RYM - Ryman Healthcare

[percy]

JT.I think we can understand from this article why development margins, and re-sales are so important to the likes of RYM,as there is little or no profit in care.

[janner]

Fantastic..
Well done.
Trust the next 13 years are as good for you.!

It is all about faith ... Aye perc

Just like your beloved HBL... Still have six figures of HBL that are FREE..

The best word in the English language.. :-))

[percy]

It is all about faith ... Aye perc

Just like your beloved HBL... Still have six figures of HBL that are FREE..

The best word in the English language.. :-))

Certainly is....lol.

[dobby41]

JT.I think we can understand from this article why development margins, and re-sales are so important to the likes of RYM,as there is little or no profit in care.

Does that mean they should really be in the listed property sector rather than rest homes where they are?

[macduffy]

Does that mean they should really be in the listed property sector rather than rest homes where they are?

Not really. The care bit is an essential part of the business that makes the property side profitable.

[Joshuatree]

It is all about faith ... Aye perc

Just like your beloved HBL... Still have six figures of HBL that are FREE..

The best word in the English language.. :-))

FREE CARRIED even better .Got more nous too it i.e. no free lunch stigma. ps not free carried (i don't hold anymore) directly; but indirectly Ive a share in RYM ;a few baggers up but not free carried as we didn't sell any at all to free carry, which maybe we should have as RYM has spent two years doing nothing but is starting to make up for it now. Am now thinking a bout whats for lunch; may heat up leftovers from last nights dinner; does that make it a free lunch?

[macduffy]

The Aussie retirement sector stocks have taken a hit since the Aust Budget but Morgans have upped their rating on Estia today from Hold to Add on the presumption that they will be able to increase fees to compensate for reduced govt funding.

FWIW, bearing in mind RYM's Aussie exposure and growth plans.

[macduffy]

More glum predictions on the Aussie retirement sector. From FN Arena:

"Two events last week showed investors risk is very much omnipresent in today's share market, even though it doesn't exactly look like it when money from the sidelines is flowing back in.

First we saw a sudden and sharp sell-off in aged care stocks after Ben Griffith from fund manager Eley Griffiths announced he'd had sold out of the sector in anticipation of tougher times ahead. Then Bank of America-Merrill Lynch issued a report that essentially declared the sector is about to turn ex-growth on the back of the Federal government changing co-payment rules, stating the rest of the market has been caught napping.
More Government, More Risk

In case you missed it, or aged care is not really your thing, analysts at BA-ML have declared Estia Health ((EHE)), Japara Healthcare ((JHC)) and Regis Healthcare ((REG)) "ex-growth" for the next three years as the Federal government looks to rein in spending, which means less subsidies and a more stringent approach to what services should apply and who should be eligible.

For a sector that is on a rough estimate 70% subsidised and operating on cost levels well above many unlisted peers, such change of heart can be nothing but devastating. Share prices had already been de-rated from the moment this government started flagging its intentions, after a substantial re-rating in 2015 when Eley Griffith too was on board, but nobody was prepared for the content and predictions made in the BA-ML report.

Not everybody agrees with BA-ML's dour assessment. CLSA analysts essentially called it BS on Friday and analysts at UBS and Morgans seem to agree with CLSA rather than with BA-ML.
Nobody is contesting the fact more government savings will impact on the industry's profitability, but there are offsets through higher service fees and an increase in accommodation charges. Also, analysts point out the sector is seeking independent appraisal of proposed changes and the expectation is that if the overall impact turns out too much, there will be negotiations between the government and the sector.

After all, both share a common interest in that these services need to be provided, and the sector needs to expand in the decade ahead, and both see the importance of a profitable and motivated set of operators.

The bottom line from all of the above is not whether CLSA is right, or BA-ML, or none of the calculations published to date, but that in a world wherein most governments are facing budget deficits, sluggish growth, older populations and a plethora of other challenges, the risk for a negative impact through changes in rules or government spending is increasing exponentially."


Not a big part of RYM's business - yet.

I hold.

[Beagle]

Speaking of risk, what did I catch the last bit of on the radio the other day ? Something about a significant increase in stamp duty to be imposed on foreigners buying real estate in South Australia ? Most states seem to be either imposing substantial increases in stamp duty or thinking about it as a major tool to suppress house prices and make them affordable for Australians. We saw what happened to the SP when house prices tanked a little during the GFC so is this a possible new headwind for expansion plans in Australia, lower house price growth translating into more skinny development margins going forward ?

Disc - This is just an idea, not pretending to know if this stamp duty push-back on foreign buyers thing is the villain for the SP correction or not or whether its just the general market correction being the reason.

[couta1]

No mate, just general market correction as has happened with Sum plus it was always going to come back to sub $9 at some point after its big run up from $8 to $9.80 in a short space of time.