Retirement village and aged-care operator Summerset Group, which operates in Dunedin, continues its rapid growth with an after-tax net profit of $10.8 million for the half year, up 174% on the first half of 2012.
Underlying profit was up 45% at $10 million, operating cash flow was up 51% at $43.4 million and total assets of $764 million were up 19%.
Sales of occupation rights on new units were up 40% to 116.
Summerset shares opened on the NZX yesterday at $3 and reached a high of $3.15.
During the half year, Summerset completed 102 new retirement units across six sites which boded well for its full-year target of a minimum of 200 units, chief executive Norah Barlow said.
With six villages under development and three main buildings under construction, the company was in a good position to reach its full-year target, Mrs Barlow said.
Summerset has secured two new land sites, in Trentham and New Plymouth, and those acquisitions increased its land bank to six years, based on an annual build target of 300 retirement units a year by 2015.
It intended building more than 150 homes on the 4ha site in New Plymouth, with townhouses and villas for independent living and care apartments and care rooms for those with more advanced needs, while the 4ha Trentham site, in Upper Hutt, would enable the company to extend its existing 5.4ha Summerset on the Course village by more than 100 units.
Those two acquisitions followed the company's purchase of a 3.1ha site in Lower Hutt during the first half of the year, which Mrs Barlow described as a highlight.
Summerset's chief financial officer, Julian Cook, said the company had ''grown very rapidly'' over the last few years, particularly when looking at profitability levels.
He expected that growth would continue. The biggest challenge the company faced was managing that growth, as the opportunity was ''huge''.
Forsyth Barr broker Peter Young said average new sales prices were flat at $343,603 a unit, which was ''a bit of a surprise'' given the shift in mix to mostly villas sold in the first half of the year.
However, that probably reflected the geographic location of the sales.
Resale prices were up a strong 11.2% to $290,575 which probably reflected a combination of the strong housing market in the period but could also reflect the length of tenure.
The balance sheet remained in good shape and, with gearing at 23%, there remained considerable scope to fund its pipeline of development, he said.
Describing it as a good quality result, Craigs Investment Partners broker Chris Timms said it was ahead of the firm's expectations.
The resale margin was probably the biggest surprise.
The company had a good land bank to continue with its ongoing growth and Mrs Barlow, who announced her intention to retire as chief executive next year, left it in ''extremely good shape'', Mr Timms said.
