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Ryman boosts FY profit 13 percent as fee income jumps, portfolio value climbs

Thursday 16th May 2013

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Ryman Healthcare, the retirement village operator whose shares have jumped by more than a third this year, boosted annual profit 13 percent as increased sales of units lifted its fee income and as the value of its property portfolio continued to climb.

Net profit rose to $136.7 million, or 27.5 cents per share, in the 12 months ended March 31, from $120.8 million, or 24.3 cents, a year earlier, the Christchurch-based company said in a statement. Underlying profit, which strips out unrealised movements in the value of its property portfolio and non-cash items, advanced 19 percent to $100.2 million.

Revenue climbed 17 percent to $181.3 million, with care fees up the same amount to $148.4 million and management fees also gaining 17 percent to $32 million. Ryman lifted its sales of occupation rights 26 percent to 985, worth some $345.6 million. Of that, new units rose 35 percent to 506 and resales of existing rose 18 percent to 479.

"It's an outstanding result and marks another very successful year of growth for the company," chairman David Kerr said. "You can expect to see more land acquisitions in the year ahead as we lift our New Zealand landbank from three to four year's stock."

Ryman said has bought a new site in Auckland's Birkenhead, to add to its existing 25 villages serving more than 7,000 residents. It has also started building its first village in Melbourne.

The retirement village operator had 3,791 retirement village units as at March 31 from 3,274 a year earlier, with care beds rising to 2,400 from 2,174. Its landbank for new development flagged 1,757 new units and 645 new care beds.

Ryman's board declared a final dividend of 5.4 cents per share, taking the annual return to 10 cents compared to 8.4 cents a year earlier. The dividend has a record date of June 7 and will be paid on June 21.

The shares were unchanged at $6.24 yesterday, valuing the company at $3.13 billion by market capitalisation. The stock is rated an average 'outperform' based on six analyst recommendations compiled by Reuters, with a median target price of $4.50.

Ryman boosted operating cashflow 31 percent to $222.2 million, with a 30 percent gain in receipts from residents. That outpaced the 20 percent growth in payments to suppliers and employees, though was behind the 38 percent lift in payments to residents.

That cashflow let Ryman self-fund its building activity, and it built 517 new units and 226 care rooms during the year.

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