Ryman posts 13% gain in 1H earnings, on track for FY target

Ryman Healthcare posts 13% gain in 1H earnings, on track for FY target of 15% increase

By Tina Morrison

Nov. 21 (BusinessDesk) - Ryman Healthcare, New Zealand's largest listed retirement village builder and operator, posted a 13 percent gain in underlying first-half profit and signalled it's on track to meet its target of a 15 percent increase in annual earnings.

The Christchurch-based company said trading profit, which is used as a basis for dividend payments and doesn't include tax or unrealised gains in property values, rose to $66.3 million in the six months ended Sept. 30, from $58.5 million in the year earlier period. Revenue rose 9.6 percent to $109.2 million, it said in a statement.

Ryman has been developing new villages as it seeks to benefit from an ageing demographic, adding a record 450 beds and units in the first half of its financial year. The company is seeing the same trend in Australia and this year opened its first village in Melbourne, bought a second site there and is eyeing more land in the city. To aid its future development plans, Ryman has acquired a landbank with potential for an additional 4,294 units and beds to be built.

"We're lifting our build rate to cope with the phenomenal growth ahead," chairman David Kerr said. "From 2018 we're expecting the number of New Zealanders aged 75-plus to grow rapidly and it will triple over the next 30 years. It's a similar story in Melbourne."

Ryman will pay a dividend of 6.3 cents on Dec. 12, up from 5.6 cents in the same period a year earlier.

The company's net profit jumped 38 percent to $107.9 million, or 21.6 cents per share, as it benefited from a $39.8 unrealised gain in the value of its properties and a $1.9 million deferred tax credit. In the year-earlier period, the $78.4 million net profit was boosted by a $24.7 million property gain, offset by a $4.8 million tax expense.

Kerr said the first-half result was driven by a lift in pricing and strong sales volumes as Ryman's village portfolio grew.

The company’s total retirement village units and residential beds rose 11 percent to 7,174. Retirement village units increased 12.4 percent to 4,478 and residential care beds rose 8.7 percent to 2,696.

Ryman sold more occupation rights for its new units, posting a 10.4 percent increase in volume to 233, while the fee revenue rose 21.7 percent to $101.6 million. Meanwhile, sales volumes of its existing units rose 19.5 percent to 312 units, with the value of those sales rising 30.8 percent to $119 million.

Auckland, New Zealand's largest city and the fastest growing, is a key focus for the company, with more than $800 million of work to be carried out over the next five years, Kerr said.

Shares in Ryman last traded at $8.11 and have gained 3.3 percent so far this year.

(BusinessDesk)

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