RYM - Ryman Healthcare

[troyvdh]

Dear whatsup....Was that one of those directors reynolds...Chase Corp...With all due respect.I would damn like to think that times have changed...RJI...BIL...those entites Judge corp,,,...a bloke on the coast ...Smith...Hawkins...Euro-national....Mate laws have changed...I hope ...cheers

Is this a private issue with you guys.
Anyways....compliments of the season to you guys.

[Curly]

Dear whatsup....Was that one of those directors reynolds...Chase Corp...With all due respect.I would damn like to think that times have changed...RJI...BIL...those entites Judge corp,,,...a bloke on the coast ...Smith...Hawkins...Euro-national....Mate laws have changed...I hope ...cheers

Is this a private issue with you guys.
Anyways....compliments of the season to you guys.
Now there’s a flash back, Equiticorp, Ariadne, Micheal Faye, now they were the cowboy days. 1987 crash was a goodie. More bulls than bears overall tho.

[bull....]

major event next year add's big risk to sector

Review of Retirement Villages Act begins in 2023

At a high level, the review is set to consider whether the current Act and all its parts remain fit for purpose

https://www.hud.govt.nz/news/review-...egins-in-2023/ (https://www.hud.govt.nz/news/review-of-retirement-villages-act-begins-in-2023/)

[nztx]

major event next year add's big risk to sector

Review of Retirement Villages Act begins in 2023

At a high level, the review is set to consider whether the current Act and all its parts remain fit for purpose

https://www.hud.govt.nz/news/review-...egins-in-2023/ (https://www.hud.govt.nz/news/review-of-retirement-villages-act-begins-in-2023/)


A perfect storm for the Sector coming .. if it eventuates - will the Covid Lockdown lows be breached ? ;)

[Snoopy]

A perfect storm for the Sector coming .. if it eventuates - will the Covid Lockdown lows be breached ? ;)

Well the Covid lockdown low at Ryman was $8.40. And yesterday's closing price was $5.63. So, I suppose , the answer to your (rhetotrical?) question might be um errr.......I am really not sure. Brain working a bit slowly today.

SNOOPY

[Balance]

Just remember that Ryman is geared 3 times to the property sector.

So a 20% fall in property values = 60% drop in NTA.

Sobering but it worked wonderfully on the way up as the market then priced in the upside from future property price rises.

[BlackPeter]

Just remember that Ryman is geared 3 times to the property sector.

So a 20% fall in property values = 60% drop in NTA.

Sobering but it worked wonderfully on the way up as the market then priced in the upside from future property price rises.

Just curious - did you make these numbers up, or how do you calculate that?

As per their last (2022) annual report their gearing is 69.1%, but most of that is obviously interest free.

Their interest bearing liabilities are 24.4% of total assets.

How does this make them "geared three times to the property sector"?

[winner69]

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.

For you BP

This is Balances thinking …and might satisfy your curiosity …..spooky eh

[alokdhir]

For you BP

This is Balances thinking …and might satisfy your curiosity …..spooky eh

He is explaining leverage...aint all mortgage holders leveraged and all had done very well ...becoming landlords was the only way to retirement in NZ ...ie leverage at play ...NTA surely going down and then similarly they will go up ...unless he is suggesting that house prices wont ever rise again ...wont that make many youngsters happy ...alas that has never happened and will never happen ...20% property market cut has been into Sps of retirement operators already ...maybe another 5% left with 50% probability ...so trying to chicken out now will be little foolhardy ...maybe top up time over the next 3-6 months ...imo opinion ...when scaremongering becomes high pitched then u get best deals ...like covid times ...

[BlackPeter]

For you BP

This is Balances thinking …and might satisfy your curiosity …..spooky eh

Still doesn't explain the numbers he is throwing around (geared three times - what does this mean at all?) and clearly does not excuse his terminology.

Funny as well that NTA seems now to be the only thing which matters when valuing companies?

There was a time when earnings potential did matter as well, but maybe I am just old-fashioned :) - Just wondering: Are we now leaving the year of the down-ramper :t_up:, or are we just entering it :scared:?

[Rawz]

Balance says in the boom years the RV sector traded at a huge premium to NTA because the cycle was going up.

Now we are going to see a drop in house prices and the market has already front footed it as the premium is gone.

It’s already priced in. Markets always forward looking. That’s why little downside from here and solid buy as it’s so very cheap

[percy]

I notice on my walks around our neighbourhood ,all the For Sale properties now have SOLD stickers on them.
Currently no houses for sale....

[justakiwi]

Dreams are free but I’m not holding my breath.


- Just wondering: Are we now leaving the year of the down-ramper :t_up:…..?

[Entrep]

Ryman should have raised at $16. Now they will be forced to raise at $5 or lower this year. Bad management.

[BlackPeter]

Ryman should have raised at $16. Now they will be forced to raise at $5 or lower this year. Bad management.

True. But I guess this is the thing with perfect hindsight :) ... and lets face it, if they would have raised at $16 shareholders would now complain as well - they always do, if they pay more into a CR than whatever the share price of the day is.

Board is screwed if they don't and screwed if the do. They just can't win ...

[Rawz]

Only the guru OCA and ARV management had the foresight to raise money at roughly double todays share prices

[winner69]

Only the guru OCA and ARV management had the foresight to raise money at roughly double todays share prices

And most of those who fell over themselves to put cash in the collection plate / begging bowl are now really pissed off …..not good having passed off shareholders eh rawz

Yes if ação raise at a high share price is good than OCA / ARV management are real gurus

[nztx]

And most of those who fell over themselves to put cash in the collection plate / begging bowl are now really pissed off …..not good having passed off shareholders eh rawz

Yes if ação raise at a high share price is good than OCA / ARV management are real gurus


I ran away a safe distance when the heady SP started sliding badly around time of ARV Cap raise :)

A quick look around the rest of the sector suggested major indigestion likely ahead for stayers at that time

[BlackPeter]

Only the guru OCA and ARV management had the foresight to raise money at roughly double todays share prices

Good point. OCA and ARV must be really good companies with highly competent boards ... :)

And actually - at least in the case of OCA I mean that ... though maybe ... maybe they just have been more lucky then the RYM board, who knows?

[Baa_Baa]

Good point. OCA and ARV must be really good companies with highly competent boards ... :)

And actually - at least in the case of OCA I mean that ... though maybe ... maybe they just have been more lucky then the RYM board, who knows?

I'm not sure luck comes into much, they can only play the cards they're dealt to at the time (no one has a crystal ball to the future), the OCA cap raised at a good price at the time and they took on long term development debt at very low interest rates. That's the sign of a seriously onto it Board and management imo.

Some would say shareholders should be "pissed off" for participating in the cap raise at much higher prices than the market is right now, but I'd say for longer term investors just make the best of what's in front of them and decide whether to accumulate / maintain % holdings at the time. No one can predict what the SP or the market thinks.

The whole sector has taken a hammering from the market, the acquisition prices of all sector listed participants is ridiculously lower than assets value and as another learned member says, they have a business model that leverages no-interest debt float that has no rival in any other sector.

Now is the time and had been for some time to decide whether it's a smart decision to take or accumulate a long term position in a sector with an unrivalled business model and an unprecedented demand side that will endure for decades, even if the business model has to be tweaked.

Despite the chatter about care being a dog on the businesses, to a greater or lessor extent, the reality is these are all proxy property market plays and underpinned by attractive sustainable demographics and development policy.

Like it, or lump it, opportunities like now only come around once in a decade or more. A chance to buy into very successful sustainable property investments at very low multiples.

[troyvdh]

My perspective.I believe RYM had a 1 for 5 about 12 years ago at around 11 dollars.
Its SP trajectory continued upwards,
I believe that a lot of punters shy away from seemingly highly priced companies.
Yes yes its factually irrelevant.....cheers.
Sorry 5 for one.

[nztx]

Looking at RYM 2022 Published Annual Reports:

from the 2022 Income Statement:


(expressed as reported in $ 1'000s)

Total Revenue 2022: $508,797 2021: $456,794

Fair Value Movement - 2022: $746,885 2021: $416,847

Total Income - 2022: $1,254,682 2021: $872,641

Less Expenses 2022: $532,600 2021: $462,141

Profit Reported including
Fair value movement 2022: $722,082 2021: $410,500

If we deduct FV movement - 2022: ($746,885) 2021: ($416,847)

Profit (Loss) Excl FV Movements 2022: ($24,803) 2021: ($6,347)


Expressed In Millions Excl FV Movements say: 2022 LOSS ( $24.8 M) ; 2021 LOSS ($6.3 M) Pre Tax


Tax (Expense) / Credit - 2022: ($29,209) Exp ; 2021: $12,561

Dividends paid in respect of 2022 year:

2.6.22 Final 13.6cps - Nil Imputation credits
9.12.21 Interim 8.8cps - No Imputation credits

and in respect of 2021 year:

3.6.21 Final 13.6cps - Nil Imputation credits
10.12.20 Interim 8.8cps - No Imputation credits

(from NZX Site)


Full Year Dividends paid/payable applicable to year reported including paid after balance

For 2022 Year $ 112.0 Million ; 2021 Year $112.0 Million

(From page 120 of 2022 Annual Report)



Tax Losses:

Looking again at P112 of published 2022 Annual Report:


Total Group tax losses available in New Zealand and Australia amounted to $567.6 million
(2021: $410.7 million) and AU$156.0 million (2021: AU$105.8 million), respectively.

P104 2021 Annual Report:


Total Group tax losses available in New Zealand amounted to $410.7 million (2020: $289.5 million).

Total tax losses available in Australia amounted to AUD$105.8 million (2020: AUD$71.3 million).


Increase in TAX Losses by Year from the above Notes (millions)

2022 NZ Tax Losses + NZ $156.9 M
2021 NZ Tax Losses + NZ $121.2 M

2022 Aust Tax Losses + Au $ 50.2 M
2021 Aust Tax Losses + Au $ 34.5 M


Looking again at P114 of published 2022 Annual Report:

Imputation credit account:

Closing balances: (in 1,000's)

Parent Company - 2022: $ 870 - 2021: Nil
Subsidiaries - 2022: $ 4 - 2021: $94

Totals 2022: $874 - 2021: $ 94


Similar to the analysis of OCA, it is obvious that but for Fair Value Movements taken in, RYM would be in the RED (or pre-tax Loss Territory) before paying out distributions.

Tax Losses have increased in both years 2022 and 2021 significantly

RYM has minimal Imputation credits, none have been attached to dividends paid in both years.

There is movement in Imputation balance, but no details of this is reported in Cashflow statement.

Fair Value Adjustments do not generate resultant Cash inflow unless/until the Asset is realised
which then leads to question of how Dividends have been financed - from borrowing or otherwise ?
as pre-tax Losses suggested for both 2022 and 2021, if Fair Value movements are eliminated.

The RYM Annual Reports despite their large lengthy size and numerous pages are well set out
requiring a long read.

They clearly disclose Fair Value Adjustments as an additional line after Revenue, with
aggregate of both described as Total Income on the Income Statement.

The RYM SP continues to lose elevation, once at $15.50 in early Jan 2021, slipping
to $12 a year later (Jan 2022) and sliding further to circa $5.50 Last close (10 Jan 23).

[Habits]

Great analysis, really appreciate it
I guess the question is, does it rate as a buy. I included the company as one of my picks for the 2023 competition

[bull....]

rym led the charge last week on change in sentiment towards the sector , maybe because it was the most oversold ? or was it the best value ?

[BlackPeter]

rym led the charge last week on change in sentiment towards the sector , maybe because it was the most oversold ? or was it the best value ?

I don't think your two options are mutually exclusive - and they both might be true.

Anyway - I enjoyed all the bleak posts describing the retirement sector and did load up over the last 6 months or so on both RYM and OCA ... cheers folks!

[Bjauck]

I don't think your two options are mutually exclusive - and they both might be true.

Anyway - I enjoyed all the bleak posts describing the retirement sector and did load up over the last 6 months or so on both RYM and OCA ... cheers folks!
Likewise for me. Although I am still under water on my OCA purchases during the last 6 months though.

[snigmac]

Ryman has been very oversold. Looks like $8-10 might be on the horizon in Q1/Q2.

Retirement homes are recession proof. All the oldies earned their money already and cashed up after selling or reverse mortgaging their properties.

DYOR

[winner69]

Ryman regaining its position of ‘top dog’ in the sector.

Like it or not there is a pecking order in this sector ….RYM/SUM on top and OCA/ARV further down

[BlackPeter]

Ryman regaining its position of ‘top dog’ in the sector.

Like it or not there is a pecking order in this sector ….RYM/SUM on top and OCA/ARV further down

Correct - however, pecking orders can change and do change. Remember the times when SUM was just the poor sibling compared to RYM - and one of the more prolific posters here coined the formula 2 SUM equals 1 RYM? How wrong he was, but that was the right time to load up on SUM.

These days the time to load up is in my view for the current poor siblings ... and yes, admittedly for RYM as well, they did get a good bashing over the last years or so, didn't they?

Pecking orders are often just another reflection on the markets sillyness :) ;.

[winner69]

Correct - however, pecking orders can change and do change. Remember the times when SUM was just the poor sibling compared to RYM - and one of the more prolific posters here coined the formula 2 SUM equals 1 RYM? How wrong he was, but that was the right time to load up on SUM.

These days the time to load up is in my view for the current poor siblings ... and yes, admittedly for RYM as well, they did get a good bashing over the last years or so, didn't they?

Pecking orders are often just another reflection on the markets sillyness :) ;.

In spite of all prices being down heaps, some more than others, the pecking order has remained much the same as it was years ago …except that RYM isn’t way out in front but now close to SUM but remains well ahead of ARV and OCA

The pecking order refers to both financial performance over time and to market valuations…….. the order/ranking is much the same

The only market silliness (assuming they are silt) over the last few years has been the reduction in multiples driving share prices down ….but even through this process the pecking order has essentially remained in place.

Will your poor siblings ever move up the pecking order …I can’t really see any trigger that will make that happen. Methinks that because OCA is seen as one of the poor siblings it wil outperform the others is just a hope strategy and another example of market silliness

[BlackPeter]

In spite of all prices being down heaps, some more than others, the pecking order has remained much the same as it was years ago …except that RYM isn’t way out in front but now close to SUM but remains well ahead of ARV and OCA

The pecking order refers to both financial performance over time and to market valuations…….. the order/ranking is much the same

The only market silliness (assuming they are silt) over the last few years has been the reduction in multiples driving share prices down ….but even through this process the pecking order has essentially remained in place.

Will your poor siblings ever move up the pecking order …I can’t really see any trigger that will make that happen. Methinks that because OCA is seen as one of the poor siblings it wil outperform the others is just a hope strategy and another example of market silliness

I guess with all this silliness it sounds like it's the silly season :) - and hey, it really is - and it is a long one this year as well! Still three weeks to go to Mardi Grass ... even if one hardly notices carnival in New Zealand.

Never mind.

If I look at forward PE's of the big four in NZ, they are 5.6 for ARV, 6.0 for RYM, 8.9 for OCA and 10.1 for SUM, then it appears it is really ARV and RYM who are at the bottom of the pecking order. Poor bastards.

If I look however at SP to NTA ratio, they are 59% for ARV, 66% for OCA, 99% for RYM and 118% for SUM, than the poor cousins are ARV and OCA.

Looks like I am making here a case for ARV (sorry, TJ) :) ;

But in reality anybody who wants to can doubt the valuations (where the NTA / SP ratio is based on) - and they do. Everybody can of course question as well the analysts forecasts (the forward PE is based on) ... and I can't blame them.

Which leaves us still with an amazing opportunity to enjoy the rest of the silly season ... even if in NZ it seems to be confined to some threads of this great forum! :p ;

"Helau" and "Alaaf" to everybody who made it to this point in my post :) :

[winner69]

BP - If I look however at SP to NTA ratio, they are 59% for ARV, 66% for OCA, 99% for RYM and 118% for SUM, than the poor cousins are ARV and OCA.

Are you saying the worse this ratio is the higher up the pecking up they should? Seems flawed logic to me and I sense some hope on your part that this is true.

The ranking of those NTA ratios only reflect the ranking of things like total assets / returns on those assets / growth in book value / operational performance etc etc ……now one performs on those relative to others to a large extent drives their position in the pecking….that’s how weighing machines work as opposed to voting machines.

[nztx]

BP - If I look however at SP to NTA ratio, they are 59% for ARV, 66% for OCA, 99% for RYM and 118% for SUM, than the poor cousins are ARV and OCA.

Are you saying the worse this ratio is the higher up the pecking up they should? Seems flawed logic to me and I sense some hope on your part that this is true.

The ranking of those NTA ratios only reflect the ranking of things like total assets / returns on those assets / growth in book value / operational performance etc etc ……now one performs on those relative to others to a large extent drives their position in the pecking….that’s how weighing machines work as opposed to voting machines.


might be a new definition of "Silly" due out soon - Winner:)

Nice ride with RYM by the way

How are the poorer cousins doing ? :)

[Bjauck]

might be a new definition of "Silly" due out soon - Winner:)

Nice ride with RYM by the way

How are the poorer cousins doing ? :) It is a hairy roller coaster ride. Now, the passengers throw their arms up and scream at the debt and interest rates!

[nztx]

It is a hairy roller coaster ride. Now, the passengers throw their arms up and scream at the debt and interest rates!


you telling me nothing .. down 10% in a matter of a part week off the peak

the year graph suggests continuing slide

[Balance]

Just when they thought they might be able to get a CR done?

Inevitable imo.

[ralph]

you telling me nothing .. down 10% in a matter of a part week off the peak

the year graph suggests continuing slide

Yep Crazy ,I got off the coaster last week managed to get out at 6.90 when it spiked with a very minor profit ,and the next day a batting collapse did not see it being this quick quite chuffed with that .
Probably look again if it goes below 5 bucks not to keen with all that debt & the rising Interest rates .and the housing market bubble bursting .
Very Glad to be out for now.

[Greekwatchdog]

Finally the C.R is announced.

Ryman moves to strengthen balance sheet
Ryman Healthcare Limited (Ryman) is raising $902 million through a 1 for 2.81 accelerated pro rata entitlement offer of new ordinary shares (New Shares), with trading of retail entitlements on the NZX (the Offer).
The purpose of the Offer is to reset Ryman’s capital structure, provide funds to strengthen its balance sheet through the repayment of debt and better enable the company to execute its growth framework.
With a history dating back almost 40 years, Ryman has a strong presence in New Zealand and is the largest retirement village operator. In addition, Ryman now has a growing presence in Victoria, Australia. Across both markets Ryman provides homes for more than 13,000 residents across 45 high quality villages in high value suburbs.
Since the start of FY18, Ryman has invested over $3.9 billion in its portfolio, delivering more than 2,699 independent living units and 1,018 new care beds for residents. During this period Ryman also invested in new sites for its landbank, which provides a platform for growth. Ryman currently has 15 villages under construction and 6,710 units in its current land bank.
This period of accelerated investment, where investing cash flows exceeded operating cash flows, has resulted in elevated levels of debt. Resetting the capital structure with new equity through this Offer will allow Ryman to pay down debt by fully repaying Ryman’s USPP notes and reduce pro-forma gearing from 45.3% to 33.9% .
In addition, the Board has determined that no further dividend will be paid for FY23F.
CEO Richard Umbers said, “Our significant recent investment in our portfolio underpins our potential for future growth but has resulted in higher debt than we are comfortable with in current market conditions. The steps announced today will mean we are well capitalised as we seek to meet increased demand for the Ryman way of life, while also increasing cash flow generation and shareholder returns.”
“Ryman is now an established trans-Tasman business, with a compelling retirement village living and aged-care proposition in both markets. With a recapitalised balance sheet, a refreshed leadership team and a newly focused approach to development, we believe we are well placed to take advantage of the opportunities in our business and continue to deliver care that is ‘Good Enough for Mum or Dad’.”
Details of the Offer
Under the Offer, eligible shareholders are being invited to subscribe for New Shares, at a discount to the closing share price before the Offer. Eligible holders of entitlements to subscribe for New Shares can choose to take up their entitlements in whole or in part or not at all.
Importantly, the Board has structured the Offer with a view to maximising fairness for its shareholders, including through providing for eligible retail shareholders with the ability to apply for additional New Shares if they take up their entitlements in full, and also to sell their entitlements on the NZX Main Board.
The Offer is open to eligible shareholders in New Zealand, Australia and a limited number of other jurisdictions. Information about the Offer, including on the eligibility criteria and how to participate, is set out in the Offer Document.

[alokdhir]

Finally the C.R is announced.

Ryman moves to strengthen balance sheet
Ryman Healthcare Limited (Ryman) is raising $902 million through a 1 for 2.81 accelerated pro rata entitlement offer of new ordinary shares (New Shares), with trading of retail entitlements on the NZX (the Offer).
The purpose of the Offer is to reset Ryman’s capital structure, provide funds to strengthen its balance sheet through the repayment of debt and better enable the company to execute its growth framework.
With a history dating back almost 40 years, Ryman has a strong presence in New Zealand and is the largest retirement village operator. In addition, Ryman now has a growing presence in Victoria, Australia. Across both markets Ryman provides homes for more than 13,000 residents across 45 high quality villages in high value suburbs.
Since the start of FY18, Ryman has invested over $3.9 billion in its portfolio, delivering more than 2,699 independent living units and 1,018 new care beds for residents. During this period Ryman also invested in new sites for its landbank, which provides a platform for growth. Ryman currently has 15 villages under construction and 6,710 units in its current land bank.
This period of accelerated investment, where investing cash flows exceeded operating cash flows, has resulted in elevated levels of debt. Resetting the capital structure with new equity through this Offer will allow Ryman to pay down debt by fully repaying Ryman’s USPP notes and reduce pro-forma gearing from 45.3% to 33.9% .
In addition, the Board has determined that no further dividend will be paid for FY23F.
CEO Richard Umbers said, “Our significant recent investment in our portfolio underpins our potential for future growth but has resulted in higher debt than we are comfortable with in current market conditions. The steps announced today will mean we are well capitalised as we seek to meet increased demand for the Ryman way of life, while also increasing cash flow generation and shareholder returns.”
“Ryman is now an established trans-Tasman business, with a compelling retirement village living and aged-care proposition in both markets. With a recapitalised balance sheet, a refreshed leadership team and a newly focused approach to development, we believe we are well placed to take advantage of the opportunities in our business and continue to deliver care that is ‘Good Enough for Mum or Dad’.”
Details of the Offer
Under the Offer, eligible shareholders are being invited to subscribe for New Shares, at a discount to the closing share price before the Offer. Eligible holders of entitlements to subscribe for New Shares can choose to take up their entitlements in whole or in part or not at all.
Importantly, the Board has structured the Offer with a view to maximising fairness for its shareholders, including through providing for eligible retail shareholders with the ability to apply for additional New Shares if they take up their entitlements in full, and also to sell their entitlements on the NZX Main Board.
The Offer is open to eligible shareholders in New Zealand, Australia and a limited number of other jurisdictions. Information about the Offer, including on the eligibility criteria and how to participate, is set out in the Offer Document.

The way its worded and the size of the offer ...it seems shares shud tank big time today ...it can be gamed to get new shares at discount to closing SP ...if its $ 4 then people get it at $ 3.50 maybe ...

[Balance]

Smell of a capital raising getting stronger and stronger.


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.

Entirely predictable and I weren't too far out :

1 for 2.81 to raise $902m vs my prediction of 1 for 2.5 to raise $900m.

[bull....]

lucky for them the share's rose so strong recently.
on a more pessimistic note it show's the sector will be facing headwinds going forward .... cash crunch

[Balance]

Entirely predictable and I weren't too far out :

1 for 2.81 to raise $902m vs my prediction of 1 for 2.5 to raise $900m.

And here were some choice responses to my CR alert :


Panda-NZ-;[/COLOR]986140]NTA is over $7..

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


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?

Ryman doing the institutional rounds now with its brokers and offering the new shares at $5.00 - 22% discount to last market price of $6.40.

[alokdhir]

lucky for them the share's rose so strong recently.
on a more pessimistic note it show's the sector will be facing headwinds going forward .... cash crunch

Lucky !!! Mate u r being very charitable ...Kudos to lead managers it rose so fast to $ 6.50 against all odds ...now even $ 4 offering looks attractive otherwise it wud have been maybe $ 3 to get almost a billion in this environment ....

[trader_jackson]

every year they used to bang on about how they've NEVER had to do a capital raise as their business is amazing and their business model is resilient in any and all conditions... now they come cap in hand wanting almost a billion big ones and canned the dividend... how the tables have turned

[Entrep]

Ryman should have raised at $16. Now they will be forced to raise at $5 or lower this year. Bad management.

https://media.giphy.com/media/3o7qDSOvfaCO9b3MlO/giphy-downsized.gif

[Balance]

And here were some choice responses to my CR alert (from the vibes picked up from my market contacts) :





Ryman doing the institutional rounds now with its brokers and offering the new shares at $5.00 - 22% discount to last market price of $6.40.



So guesses as to where the sp settled at after the CR?

I pick $5.10.

[winner69]

Wonder if media will come out with headlines like this

Ryman shares in trading halt as it raises $900m to avoid going broke

That’ll get a few clicks eh

[winner69]

Kingfish proudly said in last update they were buying more …..they be happy they can buy even more now.


Although we had reduced the position size on balance sheet concerns in November, we also think the steep share price fall in December had simply overshot fundamentals, and we upgraded our position during January as the valuation had become much more attractive.

[alokdhir]

Kingfish proudly said in last update they were buying more …..they be happy they can buy even more now.

They reduced from 4% to 2% as on 31st Dec ...after that what they added will be known in April when 31st March portfolio is revealed ...on whole they doing pretty well and their NAV is steadily rising ...

[Bjauck]

Wonder if media will come outwits headlines like this

Ryman shares in trading halt as it raises $900m to avoid going broke

That’ll get a few clicks eh Yikes. It is a big raising. At $5 per share that is a big discount. Is there a pong of desperation?

[Newman]

$134m of costs associated with full repayment of $709 m of USPP Notes seems very high.

[Balance]

They reduced from 4% to 2% as on 31st Dec ...after that what they added will be known in April when 31st March portfolio is revealed ...on whole they doing pretty well and their NAV is steadily rising ...

That’s because of the sp fall?

[alokdhir]

That’s because of the sp fall?

They did after HY results and scary debt levels as per their own admission...actually sold some to reduce position size

[winner69]

$134m of costs associated with full repayment of $709 m of USPP Notes seems very high.

Always 'cool'at the time to take on USPP borrowing ....but hurts when you want to repay them (early) when interest rates / currency might not be in your favour

[nztx]

what will EPS & DPS after this look like ? :)

well at least RYM wont get savaged so badly by increasing interest rates, but will those partaking
in the CR wake up to the fact they are carrying the can on this & likely earning less on what
they throw at it ? ;)

What could come next -- faltering revaluations or reversals in next reporting rounds ?

[winner69]

Bit of guidance for FY23 given - FY23F underlying profit guidance in the range of $280 million - $290 million2,

Bit higher than FY22 of $255m

But second half sees underlying profit down roughly 10% on pcp

Sales not looking too good?

[epower]

Hi all,

Never been a shareholder in a company doing a capital raise until now.

How does it work in practice? Say I have 1000x shares for example, I own them through a broker (not sharesies) so I can now buy up to 2810x new shares at $5 if I want to? Do I get something in the post to tick and sign? In the notice it’s says we can on sell these ‘on market’ what does that mean in practice?

Thanks

[Snoopy]

Kingfish proudly said in last update they were buying more …..they be happy they can buy even more now.




They reduced from 4% to 2% as on 31st Dec ...after that what they added will be known in April when 31st March portfolio is revealed ...on whole they doing pretty well and their NAV is steadily rising ...




That’s because of the sp fall?


I suspect Balance is largely correct. I did my own little exercise on the managed funds thread here, in relation to Fisher Funds:

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

My exercise was on Fisher funds de-favouritising Ryman. Fisher Funds are of course the unlisted mirror partner of Kingfish that is managed by the same investment team.

From the link I gave above:

----------------------

Over the quarter the total value of Ryman shares in the portfolio dropped from: $12.53m -$9.98m = $2.55m. That $2.55m represents both:

a/ A drop in value, representing the number of shares held. AND
b/ A drop in the total value of the shares remaining in the portfolio that were not sold.

The total number of RYM shares sold by Fishers NZ Growth fund over that time (refer to notes 1 and 4 above - see link) was: 830,000-817,000= 13,000 shares. If those shares were sold at an average price of $13.50 per share over the period, those share sales would have netted Fishers cash of: 13,000 x $13.50 = $0.176m.

By simple subtraction, the drop in value of the shares retained was: $2.55m - $0.176m = $2.37m

This means that

c/ 93% of the market value of RYM shares lost came from share price depreciation AND
d/ only 7% came from share sales.

I don't know exactly when Fishers came to a realisation that their shareholding in RYM should reduce. But this calculation is telling us that most of the sell down must have occurred after 31st December 2021. More likely than not, this would have been at a price closer to $9 than $12 - with both of those figure well down on September 2021 highs.

-----------------

SNOOPY

[alokdhir]

[QUOTE=Snoopy;992609]I suspect Balance is largely correct. I did my own little exercise on the managed funds thread here, in relation to Fisher Funds:

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

My exercise was on Fisher funds de-favouritising Ryman. Fisher Funds are of course the unlisted mirror partner of Kingfish that is managed by the same investment team.

From the link I gave above:

----------------------

Over the quarter the total value of Ryman shares in the portfolio dropped from: $12.53m -$9.98m = $2.55m. That $2.55m represents both:

a/ A drop in value, representing the number of shares held. AND
b/ A drop in the total value of the shares remaining in the portfolio that were not sold.

The total number of RYM shares sold by Fishers NZ Growth fund over that time (refer to notes 1 and 4 above - see link) was: 830,000-817,000= 13,000 shares. If those shares were sold at an average price of $13.50 per share over the period, those share sales would have netted Fishers cash of: 13,000 x $13.50 = $0.176m.

By simple subtraction, the drop in value of the shares retained was: $2.55m - $0.176m = $2.37m

This means that

c/ 93% of the market value of RYM shares lost came from share price depreciation AND
d/ only 7% came from share sales.

I don't know exactly when Fishers came to a realisation that their shareholding in RYM should reduce. But this calculation is telling us that most of the sell down must have occurred after 31st December 2021. More likely than not, this would have been at a price closer to $9 than $12 - with both of those figure well down on September 2021 highs.

-----------------
"Ryman Healthcare (+29%) saw a strong share price move during the month. While there was no company specific news, the move reflects some comfort from Summerset's return to growth on new unit sales. Although we had reduced the position size on balance sheet concerns in November, we also think the steep share price fall in December had simply overshot fundamentals, and we upgraded our position during January as the valuation had become much more attractive."

This is from their latest KFL monthly letter ...which clearly states that they did reduce some after HY results on high debt fears and added maybe some when it tanked

As per their quarterly portfolios dated 30th Sept ...they had 3.6 % RYM while on 31st Dec 2022 it was 2% ...generally supports KFL's views that they did some reduction also ...how much they added back will be known when they reveal latest portfolio in April .

[percy]

Hi all,

Never been a shareholder in a company doing a capital raise until now.

How does it work in practice? Say I have 1000x shares for example, I own them through a broker (not sharesies) so I can now buy up to 2810x new shares at $5 if I want to? Do I get something in the post to tick and sign? In the notice it’s says we can on sell these ‘on market’ what does that mean in practice?

Thanks
You will receive a letter of entitlement.
It will show the number of shares you are entitled to apply for and date they must receive payment.
Should you not wish to take up your entitlement you can sell your rights [via a broker.]
The trust I am a trustee of will be taking up its entitlement.
ps.When a company is raising capital, the shares are often very weak,which means if you want more of its shares it is a good time to top up.
This can be caused be sharehoders selling down some shares to free up some cash to take up their entitlement [rights].

[Onemootpoint]

Hi all,

Never been a shareholder in a company doing a capital raise until now.

How does it work in practice? Say I have 1000x shares for example, I own them through a broker (not sharesies) so I can now buy up to 2810x new shares at $5 if I want to? Do I get something in the post to tick and sign? In the notice it’s says we can on sell these ‘on market’ what does that mean in practice?

Thanks

i am not a holder, but I believe Sharesies also take part in these events/ capital raise.

[epower]

You will receive a letter of entitlement.
It will show the number of shares you are entitled to apply for and date they must receive payment.
Should you not wish to take up your entitlement you can sell your rights [via a broker.]
The trust I am a trustee of will be taking up its entitlement.
ps.When a company is raising capital, the shares are often very weak,which means if you want more of its shares it is a good time to top up.
This can be caused be sharehoders selling down some shares to free up some cash to take up their entitlement [rights].

Thanks Percy, just got an email from link market services so will follow the steps in the link.

[Rawz]

Yes not a holder in RYM but got the shareies email.

can apply for the shortfall. Can put in buy price and amount you want to invest. it can be scaled of course.

Will try get some. might sell some OCA to do it. :mellow:

[justakiwi]

......................................


Yes not a holder in RYM but got the shareies email.

can apply for the shortfall. Can put in buy price and amount you want to invest. it can be scaled of course.

Will try get some. might sell some OCA to do it. :mellow:

[Jaa]

Biting column from Jenny Ruth (https://businessdesk.co.nz/article/finance/ryman-belatedly-addresses-debt-with-902m-capital-raising), "a stupid dividened", "poor decisions", "cash-flow is king". Broad-acre villages better for cashflow as you can sell units as they are built vs high-rise villages where units can only be sold when everything is built.

At least they are doing an accelerated rights issue and not a placement.

[dabsman]

Are we expecting the head share to revert down to rights price like other raisings have in this soft market?

[Old mate]

below rights id say

[bull....]

Ryman had also slowed and/or paused construction at six existing sites and revised its development pipeline towards lower density developments, "reflecting prudent management decisions made in response to elevated debt levels and changing market conditions including rising interest rates, the outlook for residential house prices, elevated construction costs and supply chain constraints

https://www.interest.co.nz/business/119662/retirement-village-operator-ryman-says-it-has-higher-debt-it-comfortable-current

[troyvdh]

What do folk think about Chris Lee....financial guy.

[Entrep]

While the share price will inevitably fall to the offer price (and maybe below), it it highly unlikely to do so immediately. If you want to make a quick buck you could take them up and instantly dump.

[alokdhir]

While the share price will inevitably fall to the offer price (and maybe below), it it highly unlikely to do so immediately. If you want to make a quick buck you could take them up and instantly dump.

U will be surprised mate ...the day HGH announced SPP @ $ 1.80 ...it was hard to sell much above after it went ex divvy in just one day ...

Also I note the similarity here ...HGH was trading around $ 1.80s then suddenly it went to $ 2.15 in few days that they got so called " Speeding Ticket " from NZX ...and then suddenly out of the blue CR announcement came @ $ 1.80

RYM was making new lows and then it was not ...it went against the tribe ...up some 25% on so called " Value Buying " rumours ...then one fine day CR @ $ 5.00 came ...it wud have been around $ 5 without that sudden spurt of " Value Buying " and similarly for HGH ...why both got sudden interest or upwards momentum very close to their CR announcements ...I wonder why !!!

[Balance]

U will be surprised mate ...the day HGH announced SPP @ $ 1.80 ...it was hard to sell much above after it went ex divvy in just one day ...

Also I note the similarity here ...HGH was trading around $ 1.80s then suddenly it went to $ 2.15 in few days that they got so called " Speeding Ticket " from NZX ...and then suddenly out of the blue CR announcement came @ $ 1.80

RYM was making new lows and then it was not ...it went against the tribe ...up some 25% on so called " Value Buying " rumours ...then one fine day CR @ $ 5.00 came ...it wud have been around $ 5 without that sudden spurt of " Value Buying " and similarly for HGH ...why both got sudden interest or upwards momentum very close to their CR announcements ...I wonder why !!!

The bigger question I have is this :

Why did Ryman never advised shareholders that it was negotiating with its banking syndicate over a potential breach of its banking/financing covenant?

Surely that is why the sp started dropping like a stone with little respite and now we know that Ryman has to pay $134m penalty to retire its US debts!

https://www.nbr.co.nz/investment/ryman-shareholders-pay-heft-fee-to-cut-company-debt/

Ryman’s ‘extraordinary’ penalty costs for paying off USPP debt

The proceeds from its $902m capital raise would go towards paying off foreign debt, but it comes with a $134m penalty fee.

[Fortunecookie]

The bigger question I have is this :


Why did Ryman never advised shareholders that it was negotiating with its banking syndicate over a potential breach of its banking/financing covenant?

Surely that is why the sp started dropping like a stone with little respite and now we know that Ryman has to pay $134m penalty to retire its US debts!

https://www.nbr.co.nz/investment/ryman-shareholders-pay-heft-fee-to-cut-company-debt/

Ryman’s ‘extraordinary’ penalty costs for paying off USPP debt

The proceeds from its $902m capital raise would go towards paying off foreign debt, but it comes with a $134m penalty fee.

I do wonder if it is a break cost but termed as a penalty fee. If it is they are front loading the interest cost. The US itemise it extinguishment of debt.

[alokdhir]

The bigger question I have is this :

Why did Ryman never advised shareholders that it was negotiating with its banking syndicate over a potential breach of its banking/financing covenant?

Surely that is why the sp started dropping like a stone with little respite and now we know that Ryman has to pay $134m penalty to retire its US debts!

https://www.nbr.co.nz/investment/ryman-shareholders-pay-heft-fee-to-cut-company-debt/

Ryman’s ‘extraordinary’ penalty costs for paying off USPP debt

The proceeds from its $902m capital raise would go towards paying off foreign debt, but it comes with a $134m penalty fee.

There is a simple answer in my book and my mind for that question ...then it wud have become almost impossible to take the so called "Value Buying " to $ 6.50+ levels thus CR price wud have been $ 3.50 then ....also it breaches NZX disclosure norms at least in my view ...as it states Management will disclose to NZX first anything substantially different comes to their knowledge after the last disclosure or reporting ...this $ 134 Million penalty issue must have been known by management much before they disclosed to market . When this value buying was going on many articles citing Forbars etc came out against RYM financial state ...its getting murkier and ...Bull may get his first scalp if all goes to .....

[Ferg]

How does it work in practice? Say I have 1000x shares for example, I own them through a broker (not sharesies) so I can now buy up to 2810x new shares at $5 if I want to
It is the other way round. It is a rights issue of 1 new share for every 2.81 shares you own. So with 1,000 shares you will have the right to buy another 355-356 shares at $5 each.

[Balance]

It is the other way round. It is a rights issue of 1 new share for every 2.81 shares you own. So with 1,000 shares you will have the right to buy another 355-356 shares at $5 each.

Thanks to management screwing up by taking on too much and the wrong sort of debt, you get the chance to contribute to the screw up!

[Ferg]

Quick back of the fag packet calculation of NTA and EPS post capital raise (CR), assuming all rights are exercised at $5 and their forecast underlying profit is achieved for FY23 and FY24:

Raw NTA per share at 1H23 is $7.19c (being $3,628m divided by 504.67m shares).

After adding new shares equity of $902m less $30m CR costs less $134m USPP exit costs* gives post CR equity of $4,366m.

Divide this into the new number of shares of 685m gives post CR NTA of $6.37c before adding anything for NPAT for 2H23 (if any).

If RYM achieve underlying profit of $285m in FY23 that is EPS of $0.42c (based on underlying) and EPS of $0.47c in FY24 before any DRIP if the dividend is reinstated in the back half of FY24.

*USPP exit costs likely relate to unwinding the FX and interest rate swaps they entered into. Notice this from the last HY report:

"In April 2022, the Group entered into additional cross-currency interest rate swaps to hedge the foreign currency risk and interest rate risk in relation to the additional USPP notes issued. The CCIRS transform a series of known fixed interest rate USD cash flows to floating rate NZD cash flows."
Not so clever now is it?

[Rawz]

this is why the US have such an advantage over the rest of the world. when their currency is the world currency they have much lower risk.

Never understood why one would raise US denominated debt when they have no US$ cashflows.

RYM lost a lot of trust. wonder if they will lose their SP premium they used to enjoy?

[BlackPeter]

this is why the US have such an advantage over the rest of the world. when their currency is the world currency they have much lower risk.

Never understood why one would raise US denominated debt when they have no US$ cashflows.

RYM lost a lot of trust. wonder if they will lose their SP premium they used to enjoy?

Didn't they lose this premium already? Which remaining "premium" do you see in the current SP?

RYM currently coming with the lowest forward PE (5.4) of all retirement villages ... though admittedly - I didn't yet CR adjust this value, i.e. take that with a grain of salt ...

[alokdhir]

Didn't they lose this premium already? Which remaining "premium" do you see in the current SP?

RYM currently coming with the lowest forward PE (5.4) of all retirement villages ... though admittedly - I didn't yet CR adjust this value, i.e. take that with a grain of salt ...

Used to be 2XSUM = 1XRYM ...now its other way round ...Gosh thats called bad management

I just dont know which one is more incompetent ...older ATM or current RYM ...but both did amazingly bad jobs for shareholders ...they got paid to destroy the companies

All this kind of stuff will surely add premium to proven track record management companies like MFT / FPH etc

[Balance]

Used to be 2XSUM = 1XRYM ...now its other way round ...Gosh thats called bad management

I just dont know which one is more incompetent ...older ATM or current RYM ...but both did amazingly bad jobs for shareholders ...they got paid to destroy the companies

All this kind of stuff will surely add premium to proven track record management companies like MFT / FPH etc

Not their fault that punters and investors wanted to price their shares at such humongous premiums to underlying values.

[Rawz]

Didn't they lose this premium already? Which remaining "premium" do you see in the current SP?

RYM currently coming with the lowest forward PE (5.4) of all retirement villages ... though admittedly - I didn't yet CR adjust this value, i.e. take that with a grain of salt ...

RYM always traded at a hefty premium to their NTA and the likes of OCA at a discount.

However based on Fergs calcs above and what the SP might do after the CR.... yes the premium days will be a distant memory

[alokdhir]

Not their fault that punters and investors wanted to price their shares at such humongous premiums to underlying values.

I dont think punters and investors encouraged management into doing speculative deals based on unsustainable debt channels ...rather its other way round . I will hold management responsible for this fiasco then just punters ..." Humpty Dumpty had a big fall "

[Rawz]

Used to be 2XSUM = 1XRYM ...now its other way round ...Gosh thats called bad management

I just dont know which one is more incompetent ...older ATM or current RYM ...but both did amazingly bad jobs for shareholders ...they got paid to destroy the companies

All this kind of stuff will surely add premium to proven track record management companies like MFT / FPH etc

Hey Alokdhir, maybe the 'never sell' approach is wrong. RYM over the last 20 years was a premium company that never miss stepped, never over extended, never got caught out with a rotten balance sheet and had to pay $100m+ in fees.
Even the premium companies can bugger it up.

RYM over the last 20 years has had 2000% sp growth. But not long ago that was 4000% so the conclusion is when stock picking, even the premium companies, you have to watch them qrt by qrt. And if you can do that buy your favorite KFL and let them do the watching

[alokdhir]

Hey Alokdhir, maybe the 'never sell' approach is wrong. RYM over the last 20 years was a premium company that never miss stepped, never over extended, never got caught out with a rotten balance sheet and had to pay $100m+ in fees.
Even the premium companies can bugger it up.

RYM over the last 20 years has had 2000% sp growth. But not long ago that was 4000% so the conclusion is when stock picking, even the premium companies, you have to watch them qrt by qrt. And if you can do that buy your favorite KFL and let them do the watching

Agree with u fully about KFL benefits ...but I never subscribe to " Never Sell " approach to all stocks ...ATM I advised and did myself sold all in Dec 2020 after that halt , same I did to HGH and OCA etc ...Buy and hold works for proven track records like FPH / MFT etc ...So I didnt sell my FPH when it running 5% down every day ...rather I added to reduce my costs ...but over 26.50 so soon based on China covid which is one off ...too high too soon again imo .

KFL is worth when its SP is below NAV as they will try to save u from ATM/ RYM kind pitfalls ....RYM used to be their preferred RV stock which they changed to SUM long time back after they saw its inflated SP over NTA ...so they do things pretty well to deserve 1.25% fees ...even Mr B has got back into them if thats some consolation or comfort ...lol

[Newman]

The matched price now is $6.00.

[Balance]

The matched price now is $6.00.

Totally irrelevant until we know how much stock have been taken up by the institutions in the accelerated placement.

The fact that there's still no news 3 days after the announcement is NOT a good sign that the institutions are chomping at the bits to take the stock.

If the under-writers are left with stock, there is going to be carnage on the sp in the after market.

So the under-writers will use one of their funds to take the stock and proclaim the placement as successful and fully placed?

You have been warned!

[Entrep]

The fact that there's still no news 3 days after the announcement is NOT a good sign that the institutions are chomping at the bits to take the stock.

You have been warned!

Exactly! Very ominous.

[alokdhir]

https://www.nzherald.co.nz/business/the-debt-explosion-that-led-to-ryman-healthcares-mea-culpa-moment/4HUAHC6QENGRTCFKXG6TQVAFNY/

Saga as told !! Clearly a management issue ...not punter issue !!!

[nztx]

https://www.nzherald.co.nz/business/the-debt-explosion-that-led-to-ryman-healthcares-mea-culpa-moment/4HUAHC6QENGRTCFKXG6TQVAFNY/

Saga as told !! Clearly a management issue ...not punter issue !!!


Wonder if the NZH Storywriters read here ? ;)

[Balance]

Totally irrelevant until we know how much stock have been taken up by the institutions in the accelerated placement.

The fact that there's still no news 3 days after the announcement is NOT a good sign that the institutions are chomping at the bits to take the stock.

If the under-writers are left with stock, there is going to be carnage on the sp in the after market.

So the under-writers will use one of their funds to take the stock and proclaim the placement as successful and fully placed?

You have been warned!

A broker's view - Jarden obviously not happy that they missed out on a role in the CR (nice big fat fees) so take view with that in mind.

As for the narrative that the CR is long talked about, has anyone actually seen any commentary on that save for on ST?

In fact, it came as a surprise (& shock) for the market!

https://www.goodreturns.co.nz/article/976521352/ryman-capital-raising-surprises-market-amidst-earnings-season.html

Jarden's view :

"Ryman’s long-talked-about capital raising announcement finally arrived this week with the company revealing it will seek $902 million to repay debt, largely to pay down its US private placement (USPP).

Fund managers were reluctant to talk about the offer, given that they were in the midst of deciding whether to commit to backing the raise.

Jarden’s Arie Dekker noted the repayment of the USPP came with significant exit costs and there were still “a lot of questions to work through”.

As well as repaying the debt, Ryman said it had slowed and/or paused construction at six existing sites and revised its development pipeline towards lower-density developments, reflecting prudent management decisions made in response to elevated debt levels, changing market conditions including rising interest rates and the outlook for residential house prices.

In an investor presentation, the company said lower-density developments would mean a streamlined design and consenting process, lower peak debt requirements due to the ability to sell units and a shorter time to complete.

Dekker said that while targeting an unwinding of development work in progress for a neutral total cashflow outcome would stabilise total debt, it was not the same as addressing how the company would correct a lack of free cashflow from its large existing asset base."

[Balance]

$138m shortfall from the institutional placement.


Institutions & major shareholders make up around 90% of register so shortfall = around 18%.

https://www.afr.com/street-talk/mac-ubs-mop-up-ryman-raising-with-nz138m-shortfall-auction-20230216-p5cl4o

Sp heading down towards $5.00 when the market reopens on Monday unless UBS & Macquarie provide sp support - most likely as they will want retail investors to take up as much of the stock as possible!

[winner69]

$138m shortfall from the institutional placement.

https://www.afr.com/street-talk/mac-ubs-mop-up-ryman-raising-with-nz138m-shortfall-auction-20230216-p5cl4o

Sp heading down towards $5.00 when the market reopens on Monday unless UBS & Macquarie provide sp support - most likely as they will want retail investors to take up as much of the stock as possible!

Thats a huge shortfall isn’t it Balance

I take it this is the rights for those holders deemed ‘ineligible’ etc and big guys?

The mum and dads haven’t had a chance to say no yet and then another book build

[Balance]

Thats a huge shortfall isn’t it Balance

I take it this is the rights for those holders deemed ‘ineligible’ etc and big guys?

The mum and dads haven’t had a chance to say no yet and then another book build

Very few ineligibles these days as I understand it as the big boys from US or Europe hold their shareholdings via their funds in Australia.

[winner69]

Book Value per share post cap raise is $6.40 ($7.19 prior) according to RTM presentation

So maybe 5 bucks a 'reasonable' share price - P/BV of .78

[nztx]

Anyone see the SP to NTA rations across the Sector improving in short to medium term
to loftier levels seen earlier in the current economic climate ? :)

[whatsup]

Dis we all see yesterdays N Z Herald write up, lays it all out there on the table, pi$$ poor management imho !!!!

[nztx]

Dis we all see yesterdays N Z Herald write up, lays it all out there on the table, pi$$ poor management imho !!!!


could be worse though .. at least she didn't wind up in a receiver's bucket of broken projects :)

[epower]

Dis we all see yesterdays N Z Herald write up, lays it all out there on the table, pi$$ poor management imho !!!!

Anyone able to copy the article across to here don’t have NZH premium unfortunately.

[percy]

Anyone able to copy the article across to here don’t have NZH premium unfortunately.

If you a member of your local library you can go to their site.Log in using your library card number [you may have to set it up online,where they will give you a password] then go to eRerources,then pressreader and then look for Weekend Herald 18th feb.
If you have trouble go to your local library and the friendly librarian will help you.
Do not look for NZ Herald,but Weekend Herald 18th Feb.

[justakiwi]

I did not know this. Thank you!


If you a member of your local library you can go to their site.Log in using your library card number [you may have to set it up online,where they will give you a password] then go to eRerources,then pressreader and then look for Weekend Herald 18th feb.
If you have trouble go to your local library and the friendly librarian will help you.
Do not look for NZ Herald,but Weekend Herald 18th Feb.

[Sideshow Bob]

https://www.nzx.com/announcements/406948

Ryman announces completion of Institutional Entitlement Offer

Ryman is pleased to announce that it has successfully completed the institutional component (Institutional Entitlement Offer) of its fully underwritten 1 for 2.81 accelerated pro-rata entitlement offer (Offer), as announced on 15 February 2023.

Ryman received strong support from existing institutional shareholders with eligible institutional shareholders (excluding the pre-committed shareholders ) electing to take up approximately 95% of their entitlements under the Institutional Entitlement Offer. The take up rate including the pre-committed shareholders was approximately 75%.

CEO Richard Umbers said, “We are very pleased with the level of support received from our insitutional shareholders. These proceeeds, together with the proceeds from the Retail Entitlement Offer opening tomorrow, will strengthen our balance sheet, better enable Ryman to execute its growth framework, and allow Ryman to maintain the high standard of care it is known for – care which is to be ‘Good Enough for Mum or Dad’”

Institutional Entitlement Offer

Approximately $542 million was raised under the Institutional Entitlement Offer (subject to final reconciliation of institutional shareholdings), with the Institutional Bookbuild (for the entitlements not taken up by institutional shareholders or attributable to ineligible institutional shareholders) well supported.

The Institutional Bookbuild clearing price of $6.00 per share represents a 20% premium over the Offer Price of $5.00. Eligible institutional shareholders who elected not to take up their entitlements and ineligible institutional shareholders will receive the premium ($1.00) for each entitlement not taken up by them (less any applicable taxes).

The New Shares issued under the Institutional Entitlement Offer will rank equally with Ryman’s existing shares from the date of issue. Settlement and allotment of the New Shares issued as part of the Institutional Entitlement Offer is expected to occur on Friday, 24 February 2023.

Retail Entitlement Offer

Retail entitlements begin trading on the NZX today and will continue to trade until Tuesday, 28 February 2023. Trading of the retail entitlements on NZX will initially be on a deferred settlement basis:

• Trades executed on 20 February 2023 to 23 February 2023 (inclusive) will settle on 28 February 2023.

• Trades executed on 24 February 2023, 27 February 2023 and 28 February 2023 will settle on a T+2 basis.

Entitlements purchased on the NZX may only be exercised by purchasers that meet eligibility requirements. In particular, rights may not be exercised by purchasers that are in the United States or who are acting for the account or benefit of persons in the United States (to the extent such persons are acting for the account or benefit of persons in the United States). Potential purchasers of Entitlements should familiarise themselves with the requirements for exercise, which are set out in the Offer Document.

The retail component of the Offer (Retail Entitlement Offer) is scheduled to open tomorrow, Tuesday, 21 February 2023. Once open, eligible retail shareholders will be able to subscribe to New Shares in Ryman at the same Offer Price and ratio as the Institutional Entitlement Offer.

[Newman]

"Ryman received strong support from existing institutional shareholders with eligible institutional shareholders (excluding the pre-committed shareholders) electing to take up approximately 95% of their entitlements under the Institutional Entitlement Offer. The take up rate including the pre-committed shareholders was approximately 75%".

Why is the difference (95%-75%) so big?

[winner69]

"Ryman received strong support from existing institutional shareholders with eligible institutional shareholders (excluding the pre-committed shareholders) electing to take up approximately 95% of their entitlements under the Institutional Entitlement Offer. The take up rate including the pre-committed shareholders was approximately 75%".

Why is the difference (95%-75%) so big?

The 95% or 75% bit …goodness knows

But it seems the 5% and/or 25% who didn’t take up the offer get $1 each ‘entitlement’ for not doing so

All too complicated for me ….maybe Balance can give us more insights

[winner69]

Anybody playing around with RYMRA

Seems a bit of activity

[Ferg]

Why is the difference (95%-75%) so big?

Is this 75% of institutions who held 95% of the relevant shares? I'm not sure how else to interpret that - I was certainly scratching my head when I first read it.

[Bjauck]

Is this 75% of institutions who held 95% of the relevant shares? I'm not sure how else to interpret that - I was certainly scratching my head when I first read it. The way I read it - I think it dropped to a 75% take up rate as the pre-committed shareholders (Directors and Hickman and Cumming) only took up a smallish percentage of their entitlement. When added to the 95% institutional take-up, the overall take-up percentage was 75%.

[Ferg]

The way I read it - I think it dropped to a 75% take up rate as the pre-committed shareholders (Directors and Hickman and Cumming) only took up a smallish percentage of their entitlement. When added to the 95% institutional take-up, the overall take-up percentage was 75%.
Ah gotcha. I interpreted "pre committed" as being nett buyers (or choosing to exercise their rights) when in fact they were mainly committed to NOT taking up their rights.....thanks for that.

[Perky]

Anybody playing around with RYMRA

Seems a bit of activity

Tell us more winner…what sort of playing are you talking about?
Personally I’m playing RYMA by buying ARVC…c= cheap…(he says hopefully)



I read this in Chris lee newsletter yesterday…is this your angle.

Existing shareholders will be invited to bid for additional shares beyond their allocation if they wish, acquiring the rights from those who elect not to participate. Importantly, this offer includes the use of a Maximum Retail Oversubscription Price. This means that those bidding for additional shares beyond their entitlement will not pay more than this price for that oversubscription. This maximum will be set based on the closing price of Ryman shares on the 8th of March.


However, there is no adjustment made if the share price declines. If the share price falls below $5, those taking up the offer will still pay $5 a share. There are no prizes for applying early.


The decision to use a maximum price in this way is an interesting one, and one that will place undue importance on the closing auction on the 8th. If Ryman shares finish weakly on that day, whether deliberately or not, it may lead to a perverse outcome with regards to the bookbuild. If the bookbuild closes a single cent higher than this price, retail investors will not be allocated any shares.

I thought It was a well written article explaining process…if anyone wants to read full article I recommend looking at yesterdays email newsletter.

[alokdhir]

Its becoming more and more clear that management of RYM has let shareholders down ...I will not trust them with my money ever ...they need go before RYM shares become investible again ...imho

[nztx]

https://www.nzherald.co.nz/business/regulator-looking-into-ryman-healthcare-raise/5IOR2WZ7MRFFNM46UGA4GC4QVU/

Regulator looking into Ryman Healthcare raise

Ooops . could it be a wet bus ticket on the way ? ;)

[winner69]

https://www.nzherald.co.nz/business/regulator-looking-into-ryman-healthcare-raise/5IOR2WZ7MRFFNM46UGA4GC4QVU/

Regulator looking into Ryman Healthcare raise

Ooops . could it be a wet bus ticket on the way ? ;)

Might get fined …..and shareholders will pay that lol

[nztx]

Might get fined …..and shareholders will pay that lol


might be cheap advertising for RYM to get more shortfall jobs sold :)

and a few more sales too

entering the proximity of the bus stops should be easy

[limmy]

Sold off my RYMRA for myself and my wife this morning at 60c with no regrets. They are currently selling at 58c.

[whatsup]

Sold off my RYMRA for myself and my wife this morning at 60c with no regrets. They are currently selling at 58c.

Good move IMHO.

[Bjauck]

Might get fined …..and shareholders will pay that lol
If the Regulator determines that RYM breached continuous disclosure rules and the date when that occurred, would purchasers of shares after the date of breach until subsequent disclosure be compensated?

Disc: I may have bought RYM shares in the affected period.

[whatsup]

If the Regulator determines that RYM breached continuous disclosure rules and the date when that occurred, would purchasers of shares after the date of breach until subsequent disclosure be compensated?

Disc: I may have bought RYM shares in the affected period.

Nah, imho a wet bus ticket penalty !

[Bjauck]

Nah, imho a wet bus ticket penalty !
I suspect you will be right. Paper Tiger market regulations?

[whatsup]

Im hovering to buy @ circa $5.00 !!

[epower]

Im hovering to buy @ circa $5.00 !!

If you are a current shareholder you can participate in the capital raising over and above your allocation and stipulate $5 as your price. I did that last night and bought more shares over and above my 2.81:1 allocation. No commission and already paid today and own more shares at $5

[Newman]

If you are a current shareholder you can participate in the capital raising over and above your allocation and stipulate $5 as your price. I did that last night and bought more shares over and above my 2.81:1 allocation. No commission and already paid today and own more shares at $5

There will be a bookbuild process on March 8 to determine the price for extra shares existing shareholders wish to buy. The price cannot be below $5.

[epower]

There will be a bookbuild process on March 8 to determine the price for extra shares existing shareholders wish to buy. The price cannot be below $5.

So they’ve withdrawn from my account but if I don’t get allocated shares as someone outbids me (i.e. pays $5.01) then I won’t get over allocated shares and will get refunded my deposit?

[Bjauck]

So they’ve withdrawn from my account but if I don’t get allocated shares as someone outbids me (i.e. pays $5.01) then I won’t get over allocated shares and will get refunded my deposit? You read the documentation?

[Onemootpoint]

So they’ve withdrawn from my account but if I don’t get allocated shares as someone outbids me (i.e. pays $5.01) then I won’t get over allocated shares and will get refunded my deposit?

I am not vested in this but a cursory glance indicated refunds by 20 March 2023. Perhaps best to check the documents yourself for confirmation.

[epower]

You read the documentation?

I essentially run my own personal small scale property index fund with property trusts and retirement village operators so didn’t read the documentation too much to be completely honest.

The bulk 95% + of my funds are in total world fund TWL

[huxley]

There’s no point bidding for shares early since you’ve got till the 6 March to do so. You won’t pay more than $5 as they are using a Maximum Retail Oversubscription Price, however If the share price were to fall below $5, you’ll still have to pay $5 a share. So it may be beneficial to wait till closer to 6 march before making any commitment.

[huxley]

So they’ve withdrawn from my account but if I don’t get allocated shares as someone outbids me (i.e. pays $5.01) then I won’t get over allocated shares and will get refunded my deposit?

Yeah, reminds me of the GNE float in 2014 when everyone got scaled. They take the $ immediately but return it if shares don’t get allocated.

[huxley]

Has anyone commented on the repayment of the USPP, $130m in fees to repay $290m of debt early - am I reading that correctly? It’s going to be one hell of a shareholder meeting eh, totally tanked their reputation as being a good steward of shareholder capital!

[Onion]

Has anyone commented on the repayment of the USPP, $130m in fees to repay $290m of debt early - am I reading that correctly? It’s going to be one hell of a shareholder meeting eh, totally tanked their reputation as being a good steward of shareholder capital!

Jenny Ruth on Business Desk (https://businessdesk.co.nz/article/ryman-burned-through-hundreds-of-millions-of-dollars) says:


... the directors might just as well have set fire to hundreds of millions of dollars...

Try and get hold of the whole article (they offer 10 days free, it's worth taking a look, they have some good articles). She paints a dire picture of their debt management. As she notes, they could have called upon the loyal shareholders any time to raise capital except they had a numb-skull pride in never having raised capital!

[limmy]

I took the simple option of selling the RYMRA rights on the first day at 60c. No hassles. They are now trading at 39.8c.

[Balance]

Looking ominous for post rights trading that it will follow other CR issues in recent years and trade below issue price.

Underwriters are not really having much success supporting & holding up the sp after the company boasted about placing the institutional shortfall shares at $6.00.

Best to bail out via the rights and buy back post the CR.

[winner69]

Looking ominous for post rights trading that it will follow other CR issues in recent years and trade below issue price.

Underwriters are not really having much success supporting & holding up the sp after the company boasted about placing the institutional shortfall shares at $6.00.

Best to bail out via the rights and buy back post the CR.

I can't believe that instos (assuming instos took up the shortfall) actually paid $6.00

The $1.00 (over the raise price) goes to those who didn't take up the rights so those guys did OK

Something doesn't seem right but what the heck do I know

[nztx]

I can't believe that instos (assuming instos took up the shortfall) actually paid $6.00

The $1.00 (over the raise price) goes to those who didn't take up the rights so those guys did OK

Something doesn't seem right but what the heck do I know


yep .. but remember the guts has dropped out of SP of many listings on the market fairly rapidly in the past week.

Just look at where ARV closed on Friday - @ 1.01

A large Cap Raise by RYM covering past Company stuff ups on verge of threatening to get worse at a high cost,
in volatile times with RB going bananas, Govt dithering around, inflation rising and recent disasters - not surprising RYM SP hit the retreat gears hard :)

What to look forward to with RYM next reporting period now ? - how about the huge cost of getting
rid of the Yankie debt to come through P&L Statement - will that blow away prospect of a few period's dividends going forwards ?

[Jim]

Ryman is falling like a lead balloon. I wonder if it were to fall below the $5 offer price

[Baa_Baa]

Ryman is falling like a lead balloon. I wonder if it were to fall below the $5 offer price

And the rights RYMRA, down 55% again today, only 9.4 cents at the moment :O

[whatsup]

Ryman is falling like a lead balloon. I wonder if it were to fall below the $5 offer price

"IF" that happens whats the "B" plan or does that matter, the instos are on board , arnt they !

[snigmac]

Will be interesting to see how much is paid by Ryman. The break fee will free up lending at a higher rate for the lender. I havent read the contract but i wonder if it will be similar to break fees for mortgages if the interest rate is higher than what was agreed to, a discount is applied to the break fee.

[Rawz]

CFO should resign for this blunder

[sb9]

Looks as though retail entitlement offer met with lukewarm response, just 66% took up their lot. Bit of disaster me thinks..

[waikare]

Looks as though retail entitlement offer met with lukewarm response, just 66% took up their lot. Bit of disaster me thinks..

Yes a bit of a concern when a 1/3 did not take up the offer.

[limmy]

The whole RV sector has fallen out of favour. It'll take correction of property prices for the trend to reverse and for buyers to come back.

[troyvdh]

limmy .With all due respect I do not get that logic...Are you suggesting that those needing to move into a retirement entity wont because perhaps the value of there house has dropped a bit.
Yes the value may have dropped...but aint the price of rebuilding that house gone up....say 20 % over the past 18 months.
Same goes for retirement entities....cheers,

[Balance]

limmy .With all due respect I do not get that logic...Are you suggesting that those needing to move into a retirement entity wont because perhaps the value of there house has dropped a bit.
Yes the value may have dropped...but aint the price of rebuilding that house gone up....say 20 % over the past 18 months.
Same goes for retirement entities....cheers,

So many of you keep posting about the cost of rebuilding a house.

Do you actually know that building & construction cost is minor these days compared to the cost of land?

Used to be that land would be about half the cost of the house. Then, it became 100% and these days, it’s 200% to 300% of the house!

And the price of land is what is dropping rapidly at present?

And the RVs (along with many developers) have been paying up for ever more expensive land?

[justakiwi]

Well that's a good thing for RVs looking for further greenfield acquisitions. Isn't it?



And the price of land is what is dropping rapidly at present?

[troyvdh]

Cost of building and construction is minor....WOW.
Price of land dropping.....What about in the next few years.
I believe an investment horizon of at least a few years may prove to more than ok.
Also....how many retirement entities purchased the land years ago......

[SailorRob]

Well that's a good thing for RVs looking for further greenfield acquisitions. Isn't it?

Well said.

[Greekwatchdog]

And the price of land is what is dropping rapidly at present?

As per usual Balance,your short views are noted but lets look at last 25 years shall we. Prices have indeed gone up even with drop is in market values from time to time. So in 5/10/15 or 20 years time the value of land your talking about today will be worth how much more???

I no what camp I am happy with.

Keep up your short sighted views. Us long term holders are loving it.

[Balance]

Well that's a good thing for RVs looking for further greenfield acquisitions. Isn't it?

Yes, it is indeed.

If only the RVs have not loaded up on ever more expensive land which they are now choking on due to debt funding.

And needing CRs to reduce leverage!

Simple economics - something you should embrace!

[Balance]

And the price of land is what is dropping rapidly at present?

As per usual Balance,your short views are noted but lets look at last 25 years shall we. Prices have indeed gone up even with drop is in market values from time to time. So in 5/10/15 or 20 years time the value of land your talking about today will be worth how much more???

I no what camp I am happy with.

Keep up your short sighted views. Us long term holders are loving it.

Bet you are loving it indeed - especially when others buy in at a huge discount to what some of you bought in at.

Property is long term but is also all about timing - something you should learn about.

[SailorRob]

And the price of land is what is dropping rapidly at present?

As per usual Balance,your short views are noted but lets look at last 25 years shall we. Prices have indeed gone up even with drop is in market values from time to time. So in 5/10/15 or 20 years time the value of land your talking about today will be worth how much more???

I no what camp I am happy with.

Keep up your short sighted views. Us long term holders are loving it.

Will land values constantly compound at a greater rate than GDP?

[Greekwatchdog]

Bet you are loving it indeed - especially when others buy in at a huge discount to what some of you bought in at.

Property is long term but is also all about timing - something you should learn about.

I haven't stopped buying, in fact loving the continued opportunity, and you make the assumption that I am down. Assumptions being the mother of all f**k ups.

Maybe you should take a look at your own book and see long term averages are. Oh yes timing is everything and I know exactly where I stand hotshot. I prefer my odd's than yours.

Remember not everyone plays the short game. Something I could teach you about ATM in my investment strategy hotshot. I will trust judgement anytime over yours after all my investment strategy has given me more than I could never have imagined. I count myself very fortunate and grateful and work as I hard as I did 37 years ago when I first started out whilst helping those who need help and support thru my Charitable Trust.

Thanks for your advice and your contribution, GWD

[Ferg]

CFO should resign for this blunder
That would depend on where the responsibility or decision to act (or to not act) was made.....the FX/fixed vs floating fiasco would certainly sit with the CFO. Anything CR related would sit with the Board.

[SailorRob]

Bet you are loving it indeed - especially when others buy in at a huge discount to what some of you bought in at.

Property is long term but is also all about timing - something you should learn about.

If you can time the property market, considering the leverage which normal people use, you would be safely able to use much more and you would be a way up the NZ rich list if you've been around for a while.

Happy to provide the math.

[troyvdh]

GO Sailor and Greek.In fact balance and his ilk are a perfect example why people defer investing in the SM.
Wealth is accumulated...over time.

[nztx]

GO Sailor and Greek.In fact balance and his ilk are a perfect example why people defer investing in the SM.
Wealth is accumulated...over time.


Is it ? how many other ways are there of accumulating a fair few more bags than tied up in a sector & in markets that have their own cyclical and bad patches with corrections ? ;)

This is one of the few sectors that hasn't landed a few punches king shots and knockbacks from the current increw .. if they come back - what are the chances ? or will the contingent in the glass towers overlook it, if it's still looking like it's fallen on harder times ? ;)

Let's face it - Govt are going to be clawing into every nook and cranny looking for readies for large scale repair work and infrastructure .. it has to come from somewhere, and a sector reporting unrealised gains through P&L, paying SFA in tax on the past expansion trail might just represent extremely inviting low hanging fruit for Govt Revenue harvesting .. ;)

[troyvdh]

So...you wont be voting for Labour then...And that the nats will do any better..,.As Liam heard ...'good luck".....and what happened.
I believe Winston Churchill..said it best.....fewer words are best.

[sb9]

Retail book build clearance price of only $5.25 compared to institutional clearance price of $6.00. Guess not much premium payout for eligible retail holders who didn't take up their entitlement. Always the case for ma and pa retail holders, few chips in the bowl.

[Bjauck]

Retail book build clearance price of only $5.25 compared to institutional clearance price of $6.00. Guess not much premium payout for eligible retail holders who didn't take up their entitlement. Always the case for ma and pa retail holders, few chips in the bowl. Ma and Pa investors are always an after-thought. In addition , The announcement said that the premium, less applicable withholding tax, will be paid out to those shareholders who did not participate. Does this mean that the premium is taxable for those shareholders?

[nztx]

So...you wont be voting for Labour then...And that the nats will do any better..,.As Liam heard ...'good luck".....and what happened.
I believe Winston Churchill..said it best.....fewer words are best.


Who shall we pin "Crash the Market" on this time ? ;)

[nztx]

5 Dollar 22 pennies (- 0.22) .. that's nice for the smart money who romped in earlier :)

[Mr Slothbear]

Ma and Pa investors are always an after-thought. In addition , The announcement said that the premium, less applicable withholding tax, will be paid out to those shareholders who did not participate. Does this mean that the premium is taxable for those shareholders?


come now gents save us the sob story.

as capital raises go, this has been a fair and open one.

if they wanted to, they couldÂ’ve sold their rights anytime or even taken part in the offer and sold an equal number of shares concurrently a couple of days ago for an over 10% instant profit.

edit; although I will add the disclosure regarding the loan and loan details was very poor and the comments given at november presentation by management were misleading at best.

[Balance]

Ma and Pa investors are always an after-thought. In addition , The announcement said that the premium, less applicable withholding tax, will be paid out to those shareholders who did not participate. Does this mean that the premium is taxable for those shareholders?

Withholding tax will only be applicable to the likes of Australian shareholders.

[Balance]

come now gents save us the sob story.

as capital raises go, this has been a fair and open one.

if they wanted to, they couldÂ’ve sold their rights anytime or even taken part in the offer and sold an equal number of shares concurrently a couple of days ago for an over 10% instant profit.

edit; although I will add the disclosure regarding the loan and loan details was very poor and the comments given at november presentation by management were misleading at best.

Really?

Institutions got their $5 placement stock on 24 Feb so had time to sell into the market while retail investors had to wait.

And how many ‘shortfall’ placement stock were really placed at $6.00? Anyone been able to decipher the announcement after the institutional placement?

Smoke and mirrors to entice retail investors.

Remember that the underwriters have $30m+ fees to play with.

In any case, the fact that there’s stock left by retail investors mean that any potential after market demand has been absorbed so where is the additional buying of Ryman going to come from post CR?

Not looking positive in the weeks ahead for sp to hold above $5.00?

[nztx]

How much was that US Loan Break Fee/ Penalty again - set to hit the next Reporting Period as a huge Financial Expense ?

Will that be dividend gone ? ;)

[BlackPeter]

...

Let's face it - Govt are going to be clawing into every nook and cranny looking for readies for large scale repair work and infrastructure .. it has to come from somewhere, and a sector reporting unrealised gains through P&L, paying SFA in tax on the past expansion trail might just represent extremely inviting low hanging fruit for Govt Revenue harvesting .. ;)

Not really on subject - but I take the bait.

Hard to imagine any government screwing up the retirement sector by taxing unrealised gains (and this is what they would need to do to get more tax out of them, but it would kill not just the retirement industry they need, but the NZ economy as a whole).

Much more likely for them to go along the following lines:
- Increase GST
- Increase Road User Charges
- Introduce a wealth tax.

I love the idea of a wealth tax and so does the majority of all New Zealanders according to a recent survey. You should clearly adjust your fear mongering to target some more likely targets ... and maybe on more appropriate threads ..

[clearasmud]

I don't love a wealth tax.
Tax should only be charged once imo.
A land tax would make more sense to collect large amounts of money and destroy the property boom bust cycle that's been inflicted on NZ the last hundred years.
Then income tax can be dropped to encourage effort.
But seriously government is at least twice the size it should be. So much waste.

[FTG]

Not really on subject - but I take the bait.

Hard to imagine any government screwing up the retirement sector by taxing unrealised gains (and this is what they would need to do to get more tax out of them, but it would kill not just the retirement industry they need, but the NZ economy as a whole).


I love the idea of a wealth tax

Yes, taxing unrealised gains (in this case, property val's) would quite possibly be destructive for RYM, the sector and the broader NZ economy.

For the glib & envious ones who desire a NZ government to introduce a wealth tax (on anyone else but themselves, of course!), be very careful what you wish for.

In actuality, an individual's or company's (e.g RYM) 'wealth' also includes any unrealised gains.


"Why?" you might ask. Because to accurately assess 'wealth", ALL the assets currently owned by the 'victim' would need to be put through a MTM (mark-to-market) lens. Hence capturing those unrealised gains (or losses).

Without doubt, a wealth tax would put RYM's FCF under further pressure.

If a government introduces a wealth tax here, first up, we would see a tremendous flight of capital (financial & human) - OUT of NZ Inc. The economic damage would likely be catastrophic. Not only to RYM (which let's remember is ultimately owned by SHAREHOLDERS - presumably you are or have been one?), but also the industry and broader economy.

So many 'unintended' negative consequences!

[Balance]

The answer is to cut and curtail wasteful and inefficient government spending which is not going to happen anytime soon in NZ.

So a capital gains tax or wealth tax is a certainty in the next term of a Labour government - be it 2023 or 2032.

And why should the RV industry be exempt from paying tax on realised gains from sale of property? Beggars belief when the government pumps many billions of dollars directly and indirectly to support the industry.

[Baa_Baa]

The answer is to cut and curtail wasteful and inefficient government spending which is not going to happen anytime soon in NZ.

So a capital gains tax or wealth tax is a certainty in the next term of a Labour government - be it 2023 or 2032.

And why should the RV industry be exempt from paying tax on realised gains from sale of property? Beggars belief when the government pumps many billions of dollars directly and indirectly to support the industry.

Do you mean paying tax on villages that they sell, i.e. literally sell the whole or part of a complex, or paying tax on the ORA profit when it closes, or something else, like tax on the DMF maybe, or tax on the unrealised capital gains of the portfolio?

[Balance]

Do you mean paying tax on villages that they sell, i.e. literally sell the whole or part of a complex, or paying tax on the ORA profit when it closes, or something else, like tax on the DMF maybe, or tax on the unrealised capital gains of the portfolio?

Tax should never be imposed on unrealised gains imo.

Should only be on realisation of gains (or losses).

[Balance]

Lee Kuan Yew of Singapore passed on a piece of excellent advice when he was last in NZ - social welfare must be about providing a safety net, not a lifestyle choice.

Where is NZ today? Think of solo mums having 6 kids from 6 fathers as their right and the answer is clear.

And that is why a wealth or capital gains tax is an inevitability in NZ - matter of when, not if.

The government has to find the $$$ to find that ever growing welfare lifestyle choice.

[Baa_Baa]

Tax should never be imposed on unrealised gains imo.

Should only be on realisation of gains (or losses).

So which of the realised gains are you referring to, that in your view should be taxed?

[Balance]

So which of the realised gains are you referring to, that in your view should be taxed?

For RVs, resale of units be it straight unit sale or Right of Occupancy.

And BTW, I think a capital gains tax in NZ is well overdue along with a total revamp of the tax system.

[Rawz]

For RVs, resale of units be it straight unit sale or Right of Occupancy.

And BTW, I think a capital gains tax in NZ is well overdue along with a total revamp of the tax system.

Agree with that

[Bjauck]

For RVs, resale of units be it straight unit sale or Right of Occupancy.

And BTW, I think a capital gains tax in NZ is well overdue along with a total revamp of the tax system.
I agree that there needs to be a comprehensive CGT. It should include both occupational right agreement resale net capital gain and net capital gain on owner occupied housing, commuted as a charge registered on the title of the owner’s current home, and payable on the sale of the owner’s final family home or ORA if they move into a village.

[Biscuit]

I agree that there needs to be a comprehensive CGT. It should include both occupational right agreement resale net capital gain and net capital gain on owner occupied housing, commuted as a charge registered on the title of the owner’s current home, and payable on the sale of the owner’s final family home or ORA if they move into a village.

CGT aka property theft. CGT might be acceptable if: interest (mortgage) expense is tax deductible; applies only to property bought with borrowed money; applies to all assets including owner-occupied homes; excludes inflation.

[nztx]

CGT aka property theft. CGT might be acceptable if: interest (mortgage) expense is tax deductible; applies only to property bought with borrowed money; applies to all assets including owner-occupied homes; excludes inflation.


Property value increases might be a result of certain Political policies too

I dont altogether agree with enriching Govt for the fruits of it's sometimes wayward and shortsighted political
direction - to further empower them with windfall tax gains to then squander in further inept directions, again
largely the symptoms of further incompetent policy direction or their own failures :)

Movement in property values is a measure of truer changes in values of assets - but until sold is unrealised

If Govt's choose to effectively devalue the local fiat out of their fancy money creation schemes, then why punish
those who have had the nous to sensibly apply their own resources into something that better maintains truer
measurement of real value over the time ? ;)


To those who advocate CGT, your Govt could tomorrow be looking over your fence thinking "We like what is yours"
and decide to inflict a tax to grab a large slab of your freehold without contributing anything to it .. :)

You would of course still be left wearing 100% of all the outgoings, with no contribution in on the
shared ownership plan.

Would that be something that you would enjoy experiencing ? :)

[Bjauck]

…
To those who advocate CGT, your Govt could tomorrow be looking over your fence thinking "We like what is yours"
and decide to inflict a tax to grab a large slab of your freehold without contributing anything to it .. :)
NZ Real Estate values are the result of government regulatory, fiscal and monetary policies. So their contribution currently is both magnificent and beneficent..

[Balance]

NZ Real Estate values are the result of government regulatory, fiscal and monetary policies. So their contribution currently is both magnificent and beneficent..

NZ is one of the very few OECD countries not to have a CGT.

[Bjauck]

CGT aka property theft. CGT might be acceptable if: interest (mortgage) expense is tax deductible; applies only to property bought with borrowed money; applies to all assets including owner-occupied homes; excludes inflation.
With that terminology, GST is theft and Income tax is theft too. Interest should be tax deductible, but of course with the family home your benefit of ownership (imputed rent) is currently exempt from income tax. That would need to become taxable.

Why should CGT have an inflation allowance when you are taxed on every bit of income earned just to pay for survival, let alone being given an inflation allowance?

[nztx]

NZ is one of the very few OECD countries not to have a CGT.


Better keep it that way ?

The way CGT and other Socialist spins usually play out is to shaft those on the bottom of the
feed chain pro rata harder than others :)

Millions of Kiwisaver holders held at ransom could pay dearly

What of Rest Home operators - ultimately another cost ?

Unit holders - Another cost ?

And anything else the CGT net purports to go after as well

If the last efforts by the Beehive twits on the earlier CGT stance is anything to go by
then the current Socialist Govt probably couldn't hold it together for long enough before getting
given the boot for trying it on again ;)

And what will a Govt that doesn't have the nous to even recognise Tax bracket creep on their doings
choose to squander the further hijacked gains on ? ;)

Probably nothing productive or useful .. look at what recent spotlight policies have produced :)

A few enriched consultants producing fancy reports for chewing things over and nothing further
after a bunch of politicians woke up to their future tenures being placed at risk if they stirred
the pot too fast .. :)

[Biscuit]

With that terminology, GST is theft and Income tax is theft too. Interest should be tax deductible, but of course with the family home your benefit of ownership (imputed rent) is currently exempt from income tax. That would need to become taxable.

Why should CGT have an inflation allowance when you are taxed on every bit of income earned just to pay for survival, let alone being given an inflation allowance?

Taxing your property is theft. Taxing imaginary gains on your property value is fraud.

[Balance]

Taxing your property is theft. Taxing imaginary gains on your property value is fraud.

Hence the operative words ‘realised gains’.

[Biscuit]

Hence the operative words ‘realised gains’.

Buy a house for a hundred thousand and sell it twenty years later for a million, it ain't the house that went up in value.

[Bjauck]

Better keep it that way ?

The way CGT and other Socialist spins usually play out is to shaft those on the bottom of the
feed chain pro rata harder than others :)…

Have you got any data to back-up your claims on the effect of a CGT?

Wealthier people usually have a greater proportion of their returns as capital gains rather than income. Some OECD countries with a wider tax base including a CGT, give income earners a tax-free threshold. Poorer and lower paid people tend to have smaller pension funds and are more reliant on current income.

[Balance]

In any case, the fact that there’s stock left by retail investors mean that any potential after market demand has been absorbed so where is the additional buying of Ryman going to come from post CR?

Not looking positive in the weeks ahead for sp to hold above $5.00?

Sp at $5.05.

So who is going to step up and go very overweight RYM?

[Baa_Baa]

Sp at $5.05.

So who is going to step up and go very overweight RYM?

Definitely not going overweight, but happy to take a position around here and/or more into the 4's. Ridiculously cheap (all the RV's are), it's not like a RYM is going bust or their market is going away. I'll let my chart help me decide how much and when to get my stash, tempting as it may be to go all in now, it may go lower under current circumstances. Who would've thought RYM at 5 bucks, maybe even less?

It's not all that easy to recalibrate from a decade+ bull market to a downtrodden bear market, that still has very solid companies trading at well below NTA (and other metrics). It takes balls and nous to unleash capital into a once in a decade (or more) opportunity. Timing helps a bit, but in the scheme of things, anytime in the doldrums is the right time in the longer term. Not wanting to split hairs, trying to pick the perfect time.

[alokdhir]

Definitely not going overweight, but happy to take a position around here and/or more into the 4's. Ridiculously cheap (all the RV's are), it's not like a RYM is going bust or their market is going away. I'll let my chart help me decide how much and when to get my stash, tempting as it may be to go all in now, it may go lower under current circumstances. Who would've thought RYM at 5 bucks, maybe even less?

It's not all that easy to recalibrate from a decade+ bull market to a downtrodden bear market, that still has very solid companies trading at well below NTA (and other metrics). It takes balls and nous to unleash capital into a once in a decade (or more) opportunity. Timing helps a bit, but in the scheme of things, anytime in the doldrums is the right time in the longer term. Not wanting to split hairs, trying to pick the perfect time.

Fully agree with your thoughts ...No one can perfectly pick the bottom ...but current prices are good enough to start the process of investing at great prices ...in few years it will reward handsomely ...." No time for FEAR " ....but be prepared for seeing prices languish for reasonable period ahead .

If current SVB scenario becomes ugly ...then stocks will become dearer sooner then thought at the moment ...

[Entrep]

Definitely not going overweight, but happy to take a position around here and/or more into the 4's. Ridiculously cheap (all the RV's are), it's not like a RYM is going bust or their market is going away. I'll let my chart help me decide how much and when to get my stash, tempting as it may be to go all in now, it may go lower under current circumstances. Who would've thought RYM at 5 bucks, maybe even less?

It's not all that easy to recalibrate from a decade+ bull market to a downtrodden bear market, that still has very solid companies trading at well below NTA (and other metrics). It takes balls and nous to unleash capital into a once in a decade (or more) opportunity. Timing helps a bit, but in the scheme of things, anytime in the doldrums is the right time in the longer term. Not wanting to split hairs, trying to pick the perfect time.

How does a chart help you time entry into a share breaching decade lows?

[Balance]

How does a chart help you time entry into a share breaching decade lows?

Never average down - golden rule for professionals.

[Snoopy]

Never average down - golden rule for professionals.


There are a couple of problems with that meme.

The first thing to recognise is that 'averaging down', can only be done while you are in a state of denial. Shares you have purchased at a higher price in the past are still worth what you paid, but new shares in the same company you buy today at a lower price are worth less - right? Of course not! All the shares you buy today are worth exactly the same market price as the shares you purchased earlier. Thus you can never "average down". That is an impossibility. You can only "average across" - pay the market price of a share as they trade on any particular day.

Next linking this piece of advice to 'the behaviour of professionals' is wrong. If that was what happened it would mean that all companies that go bankrupt would only have amateur shareholders on the share register. The professionals would never even enter the share register as the share price fell, and they would always sell down their existing positions as the share price sank. Obviously not true. In fact, because professionals tend to deal in larger numbers of shares it is more often than not their own behaviour that influences the share price direction. Not the other way around. I am sure that professionals would much prefer to sell out of their positions in a rising market. But because they hold substantial stock positions, they can't.

This behaviour is mirrored as the market rises. The reason why institutions must pay higher and higher prices if the want to accumulate a stake quickly is more often than not market liquidity. I am sure they would love to pay less for their shares ('average down' - sic). But market liquidity means that this is not possible.

Bringing this back to Ryman, I don't know what a good entry price would be. I know it is linked to the great 'kiwi property ponzi' game'. But that is a game I have always been too shy to play (to my great cost I guess, at least so far). So I will end this post with my own investment meme.

"If you don't know under what circumstances you would leave a particular investment table, then don't take a seat at the table in the first place!"

SNOOPY

[Rawz]

Each to his own and all that but I would be surprised if it goes much below $5.00 again

It may happen.. never say never

[bottomfeeder]

It may happen.. never say never

I see it going slightly below $5. Wholesale issue was at $5, retail at $5.20, underwriter at $5. Thats my understanding, I could be wrong. If that is correct the underwriter will unload for anything over $5 and when it gets closer to the end of the unload may get down to $4.90. Thats where my order will be sitting.

Interested to hear what everyone thinks.

[Frostwind]

Am I understanding this correctly? Underwriters paid $5 and retail paid $5.2?


I see it going slightly below $5. Wholesale issue was at $5, retail at $5.20, undrtwriter at $5. Thats my understanding, I could be wrong. If that is correct the underwriter will unload for anything ovet $5 and when its gets closer to the end of the unload may get down to $4.90. Thats where my order will be sitting.

Interested to hear what everyone thinks.

[bottomfeeder]

The Retail Bookbuild was well supported, clearing at a price of $5.25 per New
Share (Bookbuild Price), which represents a premium of $0.25 (Premium) above
the offer price of $5.00 per New Share.

Additional Shares applied for by eligible retail shareholders in the Retail
Entitlement Offer will be allocated in full to those shareholders at the
Bookbuild Price. Scaling has been applied to institutional and broker bids in
accordance with the terms set out in the Offer Document dated 15 February
2023.

From Ryman NEWS


Am I understanding this correctly? Underwriters paid $5 and retail paid $5.2?

OOps $5.25, presume underwriter got them at $5.00. Anyone have confirmation. Plus hefty underwriting fee.

CR at $5 taken from post on OCA as follows. Can anyone confirm this.



By BALANCE #14905

"I have stated before and will state again - I do not do shorting.

As for the CR, it is but my opinion and the 50c is an inevitability unless they get on with it.

And btw, CR at 50c does not mean the sp has to be at 50c - Ryman did it’s capital raise at $5 with its sp at $6.

And of course my opinion can and has been wrong in the past!"



My posts use the excellent money making features of "fuzzy logic" (Perhaps its just fuzzy thinking, I may be getting too old for this)

[Balance]

Am I understanding this correctly? Underwriters paid $5 and retail paid $5.2?

As all the shares not taken up were placed, underwriters did not have to take up any shares.

They get to pocket the $34m fees, thank you very much!

[limmy]

Dropped below $5 this morning. Those who took up the rights must be regretting their decision now ?

[BlackPeter]

Dropped below $5 this morning. Those who took up the rights must be regretting their decision now ?

Hardly. Anybody only buying at absolute bottom prices is either a liar or not buying at all.

Essential is whether RYM shares are in the long run good value at $5. I think they are.

[UkiwiS]

Never average down - golden rule for professionals.

Not very professional of me but I averaged down today. I added 1000 @ $4.93

[whatsup]

So where is the bottom for RYM, what a coc$ up imo. $4.93 atm !!!

[Lease]

So where is the bottom for RYM, what a coc$ up imo. $4.93 atm !!!

a $1M question: nobody knows. But one thing I'm pretty sure is: the more SP drop, the more value it is.

[Entrep]

If it's under $5 now, what happens when global markets (including us) crap themselves mid-year?

[Balance]

Really?

Institutions got their $5 placement stock on 24 Feb so had time to sell into the market while retail investors had to wait.

And how many ‘shortfall’ placement stock were really placed at $6.00? Anyone been able to decipher the announcement after the institutional placement?

Smoke and mirrors to entice retail investors.

Remember that the underwriters have $30m+ fees to play with.

In any case, the fact that there’s stock left by retail investors mean that any potential after market demand has been absorbed so where is the additional buying of Ryman going to come from post CR?

Not looking positive in the weeks ahead for sp to hold above $5.00?

Dropping below $5.00 so soon after the close of the CR is a bad sign.

Means underwriters have pocketed their $34m fees and are in the clear as far as shortfall stock is concerned - so no need on their part to support the sp.

Looks to me like that did a superb job of placing out the shortfall stock of 25m shares at $5.25.

Then, there were the $14m of over subscriptions by eligible retail shareholders:

Additional Shares applied for by eligible retail shareholders in the Retail Entitlement Offer will be allocated in full to those shareholders at the Bookbuild Price. Scaling has been applied to institutional and broker bids in accordance with the terms set out in the Offer Document dated 15 February 2023.

[tipsy]

If it's under $5 now, what happens when global markets (including us) crap themselves mid-year?

Things are gonna be bad until the next solar eclipse April 2024, when the fed flips once again to irrational exuberance.

[tipsy]

Gee, if you remove the little covid blip, we've been in a downtrend since the start of 2020, I thought it was generally a bad idea to buy into such a down trend?

[Balance]

Gee, if you remove the little covid blip, we've been in a downtrend since the start of 2020, I thought it was generally a bad idea to buy into such a down trend?

And looks like we now have those who took part in the CR cutting their losses and flipping out - Ryman sp seems to be now caught in a vicious down cycle?

[limmy]

Those who had just sold the rights RYMRA without taking on the CR are the lucky ones.

[Balance]

Those who had just sold the rights RYMRA without taking on the CR are the lucky ones.

They get 25c and get to buy cheaper!

Maybe they should load up now?

[whatsup]

They get 25c and get to buy cheaper!

Maybe they should load up now?

I think some sold at circa .70 !!

[Balance]

Hard to believe that this CR is costing Ryman over $165m!!!!

A measure of just how hard things are out there in the fund & debt raising game!

[limmy]

I think some sold at circa .70 !!
For those who sold at 0.70, if they buy back the stock at today's closing price, they're only paying $4.23.

[troyvdh]

This is becoming quite nasty...obviously.
Like how many participants are just trading ....with an investment horizon of a gnat....

[BlackPeter]

Hard to believe that this CR is costing Ryman over $165m!!!!

A measure of just how hard things are out there in the fund & debt raising game!

Doesn't the $ 165m include the penalties for early repayment of their US loan? I guess if one doesn't read (or understand) the fine print of the contracts one signs, than things are always hard ... not just these days.

[BlackPeter]

This is becoming quite nasty...obviously.
Like how many participants are just trading ....with an investment horizon of a gnat....

Agree. Hard to understand anybody can buy something on a special one day, and sell the same thing next day with a loss, just because it got a bit cheaper.

I guess whoever does this, they deserve what they get.

[bottomfeeder]

52 Week high of $10-50, now $4-90, and thats after the Capital raise. No further Cash Flow problems for a while now. I say onward and upward SP. Good value at the moment.

[nztx]

Hard to believe that this CR is costing Ryman over $165m!!!!

A measure of just how hard things are out there in the fund & debt raising game!


A direct Cash Cost - to come off next period's Result ?

Will that mean no dividend for the next period ?

[limmy]

It wasn't that long ago that RYM was one of the top companies in NZ, a market darling. So what happened ?

[Out to lunch]

Isnt this early repayment cost simply repaying the debt in USD at a weaker spot rate. Looking at reports it was initially swapped to NZD at like 0.72 and they're repaying at like 0.61, this kinda works out as the difference stated as early repayment costs. I dont think its a "fee"

[stoploss]

Isnt this early repayment cost simply repaying the debt in USD at a weaker spot rate. Looking at reports it was initially swapped to NZD at like 0.72 and they're repaying at like 0.61, this kinda works out as the difference stated as early repayment costs. I dont think its a "fee"
In any case it’s a fail for not hedging the exchange rate risk .
Just like SVB had an epic fail not hedging their interest rate risk .

[Frostwind]

Does anyone have any reliable data on their development pipelines and the cash cost required to achieve those?

[Out to lunch]

In any case it’s a fail for not hedging the exchange rate risk .
Just like SVB had an epic fail not hedging their interest rate risk .

well it was poor interest rate risk mgmt that led RYM to breach USPP ICR's and then force repayment (assuming this is indeed what happened)
I think they wouldve hedged the FX risk in doing the CCIRS, its just they have to repay like 10 years ahead of plan.

[winner69]

Does anyone have any reliable data on their development pipelines and the cash cost required to achieve those?

Pipeline in this ….$s anybody’s guess I’d say

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/402597/383713.pdf

[Frostwind]

Pipeline in this ….$s anybody’s guess I’d say

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/402597/383713.pdf

Thanks, I'll have a look.

I got a feeling rising construction cost is hitting them really hard, along with rising interest rate and declining market.

[Bjauck]

Ryman units are significantly cheaper in comparison to surrounding area median house prices in Melbourne compared to Auckland (43% cheaper in Melbourne; 18% cheaper in Auckland.) Why is that?

1. RV market is better supplied and more competitive in Melbourne?
2. RYM units are less desirable compared to the opposition offerings in Melbourne?
3. RYM units are significantly poorer quality and smaller compared with median houses in Melbourne?
4. Government regulatory framework differences?
5. Other reasons?

[winner69]

Signs of Ryman turnaround expected in FY24: Forbar

Ryman Healthcare has the potential to become one of the best “large cap equity stories” in New Zealand, according to Forsyth Barr analysts.

https://www.nbr.co.nz/investment/we-expect-signs-of-ryman-turnaround-in-fy24-forbarr/
Prob paywalled

Nothing really new but good for sector to get headlines like this

[Greekwatchdog]

For Bars brief report this morning..

We believe Ryman Healthcare (RYM) is changing its stripes more than the market is giving it credit for. The ~NZ$2bn of debt built up over the last five years was driven equally by (1) WIP build up, and (2) poor cash recycling. We expect a major turnaround on both accounts over the next two to three years. Our detailed analysis of the debt accumulation causes suggests that the announced pivot to less high density villages and less care should be enough to get back to 100% cash recycling. This process has already started; (1) RYM's land bank has a lower proportion of high density than at any stage over the last seven years, (2) 1H23 saw a higher proportion of capex allocated to investment property, and (3) as part of its capital raise trading update RYM highlighted, amongst other news, that units under contract but not settled had reduced by over NZ$100m since September 2022. This is starting to release cash tied up in finished units. Since RYM's capital raise, we have increased our estimates for cash generation and reduced our expectations for net debt. We reiterate our OUTPERFORM rating with an unchanged target price of NZ$7.85, implying >50% upside.
link


NZX Code
RYM


Share price
NZ$5.05


Target price
NZ$7.85


Risk rating
Medium


CESG rating
B-


Market cap
NZ$3,470m


Avg daily turnover
850.7k (NZ$6,446k)






link


Financials: Mar/
22A
23E
24E
25E


NPAT* (NZ$m)
254.9
285.8
312.3
326.6


EPS* (NZc)
51.0
55.5
45.5
47.5


EPS growth* (%)
13.6
8.9
-18.1
4.6


DPS (NZc)
22.4
8.8
13.6
16.6


Imputation (%)
0
0
0
0




*Based on normalised profits







link


Valuation (x)
22A
23E
24E
25E


PE
9.9
9.1
11.1
10.6


EV/EBIT
20.6
17.5
15.9
15.2


EV/EBITDA
18.3
15.5
14.0
13.3


Price / NTA
0.7
0.6
0.7
0.6


Cash div yld (%)
4.4
1.7
2.7
3.3


Gross div yld (%)
4.4
1.7
2.7
3.3











Headwinds turning to tailwinds as work in progress is likely to start declining
RYM has added ~NZ$2.5bn of net debt since FY16 and not had a single year of positive free cash flow since FY14. This compares to the NZ$500m it added its first 17 years as a listed company. Our analysis suggests that two related factors dominate the build up of net debt. First and foremost, an ever decreasing proportion of capex has been spent on Independent Living Units (ILUs) and Serviced Apartments (SAs) directly (we estimate only around half) for a total cash recycling of ~75%. The second and related reason is RYM's focus on high density villages with longer lead times and an associated build up of WIP; we estimate ~NZ$200m per annum over the last five years. This has been a long process but just five years ago RYM had ~2x annual cash sales in total WIP and receivables, today it has ~3x. Just getting back to the level from 2018 would turn a headwind of ~NZ$200m per annum to a tailwind of ~NZ$100m per annum over the coming years.

The holy grail of ~100% cash recycling of capex is achievable
Our analysis suggests that over the last five years RYM has only recovered ~75% of all capex on a forward looking basis. Even allowing for the eventual recovery of a proportion of the build up in work in progress, RYM was left with 25 dollars of core debt for every 100 dollars in capex. Closing this 25% gap is a tall order but our analysis suggests that RYM has set in motion the changes needed to achieve it. A combination of less high density, and therefore less allocations to common facilities (>10%), halving care (>10%) and better recovery of remaining care capex from RADs and care suites (<5%) will, on our estimates, be enough. It will take several years until we know if this turnaround has been successful. We believe RYM will be judged on its ability to control debt and expect to see the first signs of a meaningful slowdown in debt build up already at the FY23 result in May 2023.

[Paint it Black]

3.5% up today and 50% below it's DCF. Has to be a buy now doesn't it?

[whatsup]

$30,000,000 to investment bankers to get the C Raising across the line, , was RYM is such poor shape was this necessary, I think that it was the companies first C R and after its rapid fall from its high to its current $ 5 -00 s p is devistating for all s hers.

[Sideshow Bob]

Interesting....

https://www.livewiremarkets.com/wires/ryman-shareholders-pay-a-hefty-penalty?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+2 9+March+2023

[BlackPeter]

Interesting....

https://www.livewiremarkets.com/wires/ryman-shareholders-pay-a-hefty-penalty?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+2 9+March+2023

Well, yes - but to be honest I fail to understand how anybody can sell this as news.

It was clear from the original CR documentation that a significant share of the CR will be used to pay early repayment penalties to the US debtor. Clearly management and board have been sleeping at the wheel when they agreed to these loan conditions.

However - we all discussed this already mid February when the CR was announced (as well on this thread).

The livewire you are linking to seems to be a pretty sleepy magazine when they discovered significant issues like this only with a 7 week delay. Maybe somebody should wake them up - or better let them sleep and look for a source offering "fresher" news.

[winner69]

Interesting Ryman get an article in NBR .... tryingto justify the US borrowings

Still reckon the CFO has been moved sideways .... and probably will have departed by this time last year

If you can access a good read

Taking on USPP debt right thing to do: outgoing Ryman CFO
https://www.nbr.co.nz/investment/taking-on-uspp-debt-was-right-thing-to-do-outgoing-ryman-cfo/

Best bit is -

Bennett also confirmed he attended the Private Placements Industry Forum in Florida, which was where it lined up its USPPs.

"It's like any conference, you see a lot of the hotel room and various conference rooms."

Suppose seduced by the glita and glamour of a high finance 'forum'

[Habits]

Interesting....

https://www.livewiremarkets.com/wires/ryman-shareholders-pay-a-hefty-penalty?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+2 9+March+2023

What sort of terms are those that charge 17 percent early repayment fee in a rising interest rate environment.
Totally bonkers agreeing to it.

[snigmac]

The USPP debt was short sighted and the contract should have been negotiated better (at entry and exit) but it's easy to say this in hindsight. Hopefully we will see a recovery q3/4 and into 2024 for Ryman :)

[SailorRob]

The USPP debt was short sighted and the contract should have been negotiated better (at entry and exit) but it's easy to say this in hindsight. Hopefully we will see a recovery q3/4 and into 2024 for Ryman :)


No... It's not just easy to say this in hindsight. This was moronic with and without hindsight.

As winner said, this cretin was seduced by a cheap hotel room.

Do I need to check if he owned any stock bought with his own money?

[whatsup]

Holly Hel! out of $902,000,000 raised $855,800,000 went to repay the U S loans ter , do we call that a great business decission in the first place ?

[BlackPeter]

Holly Hel! out of $902,000,000 raised $855,800,000 went to repay the U S loans ter , do we call that a great business decission in the first place ?

Didn't we had this discussion before? Do us all a favour and go back 3 months in this thread and read it. No doubt you will get to enjoy all shades of this discussion. At that stage it was even fresh :) ;

[Filthy]

results due in 2 days. anyone want to take an educated guess at what they might look like?

[Bikeguy]

Don’t sell on this uplift guys, the fundamentals line up now the debt is reduced and on Friday you will see how well the financials stack up without that mountain of debt and having paused the pace of development a little, it’s going to be a pleasant read,
Not that I think the SP will move much on the result initially,

[mshierlaw]

results due in 2 days. anyone want to take an educated guess at what they might look like?

Why not take a stab ......

Revenue same
depth service cost down
Net profit up
Share price goes to $6.50

[winner69]

results due in 2 days. anyone want to take an educated guess at what they might look like?


Underlying Profit $281m ….last year $255m so profit up

Will mention ‘premium’ and ‘resilience’ many times ….so great narrative and share price will head to 7 bucks

[Sideshow Bob]

https://www.nzx.com/announcements/411681

Ryman audited full year underlying profit of $301.9m

Highlights

• Audited underlying profit of $301.9 million, up 18.4%, driven by strong resale margins and a growing contribution from the Australian business
• Audited reported (IFRS) profit of $257.8 million, down 62.8% due to lower revaluation gains of investment property and costs associated with the early USPP repayment
• Free cash outflow of $389.0 million, reflecting a period of significant investment
• Completion of $902.4 million equity raise in March 2023
• Net interest-bearing debt of $2.30 billion, down from $3.00 billion at September 2022
• Gearing of 33.1%, down from 45.3% at September 2022 and in line with medium-term target of 30-35%
• 1,519 booked sales of occupation rights remained steady (1,543 in FY22)
• Aged care occupancy improved to over 96% at March 2023 for mature villages
• No final dividend for FY23


Ryman Healthcare Limited (Ryman) has delivered a solid result while also undertaking a number of steps to reposition the business for future growth. This result was achieved against a backdrop of a challenging economic environment, severe weather events and the tail-end impacts from COVID.

Underlying profit of $301.9 million was up 18.4% (vs. guidance of $280-290 million), while reported (IFRS) profit decreased by 62.8% to $257.8 million.

Total assets of $12.51 billion at March 2023 have increased 14.1% from March 2022. Booked sales of occupation right agreements (ORAs) held steady, with growth in resales offsetting softer new sales. Total booked sales of occupation rights increased from $1.08 billion to $1.17 billion, driven by a 10.3% uplift in average price per unit.

Refocused development pipeline

Longer term the company remains positive about the age and wealth demographic and has taken steps to reposition the business to capitalise on this future demand.
Group CEO Richard Umbers said: “As we look to achieve positive free cash flow by FY25, as signaled in our strategy, we have reprioritised our development programme over FY24 and FY25. We are also taking steps to refocus our future pipeline on lower density villages with lower peak debt and an improved cashflow profile. And we are right-sizing our care offering in future villages, but remain committed to providing a continuum of care for all Ryman residents.”

At 19 May, there are 14 villages under construction, a reduction of two on the prior year. Progress has been made on a number of village main buildings that were delayed due to COVID.

Ryman invested $1.04 billion in portfolio development and finished the year with net operating cashflows of $650.8 million, resulting in a free cash outflow of $389.0 million.

During the year the company added Taupō to its landbank, sold its Mt Martha site in Victoria with settlement due later in 2023, and the Newtown site in Wellington is now being held for sale.

Significantly, Ryman achieved planning approvals on four sites in FY23, including Karori and Rolleston in New Zealand and Mulgrave and Mt Eliza in Victoria.
Enhancing resident experiences

Throughout the year Ryman has maintained the highest standards of care, and resident experience remains a key priority.

“We were very pleased to receive external endorsement for the quality of care we provide. 82% of our New Zealand villages have four-year certification. In Australia, all four of our operational care centres received a 4-star rating following the launch of a new rating system for aged care,” said Mr Umbers.

“Winning Readers Digest Most Trusted Brand nine times proves just how much older people and their families trust us to do right by them,” he added.

Technology is increasingly being employed to enhance our resident experience programme - for example, with the introduction of the new resident app, a platform to improve access to a wider range of activities and services within the villages. Similarly, hospitality platform Saffron is now being rolled out to all villages to enhance the food offering.

New sustainability strategy

The launch of the company’s sustainability strategy during the year was a major milestone in its journey to a sustainable future. In consultation with stakeholders, the company identified a number of key projects that will be undertaken in coming years. As a step towards addressing its environmental impact, Ryman secured an exclusive agreement with renewable energy developer Solar Bay. This will see power provided to its village operations via a new solar farm which is now under development in Maungaturoto, Northland.

Capital structure

“The company completed a $902.4 million equity raise in March 2023. Net debt has reduced to $2.30 billion, and we finished the year with a gearing ratio of 33.1%, in line with the company’s medium-term target of 30-35%,” said Mr Umbers.

Outlook

Underlying profit is expected to be in the range of $310-$330 million for FY24, in line with the statement provided at the time of the equity raise.
Ryman anticipates making an announcement on board renewal, including the appointment of a new Chair, in the near future. The board will consider the resumption of paying dividends in FY24, taking into account trading performance, cash flow and market conditions.

Looking ahead, Mr Umbers added: “The strength of the Ryman team gives me every confidence that we will deliver on our care promise, reposition the business to capitalise on future opportunities and improve financial performance. The team continues to impress with their dedication and commitment, and I wish to thank everyone for their efforts.”

Fourteen new villages currently under construction

New Zealand (9)
Lynfield, Auckland (Murray Halberg)
Devonport, Auckland (William Sanders)
Lincoln Rd, Auckland (Miriam Corban)
Havelock North, Hawkes Bay (James Wattie)
Hobsonville, Auckland (Keith Park)
Riccarton Park, Christchurch (Kevin Hickman)
Northwood, Christchurch
Takapuna, Auckland
Cambridge, Waikato
Australia (5)
Brandon Park, Melbourne (Nellie Melba)
Burwood East, Melbourne (John Flynn)
Ocean Grove, Victoria (Deborah Cheetham)
Highett, Melbourne (Bert Newton)
Ringwood East, Melbourne
Eleven sites in the land bank
New Zealand (6)
Kohimarama, Auckland
Park Terrace, Christchurch
Karori, Wellington
Karaka, Auckland
Rolleston, Canterbury
Taupō, Waikato
Australia (5)
Mt Eliza, Victoria
Essendon, Melbourne
Coburg North, Melbourne
Kealba, Melbourne
Mulgrave, Melbourne

[bull....]

dividend gone :scared: and no guarantee of div next yr :scared: just as thought cash flow is most important thing in this uncertain environment so kudo's for them cutting div

investment property gains gone as well not surprising

savage decline in new sales :scared: but saved by re-sales :t_up:

[winner69]

dividend gone :scared: and no guarantee of div next yr :scared: just as thought cash flow is most important thing in this uncertain environment so kudo's for them cutting div

investment property gains gone as well not surprising

savage decline in new sales :scared: but saved by re-sales :t_up:


….but look at those selling prices …both new and resales ……….huge increases

And margins pretty good as well

Great result

[JeffW]

dividend gone :scared: and no guarantee of div next yr :scared: just as thought cash flow is most important thing in this uncertain environment so kudo's for them cutting div

investment property gains gone as well not surprising

savage decline in new sales :scared: but saved by re-sales :t_up:

To be fair, they did say that there would be no dividend paid at the time of the capital raise a few months ago

[bull....]

….but look at those selling prices …both new and resales ……….huge increases

And margins pretty good as well

Great result

lol those squiggly lines on pg 18 cant keep going up forever ... resale margins were good old sales booked at low original sale prices eh

[X-men]

The market likes the result. Shame on u bull ...keep ramping the retirement stocks

[kiwikeith]

To be fair, they did say that there would be no dividend paid at the time of the capital raise a few months ago

It makes no sense to raise capital and then pay some of it back with dividends a short time later. The shareholder pays tax on the dividends so better to raise a little less capital and pay no dividend.

[Panda-NZ-]

The Ryman Recovery.

Should do a share repurchase with the surplus funds :p (before the SP increases too much ).

A two for the price of one discount for management and long term RYM shareholders.

[snigmac]

It makes no sense to raise capital and then pay some of it back with dividends a short time later. The shareholder pays tax on the dividends so better to raise a little less capital and pay no dividend.

Tell that to SkyTV. Alot of these companies don't think ahead becuase it's a really hard thing to do.

[Bikeguy]

It doesn’t matter what the media have to say in the short term the fundamental drivers of a business always play out in the long run, this sector is driven by supply and demand (in this case capital rich customer demand) and the reality is this demand will only continue to grow with aging populations.
Ryman Healthcare knows its model and it’s market very well.