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Daily ShareChat: Ryman Healthcare

By Jenny Ruth

Friday 26th November 2010

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 Jenny Ruth

Retirement village builder and operator Ryman Healthcare's first-half result was ahead of his expectations in most areas and the company remains well on track to achieve its target 15% growth in underlying earnings, says Jeremy Simpson, an analyst at Forsyth Barr.

Ryman reported a 36% rise in reported net profit to $52.3 million with realised profit (excluding unrealised property valuation gains) up 25% to a record $36.1 million.

"Ryman continues to deliver a high-quality product enjoying increased demand, despite working through a tough period for the property market," Simpson says.

The company has the scale, inhouse expertise and development pipeline to capitalise on the compelling demographics in its favour, he says.

"The key challenge for Ryman is (to) continue to effectively execute its rapid expansion and daily management of a large and complex operation."

Ryman worked on expanding and developing 10 sites during the first-half, purchased a new site and is considering expansion options in Australia with Melbourne its preferred location for its first foray.

"We expect Ryman to take a cautious approach and to be very careful with its initial site selection," Simpson says.

"It has considerable growth options in New Zealand. However, Australia remains an exciting longer-term option."

Recommendation: Buy.


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