The new Summerset St Johns retirement village in Auckland: first residents arrived in October, 2024. Photo / Summerset Group
The new Summerset St Johns retirement village in Auckland: first residents arrived in October, 2024. Photo / Summerset Group
NZX-listed Summerset Group is considering banning non-residents getting into its 28 resthomes and hospitals, saying it can no longer afford it due to a big Government funding gap in the aged care sector.
Today, Summerset and privately-owned Metlifecare released results from the expanding retirement village sector.
Summerset dropped the bombshellabout its many hospitals: “We will have to consider making our care centres available to our village residents only and no longer accepting referrals from the public health system,” said CEO Scott Scoullar.
Hospital-level care for thousands of older people is now in privately-owned retirement villages, which the Government relies on because it doesn’t have the capacity in our hospitals.
Summerset has 28 villages with resthome and hospital-level care to 1300 residents.
Many religious and charity-based geriatric care centres have closed lately, putting further strain on the sector.
Summerset chief executive Scott Scoullar. Photo / Supplied
Summerset was considering changes due to the state of aged care under-funding in New Zealand, Scoullar said.
“While we’ve created greater financial certainty for ourselves and our residents, by moving to care occupational rights agreements at many of our villages, there is still a major gap between our aged care funding and the costs of running our care centres.
“We are currently reviewing our policies and where this funding gap is leaving us,” he said.
It was not what Summerset wanted to do.
“But we need to focus our limited funding and staffing resources on our village residents and their needs,” Scoullar said.
The business houses 8700 people aged 70-plus.
“We don’t want to end up overstretching our staff. We know this will mean a bigger burden will be placed on the public health system, but we can’t keep taking the strain,” Scoullar said.
The main building at Summerset on Cavendish, in Christchurch.
Most of Summerset’s 40 villages have care.
Summerset’s net profit after tax for the December 31, 2024 full year fell 20% from $425.3m to $339.8m but its presentation stressed a record $206.4m underlying profit, up 8% on FY23.
Summerset’s revenue rose 18% from $272.2m to $319.9m.
Chairman Mark Verbiest said the company was pleased with the business’ underlying operating performance in light of 2024’s tough macro-economic environment. The company sold a record 1238 occupation rights agreements, up 12% annually.
Scoullar said: “We continue to see the benefits of our regionally diverse portfolio”.
Summerset met its forecast build target, delivering 676 homes here and 32 in Australia, up 10% on FY23.
Summerset’s flagship village, St Johns, was delivered on time and on budget in October and opened by Prime Minister Christopher Luxon in December.
It was built on the 2.6ha site and features six multi-storey buildings.
“So far we have approximately 30% of St Johns’ available homes under contract, a figure we’re pleased with, and which compares very favourably with similar retirement villages in the area which have been open much longer,” Scoullar said.
The company announced the purchase of three new village sites and two extensions to existing villages in 2024.
The three proposed village sites at Belmont in Auckland, Otaihanga on the Kāpiti Coast and Mission Hills in Napier.
Metlifecare CEO Earl Gasparich says the third-largest retirement village company has undergone a significant transformation behind closed doors over the past four years.
Metlifecare’s half-year result to December 31, 2024 showed net profit after tax of $51.1m, up from a net loss after tax of $22.1m in 1H24.
Total assets $6.6b are up from $6.3b at June 30, 2024.
Total occupation right agreement sales of $258.9m rose 18.7% on 1H24.
Operating revenue of $120.3m was up 13.8%.
Net gearing was reduced to 38.1% and bank re-financing on $1.1b of debt was completed with an additional $100m in debt capacity added.
Total debt increased by $5.5m to $1.4b at December 31, 2024.
Metlifecare also received an equity contribution from its parent APVGL of $107.7m to enable continued growth across the business, it said today.
The increase in operating revenue was due to growth in deferred management fees from resales and new development village sales, higher care and village fees.
The increase in total revenue was due to a higher gain in fair value movement on investment properties compared to the previous reporting period, the result said.
The net profit from continuing operations and the total net profit can be attributed to the higher gain, in addition to the higher operating revenue, the company announced today.
Metlifecare has independent living and aged residential care for about 7000 people.
It was established in 1984 and now owns and operates 37 villages predominantly in the upper North Island but several village and greenfield site acquisitions including in the South Island.
Anne Gibson has been the Herald’s property editor for 25 years, written books and covered property extensively here and overseas.
