New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

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.

Equity Bottom-Up

Summerset Group Holdings / Equity Bottom-Up

<ul><li>SUM reported a relatively weak first quarter sales update.</li><li>New and resales were ~17% of our FY23 estimates, and the conversion from contracted sales at year end was 75%, compared to over 100% historically.</li><li>The slowdown in resales was attributed primarily to timings with regards to residents settling and moving in, presumably a consequence of the well-publicised major slowdown in the housing market, in particular in relation to days to sell.</li></ul>

SUM reported a relatively weak first quarter sales update.New and resales were ~17% of our FY23 estimates, and the conversion from contracted sales at year end was 75%, compared to over 100% historically.The slowdown in resales was attributed primarily to timings with regards to residents settling and moving in, presumably a consequence of the well-publicised major slowdown in the housing market, in particular in relation to days to sell.

Thematic (Sector/Industry)

<ul><li>Our MI index remains flat: Year-on-year growth for our MI-aged care pricing index to February has fallen to only +3% and the index has been flat over the last six months</li><li>Pricing buffers consumed by falling house prices</li><li>Low turnover and elevated days to sell are no signs of a "proper" bottom in house prices</li></ul>

Our MI index remains flat: Year-on-year growth for our MI-aged care pricing index to February has fallen to only +3% and the index has been flat over the last six monthsPricing buffers consumed by falling house pricesLow turnover and elevated days to sell are no signs of a "proper" bottom in house prices

Aged Care Sector: Montgomerie-Ibbotson Aged Care Pricing Index (15-March-2023)

<ul><li>Summerset (SUM) delivered a strong FY22 result, with small beats across the P&amp;L, albeit weighted towards new sales gains</li><li>We were particularly pleased by the moderation in operating expense growth, up ~+10% in 2H22 after two years of 20% to 30% opex growth</li><li>FY23 also appears to be off to a good start with management commentary suggesting the first six weeks of trading has been strong.</li></ul>

Summerset (SUM) delivered a strong FY22 result, with small beats across the P&amp;L, albeit weighted towards new sales gainsWe were particularly pleased by the moderation in operating expense growth, up ~+10% in 2H22 after two years of 20% to 30% opex growthFY23 also appears to be off to a good start with management commentary suggesting the first six weeks of trading has been strong.

Summerset Group: FY22 Result — Buy Now, Cash Later

<ul><li>Summerset (SUM) delivered a strong FY22 result, with small beats across the P&amp;L adding up to a meaningful bottom line beat of ~+10% versus our estimates</li><li>Cash flow from ongoing operations was negative and slightly weaker than we had anticipated</li><li>Capex was +NZ$150m higher than we had anticipated and net debt +NZ$100m higher</li></ul>

Summerset (SUM) delivered a strong FY22 result, with small beats across the P&amp;L adding up to a meaningful bottom line beat of ~+10% versus our estimatesCash flow from ongoing operations was negative and slightly weaker than we had anticipatedCapex was +NZ$150m higher than we had anticipated and net debt +NZ$100m higher

Summerset (SUM): FY22 Result – Initial Impressions

<ul><li>Summerset (SUM) released its 4Q22 sales metrics with some brief comments on the current environment</li><li>Slowing, yes, but not grinding to a halt: Q4 resales and new sales were up +22% and +15% versus 4Q last year, respectively</li><li>Forecasts down ~-7–14% driven primarily by lower new sales but earnings are still growing</li></ul>

Summerset (SUM) released its 4Q22 sales metrics with some brief comments on the current environmentSlowing, yes, but not grinding to a halt: Q4 resales and new sales were up +22% and +15% versus 4Q last year, respectivelyForecasts down ~-7–14% driven primarily by lower new sales but earnings are still growing

Summerset Group: 4Q22 Sales — Not Immune to Slowdown

New Zealand

Summerset Group Holdings Ltd. is a profit-oriented entity and develops, owns and operates integrated retirement villages, rest homes and hospitals for the elderly within New Zealand.

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Summerset Group Holdings (SUM NZ)

Summerset (SUM): 1Q23 Sales Update

SUM reported a relatively weak first quarter sales update; New and resales were ~17% of our FY23 estimates, and the conversion from contracted...

Forsyth Barr

Aged Care Sector: Montgomerie-Ibbotson Aged Care Pricing Index (15-March-2023)

Another tough month for the aged care stocks, down between -10% and -15%, has likely been driven to a significant degree...

Forsyth Barr

Summerset Group: FY22 Result — Buy Now, Cash Later

Summerset (SUM) delivered a strong FY22 result, with small beats across the P&L, albeit weighted towards new sales gains; FY23 also appears to be...

Forsyth Barr

Summerset (SUM): FY22 Result – Initial Impressions

Summerset (SUM) delivered a strong FY22 result, with small beats across the P&L adding up to a meaningful bottom line beat of ~+10% versus our...

Forsyth Barr

Summerset Group: 4Q22 Sales — Not Immune to Slowdown

Summerset (SUM) released its 4Q22 sales metrics with some brief comments on the current environment and acknowledged the “tough market conditions”...

Forsyth Barr

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