Ryman lifts profit 40%

Ryman Healthcare has delivered a more than 40% gain in after-tax profit, to $195 million, as strong demand continues for its expanding retirement village holdings.

For its full-year to March, Ryman's total operating revenue was up 12%, from $181.27 million to $203.22 million, cashflows increased 7% to a record $238 million and after-tax profit was up 42.5%, from $136.73 million to $194.80 million.

Ryman chairman Dr David Kerr said the $194.8 million after-tax profit benefited from property valuation gains during the year, with fair values up 46.3% from $118.9 million to $174 million.

''It's another standout result for us, thanks to some strong earnings growth from our new villages,'' Dr Kerr said.

Development activity includes 11 North Island sites, two in the South Island and an inaugural Australian village in Melbourne, receiving its first residents.

Ryman shares hit a high of $9.10 last week, and after yesterday's announcement were down slightly, at $8.78, on low volumes. The final dividend of 6.2c per share takes the total for the year to 18c. Craigs Investment Partners broker Peter McIntyre said the result was in line with Craig's and the market's expectations.

''Ryman has delivered yet another year of strong growth.''

He said the $194.8 million after-tax profit reflected a strong increase in unrealised revaluation gains, on the back of broad-based strength in the New Zealand housing market, which flowed through to unit prices at Ryman's existing villages, and the three-yearly revaluation of its aged-care assets.

''Ryman has flagged that the year ahead will be busy with consent activity with six sites acquired over the past year,'' Mr McIntyre said.

For the 2015 financial year, Mr McIntyre highlighted the company had noted that the new Bruce McLaren village in Auckland was experiencing strong pre-sales and could account for half of total new sales in the year ahead.

Forsyth Barr broker Haley Van Leeuwen said the result was ''close to expectations'', noting a lower build and sales rate was offset by development margins and sales prices.

''Total fair value [of properties] change was up a very strong 46% reflecting increased sales prices and the expanded portfolio,'' she said.

New sales numbers and the build rate, of 607 units and beds, was below expectations but offset by very strong pricing, she said.

''Given the timing of new village development, we expect a higher number of new unit delivery in full-year 2015,'' Ms Van Leeuwen said.

The key focus during 2015 is selling units in Melbourne, opening the large Howick village, getting the first residents into Petone and selling units in the redeveloped Beckenham Courts village in Christchurch, she said.

Dr Kerr said Ryman had lifted its underlying profit for 12 consecutive years and had again exceeded its medium-term target of growing underlying profits, by 15% a year.

''We're also pleased to have bought another site in the eastern suburbs of Melbourne.

- simon.hartley@odt.co.nz

Ryman Healthcare
- Christchurch-founded 1984, listed 1999.
- Owner-operator 27 retirement villages NZ and Aust.
- Has 7500 residents, employs 3500.
- Acquired six new NZ sites, extending landbanking to almost 4000 beds and units.
- Build target upgraded to 850 beds and units per year in NZ by 2017.
Source: Ryman Healthcare


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