RYM - Ryman Healthcare

[couta1]

Out of interest, is it a good idea to sell some RYM to buy SUM, i.e. does SUM have better growth prospects in the next 10 years.

Short term(2-3 yrs)Sum will grow faster but once Ryman get their Aussie expansion cranked up, the compounding effect will push their growth back ahead of Sum IMO, so if your looking at say a 3- 10yr timeframe, I'd choose Ryman.

[Carpenterjoe]

Yip, all things considered its a no brainer.

Hold both

[Beagle]

My calculations show if RYM can grow underlying EPS by 15% to 31 March 2017 to be reported in late May 2017 their underlying EPS will be 36.4 cps. SUM's underlying EPS for the year to 31 December 2016 was 25.6 cps.

Ignoring the difference in balance dates if these two stocks were on the same historical PE RYM should be worth 1.422 times SUM's SP which closed at $5.17 on 31 March 2017 = $7.35.

Ignoring the difference in growth rates between these companies, (which is very unwise in my view) RYM presently 14% over-priced relative to SUM.

If we start pricing them on a forward basis, (the market is always forward looking) I'm expecting ~ 25% earnings growth for SUM this year and RYM may make 15% again RYM is even more over-priced relative to SUM.

If we turn to their relative growth rates since SUM listed, SUM averaging 48% compounded per annum for the last 5 years and RYM circa 15-16%.

Conclusion: RYM dramatically overpriced relative to SUM.

Disc: Happy to back my own investment thesis by holding all SUM and no RYM.

I know RYM have a wonderful and more lengthy track record of consistent growth but I think their star continues to wane and its likely that we'll see ~ 1.5- 2 more years of the SP oscillating around the current level as value is finally installed back into their SP through earnings growth. If that transpires that would make half a decade of the RYM SP doing very little and the current unimputed dividend yield does not make for a compelling investment case based on the current SP.

[Baa_Baa]

Cross post from SUM thread.

There is a straight forward principal in the New Zealand Tax System that items which are held with the primary intention of deriving income from, are themselves exempt from taxation on the change in their 'capital' value.

Essentially the binding ruling defines a retirement village operators apartments etc as falling into this category and thus exempt from 'capital gains tax'.The main activities of the retirement village operators, to provide accommodation and care etc are very taxable.

While some operators shamelessly make a profit doing so (i.e. Arvida) others such as Ryman and Summerset just about break even, practically charities .So there you have it: They build properties to provide services to the elderly, they keep said properties, making only unrealised capital gains on, which is not taxable;and if they make a profit on the services themselves then tax is paid.

Or they could register as a charity with the 'Objects of Trust' being somewhat similar to the registered company and pay no income tax.

Attachment 8810
Attachment 8809

[macduffy]

Cross post from SUM thread.



Or they could register as a charity with the 'Objects of Trust' being somewhat similar to the registered company and pay no income tax.

Attachment 8810
Attachment 8809

Hardly likely that a company such as Ryman would have got off the ground as a charity. To ask the shareholders who took the early risks to now forego their interests in favour of charitable status doesn't sound likely, either!

[Baa_Baa]

Hardly likely that a company such as Ryman would have got off the ground as a charity. To ask the shareholders who took the early risks to now forego their interests in favour of charitable status doesn't sound likely, either!

Do you know what role the Ryman Healthcare Charitable Trust (formed January 2005 and still listed today as a registered and tax exempt NZ Charity organisation) has in terms of the settlor Ryman Healthcare Limited?

[dobby41]

Do you know what role the Ryman Healthcare Charitable Trust (formed January 2005 and still listed today as a registered and tax exempt NZ Charity organisation) has in terms of the settlor Ryman Healthcare Limited?

Registered as a charity in 2008.
Their activities is stated as 'donating funds to nominated charities'
They received and made donations of $260k last year.
Interesting that their Trust Deed reads like a description of the company Ryman.

[Under Surveillance]

Registered as a charity in 2008.
Their activities is stated as 'donating funds to nominated charities'
They received and made donations of $260k last year.
Interesting that their Trust Deed reads like a description of the company Ryman.

Could be that these are donations made by residents of Ryman villages to the charity for the year which all the NZ villages support (currently the Heart Foundation?). For some of their happy hours, or similar knees ups, entry involves, say, a $2 a head contribution. $1 goes to the charity and the other $1 goes into a pot awarded to a lucky ticket holder at the particular event.

[Vaygor1]

Hi Vaygor1,

Yes absolutely it would be great to have a good chance to chew the fat with you mate as I missed having a good yack with you at the last meeting. I was down one end or the other of the long table and you were in the middle, never mind it looked like you enjoyed yourself and others enjoyed themselves very much too. Can't see any reason we shouldn't have a Sept get together, give other Auckland ST folks and us a good chance to chew the fact on 30 June results announced in August.

Hi Roger.
Just been doing a catch up on this thread. have been away for some time.
Some interesting posts since my last one on this thread.
September sounds like a plan for a second 2017 Auckland ST meet.
Is Saturday 9th September too early? If not, I could go to the Midnight Oil concert that night
Vaygor1.

[QOH]

Can anyone confirm whether the minimum age for entering a Ryman Retirement village is now 75.