerslie 30 221 57 308 58 Hamilton 14 0 30 44 0 Hobsonville
Summerset Group Holdings — FY2016 Earnings Presentation on 6ix