RYM - Ryman Healthcare

[Placebo]

No worries PT, I think it is safe to return to my former ways (whatever those were .

Just come back from a day trip to Hawke's Bay, lovely big Sommerfields rest home going up with its own hospital to boot. Yes resthomes are the way of the future and RYM is poised to continue as a market leader

Not mumbling but shouting
Placebo

[TheBossMan]

NPAT of $35million and 49% increase from last year!!

http://www.nzherald.co.nz/section/st...ectID=10383134

[Snow Leopard]

and don't the crowd just love it? up 4% to $7.65.
After the half year surely this result is not a surprise?

Anyway what is now important is what does the next few years hold?

[Placebo]

Well, in short; more buildings, more oldies, more earnings. Predictions of a slowdown in profit growth in 07 then a return to higher growth in 08. This is a company with a history of overperforming its forecasts, so you could regard these as conservative.

Happy to disclose that I am in love with Ryman. Imagine this scenario: You own a slice of land, and build a house on it. A person comes along and offers to buy the house off you, but agrees that you keep ownership of the land (and bank any capital gain on it). They also agree to pay you a fee for living on the land in the house they own. AND they sign up to an agreement to sell the house back to you at an agreed rate, which will probably be considerably below the capital gain (and the price at which you will onsell it to a new owner).

That is Ryman's business model. This company is going gangbusters, no debt, a busy building programme, organic growth and constant revenue streams from existing assets. 49% growth in profit -- go you good thing

One cloud on the horizon; there are a number of large scale retirement village and resthome operators, all building away like mad. There must come a point when the market reaches saturation. Then you have to think beyond organic growth to maintain your growth trajectory.

Come year-end I'd like to see the figures for unit turnover; this is crucial to their revenue stream long-term.

[TheBossMan]

sure, there'll be further consolidation in the industry in the next few years. (currently seen in australia). But, growth? years 2010-2015 would see thousands of kiwis going out of their family homes, and not to mention the professionals returning from overseas.

I wont be surprised if Ryman gets taken over for $11 per share or so within the next year or so. In the interim, I'm happy to see the SP inching towards my valuation of $8.

[Placebo]

The Boss may not agree but with a strong run up since its result RYM must now be getting to the point where it's fully valued.

Glad I got on board this one already

[TheBossMan]

well, well..there's always a start and I agree that it is close to being fully valued. However, my estimates were very conservative and I suggested $8.25, from memory. I havent analysed the latest results to see their profitability levels, but this one has still some way to go, methinks. See the continued optimism of 15% annual growth.

[Snow Leopard]

I think it is overvalued. $7.24 would be the right value at the moment heading towards $8.00 at the end of the year.
But I have no intention of selling a single share. Long term the trend is UP.

[Placebo]

Forsooth Bore says:

quote:Ryman Healthcare ACCUMULATE
Report: FY06 Result Review John Cairns
#56256;#56510; RYM reported an impressive FY06 operating profit (EBITDA) of
$38.2m, a 39.9% increase on FY05 and broadly in line with our
expectations.
#56256;#56510; We have upgraded our FY07 and FY08 operating profit forecasts by
5.5% and 5.9% to $47.2m and $53.3m respectively due largely to
increases in our underlying average Resales assumptions.
#56256;#56510; We have adopted RYM's longer-term New Sales target of 300 units
pa increasing our valuation to $7.56. Due to the small valuation
gap, we have reduced our recommendation from BUY to
ACCUMULATE.

So good news all round, and the recommendation is downgraded (because of the closing of the valuation gap). Make sense?

[Snow Leopard]

RYM needs sellers now:
Price stuck at a mere $8.05, how high can it go?

Disc: Still not selling [8D]