Retirement giants to repay wage aid

Summerset says time is right, Ryman follows hours later

Under his leadership, Summerset has grown to be the second-largest retirement village operator in New Zealand, with a market capitalisation of $2.5b.

Listed retirement village owners Summerset Group and Ryman Healthcare will repay Government wage subsidies as sales rebound from Covid19 disruption.

Summerset also announced chairman Rob Campbell will step down in April after a decade in the role and updated its full-year profit guidance.

The company qualified for wage subsidies of $8.6 million in April when revenue fell by more than 30 per cent as retirement village unit sales fell to zero. Campbell said since coming out of lockdown the board had been monitoring the situation “and had decided the time was right to return the wage subsidy. Summerset was in a stable financial position and the business outlook was positive.”

The company has had no Covid cases in any of its villages.

Hours after Summerset’s announcement, the country’s biggest retirement village business, Ryman Healthcare, said it was also repaying $14.2m of wage subsidies received during level 4 lockdown.

Two other listed firms — Metlifecare and Arvida — have also previously announced repayments.

“We’d like to thank the Government for its initiative in introducing the subsidy, which provided help at a time of great uncertainty for us and for thousands of other businesses,” Ryman chairman David Kerr said.

“Since January we have spent more than $50m on our Covid-19 response, and I’m pleased to say we have not had a single case of Covid19 among our more than 18,000 residents and staff.”

Summerset’s Campbell had been on the board for 10 years. He oversaw Summerset’s listing on the NZX in 2011 and guided the company into one of the NZX’s top 20 companies.

“Under his leadership, Summerset has grown to be the second-largest retirement village operator in New Zealand, with a market capitalisation of $2.5b. Assets have increased from $540m to $3.4b . . . and resident numbers have gone from 1700 to over 6000,” the company said.

“We would like to thank Rob for his outstanding leadership. During his time we have invested in memory care centres for people living with dementia, improved our offering for staff, become New Zealand’s first carbon zero retirement operator, and more recently, have expanded across the Tasman,” it said. The board has started to hunt for a new chairman.

The company is also losing its chief executive Julian Cook. On November 9, he said he would step down in March after more than 10 years with the business, of which seven had been as CEO.

Campbell praised Cook at the time, saying he had been an outstanding chief executive. Deputy chief executive and chief financial officer Scott Scoullar is replacing Cook.

Summerset also updated the market on its full-year profit guidance, saying the wage subsidy repayment was now factored in to the forecast.

The company now expects underlying profit, stripping out movement in property valuations, for the year to December 31, 2020 to be between $96m and $98m.

This would be down 9.6 per cent to 7.7 per cent on last year’s underlying profit of $106.2m.

Summerset on the retirement of chairman Rob Campbell (left)