The Frances Hodgkins Retirement Village, overlooking St
Clair. Photo by Gerard O'Brien.
Rising star Ryman Healthcare's growth strategies are
expected to underpin improved revenue and profits of between
15% and 20% when it reports its half-year performance, later
The listed aged-care provider has 25 villages across New
Zealand with more than 6000 residents. An announcement in
July confirmed Petone would be home to its 28th village.
Earlier this year, it lifted its new-bed build rate forecast
from 550 annually to 700.
About a year ago, Ryman shares were trading about $2.59
before steadily climbing to a year-high of $4.12 in
mid-September, and have since traded at just over $4.
Both Forsyth Barr and Craigs Investment Partners brokerages
maintain a "buy" recommendation on Ryman stock, and forecast
at least 15% revenue gains, for the half to September.
Craigs Investment Partners broker Peter McIntyre said a "key"
indicator for Ryman was it having "reinvested heavily" during
full-year 2012 and lifted its annual build-rate forecast to
"Ryman is leveraged to New Zealand's ageing population, which
provides solid and sustainable market growth.
Ryman's competitive advantage lies in its capability to
develop its own facilities," Mr McIntyre said.
He highlighted strong historical cashflows in recent years,
of $149.4 million (2010), $133 million (2011) and $169.2
(2012) as being sufficient to support ongoing developments.
He forecast about 15% gains to both underlying profit and
total operating revenues, figures respectively of $47.1
million and $85 million.
Forsyth Barr broker Peter Young forecast revenue for the
first half of the 2013 year to rise 18% to $148.5 million,
with earnings before interest tax, depreciation and
amortisation up similarly to $84 million.
"Strong gains are expected for all areas of Ryman's
operations," Mr Young said.
With its expanding village portfolio, Mr Young expected care
fees would "grow strongly" and also expected increasing
levels of premium payments.
"Despite the subdued economic environment, Ryman has
continued to hold up its high occupancy levels and enjoy high
levels of pre-sales for its new villages," he said. Occupancy
and pre-sales were "critical" factors for driving growth in
the sales prices, he said.
Mr McIntyre said Statistics New Zealand had estimated that
during the next 20 years the number of New Zealanders over 75
would more than double, from 250,000 to 516,000, and in
Australia double to 2.8 million - with its first village
project for Melbourne being designed now.
However, Mr Young cautioned that growth rate was at risk for
the first 12 months' operation of new care developments and
extensions, as they were "typically loss making" during the
first year until occupancy rates increased.
Mr Young was forecasting a realised gain of $33 million from
the villages portfolio, from new sales and resales of
existing occupancy advances, plus an estimate of as-yet
unrealised gains of $26 million.
In Dunedin, Ryman operates the recently opened Yvette
Williams Retirement Village in Roslyn and the Frances
Hodgkins Retirement Village, overlooking St Clair.