Memory care centres to the fore as Summerset posts profit, and expands

Friday, 22 February 2019

Summerset manager Wayne Mackay and Summerset national cheif executive Julian Cook in the 'man cave' at Mountain View village in New Plymouth.

Retirement village operator Summerset has published its annual result which focuses on its 'memory care centres' including holding public talks by Dementia NZ.

The first talk will be held next week at Summerset's village in Hobsonville, and more are scheduled at other villages.

Joy Wardell (front) and friends at a Summerset village enjoying yoga.

Summerset aims to become New Zealand's first retirement village operator with Dementia Friendly Accreditation, chief executive Julian Cook said.

The company was constantly refining its new buildings to include circular designed units so residents would not get lost, and including gardens in the centre for security.

Summerset resident Betty van Rooyen with Bippy Skurr during a tea and tech session, a pilot programme linking young people with older people.

* Oceania and Summerset ride the wave of seniors flocking to retirement villages

* Another good year at Summerset, new villages coming**

Over the next 30 years the number of people with dementia is expected to triple from 62,000 currently.

Cook discussed the dementia initiatives when announcing Summerset's underlying annual profit, up 21 per cent to $98 million for the year ending December 2018.

'In 2018 we completed villages in Wigram, Trentham, Katikati and Karaka. This year we're working on our Ellerslie, Hobsonville, Rototuna, Casebrook, Richmond, and Avonhead villages, and began construction in Kenepuru, Wellington and Te Awa, Napier.'

Summerset now has 25 villages completed or in development, a land bank of nine properties, and two new land purchases at Milldale, north of Auckland and Waikanae on the Kapiti Coast, north of Wellington

The company was also looking at the property market in Melbourne with a view to developing villages there. Property prices in Melbourne were softening and have fallen about 8 per cent over 2018, Cook said.

Summerset was the fastest growing retirement village operator in New Zealand, building 454 new homes.

Resident satisfaction was steady at 97 per cent for care residents and 95 per cent for retirement village residents based on a review by KPMG. Staff engagement was 69 per cent.

Village staff were now using VCare, a resident management system on iPads. This allows them to see vital resident information at the touch of a button, and provides much improved data.

The operational profit was boosted by Summerset's re-sale of licences to occupy, giving a record gain of 23 per cent at $28m.

About 39 per cent of resales were in Auckland with the balance in other centres.

Operating expenses and depreciation were higher than previously driven by development costs, training, better quality food, new uniforms, and higher wages.

Summerset develops its own villages and achieved development margins of 33 per cent.

A softer property market affected the value of investment properties, which increased by $209m but less than the $234m in 2017. Combined with higher expenses this reduced the final profit after tax below the previous year to $214m compared with $239m in 2017.

Total assets came to $2.8 billion. The total unimputed dividend to shareholders for the year was 13.2 cents.