Economic uncertainty affects Ryman result

By Phil Boeyen, ShareChat Business News Editor

Monday 26th November 2001

Resthome operator Ryman (NZSE: RYM) has reported a drop in profit for the six months ended September with sales of occupation rights to new apartments falling behind budget.

Interim net profit after tax was $4.53 million for the period, down 35% on last year's $7 million. Sales at $27.25 million were slightly behind last year's interim figure of $28 million.

The company says sales of occupation rights to new apartments and studio units fluctuated during the period, with no clear pattern emerging.

"This resulted in the number of sales being lower than budgeted. It appears that the elderly are concerned by the current financial and political climate, and this is influencing their decision making," Ryman reports.

Increased operating costs without a corresponding lift in the level of care fees has also been blamed for the fall in profit.

"Negotiations between the industry and government continue in this area, although some increase in subsidised resthome fees is expected in the near future," the company says.

"It is anticipated that the group results will improve in the second half of the year, due to a significant contribution from the opening of the new Hilda Ross Retirement Village in Hamilton and a contribution from the start of the development of the Grace Joel Retirement Village in St. Heliers, Auckland."

Ryman says the Rita Angus resthome and Shona McFarlane resthome extension will also contribute to earnings in the second half.

Despite a lower profit net operating cashflows were much stronger than last year, rising to $18.7 million from $13.8 million. There were no revaluations of properties at the half-year, as these occur at year end.

An interim dividend of 2 cents without imputation credits has been declared.

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