Summerset vertical village, planned for Parnell. Photo / supplied
Retirement village owner-operator Summerset Group pushed up its bottom line profit 32 per cent but underlying profit fell 7 per cent when the company spent more during the pandemic.
Net profit after tax, which includes unrealised property revaluations, rose 32 per cent to $230.8 million but full-year underlying profit was $98.3m.
The bottom line uplift was driven by major revaluation rises of $221.1m.
Chief Executive Julian Cook said Summerset had a strong year, despite the pandemic.
"Summerset has maintained strong profitability and resilience throughout 2020," he said.
Summerset is paying shareholders a 13cps dividend for 2020, down on the previous year's 14.1cps.
Expenditure on measures to keep residents safe from Covid, including increases in employee wages, resulted in the underlying profit falling, he said.
The business developed 356 residences or units on nine sites despite the five-week construction shutdown starting last March.
Summerset has 32 villages completed or under development. It claims to have the largest land bank in the sector.
It now accommodates 6200 people, up from the previous year's 5500 people.
During the pandemic, the business hired around 160 extra staff.
"Our priority throughout 2020 was on keeping our residents and staff safe from the Covid," the company said.
Cook said no cases of Covid were reported in any Summerset villages but he said the deaths at Christchurch's Rosewood centre were "tragic. The country was lucky but it was a well-planned response," he said of anti-pandemic measures.
Summerset spent $9.2m to fight the pandemic. This included more than $700,000 on personal protective equipment, increasing staff pay, hiring guards to put on gates, more cleaning and the costs of delivering meals to residents' doors.
The company plans an eight-level village in Parnell where some locals have voiced concern about those plans.
"We've done a lot of engagement with the community - more than any other. We have a resource consent hearing coming up and it's their chance to have their say. This is something that's needed in the community and we have a very long list of people keen to go there. We think it regenerates a piece of wasteland, an eyesore, to something that's going to be very attractive and we would be spending around $350m on the project, so it's considerable. We have asked Auckland Council to notify the resource consent," Cook said.
He leaves next month and described how the business had changed in the last decade.
"We've gone from about 1000 retirement village units to about 4500 now so it's about four times the size. Our staff numbers were 350 and are now around 1800. We've gone from being a regional, smaller business to number two in terms of size, starting out with 12 or 13 villages but now with 32 villages. We've got the biggest land bank in the sector," he said today.
The company this year plans to open main buildings at its Richmond site in Nelson and Avonhead in Christchurch.
Last year, Summerset opened main buildings in Christchurch and Hamilton and new retirement villages in Tauranga at Papamoa Beach, Napier and New Plymouth.
Demand for its hospital care is high, with around 96 per cent occupancy.
'Developers are a good target for a council under financial pressure.' - Steve Evans