Summerset reports good half profits

Summerset Group, which runs retirement villages, says it had a solid first six months. Photo / NZH

Listed retirement village company Summerset Group says it is on target to exceed its initial public offer (IPO) forecasts after reporting a net profit of $3.9 million in the first half to June.

Summerset, which listed on the NZX last November, reported a loss of $1.2m in the previous corresponding period.

The company's forecast is for an annual underlying net profit of $9.7m and an annual net profit of $13.3m.

Managing director and chief executive Norah Barlow said Summerset's total sales of occupation rights were up 73 per cent on the previous corresponding half year period.

"We are expecting to exceed IPO forecasts if trading momentum continues," Barlow said in a statement.

In April, Summerset bought a waterfront site in Hobsonville, Auckland, for development.

The company expects to announce more land purchases in the second half.

Barlow said the company expects to pay its first dividend following its full year 2012 results.

Summerset 's IPO - which at the time was the biggest in New Zealand for more than two years - raised $123.6m.

The company is 56 per cent owned by Australian private equity partnership, Quadrant, which divested 41 per cent of its holding through the IPO.

The shares, which were issued at $1.40, last traded at $1.88, down 7c.

Matt Goodson, portfolio manager at BT Funds Management said the share price, which performed strongly in the lead-up to the result, had started to imply higher earnings than the company had delivered.

"It had a very, very strong run going into this result, and probably got a bit ahead of itself," Goodson said.

"The general feedback appears to be that the result was relatively in line with expectations, so there were no surprises there," he said.