Ryman posts record full-year profit again, on strong demand, faster expansion

See also: Ryman stock falls after Melbourne consent delays

Ryman Healthcare [NZX: RYM] posted another record full-year profit, rounding out 14 straight years of earnings growth as New Zealand's largest retirement village operator ramped up its Australian expansion and increased re-sales of occupation rights.

Underlying profit, which excludes fair value changes from its property portfolio, rose 16% to $157.7 million in the 12 months ended March 31, the Christchurch-based company said in a statement. Operating revenue climbed 15% to $261 million.

Net profit, which included about $152 million of unrealised revaluations of units on the back of new stock and a strong housing market, jumped 26% to $305 million. Ryman's business model, which taps into New Zealand's ageing demographic and demand for quality retirement options, is so successful that it has become an industry benchmark, emulated by rivals including Summerset Group. The company hasn't sought fresh capital from shareholders since its 1999 initial public offering raised $25 million, yet has invested $2.1 billion expanding its villages since then while returning $500 million in dividends.

The company had its busiest building programme on record in 2016, and while it is projecting a quieter 2017, its expansion plans are projected to surge again between 2018 and 2021, mainly driven by activity in Australia. It has five new villages under construction, three awaiting consent and four planned, adding to its existing 30 villages.

Operating cash flow surged 34% to $312 million in a year when growth was driven by record levels of demand and a buoyant housing market, chairman David Kerr said.

"Looking out past 2020, our long-term plan is to match our New Zealand build rate in Australia," Kerr said. "We are excited about the opportunity that both markets offer.''

Ryman will pay a final dividend of 8.5c a share, up from 7.3c a year earlier and lifting payments for the full year by 16%.

Ryman's shares last traded at $9.60 and have gained about 13% this year, outpacing the S&P/NZX 50 Index's 9.2% gain. Over the past five years, the stock has shot up 258% while the benchmark index gained 93%. It is rated a 'hold' based on the consensus of five analysts surveyed by Reuters.

(BusinessDesk)