Summerset revenue jumps, but warns of “major gap” in aged care funding

28th February 2025 By Paul Yandall | paul@propertyticker.co.nz | @propertyticker

Summerset Group Holdings has reported a record underlying profit $206.4m for the year to December 2024, up 8% on the previous period.

The retirement village operator’s total revenue jumped 17.5% to $319.9m but net profit after tax fell 20.1% to $339.84m.

The company declared a final dividend of 13.2 cents per share, bringing the total dividend payable for FY24 to 24.5 cents per share.

Summerset said the fall in net profit was largely due to the fair value movement of investment properties recognised in 2024, relative to 2023.

“We have continued to deliver value for our residents and shareholders during a year which has been one of the most challenging we’ve seen as a company,” said Summerset board chair Mark Verbiest.

“Like most other businesses in 2024 we had to work within an environment where higher costs, inflation and the subdued residential property market all made our work harder.

“Despite these challenges, we have continued to grow.”

The company said it delivered its highest ever sales, with 1,238 occupation right agreement homes contracted for 2024, up 12% on FY23, which comprised of 588 new sales and 650 resales. It delivered 708 new homes during the year, 676 in New Zealand and 32 in Australia.

Summerset chief executive Scott Scoullar said the company continued to see “the benefits of our regionally diverse portfolio with eight regions seeing over 30 sales settlements across 2024, highlighting the broad appeal and strength of our villages nationwide”.

“When we exclude the three new village centre buildings we opened this year our uncontracted stock is down between 20-50% year-on-year across our home types, a very pleasing result in a tough market.”

Summerset’s development margin of 28.9% was down from 31.6% in FY23, driven by a change in the company’s sales mix with a higher proportion of care and memory care suites sold than previous years.

Scoullar also said there was “a major gap between our aged care funding and the costs of running our care centres”.

“We are currently reviewing our policies and where this funding gap is leaving us.

“We will have to consider making our care centres available to our village residents only and no longer accepting referrals from the public health system.

“It’s not a step we want to take but we need to focus our limited funding and staffing resources on our village residents and their needs.”

The company said its three proposed village sites at Belmont in Auckland, Otaihanga on the Kāpiti Coast, and Mission Hills in Napier were in high demand areas, while extensions at Boulcott in Lower Hutt and Blenheim would allow the addition of profitable new homes.

It has 40 villages completed or in development.