By Jenny Ruth
Sunday 10th April 2011
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Ryman Healthcare has a proven business model, an impressive track record and further growth opportunities, says David Oxley, an analyst at Craigs Investment Partners.
His model, based on management's current development plan, "suggests that, as the existing portfolio matures, even relatively conservative underlying asset price inflation assumptions result in attractive rates of growth in realised profit and operating cashflow," Oxley says.
Ryman designs, develops and operate retirement villages that offer specialised long-term managed care to the elderly, combining flexible "home-style" living in apartments through to rest-home and hospital beds.
"With a relatively modest share of a New Zealand market that, in itself, has low penetration rates by international standards, and where demand is clearly increasing, the group has significant scope to continue upon the measured growth path taken since listing."
Ryman currently claims 8% of the retirement village/rest-home market and Oxley cites studies showing the number of people over 75 years in New Zealand is likely to almost double to around 500,000 over the next 20 years.
When it listed in 1999, the company had just under 1,000 beds in eight facilities, all in the South Island. It now has nearly 4,300 beds across 22 villages across the country and a land bank equivalent to an additional 2,000 beds. Oxley values the stock at $2.71.
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