Construction reward tipped for second half

Villages in demand, AGM told

Demand at Ryman Healthcare’s existing villages was strong in the first quarter but growth in the first half of the year would be limited, chairman David Kerr told the company’s annual general meeting.

Trading was in l i ne with expectations but “development earnings would be heavily weighted towards the back end of the second half in line with the timing of the construction programme at Ryman’s developing villages. Growth in the first half of the year would be limited as a result,” Kerr said.

Planning consents for new villages in Australia’s Burwood East and Coburg had been lodged and work was under way at the Brandon Park site as the Melbourne expansion gathered pace.

Design teams were developing plans for new villages at Mt Eliza on the Mornington Peninsula and Geelong. Work was also about to start on new villages at Devonport and Lynfield in Auckland, Kerr said. The company’s bank facility had been extended by $125 million to $1.125 billion, providing increased working capital.

Ryman has five villages under construction and another 11 in the pipeline. It owns 31 villages that house more than 10,000 residents in Australia and New Zealand. In May it reported a 13 per cent lift in underlying profit to $178m for the year to March 31. Its medium-term target is to grow underlying profit by 15 per cent.

Kerr also said that the Government’s proposed policy changes for skilled migrant workers had created uncertainty for many employees and Ryman had expressed its concern.

It did its best to recruit locally but a skills gap meant it also needed to hire skilled migrants.

In April, Immigration Minister Michael Woodhouse unveiled a “Kiwis first” immigration policy which made it harder for firms to hire overseas, with new restrictions on temporary work visas for anyone earning less than the median wage.

The Government then planned to categorise high and low-skilled temporary work visas depending on how much a person earned, introduce a three-year limit for how long lowskilled workers could stay, and impose a one-year stand-down period.

This week, however, Prime Minister Bill English confirmed that proposed changes to skilled-migrant visa conditions were under review after complaints.