New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

Summerset Group Holdings / Equity Bottom-Up

<h2>Summerset (SUM)</h2>
<h3>Investor Day takeaways</h3>
SUM&nbsp;held an “in person” investor day today, focused on strategy, development and Australia. There were limited news in the form of hard numbers, but we walk away encouraged with the confidence in SUM’s ability to scale up, make Australia work and monetize care; three brief points;
(1)&nbsp;&nbsp;&nbsp;Australia&nbsp;is progressing well albeit at relatively pedestrian pace, they expect first units to be delivered end of CY21. After five years of “looking seriously” and three years in the market, they are more convinced than ever that the model will work and that the opportunity is “bigger than we thought”. The integrated care and village living model offered by SUM and RYM barely exists in Australia, and SUM view the only viable competition as being RYM. They expect to continue to build out the land bank in Australia, and remain focused on broad acre, high quality sites.
(2)&nbsp;&nbsp;&nbsp;Scaling up.&nbsp;SUM stated that they are “ready to go to 600” units in NZ due to increased land bank, more efficient designs a better systems. Additionally, they believe they have balance sheet capacity to deliver 1 -2 villages a year in Australia.. Our forecasts are for a gradual increase to 560 units by CY22.
(3)&nbsp;&nbsp;&nbsp;&nbsp;Monetizing care:&nbsp;SUM does not see the need to introduce Refundable Accommodation Deposits, RADs, like RYM recently announced. But they are “pushing hard” to sell some higher end care beds under the ORA model and will attempt to sell all its memory care with an ORA. SUM is also increasing the proportion of Serviced Apartments in its new builds and see it as a fungible product that can deliver rest home and in some instances even hospital level care. We view this as an innovative approach to effectively introducing care ORAs.
Aaron Ibbotson &nbsp;CFA Director / Senior Analyst, Equities
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1684944735798087377&amp;th=1762204f5b68ced1&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8WBdqxP3EKY6aW9CaXz6SVU-e1ikk_FJlxjxIUifAWv4vHWOqzXfFitFA7LTwlGqZopuTr0UXwXLYO3oVjfNjeBFeChPnLUwxoCjn1ZD1Law9248_wEuYB2MU&amp;disp=emb" class="editor-image img-responsive"></figure>
 M: +64 21 470 377 |P: +64 9 368 0024 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Summerset (SUM)
Investor Day takeaways
SUM&nbsp;held an “in person” investor day today, focused on strategy, development and Australia. There were limited news in the form of hard numbers, but we walk away encouraged with the confidence in SUM’s ability to scale up, make Australia work and monetize care; three brief points;
(1)&nbsp;&nbsp;&nbsp;Australia&nbsp;is progressing well albeit at relatively pedestrian pace, they expect first units to be delivered end of CY21. After five years of “looking seriously” and three years in the market, they are more convinced than ever that the model will work and that the opportunity is “bigger than we thought”. The integrated care and village living model offered by SUM and RYM barely exists in Australia, and SUM view the only viable competition as being RYM. They expect to continue to build out the land bank in Australia, and remain focused on broad acre, high quality sites.
(2)&nbsp;&nbsp;&nbsp;Scaling up.&nbsp;SUM stated that they are “ready to go to 600” units in NZ due to increased land bank, more efficient designs a better systems. Additionally, they believe they have balance sheet capacity to deliver 1 -2 villages a year in Australia.. Our forecasts are for a gradual increase to 560 units by CY22.
(3)&nbsp;&nbsp;&nbsp;&nbsp;Monetizing care:&nbsp;SUM does not see the need to introduce Refundable Accommodation Deposits, RADs, like RYM recently announced. But they are “pushing hard” to sell some higher end care beds under the ORA model and will attempt to sell all its memory care with an ORA. SUM is also increasing the proportion of Serviced Apartments in its new builds and see it as a fungible product that can deliver rest home and in some instances even hospital level care. We view this as an innovative approach to effectively introducing care ORAs.
Aaron Ibbotson &nbsp;CFA Director / Senior Analyst, Equities

 M: +64 21 470 377 |P: +64 9 368 0024 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Summerset (SUM): Confident Investor Day but Few Numbers - Brief Takeaways