RYM - Ryman Healthcare

[bull....]

Ouch SP taking a beating today after that update. Might find a bottom end of next week around $12.50? End of month portfolio rebalancing, might be quite a few after this update and recent news in the sector/ property outlooks etc who might move funds elsewhere. Possible see lows of June/August retested?

picking bottoms is brave

[Beagle]

I think the issue is that yet again for the umpteenth year they are not achieving their stated goal of 15% per annum growth in underlying earnings.
You can't keep on missing this goal indefinitely without the market eventually waking up and saying that the company is no longer worth the premium to the rest of the sector.

[peat]

picking bottoms is brave
and smelly.

[Beagle]

I'd be interested at $7. If it doesn't get down there to reality ask me if I care :D

[bull....]

looks like the ryman result rubbing of on all them now

[BlackPeter]

picking bottoms is brave

... and disgusting :).

[Maxtrade]

looks like the ryman result rubbing of on all them now

Yeah except Radius which has already seemed to find its bottom trough and has been holding around the previous CR price for a while now. Didn't follow the spike up that Ryman, Somerset etc did. Rad will probably be the odd ball and buck the trend out of them and may rally off its low to 10% up above CR price. SUM and RYM do seem priced at a premium. We sold out of both and moved funds across to RAD when dropped slightly below the CR. Will sit and see fruitions from their recent acquisitions to develop. Might be the first of this sector to see some upwards movement if the sector has stalled and trends down currently.

[winner69]

Yeah except Radius which has already seemed to find its bottom trough and has been holding around the previous CR price for a while now. Didn't follow the spike up that Ryman, Somerset etc did. Rad will probably be the odd ball and buck the trend out of them and may rally off its low to 10% up above CR price. SUM and RYM do seem priced at a premium. We sold out of both and moved funds across to RAD when dropped slightly below the CR. Will sit and see fruitions from their recent acquisitions to develop. Might be the first of this sector to see some upwards movement if the sector has stalled and trends down currently.

If you think SUM and RYM trade at a premium then so does RAD

On similar multiples

[macduffy]

FWIW, Macquaries retain their Outperform rating on RYM with a 12 month target SP of $16.

[bull....]

Jarden analysts reiterated their ‘sell’ rating after the retirement village operator’s half-year earnings result was below their forecast.
The analysts said the stock was “unappealing” due to high levels of debt and a risk the share price could fall significantly.
However, Macquarie gave a different view saying that with strong demand and high property prices the stock deserved its price tag

https://www.goodreturns.co.nz/article/976519634/shares-slump-as-rate-hike-looms.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+22+Nov+ 2021

[Maxtrade]

If you think SUM and RYM trade at a premium then so does RAD

On similar multiples

SUM and RYM got a bit more of a push up recently than RAD though. So the apple has a bit further to fall from the tree. Where do you feel the SP of Radius should be sitting at currently then. Do you feel it should be substantially lower than the recent 0.52 Cap Raise? Would say there will be enough support from recent acquisition close to CR price. SUM and RYM rallied a bit harder recently hence the higher % falls having taken place over the past few weeks.

[JohnnyTheHorse]

With the NZX50 looking to make a daily trend change I am looking to some of the most beat up names for a short term bounce. RYM one of the best targets imo with both daily and weekly RSI in oversold, RSI divergence on the daily too. Double bottom at $12 provides good risk/reward for entry.

Need to be wary of risk of daily or weekly bear flag forming instead.

[Mr Slothbear]

Very safe bet there Johny, at these prices even I am thinking about loading back up after divesting half my shareholding in dec2019/jan2020 in the high $16 range but $11.50 is looking attractive.

[Beagle]

With the NZX50 looking to make a daily trend change I am looking to some of the most beat up names for a short term bounce. RYM one of the best targets imo with both daily and weekly RSI in oversold, RSI divergence on the daily too. Double bottom at $12 provides good risk/reward for entry.

Need to be wary of risk of daily or weekly bear flag forming instead.

I know you're a skilled trader and will time this to the best of your ability but for the average Joe I can't help but feel that this looks worrying on the chart both now and over the last 5 years. Did the magic leave when Simon Challis left ? A five year comparison to the NZX50 tells a sobering story of underperformance. Index up just on 85% and RYM up just on half that...a little less of a poor underperformer if you factor in their very modest dividends over that timeframe.

Its clearly broken down through the 200 day MA and broken the key support level of $12.00 and is plumbing lows not seen since the huge initial Covid scare in March / April 2020.

Worse...there seems to have been a systemic multi year failure in their stated medium term goal of 15% per annum eps growth and worse still, they remain at a substantial premium to most other stocks in this sector.

Is the Simon Challis premium warranted anymore ? Absolutely not in my opinion. If one is going to pay a big premium to NTA I would be buying SUM with its better track record in recent years of much faster growth. I expect continued underperformance relative to the rest of the sector and the market going forward.

[JohnnyTheHorse]

I know you're a skilled trader and will time this to the best of your ability but for the average Joe I can't help but feel that this looks worrying on the chart both now and over the last 5 years. Did the magic leave when Simon Challis left ? A five year comparison to the NZX50 tells a sobering story of underperformance. Index up just on 85% and RYM up just on half that...a little less of a poor underperformer if you factor in their very modest dividends over that timeframe.

Its clearly broken down through the 200 day MA and broken the key support level of $12.00 and is plumbing lows not seen since the huge initial Covid scare in March / April 2020.

Worse...there seems to have been a systemic multi year failure in their stated medium term goal of 15% per annum eps growth and worse still, they remain at a substantial premium to most other stocks in this sector.

Is the Simon Challis premium warranted anymore ? Absolutely not in my opinion. If one is going to pay a big premium to NTA I would be buying SUM with its better track record in recent years of much faster growth. I expect continued underperformance relative to the rest of the sector and the market going forward.

Agree with your general sentiment. Although sometimes underperformers turn into the best performers in following years. A strategy I often use on stocks like this is buying into oversold conditions and then selling enough into the bounce that my stoploss (below the newly established support) is then at breakeven. Lets you try to nail the bottom of a longer term trend change (however more often than not you will stop out breakeven, as the downtrend eventually continues). The key skill is being able to recognise oversold bottoms and be willing to stop out when you get it wrong!

[Panda-NZ-]

The bottom might have been hit by RYM.

[BlackPeter]

The bottom might have been hit by RYM.

Whose bottom ... are we talking sexual harassment :p ?

[ralph]

The bottom might have been hit by RYM.
Still Spanking Panda

[Panda-NZ-]

Sorry, trying to sound too much like a crypto bro .

[ralph]

Sorry, trying to sound too much like a crypto bro .
Even so its getting lower Rymans bottom is ,not meaning to upset you panda broo
Ps I am not buying that crypto crap ,its all going to go tits up soon mark my words

[Panda-NZ-]

Even so its getting lower Rymans bottom is ,not meaning to upset you panda broo
Ps I am not buying that crypto crap ,its all going to go tits up soon mark my words

Agreed.

I like using my pc for Folding@H (medical research) and getting free banano coins for it. It pays for the electricity.

Though there's lots of scams out there of course. Like many things which are not regulated.

[Greekwatchdog]

$9.85. Beagle what do you a entry target is for this? Was it $7.50?

[Beagle]

$9.85. Beagle what do you a entry target is for this? Was it $7.50?

Hi mate, back in November I called fair value at $7, see post #4004 but also #4002, #4014 and also bulls post regarding debt level's #4010.

Given the huge pullback in this sector and in the market generally we've seen this month and the widespread belief that the real estate market is likely to contract this year and with no knowledge of the new CEO's abilities, their high debt is starting to be a bit of a worry. High leverage in a declining property market is a recipe for value destruction and from what I have observed over many years RYM's unit pricing is right up there at a high premium level for what they offer so maybe they're more vulnerable in a declining market in more ways than one ?

How much of the magic left when Simon Challis left years ago ? I think most or all of the magic is gone. Even his right hand man Gordon who worked with him was a pale shadow of the man himself and the market has repriced accordingly. What do you think, did the magic depart when Simon did ? Surely it is not a coincidence that ever since Simon Challis left RYM has been badly underperforming the market and this sector ?

Is the RYM "brand" with an unproven new CEO worth much or any premium at all to NTA of just on $6 now given you can buy OCA at a deep discount to NAV or ARV at a very small premium to NTA ? Sorry, I have many more questions than answers with this one. $7 was my assessment of fair value in early November. I wouldn't pay over $6 in the current market. Who wants to catch a falling knife unless the shares are dirt cheap ?

Or maybe I have this all wrong and its just high PE stocks generally that are getting bashed ?

[Greekwatchdog]

Thanks Mate, I got more ARV Tuesday @ $1.70 for bottom draw to join its ugly cousin OCA. Debt levels here have always been a concern for me as well. Might just stay with the ugly cousins for now.

[alokdhir]

Hi mate, back in November I called fair value at $7, see post #4004 but also #4002, #4014 and also bulls post regarding debt level's #4010.

Given the huge pullback in this sector and in the market generally we've seen this month and the widespread belief that the real estate market is likely to contract this year and with no knowledge of the new CEO's abilities, their high debt is starting to be a bit of a worry. High leverage in a declining property market is a recipe for value destruction and from what I have observed over many years RYM's unit pricing is right up there at a high premium level for what they offer so maybe they're more vulnerable in a declining market in more ways than one ?

How much of the magic left when Simon Challis left years ago ? I think most or all of the magic is gone. Even his right hand man Gordon who worked with him was a pale shadow of the man himself and the market has repriced accordingly. What do you think, did the magic depart when Simon did ? Surely it is not a coincidence that ever since Simon Challis left RYM has been badly underperforming the market and this sector ?

Is the RYM "brand" with an unproven new CEO worth much or any premium at all to NTA of just on $6 now given you can buy OCA at a deep discount to NAV or ARV at a very small premium to NTA ? Sorry, I have many more questions than answers with this one. $7 was my assessment of fair value in early November. I wouldn't pay over $6 in the current market. Who wants to catch a falling knife unless the shares are dirt cheap ?

Or maybe I have this all wrong and its just high PE stocks generally that are getting bashed ?

EBO has a P/E of 32 ...now higher then FPH ...its one of the few positive stocks of the day ...so its not just P/E which is the problem ...its not that simplistic . Also FPH closed almost 4% higher on ASX today compared to NZX close ...what changed in 2 hours for such upwards revision in SP ...I wonder ...both on huge volumes

[Lease]

My calculation is there is huge margin of safety if you buy at $9.85.

[Monarch]

Sure this company has a lot of debt, and interest rates are going up. But what about the real interest rate? I imagine in real terms the value of their debt is actually decreasing with inflation higher than the interest rate.

[winner69]

Punters worried about Ryman's debt

Not really that much higher than others in the sector - they are all highly leveraged .... but that's the property game eh

In case anybody interested here's latest numbers ... it is important to account for what they owe residents (although interest free they do need to get repaid)

[BlackPeter]

Punters worried about Ryman's debt

Not really that much higher than others in the sector - they are all highly leveraged .... but that's the property game eh

In case anybody interested here's latest numbers ... it is important to account for what they owe residents (although interest free they do need to get repaid)

Interesting comparison. Given the way OCA is beaten up on some other thread, it appears the market sees high debts as desirable and low debts as bad :):

[dobby41]

Interesting comparison. Given the way OCA is beaten up on some other thread, it appears the market sees high debts as desirable and low debts as bad :):

Inflation gobbles debt.
Though high interest rates aren't good for debt.
Maybe the market sees inflation as a bigger thing than high interest rates?

[winner69]

Interesting comparison. Given the way OCA is beaten up on some other thread, it appears the market sees high debts as desirable and low debts as bad :):

Probably more to do with financial performance - like does leverage generate better returns

[Beagle]

I think there's a compelling argument that interest free loans from residents are not debt as they are never repaid by the company. These days we all know that the outgoing residents estate is not repaid until a new incoming resident foots the bill.

[Mr Slothbear]

I think there's a compelling argument that interest free loans from residents are not debt as they are never repaid by the company. These days we all know that the outgoing residents estate is not repaid until a new incoming resident foots the bill.


As a rule for retirement villages you’re absolutely right.

part of the Ryman guarentee that sets them apart from the crowd however :)

“REPAYMENT PROTECTION

It is common practice for retirement villages to repay the balance of the occupancy advance only when the apartment or townhouse has been on-sold.
“We guarantee that if the new resident has not settled within 6 months of you vacating your apartment or townhouse, we will pay you interest on your occupancy advance until it is paid in full.”
In over 35 years the longest time a Ryman resident has waited to be repaid is 6 months.”

edit i will add, as a long time owner of Rym shares i view the resident advances as debt with a very low cost nearing zero so normally don’t include this as debt during valuation or looking at gearing

[Gerald]

Apparantly a case of covid in Jane Mander - Whangarei.

[whatsup]

Below $10-00 atm !

[Beagle]

As a rule for retirement villages you’re absolutely right.

part of the Ryman guarentee that sets them apart from the crowd however :)

“REPAYMENT PROTECTION

It is common practice for retirement villages to repay the balance of the occupancy advance only when the apartment or townhouse has been on-sold.
“We guarantee that if the new resident has not settled within 6 months of you vacating your apartment or townhouse, we will pay you interest on your occupancy advance until it is paid in full.”
In over 35 years the longest time a Ryman resident has waited to be repaid is 6 months.”

edit i will add, as a long time owner of Rym shares i view the resident advances as debt with a very low cost nearing zero so normally don’t include this as debt during valuation or looking at gearing

Have you got a link to support that ?

Now putting my technical bean counters hat on. Technically, the fact that they may pay some tiny minuscule interest rate if a unit is not resold within 6 months does not mean they are taking legal ownership of the debt to the former resident. They are merely paying a tiny amount of compensation for the inconvenience of it not being resold within 6 months. Check the pitiful interest rate out.

You will recall that many years ago they used to guarantee repayment within 6 months but they changed that policy when it started costing them money. When they removed that guarantee of repayment they also removed legal liability for the company to repay the debt. I think this fundamental change was a very poor move and damaged their former stellar reputation, which is one of many reasons these have been so woefully underperforming in recent years.

[whatsup]

Dec 2017 levels atm !!

[ralph]

Dec 2017 levels atm !!
Sailed through 9.50 today wow getting closer to 7 bucks covid is hitting hard if it gets in the villages

[Sideshow Bob]

Sailed through 9.50 today wow getting closer to 7 bucks covid is hitting hard if it gets in the villages

Which it surely will.

A case with a worker at Clare House, Invercargill which is a Radius facility.

[ralph]

I Bob it surely will .I am concerned for resident's of these villages and patients in care homes, because now with the shortened miq times any new variants will be lost in the masses coming out & with the infections rising rapidly we are done for ,9.15 now will the 9 bucks offer much resistance tomorrow .
Disc I believe things will calm down a bit until covid goes ballistic in the N Z

[Baa_Baa]

I Bob it surely will .I am concerned for resident's of these villages and patients in care homes, because now with the shortened miq times any new variants will be lost in the masses coming out & with the infections rising rapidly we are done for ,9.15 now will the 9 bucks offer much resistance tomorrow .
Disc I believe things will calm down a bit until covid goes ballistic in the N Z

Have a read of the Aus Govt Health February report on RV's covid infections and deaths in Oz (https://www.health.gov.au/sites/default/files/documents/2022/02/covid-19-outbreaks-in-australian-residential-aged-care-facilities-11-february-2022.pdf). They're pretty bad, widespread, affecting residents and staff. The report references Canada, which is way way worse.

"During the COVID-19 pandemic, no country has been able to avoid outbreaks or deaths in residential aged care when there has been widespread community transmission.


The Australian death rate is 0.74 per cent (7.4 in 1,000) against the total number of residential aged care beds across the country.


By comparison, Canada has experienced over 10 times the number of deaths in care homes than Australia as at 11 February 2022.


• As at 11 February 2022, Canada had experienced 34,753 deaths. This includes 16,345 deaths at residential in care homes (or 47 per cent).


• 59 per cent of all aged care homes in Canada have had reported cases of COVID-19 in residents or staff (compared to 75 per cent in Australia).

[BlackPeter]

Have a read of the Aus Govt Health February report on RV's covid infections and deaths in Oz (https://www.health.gov.au/sites/default/files/documents/2022/02/covid-19-outbreaks-in-australian-residential-aged-care-facilities-11-february-2022.pdf). They're pretty bad, widespread, affecting residents and staff. The report references Canada, which is way way worse.

"During the COVID-19 pandemic, no country has been able to avoid outbreaks or deaths in residential aged care when there has been widespread community transmission.


The Australian death rate is 0.74 per cent (7.4 in 1,000) against the total number of residential aged care beds across the country.


By comparison, Canada has experienced over 10 times the number of deaths in care homes than Australia as at 11 February 2022.


• As at 11 February 2022, Canada had experienced 34,753 deaths. This includes 16,345 deaths at residential in care homes (or 47 per cent).


• 59 per cent of all aged care homes in Canada have had reported cases of COVID-19 in residents or staff (compared to 75 per cent in Australia).

Great stats, cheers.

Well, looking at this carnage overseas it would be interesting to learn what happened to the share prices of the respective institutions.

Surely - they must have been run into the ground and shareholders are now paying others for taking the shares off their hands? Yes? Maybe the scaremongers are some of the vultures, who knows?

Actually - no, nothing happened and the resident scaremongers on this and other retirement threads are just that. It might be worthwhile to question their motives ...

[winner69]

......

Actually - no, nothing happened and the resident scaremongers on this and other retirement threads are just that. It might be worthwhile to question their motives ...

Should we also question the motives of the resident cheerleaders?

[Biscuit]

Should we also question the motives of the resident cheerleaders?

No, we should take it all with a grain of salt and carry on cheering or scaremongering as we feel appropriate.

[Beagle]

Wow those overseas stat's are a worry. RYM have been badly underperforming the market for 8 years now and I am not sure how anyone could come to the conclusion it would outperform in the current environment...but good luck to holders, you'll need it.

[BlackPeter]

Should we also question the motives of the resident cheerleaders?

Probably a good idea with anybody who is trying to push hype up or down without being able to provide relevant data or arguments. Wouldn't you think so?

[percy]

Wow those overseas stat's are a worry. RYM have been badly underperforming the market for 8 years now and I am not sure how anyone could come to the conclusion it would outperform in the current environment...but good luck to holders, you'll need it.

The Trust I am a trustee of holds OCA [av cost approx $1.05] RYM [average cost approx $2.14] and SUM [av cost approx $2.40}.
We have no intention of selling any of the above shares.
All three have strong boards,good management, and although the tail winds have stopped currently, I expect the tail winds will strengthen in the longer term again,with the rapidly ageing population driving demand for a safe,secure,happy retirement .
We did not buy ARV as we had enough exposure to the sector.

[Bjauck]

Have a read of the Aus Govt Health February report on RV's covid infections and deaths in Oz (https://www.health.gov.au/sites/default/files/documents/2022/02/covid-19-outbreaks-in-australian-residential-aged-care-facilities-11-february-2022.pdf). They're pretty bad, widespread, affecting residents and staff. The report references Canada, which is way way worse.

"During the COVID-19 pandemic, no country has been able to avoid outbreaks or deaths in residential aged care when there has been widespread community transmission.


The Australian death rate is 0.74 per cent (7.4 in 1,000) against the total number of residential aged care beds across the country.


By comparison, Canada has experienced over 10 times the number of deaths in care homes than Australia as at 11 February 2022.


• As at 11 February 2022, Canada had experienced 34,753 deaths. This includes 16,345 deaths at residential in care homes (or 47 per cent).


• 59 per cent of all aged care homes in Canada have had reported cases of COVID-19 in residents or staff (compared to 75 per cent in Australia). Those stat include Delta and previous variants, which NZ rest homes were more successful in combatting. The current variant is not so deadly, especially now that most elderly in NZ are now boosted.

As for future variants...?

I am holding SUM, OCA and ARV.

[maclir]

What happened today? Didn't see an announcement but up 6%

[winner69]

What happened today? Didn't see an announcement but up 6%

‘Mother of all reversals’ they say …after yesterdays fall …back to where it was Wednesday

[Shareguy]

The Trust I am a trustee of holds OCA [av cost approx $1.05] RYM [average cost approx $2.14] and SUM [av cost approx $2.40}.
We have no intention of selling any of the above shares.
All three have strong boards,good management, and although the tail winds have stopped currently, I expect the tail winds will strengthen in the longer term again,with the rapidly ageing population driving demand for a safe,secure,happy retirement .
We did not buy ARV as we had enough exposure to the sector.

Agree with you Percy. I have shares in all the main four. Rym and Sum have had for years at similar costs to you. Have been adding to my position in Oca over the weeks and currently over six figures and still buying. Ryman has been under performing for some time but have no intention to sell. All the reports I have seen show a massive shortage of retirement accomodation looming. And certainly not worried about COVID or some who think the property market is going to tank.

[Maxtrade]

Agree with you Percy. I have shares in all the main four. Rym and Sum have had for years at similar costs to you. Have been adding to my position in Oca over the weeks and currently over six figures and still buying. Ryman has been under performing for some time but have no intention to sell. All the reports I have seen show a massive shortage of retirement accomodation looming. And certainly not worried about COVID or some who think the property market is going to tank.

Thoughts to the level that interest rates will rise to 2022/2023 with the debt exposure Rym currently has?? May provide hurdles to SP comparatively compared to the other RV operators such as, OCA, RAD, SUM.

[BlackPeter]

Thoughts to the level that interest rates will rise to 2022/2023 with the debt exposure Rym currently has?? May provide hurdles to SP comparatively compared to the other RV operators such as, OCA, RAD, SUM.

You sure that interest rates are relevant to their debt exposure?

Haven't recently analysed Rymans balance sheet but would have thought that Ryman is in that regard not different to other retirement villages: Most of their liabilities are funds "borrowed" from the residents (when they "buy" the right to live in the units) and interest free to the retirement villages.

Does not matter to them what the market rates might be ...

[Maxtrade]

You sure that interest rates are relevant to their debt exposure?

Haven't recently analysed Rymans balance sheet but would have thought that Ryman is in that regard not different to other retirement villages: Most of their liabilities are funds "borrowed" from the residents (when they "buy" the right to live in the units) and interest free to the retirement villages.

Does not matter to them what the market rates might be ...

These figures are a bit outdated now.... But 3rd quarter 2021 balance sheet data showed that Ryman Healthcare had liabilities of approx $750m due within a year, and liabilities of $5.6b falling due after that. Offsetting this, it had $20m in cash and $542m in receivables that were also due within 1 year. Therefore liabilities outweighed approx $5.78b. I would say some of their debt liabilities incur interes. Hence relevancy of exposure to increasing interest rates?

[BlackPeter]

These figures are a bit outdated now.... But 3rd quarter 2021 balance sheet data showed that Ryman Healthcare had liabilities of approx $750m due within a year, and liabilities of $5.6b falling due after that. Offsetting this, it had $20m in cash and $542m in receivables that were also due within 1 year. Therefore liabilities outweighed approx $5.78b. I would say some of their debt liabilities incur interes. Hence relevancy of exposure to increasing interest rates?

May I direct you to page 89 of their latest annual report ... ?"

It won't be hard for you to calculate that only roughly 1/3rd of their liabilities is interest bearing", which makes a rather conservative balance sheet ...

While they might suffer as everybody else from rising wages, staff shortages and dropping property prices (i.e. potential revaluation losses - shudder) ... I am pretty sure that rising interest rates are not the biggest of their problems.

[Jim]

I think slowing house prices will be the next biggest worry.

[Greekwatchdog]

Foe Bars update 29/03.

NEUTRAL


We upgrade Ryman Healthcare (RYM) to NEUTRAL from UNDERPERFORM. After RYM's share price weakness over the last four months we no longer see any downside to our (reduced) target price of NZ$9.90. We believe that RYM's valuation fairly reflects the combination of low cash recovery of capex and declining care earnings, offset by a strong track record of delivering organic growth and a path for long term growth in Australia. Going forward our focus is on: (1) potential for increased care funding to offset care cost increases; (2) ability to recover more of the substantial capex that has been spent in Australia; and (3) capturing the previous two years House Price Inflation (HPI) through increased resales margins.


link
NZX Code RYM
Share price NZ$9.20
Target price NZ$9.90 (from 10.80)
Risk rating Medium
Issued shares 500.0m
Market cap NZ$4,600m
Avg daily turnover 558.9k (NZ$6,985k)
link
Financials: Mar/ 21A 22E 23E 24E
NPAT* (NZ$m) 224.5 202.7 214.2 240.8
EPS* (NZc) 44.9 40.5 42.8 48.2
EPS growth* (%) -7.2 -9.7 5.7 12.4
DPS (NZc) 22.4 16.2 17.1 19.3
Imputation (%) 100 100 100 100
*Based on normalised profits
link
Valuation (x) 21A 22E 23E 24E
PE 20.5 22.7 21.5 19.1
EV/EBIT 27.1 30.1 28.8 24.8
EV/EBITDA 23.9 25.9 24.4 21.1
Price / NTA 1.6 1.4 1.3 1.1
Cash div yld (%) 2.4 1.8 1.9 2.1
Gross div yld (%) 3.4 2.4 2.6 2.9
What's changed?
Earnings: FY22/FY23/FY24 underlying earnings +16%/-1%/0%. Annuity EBITDA +14%/+1%/0%
Target price: Downgraded to NZ$9.90 (from NZ$10.80) due primarily to WACC changes
Rating: Upgraded to NEUTRAL from UNDERPERFORM
FY23/FY24 numbers largely unchanged — FY22 upgraded due to reversal of Omicron resales pause
We have left our substantially (~-20%) below Visible Alpha consensus estimates for FY23 and FY24 largely unchanged but have increased our FY22 estimates by ~+15% as we reverse our previous expectations of an Omicron induced pause in new and resales following commentary from several of the aged care operators. Our difference versus consensus primarily relates to our expectations of operating expenses which are c. +10% ahead of consensus throughout FY22–FY24.


We expect care EBITDA to halve in FY22 — path to recovery dependant on uncertain but possible increase in government funding
We estimate that RYM's care EBITDA margins declined by approximately one third from FY14 to FY21 as cost growth outpaced revenue growth by ~40%. In FY22 we expect care EBITDA margins to halve from FY21. The dramatic deterioration of care profitability is being felt across the sector and is not unique to RYM, although the medium term impact is larger as RYM is unable to offset the cost pressures through increased prices of care suites. Going forward, we believe there will be increased pressure on the government to materially lift funding. The listed sector is able to offset these cost pressures with profits and cash flow from village operations, something which will be more difficult for smaller and more care heavy operators.


Where from here? Balanced risk reward
We believe the downside risk for RYM centres around (even) higher cost growth than we are modelling and continued poor cash recovery of capex. However, we see the potential for a positive government care funding outcome, maturing Australian operations and a determination to capitalise on embedded value within its resale stock as offsetting this.

[Sideshow Bob]

FB also reckon chance to get tossed out of MSCI index in the May review

https://businessdesk.co.nz/article/infrastructure/ryman-at-risk-of-being-tossed-out-of-the-msci-forsyth-barr (Paywall)

[winner69]

Article mentions a target price of $15.85

Love it when analysts talk dirty with words like 'narrow moat' and 'transient issues' --- "The market has seemingly penalised narrow-moat Ryman for transient issues or industry-wide problems not shared by Ryman,"


Ryman shares look very cheap

https://businessdesk.co.nz/article/infrastructure/ryman-shares-look-very-cheap-morningstar

Might be paywalled

[Mel]

FB also reckon chance to get tossed out of MSCI index in the May review

https://businessdesk.co.nz/article/infrastructure/ryman-at-risk-of-being-tossed-out-of-the-msci-forsyth-barr (Paywall)
The MCSI index review is due out today - will be more than interesting to see if RYM features in it......

[JohnnyTheHorse]

The MCSI index review is due out today - will be more than interesting to see if RYM features in it......

Released this morning, RYM has dropped down an index.

[Mel]

Released this morning, RYM has dropped down an index.
Thanks for the update JTH

[Sideshow Bob]

From Business Desk this morning:

As foreshadowed for a couple of months, Ryman Healthcare shares will fall out of the MSCI Standard Index after May 31.
Forsyth Barr estimates that will mean about $232.3m worth of shares will be sold by index funds and other fund managers hugging the index

[winner69]

From Business Desk this morning:

As foreshadowed for a couple of months, Ryman Healthcare shares will fall out of the MSCI Standard Index after May 31.
Forsyth Barr estimates that will mean about $232.3m worth of shares will be sold by index funds and other fund managers hugging the index

and Macquarie still have them as a BUY

Even more of a bargain if the $223m causes shares to fall even further

[tuaman]

and Macquarie still have them as a BUY

Even more of a bargain if the $223m causes shares to fall even further

I do see a lot of 6% up and down recently. Care to shed any lights on that please.
What price do you think is bottom? No holding but thinking some for long term like 5 years. Thanks.

[Mel]

I do see a lot of 6% up and down recently. Care to shed any lights on that please.
What price do you think is bottom? No holding but thinking some for long term like 5 years. Thanks.
I was surprised to see it open higher than the Friday close, following on from the MSCI announcement. I'm sure some of the recent decline has been triggered by the speculation on RYM dropping out of the MSCI Index, however, I wouldn't be surprised to see it hit the 52-week low of $8.23 again - I still think it's a good long-term hold though.

[winner69]

There was an article on RYM in BusinessDesk today and a big photo of the CEO at the top of the page.

I’d forgotten that last September they appointed a grocer / retailer as CEO ….one Richard Umbers

Poster Rep had a few choice words about the appointment and Umbers’ appointment

Share price when Umbers started was about $15 …….now $8.66 …more than 40% down…..market cap down more than $3 billion …wow

Not all poor Umbers doing ….maybe it’s just Umbers is one of those unlucky leaders …..always dogged by ill fortune …like his past careers as Rep pointed out

Unlucky leaders not good …..their fortunes rarely change ….always dogged by bad luck.

Could call this a bit of fundamental analysis

might check in to analyst preso to see what he’s like

[Ferg]

Share price when Umbers started was about $15 …….now $8.66 …more than 40% down…..market cap down more than $3 billion …wow

{snip}

might check in to analyst preso to see what he’s like

I'm curious - what was the change in the market as a whole over the same time period?
I would also be curious to hear your thoughts if you do happen to watch the presentation.

[Baa_Baa]

Excellent long play value here, whole sector actually. Just need some patience as value could be even better down the track, might miss a divi or two but it'll be worth it in the long run. Fancy going from nothing to buy a few months ago to buys everywhere, albeit a matter of timing.

[Baa_Baa]

Relative price performance charts (https://invst.ly/y56al) are notorious for being manipulated by the start date, so let's stay in keeping with that and start at the Covid 2020 low when everything in this sector bottomed at literally the same time

Noting some were thrashed a lot harder than others during the Covid low, so performance since then will appear better the lower the base they came off, and how the SP actually performed since.

RYM (blue), worst performer by far, didn't get as badly hammered but the turnover is really hurting it
OCA (purple), surprising performance but off the worst base, though insightful performance amongst peers
SUM (green), wow what a star, hard to believe it's back well under my last regretful sell price
ARV (red), unexciting recovery slow to turn over, but now sucked into the sector downturn slog ahead

Best just to wait until these confirm a base/bottom and new uptrends then buy the sector, if you've got some dry powder handy.

5, 10, 20 years from now you'll look at the chart and there will this down thing in 2022 and marvel at your foresight snaffling up the blossoming sector during one of those rare recession opportunities. Set you up for your retirement income, if you will.

Vaygor it.

[Beagle]

But if I recall correctly Vaygor reckoned it would be $30 by now and no matter whether you think its at a bottom or not RYM still trades at a huge premium to NTA. Nick Mar of Macquarie's loves them but I remain extremely cautious. The RYM magic was Simon Challis and the company has never been the same since he left. https://www.goodreturns.co.nz/article/976520286/nz-shares-fall-as-ryman-drops-7.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+16+May+ 2022

[Mel]

Ryman results:
https://www.nzx.com/announcements/392385

[bull....]

not to bad a result either

[BlackPeter]

not to bad a result either

Indeed - pretty solid results even if we discount for the significant revaluation gains (which might be volatile given the turned market mood).

Will be interesting to see what Mr. Market makes out of these results ... will the hammering stop?

[Grimy]

Some high numbers on the buy side already

[Lease]

Excellent results. looks new CEO has done the job!

[jagger]

Excellent results. looks new CEO has done the job!

It's a good result, but I'm always weary of people ascribing results to management who have been in the job for 5 minutes.

He's been there 7 months.
This isn't the easiest business model / operating environment to get your head around.
He would have been cold for at least the first 3 months just trying to understand which way is up, especially given RYM's capital structure headaches.
All the variables (at least the ones within mgmt's control) feeding today's result and RYM's strategy have been locked in place for *years* (i.e. not least, developments completing and capex in the period).

Realistically he's probably only just starting to fire and contribute to the business' direction now.
Even then, a lot of what the business will deliver in the next 2-3 years is inherited (sites acquired, consented and commenced prior to him starting).
This goes for all the players in the sector. Some management teams are being unduly feted or punished currently.

That said, his performance on the call today was a big improvement. It was positive and confident, although it's clear (and understandable for now) that he still leans a lot on the CFO for any response requiring detail.
Big step up on their half year call which was a shambles.

[Lease]

It's a good result, but I'm always weary of people ascribing results to management who have been in the job for 5 minutes.

He's been there 7 months.
This isn't the easiest business model / operating environment to get your head around.
He would have been cold for at least the first 3 months just trying to understand which way is up, especially given RYM's capital structure headaches.
All the variables (at least the ones within mgmt's control) feeding today's result and RYM's strategy have been locked in place for *years* (i.e. not least, developments completing and capex in the period).

Realistically he's probably only just starting to fire and contribute to the business' direction now.
Even then, a lot of what the business will deliver in the next 2-3 years is inherited (sites acquired, consented and commenced prior to him starting).
This goes for all the players in the sector. Some management teams are being unduly feted or punished currently.

That said, his performance on the call today was a big improvement. It was positive and confident, although it's clear (and understandable for now) that he still leans a lot on the CFO for any response requiring detail.
Big step up on their half year call which was a shambles.

Surely the good results are achieved by the team effort. We'll see if he is really capable in the next 12 months given the current tough environment.

[jagger]

Surely the good results are achieved by the team effort. We'll see if he is really capable in the next 12 months given the current tough environment.

Yeah, they're achieved with a team effort - but you can hardly say that "looks like the CEO has done the job" with regards to the FY22 result!
Absolutely the next 12 months will be more so, but again - a lot of what the business will deliver in FY23 is already baked. They can't change where their development sites are or what they're going to spend on them.

RV results are largely down to the following main variables of which he would have had, (being very generous here) little to (more likely) zero impact over:
- Resale gains (years of embedded value released from resales. Most FY22 resales would have occurred or at least had applications when he arrived in order to be booked in this financial year)
- DMF (accrued predominantly from residents already in-situ on his arrival)
- New sales development margin (a function of capex incurred on a project and the new sales price). He may have personally pushed prices higher, that's potentially the only thing. Again, unlikely there was any personal captain's call on that.

These businesses are like oil tankers, what is done today will not be seen for 4-5 years.

[Mr Slothbear]

Excellent results. looks new CEO has done the job!


i agree with Jagger, frankly new ceo looked a bit clueless and only 7 months in I will cut him some slack. Rym is built like a freight train, large with momentum rolling down a hill.

must say aussie CEO really did impress, geez hes onto it, i’m picking him as the up and coming star of the show.

there will also be very easy 20mill underlying profit currently spent on covid control that’ll be an easy winback as covid settles

[jagger]

must say aussie CEO really did impress, geez hes onto it, i’m picking him as the up and coming star of the show.

I agree, that Aussie CEO was across all his sites, including importantly understanding the local demographics, and very confident.

[couta1]

But if I recall correctly Vaygor reckoned it would be $30 by now and no matter whether you think its at a bottom or not RYM still trades at a huge premium to NTA. Nick Mar of Macquarie's loves them but I remain extremely cautious. The RYM magic was Simon Challis and the company has never been the same since he left. https://www.goodreturns.co.nz/article/976520286/nz-shares-fall-as-ryman-drops-7.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+16+May+ 2022 Looking at this latest result your extreme caution is unwarranted, sp will be back into double figures pretty soon and will then continue to climb from there over time.

[Charlie]

24-May-2022 08:36:45
>
SHINTR: RYM: SPH Notice - ACATIS Investment KVG mbH (https://online.asb.co.nz/ost/B7DDF6C8388C5A21CDFA518E78C65E4A/companyannouncements/showannouncement/nzx/rym?issuercode=rym&number=392528&ispdf=false)



Interesting German investment into Ryman . Pride themselves on Valued investments .
I looked at their website, but don't understand much :-) as I don't speak German.
Now have 6% buying up under $10 big time .

News today said due to lack of RNs that some rest-homes were in jeopardy of closing some areas. difficult to get staff when a lot got mandated out, and I know for a fact that some who were jabbed don't want boosters .
I'm not anti jab, don't get me wrong, just saying it might get very difficult to get staff.
villages should be fine though.
difficult times all round.
Hopeful the sector will see a lift, but Ryman is a bit hedged with being in Auzz too.

[Rawz]

With the NZ dollar down so low its the perfect time for overseas funds to load up on depressed blue chips like RYM that generate majority of their income in NZ. Ride the rebound in currency and SP for double the returns

[Charlie]

It does seem to be turning over the last 2 weeks .
MACD looking hopeful ,
10day MA crossing the 60 first time in nearly 7 months

[Lease]

Looking at this latest result your extreme caution is unwarranted, sp will be back into double figures pretty soon and will then continue to climb from there over time.

Yes, his comments don't make sense to me: why a sector leader, especially the sector with huge growth potential, can't trade at premium to NTA.

[Beagle]

Yes, his comments don't make sense to me: why a sector leader, especially the sector with huge growth potential, can't trade at premium to NTA.

Maybe do some research and compare their average eps growth rate over the last 5 years with SUM. Earnings matter, see second line of my signature. Then consider that RYM's units are the most expensive in the market by miles and that the housing market is falling really fast. All boats fall on a rapidly falling tide and the most highly geared company in a sector is usually not the safest place to be. Stocks on the highest multiples are hit the hardest with sharply rising interest rates in terms of the effect on their DCF valuation. This is definitely not a place to hide in a Bear market !

Its still a long way underneath its 200 day moving average which is the minimum scope TA indicator I'd be using in this market to determine if there's a new uptrend. No point owning a stock in a downtrend for a 2.2% unimputed dividend yield !
Add in an unproven new CEO and time will tell.

I think there's SUM bets out there that are definitely much better, much higher proven growth rate over the last decade, well proven CEO, well disciplined cost control processes and very modest gearing but I am happy to wait for a new uptrend in that one, no point swimming against an outgoing tide !

[Sideshow Bob]

Volume looks to have been solid in last few days - has the MSCI sell-off started??

No major SH announcements.

[Mel]

Volume looks to have been solid in last few days - has the MSCI sell-off started??

No major SH announcements.
Yes, I too was wondering about the volumes/SP impact of the MSCI - vested interest in the Funds Mgrs to maintain the higher share price for whenever they offload their volumes

[Waltzing]

removed ...

[Lease]

Maybe do some research and compare their average eps growth rate over the last 5 years with SUM. Earnings matter, see second line of my signature. Then consider that RYM's units are the most expensive in the market by miles and that the housing market is falling really fast. All boats fall on a rapidly falling tide and the most highly geared company in a sector is usually not the safest place to be. Stocks on the highest multiples are hit the hardest with sharply rising interest rates in terms of the effect on their DCF valuation. This is definitely not a place to hide in a Bear market !

Its still a long way underneath its 200 day moving average which is the minimum scope TA indicator I'd be using in this market to determine if there's a new uptrend. No point owning a stock in a downtrend for a 2.2% unimputed dividend yield !
Add in an unproven new CEO and time will tell.

I think there's SUM bets out there that are definitely much better, much higher proven growth rate over the last decade, well proven CEO, well disciplined cost control processes and very modest gearing but I am happy to wait for a new uptrend in that one, no point swimming against an outgoing tide !

House price won't fall forever. I'm optimistic on NZ housing market in the long-run. And also interest rates won't go up forever. Actually RYM interest coverage ratio is over 7 which is quite safe, plus interest-bearing debt/equity has been dropped in the latest balance sheet.

Won't deny SUM has been better over the past a few years(This is the reason I hold SUM as well). But I don't think it's entirely fair to compare RYM with SUM as the latter has much smaller size. Once SUM reaches the similar size, let's see if it still does better.

Overall, in the short-term, you may be right. But RYM is a long-term play and it's an excellent entry point when SP is weak.

[Charlie]

Maybe do some research and compare their average eps growth rate over the last 5 years with SUM. Earnings matter, see second line of my signature. Then consider that RYM's units are the most expensive in the market by miles and that the housing market is falling really fast. All boats fall on a rapidly falling tide and the most highly geared company in a sector is usually not the safest place to be. Stocks on the highest multiples are hit the hardest with sharply rising interest rates in terms of the effect on their DCF valuation. This is definitely not a place to hide in a Bear market !

Its still a long way underneath its 200 day moving average which is the minimum scope TA indicator I'd be using in this market to determine if there's a new uptrend. No point owning a stock in a downtrend for a 2.2% unimputed dividend yield !
Add in an unproven new CEO and time will tell.

I think there's SUM bets out there that are definitely much better, much higher proven growth rate over the last decade, well proven CEO, well disciplined cost control processes and very modest gearing but I am happy to wait for a new uptrend in that one, no point swimming against an outgoing tide !

Help me out here Beagle

currently

Rym $10.30 P/e of 7.48
SUM 10.53 P/e of 4.45

lets make an even P/E.....
RYM at $14 - EPS 138 gives us a P/E of 10.1
SUM at $24 EPS 236 gives us a P/E of also 10.1

so to reach an equivalent P/E
Sum would rise 140% ish
RYM would rise 35% ish

my maths is probably wrong.....

[BlackPeter]

Help me out here Beagle

currently

Rym $10.30 P/e of 7.48
SUM 10.53 P/e of 4.45

lets make an even P/E.....
RYM at $14 - EPS 138 gives us a P/E of 10.1
SUM at $24 EPS 236 gives us a P/E of also 10.1

so to reach an equivalent P/E
Sum would rise 140% ish
RYM would rise 35% ish

my maths is probably wrong.....

LOL - Churchills famous saying "Never trust a statistic you didn't made up yourself" springs to mind.

Not sure whether it is your maths or your data (possibly both), but something looks funny.

In my books has SUM a backward PE of 13 and RYM of 15.5 (both based on 10 years average earnings).

SUM's earning CAGR during this time was 28.6 and Rymans was 19.2.

So yes, if we assume that both will fare over the next 10 years exactly as they did over the last 10 years, than SUM looks cheaper.

However - SUM had the advantage of being the smaller and nimbler. With continuing growth this advantage will shrink.

As well ... analyst forecast for Ryman (9.3 - based on earning estimates for the coming three years) a lower forward PE than for SUM (11.8), but hey - analyst forecasts are still less reliable than somebody elses historic stats :p ;

I reccon both companies will do well ...

[winner69]

The way the RYM and SUM share prices are going at the moment we could be seeing a 'reversion to the mean' happening

Like the SUM share price is reverting to 50% of the RYM share price (for many years that was the average)

That would be interesting - amazing how often things revert to the mean ... not just in the stock market

[Charlie]

Thanks W69, insightful as always. just using the ASB data as it is in their site.....

[winner69]

There isn't really that much difference in multiples of SUM and RYM at the moment

On Underlying Earnings RYM at a PE of 20 and SUM at 17

On a Price/Book Value RYM at 1.5 and SUM at 1.3

Far more realistic numbers than using PE ratios based on Reported NPAT

[Beagle]

Hi Charlie,

Others have pretty well covered it. Both SUM and RYM make it clear that they base their earnings on what's known as underlying earnings...which is really another name for realised earnings.

International financial reporting standards (IFRS) make it mandatory for companies with property operations to report total gains on property, both realized (underlying) and unrealised, (on paper gains independent valuers say their properties have increased by).

SUM's underlying profit on average has risen at a much faster rate than RYM's over the last decade but they're on a cheaper underlying PE than RYM. This is definitely not warranted in my opinion.

My view is all the retirement village companies share prices will struggle in the near term as the tide is going out on the real estate sector at a very rapid rate of knots and all boats fall on an outgoing tide.

I am very cautious on this sector especially in the context of the current hostile political environment and the pending Government review of this sector. The name of the game at the moment is for the Government to radically underfund late stage care to the point where's its had an absolutely devastating effect on the company most exposed to care (OCA) and hurt the others as well but what new and insidious punishments will the Greens and the radical socialists in power inflict in that pending review ? :scared:

Who would ever have thought that a foundational principle of the tax system that goes back to the very beginning of our tax laws, (an expense can be claimed when its necessarily incurred in earning income) that mortgage interest deductibility for rental properties would have been legislated against so that rental property owners are treated as pariah's ? What's next on their socialist agenda ? Retirement villages singled out for even more special punishment ?

[Charlie]

Thanks Beagle, very well explained .
hoping we see the bottom soon but not holding my breath, although nice to see some recent improvement, but i think it will be a slow push uphill.

[clearasmud]

Who would ever have thought that a foundational principle of the tax system that goes back to the very beginning of our tax laws, (an expense can be claimed when its necessarily incurred in earning income) that mortgage interest deductibility for rental properties would have been legislated against so that rental property owners are treated as pariah's ? What's next on their socialist agenda ? Retirement villages singled out for even more special punishment ?

They just copied what the UK did.
It's so wrong isn't it.

[Beagle]

They just copied what the UK did.
It's so wrong isn't it.

I've been an accountant for just over 40 years and I have never seen anything anywhere near as egregiously unreasonable before.

[Waltzing]

"accountant for just over 40 years and I have never seen anything anywhere near as egregiously unreasonable before."

Surely it tells investors that they can not assume that principles of accounting for capital can be relied upon when investing for the long term.

Imagine if that new precedence is extended to other sectors of industry.

A revolt to on going foreign investment that could cripple growth in an economy without higher rates of interest charged on capital to maintain it.

[Beagle]

I think overseas investors are very wary of this Government and who can blame them. It would seem almost anything is possible if it fits their extremist views of socialist or restorative justice which is why I am so wary of the pending review of this sector. The whole methodology of how the gains on occupation right agreements can be resold tax free comes under the financial arrangements provisions of the Income tax act wherein people lend a company some money interest free in exchange for a license to occupy and companies can resell those licenses to occupy for more money later on and the gains are tax free. One stroke of the pen to amend this "loophole" as Cindy and her mates like to call it and retirement villages will be paying their "fair share" and the vast majority of Labour supporters would be thinking, good job, about time that loophole for greedy capitalists was fixed.

If they can legislate to overturn such a basic principle as interest deductibility and deny people the right to claim mortgage interest on rental properties which has stood the test of time longer than I can remember then fixing this so called "retirement village loophole" is a very real and present danger. This key "socialism" risk and the real estate market falling like a stone together with the egregious deliberate underfunding choking the life out of care services are the three key reasons I am out of this sector completely and I may stay on the sidelines for quite some time. In my experience when the tide goes all boats fall with it and the tide does not change direction quickly. None are paying a yield anywhere near high enough to provide any meaningful counterbalance to the obvious and very serious risks.

[couta1]

I think overseas investors are very wary of this Government and who can blame them. It would seem almost anything is possible if it fits their extremist views of socialist or restorative justice which is why I am so wary of the pending review of this sector. The whole methodology of how the gains on occupation right agreements can be resold tax free comes under the financial arrangements provisions of the Income tax act wherein people lend a company some money interest free in exchange for a license to occupy and companies can resell those licenses to occupy for more money later on and the gains are tax free. One stroke of the pen to amend this "loophole" as Cindy and her mates like to call it and retirement villages will be paying their "fair share" and the vast majority of Labour supporters would be thinking, good job, about time that loophole for greedy capitalists was fixed.

If they can legislate to overturn such a basic principle as interest deductibility and deny people the right to claim mortgage interest on rental properties which has stood the test of time longer than I can remember then fixing this so called "retirement village loophole" is a very real and present danger. This key "socialism" risk and the real estate market falling like a stone together with the egregious deliberate underfunding choking the life out of care services are the three key reasons I am out of this sector completely and I may stay on the sidelines for quite some time. In my experience when the tide goes all boats fall with it and the tide does not change direction quickly. None are paying a yield anywhere near high enough to provide any meaningful counterbalance to the obvious and very serious risks. Costs will always be passed onto the end user at the end of the day, if the gains suddenly become taxable then you just crank up the purchase price to compensate along with increased service fees to boot. If the Govt continue to severely underfund the sector then you just reduce the size of the care operation and pass the problem to the Govt to deal with (Wonder how they would cope with thousands of homeless hospital level elderly on their doorstep)

[Waltzing]

Clement Attlee socialism is here and where as UK housing needed rebuilding after the war the labour governments of the UK got carried away and tossed the baby out with the bath water..

wait till the greens demand that land taxes apply and all those revaluation on P&L account must be Taxed at some rate.

The accounting working papers for these companies and every other company that has property of any kind will mean there will be a shortage of Accountants!!!


https://www.newyorker.com/news/daily-comment/never-mind-churchill-clement-attlee-is-a-model-for-these-times



A game where the goal post's can be moved at any time.

[Biscuit]

I've been an accountant for just over 40 years and I have never seen anything anywhere near as egregiously unreasonable before.

It could be worse, if the Greens had their way, we would now have rent control.

[Beagle]

Costs will always be passed onto the end user at the end of the day, if the gains suddenly become taxable then you just crank up the purchase price to compensate along with increased service fees to boot. If the Govt continue to severely underfund the sector then you just reduce the size of the care operation and pass the problem to the Govt to deal with (Wonder how they would cope with thousands of homeless hospital level elderly on their doorstep)

All good in theory but you can't magically transform care beds into ILU units and interestingly I noted that RYM's average price for an independent living unit in Auckland is already $1.4m ! They creatively try and show that this is less than the cost of the houses in the suburbs their villages are in but there is very little headroom to come and go on and RYM's units are generally, already very expensive. They have to do this because they only take 20% DMF fees as you know and try and have cheap weekly fees.

Any way you slice and dice it the radical activists that are after socialist and restorative justice are on the rampage in Wellington and there's no chance to get rid of them until Nov 2023. Scorched earth as you put it a while back is a genuine worry.

[Beagle]

It could be worse, if the Greens had their way, we would now have rent control.

That's a different subject but looking at all the recent changes to the Tenancy Act and tenants new rights this sector is now very, very tightly controlled.
I wouldn't want to be a residential landlord in the current environment.

[couta1]

All good in theory but you can't magically transform care beds into ILU units and interestingly I noted that RYM's average price for an independent living unit in Auckland is already $1.4m ! They creatively try and show that this is less than the cost of the houses in the suburbs their villages are in but there is very little headroom to come and go on and RYM's units are generally, already very expensive. They have to do this because they only take 20% DMF fees as you know and try and have cheap weekly fees.

Any way you slice and dice it the radical activists that are after socialist and restorative justice are on the rampage in Wellington and there's no chance to get rid of them until Nov 2023. Scorched earth is the worry.... You don't have to transform them for quite some time, just shut down the hospital section and pass the hot potato to the Govt (Hospital side of the business is not making any money anyway) Your last paragraph is unfortunately right on the mark. (It actually makes me really angry that this Govt have no heart or concern for the aged care sector as evidenced by the latest budget)

[Biscuit]

That's a different subject but looking at all the recent changes to the Tenancy Act and tenants new rights this sector is now very, very tightly controlled.
I wouldn't want to be a residential landlord in the current environment.

Yes, you have to be very selective of tenants. I sometimes wonder why I still do it, but it is another form of diversification.

[BlackPeter]

Anybody could point me to the Ryman thread?

[Habits]

That's a different subject but looking at all the recent changes to the Tenancy Act and tenants new rights this sector is now very, very tightly controlled.
I wouldn't want to be a residential landlord in the current environment.

Off topic now, kpg must think that it is a good sector to be apart of as they are throwing their weight behind a sizable 3 to 400 million resi investment at sylvia plus more at lynmall and Drury. Provide a good offering and do not overprice otherwise they may come unstuck. The temptation will be to maximize yield.

Back to RYM

[Biscuit]

Off topic now, kpg must think that it is a good sector to be apart of as they are throwing their weight behind a sizable 3 to 400 million resi investment at sylvia plus more at lynmall and Drury. Provide a good offering and do not overprice otherwise they may come unstuck. The temptation will be to maximize yield.

Back to RYM

I think KPG have a good strategy. Combining retail and residential is really the original urban design. Isolated shopping centers you have to drive to is a modern anomaly. Adding in retirement living would also make sense as access is a big issue for older people.

[winner69]

Director Bell sold some shares

At least he doesn't seem to have suggested to Mr Hickman (Bell being a Trustee of his Trust) to sell some of his 33 million shares

https://www.nzx.com/announcements/393453

[BlackPeter]

Director Bell sold some shares

At least he doesn't seem to have suggested to Mr Hickman (Bell being a Trustee of his Trust) to sell some of his 33 million shares

https://www.nzx.com/announcements/393453

Funny - maybe the grocery bill was too high and he unintentionally mixed up the broking account with the savings account? These things happen.

[winner69]

Seems Ryman numbers about completions not that transparent

Investor expresses concern over Ryman build rate reporting


https://www.nbr.co.nz/investor-expresses-concern-over-ryman-build-rate-reporting/

Prob paywalled

[Charlie]

SP almost where it was 8 yrs ago !!!!
5/5/14 8.70

[Rawz]

SP almost where it was 8 yrs ago !!!!
5/5/14 8.70

thats quite incredible isnt it. i bet nobody would have expected that.

maybe could drop more too

[Mr Slothbear]

Seems Ryman numbers about completions not that transparent

Investor expresses concern over Ryman build rate reporting


https://www.nbr.co.nz/investor-expresses-concern-over-ryman-build-rate-reporting/

Prob paywalled

i don’t have access to behind the paywall but believe its the same guy who asked same question at the recent AGM. The way he posed the questions was like an annoying yapper of a thing, the directors responded saying the way they present build rate is consistent with the way it has been recorded and presented over the last several years and was standard. Seemed happy to answer all his questions privately but he wanted to make a show out of it.

[Akcam]

I wonder how long it will be before RYM starts thinking about their shareholders, rather than just building more and more and all the profits going to the builders???

[limmy]

That's probably the wrong perspective when looking at the actions of RYM. If there's a business case for building more units, then doing so will increase the value of the company which in turn benefits the shareholders.

I wonder how long it will be before RYM starts thinking about their shareholders, rather than just building more and more and all the profits going to the builders???

[winner69]

Good sign “We’ve reviewed progress and we are pleased with where we are at after the first three months of the financial year,’ they said today

[Marilyn Munroe]

I attended Rymans AGM today, it was really interesting.

A question was asked, will the recent softening of the housing market have an effect on Ryman?
The chairman answered they had not noticed any effect yet and their experience when the proceeds of a property sale were insufficient there was a willingness of new residents to commit capital from other sources for the buy-in.

Several shareholders challenged the top tables asset valuation methods. These shareholders pointed out that the valuations included buildings under construction pre-purchase of building materials and commitments by new residents which were not yet been settled by payments, in other words rather forward looking. It was pointed out to the top table a competitor in the listed retirement sector had a far more conservative valuation policy of only including completed construction and money in the bank in the balance sheet.

The top table countered their valuation policy complied with listing rules. The representative of the auditor present at the meeting endorsed this valuation policy.

Opinion: When a British political leader was asked what was the greatest danger he faced he replied "Events dear boy events". Would events place such a forward looking valuation method at risk? Much anxiety would arise if events forced a restatement of asset valuations.

Boop boop de do
Marilyn

[Maverick]

Thanks for going to the meeting and sharing Marilyn. Appreciate the feedback.

[dobby41]

Not a good look for Ryman.
"A Napier retirement village has used members of a local Rotary club as volunteers in a complex where Covid is rife, prompting concerns from a resident’s family and Grey Power.

Ahuriri Sunrise Rotary Club members received an email from their president on Friday, saying the club had fielded “a reasonably urgent request” from Ryman Healthcare’s Princess Alexandra Retirement Village for volunteer help."

https://www.stuff.co.nz/national/health/129462830/rotary-volunteers-helping-at-covidhit-retirement-village-raises-alarm?cid=app-android

I hope that the person who started the request has been educated.

[Master98]

https://www.scoop.co.nz/stories/BU2209/S00259/its-official-ryman-top-of-the-country-again-in-peoples-choice-awards.htm

its official-ryman top of the country again in people's choice awards.

[Marilyn Munroe]

Aussie is going through a we need to do something about aged care phase. RYM has made a contribution to the debate;

Headline: "New Zealand thinks it knows best how to tackle Aussie aged care reform."

https://nationalseniors.com.au/news/health/nz-thinks-it-knows-best-how-to-tackle-aged-care-reform

Boop boop de do
Marilyn

[Filthy]

18/11/2022, 8:30 am HALFYRMEDIA RELEASE November 18, 2022
Ryman reports unaudited first half underlying profit of $138.8 million, up 44.8%; announces introduction of dividend reinvestment plan
Ryman Group results for six months to 30 September 2022
• Unaudited underlying profit of $138.8 million, up 44.8% on the same period last year, driven by strong resale margins
• Unaudited reported (IFRS) profit decreased 31.1% to $194.0 million due to lower unrealised revaluation gains of investment property
• Interim dividend of 8.8 cents per share (unchanged from last year), representing 31.7% of underlying profit, and eligible for the dividend reinvestment plan
• Total assets of $12.03 billion, up 9.7% from $10.97 billion as at 31 March 2022
• Cash receipts from residents of $714.7 million, up 5.0% on the first half last year
• Booked sales of occupation rights up 9.8% driven by strong growth in Australia
• Resales stock remains low at 1.7% despite softening housing market conditions
• Resilient aged care occupancy of 94% for our mature villages, notwithstanding the re-emergence of COVID through the winter months
Ryman Healthcare has reported an unaudited first half underlying profit of $138.8 million, up 44.8% on the same period last year, driven by strong resales margins as well as continued strong growth in its Australian business.
Unaudited (IFRS) profit decreased 31.1% to $194.0 million, reflecting lower unrealised fair value gains on investment property.
Shareholders will receive an interim dividend of 8.8 cents per share, unchanged from last year, representing 31.7% of underlying profit. The record date for entitlements is December 9, and the dividend will be paid on December 16, 2022.
As part of today’s announcement, Group CEO Richard Umbers advised that the Board of Directors has approved the establishment of a dividend reinvestment plan, which will apply to the interim dividend.
“This reflects feedback from our shareholders and provides us with more flexibility to manage our balance sheet as part of our ongoing capital management,” said Mr Umbers.
“We are currently in a rapidly changing and uncertain macro-economic environment in both our markets, and the Board and management are mindful of the impact this is having on our business. We are therefore closely monitoring our cashflows and capital management.”
Participation in the dividend reinvestment plan is optional and investors can choose to reinvest their dividends into Ryman shares or continue receiving a cash dividend. An offer document and details on how to participate will be provided to shareholders in the coming days.
In reflecting on the result, Mr Umbers said that it demonstrated Ryman was now an established trans-Tasman business, with a compelling proposition in both New Zealand and Australia.
He highlighted the increase in booked sales of occupation rights, which were up 9.8% on the first half of last year.
Ryman’s development programme continues to progress, with work under way on 10 sites in New Zealand and another five in Australia.
First half development highlights included commencing construction in Cambridge, New Zealand, and in Australia receiving planning approval for the Mulgrave site and completing the Charles Brownlow and Raelene Boyle villages.
Mr Umbers reflected on the recent investor day and village tour, held in Auckland last month.
“At our recent investor day, I was pleased to present a number of initiatives already under way that are improving the performance of our business, and while this is a good result for the half, we want to do better. I am confident that we have the strategy, the team, and the ability to deliver and we look forward to expanding this programme of work.”
Chairman Greg Campbell commented, “in a year characterised by increasing uncertainty this is a pleasing result which gives us confidence as we face into some continuing and new market headwinds, including a cost inflationary environment, a challenging property market and an underfunded aged care sector.”
Mr Campbell also advised that after ten years on Ryman’s Board, George Savvides would be retiring at the next annual meeting of shareholders in July 2023.
“I want to take this opportunity to thank George for his contribution to Ryman since he joined the board in 2013. As our first Australian-based director his input has been invaluable in supporting our growth in the Australian market," he said.

[bull....]

Two key points for me confirming my outlook

Unaudited reported (IFRS) profit decreased 31.1% to $194.0 million due to lower unrealised revaluation gains of investment property

“We are currently in a rapidly changing and uncertain macro-economic environment in both our markets, and the Board and management are mindful of the impact this is having on our business. We are therefore closely monitoring our cashflows and capital management.”

hence why we are introducing div re-investment plan ( cashflow becomes tight for property developers in a downturn )

look at operating cashflows down 19% ..... no wonder there getting nervous

Chairman Greg Campbell commented, “in a year characterised by increasing uncertainty this is a pleasing result which gives us confidence as we face into some continuing and new market headwinds, including a cost inflationary environment, a challenging property market and an underfunded aged care sector.”

guess there warning you all for the outlook

[winner69]

Cant do muh better than Unaudited underlying profit of $138.8 million, up 44.8% on the same period last year, driven by strong resale margins

[winner69]

Two key points for me confirming my outlook

Unaudited reported (IFRS) profit decreased 31.1% to $194.0 million due to lower unrealised revaluation gains of investment property

“We are currently in a rapidly changing and uncertain macro-economic environment in both our markets, and the Board and management are mindful of the impact this is having on our business. We are therefore closely monitoring our cashflows and capital management.”

hence why we are introducing div re-investment plan ( cashflow becomes tight for property developers in a downturn )

Chairman Greg Campbell commented, “in a year characterised by increasing uncertainty this is a pleasing result which gives us confidence as we face into some continuing and new market headwinds, including a cost inflationary environment, a challenging property market and an underfunded aged care sector.”

guess there warning you all for the outlook

Hey bull -- a FIRST for Ryman -- first time new capital has been injected into the company since the IPO

Maybe the ponzi scheme that this sector is is coming to an end

[bull....]

Hey bull -- a FIRST for Ryman -- first time new capital has been injected into the company since the IPO

Maybe the ponzi scheme that this sector is is coming to an end

winner look at the cashflows down 19% no wonder there getting a tad nervous

[Rawz]

So is this a good result? lol.
Result looks good! I dont understand these companies.

Operating cashflows down, not good. Payments to suppliers and employees up 24% yoy.

Good headline numbers though. Have to wait for more learned investors to comment lol

[Onemootpoint]

The market’s initial response not great though. Price is down a bit at this point.

[bull....]

its not good report. the report highlights some serious headwinds coming to the sector

just look at the div potential going forward ... chance of increases next yr 0 i reckon chance of div decrease good

from there accounts

payout ratio has decreased from yr21 and now div re-investment scheme introduce all issue's to do with cashflow going forward and part of the cap management plan

[limmy]

The market is punishing RYM ? Down another 13c this morning, or 1.7%, yet it is rated a BUY by some analyst.
What's happening to RYM ?

[BlackPeter]

The market is punishing RYM ? Down another 13c this morning, or 1.7%, yet it is rated a BUY by some analyst.
What's happening to RYM ?

Market is'nt punishing RYM. Market is punishing the sellers and rewarding the buyers.

Which treatment would you prefer :) ?

[limmy]

Pre-Covid, I got used to RYM priced at around $16, and when the pandemic happened I reluctantly sold all my RYM except for 2,000 shares at around $11.30 weighted average. At today's prices it has turned out to be a blessing that I sold them in April 2020.

I first bought RYM in 2015 at $7.98, 7 years later today, it's trading at $7.28 this morning. This is why I used the world "punishing". I'm not sure which treatment I would prefer, BlackPeter. I suppose I would like to get back in at some stage, but RYM doesn't seem to be the darling Retirement Village stock these days, with people preferring stocks like SUM and OCA.

[BlackPeter]

Pre-Covid, I got used to RYM priced at around $16, and when the pandemic happened I reluctantly sold all my RYM except for 2,000 shares at around $11.30 weighted average. At today's prices it has turned out to be a blessing that I sold them in April 2020.

I first bought RYM in 2015 at $7.98, 7 years later today, it's trading at $7.28 this morning. This is why I used the world "punishing". I'm not sure which treatment I would prefer, BlackPeter. I suppose I would like to get back in at some stage, but RYM doesn't seem to be the darling Retirement Village stock these days, with people preferring stocks like SUM and OCA.

No doubt - if you buy low and sell high you will make money. If you buy high and sell low you lose money. However - it is still not Ryman which is punished, but only the people who sold, isn't it?

But hey, this is just playing with words.

No doubt - more or less all retirement stocks traded for years on ways to high PE values (relying on consistent re-valuation gains). Obviously - the re-valuation gains faded away and the stock prices dropped. At the moment fear is controlling the market.

Given that Ryman was the market darling in the sector, it had some years ago a particular high hype boost, and so the coming down feels maybe more painful (losing not just money but hype as well) ... but most of them lost around 50% to their ATH (SUM a bit less).

Having said that - I buy shares when the fundamentals look favorable, and for Ryman this is in my view currently the case.

I see a forward P/E of below 7 (based on analyst consensus forecasts for the coming 3 years) together with an earning forecasts CAGR of 8 - which makes a PEG (Zulu) of 0.81; Juicy.

Sure - nobody can look into the future, but business based on demographics and "must have" is typically better predictable than business based on taste and "nice to have".

I see Ryman currently as very reasonable priced - and did buy some parcels.

Did I catch the bottom? No idea, but I am sure that I will be pretty pleased about my buy in prices in say 5 or 10 years from now. To come back to the semantic discussion ... I don't see the market punishing Ryman, but I see the market rewarding the buyers who buy in while the stock is cheap. It always does :) ;

I like rewards :t_up:

[limmy]

Thanks for your good response, on the fundamentals, BlackPeter. I buy on fundamentals, and I use TA charts to decide on the timing.
The stock is currently trading below its Bollinger Bands, and looking like it has a bit more downside to go. More potential rewards for us in the near term ?

No doubt - if you buy low and sell high you will make money. If you buy high and sell low you lose money. However - it is still not Ryman which is punished, but only the people who sold, isn't it?

But hey, this is just playing with words.

No doubt - more or less all retirement stocks traded for years on ways to high PE values (relying on consistent re-valuation gains). Obviously - the re-valuation gains faded away and the stock prices dropped. At the moment fear is controlling the market.

Given that Ryman was the market darling in the sector, it had some years ago a particular high hype boost, and so the coming down feels maybe more painful (losing not just money but hype as well) ... but most of them lost around 50% to their ATH (SUM a bit less).

Having said that - I buy shares when the fundamentals look favorable, and for Ryman this is in my view currently the case.

I see a forward P/E of below 7 (based on analyst consensus forecasts for the coming 3 years) together with an earning forecasts CAGR of 8 - which makes a PEG (Zulu) of 0.81; Juicy.

Sure - nobody can look into the future, but business based on demographics and "must have" is typically better predictable than business based on taste and "nice to have".

I see Ryman currently as very reasonable priced - and did buy some parcels.

Did I catch the bottom? No idea, but I am sure that I will be pretty pleased about my buy in prices in say 5 or 10 years from now. To come back to the semantic discussion ... I don't see the market punishing Ryman, but I see the market rewarding the buyers who buy in while the stock is cheap. It always does :) ;

I like rewards :t_up:

[Lease]

RYM main issue is high level of debt. Given the interest hiking environment, market fear it will be out of control. Plus the recent half-year results show its operating cash flow is down, which intensify fear.

I have chosen to participate dividend reinvestment plan to support RYM so it doesn't need to pay out real cash dividend. I hope more shareholders do the same if we all wish the company well.

[BlackPeter]

RYM main issue is high level of debt. Given the interest hiking environment, market fear it will be out of control. Plus the recent half-year results show its operating cash flow is down, which intensify fear.

I have chosen to participate dividend reinvestment plan to support RYM so it doesn't need to pay out real cash dividend. I hope more shareholders do the same if we all wish the company well.

Fair enough - they do have somewhat higher debt levels than e.g. SUM o OCA.

However - one thing to consider is that all retirement villages don't pay interest for most of their debts (the occupancy advances), given that they get them as interest free loans from their residents. Just had a look into their last report - they pay interest for only 36% of their liabilities, which would equate to something like 25% of their asset base

Doesn't sounds like an existential threat to me ...

[Lease]

Fair enough - they do have somewhat higher debt levels than e.g. SUM o OCA.

However - one thing to consider is that all retirement villages don't pay interest for most of their debts (the occupancy advances), given that they get them as interest free loans from their residents. Just had a look into their last report - they pay interest for only 36% of their liabilities, which would equate to something like 25% of their asset base

Doesn't sounds like an existential threat to me ...

BP, I'm not talking about occupancy advances. I'm talking interest-bearing debts which is $3b on balance sheet. I keep records of all listed RV interest-bearing debt/equity ratio. The ratio of RYM jump from 55% in 2018 to 83% currently, while all the other listed RV the ratio is under 50%.

[limmy]

BP, I'm not talking about occupancy advances. I'm talking interest-bearing debts which is $3b on balance sheet. I keep records of all listed RV interest-bearing debt/equity ratio. The ratio of RYM jump from 55% in 2018 to 83% currently, while all the other listed RV the ratio is under 50%.

Sounds like they could be overstretched, trying to expand too fast, acquiring more land and building too rapidly ?

[Newman]

Interest paid was $17.377m for the 6 months to Sept . 22. If this is doubled for 12 months, the actually interest rate on $3b debt is only 1.16%!

[Lease]

Sounds like they could be overstretched, trying to expand too fast, acquiring more land and building too rapidly ?

Well, as per their own saying: some lands they signed contract in previous periods and settled in this period, thus debts go up; Also their sales contract with purchaser is normally conditional on sale of purchaser's home. Given the housing market soften so it takes longer for purchaser to sell home, therefore RYM can't collect cash from purchaser quickly they have to use debt facility to fund operations which also make debts go up.

[Lease]

Interest paid was $17.377m for the 6 months to Sept . 22. If this is doubled for 12 months, the actually interest rate on $3b debt is only 1.16%!

There are $41.5m capitalised interest paid.

[winner69]

Think they said at Sep30 there was over $150m of sales to be settled ... awaiting the prospective purchasers to settle on their own sales ... never seen before they said

[Newman]

I got wrong. The weighted average interest rate is 4.5%.

[Lease]

Think they said at Sep30 there was over $150m of sales to be settled ... awaiting the prospective purchasers to settle on their own sales ... never seen before they said

Yes, winner, they did say. It's understandable as the current housing market is not seller-friendly. I doubt that $150M can be fully settled as, if purchasers can't sell their homes at the price in order to settle RYM's unit right, then purchasers may cancel contract with RYM.

[BlackPeter]

BP, I'm not talking about occupancy advances. I'm talking interest-bearing debts which is $3b on balance sheet. I keep records of all listed RV interest-bearing debt/equity ratio. The ratio of RYM jump from 55% in 2018 to 83% currently, while all the other listed RV the ratio is under 50%.

Fair enough, though not sure, what the ratio interest bearing debt to equity would give me ...

Lets see -

If I buy a house for $1m and fund $800,000 through the bank (which is not too bad in NZ), than my equity would be $200k and my interest bearing loan $800k, i.e. the ratio would be 400%!

If I buy a house for $1m and fund only $500,000 through the bank (which would be amazing for most home buyers), than my equity would be $500k and my interest bearing loan $500k, i.e. the ratio would be still 100%!

What did you say Rymans ratio is? 83%? Does not sound too bad, doesn't it ...

[Lease]

Fair enough, though not sure, what the ratio interest bearing debt to equity would give me ...

Lets see -

If I buy a house for $1m and fund $800,000 through the bank (which is not too bad in NZ), than my equity would be $200k and my interest bearing loan $800k, i.e. the ratio would be 400%!

If I buy a house for $1m and fund only $500,000 through the bank (which would be amazing for most home buyers), than my equity would be $500k and my interest bearing loan $500k, i.e. the ratio would be still 100%!

What did you say Rymans ratio is? 83%? Does not sound too bad, doesn't it ...

You are right BP. I'm with you. That's the reason why I'm still buying RYM. But looks market doesn't think this way. RYM has been dropping after half-year results. The results are good with underling profit up 45%. The only issue with interim results is debts go up and market focus on it.

[winner69]

Realised Gains on sales $172m but Underlying NPAT only $139m - a difference of $33m. The 2nd half of F22 the difference was $13m

Usually you could rely on Underlying NPAT being Realised Gains PLUS $10m to $20m .... the PLUS is now a MINUS

And $33m isnot a piddly amount and higher than prior 6 month period

That $33m is not property related. I think it's the impact of all the all the issues they talk about - like increased day to day costs / ovt subsidies not covering costs / staff shortages etc etc. You could say that running villages and caring for people is really a loss making buisness at the moment ....with losses getting bigger and bigger and ating up a large chunk of profits from building and selling things.

I think the market has begun to realise this

[Curly]

$6.91.....sp getting the bash.

[ronaldson]

RYM down over 7% just today! Under $7 now ($6.91) at market close. You are right that this sector is out of favour, and under (extreme) pressure.

[troyvdh]

....when there is blood on the streets...

....look at the 5 year chart.

....after say 5 years...what price can we expect.

[Charlie]

Gee Winner if this is the market beginning to realize this .... when will it end ?
A lot of hurting pockets just now.

[Balance]

Gee Winner if this is the market beginning to realize this .... when will it end ?
A lot of hurting pockets just now.

It will end when the banks require Ryman to do a major capital raising to pay down debt?

[ronaldson]

When considering a capital raise it is interesting to look at the number of shares on issue and the last reported NTA per share of each of the sector's listed players now that MET has been taken private.

ARV has 723m with NTA $1.84, OCA 715m with NTA $1.32, RYM 500m with NTA $7.13, RAD 284m with NTA $0.17 and SUM 232m with NTA $8.91. I admit the current NTA can be dodgy with the reporting season in swing, so some are dated or don't take account of intervening transactions, but you get the idea.

RYM certainly have room to increase the shares on issue and should be able to do so without significant reduction in NTA if the proceeds are applied to pay down debt. Whether the banks should or could insist upon this may be a moot point but rising interest rates are painful all around. A capital raise would obviously have been optimum when the share price was (much) higher so perhaps the boat has been missed Balance?

[JohnnyTheHorse]

Really interesting selling going on here. It's institutional sized panic selling. Big boys want out and very quickly.

SUM has kept relatively stronger throughout this. I'm watching for it to start getting savaged too.

[nztx]

It will end when the banks require Ryman to do a major capital raising to pay down debt?


A reverse dividend .. except that the Taxman will not be doing any DWT top ups :)

The fact that little or no Imputation credits are distributed throughout the sector points
to distribution of revaluation gains / internal asset adjustments.

When risk of the scenario changing and write downs started happening is the very reason I have
been out of this sector for some time.

It's all too easy to stack the cards in good times but when times change to the opposite, first to
go is meagre dividends in the sector and then as things cycle lower pressure comes on the balance
sheet and harder for those well leveraged companies in the sector.

Last reporting season saw hints of this coming into the sector, and the likes of Arvida have seen
significant reduction since high $1.90's Cap raise to today's $1.20 SP

In current prevailing economic times, with fall in RRE, higher interest rates, inflation etc,
IMO the whole Rest Home sector is still over priced and could come back further.

Do any of the sector report honest trading Rest Home operation results without padding up revaluations
included ?

Cashflow reports will be a fairly significant tool in ascertaining which of the companies are near break even
trading, those above it and more secure

[Lease]

A reverse dividend .. except that the Taxman will not be doing any DWT top ups :)

The fact that little or no Imputation credits are distributed throughout the sector points
to distribution of revaluation gains / internal asset adjustments.

When risk of the scenario changing and write downs started happening is the very reason I have
been out of this sector for some time.

It's all too easy to stack the cards in good times but when times change to the opposite, first to
go is meagre dividends in the sector and then as things cycle lower pressure comes on the balance
sheet and harder for those well leveraged companies in the sector.

Last reporting season saw hints of this coming into the sector, and the likes of Arvida have seen
significant reduction since high $1.90's Cap raise to today's $1.20 SP

In current prevailing economic times, with fall in RRE, higher interest rates, inflation etc,
IMO the whole Rest Home sector is still over priced and could come back further.

Do any of the sector report honest trading Rest Home operation results without padding up revaluations
included ?

Cashflow reports will be a fairly significant tool in ascertaining which of the companies are near break even
trading, those above it and more secure

It's going to cycle by cycle. Current cycle is clearly not favour RV but the cycle won't last forever. Investors should take the chance to accumulate quality companies and wait for next cycle.

[whatsup]

IMHO it is about time that the IRD started taxing revaluations as we all know that they are smoke and mirror B S, if this was the case then all property companies would show a honest balance sheet.

What goes up can come down !

[nztx]

IMHO it is about time that the IRD started taxing revaluations as we all know that they are smoke and mirror B S, if this was the case then all property companies would show a honest balance sheet.

What goes up can come down !


No, we dont have nor want a capital gains tax.

Tax it and the sector will fall further and harder, and the sector will need to scramble
for further Cash to sure up what surplus (if any) they have.

What we need is Honest Reporting - are they Rest Home Operators or Large Scale
Commercial Property developers as a taxable activity ?

Bear in mind there are many thousands of captive Unit occupiers in the Sector, so the least
possible shaking of the tree will be needed to protect them :)

[nztx]

It's going to cycle by cycle. Current cycle is clearly not favour RV but the cycle won't last forever. Investors should take the chance to accumulate quality companies and wait for next cycle.

IMO the bottom is still on the way .. but the climb up out from it could be some time off
and not in the current political reign of the blind Socialist spindrilla ;)

[Lease]

IMO the bottom is still on the way .. but the climb up out from it could be some time off
and not in the current political reign of the blind Socialist spindrilla ;)

Ya, I agree. May need to wait until rates hike peaked. But this sector has brilliant future and investors should not ignore it.

[Balance]

Ya, I agree. May need to wait until rates hike peaked. But this sector has brilliant future and investors should not ignore it.

1st year of a property down cycle which could last up to 5 years. No big hurry.

[Sideshow Bob]

1st year of a property down cycle which could last up to 5 years. No big hurry.

And not like a great trough full of dividends to gorge on while you wait.....although the yield is getting better all the time!! ;)

[whatsup]

No, we dont have nor want a capital gains tax.

Tax it and the sector will fall further and harder, and the sector will need to scramble
for further Cash to sure up what surplus (if any) they have.

What we need is Honest Reporting - are they Rest Home Operators or Large ScalepCommercial Property developers as a taxable activity ?

Bear in mind there are many thousands of captive Unit occupiers in the Sector, so the least
possible shaking of the tree will be needed to protect them :)

I wasnt talking about a cap gain , I was talking about claiming revaluations as profit, as we all know property profit is not profit until the property is sold, valuations can go up and down and shouldnt be written into the P & L

[whatsup]

Down another $ today, 8% !.

Could we go sub $ 5-00 ?

[Balance]

Must be a substantial capital raising in the offing.

Talks about capital raise with brokers and instos already behind the scene?

[winner69]

Down another $ today, 8% !.

Could we go sub $ 5-00 ?

When overseas funds start selling/exiting it can get brutal ....espwhen they sense trouble / cap raises etc

The love affair has ended after many years .....

[ronaldson]

Ryman have the lowest Deferred Management Fee, 20%. The RV model is built upon rising prices for Villas and OCAs, with the outgoing resident (or, usually, their estate) not sharing in capital gains. But they aren't liable for capital losses either.

Might we be approaching the situation where resales cannot be made at increased prices and may actually need to be at a lower price point, perhaps not even sufficient to pay out the outgoing party? Or, if not quite that low at least below the prior sale price thus " clawing back " some of the DMF from Ryman?

You would think that where the turnover arising from an exit occurs quite quickly, and at least some resales must arise in that situation, that cashflow would/could be negative and the DMF may not even have been able to be fully claimed for a short-dated occupation.

That would start to be scary.

[Lease]

Ryman have the lowest Deferred Management Fee, 20%. The RV model is built upon rising prices for Villas and OCAs, with the outgoing resident (or, usually, their estate) not sharing in capital gains. But they aren't liable for capital losses either.

Might we be approaching the situation where resales cannot be made at increased prices and may actually need to be at a lower price point, perhaps not even sufficient to pay out the outgoing party? Or, if not quite that low at least below the prior sale price thus " clawing back " some of the DMF from Ryman?

You would think that where the turnover arising from an exit occurs quite quickly, and at least some resales must arise in that situation, that cashflow would/could be negative and the DMF may not even have been able to be fully claimed for a short-dated occupation.

That would start to be scary.

Capital raise will solve the problem. RYM never have been capital raise since listing. It's OK to do cap raise if they need.

[Balance]

Capital raise will solve the problem. RYM never have been capital raise since listing. It's OK to do cap raise if they need.

That’s why they are listed - to raise capital if required and of course to facilitate secondary liquidity.

To date, original shareholders have been doing the ‘capital raising’ very successfully - selling down their stakes at ever higher share prices.

[limmy]

When overseas funds start selling/exiting it can get brutal ....espwhen they sense trouble / cap raises etc

The love affair has ended after many years .....

If I remember correctly, there was a time not very long ago, when RYM was heading towards becoming the largest company listed on the NZX by market capitalisation. Does anyone else remember this ?

[iceman]

If I remember correctly, there was a time not very long ago, when RYM was heading towards becoming the largest company listed on the NZX by market capitalisation. Does anyone else remember this ?

Yes some of us do

[BlackPeter]

If I remember correctly, there was a time not very long ago, when RYM was heading towards becoming the largest company listed on the NZX by market capitalisation. Does anyone else remember this ?

Clearly - Ryman used to be hyped up in the lofty heights around and above $15 per share.

However - it works both ways. At current it is in my view well hyped down. Pretty sure in some years people will ask whether anybody still remembers how cheap Ryman was in late 2022.

Just physics ... if the pendulum swings too far into one direction then it comes back and swings too far into the other direction.

[Balance]

Clearly - Ryman used to be hyped up in the lofty heights around and above $15 per share.

However - it works both ways. At current it is in my view well hyped down. Pretty sure in some years people will ask whether anybody still remembers how cheap Ryman was in late 2022.

Just physics ... if the pendulum swings too far into one direction then it comes back and swings too far into the other direction.

Could be gravity in action rather than pendulum swing?

Difference is that Ryman is now loaded up with debt in a down cycle.

Used to be referred to as the jaws of the crocodile closing - property values falling (upper jaw) while costs (especially interest) rising (lower jaw).

All signs point towards capital raising in the offing.

[BlackPeter]

Could be gravity in action rather than pendulum swing?

Difference is that Ryman is now loaded up with debt in a down cycle.

Used to be referred to as the jaws of the crocodile closing - property values falling (upper jaw) while costs (especially interest) rising (lower jaw).

All signs point towards capital raising in the offing.

Lets face it - while the amount of interest bearing credit they have is higher than that of some other retirement villages - it is still only 23.5% of total assets (as per FY22 balance sheet). Not really a big worry, isn't it?

However - if they find that a capital rise is cheaper for them than paying the interest ... what's the biggie? I am sure many shareholders will be happy to chip in ... and hey, other than for some other retirement villages it would be their first CR after IPO.

Agree however that a Cap rise at their lofty SP heights might have made more sense, but I guess this is the thing about the benefit of hindsight ...

[X-men]

capital raising coming soon? anyone has a hint?

[Mr Slothbear]

capital raising coming soon? anyone has a hint?

highly doubt it, the next 6 months will be their biggest half year of finalised new units ever, huge amount of extra booked assets and equity, their bank relationships are very strong.

[limmy]

RYM do not have a history of going to their shareholders for more capital.

[Newman]

Ryman asked Craigs Investment Partners Limited (CIP) to underwrite shares not taken up by Ryman shareholders in connection with the dividend reinvestment plan on the same essential terms as under the DRP. Does this indicate Ryman is desperate to retain the cash?

[Snoopy]

Ryman asked Craigs Investment Partners Limited (CIP) to underwrite shares not taken up by Ryman shareholders in connection with the dividend reinvestment plan on the same essential terms as under the DRP. Does this indicate Ryman is desperate to retain the cash?


Since the DRP is entirely voluntary, I would say there is no such thing as "shares not taken up in conjunction with the DRP." if the shares are not taken up, that means they don't exist. I would say that what Rymans is doing is inviting Craigs to take part in a 'discounted cash issue' on the same terms as the DRP participants which will forever dilute the shareholdings of existing shareholders, all done at a rock bottom price. To use the 'Claytons' analogy:

It sounds like: "The dividend that Ryman are paying when they aren't paying a dividend."

IOW, the short answer to your question is 'yes'.

SNOOPY

[winner69]

Snoops - underwritten drps not that unusual

Think mercury recent drps were underwritten

Been a few others over the years

[Aaron]

Snoops - underwritten drps not that unusual

Think mercury recent drps were underwritten

Been a few others over the years

I would have thought if the shareholders do not take up shares through the dividend reinvestment plan the dividends get paid out. What is an underwriter, underwriting?

Do they provide additional share equity because too much cash went out as dividends? That sounds more like a capital raising than underwriting. Probably just terminology, but the DRIPs I would have thought would only get capital from those shareholders wanting to join the DRIP. You would not underwrite the shares not taken up by the shareholders who choose to take the cash unless you really need the cash and cannot afford to pay the dividend in the first place.

[BlackPeter]

I would have thought if the shareholders do not take up shares through the dividend reinvestment plan the dividends get paid out. What is an underwriter, underwriting?

Do they provide additional share equity because too much cash went out as dividends? That sounds more like a capital raising than underwriting. Probably just terminology, but the DRIPs I would have thought would only get capital from those shareholders wanting to join the DRIP. You would not underwrite the shares not taken up by the shareholders who choose to take the cash unless you really need the cash and cannot afford to pay the dividend in the first place.

Not sure it indicates they are desperate, but yes, they clearly don't want to pay the dividend. So yes, it is an underwritten capital raise to pay the dividend. But winner is right - these things are not that unusual. I remember INA (on the ASX) likes to do that as well ... and hey, they are a solid company.

Bit of a bugger though considering the share price ... better they would have done their CR when SP was twice of today.

[Aaron]

Not sure it indicates they are desperate, but yes, they clearly don't want to pay the dividend. So yes, it is an underwritten capital raise to pay the dividend. But winner is right - these things are not that unusual. I remember INA (on the ASX) likes to do that as well ... and hey, they are a solid company.

Bit of a bugger though considering the share price ... better they would have done their CR when SP was twice of today.

Depending on your valuation of the company if they did not need the cash maybe it was a good way to offer institutional shareholders cheap shares without upsetting the shareholders who did not take up the DRIP.

[Newman]

It seems that just 3 weeks ago Ryman did not realize that a lot of shareholders would not want to convert dividends to shares. This is the problem!

[dibble]

Depending on your valuation of the company if they did not need the cash maybe it was a good way to offer institutional shareholders cheap shares without upsetting the shareholders who did not take up the DRIP.

Well that's a fail. Just forking out for underwriting fees has annoyed this holder. They probably paid a decent fee for advice to be told to pay the advisees that fee too. As an aside one sometimes wonders what a CFO does to earn a massive salary these days if they are merely massaging a bit of accounting software and outsourcing proper financing decisions. Perhaps no one runs a mean tea trolly like a CFO.

Surely if Ryman want a bit of extra capital the cheapest way is merely to e.g. halve the dividend. Doesnt require any nasty underwriting or spurious advisory fees. It's hardly a yield stock so anyone miffed at their reduced payout without realising it is in the long term interest of their holding might be better served with a different type of stock.

[Snoopy]

Hi all,

Fisher Funds Management Newsletter for May advises (E&OE) that they have taken profits and reduced their stake in RYM.

I have had a look and mid March FFM advice via NZX for NTA valuations showed RYM holdings at 14% ( of FFM NZ Growth Fund portfolio).

Now they are 12% ( of FFM NZ Growth fund portfolio).


The above is a quote from June 2014, more than eight years ago. I hadn't realized that Fishers had sold down their RYM stake 'back then'. This could explain why Ashley Gardyne, Fisher Funds CIO, could recently claim that their original RYM investment had multiplied by 100 times at one point (note that partially selling down at a profit reduces your average initial purchase price).

I have just completed a post on Fishers Funds downrating of Ryman on another thread.

https://www.sharetrader.co.nz/showthread.php?10315-NZ-Fund-Managers&p=985372&viewfull=1#post985372

This may be of interest to Ryman shareholders.

SNOOPY

[troyvdh]

It would be interesting to hear discussions between institutional RYM investors and the company.

[BlackPeter]

It would be interesting to hear discussions between institutional RYM investors and the company.

In what regard? Company is not responsible for the stock price ... and company was not responsible either for the stock markets hyping them up in the early days.

The market giveth and the market taketh. Has nothing to do with the company, only with the hype of the day.

[Balance]

As posted on OCA's thread : same applies to Rym.

Seems to me that some posters accept the published NTAs of the retirement village as gospel truth.

What we know however that is the institutional market (especially overseas instos) prices in premiums or discounts to the NTAs, depending on their collective view of the property market and values are going.

Hence, the huge premiums to published NTAs during the boom years.

Now that the boom has turned to bust, hardly surprising that there are huge discounts to NTAs.

Why?

As one fundie put it to me a few months ago, they decided to get out of the sector as it was clear that the tide has gone out of the sector and the leverage from 'free equity' & debt that RVs enjoy to rising property values is now going into reverse.

Take OCA as a case in point - 30 Sept 2022:

Total land & buildings - $2.285b
Equity - $964m
'Free equity' - $889m (ror)
Debt - $493m

As can be seen, a 10% drop in property values will wipe 23.6% off NTA ($228m/$964m).

How about a 20% drop? 45.2% off NTA to 73.5c.

So market is pricing in an 18% drop in property values on OCA's sp of 79c vs NTA of $1.34 - realistic?

https://www.stuff.co.nz/life-style/h...124-nationally

Median house price to Nov 2022 - nationally down 12.4%

Auckland down 18.4% (some suburbs down 24.8%)

Wellington down 17.4% (some suburbs down 26.6%).

Leverage is a wonderful thing on the way up - it is nasty and un-nerving on the way down. Make sure you have the stomach for it if you ever use leverage or play leverage!

Note :

Rym's leverage is $10.98 billion land & buildings against $3.63 billion of equity. So a 10% fall in property values = 30% drop in NTA.

[troyvdh]

Probably a dumb question...Re NTA...Yes house values are down...To what extent does the 20-30 % increase of labour and building costs in the 2 or so years figure then in determining a NTA.

[Balance]

Probably a dumb question...Re NTA...Yes house values are down...To what extent does the 20-30 % increase of labour and building costs in the 2 or so years figure then in determining a NTA.

It’s called inflation so all things being equal, NTA will increase by the increased in costs.

All things are not equal however - the biggest determinant of property values these days is land values. And any movement there has got a proportionally bigger impact on NTA than building costs.

[Sideshow Bob]

From Investopedia:

What Are Net Tangible Assets?The term net tangible assets (https://www.investopedia.com/terms/t/tangibleasset.asp) refers to the total physical assets of a company minus all intangible assets and liabilities. In other words, net tangible assets focus on physical assets such as property, plant, and equipment (https://www.investopedia.com/terms/p/ppe.asp) (PP&E), as well as inventories and cash instruments. Physical assets are anything that is listed on a company's balance sheet while intangible assets are those without a physical form. A company's net tangible assets can help it secure financing and determine how much risk it carries.

[troyvdh]

Thanks SB...No mention of cost to replace assets.It may be a circular debate.
In addition ..can it be said re inflation at least one benefit is that it kills debt.
Thats a question.

[Rawz]

Thanks SB...No mention of cost to replace assets.It may be a circular debate.
In addition ..can it be said re inflation at least one benefit is that it kills debt.
Thats a question.

Yes well there is big negative real rates so the inflation is helping pay the debt some 3-4% a year. Nice
These RV operators will never be able to build a village any cheaper than they previously did.

Its all good

[percy]

Yes well there is big negative real rates so the inflation is helping pay the debt some 3-4% a year. Nice
These RV operators will never be able to build a village any cheaper than they previously did.

Its all good

Not a lot of people know that...

[troyvdh]

6.15 interesting.

[limmy]

It has gone to Covid lows. Who would have thought ?

[Baa_Baa]

It has gone to Covid lows. Who would have thought ?

For sure who would've thought, now well below covid low $6.61, currently $6.10.

Tempted?

[troyvdh]

Dosh in superfund or RYM....5 year view.

[Balance]

For sure who would've thought, now well below covid low $6.61, currently $6.10.

Tempted?

Smells like a huge capital raising in the offing.

Wait for the rights issue.

[Rawz]

wow was last at these prices in 2013. must mean house prices are reverting back to 2013 levels? or its oversold

[troyvdh]

I got 500 at 605...

[mshierlaw]

bought a couple of packets on the way down, I now regret that strategy. I can't see any end to this decline in sight, in middle of trend lines & well below 30 day average. Hands in pockets here for me.
14377

[Entrep]

Smells like a huge capital raising in the offing.

Wait for the rights issue.

A raise for what?

[Balance]

A raise for what?

Have you taken a look at Ryan’s gearing?

Now & forecast?

[winner69]

Have you taken a look at Ryan’s gearing?

Now & forecast?

Some of that debt in USD worries the market a bit as well

[Baa_Baa]

Have you taken a look at Ryan’s gearing?

Now & forecast?

Muhahahaa
14378

[winner69]

Lot of noise around Ryman at the mo

Whenever there is too much noise around, we often have a hard time seeing the bigger picture; but when the layers are beautifully formed clarity can be found.

Just like how this photo shows us the effect of double exposure, some times we need to distance ourselves for a while in order to better understand what's in front of us.

I did that distancing - all all good on the western front for buying into RYM

[Rawz]

Some of that debt in USD worries the market a bit as well
Why do companies raise debt in US$???

Can the NZ$ market not handle it?

[winner69]

RYM shareprice going to show 600 was it’s low …..and stsrt the climb back to 700

If included in a couple of Brokers Tios for 2023 we’ll be fine

[Rawz]

Why do companies raise debt in US$???

Can the NZ$ market not handle it?

When you go for your next walk with the dog, or in my case pushing the pram. this is a good listen on the history of money and the US$ being a global currency. They discuss the potential downfall of the US$

Maybe Ryman will have Chinese $ debt one day :eek2:

https://open.spotify.com/episode/4eXIMwAoWIKiOOciVA9onx

download the spotify app on your phone. invest in some good Bluetooth ear buds and away you go

[whatsup]

When you go for your next walk with the dog, or in my case pushing the pram. this is a good listen on the history of money and the US$ being a global currency. They discuss the potential downfall of the US$

Maybe Ryman will have Chinese $ debt one day :eek2:

https://open.spotify.com/episode/4eXIMwAoWIKiOOciVA9onx

download the spotify app on your phone. invest in some good Bluetooth ear buds and away you go

No this will not happen, you may as well have said , Russia as well !!

[Rawz]

No this will not happen, you may as well have said , Russia as well !!

Or maybe RYM has BRICS $ denominated debt..

Apparently these countries dont like selling their resources or running surpluses and swapping them for US $ that have been devaluing 8% a year- because of huge money printing. anyways all this stuff is way about my pea brain to contemplate. Buffett says dont worry about the macro right.

[troyvdh]

Rawz...the downfall of the US dollar has been heralded for yonks...cheers.BTW if RYM does have US debt does that mean it's less now because our dollar has risen...I suppose it depends when it was borrowed.
OR most likely I'm talking a lot of twaddle.

[dibble]

Why do companies raise debt in US$???

Can the NZ$ market not handle it?

If the outcome is unknown it is somewhat speculative. So.... increased risk, there will be a forex spread cost and some banker will be smirking on a nice new boat this summer courtesy of the special international fees.

Whats not to like.

Wonder if any company has ever actually explained, in detail (as opposed to the perennially glib "in shareholders' best interests"), why they do it.

[troyvdh]

gee 6 dollars..

I would appreciate if a seller of shares of RYM can explain why.

[Balance]

gee 6 dollars..

I would appreciate if a seller of shares of RYM can explain why.

Smell of a capital raising getting stronger and stronger.

[troyvdh]

Just curious...which kiwi saver institutions have the biggest exposure....

[ralph]

gee 6 dollars..

I would appreciate if a seller of shares of RYM can explain why.

I doubt very much they will tell you or I why, as they would very likely be unable to sell them at under six dollars perhaps in a few months we will all know why the market has turned on them as with others in similar predicaments & retirement stocks in general .

[BlackPeter]

Smell of a capital raising getting stronger and stronger.

Are you related to Wayne Brown? I heard him boosting similar wisdoms related to Auckland Airport?

What would you think they need the capital for?

[777]

Are you related to Len Brown? I heard him boosting similar wisdoms related to Auckland Airport?

What would you think they need the capital for?

Jeez Wayne.

[Balance]

Are you related to Len Brown? I heard him boosting similar wisdoms related to Auckland Airport?

What would you think they need the capital for?

Have you had a look at Ryman's balance sheet & projected cashflow in a rapidly slowing property market?

BTW, Len Brown (famous for his Ngati Whatua room antics) departed from the political scene a long time ago - maybe you mean another person?

[BlackPeter]

Jeez Wayne.

Not Jeez either, but yes, I withdraw, apologize and I fixed it.

Clearly - he needs to make some more outrageous statements to get proper name recognition ;) - but then, my excuse - I don't live in the big wet, and there seem to be so many Browns in charge of the town ....

[Panda-NZ-]

NTA is over $7..

Should do a share repurchase, with some debt if necessary.

[troyvdh]

580 cheez Wayne...strewth ,,,

[Swala]

580 cheez Wayne...strewth ,,,

Think everyone is waiting for a capital raise. My Broker indicated as much today.

[bull....]

hugely discounted one for sure as next yrs cash crunch eventuates i reckon

[Balance]

hugely discounted one for sure as next yrs cash crunch eventuates i reckon

2 for 5 at $4.50 per share to raise $900m to make a meaningful dent on debt level?

Should have done a capital raising when sp was $16 but debt was of course very attractive then to get maximum leverage to the booming property market.

[troyvdh]

Swala ...your broker have you asked him about his exposure personally to RYM.cheers

[Swala]

Swala ...your broker have you asked him about his exposure personally to RYM.cheers

Didn't want to embarrass him!

[nztx]

Gee - SP $12.50 down to almost $5.80 in 12 months - absolutely brutal IMO

Wonder how MET is faring under owners after T/o ?

[ralph]

[QUOTE=nztx;986223]Gee - SP $12.50 down to almost $5.80 in 12 months - absolutely brutal IMO



Yeah brutalism big dump about Five o'clock fetched it right down did not expect to get any at that price ( $5.81) just yet ! especially after it fought back up and rallied at Six & just above all day

[Rawz]

Everyone thought OCA was the dog of the sector but all along it was the debt hungry beast, RYM

[limmy]

Everyone thought OCA was the dog of the sector but all along it was the debt hungry beast, RYM
How did RYM get from being the darling of the sector to this state ? Hard to understand, really !

[Balance]

How did RYM get from being the darling of the sector to this state ? Hard to understand, really !

Leverage is wonderful on the way up - nasty on the way down.

[JSwan]

So is this stock get relentlessly shorted or just general running for the hills

[ralph]

Everyone thought OCA was the dog of the sector but all along it was the debt hungry beast, RYM
Both dogs at the moment Rawz! but hey ho nothing lasts forever does it ;)

[nztx]

IMO - its more the whole sector is a dog - maybe with one that hasn't so badly scathed

The clue is no imputation credits on distributions made (in turn 33% DWT deducted)

So distributions basically on creative revaluation / internal write up jobs ;)

When the wind blows the other way and the cards start leaning and falling over
there go surpluses which start turning red, distributions become invisible,
financing structures for all but the strongest become vulnerable to deteriorating
balance sheet, and in current times start attracting higher financing costs.

Wage round increases, more stats and other fancy add-ons wont help, and
also the market that the sector depends on becomes tighter and more difficult.

This is a sector I have steered well clear of for past 12-18 months, fearing
what was a possibility. Too higher real risk of major loss. In main Div yields too low
and the nuts and bolts of the regime with creative surpluses don't impress one bit.

For those with ARV look at the slide in SP there from the lofty Cap raise in high $1.90's
down to a lowly $1.19 on Friday's close.

Cap Raises become difficult if not impossible in unpopular sectors showing sign of
pressures and issues, when these occur to try to rescue the ship

The sector possibly is exposed also to further risk of how surpluses on units are
chopped up between operator that is the company and occupier, if the meddling Drones
in Wellington start taking an interest in things

The question is which dog has most fleas and likely to fall over first while all in the sector
start spinning downwards towards the ground on the back of harder times and other pressures ;)

[Bjauck]

The bonanza times of years of heady real (after CPI inflation) capital gains must be behind us. We had years of falling and low interest rates feeding those bonanza capital gains.

Sure, we may go into a highly inflationary cycle if we are not careful, with nominal capital gains on housing but imho the same level of real gains as in the past, may take some time to return. Even if National tries to roll back some of the attempts at tax reforms and attempts at residential rental reforms introduced by Labour.

[winner69]

Be interesting to see if big shareholders Cumming and Hickman participated in the DRP

Could indicate their appetite for a capital raise

[bull....]

summerset putting on hold there building of retirement village in parnell

say rising building costs and falling property market make the project not viable

https://www.nzherald.co.nz/business/...I6JBCEPNZUZDI/ (https://www.nzherald.co.nz/business/300m-auckland-retirement-village-plans-stall-falling-house-values-rising-building-costs/HBEB5FENAVCFBI6JBCEPNZUZDI/)

wonder if rym being affected by same

[troyvdh]

Wonder what the SP will be in say 5 yrs of RYM and other similar entities.

[troyvdh]

Retired people will still need to move in retirement homes.

[percy]

I was thinking about turnover of units.
Ryman's first village opened in 1996.They raised $25mil Market Cap then was $134mil.Today MC is $2.896 bil.
Wonder what a unit cost then,how many times has it turned over,what that unit cost to build,and how much does that unit sell for today.?
I would think each unit would have been a "gold mine".
And that "gold mine" would still be earning today,and will keep on earning for the foreseeable future.
A great business model for all in the sector to follow.

[whatsup]

I was thinking about turnover of units.
Ryman's first village opened in 1996.They raised $25mil Market Cap then was $134mil.Today MC is $2.896 bil.
Wonder what a unit cost then,how many times has it turned over,what that unit cost to build,and how much does that unit sell for today.?
I would think each unit would have been a "gold mine".
And that "gold mine" would still be earning today,and will keep on earning for the foreseeable future.
A great business model for all in the sector to follow.

Percy, If I remember at one of the last AGM's that Chase Corp had before it crashed a retirement unit holder got up and tore a big strip off the directors saying what a massive rip off their retirement scheme was because of your comments, their reply if I remember correctly was one of indifference ! has anything changed with this out fit ?