RYM - Ryman Healthcare

[James108]

Some interesting comments comparing DMF for the three big retirement villages. From Morningstar’s latest recommendation on 23/11/17.
Boring old Ryman continuing with its same old boring predictable conservative long term strategy, which is very successful but not exciting. Boring is good.

“Market conditions are so favourable Ryman could raise its prices, but the board and management appear to be playing a longer game, focusing on service over profits, which provides increased comfort in the long-term earnings trajectory. Ryman’s conservative pricing is illustrated with the deferred management fee, or DMF, of 20% of the unit's entry price. For individual living units and serviced apartments, the DMF to Ryman accrues over five and three years, respectively. Major competitors Summerset and Metlifecare charge higher DMFs of 25% and 30%, respectively and the DMFs accrue at a faster rate for both.”

They have different pricing structures. From memory ryman make a profit from their day to day operations, whereas summerset do not. If I was retired I think I would prefer to pay more when I move out rather than weekly.

[couta1]

They have different pricing structures. From memory ryman make a profit from their day to day operations, whereas summerset do not. If I was retired I think I would prefer to pay more when I move out rather than weekly.

What do you mean by Ryman make a profit from their day to day operations and Sum don't? They both make profit from their day to day operations otherwise they wouldn't be in business. If your talking about the day to day care centre operations then yes Ryman have bigger care centres but that doesn't mean their profit is bigger on a percentage basis, remember the industry is underfunded by the Govt. The difference in the DMF between the two is that Sum have a far more agressive pricing structure, charging a good dollop straight up and over the following two years.

[moka]

They have different pricing structures. From memory ryman make a profit from their day to day operations, whereas summerset do not. If I was retired I think I would prefer to pay more when I move out rather than weekly.

You could be paying more when you move out AND paying more weekly. It depends on the agreement. How much it costs you in ongoing weekly costs and in one off costs varies a lot between villages, and the villages make it complex to understand and compare.
The retirement villages write the contract so it is not a level playing field which is why there is a legal requirement to have legal advice before you sign the agreement so you go in with eyes wide open - knowing how much it will cost you.

The DMF is about the lump sum you get at the end.There can also be other costs taken out at the end such as refurbishing, legal fees. It depends on the agreement. You also pay weekly fees. The costs are different depending on whether you are in an independent living unit or in a serviced/rest home care unit.

Looking only at the DMF if you pay $500,000 for your unit at the retirement village (an independent living unit not a serviced unit) with Ryman after five years you get back only $400,000 i.e. lose 20% = $100,000
With SUM you would lose at least 25% - $125,000
With MET you would lose at least 30% - $150,000
Because the DMFs accrue at a faster rate for SUM and MET you could lose 25% or 30% within say three or four years rather than five years (not sure of the exact figures.)

I have seen an agreement for a serviced unit/rest home care where 30% came into effect immediately. So if the resident died a few days after purchasing the unit the estate would only get 70% back. It is a lot of money but for many people it is a price worth paying for peace of mind and security.

[Joshuatree]

How would you feel as a shareholder if you knew that some residents(or your parent) in care are only allocated two adult nappies a day to save costs. Im not naming names here,but have heard in some care facilities only two are allocated and three in another depending on which outfit is the manager/owner.And we have hot summer days atm if you get my whiff.All about profit i guess.

[moka]

How would you feel as a shareholder if you knew that some residents(or your parent) in care are only allocated two adult nappies a day to save costs. Im not naming names here,but have heard in some care facilities only two are allocated and three in another depending on which outfit is the manager/owner.And we have hot summer days atm if you get my whiff.All about profit i guess.

Rest homes run on the smell of an oily rag if you get my whiff. They are underfunded by the government and do an amazing job to provide the service they do to the residents and still survive and make a profit.
And some aren’t surviving. Some of the smaller ones that don’t earn extra income from premium room charges like the big retirement villages have or will be closing. Incontinence products are a huge source of complaint. Rest homes may provide ones that are inadequate or uncomfortable and if you want something better you buy your own.

I had a friend in dementia care. When he got to the stage he couldn’t feed himself the staff did not have the time to feed him properly. There was just not enough staff to allow them to spend 5 - 10 minutes with each resident who needed help with feeding. Generally the staff do their best.

Who is going to pay for better care? The government/taxpayer doesn’t want to pay more and neither does the resident. People complain about the cost of rest home care. In Auckland City you pay $152 per day for rest home care. But you can’t get accommodation in a hotel with three meals in Auckland for $152 day. And then there is the cost of providing the personal care with showering or dressing and the health-related costs.

https://www.consumer.org.nz/articles/rest-homes
“Rest homes are expected to have sufficient staff to meet residents’ needs. However, minimum staff-to-resident ratios set in funding contracts between district health boards and rest homes remain low. A home with 50 residents is only required to have 2 caregivers on duty.”

[couta1]

Ryman buys Karori Campus site to convert into retirement village, their 7th Wellington site to date, they have certainly taken the Wellington area by storm, basically shutting out all opposition.

[Beagle]

Ryman buys Karori Campus site to convert into retirement village, their 7th Wellington site to date, they have certainly taken the Wellington area by storm, basically shutting out all opposition.

Have to concede that RYM have been mowing SUM others lawn in Wellington lately. This probably explains why the the 2:1 price ratio is so logical doesn't it mate

[whatsup]

Can someone please update and help with this gos, last night I was told by a senior citizen who should know that the RYM care facility of Ed Hillary in Ellerslie Auck was built on top of an old rubbish tip /land fill/ contoured land , has parts of the complex marked off and out of bounds as that part of the complex is sinking.

Is this true, if so shouldn't there be some sort of update to the NZX ?

[Beagle]

Lovely facility that one, visited it myself quite a few years ago and was looking at putting my Dad in there. Got a nice big bolt through the side of my tire for my trouble, probably from the old rubbish tip...RYM priced like the Rolls Royce of the retirement sector it is but what you say can't be true because Rolls Royce assure us their engines are impeccably manufactured and nothing ever goes wrong with them Simon Challis the legend that he is retiring, won't have any effect on the company going forward either...where's my Tui beer...

[dabsman]

Boom... $11 tomorrow?