MEDIA RELEASE, 19 May, 2023
Highlights:
- Audited underlying profit of $301.9 million, up 18.4%, driven by strong resale margins and a growing contribution from the Australian business
- Audited reported (IFRS) profit of $257.8 million, down 62.8% due to lower revaluation gains of investment property and costs associated with the early USPP repayment
- Free cash outflow of $389.0 million, reflecting a period of significant investment
- Completion of $902.4 million equity raise in March 2023
- Net interest-bearing debt of $2.30 billion, down from $3.00 billion at September 2022
- Gearing of 33.1%, down from 45.3% at September 2022 and in line with medium-term target of 30-35%
- 1,519 booked sales of occupation rights remained steady (1,543 in FY22)
- Aged care occupancy improved to over 96% at March 2023 for mature villages
- No final dividend for FY23
Ryman Healthcare Limited (Ryman) has delivered a solid result while also undertaking a number of steps to reposition the business for future growth. This result was achieved against a backdrop of a challenging economic environment, severe weather events and the tail-end impacts from COVID.
Underlying profit of $301.9 million was up 18.4% (vs. guidance of $280-290 million), while reported (IFRS) profit decreased by 62.8% to $257.8 million.
Total assets of $12.51 billion at March 2023 have increased 14.1% from March 2022. Booked sales of occupation right agreements (ORAs) held steady, with growth in resales offsetting softer new sales. Total booked sales of occupation rights increased from $1.08 billion to $1.17 billion, driven by a 10.3% uplift in average price per unit.
Refocused development pipeline
Longer term the company remains positive about the age and wealth demographic and has taken steps to reposition the business to capitalise on this future demand.
Group CEO Richard Umbers said: “As we look to achieve positive free cash flow by FY25, as signaled in our strategy, we have reprioritised our development programme over FY24 and
FY25. We are also taking steps to refocus our future pipeline on lower density villages with lower peak debt and an improved cashflow profile. And we are right-sizing our care offering in future villages, but remain committed to providing a continuum of care for all Ryman residents.”
At 19 May, there are 14 villages under construction, a reduction of two on the prior year. Progress has been made on a number of village main buildings that were delayed due to COVID.
Ryman invested $1.04 billion in portfolio development and finished the year with net operating cashflows of $650.8 million, resulting in a free cash outflow of $389.0 million.
During the year the company added Taupō to its landbank, sold its Mt Martha site in Victoria with settlement due later in 2023, and the Newtown site in Wellington is now being held for sale.
Significantly, Ryman achieved planning approvals on four sites in FY23, including Karori and Rolleston in New Zealand and Mulgrave and Mt Eliza in Victoria.
Enhancing resident experiences
Throughout the year Ryman has maintained the highest standards of care, and resident experience remains a key priority.
“We were very pleased to receive external endorsement for the quality of care we provide. 82% of our New Zealand villages have four-year certification. In Australia, all four of our operational care centres received a 4-star rating following the launch of a new rating system for aged care,” said Mr Umbers.
“Winning Readers Digest Most Trusted Brand nine times proves just how much older people and their families trust us to do right by them,” he added.
Technology is increasingly being employed to enhance our resident experience programme - for example, with the introduction of the new resident app, a platform to improve access to a wider range of activities and services within the villages. Similarly, hospitality platform Saffron is now being rolled out to all villages to enhance the food offering.
New sustainability strategy
The launch of the company’s sustainability strategy during the year was a major milestone in its journey to a sustainable future. In consultation with stakeholders, the company identified a number of key projects that will be undertaken in coming years. As a step towards addressing its environmental impact, Ryman secured an exclusive agreement with renewable energy developer Solar Bay. This will see power provided to its village operations via a new solar farm which is now under development in Maungaturoto, Northland.
Capital structure
“The company completed a $902.4 million equity raise in March 2023. Net debt has reduced to $2.30 billion, and we finished the year with a gearing ratio of 33.1%, in line with the company’s medium-term target of 30-35%,” said Mr Umbers.
Outlook
Underlying profit is expected to be in the range of $310-$330 million for FY24, in line with the statement provided at the time of the equity raise.
Ryman anticipates making an announcement on board renewal, including the appointment of a new Chair, in the near future. The board will consider the resumption of paying dividends in FY24, taking into account trading performance, cash flow and market conditions.
Looking ahead, Mr Umbers added: “The strength of the Ryman team gives me every confidence that we will deliver on our care promise, reposition the business to capitalise on future opportunities and improve financial performance. The team continues to impress with their dedication and commitment, and I wish to thank everyone for their efforts.”
Fourteen new villages currently under construction
New Zealand (9)
Lynfield, Auckland (Murray Halberg)
Brandon Park, Melbourne (Nellie Melba)
Devonport, Auckland (William Sanders)
Burwood East, Melbourne (John Flynn)
Lincoln Rd, Auckland (Miriam Corban)
Ocean Grove, Victoria (Deborah Cheetham)
Havelock North, Hawkes Bay (James Wattie)
Highett, Melbourne (Bert Newton)
Hobsonville, Auckland (Keith Park)
Australia (5)
Ringwood East, Melbourne
Riccarton Park, Christchurch (Kevin Hickman)
Northwood, Christchurch
Takapuna, Auckland
Cambridge, Waikato
Eleven sites in the land bank
New Zealand (6)
Kohimarama, Auckland
Mt Eliza, Victoria
Park Terrace, Christchurch
Essendon, Melbourne
Karori, Wellington
Australia (5)
Coburg North, Melbourne
Karaka, Auckland
Kealba, Melbourne
Rolleston, Canterbury
Mulgrave, Melbourne
Taupō, Waikato
About Ryman: Ryman Healthcare was founded in Christchurch in 1984 and owns and operates 45 retirement villages in New Zealand and Australia. Ryman villages are home to 13,900 residents, and the company employs 7,200 staff.
Contacts: For investor relations information contact Hayden Strickett, Head of Investor Relations, on 027 303 1132 (+64 27 303 1132) or email hayden.strickett@rymanhealthcare.com.
For media information or images contact Silke Marsh, Group Corporate Affairs Manager, on 027 294 3609 (+64 27 294 3609) or email mediacontact@rymanhealthcare.com.
