At the launch of trading we welcomed more than 1200 new investors in a fully subscribed float against a backdrop of significant economic and market uncertainty.
Since then, Summerset has consistently outperformed IPO forecasts.
The growth we have seen over the 14 months post-listing has been strong and our profile has increased considerably. At the end of the 2012 financial year we grossed more than $100 million in sales for the first time.
We were pleased to become part of the NZX50 in December last year.
The goal of listing was to provide a good strong capital base to enhance our growth potential. It did just that.
The raising of new capital through listing has enabled us to grow the company more rapidly than if we had remained unlisted.
Our vision is to have a Summerset retirement village in every market where we see a need for quality aged care and retirement living. Across New Zealand there is no shortage of these markets.
The country is faced with a 98 per cent increase in the over 75 population within the next 20 years.
In addition to this, an increasing acceptance and understanding of the advantages of retirement village living has seen a steady rise in demand over the past five to 10 years.
To take advantage of this opportunity, Summerset wanted to accelerate our growth plans. This required capital, which was provided through the list process.
Following listing, $50 million of new equity was set aside for growth. Having permanent capital in the business has allowed our development rate to increase considerably.
We have completed close to 300 units across six villages since our entry on to the NZX. Construction has started on two new villages - Dunedin and Katikati.
Within the next year we plan to have started work on a further three new village developments.
With the increased equity we have also been able to accelerate construction at existing villages and shorten development timelines.
We have acquired two large sites in urban Auckland. Work has begun in earnest to gain consent and start developing these.
The speed with which we have grown has been in part due to internalising more of the development process.
By directing funding raised at listing into the development team we have improved village design and cut down on construction costs while raising quality.
This increased control over every aspect of a village design and build has led to a higher build-rate and faster delivery.
Listing also increased Summerset's corporate profile by providing us with ongoing exposure through both the media and our own regular releases to market.
We have noticed a significant increase in the knowledge of Summerset as an experienced and stable operator.
We no longer have to explain to people what we do and how we operate. When we meet with new communities we have noticed a brand recognition beyond anything we have seen before.
One of the best things to come out of listing is the positive feedback from our residents and their families who feel secure knowing the company is performing well and is financially sound.
They appreciate the level of information publicly available to them. Meeting the NZX listing rules around disclosure and ongoing requirements set by the exchange has added credibility to our brand.
As a sector, retirement villages and aged care operate in a regulated environment. Summerset has always been proud of its transparency.
Listing has taken this to a new level, and while it has meant a lot more work for our team, having publicly stated financial targets to work toward has been very good for our processes and business practices.
We are benefiting from robust scrutiny and accountability to our shareholders.
The performance of the three retirement village operators listed on the NZX has been strong, particularly over the past year.
The market understanding of the sector has been good for us and has attracted investors. What was not quite so expected was its flow-on effect on sales and consequently our bottom line.
During the 2012 financial year we saw a 55 per cent increase in the sales of new occupation rights and a 33 per cent increase on occupation rights re-sales on the previous year.
This represents a 43 per cent increase in total sales. Gross sales for 2012 were more than $100 million. This is the first time the company has achieved this.
The increased sales and greater control we have over the build process has meant we were able to upgrade our longer term build rate to 300 units by the end of the 2015 financial year. Guidance given during IPO was for 250 units per annum by 2016.
The listing process and the ongoing disclosure and reporting requirements are not easy, but where listing can raise capital to help you grow, it is very worthwhile.
The provision of permanent capital into a business, the advantages to shareholders of increased liquidity and the additional credibility provided to your company through the NZX are invaluable.
Tomorrow: Port of Tauranga chief executive Mark Cairns.
