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While stronger development margins for its half year to June made up for a decline in new sales for Summerset, analysts are scrutinising the company's overall development targets
for the year.
Underlying profit, which excludes unrealised valuation gains in the fair value of investment property, was between $43million and $45million for the six months, up from about $36million a year earlier.
Shares in Summerset are up more than 57% on a year ago, trading about $7.60 yesterday.
Summerset chief executive Julian Cook while new sales volumes were lower than a year ago, there were strong development margins on homes sold and settled during the first half of 2018.
''We're also seeing good levels of sales contracts and presales on homes which will be completed and delivered over the remainder of the year,'' Mr Cook said in a statement.
Summerset has 23 villages completed or under construction, with more than 5000 residents, and a further seven sites for development.
Forsyth Barr broker Damian Foster said Summerset's total first-half new sales of 145 units was only 34% of his forecast of full-year 2018 new sales.
''While the soft new sales largely reflect the timing of new stock delivery, the sales numbers also reflect the time taken to shift service apartment stock,'' he said.
Summerset said it had sales of 156 units in the three months ended June 30, comprising 77 new units and 79 resales, while a year earlier sales were 152, comprising 82 new and 70 resales, BusinessDesk reported.
''Resales also remain strong across all villages and are at levels consistent with 2017, with no sign of impacts from any changing property market conditions,'' Mr Cook said.
Mr Foster said given the steady sales volumes, that implied the continuation of strong sales prices and margins, which would be ahead of Forsyth Barr expectations.
''Summerset also noted that wait-list numbers have increased at established villages,'' he said.
Mr Cook said Summerset was seeing good levels of sales contracts and presales on homes which would be completed and delivered during the remainder of the year.
However, Mr Foster said Summerset had not commented yesterday about its development target of 450 new units during full-year 2018, and believed there was ''some risk of slippage'' on that target, due to the late timing of new stock delivery during the year.
Summerset is scheduled to deliver its half-year result on August 14.
- Additional reporting: BusinessDesk