Ryman Reports First Half Underlying Profit of $85.2M
Ryman Reports First Half Underlying Profit of $85.2 Million, up 11.4%
• Underlying profit up 11.4% to $85.2 million
• Reported (IFRS) profit up 8.4% to $202.6 million
• Interim dividend lifted to 9.5 cents per share
• Full year underlying profit expected to be between $195-$210 million (+9% to +18%)
• Total assets $5.3 billion, up 19% on September last year
• Seventh site in Victoria secured, 14 new villages in the pipeline
• Continued investment in people and systems to support long term growth and to improve the resident experience
Ryman Healthcare’s underlying profit rose 11.4% to $85.2 million thanks to continued growth in resale volumes and demand, and the company has secured its seventh site in Victoria.
Ryman shareholders will receive an increased interim dividend of 9.5 cents per share, in line with the growth in underlying profit. The dividend will be paid on December 8, and the record date for entitlements is December 1.
Chairman Dr David Kerr said strong gains from the resale of occupancy rights had driven the result, as Ryman’s unique villages and high-quality care offering continued to be in strong demand.
“We are pleased to be able to report another good first half result and we have a great pipeline of villages to develop. We are in a very strong financial position, and our total assets are now $5.3 billion.’’
Ryman continued to expand its landbank, buying a site for its seventh village in Victoria at Mt Martha on the Mornington Peninsula. The landbank in Victoria is now close to matching New Zealand, reflecting Ryman’s plans to expand at the same pace in both markets.
Work is now well under way on three new villages in Auckland and one in Melbourne, and in addition to this Ryman has another 10 villages in its landbank. Dr Kerr said the development team was busy looking for new sites in Victoria and New Zealand with long-term demand just beginning to take off.
“We know that we have great demand ahead but we will only be successful if our residents and their families love what we do. Our latest survey results show that the investments we’ve made in improving the resident experience have hit the mark, and our retirement village residents are telling us they are happier than ever.’’
“As a board, we are also delighted to see that we are achieving consistently excellent external clinical audit results, which shows that our care is of the highest quality and is continuously improving.’’
Occupancy in Ryman’s established care centres was running at 97% during the first half, well ahead of the industry average of 87%.
Dr Kerr said it was pleasing to see resale volumes at Ryman’s villages grow by 12%, despite volumes in the real estate market dropping by more than 20%.
“We are keeping an eye on the property market like everyone else. It is also important to remember that moving into a Ryman village is usually a decision based on health needs, rather than a purely market-driven decision.’’
Chief Executive Gordon MacLeod said village staff had been given further pay increases and improved entitlements. A new leadership programme is also being rolled out to support Ryman’s current leaders and identify the next generation needed as the company grows.
Ryman remained concerned about New Zealand’s immigration settings and would continue to lobby at a Government level to support members of the Ryman family who were born outside of New Zealand, Mr MacLeod said.
“A great resident experience depends on staff who are passionate about caring for people. It takes years of training and commitment,’’ Mr MacLeod said.
“We are about to experience huge growth in demand and the reality is there is likely to be a shortfall locally.’’
On outlook, Dr Kerr said full year underlying profit was expected to be in the range of $195 million to $210 million.
“We have reviewed how we are going and we are expecting a busier second half with construction activity weighted towards the end of the year. We are expecting steady growth for the full year as we make further progress at Birkenhead, Greenlane and Brandon Park. We are also busy getting the next generation of villages through the design and consenting process, so we have a springboard for future growth."
Dr Kerr said Ryman’s long-term focus remained to double underlying profits every five years and to expand with new villages in communities where better retirement living options and high-quality care were needed. Ryman is on track to increase profit for the 16th year this year.
“Our long-term goal remains to grow to meet the massive amount of demand we see ahead as the population ages. Each new village we build represents a long-term investment in care for the communities we operate in, and the villages create a new economic engine to support our future growth as a company.’’
“That focus on care and meeting a long term social need and the commitment of our wonderful staff make Ryman a very special company.’’
New villages under construction:
Greenlane, Auckland: First stages
Brandon Park, Melbourne: Construction under way.
Devonport, Auckland: Earthworks under way.
Lynfield, Auckland: Earthworks under way.
New villages in planning and design phase:
River Rd, Hamilton
Burwood East, Melbourne
Mt Eliza, Victoria
Lincoln Rd, Auckland
Park Terrace, Christchurch
Mt Martha, Victoria
About Ryman: Ryman Healthcare was founded in Christchurch in 1984 and owns and operates 31 retirement villages in New Zealand and Australia. Ryman villages are home to over 10,500 residents, and the company employs over 4,500 staff