Retirement village operator Summerset Group's (ASX:SNZ) share price stagnant on property update

The Summerset Group Holdings Ltd (ASX: SNZ) share price is not moving, after the announcement of a third property purchase in Victoria.

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The Summerset Group Holdings Ltd (ASX: SNZ) share price will be watched closely today following an update from the retirement village operator.

In the announcement made before open, Summerset disclosed the purchase of its third property in Victoria. The property in Chirnside Park, northeast Melbourne, is planned to be a part of its NZD$170 million retirement village in the area.

Chirnside Park retirement village

Summerset's newest retirement village in the works will deliver over 200 retirement units, ranging from one to three-bedroom variants. These options will also include independent and supported living arrangements.

Summerset Group CEO, Julian Cook, commented on the development:

The over-75 population in Chirnside Park is forecast to grow by 60% over the next decade. Our retirement villages include supported living and a residential care centre, making it easy for residents to move when their needs change.

Centrally located, the Chirnside Park village will be close to Maroondah Golf Park and Chirnside Park shopping centre, with bus and train stations close by.

Summerset recent results

Summerset also reported its 2020 full-year results a couple of weeks ago. Despite a challenging year with immense pressure on aged-care throughout COVID-19, the company managed to deliver a strong result.

Total revenue from operations increased by 12% to NZ$172.4 million. Meanwhile, on the bottom line, net profit after tax soared 32% to NZ$230.8 million. During the lockdown period, Summerset completed the construction of 356 units over 9 different locations. The village operator recorded 32 villages now completed or in development by the end of 2020. The expansion in property came with an increase in residents, from 5,500 to 6,200. 

The strong result facilitated the company's final dividend of 7 cents per share.

Summerset Group share price recap

It likely comes as no surprise that Summerset Group's share price has performed strongly over recent months. The company's ability to grow profits during the pandemic obviously made investors happy. The Summerset Group share price reflects this with a 75% increase in the past year.

Although the share price has increased considerably, its price-to-earnings (P/E) ratio is still relatively low at 13 times. For comparison, the New Zealand healthcare industry, on average, trades at a 23 times multiple.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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