RYM - Ryman Healthcare

[macduffy]

Do you fancy Hobsonville?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11682330

[Vaygor1]

Do you fancy Hobsonville?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11682330

I went to Ryman's AGM on the 27th July and had an excellent time catching up with Forest.

Some recent law/rule changes in Melbourne (I recall in relation to proposed plot ratio limitations restricting buildings to 18 stories within certain areas) means a relatively large number of opportunities for retirement village sites are now presenting themselves to Ryman, who don't rely on anywhere near 18 stories/site for their business model to work.

I suspect if the proposed (albeit implemented) plot ratio restrictions reduce construction workload within the area, construction-cost pressure may also ease a bit for Ryman.

http://www.heraldsun.com.au/news/victoria/property-industry-outraged-at-melbourne-construction-controls/news-story/7920bf6716ae4a5c8973f30aeb40f988

Separate to this, Simon, during his part of the presentation explained even if the plan is to have 5 villages open in Melbourne by 2020, the plan also includes having 2 additional Melbourne villages in the development phase by then.

[forest]

Was good to catch up Vaygor1 and I thought a good meeting to attend.

It amuses and surprises me that some companies on this forum are getting a disproportional quantity of post, but a company like RYM were serious wealth has been created and likely more to follow an AGM can past without discussion.

[Zaphod]

Was good to catch up Vaygor1 and I thought a good meeting to attend.

It amuses and surprises me that some companies on this forum are getting a disproportional quantity of post, but a company like RYM were serious wealth has been created and likely more to follow an AGM can past without discussion.

IMO it's because Ryman is seen by many to be a 'bottom draw' type investment. From personal experience, RYM is one of the investments that I spend the least amount of time on following each week.

[percy]

Was good to catch up Vaygor1 and I thought a good meeting to attend.

It amuses and surprises me that some companies on this forum are getting a disproportional quantity of post, but a company like RYM were serious wealth has been created and likely more to follow an AGM can past without discussion.

I think the site being Sharetrader attracts the type of person who mainly trades with a short time frame,and exceedingly high expectations,while a share such as Ryman suits a share investor who is more attune to long term trends,and the quality of the business they are investing in.

[troyvdh]

dear percy...Have i not highlighted this issue ...I detest folk who treat the SM as a casino...anyways I have just returned from a few weeks in norway iceland and greenland...anyways Norway...we may well compete as the least corrupt nations...but man...have they got it sorted,,,cheers

[Biscuit]

but man...have they got it sorted,,,cheers

You've got to be joking! There are no casinos at all in Norway, gambling practically illegal and heavy control on alcohol! Or were you referring to the sharemarket?

[LAC]

Would this cause any significant costs for Rym?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11700148

[couta1]

Would this cause any significant costs for Rym?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11700148 No, long term it will save them money by producing their own panels at the new plant.

[Bjauck]

I think the site being Sharetrader attracts the type of person who mainly trades with a short time frame,and exceedingly high expectations,while a share such as Ryman suits a share investor who is more attune to long term trends,and the quality of the business they are investing in. However Sharetrader.co.nz is also sub-titled "NZ's Number One share market forum for investors". ​

[winner69]

However Sharetrader.co.nz is also sub-titled "NZ's Number One share market forum for investors". ​

We are all traders - some short term and some medium term and some long term

Very few (if any) true investors on here

[couta1]

We are all traders - some short term and some medium term and some long term

Very few (if any) true investors on here On this particular stock, I can think of one (Vaygor 1) but otherwise the true investors are probably the Guests forever watching the posting action on the various threads.

[minimoke]

This is one stock i just let sit there with no cause for concern. My portfolio is very heavily overweighted with RYM but i cant be bothered reducing it as it continues over the long term to perform very well. Consequently its on a very wide stoploss as i remain confident any fall will come back up in not too bad a time. Ill probably keep holding till im ready to move into one of their homes in which case ill get a massive discount on purchase. Simply put - its a grief free holding. (Unlike skt which keeps threatening my stoploss but doesnt quite get there!)

[Soolaimon]

I "invested" in RYM 8 years ago and have held since and will continue to do so. Very happy.

[Vaygor1]

This post was sparked in-part by coming across the rubbish MorningStar are commenting on about RYM, their advise to Hold, and their current fair-value price.... "Ryman's Outstanding Growth Will be Hit If House Prices Fall; We Raise our Fair Value to NZD 9.10 [HOLD]"

After holding and accumulating RYM for 9 years, I have tried, tested, and witnessed an enormous variety of methods and means to evaluate this share from both my own analyses and those from a wide range of holders and non-holders alike. No one method being completely right or completely wrong.

The historical growth of this company along with its future growth has been, and will continue to be the easiest to accurately predict out of any NZ publicly listed share due to its consistent growth, fundamental business model, and board integrity.

So, for reasons I may chose to divulge (if pressed), the price of a RYM share under rational average market conditions reached $10.00 today. If 15%/annum capital growth + a low annual dividend (growing at a not-low 15%/annum) is acceptable then that is the minimum this share will achieve over the long term if purchased today at $10.00.

Last week this figure was $9.97. This time next week it will be $10.03

My current view is RYM's H1 result (due out in 3 months) will be on the low side just like it was last year predominantly due to the timing of their village openings. If historical irrational market behaviour is anything to go by, one may well get an opportunity to buy at under $9.00 (as low as $8.50 even) before April 2017... or one may not.

[macduffy]

My current view is RYM's H1 result (due out in 3 months) will be on the low side just like it was last year predominantly due to the timing of their village openings. If historical irrational market behaviour is anything to go by, one may well get an opportunity to buy at under $9.00 (as low as $8.50 even) before April 2017... or one may not.

I doubt whether the timing of the village openings, per se, is the important factor here. As an example, the Bob Scott village opened in December last year but appears to only now be getting into "full gear" as building continues apace. Plenty of future growth there.

[winner69]

This post was sparked in-part by coming across the rubbish MorningStar are commenting on about RYM, their advise to Hold, and their current fair-value price.... "Ryman's Outstanding Growth Will be Hit If House Prices Fall; We Raise our Fair Value to NZD 9.10 [HOLD]"

After holding and accumulating RYM for 9 years, I have tried, tested, and witnessed an enormous variety of methods and means to evaluate this share from both my own analyses and those from a wide range of holders and non-holders alike. No one method being completely right or completely wrong.

The historical growth of this company along with its future growth has been, and will continue to be the easiest to accurately predict out of any NZ publicly listed share due to its consistent growth, fundamental business model, and board integrity.

So, for reasons I may chose to divulge (if pressed), the price of a RYM share under rational average market conditions reached $10.00 today. If 15%/annum capital growth + a low annual dividend (growing at a not-low 15%/annum) is acceptable then that is the minimum this share will achieve over the long term if purchased today at $10.00.

Last week this figure was $9.97. This time next week it will be $10.03

My current view is RYM's H1 result (due out in 3 months) will be on the low side just like it was last year predominantly due to the timing of their village openings. If historical irrational market behaviour is anything to go by, one may well get an opportunity to buy at under $9.00 (as low as $8.50 even) before April 2017... or one may not.

Good one mate

Suppose using the same rationale / methodology on Summerset i would suggest one would get a value well in excess of $6 (today and increasing by the week)

[minimoke]

This post was sparked in-part by coming across the rubbish MorningStar are commenting on about RYM, their advise to Hold, and their current fair-value price.... "Ryman's Outstanding Growth Will be Hit If House Prices Fall; We Raise our Fair Value to NZD 9.10 [HOLD]"

So, for reasons I may chose to divulge (if pressed), the price of a RYM share under rational average market conditions reached $10.00 today. If 15%/annum capital growth + a low annual dividend (growing at a not-low 15%/annum) is acceptable then that is the minimum this share will achieve over the long term if purchased today at $10.00.

Last week this figure was $9.97. This time next week it will be $10.03

You've lost me. Rational market today has RYM at $9.64. Last friday $9.45

[Vaygor1]

You've lost me. Rational market today has RYM at $9.64. Last friday $9.45

Hence my use of the term Rational Average Market. The market is seldom rational at any time.

[Vaygor1]

I doubt whether the timing of the village openings, per se, is the important factor here. As an example, the Bob Scott village opened in December last year but appears to only now be getting into "full gear" as building continues apace. Plenty of future growth there.

The villages are opened in multiple stages, but the initial opening of a village causes the biggest leap in Underlying Profit, before which the asset is not recognised above the book value they purchased the land for.

Last financial year, RYM H1 presentation:
- increase in underlying profit of 6%
- increase in unrealised valuation gains lifted the IFRS after-tax profit by 23%
- built 166 units and no care-beds
- forecast H2 build of 450 units and 330 beds by the opening of 4 villages (Petone, Birkenhead, Pukekohe, and Rangiora)
- Gordon MacLeod quote “A strong 2nd half will be driven by Initial stages of 4 new retirement villages coming on-stream, and stronger resale pricing”.

Last financial year H2 result saw a lift of 26% in underlying profit. This brought the full year result up to 16%.

Stronger resale pricing may possibly be a factor this year coming up but I don't see any major difference between the forthcoming H1 and H2. Nothing will be coming online this H1 regarding Auckland's Greenlane, Devonport, and Tropicana sites, nor Melbourne's Brandon Park. All these 4 are underway to varying degrees.

RYM have indicated that the build-completion timing for this financial year will be much the same as last year.

[Vaygor1]

Good one mate

Suppose using the same rationale / methodology on Summerset i would suggest one would get a value well in excess of $6 (today and increasing by the week)

I agree Winner. SUM another great share although not quite as predictable (comparatively speaking) due to their past history of results being a little more volatile. Definitely worthy of serious analysis now Nora has been gone from the Board for some time.

[Beagle]

I agree Winner. SUM another great share although not quite as predictable (comparatively speaking) due to their past history of results being a little more volatile. Definitely worthy of serious analysis now Nora has been gone from the Board for some time.

SP up 38% in the several months since "she" decided to step down, coincidence or was I not the only one waiting for this to happen. (Naughty dog..must stop digging up old bones to chew on) :D

[Vaygor1]

I agree Winner. SUM another great share although not quite as predictable (comparatively speaking) due to their past history of results being a little more volatile. Definitely worthy of serious analysis now Nora has been gone from the Board for some time.SP up 38% in the several months since "she" decided to step down, coincidence or was I not the only one waiting for this to happen. (Naughty dog..must stop digging up old bones to chew on) :D

If my approach is anything to go by then no coincidence at all... a direct correlation in fact. I just couldn't be bothered analysing data I didn't trust. :blink:

Having said that, RYM up 38% over the last 11 months, and that's with their share price down a bit from $9.80 a couple of week ago.

[silu]

Ryman's plans for 600-resident Auckland retirement village

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11705220

[Beagle]

Ryman's plans for 600-resident Auckland retirement village

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11705220

I can imagine the neighbours around that site will be "thrilled" to know they'll be looking at eight story apartment blocks.

The other interesting thing about this site being so steep is how are elderly residents going to get around the site to visit the central common area's and enjoy a vibrant social life ? Will those who struggle with even moderate inclines like my elderly mother be somewhat constrained within their "apartment".

My poor old mum can't even make the modest incline back from the common area's at her retirement village now. Luckily she can still drive so she isn't trapped in her nice self contained 113 sq. metre condominium at the Peninsula Club on the Whangaparaoa. I think she would be horrified to live in a multi level apartment of say 40-50 sq metres. I could never have suggested that to her whereas a nice large stand alone ground level condominium north facing with its own sunroom opening up onto nice garden's...now that's care free retirement village living at its best :)

[Bjauck]

I can imagine the neighbours around that site will be "thrilled" to know they'll be looking at eight story apartment blocks.

The other interesting thing about this site being so steep is how are elderly residents going to get around the site to visit the central common area's and enjoy a vibrant social life ? Will those who struggle with even moderate inclines like my elderly mother be somewhat constrained within their "apartment".

My poor old mum can't even make the modest incline back from the common area's at her retirement village now. Luckily she can still drive so she isn't trapped in her nice self contained 113 sq. metre condominium and the Peninsula Club on the Whangaparaoa. I think she would be horrified to live in a multi level apartment of say 40-50 sq metres. I could never have suggested that to her whereas a nice large stand alone ground level condominium north facing with its own sunroom opening up onto nice garden's...now that's care free retirement village living at its best :) Existing Auckland home owners do not have a reputation for accepting intensification willingly! However if the government wants a larger NZ population, people have to be housed in the places they want to live somewhere...

Maybe the retirement villages should have a fleet of golf carts/mobility scooters available for the residents to hire for use in the village.

[dobby41]

Maybe the retirement villages should have a fleet of golf carts/mobility scooters available for the residents to hire for use in the village.

I'm sure Ryman have thought of the potential mobility issues.

[Beagle]

They say we shuld have the first self driving cars within a few years...maybe they're working on self driving mobility scooters too....give one away free to all new residents at Tropicana :)

[OldGuy]

Met (and represented) the founder of Ryman at a hearing yesterday. Very nice and humble guy despite being worth squillions! Great attitude. Will reinvest when the timing is right :)

[stoploss]

Another one for Melb , this sounds very nice .
http://www.stocknessmonster.com/news-item?S=RYM&E=NZSE&N=288706

[percy]

Another one for Melb , this sounds very nice .
http://www.stocknessmonster.com/news-item?S=RYM&E=NZSE&N=288706

Googled Moondah Estate.
Absolutely stunning.!!

[stoploss]

Googled Moondah Estate.
Absolutely stunning.!!
Maybe we get them to build a RYMAN shareholders and share trader wing .....
A tad cold in Welly today the wood burner is working overtime !

[percy]

Maybe we get them to build a RYMAN shareholders and share trader wing .....
A tad cold in Welly today the wood burner is working overtime !

One of the sheds on the beach would do me.
Cold in Wellington.Freezing in ChCh and I am just about to head out for a presentation PGW are putting on at Macquaries.!!lol.

[stoploss]

One of the sheds on the beach would do me.
Cold in Wellington.Freezing in ChCh and I am just about to head out for a presentation PGW are putting on at Macquaries.!!lol.
Better be some hot sausage rolls and maybe a glass of Pinot to warm you up ... Enjoy.

[winner69]

Googled Moondah Estate.
Absolutely stunning.!!

Betcha that has peeved some Aussie property people - letting such a property slip into the hands of a foreigner

[stoploss]

Betcha that has peeved some Aussie property people - letting such a property slip into the hands of a foreigner

Under CER there is nothing they can really do about it .
just like PEP acquiring some great land in Auckland still goes through OIO but not much they can do about it .

https://en.wikipedia.org/wiki/Academic_Colleges_Group

[winner69]

Under CER there is nothing they can really do about it .
just like PEP acquiring some great land in Auckland still goes through OIO but not much they can do about it .

https://en.wikipedia.org/wiki/Academic_Colleges_Group

Yeah I know they can't do anything about it - they should have just offered more eh.

No doubt a few developers will look at the finished product in a few years and think jeez let that site slip through my hands

[percy]

Betcha that has peeved some Aussie property people - letting such a property slip into the hands of a foreigner

Not so.
It will remain in "Australasian" ownership.......lol.

[Gerard]

Hi

For those of you who may be interested, Rymans Tropicana village plans are on the Auckland City Council website as it has been "notified" under the Resource Concent process. Also Brandon Park plans are on the Monash City Council website where public comment is being sought. Someone who knows how may post links to this info. Both of these projects rival Edmund Hillary in size. Certainly there will many investors pleased to see a step forward on Brandon Park which has been a slow, and was a feature of questions at the Ryman AGM

[Snow Leopard]

...Both of these projects rival Edmund Hillary in size...

He was a tall man.

Best Wishes
Paper Tiger

[waikare]

He was a tall man.

Best Wishes
Paper Tiger


And he also got high

[Vaygor1]

Hi

For those of you who may be interested, Rymans Tropicana village plans are on the Auckland City Council website as it has been "notified" under the Resource Concent process. Also Brandon Park plans are on the Monash City Council website where public comment is being sought. Someone who knows how may post links to this info. Both of these projects rival Edmund Hillary in size. Certainly there will many investors pleased to see a step forward on Brandon Park which has been a slow, and was a feature of questions at the Ryman AGM

Hi Gerard and thanks for your post.

I have been tracking the Brandon Park issue closely and until now have withheld commenting on the situation surrounding this development.

I have come to the conclusion that there is a major stoush between the Monash City Council (the Local Authority for the Brandon Park site), and Victorian Parliament who introduced (imposed onto Monash City Council) a Development Plan Overlay (DPO) into 5 vacant school sites within Monash's jurisdiction. 1 of the 5 sites is Brandon Park.

Ryman are caught in the middle.

The DPO is a broad high level plan that sets out the general parameters of how a site will be developed. The theory is once the DPO is approved by Monash, Ryman can then submit detailed planning permit applications and providing these applications are 'generally in accordance' with the DPO, the Monash City Council is legally required to approve these applications without further community consultation or comment. Further, under the DPO process, residents do not have the right to appeal against the proposed development.

The reality is that the Monash City Council has some serious and fundamental principles at stake here regarding all 5 school sites and looking ahead will see this DPO process as the thin end of a very wide wedge.

So despite the relationship between Monash City Council and Ryman (which is probably very good), Monash has much bigger fish to fry. From what I can gather looking at Ryman's Brandon Park submissions, drawings, engineering reports, construction methodologies etc surrounding the development, Ryman has been required to provide very detailed plans (almost extreme detail in fact) prior to Monash even entering into the public consultation phase, which may prove to be a lengthy process in itself.

Public submissions regarding Brandon Park have only recently been called for. Community Information Sessions were held yesterday and the day before. Feedback is sought by the 26 September 2016.

On the upside, a huge amount of facts and evidence to appease those opposing the development has been assembled, and once approval is obtained, a very significant amount of work that would normally be the next step regarding Authority Submissions is already 99% complete.

You can see the impact on Ryman's build programme for 2017 here:

8299

Here is the primary two links to back up all the above. Happy digesting.

http://www.monash.vic.gov.au/About-Us/Council/Have-Your-Say/Proposed-Development-Plan-Former-Brandon-Park-Secondary-College-site

http://www.monash.vic.gov.au/About-Us/Council/Have-Your-Say/School-Sites (within this 2nd link, click on the tabs labelled Community Feedback and Council Advocacy for more interesting reading).

[Valuegrowth]

52 week high 7.05- 9.86


Valuation has stretched. It is trading above the implied price now.


However still it can maintain its uptrend provided we see strong market.

[couta1]

52 week high 7.05- 9.86


Valuation has stretched. It is trading above the implied price now.


However still it can maintain its uptrend provided we see strong market. Thumped down to the MA200 today, how much lower will it go? anything under $9 should be considered good buying I reckon.

[Lewylewylewy]

If there's a crash in nz house prices, how much would it effect the profit and viability of RYM for the duration of the crash?

[OldGuy]

If there's a crash in nz house prices, how much would it effect the profit and viability of RYM for the duration of the crash?

it would affect the capital gains on resale, and also the development margin on new units, but wouldn't affect the third key plank of revenues - DMF. Overall, the impact would be significant. However, having said that, RYM has made a higher profit every year (even through the worst financial times in 80 years)

[Hoop]

If there's a crash in nz house prices, how much would it effect the profit and viability of RYM for the duration of the crash?

Stock price volatility and Portfolio risk management is an interesting study but one which most investors don't think about until after a bad event occurs...

Most people assume RYM as being a continuous up trender (a portfolio buy and hold must have) a buy and forget share ....and therefore as the ST thread implies, a boring share...

So I was rather surprised when I dug deeper to find RYM shareprice has underperformed the NZX50 these last 2.5 years it nearly went Bear with a 20% fall after reaching a high pointback in May 2014...

Maybe part of the reason for the lackluster ~10% price gain in these last 2.5 years can be put down to the X8 (8 bagger) rise from the crash low of~114c to ~890c in 5 years (2009 -2014)....This is where Portfolio risk management comes into play..The assessment of risk after a huge price growth..

A part of Portfolio risk management is the analysis of share price volatility...We assume volatility as large sharp up/down movements...RYM has the large up/down movements but with slow oscillations...so not being spectacular it is less noticeable..Therefore it would come as a surprise to most people that RYM was one of the companies that got whacked the hardest during the 2008 GFC...The GFC Great Recession effect was less felt in NZ.. Most NZ people suffered worse effects from 1991 and the 2001 recessions...however 2008 GFC had the spector of a bank crisis contagion hanging over an global overvalued property market..NZ and Australia escaped the Global property crash due to Good management from the Aussi banks..however the property stocks prices were severely downgraded due to risk discount..

During 2008 GFC RYM price dropped ~-57% from ~266c to ~114c in comparison to the NZX50 dropping by ~-44%
I've highlighted the two red figures as many investors who haven't experienced a Bear market would casually glance over -57 and -44 and think there isn't much difference...but there is!!
Lets put the 2 figures in a better perspective...
To reach breakeven from a -44% NZX50 index fall it needed a +78% rise..the fall took 16 months to happen and the breakeven took another 49 months (this included shareprice + dividends)..

RYM became a growth darling after the 2003 recession (when it dropped ~-25%) it's share price topped in June 2007 (~10 bagger) then the 20 month decline (dropped ~-57%) and to reach breakeven needed a +133% rise took 26 months (compared 49 months for NZX50 index which had a smaller breakeven to reach).

So RYM is not boring and its share price seems to be more extreme (but not "sharply" volatile) than the overall NZX50 index..

Therefore Lewy....based on limited history it seems RYM would be more effected from financial events....Property / financial events (chicken or the egg scenario)

[Beagle]

Great company .... delivers year after year .... and no doubt another 20% increase in underlying profit this year to $120m plus

That a multiple of 36 at todays price

History says buying today at that multiple will result in a negative returns over the next 3 and 5 years (even though earnings will go up 20% pa)

Only make serious money (as a medium/long term investment) when you buy in with that multiple at 20 or less.

Already holding .... ride it as long as you can but it be inevitable that the market will take away some of the past few years gains if you hold ..... or just put in the bottom draw and don't look at the RYM shareprice until 2020 when it will be $15 - that way you would have missed the pain of seeing it fall to $5 before it riseing again will not be painful an


Whether its markets as a whole or just individual stocks buying at elevated multiples invariably leads to disappointing returns. Conversely buying at low multiples invariably leads to the good returns. Sort of buy cheap (low) sell expensive (high) approach.

In simple terms - high PE leads to low future returns / low PE leads to superior future returns.

Plenty of academia to show this works in so far as markets go but it seems to work out this way for even the best companies, even ones who have demonstrated decades of continuous growth

RYM has had enough history to do a meaningful analysis

Chart shows the 3 and 5 year annual returns for RYM from different starting PEs

Based on underlying earnings. Currently a PE of over 40 on this basis

History would indicate negative returns over the next 3 and 5 year periods - even though RYM will no doubt continue to grow earnings

That's why I watch the linear regression line on the RYM chart ......the squiggly line will one day head down

Each dot represents a PE and the subsequent 3 (or 5) year annual returns. shareprice only / no dividends

Vertical axis is % return pa and horizontal axis starting PE


I must confess I was extremly surprised by the match price of $8.20 at 4.57 p.m. just before close and thought about getting back in and buying some...but decided against it. My perception of relative value is not swayed by a 50 cent price change but my thought was this could be a good trading opportunity for resale in a few days time. Perhaps a missed opportunity on my part but I am loathe to pay what I consider too be over the odds in terms of value for any stock regardless of the time horizon one intends to hold for.

I cannot see value in a stcok that's risen in price by ~ 300% in the last few years when its EPS is growing at only ~20% per annum. Rarely do we see a finer example of substaintial PE expansion than RYM has provided us with over recent years, arguably supported by 50 year historical low interest rates, which of course won't be the situation going forward, (P.E. contraction just around the corner ?). Talk about "THE" market darling. My thoughts on the relative value of RYM v SUM are well articulated in the SUM thread.
All that said I feel a bit sorry for RYM shareholders today. Who needs this sort of wild volatility !!

There was some very good debate in March / April / May 2014 in which Winner69 and I outlined our thoughts on the dim prospects for RYM share price in the medium term future. At the time the SP was oscillating between $8-$9 and we made the case that the dramatic expansion in PE was overdone and several years of earnings growth was required to normalise this.

As Hoop as pointed out above, RYM was far from immune to the ravages of the GFC. I had thought earlier this year we might to see some sort of break out but in the current climate I no longer see that possibility. In may 2014 the SP was $9 so the SP has shown no growth since then but the NZX50 is up by circa 40%.
Winner69 is probably right, we might see the SP continue to disappoint for another year or two yet. It will be a good long term buy at some stage...I think we're not quite there yet and from a technical perspective RYM also looks very weak at present. The other relevant thing as far as I'm concerned is the woeful umimputed dividend yield. Shareholders are not being paid to be patient so unless there's genuine prospects for SP appreciation and the stock is cheap relative to its growth rate, (A PEG of under 1), I don't see any valid reason to hold.

[couta1]

Long term I still rate Ryman the number one retirement stock to own due to their proven track record,excellent management and the compounding factor from the Aussie expansion but at this point I am not holding.

[trader_jackson]

Long term I still rate Ryman the number one retirement stock to own due to their proven track record,excellent management and the compounding factor from the Aussie expansion but at this point I am not holding.

I agree that RYM have arguably the best track record, excellent management and Australian exposure (which I believe is potentially a big positive).

However, on an underlying basis, it is still trading a fair bit more expensive than the rest of the sector (proportionately more expensive that I am comfortable with). The bigger the expansion (and the more countries they're in) the more chance there is to stuff it up (although RYM's ttrack record would lead me to believe they can successfully expand in both NZ and Australia)... or at least this is my view.

None the less, execution risk remains, although more so for say SUM who are alot smaller, but trying to build at similar rates (I think)... the fact the housing market is seemingly at its peak (in my view), and with interest rates more likely to rise than fall (in my view), those who plan to continue borrowing heavily could be facing a rare issue: increasing interest costs (albeit off a low base) with decreasing or stabilizing selling prices... what will sell RYM's units (or at least make more attractive over say SUM's) is the fact that they have a much better continuum of care (ARV also does).

Lots of "my views" ;)... and I don't currently hold RYM although I did select it in stockpicks this year

[Beagle]

http://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0 Melbourne house prices still doing Okay(ish), up 3.6% for the year to June 30 2016. Just as well RYM are not in Perth or Darwin !

[Valuegrowth]

Thumped down to the MA200 today, how much lower will it go? anything under $9 should be considered good buying I reckon.

For me its short term trend is not that clear. In other words it is directionless. Still its long term growth is intact. In addition, in the short run, there should be demand for defensive stocks. Value is one of the factors that I like to consider.As long as we see strong market, investors may create demand for this stock as well. I have kept under my radar now. If it drop to around $5-6 levels there will be many buyers. I don't think it will drop to that level in the short run unless we see some big sell-off in stocks or bear market.

[Baa_Baa]

For me its short term trend is not that clear. In other words it is directionless. Still its long term growth is intact. In addition, in the short run, there should be demand for defensive stocks. Value is one of the factors that I like to consider.As long as we see strong market, investors may create demand for this stock as well. I have kept under my radar now. If it drop to around $5-6 levels there will be many buyers. I don't think it will drop to that level in the short run unless we see some big sell-off in stocks or bear market.

RYM is not directionless imo, it has broken down (major) below its rising trend line support, which puts it back into the range trading mode that it has been in for some time previously. Right on the 200 MA support. Risky hold for capital focused investors right now, otherwise for buy and hold's, no worries it has a great future.

[macduffy]

RYM buys its fifth Melbourne site at Coburg, an established suburb 10k north of Melbourne CBD.

http://www.rymanhealthcare.co.nz/the-ryman-difference/ryman-news/11808-ryman-buys-fifth-site-in-melbourne

[percy]

RYM buys its fifth Melbourne site at Coburg, an established suburb 10k north of Melbourne CBD.

http://www.rymanhealthcare.co.nz/the-ryman-difference/ryman-news/11808-ryman-buys-fifth-site-in-melbourne
The excitement continues.!

[Snow Leopard]

I am right in thinking that they are not actually building anything in Melbourne at the moment?

Best Wishes
Paper Tiger

[macduffy]

Correct, Tiger.

Wheelers Hill completed; Brandon Park awaiting council approval; others are recent land acquisitions.

[Vaygor1]

I am right in thinking that they are not actually building anything in Melbourne at the moment?
Correct, Tiger. Wheelers Hill completed; Brandon Park awaiting council approval; others are recent land acquisitions.

I agree

Brandon Park purchase was announced in May 2014... almost two and a half years ago. The holdup due to the reasons stated in my previous post. http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=636918&viewfull=1#post636918

The remaining 3 Melbourne purchases all announced this calendar year (in Feb, Sept, and Oct).

[Vaygor1]

If there's a crash in nz house prices, how much would it effect the profit and viability of RYM for the duration of the crash?

A crash in NZ house prices will have little impact on RYM's bottom line in my view. Here's why:

1. How bad would a crash be? More than 13% down would be unprecedented in recent history (last 45 years on this graph). With interest rates staying down and immigration staying up, I doubt a crash of any real magnitude will happen within the next 12 months. Stricter bank lending criteria might dampen it a bit.

8358

2. How much of a drop before selling one's house would it take before having to visit the bank to move into a retirement unit? More than 20% for independent living according to the data.. and about 50% for serviced.

8359

3. Even if the above occurred, would that dampen resales? Not in my view. Demand for care beds is beginning to outstrip supply due to the demographics. Demand for retirement living precedes demand for care beds.

8360

On top of that, the average 7 year tenure per resident irons out the impact of the housing market's rises and falls over 7 years. Not once in NZ history has it been cheaper to by a house 7 years after any given date.


4. Will a housing crash, should it occur, drive RYM's share price down through the floor? Most probably.

[Lewylewylewy]

Lower hose price means lower NTA, which means lower SP. What I'm wondering is if it will effect revenue enough in the short term to cause risk to the business. 😃

[Vaygor1]

Lower hose price means lower NTA, which means lower SP. What I'm wondering is if it will effect revenue enough in the short term to cause risk to the business. 

Lower NTA possibly as reported by IFRS, but based on my last post, this will have negligible impact on RYM's revenue and underlying profit.

In the event of a housing crash, a lower SP will almost certainly occur, but it will be based purely on the markets (unfounded and typical) speculation and fear, fuelled by media scaremongering.

A much greater risk to RYM's share price is in them not making their target of 15% increase per annum in underlying profit (even a 14.9% result will cause the market to panic-sell I believe). There is a far greater chance of this occurring in this financial year than any other in RYM's recent history (in my opinion) because I can't see any growth in realised profits through opening new villages this financial year.

I know that some villages already opened will continue to expand somewhat, but the biggest gain in realised profits come from the initial opening of new villages. Can anyone tell me a single new village that has been opened or will be opening this financial year ending 31-Mar-2017?

[percy]

Dates I don't know,but from the latest issue of The Ryman Times,Spring 2016,Dr.David Kerr stated ;"Ryman is the busiest it has ever been with four large new villages set to open later this year."

[Vaygor1]

Dates I don't know,but from the latest issue of The Ryman Times,Spring 2016,Dr.David Kerr stated ;"Ryman is the busiest it has ever been with four large new villages set to open later this year."

Thanks Percy. I'll take a look and do a bit of subsequent digging.

[percy]

Thanks Percy. I'll take a look and do a bit of subsequent digging.

But wait,,,,there's more.!!!
"Ryman villages are now home to more than 10,000 residents and are set to grow to accommodate more than 17,500 residents over the next five years."
Just realised this is just recycled news, from their 27th July 2016 agm media release,which is on NZX site.
.

[Vaygor1]

Okay, so RYM state in the Spring edition of RYM Times (and elsewhere via the press) that 4 new villages will be opening later this year. Quote from David Kerr in the RYM Times "Ryman is the busiest it has ever been with four large new villages set to open later this year".

Here is a slide from RYM Build activity FY-2017 Source RYM Annual Presentation in May 2016

8361

So we have Birkenhead, Greenlane, Pukekohe, Petone, and Rangiora.

Then we have this construction update from the Ryman website dated 27-July-2016. https://www.rymanhealthcare.co.nz/the-ryman-difference/ryman-news/11569-ryman-passes-10000-resident-mark-and-buys-new-site-in-auckland . Here is an excerpt:

8362

So Pukekohe, Rangiora, and Petone already open (all before 1-April-2016 as I recall - happy to be corrected). Birkenhead looking good, and Greenlane in early stages. I read that as one and bit new villages opening this financial year, not four.

Birkenhead will eventually include 227 independent apartments, 83 serviced apartments, and care for up to 100 residents in its care centre (resthome, dementia and hospital care as well as assisted living for residents in its serviced apartments) so about 400 there upon full completion, maybe 300 by 31-Mar-2017?

Greenlane is a fairly small site at 1.7 Hectares so not such a huge construction effort there and when full will have about 215 units. so say 150 by 31-Mar-2017?

So circa 450 by end of FY17 at Birkenhead and Greenlane, with the remaining 350 from secondary opening stages at Rangiora, Petone, and Pukekohe (especially Petone) plus a few additions to the other 30 odd villages, RYM will likely attain their forecast of 800 units opening this year.

8363

Will it be enough with the anticipated increase in resale prices to get to 15% increase in underlying profit this financial year? I think so. The definition of when a unit is completed is a bit grey. I would be surprised if RYM didn't have a bit up their sleeve from previous year(s).

With not many units being opened in the 1st 6 months of this financial year, the H1 result may disappoint leading to an even lower SP then today's, which is already a bargain imho based on the historical correlation of Share Price vs Underlying Profit.

[macduffy]

I continue to maintain that the actual opening of a village is only the beginning of the process. A case in point is the Bob Scott village in Petone which "opened" last December but where construction continues apace as more units become completed. A lot more growth there for some time yet.

Back to the Melbourne market, the 2016 Annual Report anticipated Brandon Park opening in 2018, Burwood in 2019 and "Sites" 4 and 5 in 2020.

[Hoop]

Nice summary Vaygor..
I thought I recognised the charts...From NZ Reserve Bank publication .. Analysis of the NZ property market January 2016 (PDF file)
(http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/.../2016jan79-1.pdf)
With charting I tend to have a look at the overall picture..
also..
Due to extremes in inflation rate it is best to analyse in Real dollars (inflation adjusted)

The Property Market has a very wide oscillating cyclical cycle it seems to take about 40+ years to complete a cyclical wave, compared to an Equity Cyclical cycle of average 7 years ..Yes..I can hear all the property investors saying property has a 7 year cycle too, but for the case of property these 7 year movements have been bull market corrections (secondary cycles)..not cyclical reversals..

I can't be sure of the average length of time to complete a cyclical NZ property wave as the NZ data is terribly hard to find and does not go back far enough to create significances...We need many centuries to gain any significance to what could be happening with this present 45 year old Property bull market cycle**...Bull cycles (irrespective of how long they operate for) have a fairly consistent shape behaviour ..The Bull Cycle operates in stages from slow hesitant (wall of worry) rise after a cyclic reversal to the last stage of exuberant rapid rise..a shape similar to an exponential rise (half a bell curve)..

Taking a look at the NZRB publication those long term charts shows that the property market has been in a constant Bull Market cycle and now "could" be in its rapid rise exuberant stage...As life expectancy averages vary it could be years yet before a cyclical reversal to a very long period of Bear and at the reversal point when Bull does finally turn Bear it would be very difficult to define that point of change..it could either, take years to confirm or as History has told us it could sometimes come suddenly as a crash...Concerning RYM and their Investors my post and these long cyclical waves is academic...but nice to know as bear market cycles tend to display more bad news than normal which causes investor frustration and disappointment thereby creating an overall more negative than postive sentiment behaviour towards investing...

http://www.bnl.co.nz/wp-content/uploads/2015/11/image005-300x196.png

The Bradley Nuttall publication (http://www.bnl.co.nz/blog/a-long-term-lesson-in-residential-property-as-an-investment/) quote "...Looking at the chart, you’ll notice that, in real dollar terms, the price of housing declined from 1900 until roughly the end of World War II. Economists at the time felt that was perfectly normal...."

Today's sentiment towards Property Investment?...after these last 40 years we all believe that we should invest in the Property Market no matter the cost/hardship because in the end your house will be worth more in the future..

With Ryman I demonstrated in my previous post how cruel (RYM -57% fall) a small bull property market correction (7% fall) can be..It's not the figures you have to worry about Vaygor..its the sentiment....Imagine what a long term ingrained sentiment could do...we have that now [positive])

repeat that quote...eh "the price of housing declined from 1900 until roughly the end of World War II. Economists at the time felt that was perfectly normal...." ..[Negative]

I can remember decades ago when Property Investment stocks sector averaged a PE ratio of 7% and that was thought perfectly normal back then...The theoretical RYM share price with that "normal" would be $4.50

Can we use very long term global property charts to aid NZ property charts...It seems we can...secondary corrections don't correlate well, but overall it seems they might..
https://hotelivory.files.wordpress.com/2010/08/herengracht11.jpg

The very long term Herengracht chart illustrate what I have been saying about cycles...
Interesting authors perception seen by his comment..huh?..I could expect a comment during the height of a Cyclical Bull Market ..a quote " but on average the real price doubled" is expected..but we could imagine a very different comment if written at the end of the last Cyclical Bear Market (1980)..what about if written in 1808:D

Food for thought:...
RYM a good future investment.....everyone needs a place to live/ demographics demand during a long term good growth investment period......Investor myth?.....as seen by cycles....try explaining why some businesses struggle to up their share prices during high demand/rapid rising asset price periods..

Ref:
Shiller and Yale University publications (http://cowles.yale.edu/publications/cfdp)

[Vaygor1]

I continue to maintain that the actual opening of a village is only the beginning of the process. A case in point is the Bob Scott village in Petone which "opened" last December but where construction continues apace as more units become completed. A lot more growth there for some time yet.

Back to the Melbourne market, the 2016 Annual Report anticipated Brandon Park opening in 2018, Burwood in 2019 and "Sites" 4 and 5 in 2020.

You have a valid point MacD. I visited the RYM Petone site in late May this year. I was surprised how little of the site was occupied so quite a lot of capacity there I think. But just from driving around it was pretty hard to tell (I didn't go in and enquire or anything).

My perception is that upon initially opening a new village, the value of the main infrastructure is realised. ie everything that goes behind achieving resource consent and building consent, detailed engineering and design, tendering out, contracts let, reception and entranceways, roading, underground carparks. main electrical supply & switchgear, water supply, stormwater, sewage, swimming pools, gyms, bowling greens, kitchens, emergency facilities, etc etc. A big leap from just the value of the land at the date it was purchased. I guess it comes down to to just where in the process a particular facility within a village is deemed to be 'realised'.

This is the grey area I refer to as providing RYM some leeway on its underlying profit announcements.

In support of your position, here is a basic timeline provided by RYM on their village development process.

8365

[percy]

Just a few things and thoughts from this mornings RYM presentation put on by local broker Hamilton,hindin and Greene.
Presenter David King Ryman's Investor Relations.Placed his parents in Ryman care.Father dementia,mother alzheimers.Only thing his siblings have ever agreed on.!!!
Chairman Dr. David Kerr said at an agm held at Ryman village,"It is with a sense of pride I come here,as we put my mother into care here."
CFO,Gordon Macleod.I first became associated with Ryman when I put my mother into a Ryman Village.
Kevin Hickman.Joint founder of Ryman.I want to build retirement villages that would be suitable for my mother.
Floated in 1999 when they raised $25 mil.At the time it was their 2nd attempt to list.Market did not think much of them.Have never been back to shareholders for more capital since then,yet have paid out $500 mil in dividends.
Treat the staff well,make then happy and they will make the residents happy.
Everything done in house.On completion of each new village the design team make a critical inspection, to note where improvements can be made for their next village.
The level of occupancy for care was either 96%or 98%.The presenter's mother had to be moved from one Ryman village to another, for care.

[Joshuatree]

"Treat the staff well,make then happy and they will make the residents happy."
From what I've heard thats not necessarily the case.Its a shame they don't do what they say.Staff morale can be lousy with constant replacements needed is what I've heard in dementia and hospital care. The people that work in the front line are paid the least; barely enough to live on. Don't you think something is wrong here.Our parents are placed with overworked staff who are also underpaid and believe they aren't valued. Does that give you confidence in your parents being really cared for; i know some of these staff do incredibly well because its their calling , to care for the elderly for all sorts of reasons.Other staff don't have that calling and are undervalued, under paid and overworked. What do think will happen here quality of care wise.? Just my opinion from what I've heard.

[percy]

"Treat the staff well,make then happy and they will make the residents happy."
From what I've heard thats not necessarily the case.Its a shame they don't do what they say.Staff morale can be lousy with constant replacements needed is what I've heard in dementia and hospital care. The people that work in the front line are paid the least; barely enough to live on. Don't you think something is wrong here.Our parents are placed with overworked staff who are also underpaid and believe they aren't valued. Does that give you confidence in your parents being really cared for; i know some of these staff do incredibly well because its their calling , to care for the elderly for all sorts of reasons.Other staff don't have that calling and are undervalued, under paid and overworked. What do think will happen here quality of care wise.? Just my opinion.

The highest amount of staff turnover occurs in the first year of employment.Staff either like the job,the company or leave.After the first year there is very little staff turnover.Wages have been increased,and staff are encouraged to seek more training,whereupon they will be paid a higher rate.
Ryman are known to be the highest payer in this sector.
I think it is important to note The Chairman,The Founder,The CFO,and now The Investor Relations spokensman are all proud to have placed a parent in Ryman Care.
I must admit not all Ryman or Summerset Villages appeal to me,but a good number I would be proud to call home.
Ryman's continuing success is mainly driven by word of mouth ,and directors and management's desire to offer the aged in Australasia the very best .This word of mouth meant even the first village in Melborne sold extremly quickly.

[Joshuatree]

Not what I'm hearing from the front line in the areas i mentioned.It is hard to keep everyone happy for sure in this area ; its not easy and Ryman are doing better than some others i think.

[Beagle]

I am with the tree on this one. Standard of care when my Dad was in the dementia ward at Ryman's facility at Orewa was below what I would have expected. Many Fillipino staff and the left had didn't seem to know what the right hand was doing. Patient care varied between shifts a lot and application of medication was of serious concern. Thankfully my Dad has gone to a much better place now where he's being very well treated !

[Baa_Baa]

I am with the tree on this one. Standard of care when my Dad was in the dementia ward at Ryman's facility at Orewa was below what I would have expected. Many Fillipino staff and the left had didn't seem to know what the right hand was doing. Patient care varied between shifts a lot and application of medication was of serious concern. Thankfully my Dad has gone to a much better place now where he's being very well treated !

Sadly my fathers experience and our family observations were very similar to what you describe, though not in Ryman I must say, but a non-listed aged care provider. It was not dire, but far from the standards we expected.

I think behind the scenes when you experience 'the system', the high needs care pathway to end-of-life is unfortunately often littered with less than perfect experiences. I am an age where I have many friends with parents having similar experiences, concerns and issues. Very very few have glowing reports. Regardless of provider, only those high needs 'residents' who have family support with the gumption to continuously challenge and hound the system have dependants (high needs residents) that are treated with respect, dignity and proper care they deserve. Heaven help the rest, albeit hopefully heaven is where they all end up.

Some might think this overly dramatic, though they perhaps have yet to experience the reality? The entry to elder care residential estates looks lovely in the brochures and for many is also in real life. Then on to residence care (like communal facilities), then low needs communal residence, then high needs (dementia and health generally), finally palliative care. The higher the need for care, the more fraught and likely is the exposure to substandard care and outcomes.

Anecdotal experiences are fraught I admit, however our experience with my father was very close to how Joshuatree describes it, similar to Rogers experience and nothing like Percy describes it (no disrespect). Sad but true.

[percy]

For the record.
Readers Digest NZ most trusted brands.
Winner of Aged Care and Retirement Villages......RYMAN.

Anyone on ST who has had a bad experience with a relation in Ryman care,I think you should contact David King,
Investor Relations.Ryman,P.O.Box 771,Christchurch 8042.
He did say this morning they do a huge number of relations/staff/residents surveys so as they can keep improving Ryman Villages.

[Joshuatree]

Sorry that is meaningless but yes their brochures read like Readers Digest :)

[percy]

Sorry that is meaningless but yes their brochures read like Readers Digest :)

Somehow I think the following category winners would disagree with you;
Whittakers,Kiwi Bank,Vogel's,Sanitarium,Hertz,Toyota,Whiskas,St.Jo hn.Dettol,Masport,Yates,Lockwood,Villa Maria,Resene,Z,Harcourts,The Warehouse,New World,Dilmah,Firestone,Dyson and Fisher and Paykel.
Reading how the winners are chosen shows the selection is very robust.
Google NZ Most Trusted Brands,and you will understand why being a category winner means so much.

[Joshuatree]

And you have heard three first hand actual experiences percy; you are denying us our experiences?

[percy]

Sadly my fathers experience and our family observations were very similar to what you describe, though not in Ryman I must say, but a non-listed aged care provider. It was not dire, but far from the standards we expected.

I think behind the scenes when you experience 'the system', the high needs care pathway to end-of-life is unfortunately often littered with less than perfect experiences. I am an age where I have many friends with parents having similar experiences, concerns and issues. Very very few have glowing reports. Regardless of provider, only those high needs 'residents' who have family support with the gumption to continuously challenge and hound the system have dependants (high needs residents) that are treated with respect, dignity and proper care they deserve. Heaven help the rest, albeit hopefully heaven is where they all end up.

Some might think this overly dramatic, though they perhaps have yet to experience the reality? The entry to elder care residential estates looks lovely in the brochures and for many is also in real life. Then on to residence care (like communal facilities), then low needs communal residence, then high needs (dementia and health generally), finally palliative care. The higher the need for care, the more fraught and likely is the exposure to substandard care and outcomes.

Anecdotal experiences are fraught I admit, however our experience with my father was very close to how Joshuatree describes it, similar to Rogers experience and nothing like Percy describes it (no disrespect). Sad but true.

I fully understand Dementia care is a very touchy subject.At the present time a staff member at the Dementia Care Home my wife's mother is in, faces losing her job because she hit my wife's mother back.!!
Yet my wife's family can fully understand that the staff member was provoked.!!
It is not in Ryman Care.
The funny side is when my wife's family visit her, all the other residents are dozing off,while my wife's mum is in full flight, yelling out for this that and the other thing.
I guess it is something we all have to look forward to.
I did think yesterday's Ryman presenter,David King, must have a bit of concerns for his own future, having put his parents in Ryman care, his father having dementia and mother with alzheimers.

[Joshuatree]

Staff to patient ratios are one prob. especially at pinch points like preparing clients for bed; they have to be washed,napped and dressed etc by a certain time.Cranes are supposed to be used but take too much time so manhandling by one staff(not 2) happens.These sorts of situations are where the care breaks down to become efficiency. Am talking generally here and not singling out Rymans.

[Vaygor1]

And you have heard three first hand actual experiences percy; you are denying us our experiences?

JT. Your take on this is substantiated only by your own experience or from what you have heard anecdotally. No one reports satisfaction these days unless a system is in place to do so. How many complaints would you expect to hear with over 10,000 residence and their multitude of relatives?

Ryman have a system in place.

Every village encourages the relatives of those living there to conduct a survey. Here's a few links to random villages:
http://www.rymanhealthcare.co.nz/images/EP_Care_Centre_Relatives_Results_March_2016.pdf
http://www.rymanhealthcare.co.nz/images/JW_Care_Centre_Relatives_Results_March_2016.pdf

You can find the results of every open village - some of the villages (i.e. Tropicana) are not open yet - by going here:
http://www.rymanhealthcare.co.nz/villages
Then clicking on the village of your choice and then clicking "Relative's Satisfaction Survey" around the bottom left of the page. Hard evidence - warts and all.

[BlackPeter]

John Ryder (one of the Co-founders of Ryman Healthcare) and author of the book "Global investing" will give a talk in Christchurch about "the Fundamentals of Investing"; Check here for more information and pre-registration:

http://www.sharetrader.co.nz/showthread.php?10332-NZSA-Canterbury-meetings-amp-seminars&p=642982&viewfull=1#post642982

[percy]

I had the pleasure of listening to John Ryder a couple of months ago,at a Traders NZ evening.
A fantastic presentator.

[Beagle]

Sadly my fathers experience and our family observations were very similar to what you describe, though not in Ryman I must say, but a non-listed aged care provider. It was not dire, but far from the standards we expected.

I think behind the scenes when you experience 'the system', the high needs care pathway to end-of-life is unfortunately often littered with less than perfect experiences. I am an age where I have many friends with parents having similar experiences, concerns and issues. Very very few have glowing reports. Regardless of provider, only those high needs 'residents' who have family support with the gumption to continuously challenge and hound the system have dependants (high needs residents) that are treated with respect, dignity and proper care they deserve. Heaven help the rest, albeit hopefully heaven is where they all end up.

Some might think this overly dramatic, though they perhaps have yet to experience the reality? The entry to elder care residential estates looks lovely in the brochures and for many is also in real life. Then on to residence care (like communal facilities), then low needs communal residence, then high needs (dementia and health generally), finally palliative care. The higher the need for care, the more fraught and likely is the exposure to substandard care and outcomes.

Anecdotal experiences are fraught I admit, however our experience with my father was very close to how Joshuatree describes it, similar to Rogers experience and nothing like Percy describes it (no disrespect). Sad but true.

Coming up to four years since my Dad passed away, next Tuesday and I still remember the whole dementia thing very vividly. Its a really tough gig to watch you own parent die like that so you have my sympathy Baa Baa. Things went really well for my Dad for a short time after he was admitted into the Dementia unit at Ryman's Orewa facility because my Mum and Dad knew the manager there, well...Dad knew her when he had a memory. She was a lovely lady and had huge respect for my Dad because she knew him personally. When she was head-hunted by a competing healthcare provider, (that's a huge problem in this industry, the really good and capable senior staff are in huge demand), it all went south at a huge rate of knots. My Mum turned 87 in late September...thankfully she seems to be in pretty good nick so far. I pray I will be spared the same lengthy six year anguish of watching her go through a similar ordeal...got enough drama's in my life with my hapless twenty something kids, last thing I need is another dementia ordeal.

[winner69]

Handy having another village nearby

http://www.stuff.co.nz/national/nz-earthquake/86510087/wellington-rest-home-residents-have-been-evacuated-after-complex-damaged-in-quake

(Old landfill site .....hmmm)

[stoploss]

Handy having another village nearby

http://www.stuff.co.nz/national/nz-earthquake/86510087/wellington-rest-home-residents-have-been-evacuated-after-complex-damaged-in-quake

(Old landfill site .....hmmm)

Is it an old landfill site there ? Sort of goes down the side of the hill. i thought the landfill was the Raroa school and the park just South ?

[winner69]

Is it an old landfill site there ? Sort of goes down the side of the hill. i thought the landfill was the Raroa school and the park just South ?

You might be right but it was a bloody big landfill.

That quarry below it ia a decent hole isn't it?

[stoploss]

You might be right but it was a bloody big landfill.

That quarry below it ia a decent hole isn't it?
When I was a kid there was a massive hill there, driving by the old milk storage site recently I noticed the big hole there these days !!!

[winner69]

When I was a kid there was a massive hill there, driving by the old milk storage site recently I noticed the big hole there these days !!!

Yep hill nearly gone - years ago wouldn't seen the village from Ngauranga Gorge

Can you remember the Tip Top factory in J'ville

[stoploss]

Yep hill nearly gone - years ago wouldn't seen the village from Ngauranga Gorge

Can you remember the Tip Top factory in J'ville
we did the obligatory school trip with free popsicles at the end :)

[lissica]

Is it an old landfill site there ? Sort of goes down the side of the hill. i thought the landfill was the Raroa school and the park just South ?

I thought it was where the old Burma Lodge was? Remember going there for work Xmas party one year

[stoploss]

I thought it was where the old Burma Lodge was? Remember going there for work Xmas party one year
Yes that's the site , we were just wondering what was originally under it .

[couta1]

Yes that's the site , we were just wondering what was originally under it . The sports field at one end of Malvina was definately a landfill, not sure about the complex itself. Malvina has been a thorn in Rymans side since they took over the old Burma lodge and started to add onto it to become what it is today. It was the one and only time they ever added onto an existing building and it has been trouble ever since with numerous issues which have and are continuing to soak up vast quantities of cash. Obviously the site itself contains risks not encountered by other sites they have since chosen.

[couta1]

Solid result from the Best of breed, with a lot in the pipeline so to speak.

[silu]

HALFYR: RYM: Ryman reports first half profit of $76.5 million, up 9%

I have divested profits from MEL into RYM this week as their prospective PE's make RYM a bargain.

[couta1]

HALFYR: RYM: Ryman reports first half profit of $76.5 million, up 9%

I have divested profits from MEL into RYM this week as their prospective PE's make RYM a bargain. Full year guidance of between 175-185 million is not too shabby with Melbourne currently not contributing. Shareholder equity has increased 23% since last September.

[winner69]

That 23% increase in shareholder equity is the real measure of value

[Beagle]

2013 100.2 / 84.1 = 19.1%
2014 118.2 / 100.2 = 18%
2015 136.3 / 118.2 = 15.3%
2016 157.7 / 136.3 = 15.7%
2017f 180 / 157.7 = 14%

[Bjauck]

2013 100.2 / 84.1 = 19.1%
2014 118.2 / 100.2 = 18%
2015 136.3 / 118.2 = 15.3%
2016 157.7 / 136.3 = 15.7%
2017f 180 / 157.7 = 14%
Is RYM evolving from a high profit growth company?
SUM may have a few more years left as a young high growth company?
If there is a population drift from earthquake prone areas to the rest of the country maybe that will benefit MET which has a greater % in Auckland?

[couta1]

2013 100.2 / 84.1 = 19.1%
2014 118.2 / 100.2 = 18%
2015 136.3 / 118.2 = 15.3%
2016 157.7 / 136.3 = 15.7%
2017f 180 / 157.7 = 14% Not really mate, that 14% could just as easily be 16%, bet they will be over 15% again. Most reliable and consistent company on the NZX over the long term. Of significant note from those results is the 97% care centre occupancy, thats industry leading, and speaks volumes about the Ryman brand.

[stoploss]

Is RYM evolving from a high profit growth company?
SUM may have a few more years left as a young high growth company?
If there is a population drift from earthquake prone areas to the rest of the country maybe that will benefit MET which has a greater % in Auckland?
Greater risk of a volcanic eruption , let's face it there is risk everywhere . Christchurch was an unknown fault line , they have found some more near the latest quake . Who's to say there are not unknown fault lines near or through Auckland .

[Beagle]

Is RYM evolving from a high profit growth company?
SUM may have a few more years left as a young high growth company?
If there is a population drift from earthquake prone areas to the rest of the country maybe that will benefit MET which has a greater % in Auckland?

Some good questions for people to ponder. It is said that as a company gets really big it becomes intrinsically harder to grow and perhaps we have a good example of that with Ryman ?
As followers of this thread will know, Winner69 and I went out on a limb in early 2014 and called the SP as overdone, (at around the current level) and suggested we could be in for some years of relative underperformance.
Two and a half years later here's how I see it.
Based on the mid point of the forecast range 180 / 500m = underlying eps of 36 cps.
Being a little kind, (they are N.Z.'s premier growth stock) and assuming they can grow over the next 7-10 years at the average rate of the last 3 years (15%) and using my own variation of Ben Graham's valuation formula where the PE is the no growth 8.5 + 1G where G = average forecast growth I see RYM as good value at a forward PE of 23.5. 23.5 x 36 = $8.46. The shares are fair - good value in my opinion at the current price.

Turning now to SUM - Growth over the last 4 years + this year's forecast, keep in mind SUM balance date is 31 December
2012 15.2 / 8.1 = 87.6%
2013 22.1 / 15.2 = 45.3%
2014 24.4 / 22.1 = 10.4%
2015 37.8 / 24.4 = 54.9%
2016F 54 / 37.8 = 42.9%

EPS based on forecast for FY16 54 / 220.5m shares = 24.5 cps.

Now the really hard part, what forward PE to use for SUM ? Average growth the last 3 years = 36% Average growth the last 5 years = 48.2%

No question a lot of this growth has come off the back of the company learning and evolving its development model.

What growth rate to assume for the next 7-10 years...a very difficult question to answer !

Lets assume they can grow at the same 15% rate as RYM...this would appear to be a safe harbour position as they're still a young company growing and learning quickly and its quite possible we could see a few more years of growth outperformance as Bjauck has suggested.

Apply the same PE as for RYM, (there is definitely a persuasive argument for using a higher PE in my opinion), based on average growth over the last 5 years being substantially more and based on a superior land bank, (SUM have 7 years supply), but let's be a conservative bean counter today and stick with 15% average forecast growth and use the same PE for RYM 23.5 times current year's earnings. SUM are Good value at 24.5 x 23.5 = $5.75. Once we have some confirmed stability in the market, (Trump doesn't do anything totally outrageous to undermine the market, yet to be determined in my opinion) then SUM would still be my preferred investment vehicle in this sector.

Conclusion - The current SP of SUM gives a decent safety margin to its theoretical value based on my model using very conservative forward growth expectations.
RYM appears to be fair - good value but without a safety margin.

Disc: I don't bother with any analysis on MET and don't presently own shares in any of these companies, (Trumped out at present)

[Baa_Baa]

8458
----------

[Beagle]

Not really mate, that 14% could just as easily be 16%, bet they will be over 15% again. Most reliable and consistent company on the NZX over the long term. Of significant note from those results is the 97% care centre occupancy, thats industry leading, and speaks volumes about the Ryman brand.

Hi mate,

I've used the mid point of their forecast this year, same with my analysis on SUM. 100% agree with your other points.

[silu]

Trains slow down a bit the more wagons you hitch on them. The timeline for my RYM, MET & SUM shares are beyond 5 years+. They are not your get-rich-quick shares anymore but will most likely return more p.a. than term deposits or bonds.

[Bjauck]

Quick back of the envelope comparative factoids:

November: RYM first half underlying profit up by 9%; NPAT up by 41%; Occupation rights sales up by 9.4% (my calculation: 594 this year/543 last year)
August: SUM first half underlying profit up by 44%; NPAT up by 42%; Occupation rights sales up by 13%

SP price performance since 30 Jun 2016:
SUM up by 10% (4.86/4.38)
RYM down by 8% (8.58/9.33)

[Bjauck]

Greater risk of a volcanic eruption , let's face it there is risk everywhere . Christchurch was an unknown fault line , they have found some more near the latest quake . Who's to say there are not unknown fault lines near or through Auckland . ...and Global warming and rising sea levels for coastal communities. Too true about Auckland...although currently known risks are what we should act on. I think the risk of another volcano appearing in the Auckland Volcanic Field is less than another earthquake on the currently known fault lines - but how much do we really know....

[OldGuy]

These results further highlight the supremacy of SUM as an investment, with its profit growth rates being nearly 5 or 6 times higher than Ryman. I would be cautious about where RYM's SP heads over the next few years in the face of such underwhelming growth in recent times :)

[Bjauck]

Some good questions for people to ponder. ...
Conclusion - The current SP of SUM gives a decent safety margin to its theoretical value based on my model using very conservative forward growth expectations.
RYM appears to be fair - good value but without a safety margin.

Disc: I don't bother with any analysis on MET and don't presently own shares in any of these companies, (Trumped out at present) Thanks Roger. Trump, the American "quake" has to be factored in too!

[Beagle]

Trains slow down a bit the more wagons you hitch on them. The timeline for my RYM, MET & SUM shares are beyond 5 years+. They are not your get-rich-quick shares anymore but will most likely return more p.a. than term deposits or bonds. LOL that's not setting the bar very high when bank term deposits are only 3.5% per annum and well rated corporate bonds not much more !

[winner69]

These results further highlight the supremacy of SUM as an investment, with its profit growth rates being nearly 5 or 6 times higher than Ryman. I would be cautious about where RYM's SP heads over the next few years in the face of such underwhelming growth in recent times :)

OldGuy - agree wholeheartedly

No doubt about it - SUM shareprice will outperform RYMs over the next few years

Not saying RYM a dog - just SUM is better bet

[silu]

Ha yeah Roger agreed. I've set my expectations for the long term part of my portfolio very low. Definetely not the most thought out post of mine.

[couta1]

These results further highlight the supremacy of SUM as an investment, with its profit growth rates being nearly 5 or 6 times higher than Ryman. I would be cautious about where RYM's SP heads over the next few years in the face of such underwhelming growth in recent times :) Sum will eventually be constrained by its sole NZ focus,right about the time that the compounding profit and growth effect kicks in for Ryman from their Aussie operation.:)

[Beagle]

These results further highlight the supremacy of SUM as an investment, with its profit growth rates being nearly 5 or 6 times higher than Ryman. I would be cautious about where RYM's SP heads over the next few years in the face of such underwhelming growth in recent times :)

To be fair the average growth rate of SUM over the last 3 years is 36% including this year's forecast and RYM 15%. As noted above you have to be very careful with assumptions going forward as a lot of SUM's growth has come from significant expansion in their development margins growing from circa 15% to just over 20% as they've refined their development model and also from the lift in build rate from 300 units last year to 400 this year. I think SUM can grow a bit quicker than RYM over my valuation horizon (7-10 years) but I think its prudent to make an assumption at this stage they grow at similar rates over the medium term and better to be positively surprised down the track than not have one's medium term expectations met. These are long term investments hence the hound gets very conservative with long term growth projections.

[macduffy]

These results further highlight the supremacy of SUM as an investment, with its profit growth rates being nearly 5 or 6 times higher than Ryman. I would be cautious about where RYM's SP heads over the next few years in the face of such underwhelming growth in recent times :)

Underwhelming?

If 15%pa average profit growth for 3 years is underwhelming I wish all my investments would underwhelm me in this way!

(Or was that :) meant to be a ;) ?

[couta1]

Underwhelming?

If 15%pa average profit growth for 3 years is underwhelming I wish all my investments would underwhelm me in this way!

(Or was that :) meant to be a ;) ? Yep and just think what the SP will be after another 10 years at 15%pa growth, like I said before reliable and consistent(Doubling the companies profits every 5 years is none too shabby aye)

[Beagle]

Yep and just think what the SP will be after another 10 years at 15%pa growth, like I said before reliable and consistent(Doubling the companies profits every 5 years is none too shabby aye)

I agree 100% that long term growth of 15% per annum is not something to be sneezed at and as long as the PE stays the same, (now that the PE is fair at least as far as I am concerned using my valuation methodology), we should see the SP double every 5 years, (quadruple in 10 years). I guess the main risk is that as RYM continues to get bigger and bigger the growth rate starts to tail off...and one could make a reasonable argument in my opinion that we're starting to see evidence of that already.

[percy]

Sum will eventually be constrained by its sole NZ focus,right about the time that the compounding profit and growth effect kicks in for Ryman from their Aussie operation.:)

"Not a lot of peple know that."!!!!!!!!!!!!!!!......lol.

[Vaygor1]

I agree 100% that long term growth of 15% per annum is not something to be sneezed at and as long as the PE stays the same, (now that the PE is fair at least as far as I am concerned using my valuation methodology), we should see the SP double every 5 years, (quadruple in 10 years). I guess the main risk is that as RYM continues to get bigger and bigger the growth rate starts to tail off...and one could make a reasonable argument in my opinion that we're starting to see evidence of that already.

I too have pondered this but have satisfied myself this is not yet the case.

The reason behind the reduction in growth rate from 18%pa down to an abysmal 16%pa over 4 years (if one can call that a trend) is almost exclusively due to the very lengthy hold up in Brandon Park development in Melbourne, which is by the way a very large development. The reasons behind the holdup are summarised in this post:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=636918&viewfull=1#post636918

I offered a friendly wagered last year, after RYM's H1 announcement of 6% growth, that their full year result would still make the 15% mark.
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=620362&viewfull=1#post620362

Unluckily for me, no one took me up on the offer.

Judging by this year's 9% H1 result and the language used in their announcement today, I have no hesitation in re-offering my wager of a rough-red on RYM making 15% underlying profit this financial year too.

On the condition RYM get the go ahead for Brandon Park so that by March 2018 they obtain half the rate of pre-sales contracts they got with Wheelers Hill, then referring below, I struggle to see where there growth rate is slowing over the next 4 to 5 years.

8459

Right now RYM is cheap, so is SUM. Disc: Holding both.

[Beagle]

Hi mate,

Thanks for sharing your perspective. Is Brandon park problematic in much the same way as the Boulcott site is for SUM ? Could it be years before they get the required consents ?

[Snow Leopard]

Main things are that all staff got new uniforms and that Project Delicious is on it's way.

Best Wishes
Paper Tiger

[Beagle]

Project delicious must surely include Tiger time ice-cream :) http://shop.countdown.co.nz/Shop/ProductDetails?Stockcode=970298&search=icecream

Disc: No need for further testing, the hound has thoroughly audited this flavour and hereby certifies it is truly delicious !

[Snow Leopard]

Project delicious must surely include Tiger time ice-cream :) http://shop.countdown.co.nz/Shop/ProductDetails?Stockcode=970298&search=icecream

Disc: No need for further testing, the hound has thoroughly audited this flavour and hereby certifies it is truly delicious !

Are you on commission with Tip-Top, Roger?

OK Send some more, same address.

Best Wishes
Paper Tiger

[couta1]

Hi mate,

Thanks for sharing your perspective. Is Brandon park problematic in much the same way as the Boulcott site is for SUM ? Could it be years before they get the required consents ? No mate, Ryman are not in the habit of poking sleeping Tigers with sticks like Sum were and are with the Boulcott site.

[winner69]

Baabaa - spot the trend

Ryman Book Value - ie Shareholders Funds - over the years

The REAL measure of what Ryman is worth

[winner69]

Ryman Price/Book ratio

Slowing reverting to a more reasonable valuation (from it's lofty highs a few years ago)

This rerating why RYM share price hasn't really gone anywhere in that period - earnings increasing driving increased book value (Book Value up 58% since March 14) but the P/B Multiple down 40% in same period

Todays share price is slightly lower than it was in March 2014 - gone nowhere for 2 1/2 years

[Baa_Baa]

Baabaa - spot the trend

Ryman Book Value - ie Shareholders Funds - over the years

The REAL measure of what Ryman is worth

Yes, Asset value on the top-line looks great riding a sustained property price boom. Even Ryman are saying that won't continue. My graph just plotted the declining underlying PROFIT, that's the REAL measure of the company, I didn't make it up, just plotted the figures from their annual reports after Roger pointed out the elephant in the room. Don't shoot the messenger.

[winner69]

Yes, Asset value on the top-line looks great riding a sustained property price boom. Even Ryman are saying that won't continue. My graph just plotted the declining underlying PROFIT, that's the REAL measure of the company, I didn't make it up, just plotted the figures from their annual reports after Roger pointed out the elephant in the room. Don't shoot the messenger.

Sorry Baabaa - I now realise you were only the messenger

[Snow Leopard]

...after Roger pointed out the elephant in the room. Don't shoot the messenger.

You should never confuse Baa Baa the messenger (http://www.sharetrader.co.nz/member.php?6048-Baa_Baa) with Babar the Elephant (https://en.wikipedia.org/wiki/Babar_the_Elephant):

http://cdn.goodmenproject.com/wp-content/uploads/2014/02/2690.jpg

Best Wishes
Paper Tiger

[Vaygor1]

8458
----------

If you include 2012 you get this:

8463

No definitive trend there yet... maybe just a extra good year in 2013.
Btw forecast increase in Underlying Profit of 15.83% for Year End 31-Mar-2017 equates to an announced (in May 2017) Underlying Profit of $183 million.

But here is a definitive trend:

8464

... and here is a definitive correlation of underlying profit per share vs share price:

8465

Roger and Winner are correct (as can be seen) re the stagnating share price from 2013 to now, and the SP could still do what it did in 2009... or maybe it could do what it did in 2013.
Again, the forecast is based on an announced (in May 2017) Underlying Profit of $183 million for the Year End 31-Mar-2017, and assumes a non-bull non-bear market.

[Vaygor1]

You should never confuse Baa Baa the messenger (http://www.sharetrader.co.nz/member.php?6048-Baa_Baa) with Babar the Elephant (https://en.wikipedia.org/wiki/Babar_the_Elephant):


... but no problems in receiving messages from within the "Baa Baa brewhouse - have you any beer?" in Brookshire, just west of Houston. :)

8467

http://www.baabaabrewhouse.com/


... a likely spot (or should that be stripe) where one can sense the rumblings of the Tiger.

8466

[Vaygor1]

Hi mate,

Thanks for sharing your perspective. Is Brandon park problematic in much the same way as the Boulcott site is for SUM ? Could it be years before they get the required consents ?

Hi Roger. My knowledge of SUM's Boulcott issues are not as in-depth as my knowledge of RYM's Brandon Park issues, but the causal factors behind the delays on each of these respective sites appears to be quite different.

My current perception (and it is only a perception) is that SUM are offside with the locals and possibly with the Hutt City Council... more Council grooming and community engagement required next time around maybe?.. or a concession here of there possibly?

I haven't heard of any such conflict between Victoria's City Of Monash and RYM nor anything out of the ordinary between the locals around Brandon Park and RYM's plan for the site. The holdup I believe is due to Victoria's Federal Authorities dictating terms and process on a number of sites under Monash's jurisdiction, one of them being Brandon Park where RYM is the casualty. Monash feels (possibly rightfully) undermined by the Victorian Federal Government and is reacting accordingly as they (Monash) have in their mind some major principles that need to be upheld, and are stonewalling on all affected sites including Brandon Park to prove their point.

[winner69]

... and here is a definitive correlation of underlying profit per share vs share price:

8465

Roger and Winner are correct (as can be seen) re the stagnating share price from 2013 to now, and the SP could still do what it did in 2009... or maybe it could do what it did in 2013.
Again, the forecast is based on an announced (in May 2017) Underlying Profit of $183 million for the Year End 31-Mar-2017, and assumes a non-bull non-bear market.

Great chart

I hope many appreciate how beautiful it is - from many perspectives

[Beagle]

Great chart

I hope many appreciate how beautiful it is - from many perspectives

I know we both do :) Very good discussion on this one. From a fundamental perspective I think after a long time of being overpriced its now fair value and there's no question regarding their pedigree and the companies ability to create wealth for shareholders over the long run which in my view makes it an ideal retirement stock in more ways than one especially for this hound with 10 - 15 years to go before retirement. I'll keep a close eye on the technical's now and am happy to wait for a clear entry signal. Currently the 100 day moving average appears to be $9.22.

[BlackPeter]

Hmm, I've been earlier this week on John Ryders excellent presentation in Christchurch and learned next to other things that companies where the public have low expectations ("dogs of the DOW" - he talked about boring regular income earners) regularly outperform the index.

Lets keep it that way and please lets not talk too much about RYM ... and definitely keep the expectations low ... at the end it is an incredible boring stock - yawn!

There are so many more exiting threads around: PEB, WYN, AIR, ... shall we change the subject?

Discl: holding (RYM);

[Beagle]

Its certainly been boring for the last two and a half years :p

Another thing to factor into the equation with all property stocks. http://www.msn.com/en-nz/news/national/seismologists-warn-of-more-quakes-in-new-zealand/ar-AAksote?li=BBv6TfA&ocid=spartandhp

Ryman have a lot of facilities in Christchurch. They did okay with previous earthquakes there but who knows what's around the corner ?

[BlackPeter]

Its certainly been boring for the last two and a half years :p


True, this is the reason I only recently bought in .... I think its now their time again to lead the pack ...



Another thing to factor into the equation with all property stocks. http://www.msn.com/en-nz/news/national/seismologists-warn-of-more-quakes-in-new-zealand/ar-AAksote?li=BBv6TfA&ocid=spartandhp

Ryman have a lot of facilities in Christchurch. They did okay with previous earthquakes there but who knows what's around the corner ?

Well, I guess this (earthquakes or volcano eruptions) are risks you have everywhere in NZ - one, the other or both. Not sure, though whether I would see retirement villages in that regards as particularly threatened ... most of them are quite modern and not too many storey buildings ... and they either survived the 2010 earth quake or are now build to a much higher standard.

As well, yes - we are still waiting for the "big one" at the alpine fault, but given its distance to the town is this unlikely to be worse for Christchurch than what we felt in the recent quake. I am not aware of any damage (again - in Christchurch, obviously Culverden, Kaikoura, Hamner Springs and northward from there look different).

One last thing ... of the big three RYM has obviously the most diversified portfolio - i.e. any local event would hurt it less, than the other two.

But - what am I doing here ... RYM is obviously a bad and high risk company, not good to buy in. All these earthquakes in Melbourne, volcano eruptions in Canterbury and the lousy weather in Auckland ... nothing to see here - just move on, guys ... buy the other stocks and leave some more cheap RYM for me to pick up;)

[Beagle]

2013 100.2 / 84.1 = 19.1%
2014 118.2 / 100.2 = 18%
2015 136.3 / 118.2 = 15.3%
2016 157.7 / 136.3 = 15.7%
2017f 180 / 157.7 = 14%


The reason behind the reduction in growth rate from 18%pa down to an abysmal 16%pa over 4 years (if one can call that a trend)... Vaygor1


Sorry mate but I have to pull you up on that point. While you've estimated $183m to arrive at 16% growth, (that looks more than just a little convenient to me), and I would reiterate that the company's official forecast is $175m - $185m. I believe the normal convention is one takes the mid point of that forecast range as to take any other approach shows up one's natural bias. Obviously the mid point is the one where one is just as likely to be wrong to the upside as to the downside. I am happy with my numbers and believe my approach of taking the mid point is technically correct and therefore in my view there is a clear trend downward in underlying profit growth over the last few years.

Further, having thought about this a lot today, if the company had of been able to continue growing at ~ 19% as they did in 2013 I think we would have quite a different share price today.
The decline in profit growth has occurred contemporaneously with a lengthy stagnant period where the share price has materially underperformed the market. Coincidence or the market accurately reflecting the declining growth rate...
For my money, yes the SP was definitely overpriced as I clearly articulated in early 2014 but the slowing growth rate doesn't help that's for sure.

I think they need to demonstrate they can materially lift the build rate before the SP can get above $10. Based on their plans I see the build rate doesn't lift materially until FY18, assuming they get the necessary consents. The risk in my view is that we could be in for a further period of price stagnation until such time as they can prove they can drive their Australian operation harder. 3 1/2 years of the SP ostensibly doing nothing may test some shareholders loyalty although with your average entry price I doubt you will be too concerned. That said people looking to buy back in at ~ $8.60 could well find themselves a little frustrated over the next year or so, (the dividend yield is very low based on that entry price).

Interestingly we've seen a decent lift in SUM"s SP this year from about $4.00 when Norah left to $4.90 up 22.5% on the back of their 33% lift in their build rate this year. In my view there is no debate that SUM have grown underlying profit substantially more than RYM over the last 5 years and yet they are trading on a forecast multiple some 20% less. A current year PE for SUM, (keeping in mind their year is almost complete) of 19.8 doesn't make sense to me when RYM are trading on a June 17 PE of 23.4 times underlying earnings. Conclusion, SUM are really quite cheap, RYM fair value.
With RYM at $8.60 people are paying for perfection and by and large that's exactly what the company has delivered over a very long period of time but what if one year they didn't or what if they only achieved 11% profit growth this year ($175 / 157.7) which is within their guidance range and 10% in FY18 ?

[Vaygor1]

Sorry mate but I have to pull you up on that point... the company's official forecast is $175m - $185m. I believe the normal convention is one takes the mid point of that forecast range as to take any other approach shows up one's natural bias. Obviously the mid point is the one where one is just as likely to be wrong to the upside as to the downside....

And you are always welcome pull me up on any point Roger. :)

I took a closer look at RYM's growth rate of underlying profit. It is too short a term to just look at the last few years, so I adopted the 5-year & 10-year comparison method (one of Buffets methods I think) to get a more accurate picture.

8477

So I do agree the growth for now appears to be slowing. But this could easily change over the medium term with demand for aged care now beginning to outstrip supply in NZ, and in increased margins as inflation ripples its way through RYM's resales figures.

Not disagreeing at all with your mid-point method of analysing the $175M to $185M guidance, however I use $183M as my forecast for the following reasons:

RYM have been very conservative in their guidance in the past, a trait I wish them to maintain.
I have analysed why RYM gave the $175M to $185M range and think they will easily come in at the upper quartile.
I have recently wagered a 15% minimum increase in RYM's UP for this financial year and this equates to $157.7M x 1.15 = just over $181M so this figure is my minimum.
For the purpose of forecasting only (with no real need to add conservatism for the purpose of making a prudent investment decision) I am using what I believe to be a realistic estimate given my past experiences with RYM.
Track record. Last year I predicted an Underlying Profit of $158M and a dividend of 8.4 or 8.5 cents per share. http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=619718&viewfull=1#post619718 . Not bad for a result of $157.7M with 8.5c divvy. :D




The decline in profit growth has occurred contemporaneously with a lengthy stagnant period where the share price has materially underperformed the market. Coincidence or the market accurately reflecting the declining growth rate...

Possibly, but I believe the stagnation is 90% due to the Shareprice getting too far ahead of itself in 2013 as clearly seen...

8478


... and the fact RYM should have moved by now (imho). RYM has already traded at over $9.70 in June, July, and August this year. But as we all know the Market does what the Market does, and anything can happen.


Interestingly we've seen a decent lift in SUM"s SP this year from about $4.00 when Norah left to $4.90 up 22.5% on the back of their 33% lift in their build rate this year. ..... Conclusion, SUM are really quite cheap, RYM fair value.

Even at $5 where SUM traded this morning, apples-with-apples it's probably a better buy than RYM at the moment, but as you know I still hold some reservations about SUM's reporting due to potential cultural overhang from it's past Directorship.


... what if one year ... they only achieved 11% profit growth this year ($175 / 157.7) which is within their guidance range and 10% in FY18 ?

Well the answer to that lies in the past when in 2009 RYM's growth was only 5% (refer top chart above). The market drove the Share Price down 35% and those that bought did so for a song. This too is reflected in the 2009 point in the loglog chart above.

[OldGuy]

Interesting chart, vaygor. To me, the take away message from that is that it has been 10 years since RYM achieved SUM's current rate of earnings growth. This solidifies my belief that SUM will continue to massively outperform RYM in terms of earnings growth for at least the next 5 years. When the market wakes up and realises this, the potential for SUM's SP to skyrocket are huge.

[allfromacell]

Is anyone else concerned about the recent slowdown in property sale volumes and what a major correction would mean for stocks in this sectors SP? It's summer and we're meant to be seeing an increase in sales volumes however in Auckland we're seeing the exact opposite.

http://www.interest.co.nz/property/84683/many-homes-being-passed-no-bids-barfoot-thompsons-latest-auctions

[Beagle]

Caught up with my well connected real estate client the week before last, (GM N.Z. of one of the big Aussie owned franchises) and also a leading Auckland auctioneer in his "spare" time.
Feedback - People are leaving Auckland in droves. Overpriced and then there's the traffic:eek2: The market has been propped up by migration and any change in that policy would have quite an effect !
RYM CEO in the NBR the other day behind the paywall article saying the large increases in real estate prices experienced have been unusual and they don't expect them to repeat.
Auckland at 10 times national average household income...surely a record and undeniably one of the most expensive cities in the world on a per capita basis.

Good debate Vaygor 1 - you've made some good points. I think we're more or less on the same page but I like to make investments that are cheap, not fair value :)

[macduffy]

Earthquake damaged block at Malvina Major village to be demolished and rebuilt.

http://www.stuff.co.nz/dominion-post/business/residential-property/86782148/quakedamaged-block-of-malvina-major-retirement-village-to-be-demolished

[couta1]

Earthquake damaged block at Malvina Major village to be demolished and rebuilt.

http://www.stuff.co.nz/dominion-post/business/residential-property/86782148/quakedamaged-block-of-malvina-major-retirement-village-to-be-demolished I wonder if insurance will cover the total cost of this rebuild or not? I'd be much happier to see another village built and all residents relocated and the current site sold, long term this would provide a better outcome IMO.

[LAC]

Shouldn't RYM have put out an announcement post earthquake on damages (if any), not good news for RYM and not good that we are reading it on Stuff before an official announcement. I am sure their insurance will cover this.

[Vaygor1]

I wonder if insurance will cover the total cost of this rebuild or not? I'd be much happier to see another village built and all residents relocated and the current site sold, long term this would provide a better outcome IMO.

Hi Couter.

From Ryman Healthcare 2016/17 interim Results Briefing on Friday 18 November, 2016:

Of all RYM villages (including 5 in Wellington) only the one apartment block at Malvina Major) was affected by the earthquake. All the rest have been given the all clear.

41 residents evacuated mostly to the Bob Scott village in Petone

Simon Challies - “I can assure you [the impact of the earthquake] is not significant to our financial position, but it is significant to our residence who have had to evacuate at short notice, so that’s been our top priority this week.”

Gorden MacLeod - “Obviously the most important impact has been the impact on residence . That’s been the most material impact for them, and we are working really hard as Simon said to make sure that we do everything we can to support them. It’s early days in assessing what’s next, the building is insured, and regardless our financial position, we have $4.4 billion dollars of assets, it’s 40 apartments, so it’s not going to be material to the financial position of Ryman.”

David Kerr - “40 apartments across about 9000 beds and units keeps [the impact on Ryman due to the earthquake] in proportion.”

[Vaygor1]

http://www.stuff.co.nz/dominion-post/business/residential-property/86782148/quakedamaged-block-of-malvina-major-retirement-village-to-be-demolished

Shouldn't RYM have put out an announcement post earthquake on damages (if any), not good news for RYM and not good that we are reading it on Stuff before an official announcement. I am sure their insurance will cover this.

They officially announced on the earthquake damages 5 days before this demolition press release.

Ref: Ryman Healthcare 2016/17 interim Results Briefing on Friday 18 November, 2016
Link: http://edge.media-server.com/m/p/im67tar9
From 10:40 - 13:05
and again from 25:45 - 26:30

I would say Ryman elected to disseminate the news of demolition via the press rather than as an NZX announcement, but it could have gone either way. If there is no material impact on their finances and minimal overall impact to their customer base due to the earthquake, then I can see why they might not announce this via the NZX.

Yes, insurance covers it, refer my previous post.

[macduffy]

I wonder if insurance will cover the total cost of this rebuild or not? I'd be much happier to see another village built and all residents relocated and the current site sold, long term this would provide a better outcome IMO.

Many would agree with you on that, couta, but the biggest difficulty might be in finding a suitably large site in the northern suburbs. Malvina Major caters for a big chunk of Wellington and as we know, many older people prefer to remain in their area when they make that move.

[peat]

Most insurance post 2011 was written with a 10% excess for natural disasters. So if that's correct they will have to pay for 4.1 units themselves.

[winner69]

Obviously well built this village

http://www.stuff.co.nz/national/health/86930848/base-isolators-survive-first-big-test-in-new-120-million-petone-ryman-village

[kiwico]

Most insurance post 2011 was written with a 10% excess for natural disasters. So if that's correct they will have to pay for 4.1 units themselves.

Most earthquake deductibles I've seen for Wellington sit at 5% for buildings built after 1935 (although some will be 10%) but the problem is that this is typically 5% of the insured value (either per building or the entire site) so it can get costly.

[Beagle]

http://www.msn.com/en-nz/money/news/auckland-average-home-price-falls/ar-AAl8Y0c?li=AA4Zjm&ocid=spartandhp

Housing has never been this unaffordable, approx. 10 times household income so is this the start of a long trend down what with substantial new supply coming to the market in the next two years, increasing interest rates and more restrictive lending policies especially for investment properties ? Given ever increasing constructions costs are there any implications for development margins and profit growth ?
Let the debate commence !

Could easily have posted this in the SUM thread, equally applies there. I know some on here especially Vaygor1 will debate that the trend doesn't affect profit growth and perhaps with quite some validity but it does make it harder for old folks to sell their homes and afford these retirement units doesn't it. Feels like the end of the golden weather to me and I note RYM is ostensibly unchanged in price for the last 2 1/2 years and SUM are still trading below their 100 day MA, as is RYM.
Disc; Don't hold any retirement stocks at this stage but prefer SUM's valuation to the others. (Waiting for SUM to clearly break up through its 100 day MA and prepared to wait as long as it takes).

[Major von Tempsky]

Yes, too boring to talk about. I'd never buy a unit in one of their villages as long as I still had half my marbles. Same goes for Summerset and all the other con villages.

[cyclist]

Feels like the end of the golden weather to me ....

Looks like the market agrees with you - for today at least (RYM and SUM both off about 4%)

[Valuegrowth]

http://marionbusinessdaily.com/shares-in-focus-ryman-healthcare-limited-nzserym-2/36035/

[Beagle]

Looks like the market agrees with you - for today at least (RYM and SUM both off about 4%)

Apparently there's plenty of murmuring's apparent in political circles that although John Key did a very good job overall he has misread the severity of the housing crisis. I wonder if the new PM will take a more circumspect approach towards immigration and thereby suck further wind out of the housing market ? 192 people arrive in N.Z. every single day of the week, (70,000 net per annum) including weekends and look for a new home. Take that out of the equation, factor in the Chinese making it harder to get currency out of their country, all the other changes in the market including vastly higher deposit threshold rates for investors and generally interest rates widely considered to be at the bottom of the cycle and heading up, (anyone else noticed some pretty dramatic increases to 5 year fixed rates by the banks lately ?), and one wonders if we might be looking at the possibility of a pretty meaningful correction to the housing market, especially in overheated area's like Auckland. What some people may not realise is RYM being the top tier player with generally amongst the most upmarket villages asks a pretty penny for their better units.

While there's historically been quite a decent buffer margin between what our elderly folks can sell their homes for in the past as compared to the average unit price in retirement villages, (affected by a number of factors not the least of which is most people are considerably downsizing their housing requirements), what if that margin compresses significantly over the next few years and the feel good factor of freeing up a few hundred thousand by moving to a retirement village diminishes quite considerably ? Interesting times ahead...keeping my powder dry in this sector.

[peat]

as long as they are queuing up the prices for the units will have support, and the evidence from my grey base is that they are still dying to get in.
Even if prices fall there is still a big buffer between what the tenant pays and what their estate gets back ...
And if queues empty out then the unit dvlpmt slows down, the business ups the divi from the steady cash flows and the cow continues to get milked.

This sector is starting to look very cheap. MET on a PE of 5 ! I'm thinking the selloff is overdone.

[Vaygor1]

Monash Council meeting in Melbourne will be held in 2 days (on 13 Dec) and includes Ryman's Brandon Park on the agenda.

RECOMMENDATION:
That Council resolves to advise [Ryman Healthcare] that the submitted Development Plan for 6-30 Brandon Park Drive, Wheelers Hill is satisfactory and it is recommended that it be approved by Council subject to the following modifications to the plan.
1. The provision of additional kerb side parking along the southern side of Collegium Avenue to the satisfaction of Council and at full cost to the applicant. Any new street tree planting / streetscape works required/ proposed will be at full cost to the applicant.
2. The provision of a pedestrian crossing across Brandon Park Drive. The location and type of crossing will be to the satisfaction of Council and installed at full cost to the applicant.
3. Any subsequent planning permit application for this Development Plan must provide a full assessment against clause 52.17 of the Monash Planning Scheme in relation to any existing trees on site which are earmarked to be removed, and which are identified as being native to Victoria.
4. Planting of at least 6 mature trees (minimum 3 metres in height when planted) to replace those trees rated as having ‘moderate’ retention value which will be removed from ‘tree group 6’ in the Treelogic Arboricultural Assessment 26 April 2013.

Details here:
http://www.monash.vic.gov.au/files/assets/public/about-us/council/council-meetings/2016-13-december/1.2-report-council-meeting-13-december-2016.pdf

[Beagle]

Good info, thanks Vaygor1. Can't help wondering if it'll make any difference given other factors mentioned above. Certainly both RYM and SUM trading well below their 100 day moving averages at present so I will be keeping my powder dry until the technical's are supportive.

[Biscuit]

Considering some on here are concerned about the effect of a burst in the "housing bubble" on RYM, here are some interesting comments by Tony Alexander today in his last "Weekly Overview" for 2016:

"Because New Zealand is no longer the big farm which it used to be and our economy’s growth rate recently accelerated despite a $5bn fall in dairy export receipts. Our main cities led by Auckland are attractive places for the one million Kiwis offshore to return to and attractive places for many Kiwis still here to remain in and aspire to. Faster population growth means faster economic/business growth which is very positive for the SME sector. It also means more housing pressures which means higher levels of construction on average but because of the long list of restraints on housing supply growth it means the surge in house prices in recent years will not be reversed. The surge in property prices represents a response to structural shifts in the economy including structurally lower finance costs. It is not and has not been a bubble..."


The BNZ WO, always worth a quick read IMHO.

[Biscuit]

Also:

"Will there be a crash? No because this is not a bubble. Amazingly many people still describe the soaring Auckland housing market as a bubble and reference Ireland. .........the key thing these people have missed since 2007 is that unlike foreign housing markets pre-GFC we have not seen, are not seeing, and will not see a housing supply surge in New Zealand. In this country we make it so difficult for anyone to build anything ..... that growing supply is very difficult, with that difficulty assisted by shortages of builders, shortages of materials, and now a shortage of finance. There won’t be a price crash, but as noted in July, we have entered the end-game for this housing cycle and if the LVR tightening undertaken in July does prove to have only a temporary impact then there will be another tightening before the middle of this year. Chances are no further move by the RB will be needed." (Tony Alexander, BNZ WO)

[cyclist]

Also:

"Will there be a crash? No because this is not a bubble. Amazingly many people still describe the soaring Auckland housing market as a bubble and reference Ireland. .........the key thing these people have missed since 2007 is that unlike foreign housing markets pre-GFC we have not seen, are not seeing, and will not see a housing supply surge in New Zealand. In this country we make it so difficult for anyone to build anything ..... that growing supply is very difficult, with that difficulty assisted by shortages of builders, shortages of materials, and now a shortage of finance. There won’t be a price crash, but as noted in July, we have entered the end-game for this housing cycle and if the LVR tightening undertaken in July does prove to have only a temporary impact then there will be another tightening before the middle of this year. Chances are no further move by the RB will be needed." (Tony Alexander, BNZ WO)

He may as well have simply said: "Don't worry. This time is different".

[Biscuit]

He may as well have simply said: "Don't worry. This time is different".

When was the last time we had a crash in the NZ property market?

[Hectorplains]

https://www.nbr.co.nz/article/shoeshine-investors-may-be-repeating-past-ryman-mistakes-p-197926

Jenny Ruth going into bat for Ryman... debunks Ryman as primarily a property play. "Shoeshine reckons that’s a fundamental misunderstanding about what drives Ryman’s business. Rather than being about property, Ryman’s core business is providing services to the aged and their needs for increasing amounts of care."

[cyclist]

When was the last time we had a crash in the NZ property market?

Equally I don't think there is a "last time" when typical valuation metrics (e.g. house value to income ratio's for example) are so far out of whack. Just because it hasn't happened here in recent memory doesn't mean it can't, even if the short term supply / demand fundamentals are still supportive.

[Biscuit]

Equally I don't think there is a "last time" when typical valuation metrics (e.g. house value to income ratio's for example) are so far out of whack. Just because it hasn't happened here in recent memory doesn't mean it can't, even if the short term supply / demand fundamentals are still supportive.

So then, you are saying "this time is different" not Alexander?

Alexander is not saying there isn't a property cycle and he's not saying that we are not at the top of the cycle. He is just saying is that there is not a house price bubble - just normal market forces, demand pushing up prices in Auckland with a normal correction on the way. If that is true, then there will be no effect on Rymans?

[cyclist]

So then, you are saying "this time is different" not Alexander? Heh heh - you may be right.

Agree that the RYM business won't be materially affected if the scenario you outline pans out, or even something somewhat worse. Any downturn will affect market sentiment though, which may have a greater than sensible impact on this sector's share values.

[Biscuit]

Any downturn will affect market sentiment though, which may have a greater than sensible impact on this sector's share values.

Maybe, but I would think it is more likely other sectors such as retail etc would be most affected by property market downfalls?

[Beagle]

Perception can become reality regardless of whether there's an impact on their financials or not. If Bill English announces a major change in immigration policy or houses start falling of their own accord right across the board sentiment is fairly likely to sour in my opinion.

[Biscuit]

Perception can become reality regardless of whether there's an impact on their financials or not. If Bill English announces a major change in immigration policy or houses start falling of their own accord right across the board sentiment is fairly likely to sour in my opinion.

That's true to a point. And that is where opportunity lies. Perception becomes reality for the market in terms of share price but ultimately the business performance will have the last word.

[BlackPeter]

That's true to a point. And that is where opportunity lies. Perception becomes reality for the market in terms of share price but ultimately the business performance will have the last word.

Absolutely ... but always remember - markets can stay much longer irrational than you can stay solvent :scared:

As well ... currently all retirement villages have a huge growth factor priced in. None of these villages will financially struggle if this growth slows down due to economic factors, but their value (and this is real, not perceived) will drop.

[Biscuit]

Absolutely ... but always remember - markets can stay much longer irrational than you can stay solvent :scared:



You can trade the share price or you can buy the company, and I guess we all do a bit of both. Generally, I make money when I buy the company.

[BlackPeter]

You can trade the share price or you can buy the company, and I guess we all do a bit of both. Generally, I make money when I buy the company.

Absolutely agree ... but I found I make more money, if I buy the company on an uptrend. ;)

[Biscuit]

Absolutely agree ... but I found I make more money, if I buy the company on an uptrend. ;)

I know that that is sound and is a good discipline as it helps you to avoid buying shares that look "cheap" just because they are falling. However, I have found that for me (with a medium/long term view) it makes no difference which way the share price is trending when I buy. Some of my biggest gains were falling knives when I bought them.

[couta1]

BP that irrational quote is often cited on this forum and is basically a nonsense saying when applied to an investor. John Keynes who invented that saying was a high margin speculator not an investor.

[couta1]

I know that that is sound and is a good discipline as it helps you to avoid buying shares that look "cheap" just because they are falling. However, I have found that for me (with a medium/long term view) it makes no difference which way the share price is trending when I buy. Some of my biggest gains were falling knives when I bought them. Exactly right.

[Biscuit]

John Keynes who invented that saying was a high margin speculator not an investor.

He was also a smart cookie who made loads of money

[couta1]

He was also a smart cookie who made loads of money He certainly did after he almost wiped himself out prior to that, just goes to show your past doesn't have to be your future aye.

[BlackPeter]

BP that irrational quote is often cited on this forum and is basically a nonsense saying when applied to an investor. John Keynes who invented that saying was a high margin speculator not an investor.

Feeling grumpy today - do you?

I still dare to disagree. The saying applies to anybody (no matter whether trader or investor) who is dependant on getting their funds at some stage back. Only if you don't need your money back, it does not matter.

Of course - the risk is higher for short term investors ...

[stevevai1983]

8.1$ is my current estimated fair value. I bought some last week.

[Vaygor1]

8.1$ is my current estimated fair value. I bought some last week.

Good on you Steve Vai. I bought some more too at $8.15 earlier this week.

I understand that for given methods of working out fair value, different methods produce different results. Based on 15 years of real history and RYM's current metrics, anything under $8.30 is an awesome buy as far as I am concerned (not to say the SP can't get even more awesome from a buyer's perspective).

Anything under $8.30 is in The Ultra Zone.

[percy]

BP that irrational quote is often cited on this forum and is basically a nonsense saying when applied to an investor. John Keynes who invented that saying was a high margin speculator not an investor.

Sorry to go off topic,but a fantastic read is ;
"The Money Makers",how Roosevelt and KEYNES ended the depression ,and taking the US off the gold standard, by Eric Rauchway,isbn 9780465049691.
Christchurch library kindly ordered it in for me.

[janner]

Sorry to go off topic,but a fantastic read is ;
"The Money Makers",how Roosevelt and KEYNES ended the depression ,and taking the US off the gold standard, by Eric Rauchway,isbn 9780465049691.
Christchurch library kindly ordered it in for me.

As with all you TV sharks and online sellers Percy !!

No price.. And Wait ..there is more !!

Please tell .. What is the FREE gift... :-))))))

[percy]

As with all you TV sharks and online sellers Percy !!

No price.. And Wait ..there is more !!

Please tell .. What is the FREE gift... :-))))))

Reread the last line of my post.Free,or maybe a $3 "hold" fee.
Shark?
No,your friend in the trade.

[Vaygor1]

Results of the Monash Council's Ordinary Meeting 13-December-2016 concerning Ryman's Brandon Park site in Melbourne.

6-30 Brandon Park Drive, Wheelers Hill Development Plan – Ryman Healthcare Aged Care And Retirement Living

That Council resolves to advise the applicant that the submitted Development Plan for 6-30 Brandon Park Drive, Wheelers Hill is satisfactory and it is recommended that it be approved by Council subject to the following modifications to the plan.

1. The provision of six (6) to twenty (23) indented parking spaces along the southern side of Collegium Avenue to the satisfaction of Council and at full cost to the applicant. Any new street tree planting / streetscape works required/ proposed will be at full cost to the applicant.

2. The provision of a signalised pedestrian crossing across Brandon Park Drive. The location and type of crossing will be to the satisfaction of Council and installed at full cost to the applicant.

3. Any subsequent planning permit application for this Development Plan must provide a full assessment against clause 52.17 of the Monash Planning Scheme in relation to any existing trees on site which are earmarked to be removed, and which are identified as being native to Victoria.

4. Planting of at least 6 mature trees (minimum 3 metres in height when planted) to replace those trees rated as having ‘moderate’ retention value which will be removed from ‘tree group 6’ in the Treelogic Arboricultural Assessment 26 April 2013.

5. Building B04 reduced in height to no more than 3-storeys adjacent to the southern boundary (the Monash Special Development School) of the site. To accommodate the reduction in units from B04, the following could occur:
(a) Relocating a portion of the 901.44 square metre “corner reserve” to the eastern end of the “east west park” by shortening the southern wing of the Building B04.
(b) Extending Building B03 to the north by up to 4-storeys while maintaining a 15 metre setback from Collegium Avenue.
These changes are to be to the satisfaction of the Responsible Authority.

6. The east-west pedestrian and bicycle link to be provided as a shared path with a minimum width of 3 metres.

7. An additional 19 car spaces to be provided on site.

8. The Development Plan to be amended to show the future use/development of the land on the corner of Brandon Park Drive and Academy Street (south west corner) and how it integrates with the site and surrounds.

CARRIED

Source: http://www.monash.vic.gov.au/files/assets/public/about-us/council/council-meetings/minutes-decisions/13.12.16-decisions-2.pdf

Items 5 and 8 above might cause a minor headache/delay imho, but no major showstoppers there by the looks. ie Good news by and large.
I wonder if item 1 above is supposed to be 6 to 20 carparks, or 6 to 23? I would guess 23.

[macduffy]

Thanks for posting that, Vaygor.

Presumably the 6 -20/23 is an increased requirement from a proposed 6, rather than a requirement to provide between 6 and 20/23, at Ryman's discretiion?

[troyvdh]

Any guess when when RYM will list in OZ...I understand that folk over there want it...will there be a dilution off shares...like the last one at $11.25 ?...a few years back..

[Vaygor1]

Thanks for posting that, Vaygor.

Presumably the 6 -20/23 is an increased requirement from a proposed 6, rather than a requirement to provide between 6 and 20/23, at Ryman's discretiion?

Ref excerpt below from the meeting 13 December 2106 Monash Council Meeting agenda page 7:

8545

The Council's requirement was for 6 carparks and Ryman's application exceed this proposing 10. It appears an outcome of the 13 December meeting is that RYM is happy to go as high as 20/23 car parks (the incremental cost will be insignificant on the scheme of things)... the final number probably upon further discussion and agreement with the Council.

[Vaygor1]

Any guess when when RYM will list in OZ...I understand that folk over there want it...will there be a dilution off shares...like the last one at $11.25 ?...a few years back..

Hi Troy.

Ryman have made it clear they do not see any need to list on the ASX at this stage, or even into the foreseeable future.
They might do it one day, and the extra trading liquidity would certainly be of value to New Zealand investors.

The definition I use of dilution is is a reduction in the ownership percentage of a company caused by the issuance of new shares.
Ref http://www.investopedia.com/terms/d/dilution.asp

With a straight share split, there is no dilution in the value of ones holding so I do not consider the market value of approx $11.25 at the time of Ryman's share split down to whatever the new value was as a dilution. The share split (over a decade ago now) resulted in a positive outcome for existing shareholders due to increased trading liquidity.

An ASX listing of Ryman would not necessarily encompass any share spilt, and by my definition certainly no dilution.

[Hectorplains]

Hi Troy.

...and the extra trading liquidity would certainly be of value to New Zealand investors.



This often made assumption is not born out in practice - look at recent examples TIL, CEN, SML...I'm struggling to think of one where the share price moved north after dual listing? Ryman are not seeking capital, best avoid the extra compliance costs etc.

[percy]

This often made assumption is not born out in practice - look at recent examples TIL, CEN, SML...I'm struggling to think of one where the share price moved north after dual listing? Ryman are not seeking capital, best avoid the extra compliance costs etc.

Certainly worked for EBO.

[Vaygor1]

This often made assumption is not born out in practice - look at recent examples TIL, CEN, SML...I'm struggling to think of one where the share price moved north after dual listing? Ryman are not seeking capital, best avoid the extra compliance costs etc.

Thanks for your comment Hector.
I'll take a look at the more recent companies that have dual listed, it's been a while since I reviewed.
Share Price moving North via a Share Split (with nothing to do with an ASX listing) is common from my past experiences.

[Hectorplains]

Certainly worked for EBO.

That was back in 2013!

[percy]

That was back in 2013!

And proving a great success getting Australian intos on board.
RYM having an even larger market cap than Ebo I would expect the same positive rerating.
s.

[macduffy]

Dual listing is often a longer term strategy and usually associated with expansion of a business into Aust or other markets. If the dual listing doesn't "work" it's probably because the expanded business hasn't either.

[Joshuatree]

1 year return for RYM 1.23%
SUM 13.35%
MET 19.24%
The Runt ARV 44.15%

[Biscuit]

1 year return for RYM 1.23%
SUM 13.35%
MET 19.24%
The Runt ARV 44.15%

I suspect 2017 will belong to RYM then. But then I'm biased as only hold RYM.

[winner69]

1 year return for RYM 1.23%
SUM 13.35%
MET 19.24%
The Runt ARV 44.15%

Puppies generally grow pretty fast - until they become big dogs

[percy]

Puppies generally grow pretty fast - until they become big dogs

Yet some puppies only grow into small dogs.
Its in their genes.

[couta1]

1 year return for RYM 1.23%
SUM 13.35%
MET 19.24%
The Runt ARV 44.15% ARV is not primarily a property development company like the other 3 so you can't make a direct comparison, also ARV is coming off a low baseline and it's basically a train carrying one carriage, compared to Rym which is pulling a hundred. Once Oceania lists you will then be able to make a direct comparison by comparing apples with apples.

[Joshuatree]

Def apples with apples maybe a different variety but in the same orchard(sector). Kudos to TJ (&master98)for predicting this performance and brickbats to those that work/worked in the Industry chris lee being one of them (apparently). (newguy too?). Brown fields and green fields ahead.

[percy]

Def apples with apples maybe a different variety but in the same orchard(sector). Kudos to TJ (&master98)for predicting this performance and brickbats to those that work/worked in the Industry chris lee being one of them (apparently). (newguy too?). Brown fields and green fields ahead.

I think you may have miss read Chris Lee's articles.
He made it very clear the difference between developers ,such as RYM and SUM, and caregivers ,such as ARV,and pointed out the profits were to be made by developers.

[winner69]

Def apples with apples maybe a different variety but in the same orchard(sector). Kudos to TJ (&master98)for predicting this performance and brickbats to those that work/worked in the Industry chris lee being one of them (apparently). (newguy too?). Brown fields and green fields ahead.

Good on you for giving praise mate - doesn't happen often

Merry Christmas - have a good one

[Joshuatree]

I think you may have miss read Chris Lee's articles.
He made it very clear the difference between developers ,such as RYM and SUM, and caregivers ,such as ARV,and pointed out the profits were to be made by developers.

Its that he didn't rate it like most/many and i followed the herd unfortunately because i just don't have the deep research skills to join all the dots myself.

small extract from chris lees articles back then.re 27/11/14 thanks to w69 for posting it. Anyways sometimes good idea to sell the best performer(ARV)and buy the worst, (over 1 year) RYM.

"THE All Blacks have had yet another stellar year, and a few of them may well get a Xmas bonus when a rest home provider, Arvida, is listed at an improbable price in the days before Xmas.

Arvida did not attract a full subscription at the highest price sought but it has raised all the money it required at a price close to the full amount, despite a low level of interest from North Island retail investors.

Arvida is largely based in the South Island and has no presence in Auckland so the low levels of interest from northern investors was entirely predictable.

That geographically-based interest might also have been reflected by the decision of Arvida to use a Dunedin-based retail broker to market the company. Anointed by the wide South Island base of retail clients who have allowed Forsyth Barr to make their investment decisions, the Dunedin broker was a logical choice for an issue that was small and unlikely to attract much fund manager focus.

So the successful fund-raising will bring smiles to the handful of All Blacks who have invested in the concept believing a public float would bring them riches. If it holds its issue price till the escrow period ends I expect those rugby blokes with good advisors will then be seeking diversification, perhaps switching their gains into Ryman, Metlife or Summerset whose business models are very different and in my view much more sustainable."

[Beagle]

1 year return for RYM 1.23%
SUM 13.35%
MET 19.24%
The Runt ARV 44.15%

I came across my spreadsheet this morning from 31 March 2012 wherein it was noted RYM was held at market value of $2.43. Its all relative to your timeframe of reference. Suggest we compare notes in another 5 years time, my pick SUM SP will have grown the most.

[Joshuatree]

Of course ; clearly,1 year is my reference. Ive multi bagged RYM longterm.Dont hold any in the sector atpit. Watching the charts.

[Beagle]

Fair enough JT. BTW I wasn't trying to start something, I guess all I'm suggesting is long term I think development is where the money's at. Like you I multi bagged some RYM and sold about 2 1/2 years ago at around where the SP is currently at. Agree 100% the charts look most unconvincing at the moment and I'm not holding anything in the sector at present either.

[macduffy]

RYM's Devonport village "gets the green light."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11783814

[winner69]

RYM's Devonport village "gets the green light."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11783814

Seems many opposed to this 'British housing estate' in posh Devonport

Certain irony in the boomers complaining about a development for the boomers.

http://www.stuff.co.nz/business/property/88550267/Huge-retirement-complex-like-British-housing-estate-gets-go-ahead-in-Auckland?cid=app-iPhone

[winner69]

Seems many opposed to this 'British housing estate' in posh Devonport

Certain irony in the boomers complaining about a development for the boomers.

http://www.stuff.co.nz/business/property/88550267/Huge-retirement-complex-like-British-housing-estate-gets-go-ahead-in-Auckland?cid=app-iPhone

Ryman have great foresight in building this type of housing

If only Aucklanders could see that this is the real solution to there perceived housing crisis - even if they do look like 'British housing estates'

[winner69]

The Value Creators Report from Boston Consulting Group always a good read. Starts by looking at 44,000 companies to come up with the real value creators in the world.

In the 2016 report Ryman are the 7th ranked company in the Health Care Services sector with a 5 year TSR of 32.6% pa. Profit growth has driven 10% of this, dividends 3% and higher valuation multiple 19%.

One of worlds great companies

Well done Ryman

(Ramsay in Australia are 6th) with similar TSR)

[Joshuatree]

Very int thanks w69.

https://www.bcgperspectives.com/content/articles/value-creation-strategy-corporate-development-rankings-2016/

[troyvdh]

Absolutely love it...SP down yesterday 20 cents...up today 27 cents...on ..what double dollar value...thats a good indicator of a quality stock I believe...

[troyvdh]

However...I note that currently both SUM and RYM are moving up ..on tiny dollar value....shoe shiners perhaps...(Im a shoe shiner.)...

[Ace]

Not really following Ryman although adding to winner69 last post here, thought this may be of interest to some.
8732

[Beagle]

As per SUM thread posts I no longer believe RYM deserve a PE premium to any of the other retirement stocks. Plain fact is RYM perfected their systems many years ago so there's little or no opportunity for further outperformance whereas the other players are learning fast and retain the ability to deliver enhanced development margins and improved management, (better procurement policies for one thing), and operational efficiencies as well as potential economies of scale.

RYM set for year four of doing little in my opinion, (three years predicted by Winner69 and I back in this thread, read back in this thread then if you want to check this), but trading in a tight range around mid to late $8, possibly another two years or doing very little in terms of SP. This doesn't seem to worry loyal shareholders who bought cheaply years ago because as one pointed out to me on the weekend he's enjoying 10% plus dividend yields based on his acquisition cost. I suppose that's one way to look at it. Another is he's "enjoying" circa 1.5% unimputed dividend yield on current market value...probably doesn't worry him as he's got plenty but those of us that like to make sure our capital is always working hard for us are far more likely to think differently.

RYM Roger's Yearly Moan...love it :) With thanks to Vaygor1 his friendly gest.

[Vaygor1]

As per SUM thread posts I no longer believe RYM deserve a PE premium to any of the other retirement stocks. Plain fact is RYM perfected their systems many years ago so there's little or no opportunity for further outperformance whereas the other players are learning fast and retain the ability to deliver enhanced development margins and improved management, (better procurement policies for one thing), and operational efficiencies as well as potential economies of scale.

RYM set for year four of doing little in my opinion, (three years predicted by Winner69 and I back in this thread, read back in this thread then if you want to check this), but trading in a tight range around mid to late $8, possibly another two years or doing very little in terms of SP. This doesn't seem to worry loyal shareholders who bought cheaply years ago because as one pointed out to me on the weekend he's enjoying 10% plus dividend yields based on his acquisition cost. I suppose that's one way to look at it. Another is he's "enjoying" circa 1.5% unimputed dividend yield on current market value...probably doesn't worry him as he's got plenty but those of us that like to make sure our capital is always working hard for us are far more likely to think differently.

RYM Roger's Yearly Moan...love it :) With thanks to Vaygor1 his friendly gest.


Hi Roger.

Thanks for your post. I tried to add a reputation comment for it except the system won't presently let me.

I have been a bit quiet on ST of late but have come to realise that my level of contribution activity is quite variable. At times very active, and at times not. It seems that once I get into the mode of posting the activity level stays high for a while. Maybe this post will be a catalyst for another 3 month flurry. :scared:

Enjoying a circa 10% (pretax) dividend based on RYM acquisition costs is nice - no denying that.
However the real attraction is the dividend (as it has done to-date) will continue to grow at an average minimum compounding rate of 15% per annum for the foreseeable future.
RYM may well strike a bump in the road in the next 18 months in my view, however I believe the dividend growth will continue unabated given their financial position and access to free cash flow.
Further, in my view such a bump (should it occur) will have zero impact on RYM's medium term goal of averaging minimum 15% growth per annum in underlying profit.

When I started buying RYM at $2.11 in September 2007, the share was just as expensive then as it is now given it's metrics at the time, so I wouldn't say I bought them cheaply. Some people thought I was mad paying over $2, however buying RYM today at under $9/share today is no more expensive than $2.11 back then... and in 10 years time when RYM is $50/share people will think under $9/share back in good ol' 2017 was a real bargain.

Unfortunately we never got the chance to talk much at the recent Auckland ST meeting. Would be nice to have a 2nd Auckland meeting this year... around earlyish September say?... thoughts?

Vaygor1.

[Carpenterjoe]

I see RYM entrance into the Australian market as a massive point of difference between RYM and SUM. One Australian city has the same amount of old farts as the whole of NZ.

[Under Surveillance]

Earthquake damaged block at Malvina Major village to be demolished and rebuilt.

http://www.stuff.co.nz/dominion-post/business/residential-property/86782148/quakedamaged-block-of-malvina-major-retirement-village-to-be-demolished
Demolition was to start on 9 January, but 2 months later (and 4 months since the earthquake) progress with demolition is essentially nil.

A popular guess is that the insurer disagrees with the need for demolition, and - indeed - Ryman initially told residents that all was well except for a problem at one end. Ryman was at the point of starting an upgrade when the quake struck, the cost of which will conveniently be avoided with a full insurance payout. Never mind the wellbeing of residents from from the damaged block, most of whom have been relocated to Bob Scott village, and are in many cases miserable being away from their friends, doctors, hairdressers, shops, etc.

[percy]

All residents/businesses of Christchurch,Kaikoura and now Wellington, are finding out the simple joys of dealing with insurance companies.
I for one would never again buy shares in an insurance company.

[peat]

All residents/businesses of Christchurch,Kaikoura and now Wellington, are finding out the simple joys of dealing with insurance companies.
I for one would never again buy shares in an insurance company.
Buffett likes them. I'm nervous about climate volatility meaning they dont get the premiums correct. But oops, off topic. Hey Hi Ryman! hows that price/nta ratio up there?

[Beagle]

Hi Roger.

Thanks for your post. I tried to add a reputation comment for it except the system won't presently let me.

I have been a bit quiet on ST of late but have come to realise that my level of contribution activity is quite variable. At times very active, and at times not. It seems that once I get into the mode of posting the activity level stays high for a while. Maybe this post will be a catalyst for another 3 month flurry. :scared:

Enjoying a circa 10% (pretax) dividend based on RYM acquisition costs is nice - no denying that.
However the real attraction is the dividend (as it has done to-date) will continue to grow at an average minimum compounding rate of 15% per annum for the foreseeable future.
RYM may well strike a bump in the road in the next 18 months in my view, however I believe the dividend growth will continue unabated given their financial position and access to free cash flow.
Further, in my view such a bump (should it occur) will have zero impact on RYM's medium term goal of averaging minimum 15% growth per annum in underlying profit.

When I started buying RYM at $2.11 in September 2007, the share was just as expensive then as it is now given it's metrics at the time, so I wouldn't say I bought them cheaply. Some people thought I was mad paying over $2, however buying RYM today at under $9/share today is no more expensive than $2.11 back then... and in 10 years time when RYM is $50/share people will think under $9/share back in good ol' 2017 was a real bargain.

Unfortunately we never got the chance to talk much at the recent Auckland ST meeting. Would be nice to have a 2nd Auckland meeting this year... around earlyish September say?... thoughts?

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.

[Zaphod]

Buffett likes them. I'm nervous about climate volatility meaning they dont get the premiums correct. But oops, off topic. Hey Hi Ryman! hows that price/nta ratio up there?

He seems to love the entire chain, from retail insurers right up to the reinsurance business. Very surprising in some respects, but obviously I defer to his financial wisdom.

[couta1]

Chart starting to look ugly.

[Beagle]

Chart starting to look ugly.

See previous comments on this thread and many comments on SUM thread. I believe SUM and to some extent MET are considerably better value than RYM and have better medium term prospects for profit growth ARV also fully priced in my opinion.
The charts of both SUM and MET look fine whereas as you point out RYM has had a clear break down through its 100 day moving average and is looking very weak from a TA perspective and you know what I think from a fundamental perspective. Many others are copying a lot of RYM's systems, fixed fee for life for example and others are learning fast how to develop their properties and make highly satisfactory development margins with further scope for improvement.
RYM no longer deserve any PE premium with little or no scope to improve their already well perfected operational and development systems. Two more years in the wilderness for RYM shareholders eating nothing but 1.5% unimputed dividends and unless you bought them very cheaply you can hardly feed a sparrow on that dividend yield.

[allfromacell]

I think the market is just a little cautious of the property market at the moment. There is now 2440 Properties in Auckland City listed for sale on Trademe up almost 15% from the start of the year. Regardless of your business model when you own billions of dollars worth of property your value will drop when property valuations drops.

Long term of course this sector will do great.

[Beagle]

I think the market is just a little cautious of the property market at the moment. There is now 2440 Properties in Auckland City listed for sale on Trademe up almost 15% from the start of the year. Regardless of your business model when you own billions of dollars worth of property your value will drop when property valuations drops.

Long term of course this sector will do great.

Just be a bit careful with stat's like that. A lot of people withdraw their property from sale over the Christmas holidays because they'd rather go on holiday than deal with tyre kickers and time wasters and then relist in late January when they get back.

[allfromacell]

Just be a bit careful with stat's like that. A lot of people withdraw their property from sale over the Christmas holidays because they'd rather go on holiday than deal with tyre kickers and time wasters and then relist in late January when they get back.

Fair enough, I should have clarified I'm taking from January / February and not counting the Xmas period where they were far lower (1767 was as low as I saw, but yes it's irrelevant). The point is the trend is going one way.

[macduffy]

Demolition was to start on 9 January, but 2 months later (and 4 months since the earthquake) progress with demolition is essentially nil.

A popular guess is that the insurer disagrees with the need for demolition, and - indeed - Ryman initially told residents that all was well except for a problem at one end. Ryman was at the point of starting an upgrade when the quake struck, the cost of which will conveniently be avoided with a full insurance payout. Never mind the wellbeing of residents from from the damaged block, most of whom have been relocated to Bob Scott village, and are in many cases miserable being away from their friends, doctors, hairdressers, shops, etc.

Pleased to report that I detoured this morning past Malvina Major Village and that demolition of the damaged block is well underway. Large trees have been removed, heavy machinery on site and hard hats busy removing windows.

[Gerard]

In this mornings Herald an article discussing JLL's Retirement Village Database White Paper. The actual paper can be found at the bottom of the article.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11823962

I have kept an eye on this ongoing report (updated once or twice per year) which gives good insite to industry build rates, age demographics, industry trends etc. and comments on the large operators with stats on market share etc.

I note the range of comments from various contributors regarding the share price over the past few years and possible trends over at least the next couple. I am reminded of a Buffet saying in regard to markets "in the short term the market is a voting machine, but in the long-term a weighing machine" Clearly the Ryman share price had got ahead of its increase in valuation metrics with a doubling of price back in 2013, so the valuation had definitely become "stretched" at that time. As long as Ryman (and others such as Summerset) continue to deliver record results, the share price will be "weighed" accordingly by the market .

[macduffy]

Monash City Council approves Ryman's second Melbourne village at Brandon Park.

https://www.nzx.com/companies/RYM/announcements/299006

[Carpenterjoe]

Yip, one village has circa 10-15% of all summersets residents.

I heard Dick Smith rubbishing the Australian government's plan to hit a population of 100mil by 2100.
Reckon Ryman's timing into the Australian market is near perfect (low interest rates, good exchange rate,). Such a point of difference to other NZ villages.

[couta1]

Yip, one village has circa 10-15% of all summersets residents.

I heard Dick Smith rubbishing the Australian government's plan to hit a population of 100mil by 2100.
Reckon Ryman's timing into the Australian market is near perfect (low interest rates, good exchange rate,). Such a point of difference to other NZ villages. And unlike most other NZ companies that have tried, Ryman will do very well in Aussie, such is the quality of the company and it's management.

[Biscuit]

And unlike most other NZ companies that have tried, Ryman will do very well in Aussie, such is the quality of the company and it's management.

Yes, I reckon the move into Aussie was a good one and they have shown that they are one of few NZ companies that are up to the challenge. It will provide the company with a turbo charge in the years ahead. Have been buying more lately as I think the shares will move up from here as we move towards the next profit announcement.

[Lewylewylewy]

Yip, one village has circa 10-15% of all summersets residents.

I heard Dick Smith rubbishing the Australian government's plan to hit a population of 100mil by 2100.
Reckon Ryman's timing into the Australian market is near perfect (low interest rates, good exchange rate,). Such a point of difference to other NZ villages.


Really good point on the interest and exchange rate. Imagine if you owned a multimillion dollar company doing lots of property development... Being able to rack up debt basically = profit for property businesses... low interest rates are a big help there. its basically a game of finance... but when you add to that, the ability to move your debt around and play with exchange rates, you're really on to a winner!

I'm loving RYM at the moment, but I still favour SUM. I just wish SUM would move into Oz or elsewhere. I imagine they're not because there's still plenty to do here in NZ. If it were me though, I'd be considering an ASX listing, split shares for volatility and a share sell to raise money for Oz expansion.

[winner69]

I'm loving RYM at the moment, but I still favour SUM. I just wish SUM would move into Oz or elsewhere. I imagine they're not because there's still plenty to do here in NZ. If it were me though, I'd be considering an ASX listing, split shares for volatility and a share sell to raise money for Oz expansion.

lewy - some points

I love RYM a bit but totally in love with SUM

SUM is already listed on the ASX - try SNZ. Stuff all activity over there.

SUM got plenty to do in NZ so no need to over stretch themselves and do things in Oz - maybe in 5 years time.

SUM already one of the more volatile shares on the NZX - but I think you meant to say 'improve liquidity'. I doubt a share split would do much.

SUM have access to plenty of money to grow - like today they said the banks are keen to lend them another $300 m. Selling more shares (capital raise) not needed and debt cheaper than equity. Look at RYM - never raised another cent since listing last century

Just buy heaps more SUM

[couta1]

Probably a good idea for Ryman to list on the ASX over the next couple of years due to their growing presence in Aussie, Aussies more likely to buy into Ryman than SUM, who they wouldn't know from a bar of soap.

[voltage]

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.

[Beagle]

lewy - some points

I love RYM a bit but totally in love with SUM

SUM is already listed on the ASX - try SNZ. Stuff all activity over there.

SUM got plenty to do in NZ so no need to over stretch themselves and do things in Oz - maybe in 5 years time.

SUM already one of the more volatile shares on the NZX - but I think you meant to say 'improve liquidity'. I doubt a share split would do much.

SUM have access to plenty of money to grow - like today they said the banks are keen to lend them another $300 m. Selling more shares (capital raise) not needed and debt cheaper than equity. Look at RYM - never raised another cent since listing last century

Just buy heaps more SUM

Agree. Forward PE of 16.1 based on my estimate of underlying earnings for FY 17 of 32 cps is bargain buying for any stock in this sector let alone one with SUM's 48% average growth record.

Institutional selling for the new Oceania float this month could provide another golden opportunity like the one the other day at $4.98 to top up. (I won't look a gift horse in the mouth and do nothing twice in a row).

Julian Cook really hitting his straps now, free of Norah's constraints.

[winner69]

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.

Only you can answer that question

But I would say it a good idea because



SUM likely to grow faster than RYM, if not at least as fast.
SUM currently priced at lower multiples than RYM. SUM could get rerated up or RYM might get rerated down so relatively SUM will do better




Conclusion - most things in favour of SUM share price outperforming RYM share price.

[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 :cool:.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.

8810
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.

8810
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.