Slash washed onto the Napier foreshore during Cyclone Gabrielle. Photo / Mark Mitchell
Slash washed onto the Napier foreshore during Cyclone Gabrielle. Photo / Mark Mitchell
Around 1400 elderly people in six retirement villages were affected when Cyclone Gabrielle took out power and communications but stand-by generators kept services running, a retirement village boss said.
Scott Scoullar, chief executive of the giant Summerset Group Holdings, said today power went out to all the company’s villages in the Hawke’s Bay regions during the cyclone as well as an Auckland and Whangārei village.
Residents in Hasting’s Summerset at the Orchard, Havelock North’s Summerset in the Vines and Napier’s Summerset in the Bay and Summerset Palms were all affected by the cyclone, he said.
An open weekend due to start tomorrow at Summerset Palms has been cancelled as that region battles to recover from the devastation.
Summerset Mount Denby in Whangārei and Warkworth’s Summerset Falls also lost power and communications, Scoullar said.
“Our buildings are undamaged and we were able to continue to care for our residents throughout, thanks to our very dedicated staff. We ran essential services on generator power and we were fully supplied with food and medication throughout the outages,” he said in announcing the company’s annual result.
Staff from Wellington and Christchurch flew to Napier to help and Summerset helped smaller not-for-profit aged care providers, Scoullar said.
Although the Summerset villages were now running again as normal, “there are some hard times ahead for some of our staff who lost their homes or had property severely damaged”.
“We’ve set up a $250,000 disaster relief fund to help them through this difficult time and we’ll continue to offer support as they, and the Hawke’s Bay region, recover.”
In results news, the company pushed revenue up 16 per cent in its full-year but its bottom-line profit halved due to revaluation gains being less spectacular than they had been.
Summerset reported for the year December 31, 2022. Revenue rose from $205.3 million to $238.7m.
But net after-tax profit dropped from $543.7m to $269.1m, largely due to revaluations which had been $537.5m a year ago but just $268.8m in the latest period.
The business said it had made “a record full-year underlying profit of $171.4m, up 21.5 per cent on FY21, driven by strong development returns and growth in deferred management fees”.
“Net profit after tax reflects a level of fair value movement more consistent with historical trends,” it said.
Sales demand was strong: 1007 occupation rights agreements had been brokered. That was the first time the company cracked the 1000 mark.
The company also set a construction record, finishing 625 units in that period and booking an enviable development margin of 29.7 per cent, up from 23 per cent a year ago. But that won’t last.
“The company expects that development margins will return to be within the 20-25 per cent range over the medium term.”
Summerset has seven Australian properties. Earthworks started at its first village in Melbourne’s Cranbourne North in late 2021. Retirement units are under construction and pre-sales have also begun.
Shareholders get a final 11.6 cents per share dividend bringing the total payout to 22.3cps, up 20 per cent annually.
In December, the company shelved plans for a $300m Parnell village, delayed due to changing circumstances including falling house prices and rising building costs.
Summerset Group's plans for this $300m Parnell village were shelved in December. Photo / Supplied
“Construction cost pressures coinciding with a declining property market make for a relatively complex project. We consider it prudent to just pause in this environment while we do the review,” Scoullar said then.
In 2015, the company had bought a 2.3ha site next to the Auckland Domain and in 2020, it applied to Auckland Council for resource consent to build up to eight levels, planning two and three-bedroom units, a rest home, hospital-level care, memory care and short-term and respite care.
The site is at 23 and 41 Cheshire St and road reserves on Ngahere Tce and Cheshire St, as well as on railway land.
Former local resident and Gibraltar Owners Group member Graham Roberts was one of many to express concern.
“There will be no buffer from the new construction because Summerset has already taken down all trees,” he said at the time. Glass towers would clash with the Parnell Village blend-in style, and raised concerns about losing public car parks and access to a train platform.
This week, the company has a $2.18 billion market capitalisation. Shares have been trading around $9.41, down 18 per cent annually but well ahead of Ryman’s at only $5.45 which is down 35 per cent annually.
