Ryman hit by rising expenses

RISING expenses and less spectacular property revaluations hit profit from New Zealand’s biggest listed retirement village company, down 63% annually, although underlying profit rose 18.4%.

Ryman Healthcare made $275.8 million for the full year to March 31, 2023, down on the previous $692.9 million for the March 31, 2022 year.

Revenue rose 12% from $508.8 million to $571 million but operating expenses were also up from $466.2 million to $533.3 million, eating into the bottomline figure.

Unrealised revaluations fell 84% from $467.1 million last year to $73.7 million in the latest year.

Operating expenses rose 14.4% reflecting new villages and oneoff costs related to inventory and holiday pay provisions, the company said of that figure.

For the year ahead to March 31, 2024, the company has forecast underlying profit to be in the $310 million$330 million range, in line with the statement provided at the time of its $902.4 million equity raise in March.

Total assets of $12.51 billion are up 14.1% annually.

Booked sales of occupation right agreements held steady, ‘‘with growth in resales offsetting softer new sales’’.

In February,

reported how Ryman surrendered to its $3 billion net debt position and asked shareholders to help repay almost one third of it. Capital raises at the scale of Ryman’s $902 million offer are uncommon.

Last May, Ryman’s profit shot up 64% after big revaluation gains and the business announced $205 million plans for Rolleston and a new $350 million Melbourne village.

But the bottomline figure included unrealised investment property revaluations which more than doubled from $201.2 million last year to $467.1 million in the latest year.

The sector is under pressure, with the Commerce Commission saying this month it started an investigation into the multibillion dollar retirement village industry at the same time as the ministry has the sector under the spotlight for its practices. — The