Ryman Healthcare Ltd said on Friday strong gains from the resale of occupancy rights drove its rising profits, as the company invested $525 million to meet demand.
Its underlying profit rose 13% to $178 million in the year to March, while valuation gains lifted audited reported profit after tax by 17% to $357 million. Total assets grew 24% to $4.9 billion.
The 9.3c/share final dividend lifts the total for the year by 13% to 17.8c/share, in line with the increase in underlying profit.
Ryman received consent during the year for 3 new villages with a combined value over $1 billion – Brandon Park in Melbourne, and Devonport & Tropicana in Auckland.
Ryman’s established villages ended the year with care centre occupancy at 97%, and only 32 of the 6000 units in its portfolio of townhouses, apartments & serviced apartments were available.
The company has increased its land bank by over 30% and now has 13 new villages in the pipeline in Australia & New Zealand.
Chair Dr David Kerr said the annual result was satisfactory given that 4 new villages were in the establishment phase during the year, and there was no development contribution from Melbourne.
“We are confident demand for our villages will continue to grow,” he said. “Our villages meet a real & growing need in the community, and remain affordable for residents to move in and free up capital.
“Our target is to open 5 villages in Melbourne by 2020. In the medium-term our goal is to be opening 4 new villages/year – 2 in New Zealand & 2 in Melbourne.”
Ryman has delivered 15 consecutive years of underlying profit & dividend growth. Dr Kerr said Ryman’s medium-term target remained to grow underlying profits & dividends by 15%/year, which means the company doubles profits & dividends every 5 years.
Annual result figures:
- Underlying profit up 13% to $178.3 million ($157.7 million last year)
- Total operating revenue up 10.8% to $289.2 million ($261.1 million)
- Fair value movement of investment properties up 18.3% to $325 million ($274.6 million)
- Total income up 14.6% to $614.2 million ($535.7 million)
- Pretax net profit up 17.3% to $363 million ($309.3 million)
- Net profit attributable to shareholders up 16.8% to $356.7 million ($305.4 million)
- Earnings/share (basic & diluted) up 16.8% to 71.3c (61.1c)
- Total portfolio 9249 units (8468)
- New builds 781 units (869)
- New sales, gross development margin (24% (28%)
- Resales, gross margin 25% (22%)
Illness forces Challies to stand down
Managing director Simon Challies announced that he would stand down on 30 June for health reasons, but will continue as an advisor to the board until December 2018. He was diagnosed with Parkinson’s disease in 2011.
Deputy chief executive & chief financial officer Gordon MacLeod will take over as chief executive, and David Bennett, who joined Ryman 4 years ago as financial controller, will move up to chief financial officer.
Mr Challies joined the company as chief financial officer in 1999 and took over as chief executive in 2006 from Ryman cofounder Kevin Hickman. During his tenure, the portfolio of villages has grown from 12 to 31.
Mr MacLeod joined Ryman as chief financial officer 10 years ago and was promoted to deputy chief executive in 2014.
Mr Challies said of his illness on Friday: “I first noticed the symptoms about a decade ago, but it was still a huge shock to get my diagnosis in 2011. I’ve been determined not to let it beat me. This is a demanding job, and I’ve realised this year that my health was deteriorating and it was taking too great a toll on me personally, and on my family.
“I’m a great optimist and I think having Parkinson’s has made me a better MD of a healthcare company than I otherwise might have been. It has certainly me a degree of empathy & insight into the challenges our residents face, and it has taught me to make every day count. I’m sad to be leaving Ryman, but I’m looking forward to spending more time with my family and being able to contribute to the community in other ways.”
Attribution: Company release, accounts.