Friday 19 May 2017 09:21 AM
Ryman chalks up another record profit as bubbling property market bolsters resales
By Paul McBeth
May 19 (BusinessDesk) - Ryman Healthcare posted a record annual profit, adding to its run of 15 years of earnings growth, as the hot property market underpinned gains from resales of its occupancy rights.
Underlying profit, which excludes fair value changes from its property portfolio, rose to $178.3 million in the 12 months ended March 31 from $157.7 million a year earlier, the country's biggest listed retirement village operator said in a statement. Operating revenue gained 11 percent to $289 million. At its half-year report, the company forecast annual underlying profit of between $175 million to $185 million.
Ryman's sales of occupation right agreements rose 9.1 percent to 1,318, of which new sales jumped 16 percent to 600 and resales of existing units increased 4.1 percent to 718. The value of new units rose 16 percent to $263.3 million while resales rose 14 percent to $311.3 million.
"Strong gains from the resale of occupancy rights had driven the result and Ryman had invested a record $525 million to meet the demands of a growing older population," chairman David Kerr said. "We've made good progress thanks to growing resident demand for our unique Ryman-style villages and a strong real estate market."
Net profit included a $325 million gain in the fair value of Ryman's investment portfolio, rising to $356.7 million, or 71.3 cents per share, from $305.4 million, or 61.1 cents, a year earlier. Of that fair value gain, Ryman realised $63 million from the sale of new retirement village units, up from $62.4 million a year earlier, while realised gains from resales rose to $77.3 million from $60.6 million.
Ryman is adding to its 31 existing villages, with 13 at varying stages of development, including a foray across the Tasman. The Christchurch-based company wants to open five villages in Melbourne by 2020 and has four Australian sites currently in the design and consenting phase.
The value of that portfolio rose to $3.66 billion as at March 31 from $3 billion a year earlier, comprising 5,958 retirement village units and 3,281 residential care beds and with a land bank that can add 4,025 units and 1,529 care beds. The company's bank debt rose to $837.5 million as at March 31 from $544.9 million a year earlier.
The board declared a final dividend of 9.3 cents per share, payable on June 23 with a June 9 record date. That takes the annual return to 17.8 cents, a 13 percent gain from 2016.
The shares last traded at $8.63 and have gained 6.4 percent so far this year. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters with a median target price of $8.63.