Thursday 17th May 2012
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Ryman Healthcare, the rest-home operator whose shares reached a record high today, may seek a listing on the ASX as it looks across the Tasman to extend a decade of profit growth.
"It's something the board has discussed - it is a live issue but we aren't rushing into it," Simon Challies, managing director, told investors at a post-earnings briefing in Wellington.
Ryman is awaiting planning approvals to build its first Australian retirement village in Melbourne, having grown into the biggest operator in the New Zealand market. The company today posted record annual underlying earnings of $84 million, up 17 percent from a year earlier. Sales rose about 20 percent to about $155 million.
Ryman has accelerated its building plan to cater for rising demand for its units from an aging population, opening new facilities in Gisborne, Tauranga and Christchurch and lifting its annual build rate by 24 percent to 710 units and aged care beds. The company said it has a similar target in mind for Australia, initially.
"We have proven that we can get to 700 units in New Zealand and there is no reason why we can't get there in Australia but don't expect it immediately," Challies said. “We will get the first initial stages open and then we will make a commitment to other villages."
The Christchurch-based company’s shares have risen 53 percent in the last two years and are rated as ‘outperform’ based on the consensus of five analysts polled by Reuters. The stock reached an all-time high today of $3.45 and is currently trading at $3.38, up 4 percent.
Gordon MacLeod, chief financial officer said the company has started to attract interest from investors in Australia, with “two or three new funds” appearing on the share register.
The company cites estimates by Statistics New Zealand that the number of kiwis aged 75 or over will more than double to 516,000 over the next 20 years, boding well for the long-term prospects of rest-home operators. Across the Tasman the outlook is similar, with the number aged 75 plus, doubling to 2.8 million.
"The demand and dependency levels they are experiencing in Australia are just as much as we are experiencing here,” MacLeod said. “You can expect to see ongoing growth for our complete portfolio."
Among other developments, the company has received planning approval for its Waikanae village and is currently undertaking planning for its Howick village. It’s also reviewing several other sites across New Zealand, it said.
Shareholders will receive a 17 percent increase in final dividend to 8.4 cents per share to be paid out June 22.
Operating cash flows in the latest year rose 27 percent to $169 million, enabling the company to self-fund the bulk of its building activity. Profit after tax increased about 20 percent to about $120 million.
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