RYM - Ryman Healthcare

[couta1]

Some ASX aged care providers have been hit with incorrectly classifying some of the people in their care (to max the govt subsidy )
I'm wondering if RYM has been tarred with same brush ? Such that anyone operating in retirement sector in Au-land is now out of favour ?

Disc: Was a buyer today

Some Aussie aged care providers have been on the pigs back for quite a while now even bragging about their profits, now they have been caught with their pants down. Any rub off effect on Ryman will be short lived once the offenders get their wings clipped and funding trimmed. It's a different story in NZ as apart from the industry being under funded by the Govt,classifications are only done via the DHB's and not the providers themselves thus ruling out the possibility of the Aussie situation occurring here. Disc-Was also a buyer today.

[Baa_Baa]

RYM are an "Aussie aged care provider" with ambition to expand. Shareholders might hope that their business case for expansion into Australia was not founded on the government subsidies that have been clipped severely. It is immaterial at present, whether the Aus model influences the NZ funding model. More relevant is whether the RYM case for expansion in Australia is now flawed.

[percy]

Ryman model is based on development and resales of units,where the greatest profits are to be made.
Sale of occupancy rights gives them the cash to develop their next village.
In time resales of right to occupy units provides on going profits.
Care providing makes a very small % of Ryman's business and profits.
The way sales of Ryman's units in Australia are going, their expansion there will be rapid.

[couta1]

Ryman model is based on development and resales of units,where the greatest profits are to be made.
Sale of occupancy rights gives them the cash to develop their next village.
In time resales of right to occupy units provides on going profits.
Care providing makes a very small % of Ryman's business and profits.
The way sales of Ryman's units in Australia are going, their expansion there will be rapid.

Yes Percy, under or over funded care centre models won't hinder the Ryman expansion.Resource consent declines are one of the only things that could.

[percy]

Yes Percy, under or over funded care centre models won't hinder the Ryman expansion.Resource consent declines are one of the only things that could.

Well I think you know the situation better than me,but I think should the retirement village developers start having resource consent issues, governments will become involved,because with the huge tailwinds of ageing populations,if private enterprise does not build the villages, governments are faced with the problem of providing units for the aged.Governments will not be able to cope.They know this. My understanding of the issue is there is going to be a huge short fall,as it is. And that is with the likes of RYM and SUM going gangbusters with their developments.

[couta1]

Yes Percy, under or over funded care centre models won't hinder the Ryman expansion.Resource consent declines are one of the only things that could.

Percy I don't see any significant problems in this area going forward other than the odd blip, excepting the likes of Sum's Boulcott site. I was using an extreme problem to highlight what it would take to derail progress going forward in comparison to the care centre funding model.

[troyvdh]

Obviously not many folk here listen to RNZ...just saying

[QOH]

Obviously not many folk here listen to RNZ...just saying

I was listening.
http://www.radionz.co.nz/national/pr...bal-investment

[couta1]

Obviously not many folk here listen to RNZ...just saying

Yes but how does the possibility of the share market being 30% overvalued determine whether Ryman are successful or not in their expansion plans, just saying.

[Beagle]

I was listening.
http://www.radionz.co.nz/national/pr...bal-investment

Thanks for sharing and well worth listening too. I think his comments about the NZX being up to 30% overvalued in historical terms compared to 50 year average have to be viewed in the context of interest rates being the lowest they've ever been.

With subdued worldwide growth one of my central thesis going forward is that we'll have ultra low interest rates for many many years as there's simply no other way to stimulate growth and no other way for heavily indebted nations to recover from the effects of various excesses including excess debt.

There are of course many high quality companies paying a higher gross dividend yield than 6% and finding those with sustainable growth and holding them makes the most sense to me.

That said holding some cash like he is and patiently waiting for opportunities to present themselves, (while avoiding car and boat dealers who might tempt one), and avoiding any form of leverage makes sense to me too.