29 Nov 2023

Slowing property market hits Ryman Healthcare

12:45 pm on 29 November 2023
Ryman Healthcare

Underlying profit was just ahead of a year ago as revenue held up, offsetting lower margins and sales. Photo: RNZ / Nate McKinnon

Retirement village operator Ryman Healthcare has posted a lower half-year profit on lower property value gains, while its underlying performance was marginally ahead of last year.

Key numbers for the six months ended September compared with a year ago:

  • Net profit $186.7m vs $194m
  • Revenue $323m vs $274.2m
  • Underlying profit $139.2m vs $138.8m
  • Booked new sales/resales 699 units vs 772 units
  • Unsold units 453 vs 325
  • No interim dividend

Leaving aside one-off items, such as the property values, the underlying profit was just ahead of a year ago as revenue held up, offsetting lower margins and sales.

Chief executive Richard Umbers said the company had felt the effects of the slowing housing market, which had been more positive last year.

"This result has been delivered during a period of challenging market conditions, including a subdued housing market for the majority of the period. While our financial results are steady on the prior year, we continue to make progress on resetting the business and executing the strategy which was communicated at the time of the equity raise."

Ryman bolstered its balance sheet in February with a $902 million heavily discounted share issue as it looked to repay debt and review its development programme and land holdings.

Umbers said the company had reset its development programme and was matching its work to demand.

"Ryman is in a reset phase with our near-term focus on matching our build programme to sales activity and reprioritising this programme to improve cash flow from development activity."

That has resulted in work at three villages being put on hold and two sites readied for sale.

The company widened its full-year underlying profit forecast to between $300m and $330m, from the previous $310m to $330m. However, it did not pay a dividend and said payouts could be on hold for some time.

Chair Dean Hamilton said the company needed the money to complete its restructuring and support capital spending.

"The current intention is to undertake a review of the dividend policy at financial year 2026. Any future dividend policy is expected to be based on cash flow."

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