Otago Daily Times

Firsthalf hit for Ryman Healthcare


AUCKLAND: Ryman Healthcare spent $50 million on its pandemic response to protect residents and staff, despite no Covid19 among 12,000 residents and 6100 staff.

Since January, that has been the cost to the Australasi­an retirement village developer and owner, which has its headquarte­rs in Christchur­ch and is New Zealand’s biggest business in the listed sector.

Its firsthalf profit fell 14.2% to $88.4 million.

The company’s investor presentati­on carried the line, ‘‘$50 million investment in Covid19 measures since January 2020.’’

Chief executive Gordon MacLeod said the pandemic had increased costs and restricted sales and constructi­on activity in key markets.

However, with lockdowns lifting in Victoria and a buoyant housing market here, the company was expecting conditions to improve in the second half, and it had a record number of new villages in the pipeline to take advantage of the recovery.

‘‘It has been a tough six months due to the ongoing impact of the pandemic, which increased costs substantia­lly and restricted our ability to sell in key markets during the extended lockdowns,’’ Mr MacLeod said.

‘‘While there is likely to be . . . ongoing uncertaint­y due to the pandemic, there is clearly a lot of pentup demand in the housing market and we are in a good position to continue to invest heavily in new homes and jobs.’’

The company anticipate­d secondhalf cash collection­s of at least $275 million from new sales, and had 12 villages in progress.

The profit was for the halfyear from April to September 2020.

Total assets now stood at $8.34 billion, up 14.9%. Ryman had a ‘‘resales bank’’ of $945 million, which it said underpinne­d future growth and resilience.

It did not say this, but many resales happen when properties are vacated because people get sick or die; the business has significan­t potential turnover from that activity.

Ryman makes a 20% to 30% developmen­t margin when it builds new villages.

It said it was now building across 12 sites, up from just four two years ago.

Shares are trading at about $15.50, giving a market capitalisa­tion of $7.7 billion. The price dropped sharply in March when the pandemic struck, falling as low as $6.60. Shares had traded as high at $17 earlier this year — by April, they were back at $10.

However, the share price has risen steadily since.

On August 13, shareholde­rs at Ryman’s online annual meeting heard from chairman David Kerr that the pandemic had actually ‘‘reinforced the attraction of living in our villages where residents enjoy security, companions­hip and a strong sense of community’’.

Only about 43,000 New Zealanders live in retirement villages, according to a study by real estate specialist­s JLL.

In the full year, Ryman’s audited underlying profit was $242 million, up 6.6%, driven by strong demand at new villages.

The reported, or IFRS, profit was down 19% to $265 million due to Covid19rel­ated property valuation changes.

Ryman has hit community opposition to some of its plans lately.

Kohimarama residents want the Auckland Council to reject a $150 million Ryman Healthcare retirement village plan which they say breaches height limits by more than double.

The company’s plans in Melbourne’s Coburg have met opposition, too — from local Peter Robertson, who said its applicatio­n for a new village there had lapsed due to inaction. Ryman in return denies that and says it needs to start by next February and it would seek an extension. — The New Zealand Herald

Newspapers in English

Newspapers from New Zealand