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Property helps Ryman

By Chris Hutching

Friday 30th May 2003

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The strong property market has helped Ryman Corporation post record sales of its occupancy units in its retirement homes and geriatric hospitals, boosting after-tax profit 38% to $15.3 million.

Revenue at $94.3 million for the year ending March 2003 was nearly double that of last year, buoyed by 175 new sales and 169 re-sales.

The share price rose strongly after the announcement.

Chief financial officer Simon Challies repeated an oft-stated assumption ­ that fees would outstrip development earnings for now on.

But the performance of Ryman in recent years shows its turnover from the two income streams varies according to the projects on hand.

Ryman has several development sites on its books and managing director Kevin Hickman is constantly evaluating new opportunities.

Its most ambitious project will begin later this year when construction begins on a three- to-five-year $79 million development of its Abbots Way site in Remuera, Auckland.

Other successful recent developments include Hilda Ross Village, Hamilton, and Grace Joel village in St Heliers, Auckland.

Management fees rose 41% to $3.6 million.

Mr Hickman said the 1998 moratorium placed on new hospital-bed contracts outside of Auckland appeared to be breaking down as district hospital boards recognised the pent up demand.

When asked about the saturation level of retirement villages, Mr Hickman said Ryman and Metlifecare were the two biggest companies in the sector but they made up only about for about 2% of such health care facilities.

Ryman's new facilities have proved popular with rest-home residents keen to move from sub-standard older homes.

The total dividend for the year was 7.5c a share (no imputation credits are attached).

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