Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Ryman shares drop to four-day low as increased costs eyed

Ryman shares drop to four-day low as increased costs seen weighing on future earnings

By Tina Morrison

May 16 (BusinessDesk) – Shares in Ryman Healthcare weakened for a second day on the expectation New Zealand’s largest listed retirement village operator will post slower earnings growth in coming years as its costs increase.

Christchurch-based Ryman yesterday posted an 18 percent rise in underlying earnings to $118.2 million for the year ended March 31. Increased costs from adding staff and boosting wages for its aged care workers meant annual earnings growth slowed to a 14 percent pace in the second half, from a 22 percent rate in the first half, brokerage Craigs Investment Partners said in a note.

Shares in Ryman fell as much as 1.2 percent to a four-day low of $8.60. At midday, the stock was down 0.9 percent at $8.62, adding to yesterday’s 2 percent decline.

Ryman’s costs will probably accelerate in coming years as the company is likely to have exhausted its accumulated tax losses, meaning it will have to start paying tax on its assessable earnings which will grow over time, Craigs said. In addition, Ryman’s operating costs at its aged care facilities will step up as it raises wages to caregivers and invests in additional staff and training.

“In FY15, we expect earnings per share growth will remain robust but slow back towards trend of about 15 percent per annum following several years of growing above trend, as Ryman pays tax for the first time and as increased costs in its aged care business roll through,” Craigs research analyst Stephen Ridgewell said in the note.

Ryman’s earnings per share growth slowed to 17.9 percent in 2014, from 19.2 percent in 2013, Craigs said. EPS growth is likely to weaken further to a 13.9 percent in 2015 and 11.9 percent in 2016 before picking up again to a 15.9 percent pace in 2017, the brokerage estimates.

Ridgewell maintained his ‘sell’ recommendation on Ryman shares, saying the company’s strong growth outlook is already priced into the stock.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news