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Forsyth Barr

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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) Q3 sales stats strong</h2>
SUM reported a strong set of 3Q sales number, unit sales up 36% yoy and 80% sequentially. SUM flagged at their interim results that re-sales would likely be strong due partly to higher vacancies but also due to strong demand. However, the 125 reported was ahead of our (high) expectations. Annualised re-sales for the third quarter was 12% of ILU’s – highest third quarter on record and second highest quarter ever as % of ILU’s. In absolute terms, it was by some margin the highest number on record. &nbsp;New sales was also strong at 100, suggesting significant sell down of inventory built up during COVID-19.
SUM is our preferred name in Aged Care due to superior growth, valuation at a discount to RYM and best cash recovery of new business.
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 99.25pt;">
&nbsp;
</td>
<td colspan="2" style="width: 43.85pt;">
1Q19
</td>
<td colspan="2" style="width: 56.6pt;">
2Q19
</td>
<td colspan="2" style="width: 56.6pt;">
3Q19
</td>
<td style="width: 56.65pt;">
4Q19
</td>
<td style="width: 56.65pt;">
1Q20
</td>
<td style="width: 56.65pt;">
2Q20
</td>
<td style="width: 56.65pt;">
3Q20
</td>
<td style="width: 69.95pt;">
4Q20 implied
</td>
</tr>
<tr>
<td style="width: 99.25pt;">
Number of resales
</td>
<td colspan="2" style="width: 43.85pt;">
66
</td>
<td colspan="2" style="width: 56.6pt;">
76
</td>
<td colspan="2" style="width: 56.6pt;">
88
</td>
<td style="width: 56.65pt;">
93
</td>
<td style="width: 56.65pt;">
71
</td>
<td style="width: 56.65pt;">
65
</td>
<td style="width: 56.65pt;">
125
</td>
<td style="width: 69.95pt;">
87
</td>
</tr>
<tr>
<td style="width: 99.25pt;">
Number of new sales
</td>
<td colspan="2" style="width: 43.85pt;">
71
</td>
<td colspan="2" style="width: 56.6pt;">
65
</td>
<td colspan="2" style="width: 56.6pt;">
77
</td>
<td style="width: 56.65pt;">
116
</td>
<td style="width: 56.65pt;">
70
</td>
<td style="width: 56.65pt;">
58
</td>
<td style="width: 56.65pt;">
100
</td>
<td style="width: 69.95pt;">
92
</td>
</tr>
<tr>
<td style="width: 99.25pt;">
Total sales
</td>
<td colspan="2" style="width: 43.85pt;">
137
</td>
<td colspan="2" style="width: 56.6pt;">
141
</td>
<td colspan="2" style="width: 56.6pt;">
165
</td>
<td style="width: 56.65pt;">
209
</td>
<td style="width: 56.65pt;">
141
</td>
<td style="width: 56.65pt;">
123
</td>
<td style="width: 56.65pt;">
225
</td>
<td style="width: 69.95pt;">
179
</td>
</tr>
<tr>
<td colspan="2" style="width: 106.35pt;"></td>
<td colspan="2" style="width: 46.9pt;">
3Q YoY
</td>
<td colspan="2" style="width: 101.9pt;">
4Q implied YoY
</td>
<td colspan="6">
&nbsp;
</td>
</tr>
<tr>
<td colspan="2" style="width: 106.35pt;">
Number of resales
</td>
<td colspan="2" style="width: 46.9pt;">
42%
</td>
<td colspan="2" style="width: 101.9pt;">
-6%
</td>
<td colspan="6">
&nbsp;
</td>
</tr>
<tr>
<td colspan="2" style="width: 106.35pt;">
12m rolling
</td>
<td colspan="2" style="width: 46.9pt;">
14%
</td>
<td colspan="2" style="width: 101.9pt;">
8%
</td>
<td colspan="6">
&nbsp;
</td>
</tr>
<tr>
<td colspan="2" style="width: 106.35pt;">
Number of new sales
</td>
<td colspan="2" style="width: 46.9pt;">
30%
</td>
<td colspan="2" style="width: 101.9pt;">
-21%
</td>
<td colspan="6">
&nbsp;
</td>
</tr>
<tr>
<td colspan="2" style="width: 106.35pt;">
12m rolling
</td>
<td colspan="2" style="width: 46.9pt;">
6%
</td>
<td colspan="2" style="width: 101.9pt;">
-3%
</td>
<td colspan="6">
&nbsp;
</td>
</tr>
<tr>
<td colspan="2" style="width: 106.35pt;">
Total sales
</td>
<td colspan="2" style="width: 46.9pt;">
36%
</td>
<td colspan="2" style="width: 101.9pt;">
-14%
</td>
<td colspan="6">
&nbsp;
</td>
</tr>
<tr>
<td colspan="2" style="width: 106.35pt;">
12m rolling
</td>
<td colspan="2" style="width: 46.9pt;">
10%
</td>
<td colspan="2" style="width: 101.9pt;">
3%
</td>
<td colspan="6">
&nbsp;
</td>
</tr>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
<div>
<div>
Aaron Ibbotson&nbsp;&nbsp;CFA Director / Senior Analyst, Equities&nbsp;
</div>
<div>
<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:1679924386149977264&amp;th=17504a541dfc4cb0&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8UrK4QTds2-DBD-wzXCfEGxy8KlJALMdr1w2cRwr3SqeFln2HOidY2E_sMdhWV2vAlpyzcsXZX8hmlHdgT1nfMUiMCxuorh_FfkbRO5ydjlFcZKU8Hure6mZ8&amp;disp=emb" width="150" height="15" class="editor-image img-responsive" data-image-whitelisted=""></figure>
</div>
<div>
M: +64 21 470 377 |P: +64 9 368 0024 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland
</div>
</div>

Summerset (SUM) Q3 sales stats strong
SUM reported a strong set of 3Q sales number, unit sales up 36% yoy and 80% sequentially. SUM flagged at their interim results that re-sales would likely be strong due partly to higher vacancies but also due to strong demand. However, the 125 reported was ahead of our (high) expectations. Annualised re-sales for the third quarter was 12% of ILU’s – highest third quarter on record and second highest quarter ever as % of ILU’s. In absolute terms, it was by some margin the highest number on record. &nbsp;New sales was also strong at 100, suggesting significant sell down of inventory built up during COVID-19.
SUM is our preferred name in Aged Care due to superior growth, valuation at a discount to RYM and best cash recovery of new business.




&nbsp;


1Q19


2Q19


3Q19


4Q19


1Q20


2Q20


3Q20


4Q20 implied




Number of resales


66


76


88


93


71


65


125


87




Number of new sales


71


65


77


116


70


58


100


92




Total sales


137


141


165


209


141


123


225


179





3Q YoY


4Q implied YoY


&nbsp;




Number of resales


42%


-6%


&nbsp;




12m rolling


14%


8%


&nbsp;




Number of new sales


30%


-21%


&nbsp;




12m rolling


6%


-3%


&nbsp;




Total sales


36%


-14%


&nbsp;




12m rolling


10%


3%


&nbsp;




















Aaron Ibbotson&nbsp;&nbsp;CFA Director / Senior Analyst, Equities&nbsp;





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



Summerset Group Holdings

Summerset (SUM): Q3 Sales Stats Strong