RYM - Ryman Healthcare

[winner69]

Bought that Newtown site for $7m off Countdown who had brought a few years earlier.to stop opposition buying it and setting up in competition. Was the old Tip Top bread factory.

Rymans demolished the derelict building last year after it had sat there slowing rotting away and told Council at time no plans to build a multi story building.

Locals always thought a great spot for oldies to live …next door to a supermarket and the hospital and with a funeral place 100 yards up the road waiting for them

[bull....]

Ryman Healthcare is selling or pausing work on five sites

https://www.nzherald.co.nz/business/...GMW4JQIE4CLPU/

[Greekwatchdog]

For bars Review..

OUTPERFORM


Ryman Healthcare (RYM) reported a strong 1H24 result and delivered on all key markers on its path to re-establishing itself as a cash generative, sustainably growing business after three difficult years. Specifically: (1) cash generation from existing operations swung from a negative in 1H23 to +NZ$50m in 1H24; (2) care EBITDA margins are on track to double from ~6% in FY23 to ~12% in FY24, re-tracing almost half of the drop since pre-COVID (~19% in FY20); and (3) RYM reiterated its target to be free cash flow positive in FY25 and onward. It gave substantial additional disclosure to support the credibility of that target. None of the four major listed aged care operators have delivered a single year of positive free cash flow over the last decade. We increase our target price and earnings estimates, and reduce our net debt estimates. Retain OUTPERFORM with an increased target price of NZ$8.60.

What's changed?
Earnings: Annuity EBITDA increased +3%/+6%/+13% due to increased care fees offsetting higher costs
Target price: Increased to NZ$8.60 (from NZ$8.00) due to increased annuity EBITDA and lower net debt estimates.
Focus on cash finally arrives to the aged care sector — new disclosure points to a meaningfully more favourable cash recovery
It took a pandemic, a meaningful housing market downturn, and interest rates rising faster than ever before for the aged care sector in general (and RYM in particular) to switch focus to cash flow. RYM now acknowledges the importance and separately discloses: (1) cash flow from existing operations, with a focus on growing this; (2) cash flow from development, with a focus on fully recovering development capex (including capitalised interest and land acquisitions) from new sales.


RYM currently has 14 villages under construction, the vast majority (likely all) commenced before the current enhanced cash focus came into play. RYM provided new disclosure implying that these 14 villages will recover a cumulative ~90% of development capex, this is above our estimates of ~75%. RYM also stated that these 14 villages will provide a net positive development cash flow of >+NZ$1bn from September 2023 onwards, indicating ~NZ$1.5bn of WIP in these villages, NZ$300m above our estimates. In combination, the new disclosure suggests a more favourable medium-term outlook for cash flow from developments than we had forecast, some of which we have incorporated in our revised forecasts.


What a difference a year makes
A lot has changed for RYM over the past 12 months: (1) due to its capital raise its gearing has fallen from the highest gearing in the sector to the sector's lowest at ~33.5%; (2) it had the worst cash collection of new sales (~66% versus ~90% for its peers) a year ago, it now has the highest; (3) cash conversions of annuity earnings has increased to a clear sector leading position; and (4) after four year years of flat annuity EBITDA, RYM has delivered its second year of solid growth, +14% ​​​​​​​YoY on a 12 month rolling basis.

Forecast changes
We increase our annuity EBITDA estimates over the forecast horizon due to higher care fees more than offsetting increased costs, our DMF and resale estimates are little changed. We reduce our new sales estimates, reflecting both a reduced build rate over the medium term and the cautious tone of management on the current property market. We reduce our interest costs in the income statement materially; however, total interest costs (including capitalised interest) are down only -0%/-6%/-11% over FY24/FY25/FY26 as RYM continues to capitalise >70% of its interest, above prior expectations. RYM indicated it will suspend dividend payments for FY24/FY25 and review its policy again in FY26. We reduce our net debt estimates over the medium term and now forecast a slight falling of net debt from FY24, with the lack of dividends no longer offsetting improved positive free cash flow.

[Jenny Ruth]

Hi. My latest column published this morning on my Substack, Just the Business, looks at how Jarden's Arie Dekker is at last seeing fruits of his campaign to persuade the listed retirement village operators to improve their disclosure. Under the headline: Aiming for transparency from listed retirement village operators, it concludes with a piece of Charlie Munger's wisdom. You can read it here: https://justthebusinessjennyruth.sub...cy-from-listed

[snigmac]

Hi. My latest column published this morning on my Substack, Just the Business, looks at how Jarden's Arie Dekker is at last seeing fruits of his campaign to persuade the listed retirement village operators to improve their disclosure. Under the headline: Aiming for transparency from listed retirement village operators, it concludes with a piece of Charlie Munger's wisdom. You can read it here: https://justthebusinessjennyruth.sub...cy-from-listed

Thanks for sharing Jenny. That was a good read. Love the quote on EBITA from Charlie Munger.

[winner69]

Jeez, Ryman profit going to be lower than guidance

Sales not as strong as expected and margins down


http://nzx-prod-s7fsd7f98s.s3-websit...366/412766.pdf

[Bjauck]

Just a temporary slow down? House sales volumes have been lower than the previous year for some time I think. That must have an effect on the number of ORAs purchased. The housing ponzi scheme is too important to fail. Luxon will defend it I am sure.

[Snoopy]

Jeez, Ryman profit going to be lower than guidance

Sales not as strong as expected and margins down


http://nzx-prod-s7fsd7f98s.s3-websit...366/412766.pdf

Yep, the NZME media triumvirate have been doing a good job for their shareholders. People like reading about their house values recovering (Herald). People like hearing about their house values recovering (Hosking). People like repeatedly looking up the internet waiting for confirmation that their house prices have gone up (Oneroof). But in the end it all became exposed as a co-ordinated media beat up. All those oldies looking for that 'pristine price' on their private house market before they move to their premium Ryman accommodation now find they have a hole in their pockets they did not know was there. No surprise.

SNOOPY

[bull....]

wow big shock not. sales and margins being compressed which is normal for property development company this part of the cycle

conserve the cash

[Rawz]

Shesh. Not good. Bad news. Dont buy.

Buy tower.