RYM - Ryman Healthcare

[couta1]

Can anyone confirm whether the minimum age for entering a Ryman Retirement village is now 75. No it is still 70.

[couta1]

Just reading through the latest edition of Ryman Times and I see Ryman are top of the class with auditors. Ryman topped every other company in the sector with over 50% of audits with no partial attainments, compare that with Sum which had around 17%, furthermore 13 Ryman villages currently hold the gold standard of a four year certification, eight of them obtained in 2016. Still the pack leader in the sector when it's comes to setting the standards.

[percy]

Loved the article on the Wiri plant.You would have enjoyed mentioning it at the SUM agm!!,lol.
"With four Auckland villages in various stages of planning and being built,plus a housing boom stretching suppliers to their limits,it made sense for Ryman to set up its own yard to produce the pre-cast concrete"

[sonny n share]

Ryman is currently not paying tax at a company level because of its growing investment in healthcare infrastructure for the elderly.

http://www.stuff.co.nz/business/91958920/How-listed-property-companies-pay-tax

[macduffy]

NZ Herald article reports start of building at Brandon Park Village.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11847992

A small inaccuracy there. Brandon Park is south of Wheelers Hill - where Ryman's first Melbourne village is located. Reporter seems to have confused the two areas.

Meanwhile, demolition of the damaged wing at the Malvina Major village appears to be complete. Just a small pile of rubble left when I drove past at the weekend.

[Lewylewylewy]

Wouldn't be news if it wasn't inaccurate.

[artemis]

Nimby wars! What a planned retirement village in Devonport means for all of Auckland
Is it good enough to settle for developments that are merely 'good enough'?

https://thespinoff.co.nz/auckland/08-05-2017/nimby-wars-what-ryman-healthcares-plans-for-devonport-mean-for-all-of-auckland/

[Bjauck]

Nimby wars! What a planned retirement village in Devonport means for all of Auckland
Is it good enough to settle for developments that are merely 'good enough'?

https://thespinoff.co.nz/auckland/08-05-2017/nimby-wars-what-ryman-healthcares-plans-for-devonport-mean-for-all-of-auckland/

The writer seemed to go out of his way to find fault with Ryman. For example, he complained about the Ryman facility where his parents lived: "There was one flourish: an atrium featuring a large fish pond and tropical plants, but it was so clammily overheated the air clung to you like something faintly fetid." Perhaps not being in the target demographic for Ryman at that time and younger than the residents, he did not need a warm atmosphere? Perhaps he would also have found a complaint if there were no plants and his parents complained of the cold at the facility? He was also keen on finding symbols of death in paintings of sunsets and pre-Raphaelite women and cherubs. To me, it seems he was scratching around to find criticism.

There may be valid points in his article. Is the proposed development good enough - probably. Could there be a better development for the site - probably, but then you can say that for many developments. As for the Nimby criticisms, if you do not want intensification, you need to reduce population growth i.e. vote for whoever wants to reduce immigration.

[macduffy]

Yes, of course the development could be 'better'. They all can - but at a price - and that would send the facility out of reach of a good chunk of the target market - at a time when the availability and affordability of housing is one of New Zealand's most pressing problems.

[Beagle]

+ 1 I agree with your synopsis. Fact is the SP is up circa 300% in recent years and the EPS growth has been nothing like that. PE expansion cannot go on forever, in fact I think in the medium term with interest rates rising all the risk lies with PE contraction meaning we could see years of little, no or negative SP movement. The other point to consider is its not like you're being paid to wait with a decent dividend return is it !
A brilliant company, with fantastic management that's priced for absolute perfection.


Congrats mate, nice trade and great sale price. PE is FAR too high at the current price so definitly a good sale in my opinion.
Thanks again for the lift the airport the other day :)


Reasonable but not outstanding result in my opinion and I agree that it will be interesting to see the market reaction after a huge ramp up in the SP over the last three years. Increase in build rate to 850 units a year but not till 2017....
Lower build rate in 2014 and lower new unit sales compared to pcp.
Much lower growth in cash flow this year compared to last.
Core EPS excluding revaluations of 27.3 c.p.s. puts them on a PE of 32.2 on a growth rate in EPS of 18%.


My policy is not too pay for growth that isn't there. Using a fair value long term PE of 8.5 for a zero growth company and adding in consistent growth at 18% per annum my simple model gives me a long term fair value PE of 26.5 times for Ryman.
26.5 times core EPS of 27.3 c.p.s. = $7.23 fair value. I wouldn't buy or own the stock above this level.
EPS growth is not 43%, this includes revaluations.


As an accountant I can tell you there's a lot of confusion surrounding EPS for these sort of companies.
In brief IFRS, (International Financial Reporting Standards), require inclusion of unrealised revaluations in the financial statements.
Here's the result release, I have highlighted the pertinent part.


But I must confess at this early stage I am still a bit confused as the company made it clear underlying profit is $118m and according to the Direct Broking website there's exactly 500m shares on issue so this gives underlying EPS of only 23.6 c.p.s. ? If I had some shares in this company I'd spend the time necessary to fully investigate this but I don't and even on the higher EPS diluted number disclosed by the company it's a stock that's too "fashionable" for my value tastes...but good luck to all holders :)

There's some of them Joshuatree. I made it crystal clear I though the SP had run far ahead of itself as did Winner69.
I won't comment on the current SP in terms of whether there's value there or not after 3 years of ostensibly going sideways until I've reviewed their result due shortly.

[couta1]

Green light for Devonport village, well done Ryman, superb negotiating skills from the best in the business.

[percy]

Green light for Devonport village, well done Ryman, superb negotiating skills from the best in the business.

Very positive.

[Beagle]

I'm also impressed that they negotiated their way through that minefield of objectors under mediation.

[couta1]

Ryman expands into Geelong, with its 6th Aussie retirement village, this company just doesn't rest, it may be boring but behind the scenes it's all go. PS-I reckon the SP is going to have a wee run leading up to its result on Friday, those Index funds just won't be able to help themselves on all the recent positive news.

[BlackPeter]

...
PS-I reckon the SP is going to have a wee run leading up to its result on Friday, those Index funds just won't be able to help themselves on all the recent positive news.

What do you mean? Index funds can't buy on good or bad news ... unless it is the news that a stock joined or left the index :confused:

[couta1]

What do you mean? Index funds can't buy on good or bad news ... unless it is the news that a stock joined or left the index :confused: International index funds buy this stock and push it's price up, they often do a bit of rebalancing in May. Perhaps I shouldn't have used the word index as their are other big funds that buy this stock specifically also and all this good news promotes buying.

[Beagle]

Ryman expands into Geelong, with its 6th Aussie retirement village, this company just doesn't rest, it may be boring but behind the scenes it's all go. PS-I reckon the SP is going to have a wee run leading up to its result on Friday, those Index funds just won't be able to help themselves on all the recent positive news.

I still reckon my free cider is safe (<$9.20), but yes, this is another good announcement and it is nice that ex Ford employees will have somewhere nice to retire too in due course.

[couta1]

I still reckon my free cider is safe (<$9.20), but yes, this is another good announcement and it is nice that ex Ford employees will have somewhere nice to retire too in due course. Yes your cider is safe due to the current down mood on the sector in general, any other year of recent times, you would have given up that cider a couple of weeks before the results.:cool:

[percy]

Talk about getting a gee on ,Geelong here we come.!
Oh, Ryman you are doing it again.
Aussie No.6......
Incredible.

[hardt]

After careful consideration of my options in retirement, decided to go with Ryman...

The markets hissyfit was welcome today... Picked my parcel up at 863 about a minute ago!

Expect to see NPAT of $500m tomorrow, anything less and I will be disappointed.

[winner69]

After careful consideration of my options in retirement, decided to go with Ryman...

The markets hissyfit was welcome today... Picked my parcel up at 863 about a minute ago!

Expect to see NPAT of $500m tomorrow, anything less and I will be disappointed.

Wow - $500m NPAT would put a rocket under the shareprice

[couta1]

After careful consideration of my options in retirement, decided to go with Ryman...

The markets hissyfit was welcome today... Picked my parcel up at 863 about a minute ago!

Expect to see NPAT of $500m tomorrow, anything less and I will be disappointed. NPAT of $305m last year, so your looking for a 64% increase from last year, no way.

[JeremyALD]

After careful consideration of my options in retirement, decided to go with Ryman...

The markets hissyfit was welcome today... Picked my parcel up at 863 about a minute ago!

Expect to see NPAT of $500m tomorrow, anything less and I will be disappointed.

Lol you're dreaming

[Beagle]

Underlying profit is the accepted comparison metric as it strips out IFRS revaluations.
Underlying profit last year was $158m or 31.6 cps.
I think shareholders should be pleased if RYM can maintain their medium term target of growing the above at 15% per annum. That growth target would imply $181.7m underlying profit or 36.34 cps for the year ended 31 March 2017. If they can achieve that figure at today's closing price of $8.63 that would put RYM on a trailing PE of 23.75 If they confirm medium term guidance to continue to aim for 15% underlying profit that would put them on a March 2018 forward PE of 8.63 / (.3634 x 1.15) = 20.65.
By comparison - SUM by my calculations are currently on a underlying 31 December 2017 year PE of 15.75.

That cider is going to taste really nice on the ski slopes in Queenstown this spring Couta1 :)

[hardt]

I like to read reports when ima little tipsy, lets see how far off kilter my inebriated estimate actually is.


EDIT: 100M+ off, I need to stop mixing drinks and investing...

[couta1]

Hey Roger, I think we'll leave that cider for the Apres ski activities, can't have an intoxicated bean counter on the Q/town ski slopes. PS-Thats the most miserable closing price I've seen the day before a Ryman result.

[hardt]

After careful consideration of my options in retirement, decided to go with Ryman...

The markets hissyfit was welcome today... Picked my parcel up at 863 about a minute ago!

Expect to see NPAT of $500m tomorrow, anything less and I will be disappointed.

To be fair to my drunken self, I didn't clarify what currency this $500M was in.... I was obviously talking in Belize Dollars :)

[Vaygor1]

Announcement this morning. RYM increase in underlying profit up a 'pitiful' 13%... here we go boys !! :eek2:

Ref: https://www.nzx.com/companies/RYM/announcements/301389

[couta1]

Good solid result with plenty in the pipeline, 13% growth in underlying profit might disappoint the market though.

[LAC]

They have heaps of work ahead so I like the result. Solid but the market isnt going to like that 13% today.

[Vaygor1]

Good solid result with plenty in the pipeline, 13% growth in underlying profit might disappoint the market though.

Agreed Couta. SP based upon this announcement and the historical correlation with Underlying Profit should be in the $10.50 to $10.75 range.
It will be interesting to see if the market drives it down below $8.00... or further?

[winner69]

Agreed Couta. SP based upon this announcement and the historical correlation with Underlying Profit should be in the $10.50 to $10.75 range.
It will be interesting to see if the market drives it down below $8.00... or further?

$8 .........no way mate

[Vaygor1]

They have heaps of work ahead so I like the result. Solid but the market isnt going to like that 13% today.

They do have a load of work in front of them, but will they realise the number of new builds before 31-March-2018 to get to 15% increase in UP this current financial year? I think they will struggle. Either way FY ending 31-March-2019 will be a corka.

Market reaction will be interesting. RYM's target, as I have stated before, is an average of 15% increase in UP/annum, but my perception is the market views and expects this figure to be the minimum these days.

[Nasi Goreng]

The difference between 13% and 15% underlying profit growth is about $3m. So everyone needs to put that in perspective. The pipeline looks healthy... can't see it getting smashed over this.

[Vaygor1]

$8 .........no way mate

There are enough short-term thinkers out there to do it imho. Provide a fantastic buy opportunity if it did.

Results briefing live as I type at http://edge.media-server.com/m/p/agv4zgtt

[Beagle]

Announcement this morning. RYM increase in underlying profit up a 'pitiful' 13%... here we go boys !! :eek2:

Ref: https://www.nzx.com/companies/RYM/announcements/301389

Hi Vaygor1,

I'm going to go out on a limb here and say that although this is the first time ever they've failed to meet their medium term target of 15% growth in underlying earnings per share the market will forgive them this one indiscretion as they have a very solid development pipeline ahead and I think they did very well to negotiate their way through some tough opposition to get the green light for their Devonport development. Underlying EPS is 35.6 cps. Projected underlying EPS for FY18 with profit growth of 15% is 41 cps. Line up Ladies and Gentleman and choose what PE you believe is appropriate.

[percy]

Good solid result with plenty in the pipeline, 13% growth in underlying profit might disappoint the market though.

Another fantastic result.
Will not take long before we are back to 15% growth.13% a minor blip.
We remain "well positioned."

[trader_jackson]

I'll summarize it in alarming terms: Arvida Group ('the old dog') is likely to have nearly (give or take a few percent) as much EPS growth this year, and the bigger, better, faster years are still ahead of it... yet Ryman is trading at a huge premium (due to its supposed exemplary management).

They didn't miss it by 2% or a couple of million, they were off it by 15% (2% / 13%) in my view.

Lets hope they get the pipeline sorted and don't miss it again, otherwise a re-rating is required (if not already over due)

Will be interesting to see how market reacts

[hardt]

A lot of people just buy into the news of 13% growth without even looking at what was expected...

Chances are the market will be friendly this morning.

[Beagle]

SUM grew underlying profits 50% in the last year and an average of 48% per annum for the last five years and currently trades on a forward PE of 5 less than RYM...Hmmmm
RYM about 21 for 31/3/18 year and SUM about 16 for 31/12/2017 year. Interesting situation...

[couta1]

A lot of people just buy into the news of 13% growth without even looking at what was expected...

Chances are the market will be friendly this morning. Initially maybe but the big players can't be fooled. Disc-Sold my holding a couple of days ago when there was no run up on the share price and I was pretty certain they wouldn't make the 15%. Will be a better re entry price coming up

[hardt]

SUM grew underlying profits 50% in the last year and an average of 48% per annum for the last five years and currently trades on a forward PE of 5 less than RYM...Hmmmm
RYM about 21 for 31/3/18 year and SUM about 16 for 31/12/2017 year. Interesting situation...

RYMAN - 55% of the NZD383.4 million operating revenue it generated in the 2016 financial year came from the provision of different medical and age-care services, 32% from the sale and resale of occupancy rights, and 13% from ongoing management fees.

SUMMERSET - 75% of the NZD140.2 million operating revenue it generated in the 2016 financial year came from the sale and resale of occupancy rights, 16% from the provision of different medical and age-care services and the remaining 10% from ongoing management fees.

These two are playing somewhat different games, RYM is weighted towards aged care and SUM is reliant on occupancy sales.

[JayRiggs]

Simon Challies stepping down as CEO due to Parkinsons disease. After 18 years of service to Ryman, it's time to look after yourself. Congratulations on a fantastic phenomenal job, well done!

[Bjauck]

Initially maybe but the big players can't be fooled. Disc-Sold my holding a couple of days ago when there was no run up on the share price and I was pretty certain they wouldn't make the 15%. Will be a better re entry price coming up Well done. RYM sp has still outperformed both MET (by 2.5%) and SUM (by 4%) in the past month. So it will be interesting to see how the market marks RYM now.

[couta1]

Simon Challies stepping down as CEO due to Parkinsons disease. After 18 years of service to Ryman, it's time to look after yourself. Congratulations on a fantastic phenomenal job, well done! A big loss for the company, a fantastic person and role model of what a CEO should look like.

[hardt]

Initially maybe but the big players can't be fooled. Disc-Sold my holding a couple of days ago when there was no run up on the share price and I was pretty certain they wouldn't make the 15%. Will be a better re entry price coming up

Correct, I got out this morning at 868, will look for a good entry as Ryman is still outstanding.

[winner69]

I'll summarize it in alarming terms: Arvida Group ('the old dog') is likely to have nearly (give or take a few percent) as much EPS growth this year, and the bigger, better, faster years are still ahead of it... yet Ryman is trading at a huge premium (due to its supposed exemplary management).

They didn't miss it by 2% or a couple of million, they were off it by 15% (2% / 13%) in my view.

Lets hope they get the pipeline sorted and don't miss it again, otherwise a re-rating is required (if not already over due)

Will be interesting to see how market reacts

H2 earnings growth must have been a lot greater than 15% (after a poorish H1)

Momentum is going their way

[percy]

A big loss for the company, a fantastic person and role model of what a CEO should look like.

Agree ,I wish him well for the future.
A genuine gentleman,who always aimed for the very best for his residents.

[Carpenterjoe]

Is my math correct assets grew by circa 900million

[babymonster]

the new CEO should share similar with the Simon, and should have taken more responsibility since Simon was not well I guess, so not to worry about there... RYM is more expensive compared to SUM and ARV but it has 16 years of growth, maybe when SUM had 16 years of growth it would be more expensive then RYM atm. DYOR and Disc-holding

[Beagle]

A big loss for the company, a fantastic person and role model of what a CEO should look like.

HUGE LOSS for the company. No way to sugar coat this... Many thanks for the heads-up about this.

[QOH]

Interesting interview with Simon Challies
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11859154

[Snow Leopard]

So with things getting all equinoxial again it is time to pay homage to the sun god by the ritual of posting the table of annualised capital gains for Ryman...

Well you are a dopey lot! You should have woken me up and reminded me to post the table for Ryman way back in mid-March.

You are lucky that it sprung to my mind whilst posting on the SUM thread.

So without further ado, the obviously little anticipated but much overdo, pretty table:
http://i7.photobucket.com/albums/y269/TheTigerWithNoName/SharetraderImages/NZX-RYM/NZX-RYM-20170605-1.png

Best Wishes
Paper Tiger

[couta1]

Ryman currently have around 960 million worth of work at various stages in the pipeline, methinks the SP will be having another run up given time, your mission, should you choose to accept it, is to work that, given time bit out.

[winner69]

PT love that table

Just confirms buying RYM (or any stock) when the PE ratio gets ridiculously high only leads to sub par returns.

The orange bits on your table show when those times were.

[Oliver Mander]

Update this morning...more growth for Ryman.



Ryman Healthcare goes west





New retirement village planned in Henderson, West Auckland





Ryman Healthcare is planning to build a new retirement village in


fast-growing West Auckland.





New Zealand's largest retirement village operator has secured a 4.5-hectare


site on Lincoln Rd, close to shops in the heart of Henderson.

[stoploss]

Update this morning...more growth for Ryman.



Ryman Healthcare goes west





New retirement village planned in Henderson, West Auckland





Ryman Healthcare is planning to build a new retirement village in


fast-growing West Auckland.





New Zealand's largest retirement village operator has secured a 4.5-hectare


site on Lincoln Rd, close to shops in the heart of Henderson.




Hope there is a lawn or village green in the middle for the residents to do donuts on in their mobility carts :)

[Beagle]

I know the site, right next to supermarket and other shops, great site but 400 residents in 4.5 hectares...oh dear...I foresee another high density prison style development.

[percy]

Fantastic, and so handy to a Pak 'n Save.

[winner69]

I know the site, right next to supermarket and other shops, great site but 400 residents in 4.5 hectares...oh dear...I foresee another high density prison style development.

But the way forward for Auckland housing woes - not just retirement villages



Even the western leafy suburbs not safe from such developments

[dobby41]

I know the site, right next to supermarket and other shops, great site but 400 residents in 4.5 hectares...oh dear...I foresee another high density prison style development.

Do they feel like prisons to the inmates though?
Or do they feel like a close community where they can live in retirement bliss?

[percy]

Do they feel like prisons to the inmates though?
Or do they feel like a close community where they can live in retirement bliss?

Going by how quickly Ryman sell/fill their villages, the retirees want a close community where they can live in retirement bliss.!

[dobby41]

Going by how quickly Ryman sell/fill their villages, the retirees want a close community where they can live in retirement bliss.!

That's what I would have thought.

[Beagle]

Depends whether you want to be an inmate or a resident :)
I've just been looking into the difference between how Ryman, Metlifecare and Summerset market themselves and there's some very interesting differences the most notable of which is the extremely high level of assurance RYM give with their 9 peace of mind guarantees. "Old people crave certainty and peace of mind" RYM, at this point in time understand this better than the other companies.

[sideline]

Fantastic, and so handy to a Pak 'n Save.

... and just across the road from Morrison's Funeral Directors.

Kings Plant Barn next door should make a killing on this.

[percy]

... and just across the road from Morrison's Funeral Directors.

Kings Plant Barn next door should make a killing on this.

Something you start thinking about when you have buried a number of friends is your own funeral.Most of us would like to have it pre-paid,yet we put off doing anything about it,and leave it to family to organise, when we have died.Family do not feel like comparing,prices and services,at that time,so end up paying over the top.
I would therefore think Morrison Funeral Directors will be well placed to attract a good number of RYM residents.They may have to sharpen their pencil as RYM residents will be comparing prices.
And yes Kings Plant Barn will make a killing.

[Lewylewylewy]

Don't but you're fertilizer there, for the same reason you don't buy Chinese food from the place next to the vets lol

[winner69]

Herald headlines. Bit short of dramatic news today

$362.9m pre-tax profit, zero tax paid: Ryman Healthcare annual report out

But the nice man from Forbar defends them and explains why

[Zaphod]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11880947

Labour's New Lynn candidate is certainly leveraging this specific situation to claim that a formal CGT needs to be implemented

[BlackPeter]

Herald headlines. Bit short of dramatic news today

$362.9m pre-tax profit, zero tax paid: Ryman Healthcare annual report out

But the nice man from Forbar defends them and explains why

I guess shows how low the New Zealand press has fallen. This is a very dumb headline and discussion.

If we start to charge retirement villages tax for unrealised valuation gains than we need to do that as well to any other property owner (including for the family home). Charge anybody in Auckland owning a modest $1 million dollar home say 31 % tax on the 100,000 dollar their property appreciated last year? Obviously not - most people would be broke after this exercise.

So - why would we ask retirement villages to pay a tax nobody else needs to pay (sounds not legit to me)? And by the way - why would anybody run a retirement village if they are penalised for that by paying taxes for unrealised gains? Back to the state and the tax payer to look after the old people.

[couta1]

Typical bleating Herald article, rehashing very old news, nothing's going to change. Last time Labour starting pushing the CGT argument they got trashed, haven't they learnt anything(Well Andrew Little appeared to by backtracking on the idea)

[Joshuatree]

The "pop goes the bubble" re Retirement Villages article by Tim Hunter is int reading in the NBR citing disclosure standards or lack of.
And coming out in Aus ,this attack. Headwinds alright.


Bleed Them Dry Until They Die
By Adele Ferguson, Klaus Toft, Lucy Carter
Posted June 22, 2017 11:50:00

Bleed them dry until they die
Monday 26 June 2017
Bleed Them Dry Until They Die: The retirement villages ripping off retirees.
"It's a financial trap. It's a financial sinkhole. Once you're in, it's very hard to get out." Former Resident
The glossy brochures and slick advertising sell the promise of a blissful retirement in "enclaves of contentedness" where "lifestyle meets wellbeing." But residents of the retirement homes run by one of Australia's biggest providers have a very different story to tell.
"If there's any way that can more quickly separate a person in a retirement village from their money, I don't know it." Former Resident
These retirement villages are marketed as a way for older Australians to keep their independence without the burden of maintaining a property. They can relax, secure in the knowledge that they have someone to call on if they need help. What many residents don't realise, until it's too late, is the astronomical amount they will have to pay for the privilege.
"It's clearly designed to suck as much profit from the individual investors as it possibly can. I do think it's outrageous. I think it's extortionate. I think it's exploitative." Former Resident
On Monday night, in a joint Four Corners/Fairfax Media investigation, reporter Adele Ferguson examines the ruthless tactics that residents say put profits before people.
"It's completely biased in favour of the operators. You feel you haven't got a chance to defend your home against the rapacity of the huge corporation, who will always win because they can afford the legal costs involved." Former Resident
Residents say they've been patronised, marginalised and ripped off. Now they want to warn others.
"It was like living in a grubby fairy tale." Resident
The findings of this joint investigation will be revealed in a series of online articles published by ABC News Online and Fairfax culminating in the Four Corners broadcast on Monday night.

[Beagle]

SUM retirement companies have higher satisfaction level's than others (94%). I suppose its human nature for a tiny minority of disaffected people to bleat like sheep missing their lambs. Not headwinds, just one or two disaffected people making a lot of noise. Human nature can be an ugly thing, people want all the convenience of community living with all the activities, common area's,organized trips, bowling green, spa poos, swimming pool, medical support and back up panic buttons in rooms for assistance if you fall over, onsite meals, access to cleaning and support services, library, onsite chapel, organized exercise classes, e.t.c.e.t.c. these companies can provide but they expect it for free...

[Joshuatree]

Yes i hope this doesn't have legs; we will see. Going to get a lot of airing on ABC and Four corners.You get the NBR Roger; surprised you haven't commented on the Article by Tim Hunter?

[percy]

Yes i hope this doesn't have legs; we will see. Going to get a lot of airing on ABC and Four corners.You get the NBR Roger; surprised you haven't commented on the Article by Tim Hunter?

Should help Ryman sell their Melbourne Villages.
Interestingly enough that Ryman's good name proceeded their arrival.
Word of mouth is Ryman's [and SUM's] best advertising.
Added security of providing "tota care" pays big dividends.

[Beagle]

Yes i hope this doesn't have legs; we will see. Going to get a lot of airing on ABC and Four corners.You get the NBR Roger; surprised you haven't commented on the Article by Tim Hunter?

Been pretty busy and its a tired old subject and besides that there has to be some logical limit on how many forums one wastes time on :)

[Joshuatree]

Hey yeah right pass me a tui; and have a good weekend:). Must be feeling great being more light weight now; bounding around , good on you and any one else that thread has found useful re weight loss.Live longer AND reduce your personal carbon footprint.

[Onion]

... spa poos, swimming pool, medical support and back up panic buttons in rooms for assistance if you fall over,...

I'd be pressing the panic button if I fell in to the spa poos. :scared:

[couta1]

The "pop goes the bubble" re Retirement Villages article by Tim Hunter is int reading in the NBR citing disclosure standards or lack of.
And coming out in Aus ,this attack. Headwinds alright.


Bleed Them Dry Until They Die
By Adele Ferguson, Klaus Toft, Lucy Carter
Posted June 22, 2017 11:50:00

Bleed them dry until they die
Monday 26 June 2017
Bleed Them Dry Until They Die: The retirement villages ripping off retirees.
"It's a financial trap. It's a financial sinkhole. Once you're in, it's very hard to get out." Former Resident
The glossy brochures and slick advertising sell the promise of a blissful retirement in "enclaves of contentedness" where "lifestyle meets wellbeing." But residents of the retirement homes run by one of Australia's biggest providers have a very different story to tell.
"If there's any way that can more quickly separate a person in a retirement village from their money, I don't know it." Former Resident
These retirement villages are marketed as a way for older Australians to keep their independence without the burden of maintaining a property. They can relax, secure in the knowledge that they have someone to call on if they need help. What many residents don't realise, until it's too late, is the astronomical amount they will have to pay for the privilege.
"It's clearly designed to suck as much profit from the individual investors as it possibly can. I do think it's outrageous. I think it's extortionate. I think it's exploitative." Former Resident
On Monday night, in a joint Four Corners/Fairfax Media investigation, reporter Adele Ferguson examines the ruthless tactics that residents say put profits before people.
"It's completely biased in favour of the operators. You feel you haven't got a chance to defend your home against the rapacity of the huge corporation, who will always win because they can afford the legal costs involved." Former Resident
Residents say they've been patronised, marginalised and ripped off. Now they want to warn others.
"It was like living in a grubby fairy tale." Resident
The findings of this joint investigation will be revealed in a series of online articles published by ABC News Online and Fairfax culminating in the Four Corners broadcast on Monday night. After working in the sector for 27yrs and having been involved with Ryman and Sum complexes for around 15yrs of those, I've never heard such extreme comments from a unit dweller during that time. You get your garden variety complaints about food, a maintenance issue or a shrub being in the wrong place etc etc, must be an Aussie problem aye, no surprises there. PS-Headwind equals light breeze, tailwinds equal gale force southerly.

[Joshuatree]

Yeah media know how to sensationalise things. 4 corners programme on the 26th Video Bleed Them Dry Until They Die (http://www.abc.net.au/4corners/stories/2017/06/22/4689969.htm)

[skid]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11880947&ref=NZH_fb

[Bjauck]

Yeah media know how to sensationalise things. 4 corners programme on the 26th Video Bleed Them Dry Until They Die (http://www.abc.net.au/4corners/stories/2017/06/22/4689969.htm) Prospective licencees must obtain independent legal advice to forestall as much as possible "buyer's remorse". The consequences are fully explained. As in all things, it is inevitable that some will regret their decisions.

[Bjauck]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11880947&ref=NZH_fb That article was positive for the RYM, SUM et al. In brief as I read it: No tax because of non-taxable gains and development of aged-care facilities. Without this business & tax model, who else would be developing the aged-care infrastructure?

[percy]

That article was positive for the RYM, SUM et al. In brief as I read it: No tax because of non-taxable gains and development of aged-care facilities. Without this business & tax model, who else would be developing the aged-care infrastructure?

Imagine the fiasco, if The Government in partnership with FBU decided to develop age care villages.
I would guess each village would cost at least twice what RYN/SUM develop them for.

[BlackPeter]

Imagine the fiasco, if The Government in partnership with FBU decided to develop age care villages.
I would guess each village would cost at least twice what RYN/SUM develop them for.

True - but then FBU would only quote 90% of the cost and go bankrupt. Taxpayers would need to cover a hugely increased payment for the dole.

[Joshuatree]

AOG down re 9% today. Their response to questions/accusations. below. I guess all similar companies will be scrutinised, which is good; to make sure RYM etc are doing the right thing; be great to get a good bill of health and confidence in the retirement ,care, prop sector here.
Aveo's response to Fairfax/Four Corners (https://hotcopper.com.au/threads/3506511/)

[bull....]

AOG down re 9% today. Their response to questions/accusations. below. I guess all similar companies will be scrutinised, which is good; to make sure RYM etc are doing the right thing; be great to get a good bill of health and confidence in the retirement care prop sector here.
Aveo's response to Fairfax/Four Corners (https://hotcopper.com.au/threads/3506511/)

Aveo is focused on churning customers for profit (given that it is entitled to large exit fees of up to 35%-40% of the property value when residents leave)


Despite units being freehold, Aveo imposes draconian clauses and restrictions on residents with overly legalistic and imposing contracts


The company is effectively converting its freehold properties to leasehold ‘by stealth’ and is confusing customers about what they are actually purchasing


The company is engaged in ‘asset stripping’ via charging very high fees including real estate agent fees (the company is its own agent) and exit fees when a resident leaves

http://www.fool.com.au/2017/06/26/why-the-aveo-group-share-price-is-set-to-plunge-today/

Might start getting hot over here soon too.

[percy]

For this year's RYM annual report.
page 2 The Chairman; "We are also reaping the rewards of many years of reinvestment in Ryman,and are on the cusp of a great period of growth as the population ages."..."We invested a record $525 million to meet the demands .""We've made good progress thanks to growing resident demand for our unique Ryman-style villages."
page 6."We are confident demand for our villages will continue to grow.""They meet a real and growing need in the community,and remain affordable for residents to move in and free up capital."
page 7.New CEO Designate."We offer residents beautiful retirement living options,but,most importantly,the security and peace of mind of knowing there is great care available when needed.""The next phase of growth will be unprecedented in the company's history and I believe your support will be rewarded."
page 8 Simon."Ryman Healthcare ended the year in great shape,and with a fantastic platform for the growth we see ahead."
"You could say that we have spent the past 18 years since we listed warming up for the main event-and it is about to begin."

[Joshuatree]

Sounds great, hope so after 3 years of the S/P crabbing aimlessly sideways.Down 5c at 11.54am.

[percy]

Sounds great, hope so after 3 years of the S/P crabbing aimlessly sideways.Down 5c at 11.54am.

And you wonder why a lot of people can't be bothered posting.
Sorry but I expect better from you.

[Joshuatree]

Sorry percy , but its a fact that RYM has been in the doldrums for some time; im glad i sold out some time ago and while its still early the s/p so far hasn't responded well today.I just think too many ducks aren't lined up atm re whats been going on ,including sentiment; i willl be happy to get back on board when they do line up. But i do wonder if the perfect storm , golden days of investing gains is behind us in the sector; i know there is an ever increasing ageing population demand for the sector going forward that should help it to still be a good sector longterm but not necessarily as stellar as the past. Just my opinion.

[percy]

I would suggest you read Ryman's annual report.

[hardt]

The fundamentals will not stop improving over time with Ryman, but there are just too many options on the market that have very similar offerings for any one to be the darling.

[Beagle]

RYM's PE does not make a compelling case for itself against SUM other companies with a much lower PE growing at three times the pace.

[percy]

Ryman annual report is a must read for anyone wanting to understand Ryman, and the retirement sector.It is written by the people who know the sector best,who have been successful in the sector for a very long time,and who have laid the foundations for ongoing growth.
go to www.nzx.com
enter RYM.
go to announcements
then annual report.

[Beagle]

Three years of tracking sideways as predicted Percy and I reckon you're on for at least another one. Just as well some of your other shares pay proper dividends and continue to go up mate. For those who are interested https://www.nzx.com/files/attachments/260468.pdf I'm getting a beating in SUM other share and definitely don't feel the need to repeat that with this one.

[winner69]

Sorry percy , but its a fact that RYM has been in the doldrums for some time; im glad i sold out some time ago and while its still early the s/p so far hasn't responded well today.I just think too many ducks aren't lined up atm re whats been going on ,including sentiment; i willl be happy to get back on board when they do line up. But i do wonder if the perfect storm , golden days of investing gains is behind us in the sector; i know there is an ever increasing ageing population demand for the sector going forward that should help it to still be a good sector longterm but not necessarily as stellar as the past. Just my opinion.

RYM as a company not been in the doldrums for some time - still building and looking after oldies and making heaps of dosh.

Share price gone nowhere for years though because punted bid it up to ridiculous multiples - it was always going to be a case of ridiculous high PEs lead to below average future returns (documented on this thread 3 years or so ago)

RYM still be rerated and probably still has at least a year to go with share price about this level - years time might be down to a PE of below 20 (compared to 40 about 3 to 4 years ago)

Golden days for RYM will continue - golden days for shareholders will start again one day.

[Beagle]

Interestingly, no way would Winner have seen my post directly above his due to the time stamp and time taken to type up his post above and I can confirm to others we have not been comparing notes in recent weeks on this. We both felt three years or so ago that RYM would go nowhere for three years and both feel there's at least one more year of that to come. We've been right so far, lets see how we go for this coming year. Disc Hold SUM other much faster growing company of a current year underlying PE of only 14.2.

[Nasi Goreng]

2018 is looking like its going to be a bumper year for Ryman, I think the 3 years of SP pain will probably come to an end relatively soon. Once we start to get through the next reporting period (which will also be post election) and start to look forward 6, 12 months, I would expect the share price to respond if It hasn't already.

[BlackPeter]

Ryman annual report is a must read for anyone wanting to understand Ryman, and the retirement sector.It is written by the people who know the sector best,who have been successful in the sector for a very long time,and who have laid the foundations for ongoing growth.
go to www.nzx.com
enter RYM.
go to announcements
then annual report.

I see what you mean ... "Ready for the next wave". And yes, no matter how the market rates RYM and the other retirement village providers in the short term, in the long run I am sure they are all very well positioned ;). Providing a great solution in a time when potential clients are already doubling over the period of two decades just courtesy to the NZ birth statistics - and this is not even considering increased life span (resulting in more people in need of support) and potentially more people deciding to retire in NZ ... talk about a sellers market :cool:.

Doesn't looks like we need to worry about an oversupply of quality retirement home places anytime soon.

[macduffy]

I like and hold both and bought a few more SUM during the week. Might be a little early and broke my rule of waiting for a confirmed uptrend, but what the heck, it's my version of living on the edge!

:cool:

[percy]

Living on the edge is very true,as RYM are expecting the 75+ population to nearly triple over the next 30 years.
In NZ there are currently 62,000 people with dementia,which will grow to 102,000 by 2030,and more than 170,000 by 2050.
In Australia there are more than 413,000 people living with dementia,which is projected to reach more than 1 million by 2050.

[percy]

Brandon Park,Melbourne.
"We had more than 360 people on the waiting list before we even started on site,so we know there is stong demand ahead."

[Bjauck]

...

Golden days for RYM will continue - golden days for shareholders will start again one day.

I remember reading this in August 2013:
Ryman's Rise to The Top
http://www.stuff.co.nz/the-press/business/8999032/Rymans-rise-to-the-top
"Challies has stated that Ryman has the intention to become the No 1- listed firm by capitalisation."

Although I do not know the exact context in which this reported statement was made, when I read that back in 2013, I thought it was somewhat pointless to specifically express that intention (verging on megalomania?) Does anyone know if Ryman executives still have that intention that as an expressed goal?

[Joshuatree]

How about this absolute Gem and just 2nd sentence in; doesn't it make you glow and feel excited; best spin I've seen since John Key, crosby /textor style. No need to read anymore ehh?Winning the Americas Cup against the odds is still giving me the real deal glow. Hey someones got to be devils advocate here :mellow:

"It has been a period of innovationand unprecedented investment inthe company. We are also reapingthe rewards of many years ofreinvestment in Ryman, and are onthe cusp of a great period of growthas the population ages. "

[silu]

The price action over the last days has been interesting plus quite some volume today already.

[Carpenterjoe]

The price action over the last days has been interesting plus quite some volume today already.

yeah, someone is giving it a good nudge.

[Beagle]

WOW Over $20m by value already...something is going on. RYM might get a please explain enquiry for this given the speed of their recent SP rise compared to the rest of the sector....or is this simply SALT having to close out their short position in a hurry ?

[bull....]

ryman is showing the sector who's boss i reckon

[silu]

another big volume day.

[troyvdh]

Me thinks that folk have not appreciated the "aussie effect" enough....ie RYMs success over there...I understand that a dual listing is in the wings.
What does confuse me however...No please explain from NZX.

Probably Im talking rubbish...but its the only point of difference of significance I can see between these entities.

[hardt]

Me thinks that folk have not appreciated the "aussie effect" enough....ie RYMs success over there...I understand that a dual listing is in the wings.
What does confuse me however...No please explain from NZX.

Probably Im talking rubbish...but its the only point of difference of significance I can see between these entities.

It moved <9%... definitely does not meet the requirement for a speeding ticket.

[Beagle]

So SALT comes out and discloses a short position in RYM and the other institutions appear to really want to rub some ummmm....yeap, Salt into the wound.
Massive volume today, over 1% of the shares traded. 60% of that level in terms of percentage of shares traded today in SUM other retirement operator too.

[winner69]

So SALT comes out and discloses a short position in RYM and the other institutions appear to really want to rub some ummmm....yeap, Salt into the wound.
Massive volume today, over 1% of the shares traded. 60% of that level in terms of percentage of shares traded today in SUM other retirement operator too.

Conjecture?

They had Spark and Chorus as 2 other large short positions - how they going?

[troyvdh]

Woof....where did you get info from...cheers..it ain't on NZX ?....cheers

[Beagle]

Woof....where did you get info from...cheers..it ain't on NZX ?....cheers
https://static1.squarespace.com/static/53e333eee4b08ed4322ef199/t/595ed8ce20099e247c9f8a7c/1499388114888/Salt+Long+Short+Fund+Fact+Sheet+-+30+June+2017.pdf Their somewhat offsetting long is on MET

[RRR]

Short covering?

[Beagle]

Its such a large spike directly up it looks like someone covering a very large short position so could be a great time for a new short position :D

[JeremyALD]

https://static1.squarespace.com/static/53e333eee4b08ed4322ef199/t/595ed8ce20099e247c9f8a7c/1499388114888/Salt+Long+Short+Fund+Fact+Sheet+-+30+June+2017.pdf Their somewhat offsetting long is on MET
Well that was a very gloomy report about the state of the market. Notice their shorting SUM too.

[troyvdh]

I recognise this entity is "Sharetader".....but can someone enlighten me on the deficits of not investing in a company....I've said this before ....it ain't hard to see what many folk avoid the SM.....it's a casino....and it should not be.

Like ..what is so wrong with wealth.....accumulated......

[couta1]

I recognise this entity is "Sharetader".....but can someone enlighten me on the deficits of not investing in a company....I've said this before ....it ain't ain't hard to see what many folk avoid the SM.....it's a casino....and it should not be. You can't have a properly functioning SM without both traders and Investors, each person's individual personality determines which end of the spectrum one sits, others sit in the middle and enjoy the best of both worlds.

[Beagle]

Well that was a very gloomy report about the state of the market. Notice their shorting SUM too.

The Fund remains slightly net short the retirement village sector but did cover its mid-sized Summerset short near its lows as share prices fell sharply during the month as the long-awaited housing slowdown began to be priced in. We now have a large long in Metlifecare, a large short in Ryman, a tiny short in Arvida and a modest short in Summerset which we put back on after it bounced on a (last??) earnings upgrade late in the month.

Yes indeed. Maybe they closed this out today, (heavy volume in SUM), after getting squeezed very badly on their large RYM short, (extremely heavy volume).
These guys are badly underperforming the market so far this year, (up over 10% on the NZX50) and they're up just 2.6%. What's the bet they're having a very bad July !

[troyvdh]

Totally correct and appreciated...However ...can you understand where I am coming from...can you appreciate that a huge percentage of population view the Sm as a casino....and invest in property....blah blah....Gee ..don't you get it...why should the SM be the domain of a few in the know....as stated a few years ago in the Listner a few years ago....NZ could end up as the Fiji ...with snow.....Am I wrong?????...... Do you like ...care....

[hardt]

Will probably see Salt increase their short position at these levels...

The conviction required for a short position is usually twice that of a long... ha, wouldn't expect any "covering" based on a lame 8% movement.

[percy]

I wonder whether Salt can be "right", and stay solvent longer than the market remains "wrong", with the retirement village sector.?
Every day is a day closer for me moving into a retirement village.50,000 a week are already making a retirement village their new home.Wonder how many a week it will be when I move.?
Disc.
Extremely long on RYM.
Very long on SUM.
"well positioned " to be long on OCA.

[couta1]

I wonder if Salt are well, worth their Salt compared to other fund managers, I don't reckon. The only short position that's showing any sort of traction for them currently is CNU.

[Bjauck]

Simon Challies sold 1,000,000 shares. I wonder what has happened to the aim of RYM's becoming No 1 company on the NZX.
https://www.nzx.com/companies/RYM/announcements/304131

[macduffy]

Simon Challies sold 1,000,000 shares. I wonder what has happened to the aim of RYM's becoming No 1 company on the NZX.
https://www.nzx.com/companies/RYM/announcements/304131

Isn't it to be expected that a CEO, retiring due to ill-health, will want to diversify his investments, irrespective of the merits of and prospects for his former employer?

[BlackPeter]

Simon Challies sold 1,000,000 shares. I wonder what has happened to the aim of RYM's becoming No 1 company on the NZX.
https://www.nzx.com/companies/RYM/announcements/304131

Wow - this must be a hell of a deck he wants to build ... ;) I guess - sure, he is not anymore working for them, but still a worry if he (with lots of insider knowledge) thinks that there is a better place for his $9 million ...

[Carpenterjoe]

Simon Challies sold 1,000,000 shares. I wonder what has happened to the aim of RYM's becoming No 1 company on the NZX.
https://www.nzx.com/companies/RYM/announcements/304131

hmmmmm, people buy and sell for whatever reason, Parkinson’s Disease is a pretty good reason. I think it was the family trust, not sure about delays getting monies from trust to personal bank accounts/tax reasons ect. Personally i'd be concentrating on family and health, I wouldn't be giving a stuff about my old place of work.


https://www.rymanhealthcare.co.nz/the-ryman-difference/ryman-news/12558-ryman-managing-director-stands-down-for-health-reasons-

[Beagle]

Who could blame him for wanting to buy a decent Riviera motor launch and go and relax properly this coming spring / summer and / or diversify some of his financial interests ?
Well done to him, nice timing on the sale and thoroughly deserves to retire a wealthy man in my opinion. Make the most of right now I reckon, what with Parkinson's and all...no point bothering with the 12 month ? wait list on a new built one, get this http://www.trademe.co.nz/motors/boats-marine/motorboats/auction-1369558648.htm

[Bjauck]

hmmmmm, people buy and sell for whatever reason, Parkinson’s Disease is a pretty good reason. I think it was the family trust, not sure about delays getting monies from trust to personal bank accounts/tax reasons ect. Personally i'd be concentrating on family and health, I wouldn't be giving a stuff about my old place of work.
https://www.rymanhealthcare.co.nz/the-ryman-difference/ryman-news/12558-ryman-managing-director-stands-down-for-health-reasons- True. Fair comment.

[troyvdh]

Indeed a very fair comment...what 3 kids.

[couta1]

Good on Simon for selling a good helping of his shares for a cool 9 mill, nice timing too I might add, I'm pretty sure he still has a good number of shares left(I worked out a while back that he had around 15 million worth) He has had a massive part to play in making Ryman what it is today.

[BlackPeter]

Wow - this must be a hell of a deck he wants to build ... ;) I guess - sure, he is not anymore working for them, but still a worry if he (with lots of insider knowledge) thinks that there is a better place for his $9 million ...

Withdraw and apologise (after reading about his health issues ...). There is indeed a better place for his $9 million dollars ... but this has clearly nothing to do with the company.

[percy]

Good on Simon for selling a good helping of his shares for a cool 9 mill, nice timing too I might add, I'm pretty sure he still has a good number of shares left(I worked out a while back that he had around 15 million worth) He has had a massive part to play in making Ryman what it is today.

Totally agree.
Good on him, and I think we would like to wish him well, for the challenges, he and his family face.

[Baa_Baa]

Totally agree.
Good on him, and I think we would like to wish him well, for the challenges, he and his family face.

Sincerely yes. Nice sentiment Percy, well said.

[whatsup]

Who could blame him for wanting to buy a decent Riviera motor launch and go and relax properly this coming spring / summer and / or diversify some of his financial interests ?
Well done to him, nice timing on the sale and thoroughly deserves to retire a wealthy man in my opinion. Make the most of right now I reckon, what with Parkinson's and all...no point bothering with the 12 month ? wait list on a new built one, get this http://www.trademe.co.nz/motors/boats-marine/motorboats/auction-1369558648.htm
Very well timed sell imo as RYM has risen .70 in the last month =ing a additional $700,000.00 in the kitty, well done as it will come in very handy in the years ahead.

[Snoopy]

Well that was a very gloomy report about the state of the market. Notice their shorting SUM too.


I have been waiting for about ten years to buy into RYM. I thought the weakening of the Auckland property market would provide my 'bargain' entry point, but it hasn't happened yet (I don't count this month's house price sales being less than last months a serious weakening). I have never fully understood what makes RYM so valuable, but the Salt Fund assessment does resonate. That doesn't mean I agree with the Salt fund manager conclusions. But the market drivers they are looking at make sense to me.

"We have waxed lyrical (or cacophonous) on many occasions about how retirement village investors are facing potentially significant balance sheet risk when housing and thence retirement unit sales
slow."

"Who would want to own a property developer after the market has peaked? Who would pay multiples of a developer’s NTA for developments not just on the land that they currently own but on future land purchases that are merely a glint in their eye? That is the situation with Ryman and Summerset. Our issue is not their management capability but their balance sheets and valuation now that the housing market has turned."

I think it is debatable whether the housing market has turned or is simply pausing. But my (incomplete?) understanding of the Ryman business model is this.

Most of the capital gains from increases in unit valuations flow into the balance sheet and are tax free. That won't continue in Australia for a start because AFAIK only the family home is capital gains tax exempt there. Thus over the last ten years Ryman has had a massive tailwind of 'free' capital with which to leverage their original modest capital base. Pricing Ryman on historical multiples carries an implication that this source of funding will continue. It might, if those millions of millionaires in China and India are allowed to invest offshore by buying into the Auckland property market. But at some point, I think this will become politically unacceptable for NZ voters (we may be at that point already). So non residents must end up being banned from buying houses. When that happens can domestic buyers take up the slack? The answer to that question, with housing affordability at an all time low and rising interest rates on the horizon, is no. So it is clear that the constantly inflating property portion of the Ryman balance sheet will grind to a halt under this scenario. At best lower property leverage means lower growth. At worst?

Negative property inflation in Auckland could be catastrophic for Ryman. If that happened could they be forced to sell assets at a discount simply to comply with more conservative banking covenants? What may save them is that Ryman properties sell typically over five year gap periods. So if a property value reversal happened it might take five year for Ryman to see the effects of that flow through to the balance sheet.

Is Ryman, when the fog clears from the glasses just a property developer? One thing that is clear is that Ryman are not the only company able to build 'Over 60s' housing. But is building 'Over 60s' housing equivalent to building 'affordable housing', which is something that property developers in a free market don't do?

I can't close without mentioning the retirement of CEO Simon Challis, surely one of the most boring chief executives ever. That is not a facetious comment. Boring chief executives appear boring because they are knuckling down and getting on with the job without grandiose distractions. And that is usually a very good thing for shareholders.


SNOOPY

[winner69]

Headline sounds like veiled profit warning

. RYMAN HEALTHCARE SAYS DEMAND STRONG BUT 1H GROWTH LIKELY LIMITED



http://www.sharechat.co.nz/article/06fd6322/ryman-healthcare-says-demand-strong-but-1h-growth-likely-limited.html?utm_medium=email&utm_campaign=Ryman%20Healthcare%20says%20demand%20 strong%20but%201H%20growth%20likely%20limited&utm_content=Ryman%20Healthcare%20says%20demand%20s trong%20but%201H%20growth%20likely%20limited+CID_3 26b61a2a4042dcbf2c5acdf323af80a&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle06fd6322ryman-healthcare-says-demand-strong-but-1h-growth-likely-limitedhtml

[Arbroath]

I'd say its a statement of the obvious - they have several large developements coming through in FY18 but will book most of the development earnings in the second half.....so maybe first half profit only up c. 5% but the second half delivers a strong gain to get the year overall into double digits??

FY19/20/21 should be good years as large developements come through but there is always risk of course that things don't go to plan. I'm holding long-term.




Headline sounds like veiled profit warning

. RYMAN HEALTHCARE SAYS DEMAND STRONG BUT 1H GROWTH LIKELY LIMITED





http://www.sharechat.co.nz/article/06fd6322/ryman-healthcare-says-demand-strong-but-1h-growth-likely-limited.html?utm_medium=email&utm_campaign=Ryman%20Healthcare%20says%20demand%20 strong%20but%201H%20growth%20likely%20limited&utm_content=Ryman%20Healthcare%20says%20demand%20s trong%20but%201H%20growth%20likely%20limited+CID_3 26b61a2a4042dcbf2c5acdf323af80a&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle06fd6322ryman-healthcare-says-demand-strong-but-1h-growth-likely-limitedhtml

[Beagle]

Trading is in line with expectations but "development earnings would be heavily weighted towards the back end of the second half in line with the timing of the construction programme at Ryman's developing villages Something to watch. If there's any timing issues with practical completion of those units we could see some slippage of planned completion into FY19.
Some risk to assumed 15% growth in underlying earnings for FY18 in my opinion. Market forgave them only achieving 13% underlying earnings growth in FY17, maybe not so happy if there's a repeat especially if its single digit this time ? Huge PE premium to the rest of the sector, still fully priced in my opinion after SP ostensibly just range trading for 3 1/2 years. Simon Challis timing of his stake sale looked impeccable to me.

[percy]

Would some kind person please post the link to Stuff article [which can also be found by Googling the heading];
"Ryman prepares for grey Tsunami".

[Joshuatree]

Very well written Snoopy. You will get little traction on here as its almost a taboo subject; with investment bias editing out the "property development company" risk aspects of Ryman ,SUM etc etc.

[Jay]

here you go percy
http://www.stuff.co.nz/business/industries/7032854/Paying-for-the-grey-tsunami

[percy]

here you go percy
http://www.stuff.co.nz/business/industries/7032854/Paying-for-the-grey-tsunami

Thank you but that is not the article.
Google.; Ryman prepares for grey Tsunami.

[Harley]

Thank you but that is not the article.
Google.; Ryman prepares for grey Tsunami.http://www.pressreader.com/new-zealand/the-press/20170728/281784219163548

[percy]

http://www.pressreader.com/new-zealand/the-press/20170728/281784219163548

Thank you.
Gordon MacLeod:
"Ryman had been UNAFFECTED by previous downturns in the property market."
He reiterated "it's got to be good for Mum" values he pledged to uphold.
Melbourne based director George Savvides comments are well worth taking onboard.

[Bjauck]

Most of the capital gains from increases in unit valuations flow into the balance sheet and are tax free. That won't continue in Australia for a start because AFAIK only the family home is capital gains tax exempt there. Thus over the last ten years Ryman has had a massive tailwind of 'free' capital with which to leverage their original modest capital base. Pricing Ryman on historical multiples carries an implication that this source of funding will continue. It might, if those millions of millionaires in China and India are allowed to invest offshore by buying into the Auckland property market. But at some point, I think this will become politically unacceptable for NZ voters (we may be at that point already). So non residents must end up being banned from buying houses. When that happens can domestic buyers take up the slack? The answer to that question, with housing affordability at an all time low and rising interest rates on the horizon, is no. So it is clear that the constantly inflating property portion of the Ryman balance sheet will grind to a halt under this scenario. At best lower property leverage means lower growth. At worst?

A favourable tax ruling ocertainly helped the likes of RYM and I guess it stimulated the construction of ORA units. Without that ruling I guess it could be argued that there would have been less incentive for RYM et al. to build units - resulting in fewer new dwellings constructed and an even greater housing shortage (especially in Auckland.) Also the government may have had to have alternative provisioning for aged care.

As with everything, there is a risk that that the regulatory environment could change. I don't think it would be in the interests of any government to scare aware existing or future investors in the supply of retirement accommodation and long term care.

[percy]

It is very doubtful the retirement sector companies can meet the demand, of the aging Tsunami .
Alter the rules,and what will happen.? The companies in the sector will stop development.
The Government and Fletchers will step up to the plate.Yeah right.?

[Joshuatree]

I believe regulatory environment will change. The companys will have to contribute in some way, pay a little tax, fees whatever it takes. They will still be viable

[Arbroath]

I believe regulatory environment will change. The companys will have to contribute in some way, pay a little tax, fees whatever it takes. They will still be viable

Joshuatree - Ryman effectively pay about NZ$25-30m in tax right now because 50% of their underlying earnings are paid as an unimputed dividend and holders are taxed RWT on that at up to 33%. So, maybe an effective tax rate of c. 15% instead of corp tax at 28%.

Rules could be changed around retirement companies but who is going to meet the demand in society if it is made less attractive for the companies - the government won't want to do it unless its something like the economically loony Greens in charge....

[Joshuatree]

They will still be viable profitable companies; plenty of fat there no prob.

[babymonster]

26- week high

[troyvdh]

Man are we not in a bull phase ..,.the 3 yr NZ50 chart is looking scary.....as some say...when dancing like this....stay close to exits......

[winner69]

Ryman remains one of top value creators globally

Fantastic effort

Only NZ company in the ratings

http://image-src.bcg.com/Images/BCG-Value-Creators-2017-Appendix-July-2017_tcm87-166061.pdf

Ramsay Healthcare slightly better though

[limmy]

RYM appears to be the only NZ company in the whole BCG group, all sectors included.

[winner69]

RYM appears to be the only NZ company in the whole BCG group, all sectors included.

Yes it is

FPH been in past lists but not in this updated ...other companies in sector must have outperformed

[winner69]

RYM will be 10 bucks soon

That's good

[troyvdh]

When RYM was about $11.30...a few years back..they a 5-1 split.

That was good.

[percy]

Anyone wanting to learn "the truth" about the retirement village sector, would be well advised to read this week's "Taking Stock" at www.chrislee.co.nz.

[777]

Anyone wanting to learn "the truth" about the retirement village sector, would be well advised to read this week's "Taking Stock" at www.chrislee.co.nz.

https://www.chrislee.co.nz/taking-stock

[percy]

https://www.chrislee.co.nz/taking-stock

Thank you for posting the link.

[Bjauck]

Good explanation as to why villages remain popular with incoming residents. He praises the changes in MET, which is good to hear (Disc: I own MET shares!)I liked his mentioning the sustainability of the business model of the listed operators.

However, he did not seem to know why a young reporter would regard someone owning a mortgage free house of $500,000 as rich. Even raising a deposit to buy is difficult for young buyers today. House prices have increased by more thanthe increase in incomes. So to a young reporter owning a house seems out of reach. To a young reporter $500,000 could well represent much more than they would be able to save in a lifetime on their current after tax salary and and after rent and other expenses. That would be why they think someone with $500,000 is rich. One must wonder - will the extra-inflationary increase in land values owing to the drop in interest rates continue or will the next change be a deflationary one, due to an increase in interest rates?

[babymonster]

depending on how you define rich tho.. if you use income as a measure (usually newspaper uses this as a measure), retired people are not.. but if you use net asset, maybe they are..

[Bjauck]

depending on how you define rich tho.. if you use income as a measure (usually newspaper uses this as a measure), retired people are not.. but if you use net asset, maybe they are..
To most (young and not so young) people having a mortgage free $500,000 house is rich. Although in Auckland you would be lucky to find many properties at that price, which shows how ridiculous prices are in Auckland.

Often the retired may be asset rich but cash poor. You can also be rich in knowledge but poor in financial assets! Generally a rich person is one who has unencumbered assets. If you have a high income but it all goes on expenses without any ability to save or amass investments, you may be a high earner but you are not rich. You can have a high income in Auckland but with most of your after tax income being eaten up by the high rent and transport costs....so it is the number of valuable assets that you can accumulate that makes you rich or not.

[Under Surveillance]

https://www.chrislee.co.nz/taking-stock
Good read, although there's an element of "fake news" in it. Lee says Rymans require incomers to be 75, whereas the truth is they need to be 70.

By the by, the outfit Lee chairs, the Parkland Retirement Village Waikanae, is big scale. 25 hectares, 209 villas, 54 rest home apartments, hospital care, ..

[Yoda]

Are we going to breakout this time?
it seems to be taking off a bit lately and reaching its previous highs. A reasonable profit should see it at $11 or 12 next year ?

[silu]

Similar trend across the industry. Despite all the short term discussions in the aged care sector about failing house prices, leaky buildings, increased staff costs etc its a stock that I'm happy to hold for the next 10-20 years.

[dabsman]

I'd like to see it go thru $10 and hold over for a bit. Aussie is a big point of differentiation to the other sector players - happy to hold this long term too. I'd love a share split but at what price point would they look at that?

[Vaygor1]

Are we going to breakout this time?
it seems to be taking off a bit lately and reaching its previous highs. A reasonable profit should see it at $11 or 12 next year ?

I think the increase in underlying profit for this financial year's H1 result will be mediocre as last year's was.. maybe slightly worse.
I also think the full year result (ending 31-Mar-2018) will not attain an underlying profit increase of 15%+ which it didn't last financial year either.

The above due to the fact I can't see them completing enough new developments this financial year on time to deem them practically complete.

The caveat to the above is that, for some reason, their resales skyrocket to make up for it, either by increased volume or resale price, or both.... or I guess, if they alter their accounting policy and redefine how completed a development must be before it is 'realised' as underlying profit.

I am a huge supporter of RYM and a very happy holder... have been in for the long term and will continue to hold/accumulate for the long term.

The smaller the annual increase in underlying profit for this financial year (ending 31-March-2018), the greater the annual increase for the same will be for Full Year ending 31-March-2019 year.

If I am right, there will be some good buying opportunities post this financial year's half and full year result.

Irrespective of this year's result, the Shareprice around June 2019 (about 22 months from now) will be circa $15/share (or equivalent if there is a split). This because RYM's underlying profit for 31-Mar-2019 will be close to $240 million.

The Shareprice figures above of course are subject (as always) to the whim of the market.

[winner69]

Hey Vaygor - $240m profit is an eps of 48 cents

PE of 20 would give a share price of $9.60 ant not your $15

About today’s price - spooky eh

[Vaygor1]

Hey Vaygor - $240m profit is an eps of 48 cents

PE of 20 would give a share price of $9.60 ant not your $15

About today’s price - spooky eh

Hi Winner.

Not sure if that is an apples-for-apples comparison.

Published eps uses earnings per share under IFRS calc methods, not underlying Profit.

ie For underlying profit, the must recent audited full year result was $184 million or 35.6 cents/share.
By my calcs a fair Shareprice for this underlying Profit is $10.26 so right now the share is a bit cheaper than it has historically been using this measure... this is because market sentiment prevails due to perceived slow-down in RYM growth.

Using the current latest audited Underlying Profit of 35.6 cents/share and utilising your method with a PE of 20 produces a SP of $7.12 ... considerably lower than it is at present.

Value your input as always, and happy to be corrected. :)

[winner69]

Hi Winner.

Not sure if that is an apples-for-apples comparison.

Published eps uses earnings per share under IFRS calc methods, not underlying Profit.

ie For underlying profit, the must recent audited full year result was $184 million or 35.6 cents/share.
By my calcs a fair Shareprice for this underlying Profit is $10.26 so right now the share is a bit cheaper than it has historically been using this measure... this is because market sentiment prevails due to perceived slow-down in RYM growth.

Using the current latest audited Underlying Profit of 35.6 cents/share and utilising your method with a PE of 20 produces a SP of $7.12 ... considerably lower than it is at present.

Value your input as always, and happy to be corrected. :)

I think I think you just confirmed what I was implying in that RYM’s PE whether you use real or underlying profits will be lower in 2019 than what it is currently.

To what degree goodness knows and I only used 20 as a reasonable number compared to the current 27 ......and it just happened to give a value of $9.60

[Beagle]

Hi Vaygor1 - Got chatting to Couta1 about RYM yesterday and we both agree they're going to have a big Fy19 BUT by my estimations RYM and SUM will have very similar underlying EPS in the current year. The only reason RYM is trading higher than SUM is its long standing reputation. The longer SUM keep growing earnings faster than RYM, (CAGR of 48% for 5 years is very impressive and I'm expecting similar this year) and the more SUM refine their care offer which they're working hard on the more I expect the gap in their relative SP's to close.

Fact is SUM have taken a serious haircut to their forward PE whereas RYM haven't over the last 12 months or so.
Much as I have tremendous respect for RYM's outstanding long term track record I see more potential with SUM. I wouldn't discount the possibility of some relative PE contraction between these two as SUM keeps piling on the runs either.
SUM will find support SUM day soon :)

[couta1]

Hey winner, just a minute or so ago the Sum price was exactly 50% of the Ryman price, my ratio theory has stood the test of time ,regardless of whether it should or not.

[winner69]

Hey winner, just a minute or so ago the Sum price was exactly 50% of the Ryman price, my ratio theory has stood the test of time ,regardless of whether it should or not.

There are some things that are just more than a coincidence, just maybe

Good theory ..tested over time

[Beagle]

Hey winner, just a minute or so ago the Sum price was exactly 50% of the Ryman price, my ratio theory has stood the test of time ,regardless of whether it should or not.

I thought your ratio went in a band something from 55% to about 66%. I think this is the lowest its ever been, (could be wrong). Either way seems pretty strange seeing as both companies are forecast to have ostensibly the same underlying eps this year and SUM are growing considerably faster. Good opportunity to switch anyone ?

[couta1]

I thought your ratio went in a band something from 55% to about 66%. I think this is the lowest its ever been, (could be wrong). Either way seems pretty strange seeing as both companies are forecast to have ostensibly the same underlying eps this year and SUM are growing considerably faster. Good opportunity to switch anyone ? My theory put forward in 2013 was that Ryman was roughly worth double that of Sum, winners chart showed it sat within a certain range most of the time, reversion to the mean can be a powerful thing.

[Beagle]

My theory put forward in 2013 was that Ryman was roughly worth double that of Sum, winners chart showed it sat within a certain range most of the time, reversion to the mean can be a powerful thing.

Interesting theory for 2013. Maybe investors haven't noticed SUM has been growing annual underlying earnings at 48% per annum average and RYM at about 15% ? Over time I would have thought on a fundamental basis this gap should close and although they might have been worth double at one point the current situation looks rather illogical to me. Oh well, it is what it is...

[winner69]

Post 5636 on SUM thread has the chart

https://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=687418&highlight=#post687418

More often below 50% than above so maybe 50% is about right / fair

[Beagle]

Post 5636 on SUM thread has the chart

https://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=687418&highlight=#post687418

More often below 50% than above so maybe 50% is about right / fair

Thanks for referencing that mate but as noted above this situation is completely illogical as SUM have a compound growth rate in underlying earnings of more than 3 times RYM's rate. As the years have unfolded with compound growth differences this situation has become most profoundly illogical. Reminder to self I must take the necessary steps to get ready7 to execute a short RYM and double down on SUM strategy.

[couta1]

Thanks for referencing that mate but as noted above this situation is completely illogical as SUM have a compound growth rate in underlying earnings of more than 3 times RYM's rate. As the years have unfolded with compound growth differences this situation has become most profoundly illogical. Reminder to self I must take the necessary steps to get ready7 to execute a short RYM and double down on SUM strategy.
Perception is everything mate, remember since 2013, Ryman has been in the top 10 best performing healthcare companies in the world.

[Snow Leopard]

Thanks for referencing that mate but as noted above this situation is completely illogical as SUM have a compound growth rate in underlying earnings of more than 3 times RYM's rate. As the years have unfolded with compound growth differences this situation has become most profoundly illogical. Reminder to self I must take the necessary steps to get ready7 to execute a short RYM and double down on SUM strategy.


https://merovee.files.wordpress.com/2016/01/spock-illogical-e1453745427441.jpg

[winner69]

Maybe ba_baa was perceptive the other day on the OCA thread


Hey winner, do you get the feeling we're close to full cycle when lots of company's are hyper priced, future prosperity is baked in, and the punters reckon a good profitable growing business should always be rewarded with rising market valuations? They can't fathom why a 'market' would sell their stock at all, let alone at something below their perceived valuation.

[winner69]

That ratio - if anything it could be saying RYM is still ‘over valued’ and could still continue to be rerated down from its lofyry multiples

So far PE down from high 30’s to mid 20’s ....heading to sub 20?

[Beagle]

That ratio - if anything it could be saying RYM is still ‘over valued’ and could still continue to be rerated down from its lofyry multiples

So far PE down from high 30’s to mid 20’s ....heading to sub 20?

3.5 years and counting and it hasn't done much from when we called it overpriced in early 2014 at $8.50. I suspect people will have to be extremely patient for this to go over $10. Another 3.5 years of market underperformance in store for shareholders ?

[Nasi Goreng]

This may be a crude way to look at it but as or right now, the dividend yield of both RYM and SUM is exactly 1.93% for both companies. Does this mean that they are both appropriately valued and is this a moment of market perfection?

[Beagle]

This may be a crude way to look at it but as or right now, the dividend yield of both RYM and SUM is exactly 1.93% for both companies. Does this mean that they are both appropriately valued and is this a moment of market perfection?

RYM paying out 50% of underlying profit, SUM 30%. Expect both companies dividend to increase in line with underlying profit growth this year, my expectations are SUM growth 45- 50% RYM growth 10 - 15% for the current year.

[silu]

Ryman Healthcare on the cusp of major growth
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11943015

[JeremyALD]

Steady result with 11% increase in underlying NPAT. Quite a big range in full year forecast but probably tracking for 12%ish growth mid range.

Of concern development margin down to its lowest level in a few years.

[Beagle]

RYM running like a slick well oiled Swiss watch and priced like one too. Congrats to holders but I see better value and faster growth SUM where else.

[minimoke]

RYM running like a slick well oiled Swiss watch and priced like one too. Congrats to holders but I see better value and faster growth SUM where else.I've been a holder since IPO and will remain loyal to RYM until they start to disappoint - and no sign of that. They are my biggest holding in Portfoio #1 - essentially the anchor tenant which does no wrong. Sure and steady all the way. (also holding SUm on the expectation they harness their potential - but they havent earnt my trust yet. Will review in a year.)

[Beagle]

Well done for holding all that time and I can certainly understand your loyalty to them as a shareholder. Simon Challis is a man with few real peers in N.Z., a real legend and leaves a legacy of many thousands of happy and secure residents and many thousands of very happy long term shareholders. I hope he copes with his illness okay and enjoys a long and happy retirement.

No question RYM is a blue chip company with arguably the best track record of consistent growth on the NZX but trading at double the PE of SUM I think their reputation is more than fully priced in and I note their SP has done very little since I called it overpriced 3 1/2 years ago in the mid $8 mark. I am a little surprised by today's SP reaction...just hoping that the market wakes up one day to the fact that the team at SUM are trying very hard to build their own niche and reputation. SUM of their units by comparison are far nicer than RYM's , generally bigger on average according to Julian Cook.

I guess at my core I'm a value investor and hoping the market is mispricing SUM which has been growing at three times the pace based on underlying profit. Once upon a time it might have been fair that SUM traded on half the PE of RYM on an underlying profit basis but having now built a six year track record of much faster growth I for one believe this is no longer fair and reasonable and I think as SUM continue to grow at pace the potential rewards based on a potential rerating and the faster growth itself are far greater...but time will tell.

[dabsman]

I see Morningstar increased their valuation to $10...

Ryman Healthcare’s first-half fiscal 2018 earnings growth of 11.4% to NZD 17 cents per share exceeded expectations mainly due to a jump in profit on resold units. The average profit for each of the 394 units resold spiked 25% on that recorded in fiscal 2017 to NZD 134,000. Part of the increase was one-off, reflecting a higher-than-usual number of older units, while part was attributable to across-the-board price growth. Market prices for retirement living units and serviced apartments have moved ahead of our prior expectations and we’ve raised our assumptions to reflect the new paradigm. Our fair value estimate increased 5% to NZD 10, with narrow-moat-rated Ryman screening as slightly undervalued at current levels. Our fiscal 2018 forecast for underlying profit of NZD 200 million is at the lower end of the guidance range of NZD 195 to 210 million, with the midpoint of the guidance range implying profit growth of 13.8%.

[dabsman]

Oops sorry for the font size!

[minimoke]

Up a dollar in a month. At all time high. When will they breach $10.00?

[Nasi Goreng]

Up a dollar in a month. At all time high. When will they breach $10.00?

In the next 2 days hopefully :t_up:

[Beagle]

Up a dollar in a month. At all time high. When will they breach $10.00?

Right now !

[minimoke]

Right now !
My longest and most trustiest friend on the NZX. Lots of love and kisses at $10.03

[Beagle]

Understand your affection for best of breed...hasn't been especially rewarding in the last 3 1/2 years, ~ $8.50 to ~ $10.00 is hardly stellar but long term holders such as yourself I would imagine would care little or not at all.

Still preferring the buy one get one free equivalent SUM where else :)

[minimoke]

Understand your affection for best of breed...hasn't been especially rewarding in the last 3 1/2 years, ~ $8.50 to ~ $10.00 is hardly stellar but long term holders such as yourself I would imagine would care little or not at all.

Still preferring the buy one get one free equivalent SUM where else :)
I just checked. Initially bought for $1.35. Then had a 5:1 split.

Now I hold SUM as well - I expect similar performance!!

[Beagle]

I just checked. Initially bought for $1.35. Then had a 5:1 split.

Now I hold SUM as well - I expect similar performance!!

Congrats, that's what I call a STELLAR long term return !! No wonder you think of the company as your friend :)

[Onion]

Understand your affection for best of breed...hasn't been especially rewarding in the last 3 1/2 years, ~ $8.50 to ~ $10.00 is hardly stellar but long term holders such as yourself I would imagine would care little or not at all.

Still preferring the buy one get one free equivalent SUM where else :)

It is not night and day between them Beagle. Sharesight tells me my RYM shares have outperformed my SUM:

RYM:
Last 3 1/2 years: 20.47%
Last 2 years: 15.07%
Last year: 20.45%

By comparison my SUM shares have returned:

Last 3 1/2 years: 15.53%
Last 2 years: 15.27%
Last year: 3.57%

[Whitebeard]

With the price up over 10, this give me my first two bagger with a current 203% rise at 10.05. Very happy with that.

[Beagle]

It is not night and day between them Beagle. Sharesight tells me my RYM shares have outperformed my SUM:

RYM:
Last 3 1/2 years: 20.47%
Last 2 years: 15.07%
Last year: 20.45%

By comparison my SUM shares have returned:

Last 3 1/2 years: 15.53%
Last 2 years: 15.27%
Last year: 3.57%


It looks like night and day to me mate, see attached graph comparing SP performance over the last 3 years. 9293

[Baa_Baa]

It looks like night and day to me mate, see attached graph comparing SP performance over the last 3 years. 9293

Whats it look like including dividends, that chart is SP only performance comparison?

[troyvdh]

Me thinks the 5/1 split was at about $11.30.

[Beagle]

Whats it look like including dividends, that chart is SP only performance comparison?

Yes that chart is capital share price only BUT from ANZ securities website their respective dividend yields are :-
SUM 1.76%
RYM 1.75%

Neither company attaches imputation credits to their dividends.
Their relative earnings growth tells the story RYM averaging about 15% overt the last 5 years and SUM 48%.
That said I think RYM is a superb company and is run like a well oiled swiss watch and the SP reflects that. You'd be a brave man to bet against RYM long term and I would expect at the very least a market performance from RYM over the next 10 years, most likely a significant outperformance from the demographic tailwinds.

[Baa_Baa]

Yes that chart is capital share price only BUT from ANZ securities website their respective dividend yields are :-
SUM 1.76%
RYM 1.75%

Neither company attaches imputation credits to their dividends.

The 'performance' figure given would be the SP + Dividend$ paid, which illustrated RYM outperform … whereas comparing the dividend yields or the SP by themselves is irrelevant in response to the illustration?

[Beagle]

My argument is that the dividend yield is almost irrelevant and inconsequential when comparing these two companies and I have demonstrated their very low unimputed yield is very similar which is highly supportive of my contention. If you want to find a graph that compares their gross SP performance to validate your point of view, please by all means feel free to do so and post it on here.

[minimoke]

Me thinks the 5/1 split was at about $11.30.
So at that point I pretty much had a 10 bagger.

After split it must have been $2.26

After that my math doesnt cope

[minimoke]

My argument is that the dividend yield is almost irrelevant and inconsequential when comparing these two companies
Surely div yield is one way we make our money so should be taken into account.

[Beagle]

Surely div yield is one way we make our money so should be taken into account.

My point is the dividend yield is ostensibly the same at present for these two companies so the graph I presented recently comparing the SP performance of the two over the last 3 years would not materially change if it included dividends received. Anyone else like to find and post a gross SP graph inclusive of dividends is very welcome to post their own image :)

Maybe another split coming in the foreseeable future ?

[minimoke]

Just loving today. closing matches coming in at $10.71.

22,000 @$11.00 desperate for the action.

To finish at $10.35. CAnt complain about that.

[macduffy]

Maybe another split coming in the foreseeable future ?

I hope not. The "scarcity value" of a higher shareprice/smaller number of shares will do more for the shareprice than the greater marketability which is usually claimed would result from a split . Just IMO.

[trader_jackson]

NZX website says these are the following 52 week returns:
RYM 52 Week Change: $1.426 / 15.13%
ARV 52 Week Change: $0.053 / 4.55%
MET 52 Week Change: $0.230 / 4.11%
SUM 52 Week Change: $0.020 / 0.39%

sum coming dead last while ryman out in front by a reasonable margin... what is going on? even the original dog beat it for the 3rd, I think, year running

[couta1]

NZX website says these are the following 52 week returns:
RYM 52 Week Change: $1.426 / 15.13%
ARV 52 Week Change: $0.053 / 4.55%
MET 52 Week Change: $0.230 / 4.11%
SUM 52 Week Change: $0.020 / 0.39%

sum coming dead last while ryman out in front my a resonable margin... what is going on? even the original dog beat it for the 3rd, I think, year running The title of a favourite Tina Turner song will give you the answer to that question.

[Baa_Baa]

My point is the dividend yield is ostensibly the same at present for these two companies so the graph I presented recently comparing the SP performance of the two over the last 3 years would not materially change if it included dividends received. Anyone else like to find and post a gross SP graph inclusive of dividends is very welcome to post their own image :)

Maybe another split coming in the foreseeable future ?

I think we get your points Roger, but its not relevant to the illustration given about the % difference between RYM and SUM of the total returns. It proves nothing to produce a chart that proves the numbers that have already been posted, even if such a chart was available, nor is deflecting the onus on someone else to produce a chart which does not obviate you from admitting your arguments are irrelevant to the point made by the poster.

Just say, the poster is correct in their analysis (or Sharesights' reporting) that in TOTO RYM outperformed SUM over the period.

[Beagle]

This discussion has become something of a circus. Without wishing to overstate the completely obvious the relative SP performance will change depending upon the timeframe selected and to a very minor extent will change depending upon whether one is talking returns inclusive or exclusive of dividends. Three and a half years ago I correctly called RYM's SP as overvalued and before today's jump in that timeframe it has done very little in terms of share price appreciation $8.50 to $9.80 a gain of just 15.3% in 3.5 years has well and truly underperformed the market. I am more than happy to have sat out this period of underperformance and happy with my past analysis of this stock and have done very well holding it in periods of time when it was under priced and fairly priced. I'm also 100% comfortable going forward with a fulsome allocation to SUM and none to RYM at this stage because looking forward I have SUM on an underlying PE of 14.2 based on today's closing price and RYM on 25.5. SUM has been growing earnings on average at close to triple the rate RYM has and I expect SUM to continue to outperform RYM in terms of capital gain going forward for the foreseeable future based on its more attractive valuation and MUCH faster EPS growth rate.

RYM as I've acknowledged many times is a great company run like a very well oiled Swiss watch and priced like one too but SUM has plenty of room to improve its efficiencies and operational execution and I think the CFO and CEO are very motivated guys. Time will tell but there are no prizes for guessing which horse I'm backing. Each to their own and I can certainly understand why some people want to have a bob each way and good luck to RYM shareholders.

Earlier today I invited anyone to show some graphical proof to disprove my contention and I note nobody has done so.
The graph I posted speaks for itself as does my action of buying more SUM today.

[troyvdh]

Dear mini...may I suggest that the real closing price was 9.70....

[minimoke]

Dear mini...may I suggest that the real closing price was 9.70....
You could if you include a Put Through at 17:15 (I dont know what a PT is) but last sale shows at $10.35 and I reckon thats teh scoreboard that counts

[winner69]

You could if you include a Put Through at 17:15 (I dont know what a PT is) but last sale shows at $10.35 and I reckon thats teh scoreboard that counts

A PT has no change in beneficial ownership so doesn’t really count

[couta1]

My 50% ratio hypothesis sticking like super glue again today, Sum up but Ryman up also ,hence Sum horse not gaining any ground on the front runner.

[winner69]

My 50% ratio hypothesis sticking like super glue again today, Sum up but Ryman up also ,hence Sum horse not gaining any ground on the front runner.

In money terms losing ground - more behind than yesterday

In %age terms keeping up

Funny eh

[Beagle]

My 50% ratio hypothesis sticking like super glue again today, Sum up but Ryman up also ,hence Sum horse not gaining any ground on the front runner. and that despite the hound pulling the whip on the SUM horse lol. Time will tell mate, this is a steeplechase not a 1000 yard sprint :)
Memo to self, must go back to a hands and heels ride

[Ggcc]

All the retirement villages are up today, while the market is down

[Food4Thought]

Think there is some very good energy in the announcements for RYM and it will relay to other retirement operators. Great up trend and I like the outlook.

[minimoke]

Think there is some very good energy in the announcements for RYM and it will relay to other retirement operators. Great up trend and I like the outlook.
Maybe the retirement tide rises and lifts all boats

[moka]

Some interesting comments comparing DMF for the three big retirement villages. From Morningstar’s latest recommendation on 23/11/17.
Boring old Ryman continuing with its same old boring predictable conservative long term strategy, which is very successful but not exciting. Boring is good.

“Market conditions are so favourable Ryman could raise its prices, but the board and management appear to be playing a longer game, focusing on service over profits, which provides increased comfort in the long-term earnings trajectory. Ryman’s conservative pricing is illustrated with the deferred management fee, or DMF, of 20% of the unit's entry price. For individual living units and serviced apartments, the DMF to Ryman accrues over five and three years, respectively. Major competitors Summerset and Metlifecare charge higher DMFs of 25% and 30%, respectively and the DMFs accrue at a faster rate for both.”

[James108]

Some interesting comments comparing DMF for the three big retirement villages. From Morningstar’s latest recommendation on 23/11/17.
Boring old Ryman continuing with its same old boring predictable conservative long term strategy, which is very successful but not exciting. Boring is good.

“Market conditions are so favourable Ryman could raise its prices, but the board and management appear to be playing a longer game, focusing on service over profits, which provides increased comfort in the long-term earnings trajectory. Ryman’s conservative pricing is illustrated with the deferred management fee, or DMF, of 20% of the unit's entry price. For individual living units and serviced apartments, the DMF to Ryman accrues over five and three years, respectively. Major competitors Summerset and Metlifecare charge higher DMFs of 25% and 30%, respectively and the DMFs accrue at a faster rate for both.”

They have different pricing structures. From memory ryman make a profit from their day to day operations, whereas summerset do not. If I was retired I think I would prefer to pay more when I move out rather than weekly.

[couta1]

They have different pricing structures. From memory ryman make a profit from their day to day operations, whereas summerset do not. If I was retired I think I would prefer to pay more when I move out rather than weekly. What do you mean by Ryman make a profit from their day to day operations and Sum don't? They both make profit from their day to day operations otherwise they wouldn't be in business. If your talking about the day to day care centre operations then yes Ryman have bigger care centres but that doesn't mean their profit is bigger on a percentage basis, remember the industry is underfunded by the Govt. The difference in the DMF between the two is that Sum have a far more agressive pricing structure, charging a good dollop straight up and over the following two years.

[moka]

They have different pricing structures. From memory ryman make a profit from their day to day operations, whereas summerset do not. If I was retired I think I would prefer to pay more when I move out rather than weekly.


You could be paying more when you move out AND paying more weekly. It depends on the agreement. How much it costs you in ongoing weekly costs and in one off costs varies a lot between villages, and the villages make it complex to understand and compare.
The retirement villages write the contract so it is not a level playing field which is why there is a legal requirement to have legal advice before you sign the agreement so you go in with eyes wide open - knowing how much it will cost you.

The DMF is about the lump sum you get at the end.There can also be other costs taken out at the end such as refurbishing, legal fees. It depends on the agreement. You also pay weekly fees. The costs are different depending on whether you are in an independent living unit or in a serviced/rest home care unit.

Looking only at the DMF if you pay $500,000 for your unit at the retirement village (an independent living unit not a serviced unit) with Ryman after five years you get back only $400,000 i.e. lose 20% = $100,000
With SUM you would lose at least 25% - $125,000
With MET you would lose at least 30% - $150,000
Because the DMFs accrue at a faster rate for SUM and MET you could lose 25% or 30% within say three or four years rather than five years (not sure of the exact figures.)

I have seen an agreement for a serviced unit/rest home care where 30% came into effect immediately. So if the resident died a few days after purchasing the unit the estate would only get 70% back. It is a lot of money but for many people it is a price worth paying for peace of mind and security.

[Joshuatree]

How would you feel as a shareholder if you knew that some residents(or your parent) in care are only allocated two adult nappies a day to save costs. Im not naming names here,but have heard in some care facilities only two are allocated and three in another depending on which outfit is the manager/owner.And we have hot summer days atm if you get my whiff.All about profit i guess.

[moka]

How would you feel as a shareholder if you knew that some residents(or your parent) in care are only allocated two adult nappies a day to save costs. Im not naming names here,but have heard in some care facilities only two are allocated and three in another depending on which outfit is the manager/owner.And we have hot summer days atm if you get my whiff.All about profit i guess.

Rest homes run on the smell of an oily rag if you get my whiff. They are underfunded by the government and do an amazing job to provide the service they do to the residents and still survive and make a profit.
And some aren’t surviving. Some of the smaller ones that don’t earn extra income from premium room charges like the big retirement villages have or will be closing. Incontinence products are a huge source of complaint. Rest homes may provide ones that are inadequate or uncomfortable and if you want something better you buy your own.

I had a friend in dementia care. When he got to the stage he couldn’t feed himself the staff did not have the time to feed him properly. There was just not enough staff to allow them to spend 5 - 10 minutes with each resident who needed help with feeding. Generally the staff do their best.

Who is going to pay for better care? The government/taxpayer doesn’t want to pay more and neither does the resident. People complain about the cost of rest home care. In Auckland City you pay $152 per day for rest home care. But you can’t get accommodation in a hotel with three meals in Auckland for $152 day. And then there is the cost of providing the personal care with showering or dressing and the health-related costs.

https://www.consumer.org.nz/articles/rest-homes
“Rest homes are expected to have sufficient staff to meet residents’ needs. However, minimum staff-to-resident ratios set in funding contracts between district health boards and rest homes remain low. A home with 50 residents is only required to have 2 caregivers on duty.”

[couta1]

Ryman buys Karori Campus site to convert into retirement village, their 7th Wellington site to date, they have certainly taken the Wellington area by storm, basically shutting out all opposition.

[Beagle]

Ryman buys Karori Campus site to convert into retirement village, their 7th Wellington site to date, they have certainly taken the Wellington area by storm, basically shutting out all opposition.

Have to concede that RYM have been mowing SUM others lawn in Wellington lately. This probably explains why the the 2:1 price ratio is so logical doesn't it mate :)

[whatsup]

Can someone please update and help with this gos, last night I was told by a senior citizen who should know that the RYM care facility of Ed Hillary in Ellerslie Auck was built on top of an old rubbish tip /land fill/ contoured land , has parts of the complex marked off and out of bounds as that part of the complex is sinking.

Is this true, if so shouldn't there be some sort of update to the NZX ?

[Beagle]

Lovely facility that one, visited it myself quite a few years ago and was looking at putting my Dad in there. Got a nice big bolt through the side of my tire for my trouble, probably from the old rubbish tip...RYM priced like the Rolls Royce of the retirement sector it is but what you say can't be true because Rolls Royce assure us their engines are impeccably manufactured and nothing ever goes wrong with them ;) Simon Challis the legend that he is retiring, won't have any effect on the company going forward either...where's my Tui beer...

[dabsman]

Boom... $11 tomorrow?

[Ggcc]

$11 so close now I can taste it haha

[minimoke]

$11 so close now I can taste it hahaThere you go - just popped $11.05!!

[winner69]

There you go - just popped $11.05!!

....and believe or not SUM is about half of that.

[couta1]

....and believe or not SUM is about half of that. Mate, you know I believe it.

[silu]

So sorry to hear that the work-site death in Auckland this morning was on Ryman's Tropicana site.

[winner69]

There you go - just popped $11.05!!

It’ll be 12 bucks before you know it at this rate

[Ggcc]

So sorry to hear that the work-site death in Auckland this morning was on Ryman's Tropicana site.

I agree. It puts a downer on the share price. RIP and condolences to the family

[winner69]

Ryman share price $11.00

sUM share price less than 1/2 RYM

OCA share price less than 1/10th of RYM

RYM slightly over priced at the moment ....but only just

Cool eh

[Beagle]

Ryman share price $11.00

sUM share price less than 1/2 RYM

OCA share price less than 1/10th of RYM

RYM slightly over priced at the moment ....but only just

Cool eh

You're on to it mate, what an awesome cool cat...almost all in line with expected SP relativity now after RYM's correction.

[BlackPeter]

Yikes. Taxcinda strikes.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12002635

LOL - love it! The faster the lefties screw the economy the faster they will go. Just imagine the impact on retirement funds and similar - Labour is killing it!