RYM - Ryman Healthcare

[Lease]

Fair enough, though not sure, what the ratio interest bearing debt to equity would give me ...

Lets see -

If I buy a house for $1m and fund $800,000 through the bank (which is not too bad in NZ), than my equity would be $200k and my interest bearing loan $800k, i.e. the ratio would be 400%!

If I buy a house for $1m and fund only $500,000 through the bank (which would be amazing for most home buyers), than my equity would be $500k and my interest bearing loan $500k, i.e. the ratio would be still 100%!

What did you say Rymans ratio is? 83%? Does not sound too bad, doesn't it ...

You are right BP. I'm with you. That's the reason why I'm still buying RYM. But looks market doesn't think this way. RYM has been dropping after half-year results. The results are good with underling profit up 45%. The only issue with interim results is debts go up and market focus on it.

[winner69]

Realised Gains on sales $172m but Underlying NPAT only $139m - a difference of $33m. The 2nd half of F22 the difference was $13m

Usually you could rely on Underlying NPAT being Realised Gains PLUS $10m to $20m .... the PLUS is now a MINUS

And $33m isnot a piddly amount and higher than prior 6 month period

That $33m is not property related. I think it's the impact of all the all the issues they talk about - like increased day to day costs / ovt subsidies not covering costs / staff shortages etc etc. You could say that running villages and caring for people is really a loss making buisness at the moment ....with losses getting bigger and bigger and ating up a large chunk of profits from building and selling things.

I think the market has begun to realise this

[Curly]

$6.91.....sp getting the bash.

[ronaldson]

RYM down over 7% just today! Under $7 now ($6.91) at market close. You are right that this sector is out of favour, and under (extreme) pressure.

[troyvdh]

....when there is blood on the streets...

....look at the 5 year chart.

....after say 5 years...what price can we expect.

[Charlie]

Gee Winner if this is the market beginning to realize this .... when will it end ?
A lot of hurting pockets just now.

[Balance]

Gee Winner if this is the market beginning to realize this .... when will it end ?
A lot of hurting pockets just now.

It will end when the banks require Ryman to do a major capital raising to pay down debt?

[ronaldson]

When considering a capital raise it is interesting to look at the number of shares on issue and the last reported NTA per share of each of the sector's listed players now that MET has been taken private.

ARV has 723m with NTA $1.84, OCA 715m with NTA $1.32, RYM 500m with NTA $7.13, RAD 284m with NTA $0.17 and SUM 232m with NTA $8.91. I admit the current NTA can be dodgy with the reporting season in swing, so some are dated or don't take account of intervening transactions, but you get the idea.

RYM certainly have room to increase the shares on issue and should be able to do so without significant reduction in NTA if the proceeds are applied to pay down debt. Whether the banks should or could insist upon this may be a moot point but rising interest rates are painful all around. A capital raise would obviously have been optimum when the share price was (much) higher so perhaps the boat has been missed Balance?

[JohnnyTheHorse]

Really interesting selling going on here. It's institutional sized panic selling. Big boys want out and very quickly.

SUM has kept relatively stronger throughout this. I'm watching for it to start getting savaged too.

[nztx]

It will end when the banks require Ryman to do a major capital raising to pay down debt?

A reverse dividend .. except that the Taxman will not be doing any DWT top ups

The fact that little or no Imputation credits are distributed throughout the sector points
to distribution of revaluation gains / internal asset adjustments.

When risk of the scenario changing and write downs started happening is the very reason I have
been out of this sector for some time.

It's all too easy to stack the cards in good times but when times change to the opposite, first to
go is meagre dividends in the sector and then as things cycle lower pressure comes on the balance
sheet and harder for those well leveraged companies in the sector.

Last reporting season saw hints of this coming into the sector, and the likes of Arvida have seen
significant reduction since high $1.90's Cap raise to today's $1.20 SP

In current prevailing economic times, with fall in RRE, higher interest rates, inflation etc,
IMO the whole Rest Home sector is still over priced and could come back further.

Do any of the sector report honest trading Rest Home operation results without padding up revaluations
included ?

Cashflow reports will be a fairly significant tool in ascertaining which of the companies are near break even
trading, those above it and more secure