Craig's latest views say
Ryman Healthcare is a core holding in the New Zealand market, meeting much of the criteria we look for in a company. It has a high-quality portfolio of assets and is the market leader in the retirement living and aged care sector across Australasia. Its portfolio is diversified across New Zealand and Victoria, and all villages are in well-established areas where people have lived and worked, and wish to retire.
• There are limitations to using some traditional valuation metrics, although on all these Ryman Healthcare is trading at a discount to its long-term averages. While rising interest rates and a soft housing market are impacting sentiment, we don't believe the current share price fails accounts for the needs-based nature of the services it provides, or the discount at which units and apartments are priced relative to the median house price.
Craig's must be wrong I guess.
Latest results out..... I guess holders be happy? ( I don't hold.) Pressure now on OCA to measure up.
https://www.nzx.com/announcements/402597
• Unaudited underlying profit of $138.8 million, up 44.8% on the same period last year, driven by strong resale margins
• Unaudited reported (IFRS) profit decreased 31.1% to $194.0 million due to lower unrealised revaluation gains of investment property
• Interim dividend of 8.8 cents per share (unchanged from last year), representing 31.7% of underlying profit, and eligible for the dividend reinvestment plan
• Total assets of $12.03 billion, up 9.7% from $10.97 billion as at 31 March 2022
• Cash receipts from residents of $714.7 million, up 5.0% on the first half last year
• Booked sales of occupation rights up 9.8% driven by strong growth in Australia
• Resales stock remains low at 1.7% despite softening housing market conditions
• Resilient aged care occupancy of 94% for our mature villages, notwithstanding the re-emergence of COVID through the winter months
At first glance not a total train smash, but the market may know better. Price down a bit this morning.
Market seems concerned by the cash flow which wasn't that good and the company talking about headwinds and the slowdown in the property market slowing their ability to sell units. On the face of it a solid result but as mentioned many times already, when the tide goes out all boats go lower.
Highest level of debt in this sector.
Ryman have never raised any new capital since they listed (last century)
the DRP may be the first sign that the Ponzi scheme the sector is is about to unravel
Ouch, I'm not liking on this sector at all with the tide going out so fast but "Ponzi scheme" maybe a little bit harsh mate.
They recently lowered their dividend guidance from their traditional 50% of underlying profit to 30-50%. This was surprising considering they're a mature company with a history going back more than 25 years. Interestingly not only did they introduce the DRIP for the first time ever, the payout ratio is right at the very bottom of the new range at ~ 31% with the current unchanged dividend despite underlying profit being up 44%. Hmmm
If RYM are trying to warn there's serious challenges ahead they did a very good job of that with their dividend signals.
Jarden analysts seem to have had the best foresight. "We expect favourable demand dynamics to show through but expect cost pressures and challenges in care in particular to dampen the result," they wrote in an outlook issued last week.
Noting high care costs one has to wonder about OCA next week who have a significant majority of their business as care in one form or another...
https://www.nzherald.co.nz/business/ryman-healthcare-interim-result-bottom-line-profit-falls-31-revaluations-down/GBRMQ7ITEJGLDPWL3TK5T5C6QM/
Quote from: winner (n) on Nov 18, 2022, 11:44 AMRyman have never raised any new capital since they listed (last century)
the DRP may be the first sign that the Ponzi scheme the sector is is about to unravel
The fact is their sacred cow of not raising was a dumb irrational one.
They're a growing business, they should be raising capital (and not paying bl**dy* dividends, but that's another story) and there is nothing shameful in doing so.
People were screaming at them to raise when they were trading between $14-$16 but they were too arrogant.
The DRP shows that they're finally coming to their senses, albiet at the wrong time in the cycle.
Updated NTA is now $7.135. You'd be VERY brave to think that number won't get tested by the share price in this down cycle.
Quote from: Whacc on Nov 18, 2022, 02:10 PMThe fact is their sacred cow of not raising was a dumb irrational one.
They're a growing business, they should be raising capital (and not paying bl**dy* dividends, but that's another story) and there is nothing shameful in doing so.
People were screaming at them to raise when they were trading between $14-$16 but they were too arrogant.
The DRP shows that they're finally coming to their senses, albiet at the wrong time in the cycle.
Paid about $1 billion dividends last 10 years ..... that would have kept debt down ....and not stopped them growing
RYM total assets $12.0 billion
They owe banks / lenders $3.0 billion
Residents are owed $4.6 billion
Equity is $3.6 billion
Pretty high leverage eh
No wonder some guru analysts and commentators are getting a bit worried
I think it very much depends on how you classify the amount owed to Residents.
In the way that works resales will more than cover it.
I very much doubt all their residents are going to die within a month of each over.
The Ponzi will continue while the numbers of oldies approaching their market continues to grow in ever increasing numbers daily.
RYM a bellwether for this sector and it's fair to say despite underlying profit being up 44% on PCP the market really disliked this result with a whopping 37 cent decline, (4.6%), on the day. ARV and OCA are the next cabs off the rank to report next week on Tuesday and Wednesday respectively.
I hope shareholders have their seat belts firmly fixed, tray tables folded away and sick bags in hand. Anyone who's built a model thinking these next two can swim against this rip-roaring outgoing tide and have loaded up accordingly, better have their life jackets on as well.
Impressive chart in Ryman preso .....selling prices this century.
No doubt type/geographical mix has a bit to do with it but the last year hasn't seen the downturn that the REINZ HPI chart shows.
Maybe that's still to come for Ryman ......delayed settlements etc.
0000rym.JPG
Chart tells the story - Ryman is highly leveraged to the sector so the drop in property prices is going to have an eqaully pronounced effect on the way down as it did on the way up.
Its fine selling units for $1M when their customers are selling houses for $1M+. What happens when customers are selling houses for $750k? Bridging that gap is difficult for elderly people - my father is in that situation now. He has decided that he does now want to live in a retirement village, but he cant afford to buy in because his house is worth less than the village unit.
A good number of people are in the same situation.
There are a number of services available to people who decide to stay in their own home.Wife's uncle stayed in his well into his 90s.
In our situation we bought a new over 60s unit.Whether we stay here, or move to a retirement village, or a care unit only time will tell.Not much difference in pricing between a unit in the very nice local village and our unit.Moving up to nobs' hill would be costly,however who wants to be with them.?..lol
I work flat out for 15 minutes a fortnight keeping on top of our small section.Power bills are low.Permanant materials save maintance costs.
OCA's studios appear reasonably priced.
I think that's become a real issue now KW. Very little headroom, (at a record ever low), between average real estate prices of properties and RYM's independent living units, almost no margin left for all of New Zealand expect Auckland and not much margin in Auckland either, see page 16
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/402597/383713.pdf
Not only that but remember there's real estate agents commission, legal and moving fees as well.
What RYM are not saying is the gap used to be FAR bigger, like the difference that exists in Melbourne to the left in that image on page 16.
The issue you describes is not a new one either, it's been building up over the last decade.
Way back 12 years ago if my parents had of chosen a nice north facing 2 bedroom stand alone townhouse in RYM's Orewa village they would have had nothing to come and go on in their retirement except national superannuation and although you can survive on that, its not really a good position to be in.
Summerset are known for their pricing being the next level down from RYM and yet still offering the full land-based cruise ship experience so I'd be checking out their villages if I were you KW. I visited about 8 different villages with my parents to help them decide what was best for them...your Dad is very fortunate to have someone as bright as you to help him choose something more affordable but still really nice.
Quote from: Basil on Nov 19, 2022, 02:13 PMThe issue you describes is not a new one either, it's been building up over the last decade.
Way back 12 years ago if my parents had of chosen a nice north facing 2 bedroom stand alone townhouse in RYM's Orewa village they would have had nothing to come and go on in their retirement except national superannuation and although you can survive on that, its not really a good position to be in.
You wouldnt even have your super because half your pension would go on paying the weekly service fees.
Craig's today
Can RYM rediscover its self-sustaining growth model?
Investors ignored RYM's solid trading result and sent the shares down nearly 5% on Friday, largely due to concerns about the 18% HoH step up in RYM's net debt to $3.0bn. We had anticipated a weak operating cashflow result, given the 22% increase in days to sell in the NZ housing market from March to September and resulting significant drag on working capital, and we expect sector peers will also reveal some pain here when they report later this month (OCA/ARV) and in Feb (SUM). Investing cash outflows were however higher than we expected, and only partly due to the elevated levels of land purchase settlements in 1H23. While RYM still has c.$500m of untapped credit, by the end of the year we expect this to have reduced to c.$300m, and with gearing already over 45% it clearly cannot continue to run up cash deficits at this pace. The key question is how long it will take for RYM to return to a "self sustaining" growth model. At its recent investor day, RYM signalled it would cut its care build rate and develop more broad acre sites, which will reduce the amount of working capital needed to support growth, but the benefits of this pivot will take 2-3 years to become apparent as RYM first completes its existing projects. More immediately RYM has announced a discounted DRP. In addition, we think RYM will not be able to lift its build rate as previously signalled and instead will keep its build rate flat at FY23 levels (c.750 RV units) over the next 3-4 years, cut land purchases, pause commencement of high density developments, and defer main building construction, while it gets its gearing back down below 40%. Mngmt estimate the cumulative impact of these initiatives could return RYM to cash breakeven in 1-2 years.
Despite near term challenges, we retain Overweight
While pulling the levers above will reduce medium term growth, RYM is no longer priced for much growth at 1.07x NTA. Absent a severe housing crash we think RYM can "trade through", and retain Overweight with PT -5% to $10.
Interesting comments from Craigs, thanks for sharing.
Looks like RYM have snookered themselves with their high debt.
Quote from: Basil on Nov 21, 2022, 02:33 PMInteresting comments from Craigs, thanks for sharing.
Looks like RYM have snookered themselves with their high debt.
.... and others in sector all increasing debt as well
Yes a great company that has been historically "best in class." Unfortunately for several years has been overtaken by SUM in my opinion. As Basil correctly points out that debt is way to large, especially when you consider the increase in finance costs.
DRP is not going to cut it. Needs a large CR to get debt down under 30 NOW.
Quote from: Shareguy on Nov 21, 2022, 02:48 PMDRP is not going to cut it.
Why would anyone take the DRP at a 2.5% discount when the share price is in free fall?
Magic was over when Simon Challis left many, many years ago. Never been the same since.
Can't help myself wondering what he would make of the invidious position RYM finds itself in now ?
Others in this sector have far lower debt and much more reasonably priced units and look far better positioned to whether this downturn.
I am increasingly sure there is now a glut of retirement units now on the market and I expect some serious discounting to come in 2023 as those really motivated to reduce debt bite the bullet and get real with their pricing. $1.9m for a south facing two bedroom unit in their Devonport village, for goodness sake what a joke.
Won't be long before RYM trades at a discount to their NTA...mark my words.
Quote from: Basil on Nov 21, 2022, 03:28 PMMagic was over when Simon Challis left many, many years ago. Never been the same since.
Can't help myself wondering what he would make of the invidious position RYM finds itself in now ?
Others in this sector have far lower debt and much more reasonably priced units and look far better positioned to whether this downturn.
Ryman's biggest issue has been the sacred cows put in place since its inception.
Why be so proud about not raising follow on capital when you're a growth company?
That irrational point-of-pride stopped them raising when they should have when their stock was trading higher - and that's not hindsight bias, people were telling them to do exactly that.
Also being too proud/egotistical to adopt the care suite model on care to recycle capital faster and realise DMF.
Quote from: Basil on Nov 21, 2022, 03:28 PMWon't be long before RYM trades at a discount to their NTA...mark my words.
I wonder when the industry valuer (CBRE) will get the reality memo.
QuoteI wonder when the industry valuer (CBRE) will get the reality memo.
Next year and combined with much higher interest rates reflected in higher discount rates for their DCF valuation in tandem with RYM's very high gearing...oh dear...it's not going to be pretty. The truth is the wonderful first mover advantage they enjoyed for many years, evaporated many years ago.
RYM set to extend their lengthy period of underperformance (that I called out in early 2014 under my old handle, Beagle, in the other forum), until at least 2024 in my opinion. Agreed, a capital raise when the share price was in the early - mid $teens and trading at a substantial premium to NTA would have been a very good move. Too late now.
September last year Ryman appointed a grocer / retailer as CEO ....one Richard Umbers
Some had a few choice words about the appointment. Some even mentioned that he was 'asked to leave' when CEO of Meyer (a transformation that didn't work out that well and three profit downgrades). Apparently his time at Progressive in NZ wasn't that bad.
Share price when Umbers started was about $15 .......now half tha..market cap down more than $3 billion ...wow
Not all poor Umbers doing ....maybe it's just Umbers is one of those unlucky leaders .....always dogged by ill fortune ...like his past careers.
Unlucky leaders are not good .....their fortunes rarely change ....always dogged by bad luck.
And it seems Ryman have many challenges ahead of them .....that's when you need 'lucky' leaders
Could call this a bit of fundamental analysis
Now within 10 cents of NTA....hard to imagine what would stop the downwards momentum. Frankly I can't think of anything.
So that sort of begs the question of how low could the share price potentially go ? ARV a good guide, have 72% independent living units and only 28% care and they want to reduce care further. Currently $1.19 on a $1.84 NTA.
If RYM followed ARV down to that discount level, (keep in mind ARV have one of the lowest gearing levels in the sector, about 25%, so are probably better equipped to whether this downturn), that would place RYM at $4.61 ! I am not forecasting they will go that low but I do believe the general direction is a continuation of relative underperformance against this sector and the market for the foreseeable future.
SUM coming in for treatment today too. All boats fall on an outgoing tide.
Quote from: KW on Nov 19, 2022, 11:42 AMIts fine selling units for $1M when their customers are selling houses for $1M+. What happens when customers are selling houses for $750k? Bridging that gap is difficult for elderly people - my father is in that situation now. He has decided that he does now want to live in a retirement village, but he cant afford to buy in because his house is worth less than the village unit.
Ah ... but your father has a well-off daughter, hasn't he?
Did he look at alternatives? OCA seems to be generally cheaper than e.g. RYM ...
But anyway ... you are right, it will be harder for retirement villages to rise prices when houses don't pay anymore for the units.
Question is just - why do we assume that the property market will keep going down while the building costs keep going up? Sure, there might be ripples, but this does not makes sense in the long term given that it just would mean people stop building new houses and buy instead from existing stock, which means that the existing stock will get more demand, which will push up prices up for existing stock until it reaches the prices for building new again.
I expect that property market will quite quickly re-synchronise with the prices for building new houses.
RYM share price now below Book Value of $7.26
Quote from: BlackPeter on Nov 22, 2022, 12:24 PMQuestion is just - why do we assume that the property market will keep going down while the building costs keep going up? Sure, there might be ripples, but this does not makes sense in the long term given that it just would mean people stop building new houses and buy instead from existing stock, which means that the existing stock will get more demand, which will push up prices up for existing stock until it reaches the prices for building new again.
I expect that property market will quite quickly re-synchronise with the prices for building new houses.
While building costs have gone up, its land prices that have gone up more. Land prices can come down faster than building costs go up, thereby making property cheaper over time. Since you arent even buying the land in retirement units, its going to be harder to justify keeping prices high while the prices of established housing falls.
Quote from: Basil on Nov 21, 2022, 02:33 PMInteresting comments from Craigs, thanks for sharing.
Looks like RYM have snookered themselves with their high debt.
Its cashflow that always, always, always brings property developers undone. They over commit during the boom to more and bigger projects, relying on the cashflow from completed projects to partially fund the new builds, and cover the difference with debt. The problem comes when the completed projects stop selling and the cashflow dries up. The debt is still there and its getting more expensive. Eventually the subbies down tools because they are not being paid, and the whole house of cards collapses. And don't think it doesnt happen to big developers - only need to look across the ditch at Metricon to see how a giant can quickly come undone.
I'm watching one Chch developer go from building standalone houses, to small townhouse developments, to bigger townhouse developments, and now to one that consists of 61 townhouses on a single site. When their cashflow dries up and that huge project stalls due to lack of funds, what happens to the company?
If you know anyone who has their money in those development company funds (like Williams/DuVal etc) you need to tell them to get it out now. Its only a matter of time, and the clock is ticking ever closer to midnight.
Quote from: winner (n) on Nov 22, 2022, 08:22 AMSeptember last year Ryman appointed a grocer / retailer as CEO ....one Richard Umbers
...
Share price when Umbers started was about $15 .......now half tha..market cap down more than $3 billion ...wow
Not all poor Umbers doing ....maybe it's just Umbers is one of those unlucky leaders .....always dogged by ill fortune ...like his past careers.
I don't think you can blame him at all, this all goes back on the previous guy in the chair.
These businesses are like cruise liners, what you're seeing today is the manifestation of decisions made 4-5 years ago.
I'm aware of Umbers' arguably chequered past, but if anything the decisions being made now show the business is finally seeing some sense (albiet only after this come-to-hesus moment).
Looks pretty dire eh?
rym1.png
Quote from: Gerald on Nov 22, 2022, 01:19 PMLooks pretty dire eh?
rym1.png
Looks like a perfect time to buy to me.(Two men looked out through prison bars one evening, one saw mud and one saw stars)
Quote from: Whacc on Nov 22, 2022, 01:12 PMI don't think you can blame him at all, this all goes back on the previous guy in the chair.
These businesses are like cruise liners, what you're seeing today is the manifestation of decisions made 4-5 years ago.
I'm aware of Umbers' arguably chequered past, but if anything the decisions being made now show the business is finally seeing some sense (albiet only after this come-to-hesus moment).
Small ineffective rudders on a big cruise ship...hmmm...reminds me of the Titanic...hope there's no icebergs really close lol
The trouble with referencing past low data points such as low points in the price to NTA ratio in 2003 and 2009 is that you're comparing two very different points in time and market dynamics.
SUM, ARV and OCA didn't even exist as listed companies then and RYM had the legend Simon Challis at the helm.
There was not the glut of supply of units on the market there is now. People forget that MET have massive plans for expansion too and about $5 Billion of assets. RYM's gearing was much lower back then and they had tremendous capacity to grow, that's clearly not the case now with their obvious financial constraints. The market is now very different.
By comparison SUM have much lower gearing, a better track record of growth since they listed in 2011 and generally speaking their units are at a considerably lower price point providing more resiliency to their business model in a downturn. They also have a much lower care component to their business. I believe they are highly likely to continue to outperform RYM in the years ahead. That said I don't presently own and wouldn't own anything in this sector in the near future. With rampant cost increases and a falling market I feel the sector is presently on a hiding to nothing.
Quote from: Basil on Nov 22, 2022, 01:56 PMSmall ineffective rudders on a big cruise ship...hmmm...reminds me of the Titanic...hope there's no icebergs really close lol
The trouble with referencing past low data points such as low points in the price to NTA ratio in 2003 and 2009 is that you're comparing two very different points in time and market dynamics.
SUM, ARV and OCA didn't even exist as listed companies then and RYM had the legend Simon Challis at the helm.
There was not the glut of supply of units on the market there is now.
RYM's gearing was much lower then and they had tremendous capacity to grow, that's not the case now with their obvious financial constraints.
The market is now very different. The plain fact is there are icebergs around that weren't there in the past.
By comparison SUM have much lower gearing, a better track record of growth since they listed in 2011 and generally speaking their units are at a considerably lower price point providing more resiliency to their business model in a downturn. They also have a much lower care component to their business model and finally, I believe they are trading quite close to their current NTA, (we'll have to wait until late February 2023 to know what that figure is).
I believe they are highly likely to continue to outperform RYM in the years ahead. That said I don't presently own and wouldn't own anything in this sector in the near future. With rampant cost increases and a falling market I feel the sector is presently on a hiding to nothing.
Captain Edward Smith says full steam ahead.
Quote from: kasper on Nov 22, 2022, 02:15 PMCaptain Edward Smith says full steam ahead.
Take her to sea Mr Murdoch, lets stretch her legs
https://www.youtube.com/watch?v=ytexQ5AxDig
What could possibly go wrong ;)
Winner, Presentation I read had NTA at $7.135. Its now under that at $7.13 only one day after I called it. That doesn't bode well for the future.
Hands up all those who want to catch a falling knife ?
Quote from: Basil on Nov 22, 2022, 02:24 PMTake her to sea Mr Murdoch, lets stretch her legs
https://www.youtube.com/watch?v=ytexQ5AxDig
What could possibly go wrong ;)
Winner, Presentation I read had NTA at $7.135. Its now under that at $7.13 only one day after I called it. That doesn't bode well for the future.
Hands up all those who want to catch a falling knife ?
Yep NTA is $.13 and Book Value is $7.26
Thay have a bit of Goodwill on the books
Under $7 gosh.
Quote from: Shareguy on Nov 22, 2022, 04:48 PMUnder $7 gosh.
Gosh even the low target price on 4 traders is $7.87 and the avg is $10.66, massive overreaction one would think.
Quote from: KW on Nov 22, 2022, 01:11 PMIts cashflow that always, always, always brings property developers undone. They over commit during the boom to more and bigger projects, relying on the cashflow from completed projects to partially fund the new builds, and cover the difference with debt. The problem comes when the completed projects stop selling and the cashflow dries up. The debt is still there and its getting more expensive. Eventually the subbies down tools because they are not being paid, and the whole house of cards collapses. And don't think it doesnt happen to big developers - only need to look across the ditch at Metricon to see how a giant can quickly come undone.
I'm watching one Chch developer go from building standalone houses, to small townhouse developments, to bigger townhouse developments, and now to one that consists of 61 townhouses on a single site. When their cashflow dries up and that huge project stalls due to lack of funds, what happens to the company?
If you know anyone who has their money in those development company funds (like Williams/DuVal etc) you need to tell them to get it out now. Its only a matter of time, and the clock is ticking ever closer to midnight.
Hits the nail directly on the head. Alas, the halcyon days when the brilliant captain Simon Challis was steering the good ship Ryman are but a fond and very distant memory... Very stormy seas ahead. Could this go down to a significant discount to NTA ? The question is why wouldn't it when you have excellent well managed REIT's with modest gearing trading at a ~ 30% discount to NTA and others in this sector trading at even bigger discounts with much lower gearing. Ryman have snookered themselves comprehensively with their very high debt in a fast declining and slow selling housing market.
Quote from: KW on Nov 22, 2022, 12:53 PMWhile building costs have gone up, its land prices that have gone up more. Land prices can come down faster than building costs go up, thereby making property cheaper over time. Since you arent even buying the land in retirement units, its going to be harder to justify keeping prices high while the prices of established housing falls.
Not sure I understand your argument.
People are buying neither land nor buildings in retirement units, but the right to occupy both of them for the reminder of their life. Land is treated the same way as the building.
But apart from that ... argument was that people can't afford to buy a unit, if their house is less worth than the cost for their right to occupy. This is correct. However - I just checked our latest GV - land value to improvements is roughly 45% to 55% - and we do have a lot of land, i.e. I assume most people will have (in proportion) less land value and a higher value of improvements.
This clearly reduces the down risk for the whole thing to keep dropping if building costs go up with 18% p.a. (yes, to March 22 - newest number I could find).
I expect the housing market to bottom out in 2023 ...
Quote from: BlackPeter on Nov 23, 2022, 11:09 AMNot sure I understand your argument.
People are buying neither land nor buildings in retirement units, but the right to occupy both of them for the reminder of their life. Land is treated the same way as the building.
But apart from that ... argument was that people can't afford to buy a unit, if their house is less worth than the cost for their right to occupy. This is correct. However - I just checked our latest GV - land value to improvements is roughly 45% to 55% - and we do have a lot of land, i.e. I assume most people will have (in proportion) less land value and a higher value of improvements.
This clearly reduces the down risk for the whole thing to keep dropping if building costs go up with 18% p.a. (yes, to March 22 - newest number I could find).
I expect the housing market to bottom out in 2023 ...
My point was that house prices will fall as the value of land falls, at a faster rate than building costs/valuations go up. So the gap between selling a house and buying a retirement unit will increase over time unless retirement villages start cutting prices. More people will choose, or will be forced, to stay in their existing homes or downsize to a smaller non-village home because they cannot fund the gap. The potential customer pool is going to shrink.
In Christchurch house prices doubled over the last 2.5 years - this is not because the buildings became worth more its because developers started seeing houses only for the value of the land they sit on. Empty sections that were previously $250k were suddenly worth $500k. Crappy old houses that used to be worth $400k were suddenly selling for $800k because they were on 800 sqm sections and a developer could whack 6 townhouses on it.
On the housing market, the Labour Brightline period expires in March. You can expect a wave of investors selling next year as soon as they are out of lockup. The marginal buyer sets the price.
Quote from: KW on Nov 23, 2022, 12:32 PMMy point was that house prices will fall as the value of land falls, at a faster rate than building costs/valuations go up. So the gap between selling a house and buying a retirement unit will increase over time unless retirement villages start cutting prices. More people will choose, or will be forced, to stay in their existing homes or downsize to a smaller non-village home because they cannot fund the gap. The potential customer pool is going to shrink.
In Christchurch house prices doubled over the last 2.5 years - this is not because the buildings became worth more its because developers started seeing houses only for the value of the land they sit on. Empty sections that were previously $250k were suddenly worth $500k. Crappy old houses that used to be worth $400k were suddenly selling for $800k because they were on 800 sqm sections and a developer could whack 6 townhouses on it.
On the housing market, the Labour Brightline period expires in March. You can expect a wave of investors selling next year as soon as they are out of lockup. The marginal buyer sets the price.
Fair enough - though, it is very easy to talk oneself into a doom mood just by looking at a small number of outrageous examples.
Does anybody know the average ratio between land value and improvements value in NZ? Until I get that I use our property as example for the average.
So - 45% of the total is land value ... and the dollar value for our land went up by factor 2.25 since the GV reassessment in 2012 (i.e. 9 years before the last one).
How much of that do you think will the value of the land go down again? Back a decade ago is unlikely - so lets assume it might lose half of the gains of the last decade, shall we?
This means that properties might lose in average something like 15 % of the total value if the land value drops by half the gains of the last decade.
Doesn't sounds that terrible with building cost soaring by 18% pa compensating for the dropping land value.
I think a 2023 bottom for real estate is likely ... and it won't be that bad (given that average house prices came already down by nearly 10% since last years peak).
Don't forget as well - while we have currently the most xenophobe and anti immigration government ever, they need to open the immigration tap to avoid a total break down in our health system (and not just there) - i.e. demand for houses will go up.
Supply and demand are determining the price.
Quote from: BlackPeter on Nov 23, 2022, 01:10 PMFair enough - though, it is very easy to talk oneself into a doom mood just by looking at a small number of outrageous examples.
Does anybody know the average ratio between land value and improvements value in NZ? Until I get that I use our property as example for the average.
So - 45% of the total is land value ... and the dollar value for our land went up by factor 2.25 since the GV reassessment in 2012 (i.e. 9 years before the last one).
How much of that do you think will the value of the land go down again? Back a decade ago is unlikely - so lets assume it might lose half of the gains of the last decade, shall we?
You assume the GV splits are accurate, when most of them are not. For instance, the 2019 land value on mine is $365k - I cant think of anywhere (outside of the ghetto areas) where you could pick up a section now for that price. An empty section down the road sold in 2020 for $1M. Its now got 7 townhouses on it. How likely is it that land prices will drop from $1M back to $400k? I guess we shall find out. A 5.5% OCR for at least a year will help LOL
Former blue chip RYM absolutely smashed in the last 2 days.
The market is right to be worried about their high debt level.
Past former glory as a blue chip means nothing if your balance sheet gets under pressure.
A lot of old money is still in RYM from its former glory days when early investors got rich from their first mover advantage much earlier this century.
Where's the bottom ? $5 ?
Market comment in the esteemed Herald today only tells part of the story
Herald -
Smith said interest rates heading higher than originally thought will have consequences on businesses with a lot of debt. Ryman's $3 billion debt is not far away from its market capitalisation of $3.17B
Accounts to 30 Sept 2022
MC correct - 3.17B
Int bearing loans and borrowings - 3.02B
Occupancy advances ( also debt....) - 4.6B
Hmmmm..... 8)
Friend just pointed out this has now gone below the $6.65 March 2020 Covid plunge low and you have to go back nearly a full decade to when the share price was last at this level. (March 2013)
With their very high gearing they look just as vulnerable as anything else in this sector so we could easily see $5 which is a 30% discount to NTA and potentially even lower if this gets really ugly.
Technically all chart supports look broken so who knows where the bottom is but the blue chip status Ryman held once upon a day is well and truly in the trash can now.
You're on to it Crackity 👍 Scary gearing when you combine those two forms of debt. Market is starting to wake up to that.
From Chris Lee's newsletter:
"...Currently I often hear market noise that Ryman has too much debt. That would be true if it had trouble selling its licences to occupy. It would then be asset-rich, cash-poor, and have cashflow problems.
It does not have trouble selling.
It is in my view a cash machine, one that chooses to keep growing, based on strong evidence of ongoing demand...."
A legal Ponzi scheme....lol
I think the definition of a Ponzi schema is that early investors receive dividends not out of earnings, but from later investments. The consequence of that is that the capital of the schema gets eroded and late investors lose out.
I don't see this with Ryman nor with any other of the big retirement operators ... they just go through the normal property cycle and investors need to learn that no cycle has only up-phases.
Obviously - anybody who bought in a the recent peak might need some patience before they can recover their capital in full.
Good thing about the current down phase is ... experienced investors know that after any down phase starts another up phase. Time to get positioned.
Quote from: Basil on Nov 23, 2022, 09:21 PMFriend just pointed out this has now gone below the $6.65 March 2020 Covid plunge low and you have to go back nearly a full decade to when the share price was last at this level. (March 2013)
With their very high gearing they look just as vulnerable as anything else in this sector so we could easily see $5 which is a 30% discount to NTA and potentially even lower if this gets really ugly.
Technically all chart supports look broken so who knows where the bottom is but the blue chip status Ryman held once upon a day is well and truly in the trash can now.
You're on to it Crackity 👍 Scary gearing when you combine those two forms of debt. Market is starting to wake up to that.
Is today the day when it goes in to the 5 $ Bracket stuck on six bucks at the moment
Quote from: Auto Rower on Dec 16, 2022, 08:56 AMIs today the day when it goes in to the 5 $ Bracket stuck on six bucks at the moment
I would think there is much more pain to come given the head winds for the realestate market.
A lot of poeple focus too much on RYM being in the "retirement sector" and not the reality of them being housing developers who thrive when the goings good and go close to falling over when times go bad.......make no mistake times are getting bad for real estate
I really don't see what the catalyst is that's going to end the funk this sector is in ? I think they're all going to get beaten up a lot more with the Reserve Bank interest rate sledgehammer. All you are going to read about all next year is endless stories in the media about how grueling the housing sector has become with really high interest rates for vendor's, developers and buyers struggling to get approved for finance with bank's stress testing people at ~ 9% and with bank stress testing likely headed even higher in 2023, hardly anyone is qualifying for mortgage finance.
It's too hard swimming against a strong outgoing tide.
Quote from: Crackity on Nov 23, 2022, 07:27 PMMarket comment in the esteemed Herald today only tells part of the story
Herald -
Smith said interest rates heading higher than originally thought will have consequences on businesses with a lot of debt. Ryman's $3 billion debt is not far away from its market capitalisation of $3.17B
Accounts to 30 Sept 2022
MC correct - 3.17B
Int bearing loans and borrowings - 3.02B
Occupancy advances ( also debt....) - 4.6B
Hmmmm..... 8)
Just want to highlight this excellent post of Crackity again becuase this is something we should be thinking about very carefully.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/402597/383713.pdf
Page 2 - Total assets $12.03 Billion
Net Assets $3.63 Billion.
Figures as at 30 September 2022.
This week well respected fund manager Harbour Asset management claimed that to restore a normal level of housing affordability the housing market needs to fall another 30%. on top of falls this year already. I posted a link yesterday.
Just got a PM from someone on here wondering if RYM is a buy, won't name them.
Another comment on the other forum from Balance caught my eye. "Leverage is wonderful on the way up - nasty on the way down".
This got me pondering, how nasty could nasty really be ?
What if the market does fall another 30% from here over say the next year or two ? Well a 30% reduction on assets of $12.03 Billion is $3.61 Billion and would wipe out their $3.6 Billion in net assets
Just as well a lot of those liabilities are not repayable to outgoing residents until new ones move in as otherwise, they'd be insolvent.
No wonder the rumour mill is running hot with talk of a massive capital raise which if it happens will not be seeing any of this hounds cash.
The other thing that Mrs B and I discussed this morning is that the real estate market (apart from 2022) has had a tremendous run for decades.
With housing being so chronically unaffordable now relative to incomes and people's ability to afford mortgages even after this year's reductions, who's to say we might not see real estate fall not only in 2023 but also 2024 and maybe even 2025 as well ? Maybe we do get another 30% fall from here spread out over two or three years ? Interesting times for all those in this industry but especially those with higher gearing, (RYM and OCA)
I see what Balance means when he says leverage can be nasty on the way down.
Rym a bit of worry eh Basil
What's the same sum do for Oceania ......they'd be pretty stretched too wouldnt they if you used your 30% fall stil come.
And debt levels for both will be higher than September ...always keeps on growing eh lol
OCA be hurt very badly too. What I find intriguing is that SUM and ARV have about the same equal lowest gearing and they're both the ones openly talking about potentially dialing back the future build rate if they need to whereas RYM and OCA with the highest gearing are not talking about that prospect at all. Go figure ?
Pretty sobering numbers there Basil but what's terrifying is that over the years you've been spot on when it's come to the Ryman share price ...even saying it was overvalued at $11 in 2017 when it was heading up to over $17 in early 2020.
I hope you are wrong this time because if RYM share price keeps trending down so will the others in the sector ...not one of them is immune.
Jeez RYM at $3 SUM $5 and OCA at 60 cents ..that'll be painful.
Question - what does Craig's do with the 5.7 million shares they got from underwriting the dividend
Cost them $6.14 and a bit
Hi winner could you please explain......or anyone else why RYM would have a broker underwright a dividend......does not make sense to me.....appears to be a sneaky DRP dilutionary cap raise which tells me RYM board know they could not really afford to pay the last divi
Quote from: snapiti on Dec 18, 2022, 09:29 AMHi winner could you please explain......or anyone else why RYM would have a broker underwright a dividend......does not make sense to me.....appears to be a sneaky DRP dilutionary cap raise which tells me RYM board know they could not really afford to pay the last divi
Absolutely - the reason is so there is no cash drain on the already stretched Balance Sheet.
Had a relook at the FuBar analyst note from mid Oct 2021 - how things change in 14 months.....here it is - interesting the first paragraph and last paragraph 8)
Ryman (RYM), for instance, targets unit prices of ~70% of the median house price with the idea that the owners of a median house
should release some equity if they sell their house and buy a unit. The implicit target market is thus owners of median or higher priced
houses. Pricing units lower relative to the local market increases the group of house owners that can afford to buy a unit. Secondly,
over the next few years the aged care operators can tap into this "HPI buffer" as and when prices start to flatline or decline. This
provides a high degree of visibility into medium term growth.
Embedded value already represents 30% of market cap and is likely to increase further
The aged care companies report total Embedded Value (EV) in their units. EV represents the build up of future re-sale gains and
deferred management fees and is primarily based off recent transactions, i.e. not factoring in the increase in HPI that has not
translated to higher unit pricing (yet). We estimate that current EV represents c. 30% of market cap for the aged care operators,
maybe more telling; the EV of re-sale gains represents >5 years of annuity EBITDA and ~10 years of re-sale gains.
We like the aged care sector overall and prefer the smaller cap names
Overall we remain positively biased towards the aged care sector. It benefits from a combination of; (1) high visibility growth over the
near term driven by historical HPI increases; (2) long term favourable trends, particularly with regards to the need for more care beds;
and (3) in comparison to other growth names, valuations that are not too detached from history. We prefer the smaller cap names
Oceania (OCA) and Arvida (ARV) due to similar growth, only modestly higher risk (in our view) but substantially lower valuations. We
prefer SUM over RYM as SUM is growing faster, has higher EV, and is valued below RYM.
Figure 1. Summary of sector ratings and valuation
Company Ticker Current price (NZ$) Target price (NZ$) 24m fwd PE 24m fwd EV/Annuity EBITDA Rating
Oceania Healthcare OCA
1.44 1.90 12.0 17.2 OUTPERFORM
Arvida ARV 2.10 2.50 12.9 20.6 OUTPERFORM
Summerset SUM 15.05 13.85 17.4 34.0 NEUTRAL
Ryman Healthcare RYM 14.70 12.60 22.5 40.7 UNDERPERFORM
most of the sector commentary from management indicates they are busy trying to convince punters that things are moving along nicely whilst in the background the reality is the macro environment is about to run them with a knife, So RYM are just trying to sweep this under the carpet, for now, by having the DRP underwritten rather than telling the market they are not in a position to pay a divi. Would cut to close to the bone to tell the markets no divi so the use of smoke and mirrors by way of underwritten DRP would be much easier for the markets to swallow.
Quote from: Crackity on Dec 18, 2022, 09:48 AMAbsolutely - the reason is so there is no cash drain on the already stretched Balance Sheet.
Had a relook at the FuBar analyst note from mid Oct 2021 - how things change in 14 months.....here it is - interesting the first paragraph and last paragraph 8)
Ryman (RYM), for instance, targets unit prices of ~70% of the median house price with the idea that the owners of a median house
should release some equity if they sell their house and buy a unit. The implicit target market is thus owners of median or higher priced
houses. Pricing units lower relative to the local market increases the group of house owners that can afford to buy a unit. Secondly,
over the next few years the aged care operators can tap into this "HPI buffer" as and when prices start to flatline or decline. This
provides a high degree of visibility into medium term growth.
Embedded value already represents 30% of market cap and is likely to increase further
The aged care companies report total Embedded Value (EV) in their units. EV represents the build up of future re-sale gains and
deferred management fees and is primarily based off recent transactions, i.e. not factoring in the increase in HPI that has not
translated to higher unit pricing (yet). We estimate that current EV represents c. 30% of market cap for the aged care operators,
maybe more telling; the EV of re-sale gains represents >5 years of annuity EBITDA and ~10 years of re-sale gains.
We like the aged care sector overall and prefer the smaller cap names
Overall we remain positively biased towards the aged care sector. It benefits from a combination of; (1) high visibility growth over the
near term driven by historical HPI increases; (2) long term favourable trends, particularly with regards to the need for more care beds;
and (3) in comparison to other growth names, valuations that are not too detached from history. We prefer the smaller cap names
Oceania (OCA) and Arvida (ARV) due to similar growth, only modestly higher risk (in our view) but substantially lower valuations. We
prefer SUM over RYM as SUM is growing faster, has higher EV, and is valued below RYM.
Figure 1. Summary of sector ratings and valuation
Company Ticker Current price (NZ$) Target price (NZ$) 24m fwd PE 24m fwd EV/Annuity EBITDA Rating
Oceania Healthcare OCA 1.44 1.90 12.0 17.2 OUTPERFORM
Arvida ARV 2.10 2.50 12.9 20.6 OUTPERFORM
Summerset SUM 15.05 13.85 17.4 34.0 NEUTRAL
Ryman Healthcare RYM 14.70 12.60 22.5 40.7 UNDERPERFORM
crickey crackity look at those SP from just over a year ago
Would it not be best for current Shers for RYM to do a cap raise now as there are a number of macro ingredience to say this could get really nasty for the leverage developers
Quote from: snapiti on Dec 18, 2022, 09:58 AMcrickey crackity look at those SP from just over a year ago
Yeah - 2 options - punters can take their pick of
1. Sector share prices are currently on special - grab a bargain now
2. Macro forces are going to continue to be a headwind. Sell or avoid the sector.
The only objective fact is the current market price is the sum of these factors.
8)
Quote from: Crackity on Dec 18, 2022, 10:05 AMYeah - 2 options - punters can take their pick of
1. Sector share prices are currently on special - grab a bargain now
2. Macro forces are going to continue to be a headwind. Sell or avoid the sector.
The only objective fact is the current market price is the sum of these factors.
8)
I think I will take a fall back position of " don't catch a falling knife"
Hard to see any light at the end of this tunnel when in the background you have Adrian determined to raise interest rate to wreck the broader economy, unfortunately this will have a much more severe consequence on leverage property developers
Underwriting DRPs not that an unusual practice. Mercury last DRP was also underwritten by Craig's.
The company view is often saying it's an efficient (and cheaper) way to raise capital.
Betcha none would admit to it being a way of paying a dividend when they can't really afford to ,,,, must keep the shareholders happy eh.
If I understand this right than this mean; the higher the declared underwritten dividend the larger the capital raise is.
Sad how RYM is not more honest about their desperatate financial position.
I'm off to see one of the new Ryman villages on Friday with my Dad. Any questions you want me to ask them? Like I'm thinking "what happens to my father if you go bankrupt?" :o Anything specific you would want to me to look out for?
I believe the new apartments that they are building are $800k+ which makes a mockery of the claim to be priced at 70% of the local average price, which in Christchurch is $757k.
The other village (not Ryman) I looked at has virtually no availability - what happened to Covid killing all the oldies?
Quote from: KW on Dec 18, 2022, 02:38 PMI'm off to see one of the new Ryman villages on Friday with my Dad. Any questions you want me to ask them? Like I'm thinking "what happens to my father if you go bankrupt?" :o Anything specific you would want to me to look out for?
I believe the new apartments that they are building are $800k+ which makes a mockery of the claim to be priced at 70% of the local average price, which in Christchurch is $757k.
The other village (not Ryman) I looked at has virtually no availability - what happened to Covid killing all the oldies?
NZ did in that regard quite well (compared to many other countries) - and particularly the retirement villages did help to increase the lifespan of their residents during Covid. Depending on your position, you might see that as a reason to buy in :) ;
Re your other quesitons - not sure I'd see them going bankrupt ... but I definitely would check what the conditions are if your dad needs care. Will he get a guaranteed care place in the village? If not, and if he needs to move on in this situation, how much of his capital will they return, and when? Are there conditions attached to the return of the capital or will it be returned unconditionally after a guaranteed time (suitable to his and your needs)?
As well, it is not unheard off that retirement villages sell some of their assets. What would this mean for the residents?
Obviously - your dad needs to find out whether he likes the village and the villa (or unit) - but what are the rules if he changes later on his mind? Make sure, he can afford to do so.
Quote from: BlackPeter on Dec 18, 2022, 04:37 PMObviously - your dad needs to find out whether he likes the village and the villa (or unit) - but what are the rules if he changes later on his mind? Make sure, he can afford to do so.
Nah, we don't want him to be able to change his mind. That might mean he decides he wants to move in with me :o
If it is The Kevin Hickman village,listen for traffic noise.
Quote from: KW on Dec 18, 2022, 02:38 PMI'm off to see one of the new Ryman villages on Friday with my Dad. Any questions you want me to ask them? Like I'm thinking "what happens to my father if you go bankrupt?" :o Anything specific you would want to me to look out for?
I believe the new apartments that they are building are $800k+ which makes a mockery of the claim to be priced at 70% of the local average price, which in Christchurch is $757k.
The other village (not Ryman) I looked at has virtually no availability - what happened to Covid killing all the oldies?
Not sure how old your Dad is or what he's looking for but these seem very reasonably priced.
https://www.summerset.co.nz/flexiblepricing/
Disc: Very small shareholding in ARV, no stake in SUM, RYM or OCA.
Quote from: lorraina on Dec 18, 2022, 05:35 PMIf it is The Kevin Hickman village,listen for traffic noise.
Yes it is that one. He can just take his hearing aids out ;D
Quote from: Basil on Dec 18, 2022, 05:47 PMNot sure how old your Dad is or what he's looking for but these seem very reasonably priced.
https://www.summerset.co.nz/flexiblepricing/
Disc: Very small shareholding in ARV, no stake in SUM, RYM or OCA.
He's not that old and is still fully functional so only looking at a decent sized independent living unit. He would prefer something with a garden. His friends have bought a $1M+ 3 bedroom apartment in KH and they are the ones who have talked him into it, so he's off for a look see this week. I think he wants to be with people he knows, so that is the Ryman KH or The Russley one which has nothing suitable available. The location of the Ryman one is quite good, close to Yaldhurst which is where he was looking previously to buy a house, because I told him if he moved further out I wouldnt be visiting ;D ;D ;D
I might suggest he at least has a look through the Summerset one at Avonhead.
Quote from: KW on Dec 18, 2022, 09:48 PMHe's not that old and is still fully functional so only looking at a decent sized independent living unit. He would prefer something with a garden. His friends have bought a $1M+ 3 bedroom apartment in KH and they are the ones who have talked him into it, so he's off for a look see this week. I think he wants to be with people he knows, so that is the Ryman KH or The Russley one which has nothing suitable available. The location of the Ryman one is quite good, close to Yaldhurst which is where he was looking previously to buy a house, because I told him if he moved further out I wouldnt be visiting ;D ;D ;D
I might suggest he at least has a look through the Summerset one at Avonhead.
Good to share happy times with your friends as you get older. No worries about it being more expensive, I am sure he has a kind daughter who could easily afford to loan him a few hundred thousand interest free and wouldn't miss it ;D
Man from Castlepoint says Ryman a classic value trap
Mind you he could have replaced Ryman with say Oceania and said Oceania a classic value trap
https://www.nbr.co.nz/margin-call/ryman-looks-like-a-classic-value-trap/
Possibly paywalled
Forsyth Barr warns on debt level's in certain sectors and singles out Ryman - paywalled
https://www.nzherald.co.nz/business/debt-warning-analysts-are-avoiding-these-highly-leveraged-sectors/LGKHWCGNN5ALTBKUG7DU52QYZI/
Says others in the sector should be okay if interest rates rise another 1-2 percent.
Cool chart from that NBR article on Rymans debt over the years
B7484E67-50CA-4A7C-85BD-D86EB2C5F6C8.jpeg
WOW - you weren't kidding when you said that was STELLAR growth in debt and yet RYM bonds trade about 75 bps lower than OCA bonds in the NZDX debt market...go figure?
Quote from: winner (n) on Feb 07, 2023, 12:17 PMCool chart from that NBR article on Rymans debt over the years
[url="https://stocktalk.co.nz/index.php?action=dlattach;attach=614;type=preview;file"]B7484E67-50CA-4A7C-85BD-D86EB2C5F6C8.jpeg[/url]
probably need a chart of their assets as well.
Quote from: Minimoke on Feb 07, 2023, 12:21 PMprobably need a chart of their assets as well.
Would look good as well but probably not as steep the last few years ...hence market concern
Heres a 7 year summaryA1.png
Quote from: Minimoke on Feb 07, 2023, 03:40 PMHeres a 7 year summaryA1.png
That debt ratio shot up to 45.2% at half year ....that's what has spooked many
Quote from: winner (n) on Feb 07, 2023, 05:05 PMThat debt ratio shot up to 45.2% at half year ....that's what has spooked many
Do total investment property assets to equity ratio.
I have it at $8.7 billion to $3.6 billion so 2.41 times.
Means a 10% fall in property values impact NTA by 24.1%.
NTA as at 30 Sep 2022 was $7.13 so allowing for say, 15% fall in property values will reduce NTA by 36% = $4.56.
RYM sp today at $6.30 implies market sees RYM's property values only down 5% - rather heroic assumption.
Surely a capital raising is on the way to reduce debt.
Quote from: winner (n) on Feb 07, 2023, 05:05 PMThat debt ratio shot up to 45.2% at half year ....that's what has spooked many
Debt, in itself doesn't worry me. First thing I look for is ability to repay costs of debt. Then ability to repay in conjunction with capital management plan. Also what the debt is used for (I'm not a fan of borrowing to pay dividends). And the asset/equity ratio.
Rymans would make me feel very uncomfortable. Its going the wrong way in times of increasing interest rates.
Ryman have always priced their units right at the top end of the market.
I understand they are 'delivering" a lot in the current half.
"Deliver" is a euphemistic term in the industry because that simply means "completed".
The question now that real estate has fallen quite a bit is will people still be drawn to their high priced units given they're getting a lot less for their homes?
I think the chance of a major capital raise this year is VERY high.
Well we all saw that coming LOL
$902M capital raising, and suspension of the dividend
https://www.interest.co.nz/business/119662/retirement-village-operator-ryman-says-it-has-higher-debt-it-comfortable-current
Ryman had also slowed and/or paused construction at six existing sites and revised its development pipeline towards lower density developments, "reflecting prudent management decisions made in response to elevated debt levels and changing market conditions including rising interest rates, the outlook for residential house prices, elevated construction costs and supply chain constraints".
The company is expecting to report an "underlying profit" for the year to the end of March 2023 of approximately $280 million – $290 million.
It says following completion of the share offer, "Ryman intends to re-commence construction of certain projects on a staggered basis and the delivery of its re-prioritised pipeline". Ryman's re-prioritised development pipeline is to deliver approximately 1,000 new retirement village units and care beds in the 2023 financial year, 750-800 new retirement village units and care beds in 2024, and 850-900 new retirement village units and care beds in 2025 "to reflect prudent management in changing market conditions".
Quote from: KW on Feb 15, 2023, 01:04 PMWell we all saw that coming LOL
$902M capital raising, and suspension of the dividend
https://www.interest.co.nz/business/119662/retirement-village-operator-ryman-says-it-has-higher-debt-it-comfortable-current
Ryman had also slowed and/or paused construction at six existing sites and revised its development pipeline towards lower density developments, "reflecting prudent management decisions made in response to elevated debt levels and changing market conditions including rising interest rates, the outlook for residential house prices, elevated construction costs and supply chain constraints".
The company is expecting to report an "underlying profit" for the year to the end of March 2023 of approximately $280 million – $290 million.
It says following completion of the share offer, "Ryman intends to re-commence construction of certain projects on a staggered basis and the delivery of its re-prioritised pipeline". Ryman's re-prioritised development pipeline is to deliver approximately 1,000 new retirement village units and care beds in the 2023 financial year, 750-800 new retirement village units and care beds in 2024, and 850-900 new retirement village units and care beds in 2025 "to reflect prudent management in changing market conditions".
Mmh - just looking at your standard footer. I suppose you don't recommend to holders to take up their rights (which basically would be buying in a downtrend), do you?
Or do you feel that normal TA rules do not apply to a CR?
Quote from: BlackPeter on Feb 15, 2023, 01:18 PMMmh - just looking at your standard footer. I suppose you don't recommend to holders to take up their rights (which basically would be buying in a downtrend), do you?
Or do you feel that normal TA rules do not apply to a CR?
I'm not a financial advisor so I'm not advising anyone to do anything. All I can say is that I never have this problem, as I would not be in the position of being a current RYM shareholder, therefore would not have to decide to take up rights or not.
The problem with capital raisings done at big discounts that trash the share price (and therefore disrupt the TA) and designed to bail companies out rather than to grow them and add future earnings, is that there still remains the risk of more downgrades in the future.
No update on your Papa moving into a Ryman unit.
Moving in with you instead.?.......[ lol ]
Quote from: Teitei on Feb 07, 2023, 09:30 PMDo total investment property assets to equity ratio.
I have it at $8.7 billion to $3.6 billion so 2.41 times.
Means a 10% fall in property values impact NTA by 24.1%.
NTA as at 30 Sep 2022 was $7.13 so allowing for say, 15% fall in property values will reduce NTA by 36% = $4.56.
RYM sp today at $6.30 implies market sees RYM's property values only down 5% - rather heroic assumption.
Surely a capital raising is on the way to reduce debt.
And Ryman disappointed some by doing a $902m capital raising.
They were hoping that Ryman would keep the leveraged balance sheet for when the property market turns.
Given virtually all the money is going to USPP I reckon there has been a breach of covenant. And given they are only going to net $30m in cash I wouldn't be holding out on an increased/renewed build rate.
Biggest worry is they were prepared to hand out a dividend at the end of last year and now all of a sudden the wheels are falling off.
Quote from: KW on Feb 15, 2023, 01:40 PMI'm not a financial advisor so I'm not advising anyone to do anything. All I can say is that I never have this problem, as I would not be in the position of being a current RYM shareholder, therefore would not have to decide to take up rights or not.
The problem with capital raisings done at big discounts that trash the share price (and therefore disrupt the TA) and designed to bail companies out rather than to grow them and add future earnings, is that there still remains the risk of more downgrades in the future.
Fair enough ...
From a personal perspective I found it previously ways more often than not profitable to invest into "distressed" CR's of solid companies ... but hey, I am not a momentum trader (i.e. I come into this situation when I buy fundamentally undervalued assets) :):
To be honest - I remember more profitable CR's at the backend of a downtrend than I remember profitable CR's during an uptrend (latter frequently with the benefit of hindsight turn out to have been too dear). I suppose you come across the later category ... always good to buy in an uptrend, isn't it?
What a mess. They just diluted future years eps a lot and they kept using the word prudent in the narrative about this capital raise. Reduced build rate going forward with reduced margins on much higher number of issued shares.
Still a growth company? Worth $5? Hmmm
Quote from: lorraina on Feb 15, 2023, 02:48 PMNo update on your Papa moving into a Ryman unit.
Moving in with you instead.?.......[ lol ]
I was wondering what Chch villages they have put on the backburner and if the Kevin Hickman was one of them LOL
He hasnt done anything, he's a worse procrastinator than me.
Quote from: Minimoke on Feb 15, 2023, 03:25 PMGiven virtually all the money is going to USPP I reckon there has been a breach of covenant. And given they are only going to net $30m in cash I wouldn't be holding out on an increased/renewed build rate.
Biggest worry is they were prepared to hand out a dividend at the end of last year and now all of a sudden the wheels are falling off.
There has definitely been a discussion around covenants. Slide 25 on the investor pack.
Banking syndicate update
• Ryman has received approval from the majority of lenders for an amendment to the Interest Coverage Ratio (ICR) covenant until March 2026 on all institutional facilities, with further approvals not required
• Ryman sought an amendment to the Interest Coverage Ratio covenant as a precautionary change given the recent rapid changes in interest costs
Looks like USPP dug in its heels and did not negotiate, but instead asked for its money back.
And they are not getting to keep $30M - thats the cost of the cap raising, and it all goes to Macquarie and UBS.
Quote from: BlackPeter on Feb 15, 2023, 03:37 PMFair enough ...
From a personal perspective I found it previously ways more often than not profitable to invest into "distressed" CR's of solid companies ... but hey, I am not a momentum trader (i.e. I come into this situation when I buy fundamentally undervalued assets) :):
To be honest - I remember more profitable CR's at the backend of a downtrend than I remember profitable CR's during an uptrend (latter frequently with the benefit of hindsight turn out to have been too dear). I suppose you come across the later category ... always good to buy in an uptrend, isn't it?
Its the time value of money that I pay attention to - if you invest in distressed companies it may be years before they recover, in which case your money is locked up, and you are precluded from earning anything in that period. And you run the risk that they do not recover at all.
I always ask "what is the purpose of the raising" - if its to grow earnings, either by acquisition or investment in something, then I am usually in. If its for "working capital" or debt repayment, then I'll usually pass, as with those ones the share price usually drifts back to, or below the issue price because the CR soaks up most of the buyer demand, and those looking to stag the raising try to exit.
My new catch phrase for 2023 is "there is no more free money" ;D so I expect to see a lot more cap raisings of both types, those needing funds to keep growing, and those needing funds to bail themselves out.
RYM just paid a divi and done their first divi reinvestment scheme at $6 plus.......now offering shares for $5......hmmmmmm property prices still dropping quickly.....always costly to go back to lenders and renegotiate covenants
IF A 4TH TERM comes in to being and the M Party call for Capital Gains all these companies are going to get hit hard...
and after Chipie turned up in an Organge telly Tubby suit the public might just be silly enogh to think he has saved them single handly and vote for him in an early election...
https://www.youtube.com/watch?v=LBNctIlzE1I
It would be interesting to crunch some numbers on this if property falls another 15% in calander 23.
As I see it gearing inclusive of residents loans is still very high in the late 60% range even after this desperatly needed capital raise so a fall of that magnitude is effectively tripled in terms of its effect on ,NTA.
It's not hard to come up with a perfectly plausible scenario where NTA halves this year.
With all the raise going to repay USPP loans and costs and the new build rate declining this looks like a bit of a lame duck to me.
Anyone notice REINZ stats out this week with lowest January sales since 1992? People have to sell before buying. Trouble coming with Ryman's sales?
Said it before, the magic with this ended a long time ago when Simon Challis left. No interest even at $5 as far as I am concerned.
"January sales since 1992"
tiny old sub DIV property next door sold to some plumbers for 860 back in december....
1/3 the size of the surrounding properties up a long sealed drive...
it reminded me of 2008...
NBR reporting staggering penalties of $134 million for early repayment of USPP debt! Add another $30m? of costs to fund this raise and that figure rises to a staggering $164m. What a complete fiasco.
Quote from: Basil on Feb 16, 2023, 03:40 PMNBR reporting staggering penalties of $134 million for early repayment of USPP debt! Add another $30m? of costs to fund this raise and that figure rises to a staggering $164m. What a complete fiasco.
Begging bowl out big time and nearly all proceeds going to these US Private Placement guys .....NBR did mention the word 'rort'
Punters think you cool when you borrow from these USPP things but things can go terribly wrong if you get on the wrong side of interest rates and/or currency movements
Quote from: Basil on Feb 16, 2023, 03:40 PMNBR reporting staggering penalties of $134 million for early repayment of USPP debt! Add another $30m? of costs to fund this raise and that figure rises to a staggering $164m. What a complete fiasco.
That is probably still a lot cheaper than rolling it over onto higher interest rates for the rest of the term.
One of the promised benefits of moving into a retirement home is the ability to provide continuity of care if you need it. So you don't have to move out if something happens to you. Now that they are cutting back on high rise (the serviced apartments for impaired residents) and hospice level care beds (for those that can no longer look after themselves) can they make this promise any more?
I'm not so keen on my father moving into one if he's going to be turfed out on his butt as soon as he needs a higher level of care, while losing 30% of his capital so he has no money to fund the purchase of a serviced apartment elsewhere. They seem in danger of losing a major value proposition.
Quote from: KW on Feb 16, 2023, 04:32 PMThat is probably still a lot cheaper than rolling it over onto higher interest rates for the rest of the term.
Let's assume they are not complete morons and RYM and their investment bankers have crunched the numbers.
I assume you meant
hospital level care?
Can't comment on RYM as I don't hold, but this is something OCA understands, and is committed to providing. Their Care Suites are
for life - with the level of care provided, increasing as need increases, within that Care Suite. They provide single or couple's suites, where occupants can live until they die (excluding high level dementia care needs).
OCA has also made a commitment to
always provide standard care beds, to ensure that every New Zealander has access to quality standard care should they need it, even if they cannot afford to pay for it themselves. Brent made that very clear in the November results presentation.
Quote from: KW on Feb 16, 2023, 04:37 PMOne of the promised benefits of moving into a retirement home is the ability to provide continuity of care if you need it. So you don't have to move out if something happens to you. Now that they are cutting back on high rise (the serviced apartments for impaired residents) and hospice level care beds (for those that can no longer look after themselves) can they make this promise any more?
I'm not so keen on my father moving into one if he's going to be turfed out on his butt as soon as he needs a higher level of care, while losing 30% of his capital so he has no money to fund the purchase of a serviced apartment elsewhere. They seem in danger of losing a major value proposition.
Quote from: mistaTea on Feb 16, 2023, 04:39 PMLet's assume they are not complete morons and RYM and their investment bankers have crunched the numbers.
Pretty incredible to have mismanaged the business so imprudently to be in this mess in the first place in my opinion.
I suspect there is a lot they're not telling investors such as a serious slowdown in sales.
As for the forecast for FY24 of a 10 to 15% increase in underlying profit in a falling and very slow market and with a 20% reduction in build rate...I think there is a lot of sanguine assumptions built into that that are extremely vulnerable to the downside
Even if they somehow do that, that is still a material decline in eps with all the new shares on issue.
Quick back of the fag packet calculation of NTA and EPS post capital raise (CR), assuming all rights are exercised at $5 and their forecast underlying profit is achieved for FY23 and FY24:
Raw NTA per share at 1H23 is $7.19c (being $3,628m divided by 504.67m shares).
After adding new shares equity of $902m less $30m CR costs less $134m USPP exit costs* gives post CR equity of $4,366m.
Divide this into the new number of shares of 685m gives post CR NTA of $6.37c before adding anything for NPAT for 2H23 (if any).
If RYM achieve underlying profit of $285m in FY23 that is EPS of $0.42c (based on underlying) and EPS of $0.47c in FY24 before any DRIP if the dividend is reinstated in the back half of FY24.
*USPP exit costs likely relate to unwinding the FX and interest rate swaps they entered into. Notice this from the last HY report:
Quote"In April 2022, the Group entered into additional cross-currency interest rate swaps to hedge the foreign currency risk and interest rate risk in relation to the additional USPP notes issued. The CCIRS transform a series of known fixed interest rate USD cash flows to floating rate NZD cash flows."
Not so clever now is it?
some interesting charts on scottish housing stock with policies on controlling rents. While not directly related to this stock it is interesting to see what happens to a market when there is large scale intervention in markets by government and the fact that policy does have implications for buy and sell signals.
https://www.telegraph.co.uk/property/buy-to-let/how-nicola-sturgeon-killed-scottish-buy-to-let-market/
AFR reports 'Mac, UBS mop up Ryman raising with $NZ138m shortfall auction'
That's some shortfall from insto's / wonder how keen mums and dads are on the cap raise?
Might be plenty of shares looking for a home after all this is over
Yeah, as expected underwriters got heaps. Real lack of confidence in the current board and management.
What does the Ryman brand mean anymore if they're watering down their care services?
The rot started a few years back when they very quietly removed their 6 month buy back guarantee for those who passed on or otherwise chose to exit.
Recently reported the average price of a RYM ILU in Auckland is $1.4m. Good luck selling them at that price in this market!
Book Value per share post cap raise is $6.40 ($7.19 prior) according to RTM presentation
So maybe 5 bucks a 'reasonable' share price - P/BV of .78
Thought this was interesting from Craig's latest
At the $5.00 offer price, RYM is priced at 0.79x NTA, a 69% discount to its five year average price/NTA of 2.6x. RYM's multiple has compressed the most of all its peers over the last five years, notwithstanding there has been severe multiple compression across the sector.
We expect that market focus will soon switch to which operator is next to raise capital. We think SUM and ARV are least likely given modest gearing and broad acre development books. OCA is more likely in our view given higher capex density sites, already high gearing, and negative FCF generation, and we note OCA's stated intent to dispose of assets at its November result (which has not yet been successful and we think will struggle to be so). Refer to our November note on OCA for further analysis
Sector been in a secular bear market for the last 7 years -- contracting P/B multiples over that period
One day thaose multiplies will impprove and we will experience a secular bull market - one dy I said but I don't think tomorrow is that day
There were only two picks (https://www.nzherald.co.nz/business/brokers-picks-the-hot-stocks-to-watch-in-2023/OKZ3SHWIQ5CXBCZIAKMSIPEJGA/) by Brokers for retirements stocks (Forbar - OCA, MSL - ARV) No love for Ryman then.
Although, Alexander Prineas at Morningstar came out yesterday advising that, "We reduce our fair value estimate on Ryman Healthcare by 34% to NZD 10." Advising that, "Investors Should Subscribe to Ryman Healthcare's Rights Issue." They're picking dividends to, "resume in fiscal 2024 at around NZD 0.13 per security, growing to NZD 0.27 by 2032."
10 bucks? Twice the value on the CR price, must be a bargain! Mind you Morning Star is also another name for all three of: Lucifer, a potent strain of cannabis and a spiked medieval mace. So their advice might better be seen as akin to selling your soul, blowing your mind or stoving your head in. Each to their own then.
RYM said they intend to be FCF positive in 2025 .... yeah right
The man from Forbar says '"Becoming FCF positive does not come without some painful decisions, including pausing/slowing six villages in Auckland and Christchurch, sharply pivoting away from high rise development and with it a relatively sharp slowdown in deliveries over FY24/FY25."
Quote from: Basil on Feb 18, 2023, 05:04 PMYeah, as expected underwriters got heaps. Real lack of confidence in the current board and management.
What does the Ryman brand mean anymore if they're watering down their care services?
The rot started a few years back when they very quietly removed their 6 month buy back guarantee for those who passed on or otherwise chose to exit.
Recently reported the average price of a RYM ILU in Auckland is $1.4m. Good luck selling them at that price in this market!
There's been a few more odd decisions - like wanting to build a high rise retirement village on Park Terrace in Christchurch, which is one of Chch's most expensive streets. Popular with parents who send their kids to Christs, Rangi or St Margs across the road. Probably not so popular with elderly people, especially since there isn't much appetite in Christchurch to live in high rise dwellings after the earthquake. I presume that is one of the projects that is going on hold. Thats going to be an expensive land bank.
Quote from: winner (n) on Feb 19, 2023, 10:24 AMSector been in a secular bear market for the last 7 years -- contracting P/B multiples over that period
One day thaose multiplies will impprove and we will experience a secular bull market - one dy I said but I don't think tomorrow is that day
I think we can all agree on that. Tomorrow won't be that day.
The more interesting discussion would be - which day is it then?
I think the chances are good it will be aligned with the real estate market bottoming out.
So far in my view the odds for winter / spring 2023 look good:
Seasonal effects plus the impact of increased immigration might well do the trick to stabilise our real estate market.
Just hope that we don't immediately move into the next real estate bull market ...
Quote from: Hectorplains on Feb 19, 2023, 11:28 AM10 bucks? Twice the value on the CR price, must be a bargain! Mind you Morning Star is also another name for all three of: Lucifer, a potent strain of cannabis and a spiked medieval mace. So their advice might better be seen as akin to selling your soul, blowing your mind or stoving your head in. Each to their own then.
I gotta give you top marks for that. 100%. ;D
ARV last traded at $1.05 with last stated NTA of $1.93 is not far off half NTA with proven management, lowest in sector gearing and right sized care services looks like a far better bet to me but I think this sector is another 12 to 18 months away from bottoming out.
Quote from: BlackPeter on Feb 19, 2023, 11:50 AMI think we can all agree on that. Tomorrow won't be that day.
The more interesting discussion would be - which day is it then?
If it's not Tomorrow (https://www.youtube.com/watch?v=Yop62wQH498&ab_channel=%D0%93%D0%B2%D0%BE%D0%B7%D0%B4%D0%B5%D0%BD%D0%B8%D0%BF%D1%83%D0%BA) maybe it'll be tomorrow, and tomorrow, and tomorrow. (https://www.poetryfoundation.org/poems/56964/speech-tomorrow-and-tomorrow-and-tomorrow)
Quote from: Basil on Feb 19, 2023, 12:37 PMARV last traded at $1.05 with last stated NTA of $1.93 is not far off half NTA with proven management, lowest in sector gearing and right sized care services looks like a far better bet to me but I think this sector is another 12 to 18 months away from bottoming out.
ARV NTA probably over $2 now ..... even bigger discount eh
I've shot ARV off an email 'advising' them to come out with another 'Investor News' this week - and like previous Investor News include the realised gains on sales number
Institutional offer completed at $6...wow. I wouldn't pay $5 let alone $6. Yesterday's market darling that's going to continue its 9 year track record of woeful market underperformance and make it 10 years+
Quote from: Basil on Feb 20, 2023, 09:40 AMInstitutional offer completed at $6...wow. I wouldn't pay $5 let alone $6. Yesterday's market darling that's going to continue its 9 year track record of woeful market underperformance and make it 10 years+
It will be interesting to see what they trade at today. I reckon $6.00 is over the top and these folks are about to take a bath.
(Closed pre halt at $6.40)
Edit - and I see siumme5rset have announced a potential bond offer. Where is your cash better going if you hold Ryman - into the rights or into summerset? (At least with the bond issues you appear to have a pretty good chance of getting the same money you put in out.)
Edit. Trading at $5.71. Ouch
I have been flat out and only just coming up to speed.
What a disgrace this is. After the CR only $30m goes back into the business.
Given that Ryman has said the break costs are about $134m, you'd have to be insane to incur such costs unless you absolutely had to.
The company's admission that it had had to renegotiate its banking covenants – could the answer be that Ryman was also in danger of breaching covenants attached to the USPP notes?
Chief executive Richard Umbers acknowledged that there could be a potential breach.
"We did our business modelling and certainly at some point in our future, the interest rate covenants were going to be a problem,"
I want to see heads role at board level at the very least. The CEO also has made a grave error with the second trance on his watch. What gets me the most is they could of raised from shareholders some time go for a much better deal and at a far higher price.
Hey shareguy ... I'm told the spare $30m is going to UBS and Macquaries as fees for getting cap raise across the line.
A lot has been said in the media etc that Ryman management haven't been all that transparent about what's been going on with that USPP and other stuff. Losing credibility with the market per se.
Wonder what John Boscawen is thinking .... Remember he challenged Ryman to more upfront and say how many sales had 'actually' been made because he reckon it was a lot less than what was reported. Even then he didn't seem to get a proper answer
Maybe the lesson is that peoples concerns like that are just the tip of the iceberg and there are usually more stuff to come out of the woodwork.
Quote from: winner (n) on Feb 20, 2023, 07:37 PMA lot has been said in the media etc that Ryman management haven't been all that transparent about what's been going on with that USPP and other stuff. Losing credibility with the market per se.
Wonder what John Boscawen is thinking .... Remember he challenged Ryman to more upfront and say how many sales had 'actually' been made because he reckon it was a lot less than what was reported. Even then he didn't seem to get a proper answer
Maybe the lesson is that peoples concerns like that are just the tip of the iceberg and there are usually more stuff to come out of the woodwork.
I agree Winner. John Boscowan was correct. In my opinion does not deserve the premium it is still trading at. As you point out might be further cockroaches to come out. And paying a divi ...what the heck. Incompetent, stale comes to mind.
USPPs usually contain "make whole" provisions, which means that if a company breaches a covenant, it has to not only repay the face value of the loan itself, but it also has to prepay the present-day value of all the interest it would have paid had it left the notes in place until maturity
I don't understand why they would take out USD loans when there was no natural hedge. That doesn't make sense given they introduced a risky factor that did not previously exist. They further stuffed it by converting fixed rate loans into floating rate loans. Nothing wrong with fixed rates from a planning, budgeting and cash flow perspective. I don't know the timing of the USPP tranches versus the NZD/USD cross-rates at the time, but were they trying to play the FX market?
Quote from: Ferg on Feb 20, 2023, 09:42 PMI don't understand why they would take out USD loans when there was no natural hedge. That doesn't make sense given they introduced a risky factor that did not previously exist. They further stuffed it by converting fixed rate loans into floating rate loans. Nothing wrong with fixed rates from a planning, budgeting and cash flow perspective. I don't know the timing of the USPP tranches versus the NZD/USD cross-rates at the time, but were they trying to play the FX market?
Good observations, whatever they were doing though, they got caught with their pants down.
Shocking that a company that has 'never' reached out to shareholders has landed with such a distressed balance sheet that they need a bail-out from shareholders.
Along with withholding dividends, which imo are likely a primary reason many shareholders held this equity, despite its pitiful gross dividend %, albeit amazing capital gains over decades, but now those have been reset.
Thing is, the REIT market has moved very quickly and over-leveraged company's have been caught out. Some have been calling this for quite a few years, albeit in a slightly different way from plainly being a stressed balance sheet that assumed low interest rates forever and increasing market prices for their assets, forever.
Well, all that has changed, hasn't it. RYM are pretty much fecked now, it will take years to recover from this and will require a complete turn around in real estate valuations, and a massive rebalancing of the balance sheet.
And that assumes they can maintain cashflows, which isn't guaranteed in this current economic climate. Amazing, going from safe, solid investment to high risk in a matter of a few months.
I agree Ferg & Rawz - debt in various currencies should be held in proportion the earnings in those currencies.
Not a sh'r in RYM (& don't follow it particularly closely) so I'm regurgitating from what I've read elsewhere, but USPP debt was very long dated (US markets have more depth in writing long term loans) which was pretty attractive to Ryman as an owner and developer of long term assets.
Ryman looked to address this risk by taking out currency swaps, and some interest rate swaps.
Taking out concurrent currency and interest rate swaps works fine in theory but if you break early all sort of "out of the money" havoc can be created (the PV of the forgone interest become a debt like item and the currency may have moved unfavorably). These two items look to have combined to create the massive costs in exiting the USPP notes.
Apparently only 40% of RYM's debt is hedged (and who knows how it is split across its various debt instruments, their margins and base rates), so the time to settle new units has lengthened that has impacted on the revenue front and the 60% unhedged on some vary big debt numbers was giving rise to a forecast interest cover covenant breach - and the USPP noteholders had RYM by the short and curlies.
I might hunt around there may be some moody's or S&P ratings for the USPP notes. Interesting stuff.
Tearing up $134m in USPP early settlement costs and another $30m for capital raise costs is bloody disgraceful, no question whatsoever about that. The board and management should never have allowed the company to get into this position and serious questions need to be asked about their competency. (I can't help thinking there is no chance this would ever have been allowed to happen under Simon Challis watch).
What I think should seriously annoy shareholders is there is no "mea culpa" here. They are treating this capital raise as just something "prudent" to do in the circumstances. Using prudent in the presentation materials so many times would really get under my skin if I was a shareholder because the board and management have been anything but. You'd be forgiven for thinking they thought the rising property market and one in 100 year low interest rates would stay that way forever. I think it's clear heads must roll.
What's the back story here though? My theory is that sales have dramatically slowed, and they have indeed been caught with their pants down.
The margin between RYM ILU units and the average sales value in the relevant and surrounding suburbs which was commonly thought in years gone by to be, ILU's about 70%, has ostensibly evaporated. RYM's units are really expensive, there's no free lunches, you pay for their lower 20% DMF fee up-front in the price. Does that model really work anymore with lower property prices?
Why would you trust the RYM board or management with your capital going forward when there are other companies in this sector that are performing well, (e.g. SUM and ARV) that haven't "tucked shareholders up".
Some of those directors you not saying nice things about have a decent chunk of skin in the game
Maybe this 'shareholders eye' keeping a close eye on things is not always a reliable guide to company fortunes
Quote from: winner (n) on Feb 21, 2023, 09:37 AMSome of those directors you not saying nice things about have a decent chunk of skin in the game...
Good to see those incompetent Muppets get their just reward then.
Why would anyone trust them with more of their capital at $5?
Quick back of the envelope calculation of their NTA suggests there's little or no discount to current NTA there.
Last stated NTA was $6.72 at the half year mark.
The equity ratio is only just on a third when you take external debt and residents' free loans into account so property losses since 30 September are tripled by the extraordinary gearing and if the property market has fallen about 7% in the last 5 months the effect on NTA is its likely to be down by 3 times that, let's call it 20% of NTA so the likely fair value of NTA before this unmitigated fiasco started unfolding is probably somewhere around $6.72 less 20% = $5.38.
Then they have just flushed $134m down the toilet with the USPP debacle plus another $30m to fund the attempted capital raise, that's $164m on 504m shares = 32.5 cents per share that the directors and management have 'torched" on shareholders behalf. Who needs enemies when your own directors and management, acting in your "best interests", burn your money like that! Take that off adjusted NTA and you're not far off $5.
Maybe RYM directors are up for a pending class action lawsuit like ATM ?
So shareholders need to ask themselves in this market with other opportunities like well respected ARV trading at close to half NTA or well proven SUM trading at not much more than NTA, do I trust the current management and board enough such that I think buying their shares at approx NTA, (with little or no real effective discount), is a good idea compared to other opportunities in this sector or elsewhere?
I agree with Shareguy, what's happened here is an absolute disgrace.
The days when some people reckoned a RYM share was always going to be worth 2 SUM shares and 10 OCA shares seems like a lifetime ago.
This hound told them on many occasions they had no idea what they were talking about, but they wouldn't listen
Apparently NZ RegCo is "looking into" it:
https://www.nzherald.co.nz/business/regulator-looking-into-ryman-healthcare-raise/5IOR2WZ7MRFFNM46UGA4GC4QVU/
I can't read the article as it's pay-walled and I don't subscribe. Haven't seen any mention of it elsewhere so far.
From behind the paywall in that article - Extracts "
QuoteThe market regulator is assessing Ryman Healthcare's $902 million capital raise and whether it hid information about its debt situation from investors.
"NZ RegCo is assessing Ryman's capital raising and the repayment of its USPP notes, in the context of its financial covenants," a New Zealand Stock Exchange regulator spokesman said in a statement".
Quote"Ryman's scale of debt drew criticism from analysts over the past five years.
Ahead of its capital raise, Umbers would not tell the Herald if the company had breached its debt covenants or received warnings from its lenders".
Emphasis added.
Concealment is the hounds pet hate.
Quote from: winner (n) on Feb 21, 2023, 09:37 AMSome of those directors you not saying nice things about have a decent chunk of skin in the game
Maybe this 'shareholders eye' keeping a close eye on things is not always a reliable guide to company fortunes
Its known as the House Money Effect - people who get gifted shares (through employee share schemes or performance bonuses etc) do not care as much as those who actually paid their hard earned for those shares.
https://www.investopedia.com/terms/h/house-money-effect.asp
I know that Ryman are an ANZ company but the Board seems to be a lopsided with 4 of the 7 directors (Inc Chair) seem to be based in Melbourne
That leaves Warren Bell, Jo Appleyard and Tony Leighs as the NZ based directors ...the ones with ears to the ground as they say to be putting a NZ perspective input to discussions.
Must look up the Skills Matrix of the Board before I say any more
Maybe also look at skills of the CEO, how relevant is retail experience to RYM?
Quote from: Stockgathering on Feb 25, 2023, 04:17 PMMaybe also look at skills of the CEO, how relevant is retail experience to RYM?
Well, the big cock up was to take out US loans instead of taking up NZ bonds without properly watching the covenants and either not reading (or not understanding) what the the fine print does to the debtor in the case of rising interest rates.
Anybody with some accounting and legal skills should have been able to do that - but maybe they hired only idiots or yes-man.
To be fair, though - it appears that most of the damage was already done before the current CEO started ... so any skill assessment might be of mainly historic interest.
But clearly - its now obvious to everybody that there is nothing special about Rymans board. They just had a lucky streak to start with which truly seems to be over.
Maybe the US loan was not a good move however the CEO Richard Umbers knew what the cost of the loan plus other expenses were. It is his job together with his team to keep the finances healthy enough to prevent this type of issue occurring. As a minimum he should have convinced the board not to pay the last 2 dividends a of app $100m. That money would have come handy. Together with a slow down of development the books should have been manageable.
Quote from: Stockgathering on Feb 25, 2023, 04:17 PMMaybe also look at skills of the CEO, how relevant is retail experience to RYM?
I posted this last May on other place. Still seems rather pertinent ....and a great piece of fundamental analysis.
My post-
There was an article on RYM in BusinessDesk today and a big photo of the CEO at the top of the page.
I'd forgotten that last September they appointed a grocer / retailer as CEO ....one Richard Umbers
Poster Rep had a few choice words about the appointment and Umbers' past
Share price when Umbers started was about $15 .......now $8.66 ...more than 40% down.....market cap down more than $3 billion ...wow
Not all poor Umbers doing ....maybe it's just Umbers is one of those unlucky leaders .....always dogged by ill fortune ...like his past careers as Rep pointed out
Unlucky leaders are not good .....their fortunes rarely change ....always dogged by bad luck.
Could call this a bit of fundamental analysis
there is a lot of uninformed comment on the other page about the doom if Ryman breaches $5.00 support...to be clear the offer is fully underwritten so the company is getting its money...if some holders want to wet their pants and not take up their rights that's up to them but the company will not care...they still get their $900m
Quote from: Arbroath on Feb 28, 2023, 12:12 PMthere is a lot of uninformed comment on the other page about the doom if Ryman breaches $5.00 support...to be clear the offer is fully underwritten so the company is getting its money...if some holders want to wet their pants and not take up their rights that's up to them but the company will not care...they still get their $900m
True - and add to that, that share price at CR time always moves close to the new issue price ... its just what happens if holders sell some of their more expensive shares (or rights) to have money to buy the cheaper new issues.
We are currently well on plan ... some people who tend to panic will lose in the CR, some people will make an extra cent by correctly picking the post CR bottom (which may or may not be below $5), the world will continue to turn and in a handful of years todays retirement stock prices (including RYM) will look very cheap indeed.
That's what investing is about - some people use downturns to strengthen their lungs (by shouting fire and spreading misery) and others use downturns to buy high value at low prices ...
Quote from: BlackPeter on Feb 28, 2023, 01:05 PMTrue - and add to that, that share price at CR time always moves close to the new issue price ... its just what happens if holders sell some of their more expensive shares (or rights) to have money to buy the cheaper new issues.
We are currently well on plan ... some people who tend to panic will lose in the CR, some people will make an extra cent by correctly picking the post CR bottom (which may or may not be below $5), the world will continue to turn and in a handful of years todays retirement stock prices (including RYM) will look very cheap indeed.
That's what investing is about - some people use downturns to strengthen their lungs (by shouting fire and spreading misery) and others use downturns to buy high value at low prices ...
You mean like those who have been topping up and choking on RV stocks in the last 12 months - ever high values at ever low prices?
Quote from: Teitei on Feb 28, 2023, 02:42 PMYou mean like those who have been topping up and choking on RV stocks in the last 12 months - ever high values at ever low prices?
Great buying at these prices though ..... riches will follow just as there's always sunshine after rain (Dire Straits)
Quote from: winner (n) on Feb 28, 2023, 02:59 PMGreat buying at these prices though ..... riches will follow just as there's always sunshine after rain (Dire Straits)
Tend to agree with you but I think there will be ample opportunities in the post CR market?
Looks to me like the institutional placement was badly managed - stock placed at $5.00 with those who really did not want more exposure but happy to do a quick flick at above $5.00 to recover some lost value.
Cannot see too many new investors putting up their hands now that whole sector is in the outer for a while.
Underwriters and sub-underwriters ending up with stock is a bad scenario. Looking more and more the case as the sp continues to drop.
Quote from: Teitei on Feb 28, 2023, 02:42 PMYou mean like those who have been topping up and choking on RV stocks in the last 12 months - ever high values at ever low prices?
Buying cheap and selling dear works for me. How are you operating?
Quote from: BlackPeter on Feb 28, 2023, 05:49 PMBuying cheap and selling dear works for me. How are you operating?
Wow!
So profoundly revealing!
Amazing!
I wouldn't buy any at $4 with the Muppets that are "managing" the business now.
Quote from: Basil on Feb 28, 2023, 08:53 PMI wouldn't buy any at $4 with the Muppets that are "managing" the business now.
Yesterdays geniuses are todays muppets and might be tomorrows shining stars. Who knows? Just depends on the uncertainties of life and the future moves of an irrational market. Hard to follow how fast heroes turn to zeroes and back.
Overall - clearly past board and management made some mistakes ... but in my view not different in severity to the actions of board and management in other fist hyped up and than ramped down companies. Even if I have no objective measurement for muppet-like behaviour. Do you?
Remember how we used to beat up SUM at some stage (good old Nora ...)? Remember WHS ups and downs, ATM's ups and downs, SML's ups and downs and many others ... all sometimes run by heroes and later on by (often) the same old muppets.
And sure, there are always shining stars and pariahs in the market ... but who is who tends to change over time.
Always good to buy a pariah and sell it later on as a star. Used to work for me with SUM :P (and some others) ;
Overall I don't have larger worries over RYM than e.g over SUM (though admittedly, their recent report was more transparent) or over (just to add a bit of controversy) e.g. HLG.
Anyway - we seem to have from time to time different views and methods of how to make money - but over all it appears that both of our methods (even if they are different) seem to work. No worries. Diversity of thoughts is good.
I think Simon Challis would be extremely disappointed with how Ryman is now being "managed".
Interesting ... Ryman moving up today to 550 (4.6%) and volumes looking quite healthy. Somebody seems to see value. Maybe not everybody reading this forum?
It's going to be interesting to see what their new NTA is as at 31 March when they report in due course.
Taking into account falls in the property market, their exceptionally high leverage before this cash issue and remaining high after it, the discounted rights issue and who can forget one of the greatest destructions of shareholder wealth for many years, the $164m they flushed down the toilet with egregiously poor mismanagement of their debt, this hound reckons the shares may be trading very close to asset backing.
That would be fine if they had proven management like SUM companies do but with their track record why anyone would buy them at close to NTA when you can buy SUM at around NTA or ARV at close to half NTA? Doesn't make any sort of sense to me.
What many investors may be missing is that after this cash issue their debt is still high and with RYM's units priced right at the top end of the market they are the most vulnerable in terms of executing sales in a falling house price environment. For example, their average ILU price in Auckland is about $400,000 more than SUM's. Let's see who can execute sales the best going forward.
Have taken up my rights in full today. I think a good chance will go down below offer price of $5 in the short term. Hopefully longer term it shines again.
https://announcements.nzx.com/detail/408035
Not sure how they can say with a straight face this retail offer attracted strong support.
To the best of my recollection that's one of, if not the very weakest participation rates I can recall of any cash issue in recent years.
Quote from: Basil on Mar 08, 2023, 05:29 PMhttps://announcements.nzx.com/detail/408035
Not sure how they can say with a straight face this retail offer attracted strong support.
To the best of my recollection that's one of, if not the very weakest participation rates I can recall of any cash issue in recent years.
I didn't take up my rights.
I've held since IPO so I am well up on my oroginal investmetn. But well down on its all time highs.
I've accepted the nominal paper "loss" but I'm not prepared to put good money into bad.
There's better things I can do with my cash. Even if I now just leave it in the bank I'll get a dividend - unlike Ryman has to offer.
Congrats on holding since the IPO Minimoke. I wouldn't mid wagering a few bob you miss Simon Challis superb leadership.
It would seem many were underwhelmed with this whole fiasco and the retail shortfall bookbuild cleared out at only $5.25
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/408128/390458.pdf
I'm not expecting a mea culpa from management any year soon so it looks like you are stuck with them going forward. Good luck with that mate.
Quote from: Basil on Mar 10, 2023, 09:14 AMCongrats on holding since the IPO Minimoke. I wouldn't mid wagering a few bob you miss Simon Challis superb leadership.
It would seem many were underwhelmed with this whole fiasco and the retail shortfall bookbuild cleared out at only $5.25
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/408128/390458.pdf
I'm not expecting a mea culpa from management any year soon so it looks like you are stuck with them going forward. Good luck with that mate.
Those were the good old days. I'm also not so impressed with their current build quality.
There were 25m shares ($125m) in the bookbuild that cleared at $5.25 (i.e., renouncing shareholders received 25c for their rights), this compares to the last closing price for RYM of $5.44 prior to the trading halt to conduct the bookbuild. It also compares to the $6 clearing price for the Institutional bookbuild a few weeks ago (i.e. renouncing shareholders in that bookbuild received $1 for their rights) .... Clearly a very soft outcome for the final leg of this Accelerated Rights Entitlement Offer (AREO)
Quote from: Shareguy on Mar 10, 2023, 11:43 AMThere were 25m shares ($125m) in the bookbuild that cleared at $5.25 (i.e., renouncing shareholders received 25c for their rights), this compares to the last closing price for RYM of $5.44 prior to the trading halt to conduct the bookbuild. It also compares to the $6 clearing price for the Institutional bookbuild a few weeks ago (i.e. renouncing shareholders in that bookbuild received $1 for their rights) .... Clearly a very soft outcome for the final leg of this Accelerated Rights Entitlement Offer (AREO)
Seems to me this process has eroded my personal wealth. Well done Board!
Soooo, tomorrow I'm off to look at a little villa in an Over 50's gated community of 32 units for my Dad priced around $500k. He feels that this is a better fit for him than a Ryman apartment, where he has no garden, and will be forced to surrender every cent from the sale of his house rather than having a nice pile of play money to do stuff with. I've told him he better act fast though as I think there will be a lot of oldies currently thinking the same thing lol. I'll keep you updated with my "retirement village saga" ;D
Have Ryman lowered the price of the unit he was looking at.?
Over 50's gated community sounds OK.
Just watch out for "body corp" cost.Usually OK for newish units, but can get very expensive on older buildings/communities.
Also are the insurances in "the Body Corp" name.?
Just a thought KW. How's that gated community going to work out when your Dad's health deteriorates quite a bit further, (as it inevitably will), in the years ahead? Its tough helping one's parents make decisions like this. I visited 7 or 8 villages and helped my parents understand that they need to be thinking 10 years ahead to what their needs are going to be in the future, not what they are now. That's a tough thing to help one's parents come to terms with. Aging isn't much fun for them anyway but helping them to think that far ahead can be quite a confronting experience for them to come to terms with. In my case that involved confronting my Dad's inevitable demise with dementia and knowing my Mum would likely be on her own for quite some time. It worked out well for both of them. I think continuum of care is very important and some villages provide this and make it easy to transition whereas others either don't provide it or make it expensive to transition. Choose VERY carefully!
Quote from: lorraina on Mar 10, 2023, 01:57 PMHave Ryman lowered the price of the unit he was looking at.?
Over 50's gated community sounds OK.
Just watch out for "body corp" cost.Usually OK for newish units, but can get very expensive on older buildings/communities.
Also are the insurances in "the Body Corp" name.?
$166 a month for BC, including insurance. Way cheaper than the weekly service fees at a RV
Quote from: Basil on Mar 10, 2023, 02:54 PMJust a thought KW. How's that gated community going to work out when your Dad's health deteriorates quite a bit further, (as it inevitably will), in the years ahead? Its tough helping one's parents make decisions like this. I visited 7 or 8 villages and helped my parents understand that they need to be thinking 10 years ahead to what their needs are going to be in the future, not what they are now. That's a tough thing to help one's parents come to terms with. Aging isn't much fun for them anyway but helping them to think that far ahead can be quite a confronting experience for them to come to terms with. In my case that involved confronting my Dad's inevitable demise with dementia and knowing my Mum would likely be on her own for quite some time. It worked out well for both of them. I think continuum of care is very important and some villages provide this and make it easy to transition whereas others either don't provide it or make it expensive to transition. Choose VERY carefully!
Well he can always sell up and buy into a serviced apartment or dementia unit later - at least he'd still have his capital to do that. Or he could just drop dead in his garden one day and not have the problem lol. Family history suggests the latter. And there is no guarantee that he would be able to transition within a village anyway, especially if Ryman et al are all cutting back on building apartments and hospital units.
The place is just across the road from the Ryman village, so he can visit his friends and use their amenities for free ;D
QuotePayment of Premium
Eligible retail shareholders who elected not to take up their entitlements and ineligible retail shareholders will receive the Premium (less any applicable withholding tax) for each New Share sold in the Retail Bookbuild.
The Retail Premium is expected to be paid to those retail shareholders on or about Tuesday, 14 March 2023.
Extract from this morning's announcement. This suggests they think the payment may be taxable...which I must confess this got me scratching my head a bit. Struggling to see how the sale of an entitlement to a discounted cash issue one elected not to participate in, a sale organized by bookbuild and not in fact the result of any action by a shareholder per se, rather a lack of action on their part, could possibly be considered to be on revenue account? Surely this is part repayment of an entitlement on capital account and yet it appears RYM in their "infinite wisdom" may have decided otherwise.
Be interesting to see if they do take withholding tax out of the 14 March payment. One thing I am absolutely certain of, RYM's highly paid external professional advisors are paid considerably more than I am so will have looked into this a lot deeper than I have.
I think it would add insult to injury if shareholders were taxed on the miserable 25 cent premium.
Talk about that rubbing salt into the wound of this disgraceful fiasco!
Quote from: Basil on Mar 10, 2023, 05:37 PMExtract from this morning's announcement. This suggests they think the payment may be taxable...which I must confess this got me scratching my head a bit. Struggling to see how the sale of an entitlement to a discounted cash issue one elected not to participate in, a sale organized by bookbuild and not in fact the result of any action by a shareholder per se, rather a lack of action on their part, could possibly be considered to be on revenue account? Surely this is part repayment of an entitlement on capital account and yet it appears RYM in their "infinite wisdom" may have decided otherwise.
Be interesting to see if they do take withholding tax out of the 14 March payment. One thing I am absolutely certain of, RYM's highly paid external professional advisors are paid considerably more than I am so will have looked into this a lot deeper than I have.
I think it would add insult to injury if shareholders were taxed on the miserable 25 cent premium.
Talk about that rubbing salt into the wound of this disgraceful fiasco!
Well done picking that up Basil. The mind boggles.
I have a small free carry Ryman holding getting smaller by the day. The fixed fees for life deal must really be hurting in these times of high cost inflation. Will certainly be a contributing factor to deteriorating operating cash flow with no respite on the horizon unfortunately. Aside from property headwinds and unproven management, this seems like a factor that will be a real sea anchor.
You raise a very good point Mos that hasn't had a lot of discussion around here.
RYM over the years have a long history of marketing new developments at local bowling club's and selling off the plans with the carrot of very cheap weekly fees fixed for life. $99 per week was the go for many of their units in years gone by and would be hopelessly inadequate in today's high inflationary environment in terms of village operating costs. That carrot is probably more expensive these days but nevertheless I think their M.O. in terms of marketing strategy remains the same.
To the best of my knowledge all the operators except SUM offer fixed fees for life. My understanding is that SUM's board were always very reluctant to follow this trend and maintained the right to adjust weekly fees in line with the increase in superannuation, (which I note has just had a significant boost from 1 April 2023), because they were concerned about the very thing we are experiencing now, high inflation. I had quite a few discussions with Julian Cook the former CEO about this. I was all for the fixed fees for life and suggested to Julian he build the cost into the asking price of the units. I think he and the board have distinguished themselves very well here pushing back against this widespread fixed fee for life marketing tool and conferred upon themselves a significant operational advantage going forward. Julian Cook's answer to me was always, we have no trouble selling our units with weekly fees indexed to increases in the superannuation. People understand that prices go up over time.
I think the difference between RYM and SUM here is that RYM try and contrive a sense that people are getting something for nothing whereas of course there are no free lunches and RYM price this apparent advantage and the apparent advantage of only a 20% DMF cost into their asking prices. Average independent unit asking price in Auckland for RYM ~ $1.4m, Summerset ~ $1.0m, (source recent investor presentations).
How are RYM going to sell down $1.4m units in Auckland with the average house price here only $1.0m?
Their answer is the units are still affordable on the basis of comparisons in the surrounding catchment suburbs. (generally considered to be within 10km's).
Food for thought. If the real estate market keeps falling, maybe people will need to consider cheaper units outside on their immediate neighbourhood? Maybe this confers even more advantage upon SUM?
Quote from: Basil on Mar 15, 2023, 09:44 AMYou raise a very good point Mos that hasn't had a lot of discussion around here.
RYM over the years have a long history of marketing new developments at local bowling club's and selling off the plans with the carrot of very cheap weekly fees fixed for life. $99 per week was the go for many of their units in years gone by and would be hopelessly inadequate in today's high inflationary environment in terms of village operating costs. That carrot is probably more expensive these days but nevertheless I think their M.O. in terms of marketing strategy remains the same.
To the best of my knowledge all the operators except SUM offer fixed fees for life. My understanding is that SUM's board were always very reluctant to follow this trend and maintained the right to adjust weekly fees in line with the increase in superannuation, (which I note has just had a significant boost from 1 April 2023), because they were concerned about the very thing we are experiencing now, high inflation. I had quite a few discussions with Julian Cook the former CEO about this. I was all for the fixed fees for life and suggested to Julian he build the cost into the asking price of the units. I think he and the board have distinguished themselves very well here pushing back against this widespread fixed fee for life marketing tool and conferred upon themselves a significant operational advantage going forward. Julian Cook's answer to me was always, we have no trouble selling our units with weekly fees indexed to increases in the superannuation. People understand that prices go up over time.
I think the difference between RYM and SUM here is that RYM try and contrive a sense that people are getting something for nothing whereas of course there are no free lunches and RYM price this apparent advantage and the apparent advantage of only a 20% DMF cost into their asking prices. Average independent unit asking price in Auckland for RYM ~ $1.4m, Summerset ~ $1.0m, (source recent investor presentations).
How are RYM going to sell down $1.4m units in Auckland with the average house price here only $1.0m?
Their answer is the units are still affordable on the basis of comparisons in the surrounding catchment suburbs. (generally considered to be within 10km's).
Food for thought. If the real estate market keeps falling, maybe people will need to consider cheaper units outside on their immediate neighbourhood? Maybe this confers even more advantage upon SUM?
Wasn't there a beagle on the other forum complaining over years about SUM not offering fixed fees for life? Bad management at that time.
I understand circumstances do change ... but that's the problem with long term contracts, they don't.
Quote from: BlackPeter on Mar 15, 2023, 12:42 PMWasn't there a beagle on the other forum complaining over years about SUM not offering fixed fees for life? Bad management at that time.
I understand circumstances do change ... but that's the problem with long term contracts, they don't.
I still believe they could have made more money using the strategy I recommended when inflation was low, anyone's guess now. The psychology behind fixed fees for life is it's a profoundly compelling marketing tool. Older folks crave certainty with their costs.
Anyway back to RYM. I think the board and management have a HUGE job to do to win back the trust of investors after this atrocious fiasco.
Quote from: Basil on Mar 15, 2023, 01:30 PMI still believe they could have made more money using the strategy I recommended when inflation was low, anyone's guess now. The psychology behind fixed fees for life is it's a profoundly compelling marketing tool. Older folks crave certainty with their costs.
Anyway back to RYM. I think the board and management have a HUGE job to do to win back the trust of investors after this atrocious fiasco.
No doubt - a meaningful "mea culpa" in combination with a "lessons learnt" and an approved implementation plan would not hurt.
However - Rymans problems getting caught pants down in the US dollar loan trap has absolutely nothing to do with fixed maintenance costs for their residents.
Just to be clear - I have not really any heart blood in the latter discussion, but I think it is a red herring anyway.
The numbers indicate that there is a real challenge with costs which I think is exacerbated by the fixed fees for life in a time of high inflation. Analysing underlying earnings for H1 FY22 of $95.9m is comprised of new sales margin $28.5 m, resales margin $78.0 m, DMF $23 m less OTHER NET COSTS of $33.6 m. By comparison H1 FY23 underlying earnings were $138.8 m is comprised of new sales margin $45.4 m, resales margin $126.7 m, DMF 29.0 m less OTHER NET COSTS of $62.3 m. Meaning that other net costs increased by 85% over the prior comparable period and were more than twice the sum earned as DMF. It seems to me that this strong growth in other net costs is likely to continue with fixed fees for life being outpaced by escalating inflationary costs. I see Ryman are have responded by changing the 20% DMF to 4 years rather than 5 years but this mitigation only applies to new residents and will not solve for existing residents with an average tenure of 5.9 years in ILUs.
Had this site for years and finally doing something with it ....still a hole in the ground so as multi story will take a while to generate cash
They left one feature off ....funeral homes are nearby
https://www.rymanhealthcare.co.nz/retirement-villages/wellington/newtown
Ryman has appointed CFO David Bennett to the newly created role of chief strategy officer.
Wonder if sideways move?
I'd rather be a CSO than a CFO anyway ...prob a bit more exciting.
Quote from: winner (n) on Apr 04, 2023, 01:04 PMRyman has appointed CFO David Bennett to the newly created role of chief strategy officer.
Wonder if sideways move?
I'd rather be a CSO than a CFO anyway ...prob a bit more exciting.
Group CEO, NZ CEO, Australia CEO, Chief Strategy Officer, Chief Financial Officer - a lot of Chiefs!
Quote from: Mos on Apr 04, 2023, 07:06 PMGroup CEO, NZ CEO, Australia CEO, Chief Strategy Officer, Chief Financial Officer - a lot of Chiefs!
CSO, eh. So he's got to be the man with the plan then. No doubt he'll be getting right on releasing a strategic plan. Strategic plans are cool, they're like a plain plan but even more plan-y. I wonder if the opposite is a non-strategic plan 🤔
Interesting Ryman get an article in NBR .... tryingto justify the US borrowings
Still reckon the CFO has been moved sideways .... and probably will have departed by this time last year
If you can access a good read
Taking on USPP debt right thing to do: outgoing Ryman CFO
https://www.nbr.co.nz/investment/taking-on-uspp-debt-was-right-thing-to-do-outgoing-ryman-cfo/
Best bit is -
Bennett also confirmed he attended the Private Placements Industry Forum in Florida, which was where it lined up its USPPs.
"It's like any conference, you see a lot of the hotel room and various conference rooms."
Suppose seduced by the glita and glamour of a high finance 'forum'
Yeap, I can't see any "ownership" by him, the CEO, the Board or anyone else for the massive destruction is shareholder value caused by the early repayment of USPP notes. An abject failure by the Board and management to manage their debt in a prudent manner and no contrition or remorse whatsoever!
Share price performance over this Muppets tenure speaks for itself.
Seduced into this madness is an interesting thought. Can sometimes be very subtle and often not so subtle.
Craig's positive with latest
When will RYM shares bottom?
Our conversations with investors indicate a broad consensus view that RYM shares are currently depressed and offer good long term value. There is also a broad consensus that house prices will continue falling this year, though views range from -10% to -25%. What is less clear is when to buy RYM shares. As the oft-quoted Mark Twain once said, "history never repeats but it often rhymes", and in this brief note we consider evidence from prior cycles to help investors better time their entry. While the GFC was quite a different cycle to the current one, it is nevertheless the only other period for which we have data available that saw a meaningful decline in house prices (-9% vs -18% to date for the current cycle), and so we focus our analysis on this period.
RYM shares have de-rated similarly to the GFC...
During the GFC, RYM shares fell 42% from a peak in Nov 2007 until the month after house prices hit bottom in January 2009, with the decline almost solely driven by a multiple de-rate (from 3.8x NTA to 1.6x). RYM shares have declined even more severely this cycle, down 58% (raise adjusted) to date, with the majority of the decline again being driven by a multiple de-rate (from 2.5x NTA to 0.8x). The review of the prior evidence therefore suggests (i) RYM shares will not bottom until house prices bottom and (ii) house prices will not bottom until after the RBNZ hiking cycle ends (expected in May).
...but will likely not bottom until house prices bottom
The evidence is however unclear as to when after the RBNZ hiking cycle stops that house prices will start to rise again. Some housing affordability metrics suggests that if current mortgage rates remain unchanged, house prices could fall a further 25-30% from current levels. However, such a bear case scenario is unlikely, in our view, with softer economic data combined with pockets of global banking sector stress pointing to lower rates, and over the last month markets have changed from pricing in a 31% probability of a RBNZ rate hike in Aug-23 to a 25% probability of a rate cut, We estimate that interest rates need to fall c.100bps from here to limit house price falls to 10-15% (from current levels), with c.200bps supporting flat prices, while c.300bps is needed to support a return to growth. Our base case remains house prices fall 10-15% over the rest of 2023, before recovering from 2024.
Retain Overweight on view shares recover in 2024
Our base case suggests RYM shares are unlikely to outperform the broader market until 2024 (likely 2H) - but could do so strongly. Retain Overweight
Caught up with family friends who said they are wanting to sell their apartment and move into a retirement village. They had chosen a new Ryman complex under construction in Takapuna.
Only problem is only 67 units and 600 registered party's according to Ryman. Has been told the price will be over $5m.
He is now looking at other options in case they miss out.
People must be absolutely nuts considering that sort of price for a unit in Takapuna and being a very small village the overheads, (weekly fees,) will be very high as they can only be amortized over 67 units.
Beachfront living in Browns Bay at the Sands for a small fraction of that
https://www.trademe.co.nz/a/property/retirement-villages/auckland/north-shore-city/browns-bay/listing/4057554424
Wonder how many of those people who have expressed interest will try and proceed at that exorbitant price?
How many who remain interested will be able to sell their mansion to afford it?
I genuinely wonder if RYM's extreme price / low DMF business model is fit for purpose in a falling market?
Let's be honest here, they are the only ones in the sector who have let their debt problems run away on them which can only happen through gross mismanagement or insufficient sales to generate cash flow to keep on top of debt, or both.
Quote from: Basil on Apr 10, 2023, 09:35 AMPeople must be absolutely nuts considering that sort of price for a unit in Takapuna and being a very small village the overheads, (weekly fees,) will be very high as they can only be amortized over 67 units.
Beachfront living in Browns Bay at the Sands for a small fraction of that
https://www.trademe.co.nz/a/property/retirement-villages/auckland/north-shore-city/browns-bay/listing/4057554424
Wonder how many of those people who have expressed interest will try and proceed at that exorbitant price?
How many who remain interested will be able to sell their mansion to afford it?
I genuinely wonder if RYM's extreme price / low DMF business model is fit for purpose in a falling market?
Let's be honest here, they are the only ones in the sector who have let their debt problems run away on them which can only happen through gross mismanagement or insufficient sales to generate cash flow to keep on top of debt.
Yes but they will be selling their apartment which is worth more than that in Takapuna on the beach. Their are plenty of very rich people that will pay those prices and only limited supply. Which is why I think Oceania's Helier will be a great success.
Will be interesting to see as you have pointed out who will actually go ahead. One would of thought even in todays market out of 600 the odds are high will still be a success.
I agree re Rymans debt they clearly had their heads in the sand. Once regarded as a bottom draw share, no longer a blue chip darling.
Surely that village is on the beachfront at that price so for $5m you get a north facing beachfront villa ?
Agree the Helier will be a great success for OCA....there's a LOT of old money in St Heliers but that's just one village and it surprises me how cheap the Sands apartments are selling for and that's beachfront. Then there's the ten villages they are trying to sell...
Quote from: Basil on Apr 10, 2023, 10:09 AMSurely that village is on the beachfront at that price so for $5m you get a north facing beachfront villa ?
Agree the Helier will be a great success for OCA....there's a LOT of old money in St Heliers but that's just one village and it surprises me how cheap the Sands apartments are selling for and that's beachfront. Then there's the ten villages they are trying to sell...
Not water front. On old fire station site so will have great sea views. I think it's also going to have views over lake Pupuke. Is the sands to cheap? A number who miss out on Ryman will look at this I guess.
Here's a link to it. Well back from the sea.
https://www.stuff.co.nz/business/121806390/ryman-plans-thirteenth-auckland-retirement-village
I would think the price for north facing sea view 2 bedroom at the Sands in Browns Bay is very different to a non sea view one and the $1,050,000 is unlikely to have a sea view but who knows.
$5m seems a lot for that site but who knows, as you say, there's a lot of really wealthy people and Lake Pupuke is pretty special. Its good they're going to offer the full continuum of care there and it's a handy site to get quick access to all sorts of medical specialists with practices based around North shore Hospital.
This whole $5m thing makes me wonder what OCA are going to ask for their best north facing units at the Helier ?
https://oceaniahealthcare.co.nz/location/the-helier $6m ? Must admit I could see myself enjoying retirement living at the Helier, taking my dog for a walk in the adjoining Glover park and looking out at the sea views.
Quote from: Basil on Apr 10, 2023, 10:30 AMI would think the price for north facing sea view 2 bedroom at the Sands in Browns Bay is very different to a non sea view one and the $1,050,000 is unlikely to have a sea view but who knows.
$5m seems a lot for that site but who knows, as you say, there's a lot of really wealthy people and Lake Pupuke is pretty special. Its good they're going to offer the full continuum of care there and it's a handy site to get quick access to all sorts of medical specialists with practices based around North shore Hospital.
This family friend unfortunately is not in the best of health and has spend plenty of time at NS hospital. So yes the location is a big plus.
Quote from: Shareguy on Apr 10, 2023, 07:16 AMCaught up with family friends who said they are wanting to sell their apartment and move into a retirement village. They had chosen a new Ryman complex under construction in Takapuna.
Only problem is only 67 units and 600 registered party's according to Ryman. Has been told the price will be over $5m.
He is now looking at other options in case they miss out.
Takapuna is my neighbourhood. $5m just does not seem credible to me for a typical Ryman 2 bedroom apartment. They are not getting anywhere near that in nearby Devonport.
Quote from: Mos on Apr 10, 2023, 02:50 PMTakapuna is my neighbourhood. $5m just does not seem credible to me for a typical Ryman 2 bedroom apartment. They are not getting anywhere near that in nearby Devonport.
Agree 100%.
Devonport - Ryman units $1.9m with stunning views of the harbour and struggling to sell them.
$3.5m gets you a huge 195 sq met stunning penthouse https://www.trademe.co.nz/a/property/residential/sale/auckland/north-shore-city/takapuna/listing/4022927071
Ryman and their $5m units in Takapuna...tell them they're dreaming.
Just out of curiosity I went onto Trade Me and did a search under retirement villages, all of Auckland and $2m plus as the price point.
That returned only one listing. I've been to that village and seen those houses. They are not typical retirement village units. These are substantial homes, literally right on the waterfront and north facing. 234 sq meters !
https://www.trademe.co.nz/a/property/retirement-villages/auckland/waitakere-city/hobsonville/listing/4006017861
Quote from: Basil on Apr 10, 2023, 03:28 PMAgree 100%.
Devonport - Ryman units $1.9m with stunning views of the harbour and struggling to sell them.
$3.5m gets you a huge 195 sq met stunning penthouse https://www.trademe.co.nz/a/property/residential/sale/auckland/north-shore-city/takapuna/listing/4022927071
Ryman and their $5m units in Takapuna...tell them they're dreaming.
Just out of curiosity I went onto Trade Me and did a search under retirement villages, all of Auckland and $2m plus as the price point.
That returned only one listing. I've been to that village and seen those houses. They are not typical retirement village units. These are substantial homes, literally right on the waterfront and north facing. 234 sq meters !
https://www.trademe.co.nz/a/property/retirement-villages/auckland/waitakere-city/hobsonville/listing/4006017861
That is a very nice retirement villa and outlook.
Quote from: Mos on Apr 10, 2023, 04:23 PMThat is a very nice retirement villa and outlook.
Top shelf stuff, no doubt about that. My understanding is that earlier houses built there in 2017 of the same size and waterfront were $2.1 back then so maybe these new ones in this newly opened area which are more true, north facing are mid to late $3m's... somewhere around there now?
A little birdie tells me SUM have done exceptionally well with that village site.
Quote from: Basil on Apr 10, 2023, 04:55 PMTop shelf stuff, no doubt about that. My understanding is that earlier houses built there in 2017 of the same size and waterfront were $2.1 back then so maybe these new ones in this newly opened area which are more true, north facing are mid to late $3m's... somewhere around there now?
A little birdie tells me SUM have done exceptionally well with that village site.
Shows what the industry can do with good site acquisition and development plans - SUM have excelled at this overall and their model with mainly villas and some apartments/care seems to have more appeal that the apartment only model in most locations (other than highly desirable urban sites). OCA specifically mentioned slow uptake of apartments at their Hamilton site. Whereas I think the SUM broad acre site in Cambridge will fly out the door.
Well for my own curiosity I enquired about the new Takapuna village and can confirm that demand is so high I can't even go on the waitlist. Was told they have over 600 registered buyers so registration is closed. Prices have not been set as two years away from completion. Price indication is starting at $2m plus up to maybe $5m or higher for the top floor apartments. Will have own movie theatre, Restaurant and Bar. Plus Hair and Beauty centre.
For them to not even allow me to go on a waitlist shows that they are very confident in selling this out. The level of demand is what interests me.
The lovely nurture co-ordinator said
If you are wanting your parents to join our friends of the village mailing list you will need to email me their full names, DOB, address and phone numbers. This mailing list will keep them updated regarding the progress of the village, as advised we currently aren't taking any further waitlist enquiries but as I mentioned I am happy to add a note to their file that they are interested in being contacted if a vacancy on the waitlist becomes available.
Quote from: Shareguy on Apr 12, 2023, 01:33 PMWell for my own curiosity I enquired about the new Takapuna village and can confirm that demand is so high I can't even go on the waitlist.
They just called me about 5 townhouses for sale in Kevin Hickman, which I was suprised about, since I thought they had a waitlist too.
Quote from: Shareguy on Apr 12, 2023, 01:33 PMWell for my own curiosity I enquired about the new Takapuna village and can confirm that demand is so high I can't even go on the waitlist. Was told they have over 600 registered buyers so registration is closed. Prices have not been set as two years away from completion. Price indication is starting at $2m plus up to maybe $5m or higher for the top floor apartments. Will have own movie theatre, Restaurant and Bar. Plus Hair and Beauty centre.
For them to not even allow me to go on a waitlist shows that they are very confident in selling this out. The level of demand is what interests me.
The lovely nurture co-ordinator said
If you are wanting your parents to join our friends of the village mailing list you will need to email me their full names, DOB, address and phone numbers. This mailing list will keep them updated regarding the progress of the village, as advised we currently aren't taking any further waitlist enquiries but as I mentioned I am happy to add a note to their file that they are interested in being contacted if a vacancy on the waitlist becomes available.
That is a very weird non sales pitch - I'm baffled by the whole Ryman response
Yes its very surprising that they have a cap on the number of "registered buyers"
What does that term even mean without a contract and a deposit?
What tiny percentage of these, surely nothing more than recorded "expressions of interest", do they expect will proceed to purchase?
You'd expect they would have vast amounts of data on this built up over the decades so they've capped the wait list it, perhaps based on that and their experience of the cost of communicating with these people with progress updates, (not all of whom will have electronic communication channels).
Not for one minute am I disputing that they will have a huge database to support their marketing methodology and capping of numbers, however bizarre it appears, however that database is predominantly built around a period over the last two decades where we've enjoying very buoyant real estate conditions so I can't help wondering how valid are those assumptions in the current environment?
What small extra communications costs would they incur to have double the sized "registered buyers" waitlist?
If I were a shareholder, I'd be hoping that's one of the first questions their new chief strategy officer would look at.
Yes I thought was strange to cap people going on the waitlist. They must be very confident in selling this development out.
I ended up adding to my position in the cap raise and have a good sized holding so will follow this development with interest.
Yesterday I heard radio advertising for the Kevin Hickman apartments. Are they having to spend more money on marketing and advertising in order to get sales?
Of course they do.They are not alone.The Press has been full of retirement villages ads for the past year,including the hoity toity Mervale and the posh Fendalton and Cashmere ones..
Soo, I am back looking at retirement villages lol
So here's an interesting titbit. Ryman is selling a brand new build townhouse for $710k with a $20k cash back offer. The exact same townhouse that had already been built and lived in briefly but is now available as a resale due to the occupier moving into assisted living, is being sold for $795k. And exiting residents wonder why they cant get their money back quickly. If there is a loss on resale, who should wear it? And does this mean that Ryman has been forced to drop the prices of retirement units to meet the market. Of the 7 townhouses that were released this week, only 2 have been sold. The other five are available to walk ins off the street like my Dad lol.
Years ago they used to have a guarantee that the Estate / people moving out would be repaid within 6 months.
They very, very quietly dropped that guarantee as soon as it started costing them money.
Now they promise to pay you interest if it doesn't sell but you can bet you last dollar the interest rate will be a LOT less than the average rate they are paying the bank, especially if we're talking about the real funding cost of USPP debt lol.
I think RYM lost their blue chip status when Simon Challis left and are trading on the historical status and reputation they used to enjoy.
Tell your Dad to wait until a week before next Balance date if he can, March 2024 and offer them $600K. Odds on favorite to get it for that by then.
You could put him up at your place til then 😁
Quote from: Basil on May 05, 2023, 04:34 PMTell your Dad to wait until a week before next Balance date if he can, March 2024 and offer them $600K. Odds on favorite to get it for that by then.
You could put him up at your place til then 😁
Yeah, nah :o
Off to another Ryman village tomorrow, along with a Summerset one, so shall report back on that. Also looked at a villa in an established privately run retirement village, which was lovely, the units have more privacy than the Ryman ones, and about $185k cheaper to buy. I told my Dad that $185k buys a lot of nice steak dinners! Interestingly, the private village also had several units available to buy, which the lady said was quite rare as usually they have none. Are more old people dying or less old people buying?
More oldies stuck at home and unable to buy until they have sold their house.
That and I suspect when you add up all the new retirement unit supply from all the unlisted privately owned companies and well as every listed one building as fast as they can, the market is probably well and truly saturated and oversupplied. Vast supply and modest demand leads to prices only going one way...
Never mind their asking price, you tell them what you think it's worth when you find one your Dad loves. Of course, they will say their units are already priced to sell and the price is not negotiable but you're far too smart to swallow that B.S.
RYM is flatlining now, it's not broken as some might be suggesting, the others are still trending down at present. None of them reflect their true value vs market price sentiment. Value investors will be like vultures circling above the carcasses, waiting for the moment to descend and have their fill.
Whatever the market macroeconomics are currently, it would be a huge investing mistake to not realise this sector has taken a massive beating and when it returns to favour, which it will because of the demographics, to not have identified an entry.
Was not that long ago ...
The long waiting lists and queues for RV units according to industry players ...... what happened?
Clever young guy. https://www.youtube.com/watch?v=iWu0Lbge90E
Quote from: KW on May 05, 2023, 04:47 PMYeah, nah :o
Off to another Ryman village tomorrow, along with a Summerset one, so shall report back on that. Also looked at a villa in an established privately run retirement village, which was lovely, the units have more privacy than the Ryman ones, and about $185k cheaper to buy. I told my Dad that $185k buys a lot of nice steak dinners! Interestingly, the private village also had several units available to buy, which the lady said was quite rare as usually they have none. Are more old people dying or less old people buying?
Interesting KW. I did some research last month looking for a luxury unit at Ryman's new Takapuna village and also at Oceania's new Helier village.
At the time Ryman said no point in going on wait list due to high demand. Thought this was strange. Since then have not heard a thing from them. Yet lady from Oceania has contacted me several times.
Quote from: Shareguy on May 06, 2023, 08:01 AMInteresting KW. I did some research last month looking for a luxury unit at Ryman's new Takapuna village and also at Oceania's new Helier village.
At the time Ryman said no point in going on wait list due to high demand. Thought this was strange. Since then have not heard a thing from them. Yet lady from Oceania has contacted me several times.
I think in that video Josh raised a great point about the inexperience of the C Suite at Ryman.
As I understand it normally Ryman et al appoint a sales manager for each new village who often continues on to become the village manager as the old folks love the continuity of dealing with the same person.
As I am sure you can appreciate these people are not paid a fortune and they come from all different sorts of backgrounds in life and its very unlikely, they are marketing experts per se. I suspect a lack of leadership direction and / or entrenched marketing practices from the good times has led to the arrogant approach you received from them. At the indicative prices they are suggesting, I think only a tiny fraction of the people on their wait list will even attempt to purchase a unit there and of course there will be many who try but cannot sell their homes for the very high prices they will need to afford a unit there.
The person handling enquiries there is highly unlikely to be a forward-thinking economic expert either and will be unaware that marketing practices and strategies that have worked in the past may not be successful in a depressed real estate market. You would expect that individual would receive direction from senior management who are paid the big bucks to steer the ship and formulate strategies to successfully navigate the expected challenges that lie ahead....and that brings me full circle to highlight their lack of experience in the industry. Put far more succinctly, I think their pricing and marketing strategy on that village is fundamentally flawed and this may be symptomatic as to one of the key reasons for their lack of recent sales success. If they are following this marketing approach with that village, you can bet your last dollar they are doing the same thing with other new villages in their pipeline.
What I found really interesting from your enquiries is that the Helier is only 25% sold down.
In good times in the real estate game, a village of that caliber in such an incredibly stunning location, priced sensibly and conservatively like it appears to be, I would suggest this would have completely sold out many, many months ago. Frankly even in this market I am surprised it hasn't sold out because that location is absolutely superb. Their very moderate pricing for that site, very slow progress on sell down and the manner in which they have repeatedly followed you up gives a very valuable insight into the current state of the upper end of the real estate market and the very modest demand for higher end RV units.
I think in very difficult and stormy seas you want a highly experienced captain steering the ship which is why the lack of experience at the helm at RYM, at least to me, is something I find very off-putting. Then there's the mid-teens percentage eps decline for FY24 because of having to issue so many shares to fix the USPP fiasco. That eps dilution is a cruel hangover / legacy recent senior management who have left, have burdened shareholders with. I would suggest RYM hasn't had first class leadership ever since Simon Challis left.
RYM is not the company it used to be when Simon Challis was at the helm and now in my opinion deserves to be trading on metrics in the middle of the sector and no more. SUM deserves to trade on a PE premium of 4-5 ahead of the pack, OCA 3-4 under the sector mid-point and RYM and ARV mid-point.
I think low tide for this sector will not be until sometimes in 2024 and this remains a sector to completely avoid this year. That's how I see it.
Questions for RYM's management at their AGM.
1. Why do you not expand the size of your enquiry list on new villages in a falling real estate market which seems like a profoundly sensible thing to do when logic would suggest a much lower percentage will be able to execute a unit purchase?
2. Is your very high price / very low DMF strategy you have always used fit for purpose in a much lower and down trending real estate market ?
3. Why did you repay the USPP early when you knew there would be such enormous costs in doing so and its consequent effect with issuing so many shares diluting all future years eps ?
4. What cash flow issues caused this incredible destruction of shareholder value and what are you doing to ensure the company doesn't become vulnerable in the future ? Is the high pricing of RYM units partly responsible here so returning to question 2 is the current business model fit for purpose ?
5. Are the people who caused this huge USPP mess going to be held accountable in any meaningful way?
I think what happened with the USPP debacle is an absolute disgrace and someone needs to get up at the annual meeting and tell the board and management they should be bloody well ashamed of themselves.
Percy (I think) explained this not that long ago. There have not yet been any walk throughs for The Helier, and my understanding is that the most expensive, top floor units, are already sold.
Those people looking for the next level down, in terms of cost, are unlikely to be willing to sign on the dotted line until they have been able to walk through and have a look in person. Would you buy sight unseen?
Until The Helier is open for walk-throughs, there is zero point speculating and making assumptions about sales figures/wait lists, or anything else. If, down the track people walk through and don't sign up, then concern will be justified. All this worrying about stuff without knowing there is anything to worry about, is a waste of time and energy.
If I were a millionaire looking for a luxury home - you can bet I'd be watching The Helier with interest. It is a stunning facility. Yes I know, the thought of me living somewhere like that is ridiculous, but dreams are free ;)
Quote from: Basil on May 06, 2023, 09:57 AMWhat I found really interesting from your enquiries is that the Helier is only 25% sold down.
In good times in the real estate game, a village of that caliber in such an incredibly stunning location, priced sensibly and conservatively like it appears to be, I would suggest this would have completely sold out many, many months ago. Frankly even in this market I am surprised it hasn't sold out because that location is absolutely superb. Their very moderate pricing for that site, very slow progress on sell down and the manner in which they have repeatedly followed you up gives a very valuable insight into the current state of the upper end of the real estate market and the very modest demand for higher end RV units.
These days with computer generated renderings, if they have that technology, they should be able to give people a virtual walkthrough of their unit and a very accurate rendering of their outlook / view which in large part is what one is paying for with that site.
In better times SUM and RYM would completely sell out villages long before completion often with just one show-home unit on site. You would think with modern computer technology, renderings and CAD design, people should have a very good idea of what they are getting. That site is absolutely stunning...I would have thought people would be clamoring all over that without any need for a walk through. Maybe you are right, people need to see their future home they are buying before doing so, after all we know most home purchases involve a lot of emotion so why would it be different with RV units...
I's like to live there when I'm 70.
There is definitely a place for computer generated walk throughs, but many people, particularly women, want to stand in the space and view it from their perspective too. They like to open cupboards, explore all the subtle "cool features" in the kitchen, envisage where they will put their furniture etc. I would imagine that this would be even more important when spending this kind of money.
Let me know when you buy yours - I'll come have a look ;)
Quote from: Basil on May 06, 2023, 10:51 AMThese days with computer generated renderings, if they have that technology, they should be able to give people a virtual walkthrough of their unit and a very accurate rendering of their outlook / view which in large part is what one is paying for with that site.
In better times SUM and RYM would completely sell out villages long before completion often with just one show-home unit on site. You would think with modern computer technology, renderings and CAD design, people should have a very good idea of what they are getting. That site is absolutely stunning...I would have thought people would be clamoring all over that without any need for a walk through. Maybe you are right, people need to see their future home they are buying before doing so, after all we know most home purchases involve a lot of emotion so why would it be different with RV units...
I's like to live there when I'm 70.
Quote from: KW on May 05, 2023, 04:47 PMYeah, nah :o
Off to another Ryman village tomorrow, along with a Summerset one, so shall report back on that. Also looked at a villa in an established privately run retirement village, which was lovely, the units have more privacy than the Ryman ones, and about $185k cheaper to buy. I told my Dad that $185k buys a lot of nice steak dinners! Interestingly, the private village also had several units available to buy, which the lady said was quite rare as usually they have none. Are more old people dying or less old people buying?
Was not impressed with the older Ryman village. Over priced and under-refurbished. They are charging $720k which is the same price as for one of the brand new units in their new village, yet the unit was rather dated, and smaller. When I compare the private village we looked at, their idea of refurbishment was a full gut job and new kitchen and bathroom installed, so fully modernised. Rymans idea of refurbishment is new paint, carpet and drapes in a villa that was built in 2001. So I'm struggling to see how the resales are competing with their new builds. Is this a deliberate strategy?
I am sure it is a deliberate strategy.
Quote from: Basil on May 07, 2023, 12:18 PMI am sure it is a deliberate strategy.
Cashflow wise, it makes sense for Ryman (or any of the RV operators) to sell the new units as all the proceeds go to Ryman.
Selling an existing unit (resale) means Ryman gets less as it has to pay part of proceed to the estate or trust.
Plus, I understand that the estate or trust has to continue to pay for the upkeep of the resale unit until such time as it is sold.
Quote from: Teitei on May 08, 2023, 12:22 PMCashflow wise, it makes sense for Ryman (or any of the RV operators) to sell the new units as all the proceeds go to Ryman.
Selling an existing unit (resale) means Ryman gets less as it has to pay part of proceed to the estate or trust.
Plus, I understand that the estate or trust has to continue to pay for the upkeep of the resale unit until such time as it is sold.
This explains the pricing discrepancies that favour the new builds. But it also highlights the problem that departing residents are being financially penalised by the village operator and calls for legislative change is not unfounded. The occupier of a unit should not be competing with the owner of the village to sell their property.
In case anyone is interested in the end of the story - yesterday my Dad signed up for a new Summerset village unit in Avonhead. I am so relieved that he has finally made a decision, he was starting to drive me mad lol. It was the most expensive one we saw, it offered no rebates or cashback, and its weekly fees are not fixed but CPI adjusted but my Dad doesnt care. It was my favourite one as well. I look forward to visiting and using the pool ;D
What he did care about though was that Kevin Hickman was one of the villages that Ryman has put on a slowdown/pause construction wise, so there was no telling when the place would be completed and he didnt fancy living in the middle of a construction zone for years. Plus the lovely field outlook from the back of his village unit would soon be the main access road to an 11 hectare affordable housing development. It pays to do your research 8) Thanks to reading the Ryman thread on this forum I was totally up with the state of play of Ryman's construction and knew to go looking to see if KH was one of the ones being delayed. So you all saved my Dad from spending his final years being annoyed and grumpy ;)
A friend of mine moved there about 3 years ago.She loves it.
Well done,both you and your dad.
I am very glad your Dad has found somewhere he likes, where he will be happy I am sure.
Your comment below is very telling, and important to note. For many folk in your Dad's position, they are far more focussed on finding something they like, than they are on the $$$. They have worked all their lives and have done the hard yards bringing up their families. Sometimes there are much more important things than money.
I have been following some of the Facebook groups for Ryman and Metlifecare, amongst others. These are groups set up for both current occupants and the general public. The overwhelming sentiment
from those who live there, is one of total satisfaction and zero regret. The negative posts are pretty much all from families, or the general public who have zero understanding of the sector, and have fallen foul of media hype about "ripping old people off." It is really interesting to read the comments of occupants, in response to those negative posts. Unfortunately, you can't convince the naysayers, no matter how much you try. I tried, but have given up - they are not interested. Interestingly, there are more than a few implications that providers are "stealing inheritances" - also very telling. It is high time adult kids stopped expecting an inheritance. Our parents should be free to do what they wish with their money in their retirement, without any feeling of obligation to provide for their grown kids!
Quote from: KW on May 09, 2023, 10:58 AMIt was the most expensive one we saw, it offered no rebates or cashback, and its weekly fees are not fixed but CPI adjusted but my Dad doesnt care.
Quote from: Untamed on May 09, 2023, 02:29 PMI am very glad your Dad has found somewhere he likes, where he will be happy I am sure.
Your comment below is very telling, and important to note. For many folk in your Dad's position, they are far more focussed on finding something they like, than they are on the $$$. They have worked all their lives and have done the hard yards bringing up their families. Sometimes there are much more important things than money.
I told my Dad that most people's only regret is that they didnt move in earlier. That there was no point spending all that money to wait until you are so old and infirm that you cant even enjoy the facilities. That being said, they are probably not for everyone, especially those ones where everyone is in close quarters to each other. There is a 90 day "dont like it you can move out with no financial penalty" clause, but maybe that should be a bit longer, maybe 6 months might be a better time period.
And I think that the provider should make a full refund of the capital payment at the time the resident exits, and not make the resident or their estate wait for months until the place is resold. They have had the use of that money for all that time, interest free, so doing dodgy things like pricing a resale unit higher than a new build unit is not on. So some changes are needed I think, but the basic model of selling right of occupancy is fine. If families want an inheritance they are always welcome to take their elderly parent into their own home, and preserve "their" money that way. As they say, you cant have your cake and eat it too lol.
Quote from: KW on May 10, 2023, 11:54 AMI told my Dad that most people's only regret is that they didnt move in earlier.
My Mum told me when she was in her village unit for over 11 years nearly every single resident she met at her village said exactly the same thing.
I am sure he will be happy at a new Summerset village.
Results out........ crikey no final divi for holders!
https://www.nzx.com/announcements/411681
• Audited underlying profit of $301.9 million, up 18.4%, driven by strong resale margins and a growing contribution from the Australian business
• Audited reported (IFRS) profit of $257.8 million, down 62.8% due to lower revaluation gains of investment property and costs associated with the early USPP repayment
• Free cash outflow of $389.0 million, reflecting a period of significant investment
• Completion of $902.4 million equity raise in March 2023
• Net interest-bearing debt of $2.30 billion, down from $3.00 billion at September 2022
• Gearing of 33.1%, down from 45.3% at September 2022 and in line with medium-term target of 30-35%
• 1,519 booked sales of occupation rights remained steady (1,543 in FY22)
• Aged care occupancy improved to over 96% at March 2023 for mature villages
• No final dividend for FY23
Underlying profit is expected to be in the range of $310-$330 million for FY24.....
RYM result pretty solid
Great selling prices and margins
Result backs the recent renewed confidence in the sector as a whole
Share prices should continue their rises
Oceania next cab of rank
Great result against low expectations. Margins and sales saved the day. Underlying profit beats expectations.
A lot to like.
Underlying profit will have excluded the massive cost of their USPP fiasco and I think it shouldn't. Its simply window dressing to exclude such a vast expense incurred during the year and means their underlying profit is misleading.
"Fixed", if you can call it that, by issuing truck loads of new shares diluting all future years EPS and almost certainly guaranteeing a decline in underlying eps in FY24. The legacy of that tremendously costly fiasco stays with the company forever and a day going forward and dilutes all future years earnings per share.
Not sure how you can respect a board who allowed that to happen by letting debt blow out so badly and where is the remorse or contrition for this massive destruction of shareholder value ? Not for me, especially noting the C Suite has very limited experience in the industry.
Market liked the result so obviously most are prepared to accept its onward and upward from here.
Yes Basil don't remind me about that please. I agree but hopefully they have learnt a painful lesson, not to be repeated.
The company is also expecting to announce a boardroom refresh.
NTA increase since CR to $6.58. Australia contributing 25 percent of group underlying profit which I think is a standout. Still regarded by many as the premium of the four listed.
Quote from: Shareguy on May 19, 2023, 07:12 PMYes Basil don't remind me about that please. I agree but hopefully they have learnt a painful lesson, not to be repeated.
The company is also expecting to announce a boardroom refresh.
NTA increase since CR to $6.58. Australia contributing 25 percent of group underlying profit which I think is a standout. Still regarded by many as the premium of the four listed.
There's no way the forward customer demographic is going away anytime soon, or that any of the listed RV's are going out of business. It would be a shame to look back, say in 5-10 years time and rue having missed out on a discounted sector buy of a generation. Same for all the RV's, and they've started moving.
Quote from: Buzz on May 19, 2023, 08:11 PMThere's no way the forward customer demographic is going away anytime soon, or that any of the listed RV's are going out of business. It would be a shame to look back, say in 5-10 years time and rue having missed out on a discounted sector buy of a generation. Same for all the RV's, and they've started moving.
Agree and have a good holding of all 4.
Lot of water to flow under the bridge before anyone can reliably say the housing market correction is over.
Quote from: Basil on May 20, 2023, 07:58 AMLot of water to flow under the bridge before anyone can reliably say the housing market correction is over.
Agreed. Our own treasury can't even get that right. I think though that when you look at
Immigration
Increased activity at open homes.
End in sight of interest rates increases.
Still very low unemployment.
50/50 chance of change in government
Inflation heading down.
That one could say that the signs are positive.
We also need to remember that for a number of people that the move into a village is a needs based decision. Also House prices not so much of a factor if you are fortunate to be mortgage free with investments as a lot of older people are. Ryman still regarded by many as best in class.
I agree with Buzz that in years to come we will look back at the beaten down prices as a huge missed opportunity.
Hey shareguy ....bit of a worry when both you and buzz are predicting the future.
I'm told no one can predict the future ....but then I suppose it's possible the power of two (powerful forces)actually can
Quote from: Shareguy on May 20, 2023, 09:04 AMAgreed. Our own treasury can't even get that right. I think though that when you look at
Immigration Yes
Increased activity at open homes. Purely anecdotal, facts are April 2023 sales activity was the lowest in decades
End in sight of interest rates increases. Hopefully although Labour are playing fast and loose with debt and the RBNZ may have to go several more times with 25 bps increases, some economists talking about an OCR at 6% !
Still very low unemployment. Agreed but not sure what this has to do with RV companies ?
50/50 chance of change in government 50% chance of an unholy trinity wrecking major havoc on the economy in their third term and continuing to crush the sector even further with egregiously bad underfunding of care
Inflation heading down. Too early to call
That one could say that the signs are positive. Too early I reckon.
We also need to remember that for a number of people that the move into a village is a needs based decision. Also House prices not so much of a factor if you are fortunate to be mortgage free with investments as a lot of older people are. Ryman still regarded by many as best in class. I lot is lifestyle based.
I agree with Buzz that in years to come we will look back at the beaten down prices as a huge missed opportunity.
A few thoughts above. After yesterday's bounce and obviously the market liked the result, we have RYM trading on just an 8% discount to NTA.
Mid point of forecast for FY24 $320m on expanded number of shares on issue now of 687.64m = eps of 46.5 cps. 606 / 46.5 = forward PE of 13.03.
Yield if they pay 30% of underlying profit is 46.5 x 0.3 = 13.95 / 606 = 2.3% taxable = 1.54% net after tax at 33%. I.5% net yield is vastly lower than anyone can get on term deposit. At the end of the day we all know there's no money in running the villages, so the real money is in the property, so this is a property company, (subject to intense regulatory review), that provides care and facilities for residents.
Is this really the once in a lifetime opportunity some tout?
How does this compare with a couple of the REITS out there, ARG and KPG that are not the subject of intense regulatory scrutiny ?
These REITS are trading at ~ 30% discount to current valuation and generating 6-6.3% net yields, worth 9 - 9.4% before tax to a 33% taxpayer.
I understand some people think Ryman et al are cheap, but the numbers don't stack up as far as I am concerned by comparison to REIT's. I guess a lot depends on your investment timeframe. I want to have maximum cash flow now when I can still enjoy it in my 60's. Younger investors looking several decades out may find the growth potential in the long run with this sector attractive, I get that. Horses for courses, each to their own, best wishes with it.
Quote from: Shareguy on May 20, 2023, 09:04 AMAgreed. Our own treasury can't even get that right. I think though that when you look at
Immigration
Increased activity at open homes.
End in sight of interest rates increases.
Still very low unemployment.
50/50 chance of change in government
Inflation heading down.
That one could say that the signs are positive.
We also need to remember that for a number of people that the move into a village is a needs based decision. Also House prices not so much of a factor if you are fortunate to be mortgage free with investments as a lot of older people are. Ryman still regarded by many as best in class.
I agree with Buzz that in years to come we will look back at the beaten down prices as a huge missed opportunity.
End in sight of interest rate increases ? depends what your vision is like . The 2 Year swap rate is up 50 basis points this week after Robbo's spend up. Sure to hit mortgage holders next week with more increases in retail lending rates. "Transitory" inflation is a little more entrenched than they thought as well. Not an easy course for the RBNZ to navigate.
Quote from: Shareguy on May 20, 2023, 09:04 AMAgreed. Our own treasury can't even get that right. I think though that when you look at
Immigration
Increased activity at open homes.
End in sight of interest rates increases.
Still very low unemployment.
50/50 chance of change in government
Inflation heading down.
That one could say that the signs are positive.
Immigration is not happening, at least not on a net basis. Sure, there was an inflow of 100,000 people in 2022 when the borders reopened, but that was to be expected after locking everyone out for 3 years. Lots of visa holders returning, family members coming to stay, retirees returning home etc. BUT if you look at the numbers for 2023 its now a net negative for the year, so reducing that 100k that arrived last year. Why? Because there are more people now leaving than arriving - and those leaving (going by all the real estate ads touting "vendor relocating overseas") are home sellers while those coming in on temporary work, student, or tourist visas are not home buyers. A net 24,000 people left NZ in March, 34,000 left in April, and as of Thursday a net 21,000 people have left in May. Just wait until the mainstream media catch hold of that information!
The good news is that unemployment isnt likely to rise much but that then means inflation won't subside either. So the market is now pricing in an OCR of 6%. It may go higher when the rest of the world cottons on to the fact that immigration is negative. If Labour get back in, I would expect that outflow of people to get even worse. All the elderly are stuck here, because they are dependent on the pension, but if there is nobody to buy their overpriced houses, how will they afford their retirement village?
Had a bit of free time today so had a look at their presentation.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/411681/394660.pdf
Being somewhat charitable about it...It all depends how you want to interpret the data I suppose....
Underlying profit, if you accept Ryman's way of doing this is up nicely but IFRS profit including all factors, not the least of which is the $151m cost to exit the USPP fiasco is down a whopping 62% !
But we've discussed this fiasco at length already so all that's really left to do and say that hasn;t been said about this already is to actually quantify the likely legacy impact of this enormous destruction of shareholder value on future earnings per share. Yes, RYM are forecasting underlying earnings growth of just on 6% in FY24, (well down on the good old days where Simon Challis aimed for 15% per annum and consistently achieved that), BUT, (sticking with RYM's methodology of underlying eps seeing as this seems to be their preferred yardstick), last year underlying eps were 58.5 cps, (page 15) based on the weighted average number of shares on issue.
At the midpoint of their FY24 forecast, $320m, its forecast to be just 46.5 cps on the vastly expanded number of shares on issue, (See post #235 above for the number crunching on this). WOW a whopping 20.5% reduction in underlying eps in FY24.
What a legacy the Muppets that signed off on that deal have burdened shareholders with forever and a day going forward ! Who has said sorry or lost their job for this ? Yeap, you guessed it, no one ! No assurance given of any dividend in FY24, no new dividend policy announced and no final dividend for FY23.
In other words, shareholders pay the price for management and directors' gross mismanagement and breach of their fiduciary duties to put shareholders best interest first at all times. Effectively when it comes to future distributions they have said, "Trust us, we know what we are doing" LOL
Quote from: KW on May 20, 2023, 02:39 PMImmigration is not happening, at least not on a net basis. Sure, there was an inflow of 100,000 people in 2022 when the borders reopened, but that was to be expected after locking everyone out for 3 years. Lots of visa holders returning, family members coming to stay, retirees returning home etc. BUT if you look at the numbers for 2023 its now a net negative for the year, so reducing that 100k that arrived last year. Why? Because there are more people now leaving than arriving - and those leaving (going by all the real estate ads touting "vendor relocating overseas") are home sellers while those coming in on temporary work, student, or tourist visas are not home buyers. A net 24,000 people left NZ in March, 34,000 left in April, and as of Thursday a net 21,000 people have left in May. Just wait until the mainstream media catch hold of that information!
The good news is that unemployment isnt likely to rise much but that then means inflation won't subside either. So the market is now pricing in an OCR of 6%. It may go higher when the rest of the world cottons on to the fact that immigration is negative. If Labour get back in, I would expect that outflow of people to get even worse. All the elderly are stuck here, because they are dependent on the pension, but if there is nobody to buy their overpriced houses, how will they afford their retirement village?
KW thanks for that. That's very interesting re the immigration loss. What site do you use for such up to date immigration figures?
Quote from: Basil on May 20, 2023, 10:11 AMA few thoughts above. After yesterday's bounce and obviously the market liked the result, we have RYM trading on just an 8% discount to NTA.
Mid point of forecast for FY24 $320m on expanded number of shares on issue now of 687.64m = eps of 46.5 cps. 606 / 46.5 = forward PE of 13.03.
Yield if they pay 30% of underlying profit is 46.5 x 0.3 = 13.95 / 606 = 2.3% taxable = 1.54% net after tax at 33%. I.5% net yield is vastly lower than anyone can get on term deposit. At the end of the day we all know there's no money in running the villages, so the real money is in the property, so this is a property company, (subject to intense regulatory review), that provides care and facilities for residents.
Is this really the once in a lifetime opportunity some tout?
How does this compare with a couple of the REITS out there, ARG and KPG that are not the subject of intense regulatory scrutiny ?
These REITS are trading at ~ 30% discount to current valuation and generating 6-6.3% net yields, worth 9 - 9.4% before tax to a 33% taxpayer.
I understand some people think Ryman et al are cheap, but the numbers don't stack up as far as I am concerned by comparison to REIT's. I guess a lot depends on your investment timeframe. I want to have maximum cash flow now when I can still enjoy it in my 60's. Younger investors looking several decades out may find the growth potential in the long run with this sector attractive, I get that. Horses for courses, each to their own, best wishes with it.
Your points are valid. It comes down to different views. I personally don't compare RVs to REITS. REITS win hands down from a dividend comparison. I look at RVs as part of a balanced portfolio that over time will hopefully appreciate . And agree a lot depends on investment timeframes. As you no I have been buying Arv, Sum annd Rym over the last few months and certainly at this stage I'm glad I did as they are showing good gains.
Yes we have the com com and regulatory review coming up which has the potential to do some serious damage. The government needs the private sector to provide care so in my view it will be just like all the other reviews with limited downside for the big players.
Quote from: Shareguy on May 20, 2023, 04:48 PMKW thanks for that. That's very interesting re the immigration loss. What site do you use for such up to date immigration figures?
Customs used to publish a daily arrivals and departures update, but now they do monthly. But Stats NZ seems to have access to the numbers still so they publish it in their "Covid Data Portal". All the rosy immigration news is from what happened last year, plus a big influx in February as all the RSE workers arrived for the apple/kiwifruit/grape harvests. But since March its been one way traffic - something the Govt doesnt want to face up to. Now they just have to maintain the illusion and media collusion until Oct ....
In terms of general traffic, we are also still well down from pre-Covid levels. In January 2020 there were 740k arrivals, 700k departures. Compared to 504k arrivals and 495k departures in January 2023.
Given the importance of net migration and the divergence in what's being reported vs. what you are seeing KW I'd be interested in your perspectives on the below.
https://www.stats.govt.nz/information-releases/international-migration-march-2023/
First download file: International Migration: March 2023 (excel)
Go to table 5 - monthly net migration (IE not rolling 12 month).
January 2023: +7,672
February 2023: +12,609
March 2023: +12,108
These are very strong numbers and annualised (as they are seasonally adjusted) implies a 130k pa run rate for the first quarter. and yes, I'm aware of how NPLT migration figures get updated continuously for ~16 months until they are finalised.
Was curious where the trends you are seeing for post March are coming from (is it the Stat NZ Covid Data Portal - Daily Border Crossing Arrivals? Seems to be the only series for data beyond March) https://www.stats.govt.nz/experimental/covid-19-data-portal
Selected Economic > Travel > Daily Border Crossing Arrivals
If that's what you are referring to, I can see arrivals peaking in January and falling steadily & accelerating to fall into May. But that appears to be the normal seasonal pattern. Looking at all the pre covid data, they all peaked in January, fell thereafter with the fall accelerating into May.
The prof economists are likewise calling it a migration boom - ANZ below - hit control F to search for migration.
https://www.anz.co.nz/content/dam/anzconz/documents/economics-and-market-research/2023/ANZ-RBNZ-MPS-Preview-20230517.pdf
I'm just struggling to reconcile the stat nz migration data and economist commentary to your analysis.
Net migration a big driver to the economy and important to a number of listed companies so was keen to better understand.
Quote from: Fiordland Moose on May 20, 2023, 09:20 PMI'm just struggling to reconcile the stat nz migration data and economist commentary to your analysis.
Unless people are teleporting into the country, the number of extra people in NZ at any one time is a function of those who arrived minus those who left. Tourists and Business Travellers cancel themselves out as they quickly return to/from whence they came/left. So rolling over time provides the trend. Covid border closures enabled a fixed baseline from which to measure, so its easy to read the numbers now.
2020 36,829 people left
2021 29,592 people left
2022 101,212 people arrived
2023 to date 11,529 people have left
Stats NZ uses a "model" to predict current immigration numbers, which is probably about as accurate as the Covid modelling was. (Still waiting for those 80,000 Covid deaths in NZ). While inwards immigration is easy to predict (just count visas issued) where they might be underestimating is the number of permanent departures. Estimates become Actuals only after 16 months (which is too long, 9 months would be better which is when a tourist visa expires).
And of those that have arrived, students/working holidaymakers/RSE workers/grandma on a 9 month tourist visa are only here temporarily.
And as corroborrating evidence, we only need to look at the housing rental market. If we had a migration boom, then NZ would look like Australia, with sky rocketing rents, vacancy rates sub 1%, and queues around the block for rental inspections. But we don't. In fact, the NZ rental market would be even tighter than the Australian one as we don't allow temporary residents to buy houses while Australia does (which is why their house prices are going up again), so everyone has to rent. So the rental market says I'm right, Stats NZ is wrong :-)
I note Ryman have $711m in Trade Receivables
These are principally amounts due for occupancy advances ......and the monthly fees
Seems a huge number of sale contracts (recorded as a sale) but people not paid or moved in yet.
Think Mr Boscowen trying to come with grips with this.
Quote from: winner (n) on May 21, 2023, 04:26 PMSeems a huge number of sale contracts (recorded as a sale) but people not paid or moved in yet.
That would match what I saw at Summerset - there were quite a few empty places but only one for sale. You only need to pay a $3k deposit (or $9500 if at Ryman) to secure your unit, then you have 6 months to sell your house and move in. My Dad is currently in this position.
QuoteOur portfolio of RV units and aged care
beds increased by 821 in FY23
Included in this movement are:
• 519 fully completed units and beds
• 302 units and beds that have been
included on a 'near-complete' basis,
as detailed in Appendix 23.
This was below previous guidance of
~1,000 due to severe weather events in
Auckland and the Hawke's Bay (in
particular impacting construction at
James Wattie
Found the above from page 8 of the presentation, pretty interesting. Surely, they are not including development margins as profits without a unit actually being complete ?
The way I read this they were to "deliver", we all know that's a euphemistic term that doesn't mean deliver to a resident, simply construct as a complete unit ready to sell 1000 units. Are they trying to say we nearly made our target of 1000 units ? Surely they only really completed 519 ?
So they count a unit as sold when someone gives them $9,500 deposit, (anyone can walk away from that without untoward pain if they can't get what they want for their home),...and they count something as built when its not actually fully complete ?. They also exclude over $150m in early repayment costs from underlying profit. It seems a strange world we live in these days.
I fondly remember the days a sale was a sale when you were paid the whole amount, a unit was built when you got a code of compliance certificate from the council, and you took whatever costs incurred during the year like a man on the chin in the profit and loss statement. Those were the days...
Quote from: Basil on May 21, 2023, 06:22 PMFound the above from page 8 of the presentation, pretty interesting. Surely, they are not including development margins as profits without a unit actually being complete ?
The way I read this they were to "deliver", we all know that's a euphemistic term that doesn't mean deliver to a resident, simply construct as a complete unit ready to sell 1000 units. Are they trying to say we nearly made our target of 1000 units ? Surely they only really completed 519 ?
So they count a unit as sold when someone gives them $9,500 deposit, (anyone can walk away from that without untoward pain if they can't get what they want for their home),...and they count something as built when its not actually fully complete ?. They also exclude over $150m in early repayment costs from underlying profit. It seems a strange world we live in these days.
I fondly remember the days a sale was a sale when you were paid the whole amount, a unit was built when you got a code of compliance certificate from the council, and you took whatever costs incurred during the year like a man on the chin in the profit and loss statement. Those were the days...
I quite like this revenue recognition criteria from another NZX listed company - it's pretty conservative....
Revenue represents amounts derived from land and property sales, and is recognised when the customer obtains control of the property and is able to direct and obtain the benefits from the property. The customer gains control of the property when the Company receives full and final consideration for the property and the Company transfers over the Certificate of Title.
Rental income from investment properties under operating leases is recognised on a straight-line basis over the term of the lease to the extent that future rental increases are known with certainty.
The Group grants deferred settlement terms of up to 12 months on certain sections. The total value of these deferred settlements amounted to $17 million (2021: $14 million). In some instances the acquirers are permitted access to the residential sections for building activities prior to settlement. However, the acquirer does not obtain substantially all of the remaining benefits of the asset until final settlement of the land and the title has passed.
Quote from: Basil on May 21, 2023, 06:22 PMFound the above from page 8 of the presentation, pretty interesting. Surely, they are not including development margins as profits without a unit actually being complete ?
The way I read this they were to "deliver", we all know that's a euphemistic term that doesn't mean deliver to a resident, simply construct as a complete unit ready to sell 1000 units. Are they trying to say we nearly made our target of 1000 units ? Surely they only really completed 519 ?
So they count a unit as sold when someone gives them $9,500 deposit, (anyone can walk away from that without untoward pain if they can't get what they want for their home),...and they count something as built when its not actually fully complete ?. They also exclude over $150m in early repayment costs from underlying profit. It seems a strange world we live in these days.
I fondly remember the days a sale was a sale when you were paid the whole amount, a unit was built when you got a code of compliance certificate from the council, and you took whatever costs incurred during the year like a man on the chin in the profit and loss statement. Those were the days...
I recall you've said this before, maybe a few times, on another site. And it's true. Like the one time they decided to fudge the delivery numbers, they're locked in forever fudging the numbers or having to admit deliveries was HALF projections. It's almost as though they think no one would notice.
This company has had a severe reckoning recently, and the increased scrutiny that comes from that, I think it's about time they got back to full honest disclosure and just got on with doing the business as the largest listed RV in the country. Bite the bullet, tell the truth.
FB latest today
Ryman Healthcare (RYM) reported a strong FY23 result, ahead of our and consensus expectations with annuity EBITDA up +27% versus FY22, driven by good cost control and continued high resale gains. For the first time since the onset of COVID-19, RYM surprised to the downside with regards to both costs and debt. It was also the first time since 2H20 that RYM has experienced six months of clear air; free from lockdowns and major COVID outbreaks. We think the two are related. It has been a difficult three operational years for aged care as well as property development; we believe we are seeing the first signs of normalisation. The result was far from perfect. New sales were even weaker than we had anticipated and deliveries were hampered by the poor weather in the North Island of NZ. Looking ahead, we are encouraged by; (1) RYM's strong progress in Australia, (2) its focus on becoming free cash flow positive by FY25, and (3) the continued land bank mix shift towards lower density villages. We reiterate our OUTPERFORM rating with a 12 month target price of NZ$8.20.
Craigs today
Target price $7.78 (+5%)
Our DCF-driven target price increases +5% to $7.78 in part driven by an upgrade to our medium term development margin estimates to 25% (from 22.5%), as Ryman's track record in Australia improves. We have also made various minor tweaks to our modelling following improved disclosure, including of RYM's RADs in NZ and Australia. Partly offsetting the above is we now also bake in a -5% cumulative nominal decline in RYM unit prices over FY24/FY25 (vs flat prior), flat in FY26 (no change), before growth of 3% long run (no change). Other key WACC assumptions remain unchanged (WACC 9.1%, TGR 2%).
Peer multiple analysis
RYM is priced at 0.9x NTA, a 63% discount to its five year average price/NTA of 2.5x. RYM's multiple has compressed the most of all its peers over the last five years. While we do not expect RYM to again attain the lofty peaks of over 2x NTA seen pre-raise, we do see it as conceivable the business will again trade on c.1.5x NTA depending on RYM's success in pivoting to a less intensive build model and the outlook for house price growth.
Quote from: Basil on May 21, 2023, 06:22 PMSo they count a unit as sold when someone gives them $9,500 deposit, (anyone can walk away from that without untoward pain if they can't get what they want for their home),...and they count something as built when its not actually fully complete ?. They also exclude over $150m in early repayment costs from underlying profit. It seems a strange world we live in these days.
Again, that was my experience with Ryman. They were selling a block of units that we couldnt even walk through or around, as they were still being constructed and the area was blocked off. 2 of the 7 were already sold. We were expected to buy after walking through their show home in the village. I suppose its similar to other developers who sell "off the plan" and count it as a sale.
Quote from: Basil on May 22, 2023, 10:28 AMHaven't got much more time for RYM at this stage but found this little snippet from page 5 of the presentation quite interesting
One of the foundation principles upon which RYM built their empire and reputation was fixed fees for life.
Its still in their marketing material...so that little snippet shocked me to be quite frank about it.
Talk about a complete about face. Not just annual reviews of weekly fee pricing capped at the rate of increase in superannuation like SUM do, quarterly reviews of the weekly fee for new residents with no price cap, surely not :o
Do they really imagine they can undo a foundational principle this company was built on and it won't affect their sales rate or reputation?
It's perfectly clear to me the C Suite are terribly inexperienced if they think they can maintain their super premium pricing without fixed weekly fees for life.
I imagine that is reviewing the weekly fee charged to incoming residents. Its still fixed for life, but a new resident will pay more than one that moved in 3 months ago.
Quote from: KW on May 22, 2023, 10:32 AMI imagine that is reviewing the weekly fee charged to incoming residents. Its still fixed for life, but a new resident will pay more than one that moved in 3 months ago.
Yeah I think you are right and worked that out by the time I made that post which is why I subsequently deleted it. Was a bit shocked there for a few minutes lol
Quote from: Basil on May 22, 2023, 10:39 AMYeah I think you are right and worked that out by the time I made that post which is why I subsequently deleted it. Was a bit shocked there for a few minutes lol
I wonder if Summerset with its CPI adjusted fee also sets incoming residents fees higher? Fixed fees are unfair to incoming residents, as they will then be subsidising the provision of village facilities by paying higher weekly fees to compensate for all those residents still on low weekly fees. In fairness, everyone should pay the same.
Quote from: KW on May 22, 2023, 12:25 PMI wonder if Summerset with its CPI adjusted fee also sets incoming residents fees higher? Fixed fees are unfair to incoming residents, as they will then be subsidising the provision of village facilities by paying higher weekly fees to compensate for all those residents still on low weekly fees. In fairness, everyone should pay the same.
I talked this over with the village manager at SUM's huge Hobsonville village a few years ago.
The first residents there did get a great deal, (subsequently increased annually at a rate that's capped at the rate of increase in superannuation), but nevertheless, my recollection is early residents there are continuing to enjoy a price advantage. To be fair, for several years they had to endure a village without many communal facilities and the noise and dust from construction for many years.
RYM also used to do really sharp weekly fees with new villages if you buy off the plans.
Breezy might know if they are still doing this.
A little snippet she mentioned to remember when you're considering moving into a new village, is bring a young cute dog with you. Helps enormously as an icebreaker meeting new people and as one gets older, one might be less capable of looking after their dog so the village manager might not let you replace it so start with a young one and make it a condition of the sales agreement that that member of your family can move in with you otherwise its no deal!
Quote from: KW on May 20, 2023, 02:39 PMImmigration is not happening, at least not on a net basis. Sure, there was an inflow of 100,000 people in 2022 when the borders reopened, but that was to be expected after locking everyone out for 3 years. Lots of visa holders returning, family members coming to stay, retirees returning home etc. BUT if you look at the numbers for 2023 its now a net negative for the year, so reducing that 100k that arrived last year. Why? Because there are more people now leaving than arriving - and those leaving (going by all the real estate ads touting "vendor relocating overseas") are home sellers while those coming in on temporary work, student, or tourist visas are not home buyers. A net 24,000 people left NZ in March, 34,000 left in April, and as of Thursday a net 21,000 people have left in May. Just wait until the mainstream media catch hold of that information!
The good news is that unemployment isnt likely to rise much but that then means inflation won't subside either. So the market is now pricing in an OCR of 6%. It may go higher when the rest of the world cottons on to the fact that immigration is negative. If Labour get back in, I would expect that outflow of people to get even worse. All the elderly are stuck here, because they are dependent on the pension, but if there is nobody to buy their overpriced houses, how will they afford their retirement village?
Interesting statements.
Do you have a source for the immigration data you are stating? Stats NZ seems to have released their latest data only to February 2023 ... as usual NZ is a bit slower than anybody else in presenting new numbers.
Quote from: Basil on May 22, 2023, 12:47 PMA little snippet she mentioned to remember when you're considering moving into a new village, is bring a young cute dog with you. Helps enormously as an icebreaker meeting new people and as one gets older, one might be less capable of looking after their dog so the village manager might not let you replace it so start with a young one and make it a condition of the sales agreement that that member of your family can move in with you otherwise its no deal!
Interestingly, all the villages we saw were really accommodating of pets. It seems that being pet friendly is now standard business practice. My dad is taking his cat, and will be putting in a cat door for it. The cat is only 4, so he should get at least another 10 years out of it lol
Quote from: KW on May 22, 2023, 01:40 PMInterestingly, all the villages we saw were really accommodating of pets. It seems that being pet friendly is now standard business practice. My dad is taking his cat, and will be putting in a cat door for it. The cat is only 4, so he should get at least another 10 years out of it lol
Good for him. Not sure how you would get on with multiple little ankle biters or me for that matter with my pony sized dog lol
Quote from: Basil on May 22, 2023, 02:24 PMGood for him. Not sure how you would get on with multiple little ankle biters or me for that matter with my pony sized dog lol
The trick is to take in a black pet. Then you can just replace it when it dies with another black one, and nobody would ever notice ;D
Quote from: KW on May 22, 2023, 02:52 PMThe trick is to take in a black pet. Then you can just replace it when it dies with another black one, and nobody would ever notice ;D
LOL You're more cunning than a hungry Beagle. ;D
Interesting appointment
https://www.nzx.com/announcements/415471
Quote from: KW on May 20, 2023, 02:39 PMImmigration is not happening, at least not on a net basis. Sure, there was an inflow of 100,000 people in 2022 when the borders reopened, but that was to be expected after locking everyone out for 3 years. Lots of visa holders returning, family members coming to stay, retirees returning home etc. BUT if you look at the numbers for 2023 its now a net negative for the year, so reducing that 100k that arrived last year. Why? Because there are more people now leaving than arriving - and those leaving (going by all the real estate ads touting "vendor relocating overseas") are home sellers while those coming in on temporary work, student, or tourist visas are not home buyers. A net 24,000 people left NZ in March, 34,000 left in April, and as of Thursday a net 21,000 people have left in May. Just wait until the mainstream media catch hold of that information!
The good news is that unemployment isnt likely to rise much but that then means inflation won't subside either. So the market is now pricing in an OCR of 6%. It may go higher when the rest of the world cottons on to the fact that immigration is negative. If Labour get back in, I would expect that outflow of people to get even worse. All the elderly are stuck here, because they are dependent on the pension, but if there is nobody to buy their overpriced houses, how will they afford their retirement village?
Hi KW, I asked you at the time you made this brave statment where these predictions come from - but you didn't answer.
Maybe you recheck your sources and do in future always the opposite of what they predict.
Anyway - immigration (as expected by anybody else but you is humming - just have a look into todays disclosure of the government books:
"The Treasury assumes annual net migration will peak in the September 2023 quarter close to 100,000 and add approximately 45,000 more people over the forecast horizon than assumed in the Budget Update,"
It was immigrants saving Robertsons butt ... nearly 100,000 net coming in last 12 months.
Not that he deserved that, given the way Labour treated them during Covid, but this is another story.
Quote from: BlackPeter on Sep 12, 2023, 04:10 PMHi KW, I asked you at the time you made this brave statment where these predictions come from - but you didn't answer.
Maybe you recheck your sources and do in future always the opposite of what they predict.
Anyway - immigration (as expected by anybody else but you is humming - just have a look into todays disclosure of the government books:
"The Treasury assumes annual net migration will peak in the September 2023 quarter close to 100,000 and add approximately 45,000 more people over the forecast horizon than assumed in the Budget Update,"
It was immigrants saving Robertsons butt ... nearly 100,000 net coming in last 12 months.
Not that he deserved that, given the way Labour treated them during Covid, but this is another story.
... and just in case anybody wonders, what this has to do with Rym?
Well, the housing market actually did bottomed out (as well thanks to immigration), plenty of people coming in and all these retirees wanting to move into their respective RYM, OCA, SUM or ARV unit will have little problems to sell their houses. Win - win and win!
https://home.nzcity.co.nz/news/article.aspx?id=384253
12 September 2023
Provisional Stats NZ figures show a net gain of 96-thousand-200 --- with 135-thousand non-citizens arriving, and 39-thousand-400 New Zealanders leaving.
Senior demographer Kim Dunstan says it's now 12 full months since the border fully re-opened after Covid restrictions.
He says the figures partly reflect that -- but there's also been some immigration setting changes.
Ryman has reported a messy 1H24 result, with underlying trading trends worse than implied by its uNPAT reported (which for the first time is adding back costs that were previously ignored). Here is Stephen Ridgewell's first take: RYM has downgraded prior build rate guidance, confirmed it has stopped work at several sites, will sell two others that are higher risk/more capex intensive, all as part of a major restructure of its build rate. These measures are all sensible given RYM's current trading but are equally the measure of a company in some distress with little risk appetite and trying to clean up a litany of errors. Ryman will eventually recover (after all, its brand with residents is still strong, even if its brand with investors is not) and the shares are cheap, but investors need to understand this process will be both long and quite painful. In our last sector note (New merit order: SUM up to #1) we made the case that investors who are heavily in RYM should make at least a partial switch from RYM to SUM, in part due to the larger number of skeletons in RYM's closet
SUM = blue chip, sell all others in the sector I reckon.
Quote from: Basil on Nov 29, 2023, 01:52 PMSUM = blue chip, sell all others in the sector I reckon.
Charts concur.
Ok assume everyone has seen this ...
https://www.nzherald.co.nz/business/ryman-healthcare-cites-challenging-housing-market-in-4pc-net-profit-drop/HZTBLTWJHNAT3GMW4JQIE4CLPU/
got some big developments in small towns in the central North Island...
Where do we think it's heading. Under $5?
Under 5? Oh BOY!!!
what does Sir B think of that!!!
boy that bets KIP!!!
I've had more interesting things to do today than take a deep dive into this but I noticed underlying eps down a whopping ~ 30% thanks to the boards "infinite wisdom" of the USPP fiasco. So many new shares issued to fix that cataclysmic stuff-up so from an earnings per share point of view, (anyone remember how Simon Challis liked to keep things at a nice round 500 million shares forever and a day?), that appalling legacy will be with them forever.
Now being forced to eat humble pie with certain developments on hold and others cancelled and land for sale is frankly, quite humiliating.
I've said it before and it's never been more pertinent, when Simon Challis left, the magic left with him.
While this is a large company, in a sense, the reputation it carries with investors is in my opinion a pale shadow of what it once was.
Clear downtrend on the charts...frankly who knows where the bottom is, but I am certainly not interested in acquiring any.
Ok then... its hit an iceberg.. sprung a leak... pops some riverts and is down by the bow and its screws are turning partially out of the water......
sounds like a big ship in trouble...
gosh you would not have liked to bought up at the HIGH HIGHS of this one......
Interesting to see that Takapuna site is on hold. Fair bit of site works there already. I have always maintained they were dreaming with their indicative asking price of $5m for the better units there. Some really serious questions in my mind now about management's competence. I think there's been some wildly over optimistic assumptions made about what the market could bear in terms of unit asking prices with some of their pending developments. Not that they will ever eat humble pie and admit that.
Wonder how the big development just south of ST Peter school in waikato south is going.. big changes to the road leading from the site to sr peters school....
big site... dont think they can afford to stop that one.... maybe leave some streets at the back unfinished who knows....
A few more thoughts. I see future dividends, if any, from FY26 are going to be based on free cash flow so investors can assume they will be very modest indeed, when they eventually return. My view as a semi-retired investor heading into retirement in the next few years is any company that can't afford to pay me a decent dividend, is not fit for purpose for my portfolio.
I think the days of expecting rampant capital gains from housing and by extension, retirement companies are long gone. At best, housing will muddle along for the foreseeable future at its already extremely unaffordable level. Maybe housing keeps pace with inflation, (no increase in real terms) or perhaps not. Interest rates will need to fall a VERY long way for capital gains to be back on the radar. RBNZ's statement yesterday suggests you'll need to be very, very patient.
Could this go down to join the 50% off NTA club like ARV and OCA? Frankly, with their reputation in tatters, I think that's where it belongs. Clearly my view is the former reputation of this company which used to be held in high regard, is meaningless.
I remember the days many on the other channel scoffed at me when SUM was half the price of RYM when I suggested one day SUM's share price would exceed RYM. Well, I have well and truly proved them wrong so I have two new predictions.
There will come a day in the future where SUM is double the share price of RYM and fifteen times the price of OCA. Mark my words.
Does this mean that house prices are in a bubble for the next n years and then there may well be an adjustment ... IE private house prices burst at some point down the road,,,,
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.
Could be good for a Bounce at some point then....
they never paid much of a DIV anyway it was a growth stock.
But SUM other stock lapped them...
Its starting to remind one of FBU in its UP and DOWNS...
https://justthebusinessjennyruth.substack.com/p/aiming-for-transparency-from-listed
Something nobody is talking about but I think is the root cause of the problem with slow selling units by all in this sector, is we are oversupplied.
I have been going through FB, Craig's and Jardens latest on Ryman. Craig's and FB are very similar and have overweight target prices well above the current price. Jarden are underperform which means sell in my book at $5.43.
Ari Dekker I feel has got a very good handle on this sector and anyone who thinks they are a bargain needs to take note in my opinion.
Despite a $900m cap raise debt is stil at elevated levels and like others has plenty of unsold stock. As Basil points out we are oversupplied.
Ari states that if market conditions are not supportive,if significant accomodation bond receipts factored into recycling are lower or if RYM otherwise falters on closing out the developments then it is still possible RYM might be forced to bring down debt, rather than control the future growth and funding mix timing. Yep another cap raise.
I agree the NTA looks attractive compared to the share price but as a analyst said "you can't eat NTA"
Craig's say some bad decisions on sites have been made. Four of RYM's nine problem sites are located in West Auckland. West Auckland is under-penetrated with retirement villages but this in part reflects demographics, with lower socio-economic and multi-ethnic communities who have not traditionally flocked to retirement village offerings.
compounding the above issues is the intensive nature of RYM's sites. of the nine sites RYM has cited as problematic, eight are intensive apartment-heavy sites. Typically retirees are moving from 3-4 bedroom freestanding houses on full sites, and most operators report have a clear initial preference to move in to a townhouse/villa. RYM's apartment product - often with no or limited water views or special selling features - has struggled to gain traction with these residents.
Summerset's broad acre low rise village on the waterfront at Hobsonville, former Monetrey Park site is a stunning north facing setting. I've been in one of their luxury waterfront homes there with its lovely north facing deck looking out over the water and when the tide is in and its sunny, its simply divine.
Those who cannot afford a waterfront unit are still well catered for with many parts of the site including the huge apartment blocks being north facing and having sea views and there's a walking pathway around the village capturing all the best views. Its a full feature village with everything you could want. In terms of West Auckland's retirement villages, frankly anything else is at a MUCH lower level.
Other than its proximity to supermarkets I cannot for the life of me see what the attraction is with RYM's Lincoln road village in Henderson. The one in Lynnfield is nicer but its sloping and south facing.
Its interesting that RYM plan to ditch underlying earnings, very interesting as they are the ones that pioneered that reporting methodology. Them doing this in such a forceful way, (not even reporting this in future as a comparison tool for historical comparative purposes) suggests to me an element of concealment and is somewhat contemptuous to Simon Challis that really pioneered this reporting methodology. What's interesting is that they plan to do this at the very same time as they are about to dramatically wind back their development book in the years ahead. Interesting timing. Is this a coincidence or is it that measuring profit this way in FY25 and beyond will make their outlook look really gloomy? Ditching a reporting methodology that's been in widespread use for more than two decades in this sector adds to my distrust of the present board and management of RYM.
Slide from half year preso..
Does this read as they don't recover the cash spent on developments when they sell them .......and that there is a $430m deficit?
IMG_5565.jpeg
Quote from: Shareguy on Apr 12, 2023, 01:33 PMWell for my own curiosity I enquired about the new Takapuna village and can confirm that demand is so high I can't even go on the waitlist. Was told they have over 600 registered buyers so registration is closed. Prices have not been set as two years away from completion. Price indication is starting at $2m plus up to maybe $5m or higher for the top floor apartments. Will have own movie theatre, Restaurant and Bar. Plus Hair and Beauty centre.
For them to not even allow me to go on a waitlist shows that they are very confident in selling this out. The level of demand is what interests me.
The lovely nurture co-ordinator said
If you are wanting your parents to join our friends of the village mailing list you will need to email me their full names, DOB, address and phone numbers. This mailing list will keep them updated regarding the progress of the village, as advised we currently aren't taking any further waitlist enquiries but as I mentioned I am happy to add a note to their file that they are interested in being contacted if a vacancy on the waitlist becomes available.
So after telling me that the demand was so high that there was no point on going on the waiting list, its now being put on hold. Gosh what a change in fortunes. I can now see why some of the directors have been selling.
Are we heading to $5 again.....surely not.
Quote from: Shareguy on Dec 12, 2023, 02:28 PMSo after telling me that the demand was so high that there was no point on going on the waiting list, its now being put on hold. Gosh what a change in fortunes. I can now see why some of the directors have been selling.
Are we heading to $5 again.....surely not.
I'm sure you'll recall I was most surprised with their indicative asking prices and literally scoffed at them. The way they treated you gives a valuable insight into how the sales processes have become disconnected from the current market reality. They used to be able to command a huge premium price when they were the dominant market player. Their approach towards you and with their pricing showed a level of arrogance that's extremely unhelpful to them in the current market. Old ways of doing things don't work so well now. There are many other alternatives now and not all of them listed by any means. For instance, Hoppers have a very nice retirement village at One Tree Point in Northland with canal from homes where a retiree could berth their boat. A major point of difference being you only need to be 60 to move in. I put up a lengthy post in the OCA thread on the weekend that might be worth your while reading if you haven;t already. In a nutshell RYM's gains were all predicated off a former position of market dominance and built at a time when real estate was booming. The real estate index is up 2.6 times more than the inflation rate since Rym listed in 1999. What if we get a decade or more where house prices underperform inflation ? I think it's absolutely disgraceful that this company has allowed itself to get into a position where it cannot even pay a single crumb in the way of a dividend to shareholders despite being listed for 24 years and won't be able to for years.
Simon Challis must be deeply ashamed of the board and current management. This was $8.50 ten years ago mate. This former market darling sure has fallen a very, very long way.
Gosh a nasty downgrade. Not much to be happy with here. It seems after the Stella update from Summerset that this is more company specific (will soon find out) Rymans offering and building type not going down to well. Under capital raise price ($5).
Once the market darling now the ugly duckling. However there is value and after all FB said recently it's the most under valued mid cap stock in NZ.
RYM delivered ~100x to investors from its listing in late 1999 to 2019. Outperforming the quality growth triumvirate that is MFT, EBO, and FPH. Since then it has lost 2/3 of its value as its cash recycling broke down.
So what's it worth......
Quote from: Basil on Nov 30, 2023, 08:09 AMA few more thoughts. I see future dividends, if any, from FY26 are going to be based on free cash flow so investors can assume they will be very modest indeed, when they eventually return. My view as a semi-retired investor heading into retirement in the next few years is any company that can't afford to pay me a decent dividend, is not fit for purpose for my portfolio.
I think the days of expecting rampant capital gains from housing and by extension, retirement companies are long gone. At best, housing will muddle along for the foreseeable future at its already extremely unaffordable level. Maybe housing keeps pace with inflation, (no increase in real terms) or perhaps not. Interest rates will need to fall a VERY long way for capital gains to be back on the radar. RBNZ's statement yesterday suggests you'll need to be very, very patient.
Could this go down to join the 50% off NTA club like ARV and OCA? Frankly, with their reputation in tatters, I think that's where it belongs. Clearly my view is the former reputation of this company which used to be held in high regard, is meaningless.
I remember the days many on the other channel scoffed at me when SUM was half the price of RYM when I suggested one day SUM's share price would exceed RYM. Well, I have well and truly proved them wrong so I have two new predictions.
There will come a day in the future where SUM is double the share price of RYM and fifteen times the price of OCA. Mark my words.
is today that day Mr Beagle RYM 4.80 SUM 11
Quote from: snapiti on Feb 19, 2024, 09:06 PMis today that day Mr Beagle RYM 4.80 SUM 11
It would seem it indeed is, Snapper me ol mate.
1 SUM = 2.26 RYM and 17.2 OCA.
In answer to your question Shareguy of what's it really worth. I stand by my comment in the third paragraph of the post Snapper quoted. This latest really ugly update does nothing to improve my view, it merely reinforces it. No other company in this sector is executing well, expect SUM. All others are set to disappoint, or deeply disappoint.
From Craigs this morning
Switch from RYM to SUM
RYM's chunky downgrades to build rate and earnings guidance so soon after its Feb 2023 capital raising, despite market conditions improving, is another clear signal things are worse than previously understood. This will be a long, slow, turnaround, though to be clear we think the business will eventually turn as its brand remains strong. We retain Overweight for RYM on valuation grounds (TP -12.4% to $6.46) but SUM remains our clear #1 sector pick.
Ryman has announced that Richard Umbers has resigned and is, "leaving Ryman in accordance with his contractual terms." The tone of the ann is not warm. (https://www.nzx.com/announcements/429876)
So...another CEO in this sector bites the dust. Wonder if ARV's CEO will last much longer?
Scott Scollullar at SUM has plenty to be proud of and the only one in this entire sector entitled to feel that way.
Quote from: Basil on Apr 22, 2024, 10:15 AMSo...another CEO in this sector bites the dust. Wonder if ARV's CEO will last much longer?
Scott Scollullar at SUM has plenty to be proud of and the only one in this entire sector entitled to feel that way.
Only two years in the job too. Umber came from a background in mostly retail. I get that skills are transferable et al but you don't often, for example, see a coach from one sport picked up by a different sport and making a success of the transition. Alan Jones was the most successful coach in ARU history but he sucked for the Balmain Tigers in the NRL.
Balmain were runners-up in 1988 and 1989 in the premiership, In 1990 they appointed Jones in charge. His record: 1991 – 8 wins, 12th place (out of 16 teams) ; 1992 – 10 wins, 10th place; 1993 – 5 wins, 12th place.
Maybe Ryman could look at some one with direct experience in RV, or at least property development? Preferably too someone who can construct a sentence in English. This is Mr Umber's Linkedin bio, "Highly strategic, but with a bias for execution, and proven expertise in building strong teams, fostering alignment and executing large scale organisational change."
Perhaps, Brent from OCA could be coaxed into the seat ::)... Or failing him maybe Rob Penny from the Crusaders.
My take on RYM is it's never been the same since the legend Simon Challis stood down. Even his understudy Gordy was a pale shadow of a leader by comparison. Umbers has been a disaster for shareholders. I called RYM a SELL 10 years ago in early 2014 on the other channel when it was ~ $8.50. A lost decade and ~ half their money to boot with it from shareholders hoping their dream run from past glorious times under Simon's legendary leadership would continue.
The reality is, their high initial price, and lower DMF business model simply isn't working very well these days. I think the removal of their 6 month buy-back guarantee was a massive mistake and has really undermined the brand. Last time I looked they still claim on their website nobody has waited longer than 6 months to resell their unit. I seriously doubt the truth of that claim. If it were true, why remove the guarantee?
The USPP fiasco has undermined confidence in the board, the management and forever affected the company in terms of lower eps going forward. A complete unmitigated fiasco of enormous proportions. Be interesting to see how much underlying earnings per share have declined in FY24. The fact they want to remove underlying profit as their measurement base speaks for itself in terms of probably being more creative incoming B.S..
The blue-chip status they once enjoyed has been lost to SUM a long time ago and along with it their first mover advantage. For those that like this sector, SUM on 13.6 times last year's underlying earnings looks like a solid long-term hold to me but you will need enormous patience to see decent gains from here so don't hold your breath waiting for the share price to climb north in a hurry.
Market close report
Ryman Healthcare was down 2c to an 11-year low of $4.32 following the sudden departure of chief executive Richard Umbers. Dean Hamilton will become the executive chair while a new chief executive is appointed. Ryman reaffirmed its full-year underlying profit guidance of $265m-$285m.
Sullivan said it's never comforting "when you see a chief executive leave so quickly, and there must have been some unsettled conversations at the board level about Ryman's performance."
He suggested that a further capital raise may be in the offing as Ryman is building faster than it is generating cash at present. Ryman raised $902m on the market in February last year.
Worth a punt at these levels i reckon, wife wants to buy some so always a good sign.
Which way is the wind blowing ... looks like southerly? they can be a bit cold...
Quote from: Waltzing on May 01, 2024, 01:38 PMWhich way is the wind blowing ... looks like southerly? they can be a bit cold...
My favorite wind and I love the cold, has to be below minus 10 celcius before I start feeling a bit uncomfortable on the skifield.
https://www.poetryfoundation.org/poems/56973/speech-now-is-the-winter-of-our-discontent
I suspect todays interest is related to the rebalancing of MSCI indices. Should have confirmation in the morning.
Quote from: Shareguy on May 14, 2024, 07:39 PMI suspect todays interest is related to the rebalancing of MSCI indices. Should have confirmation in the morning.
Yes, a blip before the decline continues, unless RYM retains its position. On tenterhooks here, could go either way.
I'm probably too early but after much analysis I'm thinking it's good buying at the moment. The good times will come back, the sun will rise and I'm confident that the housing market will improve as it always does. Still have concerns about a CR but think under $4 is over done. Result out soon.
Disc/Added a moderate amount to portfolio last week.
Quote from: Shareguy on May 16, 2024, 03:54 PMI'm probably too early but after much analysis I'm thinking it's good buying at the moment. The good times will come back, the sun will rise and I'm confident that the housing market will improve as it always does. Still have concerns about a CR but think under $4 is over done. Result out soon.
Disc/Added a moderate amount to portfolio last week.
Bottom picking is hard, unless it is done with the benefit of hindsight (which makes it easy but as well pointless) :);
Agree re your assessment of the fundamentals.
Our Real estate market tends to get in spring a spring in its step ... that's probably a time window to watch this year as well.
Discl: holding, not worried about timing and sleeping well;
Interesting article in The Press this morning:
https://www.thepress.co.nz/nz-news/350279642/neighbours-upset-neglected-village-site
Chris Lee knows RYM needs more 💰 - hmmm
Believers in the future of a company will be pleased to contribute capital to facilitate company plans, expecting that over time the company will prosper, helped by the additional capital.
Punters are equally welcomed by the company seeking money.
Once banked, the money will be used by the company to progress its plans. The company will have little interest in whose hands the punters' shares eventually land.
Punting fund managers are those who gamble with other people's money and rely on occasional windfall gains to feed their bonus pool.
Big punters, especially in Australia, participate in most placements, sometimes taking the view (with other people's money) that most recipients of placement money will make faster progress because of the money received, and enjoy a share price increase in the short term.
As was the case with Ryman Healthcare in NZ the money raised can be used to extract the company from the demands of its lenders, as well as to contribute to growth.
When Eroad had its placement at 70 cents last year, it had no debt but needed cash to accelerate its marketing in America and, perhaps, to spend on research and development.
ERoad's shares are now about 20% higher, rewarding those who took up the placement.
By contrast, those who took up the Eroad placement in earlier times, at $5.70 per share, benefited only if they subsequently sold when the shares rose to $6.50 (approx). The share price has since faded to current levels (94 cents at time of writing).
My guess is that Eroad punters using borrowed money, as most punters do, sold out and profited. The punters won. True believers are losing.
In Ryman's case there should be another placement soon, perhaps priced around $3.50. The believers would participate. The punters would punt. (Some market commentators disagree, believing that banks will not be pushing for capital increases. My view is that reliance on banks is a risky tactic.)
Ryman's last placement was at $5.20. The shares are now priced around $4.00.
Interesting
Quote from: Crackity on May 23, 2024, 07:22 PMChris Lee knows RYM needs more 💰 - hmmm
Believers in the future of a company will be pleased to contribute capital to facilitate company plans, expecting that over time the company will prosper, helped by the additional capital.
Punters are equally welcomed by the company seeking money.
Once banked, the money will be used by the company to progress its plans. The company will have little interest in whose hands the punters' shares eventually land.
Punting fund managers are those who gamble with other people's money and rely on occasional windfall gains to feed their bonus pool.
Big punters, especially in Australia, participate in most placements, sometimes taking the view (with other people's money) that most recipients of placement money will make faster progress because of the money received, and enjoy a share price increase in the short term.
As was the case with Ryman Healthcare in NZ the money raised can be used to extract the company from the demands of its lenders, as well as to contribute to growth.
When Eroad had its placement at 70 cents last year, it had no debt but needed cash to accelerate its marketing in America and, perhaps, to spend on research and development.
ERoad's shares are now about 20% higher, rewarding those who took up the placement.
By contrast, those who took up the Eroad placement in earlier times, at $5.70 per share, benefited only if they subsequently sold when the shares rose to $6.50 (approx). The share price has since faded to current levels (94 cents at time of writing).
My guess is that Eroad punters using borrowed money, as most punters do, sold out and profited. The punters won. True believers are losing.
In Ryman's case there should be another placement soon, perhaps priced around $3.50. The believers would participate. The punters would punt. (Some market commentators disagree, believing that banks will not be pushing for capital increases. My view is that reliance on banks is a risky tactic.)
Ryman's last placement was at $5.20. The shares are now priced around $4.00.
Interesting
Yes Interesting, thanks for posting. There is no doubt risk here given the board have not shot down the media speculation. Chris Lee may well be right.
Local down the road offering not far from ST Peters school in the WAKATOO look like LITTLE BOXES .... for over 750G a go...
got to be making a killing from them...
Quote from: Waltzing on May 23, 2024, 08:15 PMLocal down the road offering not far from ST Peters school in the WAKATOO look like LITTLE BOXES .... for over 750G a go...
got to be making a killing from them...
What does that even mean? Can someone translate this gibberish into English?
Quote from: Buzz on May 23, 2024, 09:07 PMWhat does that even mean? Can someone translate this gibberish into English?
"Local down the road offering not far from ST Peters school in the WAKATOO look like LITTLE BOXES .... for over 750G a go...
got to be making a killing from them..."
In Cambridge, Ryman have a new village. This is the area where Waltz lives. He thinks that the villas look like 'little boxes' (this is probably an allusion to Pete Seeger's '64 hit. (https://www.youtube.com/watch?v=XUwUp-D_VV0&ab_channel=ClaireSargent)) These are selling for $750k. At that price, Waltz feels Ryman will make plenty of money on these.
I'm not sure where the confusion lies?
slightly off topic..
LB'S, LB'S... we can all sing along ...not really a clamp along.. not suitable for a waltz either...
Looks absolutely bloody awful.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/431747/419436.pdf
Underlying profit per share down a whopping 33% on FY23. WOW that's a terrible indictment on Richard Umbers and his dreadful USPP debt repayment fiasco. The number of new shares that had to be issued to clean up that huge mess means that legacy stays with the company forever. Buit no worries, going forward they have come up with new ways of measuring financial performance. That would be funny if it wasn't so obviously a smokescreen to mask the legacy issue going forward. I simply don't trust them that they are changing their performance measurement basis. I went looking for green shoots in the presentation but cannot see any. Probably limp along at 50-66% of NTA for the foreseeable future is how I see it. Can't see dividends being reintroduced anytime soon and even when they eventually are, it's clear they will be based on cash flow so the yield will be even more pathetic than it has been in the past.
This is definitely not for me.
Quote from: Basil on May 27, 2024, 09:17 AMLooks absolutely awful. Cannot see a single reason to invest.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/431747/419436.pdf
Underlying profit per share down a whopping 33% on FY23.
They seem to have lost the plot completely
Even Forbar guru analyst will struggle to understand the reports
I haven't got through the entire report yet but prefer the new reporting, especially focus on Net Profit before FV movements. It does however highlight the trouble in the sector - they just aren't making any money other than through FV gains.
How its being reported in the media. https://www.nzherald.co.nz/business/ryman-healthcare-pushes-up-revenue-18-per-cent-profit-plummets-full-year-result-out/A33XRXTGQJHF7JBX4QAZ4DHJ6I/
CEO's leaving on the same day as its announced they are stepping down is surely a sign of a huge argument between the board and CEO and the CEO either being fired or resigning on the spot in disgrace. Same way Nick left WHS.
I see Umbers got $1,525,000 for leaving.
6 months notice and severance and a bit of a bonus
And there was me thinking that the major risk in this sector was political - turns out to be management!
Quote from: winner (n) on May 27, 2024, 01:25 PMI see Umbers got $1,525,000 for leaving.
6 months notice and severance and a bit of a bonus
After what he did to the company with the king sized USPP fiasco that's absolutely disgraceful and indicative of a very weak board. This at a time when underlying earnings per share have been severely impacted and shareholders get no dividends until at least FY26. To me, RYM is a pale shadow of its former self and the days of it being considered a blue chip are just a long distant memory. Fully deserving of joining the "50% off NTA" club in my opinion. A heck of a lot of really gnarly looking stuff in the presentation. Very, very ugly.
For Bars Review
At its FY24 result Ryman Healthcare's (RYM) new management and board lifted the veil on a decade plus of opaque accounting practices and half truths. What was behind the veil was worse than we had anticipated. The aggressive revenue recognition and poor cash recovery of capex was largely expected. Capitalising village start up costs (now abandoned), a meaningful valuation uplift (~+NZ$400m, now written down) at directors' discretion, as well as overstating expected cash recycling from villages under construction to the tune of ~NZ$250m was not. RYM needs a clear break with the past, and that, we believe, it has got. An entirely new management team and largely a new board, unencumbered by the past, has set out a credible path forward, focusing on all the right things. Namely, cash recovery of new developments and increasing cash generation of existing villages. The transition will be more painful than was expected, but the end result has the potential to be better. RYM is currently under earning meaningfully on its ~NZ$13bn of assets, with the sector's lowest (by far) deferred management fees and 'fixed fees for life'. The new management made it clear that everything is on the table and current levels of profitability is unacceptable. We reiterate OUTPERFORM, with a reduced target price of NZ$7.25.
What's changed?
Earnings: Annuity EBITDA reduced -13%/-6% over FY25/FY26, +2% in FY27 with less capitalised costs the key driver.
Target price: Reduced to NZ$7.25 (from NZ$8.25), driven by reduced annuity estimates, lower dividends and higher core debt.
Finding firmer ground
The aged care sector operates with largely non-GAAP measures as a marker of performance. RYM is making a clean break from the past. Going forward, cash generation and audited earning will be the focus. We expect the rest of the sector to eventually follow suit. With RYM's change of focus comes numerous minor and major changes in how it reports. The most relevant relates to lower capitalising of costs, abandoning new sale gains, and now only reporting units and beds that have been delivered. RYM also provided numerous new disclosures, in particular, in relation to cash generation for care, villages and head office. Over time this should provide firmer ground to stand on.
Fundamentals slightly ahead of expectations with strong DMF and resales gains more than offsetting higher costs
Fundamentals played second fiddle on the day, but RYM delivered a decent underlying result, with cash generation and annuity EBITDA slightly ahead of our estimates. Net debt remained broadly stable in 2H24 as guided. DMF and resales gains were strong, partly offset by higher costs. Guided deliveries for FY25 were ahead of expectations, but the change in approach makes it hard to compare. Build rate guidance for FY26/FY27 was substantially below our estimates and even further below previous ambitions. This make sense. RYM reiterated that it does not need capital, but our estimate of core debt has increased to well over NZ$1bn.
FY24 result; the good, the bad & the ugly
The good
DMF grew +15% year-over-year in 2H24, +5% ahead of our forecast. DMF is now up +50% over the last three years. Likely partly due to shortening the contractual terms over which the DMF is recognised. DMF is included in audited earnings.
Resale gains and resales cash flow. Resales gains increased +11% year-over-year and against our expectations of broadly flat. Resales cash flow was up +75% year-over-year to a record high of ~NZ$144m in 2H24, ~+NZ$30m ahead of our estimates. Since FY23, resales cash flow is up >+NZ$100m, almost +60%, and has more than doubled over the last three years. RYM's future treatment of the non-GAAP resales gain is 'up for review' but we expect at least the cash component (after ~NZ$20m of refurbishment costs) to feature going forward.
The bad
Impairment loss of NZ$244m. This primarily relates to the parts of the land bank with uncertain development plans.
~800 units and beds previously counted as delivered on a part complete basis taken out of its assets. Early recognition of deliveries has been known, and to some degree a communicated feature of RYM's for a long time. The magnitude was larger than we had anticipated.
Operating expenses, even allowing for a change in capitalisation policy and deducting some one-off costs, was ~+NZ$10m–$15m (~+3% to 5%) ahead of our 2H24 estimates.
The ugly
RYM took a ~NZ$400m write down on the fair value of its assets. We understand previous management had used a 'directors' range assumption' adjustment to the independent valuation of its properties. This involved assuming that new residents would pay a 30% DMF with no price adjustment. This compares to the valuers' assumptions of 20%, what RYM currently charges.
Capitalisation of village start-up costs. It was revealed that RYM has historically capitalised start-up costs for new villages. This will not happen on a go forward basis.
RYM restated its expectations of capital recycling from 10 villages under construction down by -NZ$256m. NZ$160m of this related to 'correction of cost allocation ... relating to head office and interest'.
Quote from: Greekwatchdog on May 28, 2024, 07:40 AMAt its FY24 result Ryman Healthcare's (RYM) new management and board lifted the veil on a decade plus of opaque accounting practices and half truths. What was behind the veil was worse than we had anticipated. The aggressive revenue recognition and poor cash recovery of capex was largely expected. Capitalising village start up costs (now abandoned), a meaningful valuation uplift (~+NZ$400m, now written down) at directors' discretion, as well as overstating expected cash recycling from villages under construction to the tune of ~NZ$250m was not.
I thought the USPP debt fiasco was as bad as it could get but these practices are truly disgraceful. Simon Challis would be truly ashamed of what this company has become.
RYM needs a clear break with the past, and that, we believe, it has got. An entirely new management team and largely a new board, unencumbered by the past, has set out a credible path forward, focusing on all the right things. Namely, cash recovery of new developments and increasing cash generation of existing villages. The transition will be more painful than was expected, but the end result has the potential to be better. RYM is currently under earning meaningfully on its ~NZ$13bn of assets, with the sector's lowest (by far) deferred management fees and 'fixed fees for life'. The new management made it clear that everything is on the table and current levels of profitability is unacceptable. We reiterate OUTPERFORM, with a reduced target price of NZ$7.25.
They must be joking with their price target. That and their $1.00 price target for OCA, (extremely deep skepticism there because of Forsyth Barr's 5% stake in OCA) look wildly optimistic to me. Honestly...who needs all this crap when there are vastly better managed companies to invest in...
Me thinks the market place is well aware of the self serving nature of broker valuations....just treat them as entertainment
I wouldn't tarnish all brokers with the same brush. Craigs analysis of OCA was spot on in my opinion and Jarden's price target also makes a lot of sense, (haven't seen the detail of their report). Really its Forsyth Barr running a real "Punch and Judy" show all on their own in this sector.
35 mill shares through pre open at $3.62, someone's keen. Up sharply on open to boot.
That's 5% of the shares on issue in one transaction. That will require a substantial shareholder notice in the very near future from both sides so it will be interesting to see who's bought and who has sold.
Quote from: Basil on May 30, 2024, 11:42 AMThat's 5% of the shares on issue in one transaction. That will require a substantial shareholder notice in the very near future from both sides so it will be interesting to see who's bought and who has sold.
Someone who has been in since day dot I guess. Certainly from a long term look its a good price thou one never knows with the market given the conditions the market is currently in. I hope they trust the management team..
Chris Lee today fwiw
RYMAN Healthcare will likely be a leading player in coping with the longevity phenomenon.
Its current balance sheet clearly needs repair, its pricing model has been too lean, yet the security and care offerings combined with all the lively activities it provides suggests the likes of Ryman will remain in great demand.
It is highly ironic that two years ago we had screeching noise from someone whose career has always focussed behind the sponsorship of the public purse, loudly opining that the likes of Ryman were profiteering and exploiting their residents. The media gave the view oxygen.
In the past two years the targets of this baloney have seen their market values slashed by more than half, hardly endorsing an amateur's view that profits were too high. Nor are the shareholders, who put up capital and take risk, getting any return for the risk they take.
The criticism was based on childish research, rare anecdotal complaints, and utter ignorance of the immense financial challenges of coping with rapid growth in demand, stubborn refusal of the government to pay adequately for access to the care the Crown demanded, and the increases in the cost of building materials and nursing care.
No government will ever build a care model similar to those offered by the various retirement villages which offer hospital-like care facilities. Nor would anyone in need of care choose a public facility if they could afford the services of the likes of Ryman, Summerset, Oceania, BUPA and the like.
In my view, these providers, struggling to get fair returns for the risk they take, will overcome some obvious challenges.
For example, Ryman must surely reduce debt, possibly with a significant capital raise. It seems none of its domestic competitors could afford to buy Ryman's individual villages and rebadge them. Ryman must increase its charges and retain a higher figure to equate with its deferred costs, this being the model that allows the residents to "buy now, pay later".
Ryman and its competitors offer the elderly a lifestyle that 50 years ago was unimaginable until the wonderful Waikanae visionary, the late Lloyd Parker, envisaged a retirement based on a healthy, green environment with access to care and fellowship in a secure, affordable village. He built Parkwood in Waikanae with NO capital, funded entirely on debt, sponsored by the community who arranged voluntary labour, creating a village that remains, 50 years later, on the top rung of the sector's ladder.
Today's different operators followed the dream he converted to reality.
My guess is that in 50 years' time the likes of Ryman will still be seen as leaders in providing solutions that ensure the elderly are rewarded, not punished, for their longevity.
I greatly admire the endeavours of those people who create and maintain these services.
_ _ _ _ _ _ _ _ _ _
Quote from: Crackity on May 30, 2024, 07:53 PMThe trading highlight was a group of European investors' block sale of 35m Ryman Healthcare shares. Ryman finished 5c ahead at $3.66 on trade worth $133.55m.
Shane Solly, portfolio manager with Harbour Asset Management, said the Europeans invested in Ryman three to five years ago, and it was a sad way to exit the investment.
They had expected more growth from the company. "The market was aware of the overhang of shares, and big cap stocks were sold off to fund the Ryman buying.
The management is addressing the issues to make Ryman more profitable but the Europeans lost trust six months ago."
Musta cost them unnamed Europeans a motza - they really have lost trust in RYM 🤔
The more interesting question is who bought them? And if its institutions, how long do they plan on holding them before selling down? Will RYM shareholders now be waterboarded as these shares are drip fed into an already weak market?
Quote from: Crackity on May 30, 2024, 07:53 PMBD tonight
The trading highlight was a group of European investors' block sale of 35m Ryman Healthcare shares. Ryman finished 5c ahead at $3.66 on trade worth $133.55m.
Shane Solly, portfolio manager with Harbour Asset Management, said the Europeans invested in Ryman three to five years ago, and it was a sad way to exit the investment.
They had expected more growth from the company. "The market was aware of the overhang of shares, and big cap stocks were sold off to fund the Ryman buying.
The management is addressing the issues to make Ryman more profitable but the Europeans lost trust six months ago."
Musta cost them unnamed Europeans a motza - they really have lost trust in RYM 🤔
Unless they bought them on the Covid lows they probably paid between $10-$14 each for them times 35.96 mill, thats serious losses.
I would not be surprised to see a class action law suit emerge in regards to the misleading financial reports over the past decade. Some of the practices admitted to as summarised in GWD's post of Forbar's review appear to be beyond judgement and well into misleading territory. Questions to the auditor of prior years accounts would also seem appropriate.
It also seems highly coincidental that Ryman only updated the market of $284 m in write downs and huge (albeit appropriate) changes in treatment of expenses and revenue recognition on the day annual results were reported to the market. It is hard to imagine the Board did not have visibility of these issues and contemplate them extensively in the weeks beforehand, which raises questions on whether continuous disclosure obligations have been complied with.
Analysts have downgraded their target prices for Ryman Healthcare after the retirement village operator lifted the veil on its finances this week, revealing a number of areas of concern.
"What was behind the veil was worse than we had anticipated," Forsyth Barr analysts Aaron Ibbotson and Benjamin Crozier said in a note released after the result.
The pair said Ryman's aggressive revenue recognition and poor cash recovery of capital expenditure was largely expected.
But other factors including capitalising village start-up costs (a system now abandoned), a valuation uplift of $400 million that had now been written down and overstatement of cash recycling from villages under construction to the value of $250m was not expected.
Target price now $7.25
Closed yesterday at $3.66
Quote from: Mos on May 30, 2024, 09:19 PMI would not be surprised to see a class action law suit emerge in regards to the misleading financial reports over the past decade. Some of the practices admitted to as summarised in GWD's post of Forbar's review appear to be beyond judgement and well into misleading territory. Questions to the auditor of prior years accounts would also seem appropriate.
It also seems highly coincidental that Ryman only updated the market of $284 m in write downs and huge (albeit appropriate) changes in treatment of expenses and revenue recognition on the day annual results were reported to the market. It is hard to imagine the Board did not have visibility of these issues and contemplate them extensively in the weeks beforehand, which raises questions on whether continuous disclosure obligations have been complied with.
Well said and as an accountant I find it abhorrent that one of N.Z's largest companies (with their accounts being audited every year), engaged in these practices and the auditors signed off on them. If this was the U.S. we would definitely see class actions against the directors for this and their gross negligence in the manner in which the company was exposed to horrendous close out costs on the USPP fiasco.
I find it extraordinary that the analyst community by and large is happy to again be so positive on the company with some board members being new to the game and others deeply complicit in misleading shareholders so egregiously, with no current CEO, (rudderless ship) and questions remaining about other senior management.
I would have thought upmost caution is still warranted here in regard to let's wait and see if a new CEO appointment is any good and whether there are any more skeletons in the closet. (Highly likely)
Suggesting that the share price should double from here in the next 12 months when it seems clear we are in a deep and enduring recession, is frankly laughable and does nothing for the credibility of the analyst making that call.
really your following statement could belong on the on the HGH thread as well
"I would have thought upmost caution is still warranted here in regard to let's wait and see if a new CEO appointment is any good and whether there are any more skeletons in the closet. (Highly likely)"
really most shares trade on sentiment more than anything else......I would suggest buying when sentiment is low rather than high works out better in the long run.
I have started to buy RYM, with a strategy of leveraging down if I have to over the next 6 months. At some stage sentiment will change
Quote from: snapiti on May 31, 2024, 02:20 PMreally most shares trade on sentiment more than anything else......I would suggest buying when sentiment is low rather than high works out better in the long run.
I have started to buy RYM, with a strategy of leveraging down if I have to over the next 6 months. At some stage sentiment will change
Bullet point overview of how I see it.
1.RYM reputation from an investor point of view is in absolute tatters.
2.Directors and management face potential class action lawsuits for deliberate deception, negligence and possible other causes of action
3. Half the board are new and unproven; the other half have engaged in deliberate deception for many years
4..Rudderless ship with no CEO
5.Complete overhaul of their business model required, DMF is unsustainably low and fixed fees for life simply doesn't work anymore with rampant village operational cost inflation
6. Chronic oversupply of stock on the market especially in Auckland
7. Debt is too high
8. Its not cheap on a price to NTA basis compared to ARV, (reputation unsullied by gross mismanagement of deliberate deception) or OCA
9. The entire sector faces headwinds from a very sluggish housing market
10. Long term outlook in my view is the whole business model only works well when there's genuine house price gains, (over and above the inflation rate on a sustained basis as this allows rampant resale profits). After house price gains outstripping inflation since RYM listed by a factor of 7:1, the likelihood of a very protracted period of subdued housing prices relative to inflation is exceptionally high and could persist for a decade or more.
11. Underlying profit being discarded as a performance yardstick but no worries, (sarcasm intended), they'll just make up some new performance measurement statistics to suit their purposes and / or disguise their ongoing woeful financial performance going forward.
Probably a lot more that I have forgotten. So many headwinds and such an incredibly torturously long and winding road for RYM to travel to try and get back some semblance of the reputation they once enjoyed under Simon Challis leadership. Actually, I think I would rather buy OCA at 55 cents that this and that's really saying something for me.
Great sector to avoid altogether, especially this one. Trust is earned, not given, and once its betrayed and broken...
I wouldn't be holding my breath for sentiment to turn on this if I were you.
Quote from: snapiti on May 31, 2024, 02:20 PMreally most shares trade on sentiment more than anything else......I would suggest buying when sentiment is low rather than high works out better in the long run.
I have started to buy RYM, with a strategy of leveraging down if I have to over the next 6 months. At some stage sentiment will change
They most certainly do trade on sentiment. But I would suggest that you might be a bit early. The big Euro investor bailing out might be the first sign that RYM is entering the Capitulation stage. But it still has to go through the Despondency and Depression stages, before Hope arrives and it begins to look like a buy. You'll know when RYM is through the final stages when it drops off the forum list of most discussed stocks ;D
Basil, why do you have a problem with moving away from Underlying Profit? Personally I think that is a good thing. Underlying profit seems to be a nonsense in this sector - since it is basically unrealised gains.
Net profit excluding fair value gains feels like a much better measure
Quote from: KW on May 31, 2024, 09:26 PMThey most certainly do trade on sentiment. But I would suggest that you might be a bit early. The big Euro investor bailing out might be the first sign that RYM is entering the Capitulation stage. But it still has to go through the Despondency and Depression stages, before Hope arrives and it begins to look like a buy. You'll know when RYM is through the final stages when it drops off the forum list of most discussed stocks ;D
see I am not interested in picking bottoms that is a mugs game, if I am early then, happy to leverage down from here, as I already said......sentiment will turn one day
Quote from: KW on May 31, 2024, 09:26 PMBut I would suggest that you might be a bit early.
I think that's the understatement of the year. FAR too early.
Quote from: Dolcile on May 31, 2024, 09:48 PMBasil, why do you have a problem with moving away from Underlying Profit?... Net profit excluding fair value gains feels like a much better measure
I agree 100% with your last sentence and that's exactly what underlying profit is.
You're getting confused, (which is easy in this sector), between reported profit after tax (which includes all fair value movements and revaluations which are required under Intenational financial reporting standards, IFRS16 from memory) and real realized underlying profit which is exactly what underlying profit is. Have a look at the recent GMT result, its a lot easier to understand. They posted a huge loss (IFRS16 required them to take massive devaluations of their properties into the profit and loss statement) but still made decent underlying profit which is how they can maintain their dividend.
The current board, (who are a combination of people with no experience in the sector and those who have mislead shareholders for the last decade) believe they know better than the founders of this company who established underlying profit as the most appropriate performance yardstick.
I'd wager a lot of money all the other companies in this sector will stick with underlying profit which simply means RYM will be a lone wolf in their new self-invented performance measurement methodology. Good luck with building back credibility with professional investors and institutions taking that approach. In effect, they have thrown the baby out with the bathwater.
My view on RYM is to start with what their underlying profit was for FY24, 39 cents per share, apply a no growth PE of 8 to that, $3.12 and then try and work out whether the new board and management are going to add value in the years ahead at a rate better than the others in this sector, (extremely unlikely in my view). My view is this is likely to be dead money for years with no dividends for quite a while and thereafter at such an extremely low level it might as well be zero.
The best chance of value accretion, in my opinion is if this joins the 50%+ off club in this sector with ARV and OCA and stays under $3 for a protracted period of time. Some large overseas fund who actually know how to run things properly might then think its a plausible takeover target on the basis they can replace the entire board and senior management with experienced people who know what they're doing.
At this point I think ARV is more takeover ready (provided the board have learned their lesson from the recent $1.70 rebuff fiasco, which is by no means a certainty). If you're bottom fishing for a takeover and hoping to catch something decent, I reckon that's the best place to throw your line in the water.
I see no reason whatsoever why RYM should trade at a price to NTA premium to ARV, (itself, currently below 50% to NTA) and plenty why they should trade at a discount to that level. Frankly they deserve to join the 60% off NTA club with OCA until they prove otherwise and start to redeem themselves and restore credibility.
I maintain my SELL rating of $8.50 from a decade ago and have never seen a compelling case to own them since. Gosh if you'd sold these more than 10 years ago and reinvested in SUM instead, you'd be a happy camper, (ask me how I know) ;D (I did subsequently sell SUM prior to covid at ~ $9 more than 4 years ago and haven't missed much since then).
I cannot foresee what catalyst there is for RYM to get out of its funk in the foreseeable future.
Disc: Former RYM shareholder from a long time ago under Simon Challis excellent leadership.
Fixing a financial disaster: Full Ryman chairman interview -NZ Herald
https://www.youtube.com/watch?app=desktop&v=A416HMp1o5c&feature=mweb_c3_open_app_11268432&itc_campaign=mweb_c3_open_app_11268432&redirect_app_store_ios=1&fbclid=IwZXh0bgNhZW0CMTEAAR0hPwHp4yqthAdkuDOvzhjZmy6o3phQpi5qZZlnE9qnFHSNOptY7d3FcUs_aem_ARr66435jLzmnihtGK5KsgiPPaVYhFHEF1CnH8m6uWmaVN0SkqSse-msfSGYg_3DZ_RBs-ysure8Ju2JRICXmEuz
Just finished watching this. Very impressed with Dean Hamilton. Pity he is not willing to consider taking on the CEO role. Not a RYM holder, but I found this interview, and everything Dean had to say, very interesting. Very relevant to the whole sector.
Quote from: Untamed on Jun 14, 2024, 09:04 AMFixing a financial disaster: Full Ryman chairman interview -NZ Herald
https://www.youtube.com/watch?app=desktop&v=A416HMp1o5c&feature=mweb_c3_open_app_11268432&itc_campaign=mweb_c3_open_app_11268432&redirect_app_store_ios=1&fbclid=IwZXh0bgNhZW0CMTEAAR0hPwHp4yqthAdkuDOvzhjZmy6o3phQpi5qZZlnE9qnFHSNOptY7d3FcUs_aem_ARr66435jLzmnihtGK5KsgiPPaVYhFHEF1CnH8m6uWmaVN0SkqSse-msfSGYg_3DZ_RBs-ysure8Ju2JRICXmEuz
Just finished watching this. Very impressed with Dean Hamilton. Pity he is not willing to consider taking on the CEO role. Not a RYM holder, but I found this interview, and everything Dean had to say, very interesting. Very relevant to the whole sector.
First step to fixing problems is acknowledging the problems. Ryman gets a tick now that they have fronted up to the problems.
Second step of fixing the problems is going to require a lot of effort and forbearance by shareholders - do they have what it takes?
So much is going to depend on who is the new CEO.
Quote from: Untamed on Jun 14, 2024, 09:04 AMFixing a financial disaster: Full Ryman chairman interview -NZ Herald
https://www.youtube.com/watch?app=desktop&v=A416HMp1o5c&feature=mweb_c3_open_app_11268432&itc_campaign=mweb_c3_open_app_11268432&redirect_app_store_ios=1&fbclid=IwZXh0bgNhZW0CMTEAAR0hPwHp4yqthAdkuDOvzhjZmy6o3phQpi5qZZlnE9qnFHSNOptY7d3FcUs_aem_ARr66435jLzmnihtGK5KsgiPPaVYhFHEF1CnH8m6uWmaVN0SkqSse-msfSGYg_3DZ_RBs-ysure8Ju2JRICXmEuz
Just finished watching this. Very impressed with Dean Hamilton. Pity he is not willing to consider taking on the CEO role. Not a RYM holder, but I found this interview, and everything Dean had to say, very interesting. Very relevant to the whole sector.
great interview.
Quote from: Untamed on Jun 14, 2024, 09:04 AMFixing a financial disaster: Full Ryman chairman interview -NZ Herald
https://www.youtube.com/watch?app=desktop&v=A416HMp1o5c&feature=mweb_c3_open_app_11268432&itc_campaign=mweb_c3_open_app_11268432&redirect_app_store_ios=1&fbclid=IwZXh0bgNhZW0CMTEAAR0hPwHp4yqthAdkuDOvzhjZmy6o3phQpi5qZZlnE9qnFHSNOptY7d3FcUs_aem_ARr66435jLzmnihtGK5KsgiPPaVYhFHEF1CnH8m6uWmaVN0SkqSse-msfSGYg_3DZ_RBs-ysure8Ju2JRICXmEuz
Just finished watching this. Very impressed with Dean Hamilton. Pity he is not willing to consider taking on the CEO role. Not a RYM holder, but I found this interview, and everything Dean had to say, very interesting. Very relevant to the whole sector.
Thanks for posting.
I agree Dean Is a very solid and credible chair which is one of the reasons that I have taken a larger position. His point regarding Rymans offering is important. Shareholders may not be happy but residents clearly are, which is why they are still the market leader. I believe that others will follow Rymans lead in separating care costs. It will make it much easier for the government to fund it as they will clearly see the costs of care. This was a bugbear of Andrew Little who rightly said the retirement sector was not transparent. Handing out the dosh to shareholders in one hand and claiming care is under funded fell on deaf ears. I think a line in the sand has been drawn here. The government will have to come to the party, otherwise our hospitals will continue to face the consequences of underfunding the sector. The ceo appointment will hopefully be a good one. I agree Untamed a shame that Dean does not take it up.
Rymans underlying result I thought was actually pretty good. DMF grew +15% year-over-year in 2H24. Also made it clear that there is no plans for another cap raise as debt was managable. I don't expect a divi for years and think it's good that when it happens it will be based on free cash flow. Not expecting miracles with the share price but think that the downside is limited from here. I'm picking that $3.60 was the low. Time will tell.
Good interview with Hamilton ....doing the job at Ryman it seems
Obviously didn't have much influence at Warehouse Group being a Director there since 2020 (even though Warehouse web site said he was appointed in 2016) He's 'overseen' the last few years disasters there...probably supporting our Nick to the end
Can't win them all ......team effort
Lol 4 traders avg tp of $6 with 4 buy ratings and 1 hold, market way wrong aye.
FB latest note out today.
They believe RYM can deliver a ~3x increase in value over the next three years. Making RYM one of the most attractive opportunities in NZ.
The chart certainly looks healthy. All the "don't buy downtrends" traders will be buying around $5. That's good.
Cuts in August, watch the fomo commence.
Quote from: Shareguy on Jul 11, 2024, 04:41 PMFB latest note out today.
They believe RYM can deliver a ~3x increase in value over the next three years. Making RYM one of the most attractive opportunities in NZ.
Some on here reckon its going to have a $2 something handle coming up, I reckon they are barking mad.
Apart from Orr at RBNZ being more dovish nothing has changed to alleviate any of my concerns articulated in post #330 above.
Quote from: Basil on Jul 11, 2024, 08:47 PMApart from Orr at RBNZ being more dovish nothing has changed to alleviate any of my concerns articulated in post #330 above.
Although I agree to some extent, I tend to think your assessment of the RBNZ position is overly pessimistic. It's clear to me that they recognise inflation has peaked and will revert in due course, be that this year or early next remains to be seen.
You've said in the past, which many would agree with, markets are forward looking. Any amelioration of interest rates will flow into interest-rate sensitive stocks, it would not be surprising at all if these stocks started to price in a reduction in inflation. All imo.
Quote from: Buzz on Jul 11, 2024, 09:30 PMAlthough I agree to some extent, I tend to think your assessment of the RBNZ position is overly pessimistic. It's clear to me that they recognise inflation has peaked and will revert in due course, be that this year or early next remains to be seen.
You've said in the past, which many would agree with, markets are forward looking. Any amelioration of interest rates will flow into interest-rate sensitive stocks, it would not be surprising at all if these stocks started to price in a reduction in inflation. All imo.
Agree 100% the market is forward looking, 6-12 months in my opinion.
Interest rate sensitive stocks should benefit, especially those bought for yield.
The problem for this sector is there is either no dividend or so little it might as well be none so any interest rate sensitivity benefit accrues only by extension from real estate movements and volumes, and you'll be well aware of my recent comments about the market still being well above average levels of affordability. OCR reductions are going to take quite some time to flow through to the real estate market considering the vast majority of buyers used fixed rate mortgages rather than floating.
Forbar are far and away the standout optimists on this sector with recommendations on OCA at circa $1 and this at $7.50. Jarden's are at $4.04 a year hence and OCA in the late 60's cents, (along with Craigs), both price targets make a lot more common sense to me than Forbar who appear to be trying to fly a kite in very light winds.
I was pleasing to see Ariane Orr's unexpected lurch from being very hawkish 6 weeks ago to being quite dovish. The elephant in the China shop has finally stopped throwing his weight around to pause and reflect...but a heck of a lot of damage has been done to the economy already.
Got a $4 handle now, thats double a $2 handle, be $6 handle in a couple of years and maybe a $8 handle a couple of years after that.
I suggested $2 something wouldn't surprise me, meaning $2.90 as you know I have previously clearly articulated.
Quote from: Basil on Jul 12, 2024, 10:21 AMI suggested $2 something wouldn't surprise me, meaning $2.90 as you know I have previously clearly articulated.
Up 7% today so you can forget any handle starting with a 2, wrong call.
When are you expecting them to be double the share price of SUM ;)
Quote from: Basil on Jul 12, 2024, 10:36 AMWhen are you expecting them to be double the share price of SUM ;)
They were for 6 yrs so pretty happy with that call, probably more upside for RYM from here as well.
Pretty sure you said it would "always be that way" but that's ancient history.
For what its worth just because I said a handle starting with a 2, i.e. $2.90 wouldn't surprise me, that doesn't automatically follow that's what I think its worth.
For mine, they earned just on 40 cps underlying earnings last year and have a massive amount of work to do in the years ahead to prove they can grow that so my thesis is that given they have made such a complete hash of things in recent years, they deserve to be in the half price NTA club along with ARV and OCA. I see better value at this level in both ARV in the mid 90's and (gosh, please don't fall off your chair), OCA at 52 cents than RYM with a $4+ handle.
One thing that's very pleasing is Adrian Orr at RBNZ, huge lurch which nobody was really expecting, from being extremely hawkish with monetary policy only 6 weeks ago to being quite dovish. That will benefit all stocks going forward not just the ones that have made a complete and utter mess of things in recent years and disingenuously mislead investors on their true earnings, just for good measure.
Just as well the new management and board can be totally trusted to make all the appropriate changes going forward and we know this because of...oh hang on a minute, nothing because they have yet to prove themselves. Hanging out much of the dirty laundry regarding how they have egregiously misled investors
and mismanaged the company is only the first step in a very long pathway towards rebuilding the trust and respect this company once had. It's going to take, many, many years for trust to be rebuilt.
Quote from: Basil on Jul 12, 2024, 12:00 PMPretty sure you said it would "always be that way" but that's ancient history.
For what its worth just because I said a handle starting with a 2, i.e. $2.90 wouldn't surprise me, that doesn't automatically follow that's what I think its worth.
For mine, they earned just on 40 cps underlying earnings last year and have a massive amount of work to do in the years ahead to prove they can grow that so my thesis is that given they have made such a complete hash of things in recent years, they deserve to be in the half price NTA club along with ARV and OCA. I see better value at this level in both ARV in the mid 90's and (gosh, please don't fall off your chair), OCA at 52 cents than RYM with a $4+ handle.
One thing that's very pleasing is Adrian Orr at RBNZ, huge lurch which nobody was really expecting, from being extremely hawkish with monetary policy only 6 weeks ago to being quite dovish. That will benefit all stocks going forward not just the ones that have made a complete and utter mess of things in recent years and disingenuously mislead investors on their true earnings, just for good measure.
Just as well the new management and board can be totally trusted to make all the appropriate changes going forward and we know this because of...oh hang on a minute, nothing because they have yet to prove themselves. Hanging out much of the dirty laundry regarding how they have egregiously misled investors
and mismanaged the company is only the first step in a very long pathway towards rebuilding the trust and respect this company once had. It's going to take, many, many years for trust to be rebuilt.
You bring up some very valid points Basil. I agree will take time to rebuild trust with the investment community. Not without risk. However It's still loved by residents and seen as the number one place to reside in many people's eyes. They have the trust of residents, only time will tell if shareholders trust is re gained. The whole sector is beaten down and I'm picking that Ryman is potentially a multi bagger for those with patience. I'm picking that we have seen the bottom and the reserve bank have signalled cuts to the OCR which has been well received by the markets. I am 100 percent invested with all cash deployed.
Disc/ My second largest position on the NZX currently.
Quite right Shareguy, readers digest most trusted brand for many years in a row but it's interesting that hasn't translated into good unit sales in recent years.
Sometimes I wonder when people participate in those survey's and are asked which is the most trusted brand, they simply pick the brand they know the best.
Realistically, notwithstanding my large holding in Turners shares, I acknowledge it's probably the same phenomenon behind them winning most trusted used car dealership many years in a row.
Come a long way from its low of $3.40 on 4th of July. $5 looking realistic sooner than thought.
Forbat target $7 heading to goodness knows where ...great opportunity
Jarden target reported as $4.04 ...neutral
Current share price $4.44
Hmmm
Quote from: winner (n) on Jul 18, 2024, 11:22 AMForbat target $7 heading to goodness knows where ...great opportunity
Craig's target reported as $4.04 ...neutral
Current share price $4.44
Hmmm
Hope so Winner. Craig's latest is Target price -11% to $5.73, retain Overweight. Maybe buyers don't believe Dekker valuation.
Craig's consensus is $5.90 from 6 analysts. 5 buy and 1 hold
Maybe A.I. did write that Forbar report as suggested to me by someone on here? From a professional point of view regarding accounting standards, which they went on and on about not being appropriate for RYM's situation, I'd wager A.I. did a deep dive on ST content to come up with that absolute nonsense.
I still maintain ARV and OCA are better buying here than RYM, (if you're bottom fishing you might as well buy the cheapest catfish), who have been actively engaging in an orchestrated litany of lies with their financial statements for years. Just as well we know leopards easily change their spots... (sarcasm).
Quote from: Basil on Jul 18, 2024, 12:15 PMMaybe A.I. did write that Forbar report as suggested to me by someone on here? From a professional point of view regarding accounting standards, which they went on and on about not being appropriate for RYM's situation, I'd wager A.I. did a deep dive on ST content to come up with that absolute nonsense.
I still maintain ARV and OCA are better buying here than RYM, (if you're bottom fishing you might as well buy the cheapest catfish), who have been actively engaging in an orchestrated litany of lies with their financial statements for years. Just as well we know leopards easily change their spots... (sarcasm).
To me the article doesn't look AI-generated, but who knows? It was definitely poorly written.
There is a lot of regurgitation of the ideas of users on Sharetrader though.
https://www.stuff.co.nz/nz-news/350348659/land-sat-empty-14-years-and-not-boutique-retirement-village-sight
Normally with such a large gain so quickly I would sell some down. Not with Ryman, even with todays gain I still think a LOT more to come.
Ryman AGM on Thursday. Will hopefully get a sales update and progress on CEO. I'm expecting continued buying with ARV proceeds helping but agree that the SP has shot up fast.
By the numbers just for the heck of it.
RYM got down to ~ 55% of NTA at one point, now 75%, 20% improvement.
OCA got down as low as 35% of NTA at the low and is now 55%, very interestingly, also a 20% improvement but in percentage terms 55/35 = 57% share price gain for OCA and 75/55 = 36% gain for RYM for anyone brave and clever enough to pick the absolute lowest point for either of these shares. Frankly, I don't believe anyone here was holding nothing and, in this sector, somehow magically managed to pick the exact bottom for either of these and all holders will have materially higher average entry prices for these than the very lowest point and many holders will still be a long way underwater.
Interestingly, OCA being 55% of NTA is 20% less than RYM's 75%, gosh there's that 20% again, this is getting spooky.
You would think on the balance of probabilities a company still trading at close to half NTA (55%), could in theory lift that to trade at 75% of NTA, a further 20% improvement, a lot easier than a company trading at 75% of NTA improving it to 95% of NTA. Even if that's not the case and if both companies close the NTA discount by 20% in the year ahead, and assuming NTA stays flat, RYM's share price gain will be 95/75 = 26.7% and OCA's gain going from 55 to 75% of will be 75/55 = 36% leading to possible further share price outperformance for OCA on a relative basis.
Just throwing numbers around and crunching them for the heck of it. Who knows what's really going to happen in the year ahead.
One thing I think we all agree on is both OCA and RYM have a LOT of work to do to restore investor confidence and grow earnings and that's going to be a lot easier said than done.
Conclusion: The low hanging fruit in this sector have already been picked. I managed to get a few OCA at exactly half NTA but am wide awake to the fact that lots and lots of patience will be required from here.
Quote from: Basil on Jul 28, 2024, 05:48 PMBy the numbers just for the heck of it.
RYM got down to ~ 55% of NTA at one point, now 75%, 20% improvement.
OCA got down as low as 35% of NTA at the low and is now 55%, very interestingly, also a 20% improvement but in percentage terms 55/35 = 57% share price gain for OCA and 75/55 = 36% gain for RYM for anyone brave and clever enough to pick the absolute lowest point for either of these shares. Frankly, I don't believe anyone here was holding nothing and, in this sector, somehow magically managed to pick the exact bottom for either of these and all holders will have materially higher average entry prices for these than the very lowest point and many holders will still be a long way underwater.
Interestingly, OCA being 55% of NTA is 20% less than RYM's 75%, gosh there's that 20% again, this is getting spooky.
You would think on the balance of probabilities a company still trading at close to half NTA (55%), could in theory lift that to trade at 75% of NTA, a further 20% improvement, a lot easier than a company trading at 75% of NTA improving it to 95% of NTA. Even if that's not the case and if both companies close the NTA discount by 20% in the year ahead, and assuming NTA stays flat, RYM's share price gain will be 95/75 = 26.7% and OCA's gain going from 55 to 75% of will be 75/55 = 36% leading to possible further share price outperformance for OCA on a relative basis.
Just throwing numbers around and crunching them for the heck of it. Who knows what's really going to happen in the year ahead.
Interesting Basil, I'm holding both, but have Ryman as the largest. Im banking that all the bad stuff is all out in the open and it's only up from here. They are still the market leader and with a good ceo we should see 🙏 the share recover. The Arvida take over has put a fire under the other stocks which are still beaten down. There is plenty of money still to trickle into Rym and OCA by default.
Broker says customer wants diversification and still wants a retirement stock and what should I buy with my proceeds from Arv.. Plus interest rate cuts are coming down...
I am sure the new CEO will find some more skeletons in the closet and "kitchen sink" those to try and make him / herself look really brilliant going forward. Same risk for OCA being frank about it. My concern with RYM, (as an accounting professional) is they are going to completely reinvent the wheel with reporting standards and try and come up with some new reporting benchmarks. In my opinion its totally inappropriate that this very inexperienced bunch of directors and management, try and reset accounting standards and benchmarks that have been established for centuries by accounting standards boards and decades in regard to underlying earnings by the likes of the legend Simon Challis. Frankly, who the heck do they think they are?
My opinion is that the only conclusion any reasonable professional in this field can draw, is that they don't want to continue with existing accounting standards, (either underlying profit, or IFRS16 which is comprehensive profit which includes all revaluations of properties using independent valuers, not numbers made up by the board to suit their own purposes), because it will show future results in the very bad light and actually complying with existing standards, rather than brazenly fudging them in the past makes them look even worse going forward.
I've thought about it a lot.
The only plausible reason for them to try and invent brand new profit measurement processes now, is what I have alluded to above. In effect creating new reporting standards is an attempt to continue the deceptive practices of the past, on another more round about convoluted way. A continued disinformation campaign and further obfuscation of the facts is how I very dimly see this. A contrite board having so brazenly played fast and loose with reporting requirements in the past should not only come clean but pull their head in and comply properly going forward. The fact that they're not tells me there is little if any real contrition for past disingenuous behavior and indeed a very blatant attempt to continue same in another form.
I know many will roll their eyes at talk of professional standards talk so let me put this in nautical terms. RYM want to not only completely recast the GPS map by which they operate, but also want to change "chart datum" and where all the rocks are marked as well. We're in dangerous, murky and unchartered waters when that happens. I prefer to navigate my ship by well-established and proven GPS maps as you're much less likely to hit a rock and capsize that way.
Trust will take a VERY long time for RYM to earn back, especially if they persist with inventing brand-new unproven reporting standards to suit their own purposes. For mine, I will never trust any company in this sector that won't report underling, (realized) earnings per share. If that forever rules me out as a future RYM shareholder, so be it. I don;t think the board and management have learned much if anything from their past deliberate misreporting.
I'd be very surprised and disappointed if any other listed company in this sector follows RYM down the Alice in Wonderland reporting "rabbit hole".
Quote from: Basil on Jul 28, 2024, 06:21 PMI am sure the new CEO will find some more skeletons in the closet and "kitchen sink" those to try and make him / herself look really brilliant going forward. Same risk for OCA too.
My professional concern with RYM is they are going to reinvest the wheel with reporting standards and try and come up with some new reporting benchmark. In my opinion its totally inappropriate that this very inexperienced bunch of directors and management, try and rest benchmarks that have been established for centuries by accounting standards boards and decades in regard to underlying earnings by the likes of the legend Simon Challis. Frankly, who the heck do they think they are?
My opinion is that the only conclusion any reasonable professional in this field can draw, is that they don't want to continue with existing accounting standards, (underlying profit, or IFRS16 (comprehensive profit which includes all revaluations of properties using independent valuers, not numbers made up by the board to suit their own purposes), because it will show future results in the very bad light.
I've thought about it a lot. The only plausible reason for them to try and reinvent new profit measurement processes now, is what I have alluded to above. In effect, RYM want to reinvent the GPS map by which they operate. We're in dangerous unchartered waters when that happens. I prefer to navigate my ship by well-established and proven GPS maps as you're much less likely to hit a rock and capsize that way. Food for thought for you mate.
Yes your points are bang on and food for thought. The directors valuation especially was just so wrong. With all that aside the valuation looks attractive to me. Thursday will be interesting and hopefully positive.
Your comments re the incoming ceo are valid. I like the talk from the chair and can only hope that all the skeletons are out on display. If they can remain the leader and hold market share then with the changes they are planning should result in EPS going up again.
Well that's what I'm banking on. Time will tell. $5 here we come
Director spending a few bob just before AGM.
https://www.nzx.com/announcements/435304
https://www.nzherald.co.nz/business/ryman-healthcare-bombshell-reviewing-fixed-weekly-fees-dmf-for-new-residents/DWZWI6RXWVDEXKSFLYUZJEQHCE/ Paywalled
Noting, trading for the first 4 months of FY25 is "more challenging"
Fixed weekly fees for life really hurting us.
Bombshell: Fixed fees for life and 20% DMF are under review.
My comment. What's taking so long? Just change fees to the CPI adjustment every year and the DMF level to 25% Simple as. Not rocket science.
Here are the key points from the Herald article on Ryman Healthcare:
Financial Challenges:
- Ryman Healthcare has faced financial difficulties due to its grow-at-all-costs strategy, leading to significant debt.
- Fixed weekly fees on occupation rights agreements, unlike other operators who adjust fees based on the Consumer Price Index (CPI), have negatively impacted the company.
- The company reported a disappointing net profit after tax of $4.8m for the year ending March 31, 2024, down from $257.8m in 2023.
Board Actions and Future Plans:
- The board is examining the viability of maintaining deferred management fees at 20%.
- Future new residents might have variable fee structures.
- Ryman is focused on improving performance in existing villages, enhancing efficiency in new developments, and creating a sustainable overhead structure.
Development and Staffing:
- Ryman has ten ongoing development projects but has put others, like the Park Terrace site in Christchurch and the Wellington's ex-Teachers' College site, on hold due to economic and regulatory challenges.
Staffing concerns, particularly from the pandemic, have been alleviated, with new hospitals being fully staffed.
Debt and Cashflow:
- The company's debt stands at $2.51 billion, with a gearing ratio of 36.2%.
- The sale of occupation rights agreements is expected to help repay bank debt.
Industry and Government Relations:
- The company criticized the insufficient funding increase from Health New Zealand Te Whata Ora, highlighting the potential broader impact on healthcare if aged care funding isn't addressed.
- Ryman has participated in the Aged Care Task Force and is hopeful for bipartisan support for better funding models.
Other Information:
- Shares are trading at around $4.56, giving the company a market cap of $3.1 billion.
- Deloitte, the long-time auditor, has been replaced by PwC.
Quote from: Basil on Aug 01, 2024, 03:00 PMhttps://www.nzherald.co.nz/business/ryman-healthcare-bombshell-reviewing-fixed-weekly-fees-dmf-for-new-residents/DWZWI6RXWVDEXKSFLYUZJEQHCE/ Paywalled
Noting, trading for the first 4 months of FY25 is "more challenging"
Fixed weekly fees for life really hurting us.
Bombshell: Fixed fees for life and 20% DMF are under review.
My comment. What's taking so long? Just change fees to the CPI adjustment every year and the DMF level to 25% Simple as. Not rocket science.
Agree. Oil tanker to turn around though. Will take a long time for changes to new residents contracts to solve cost recovery challenge. Need to make the changes and tough out the next 5+ years. Right move though when they make it.
Quote from: Basil on Aug 01, 2024, 03:00 PMhttps://www.nzherald.co.nz/business/ryman-healthcare-bombshell-reviewing-fixed-weekly-fees-dmf-for-new-residents/DWZWI6RXWVDEXKSFLYUZJEQHCE/ Paywalled
Noting, trading for the first 4 months of FY25 is "more challenging"
Fixed weekly fees for life really hurting us.
Bombshell: Fixed fees for life and 20% DMF are under review.
My comment. What's taking so long? Just change fees to the CPI adjustment every year and the DMF level to 25% Simple as. Not rocket science.
Yes why is it taking so long. Just make the decisions. Waiting for new ceo perhaps. The share price has come up quickly but I'm picking $5 won't be far off. All that Arvida money alone is going to make a difference. Interest rates on the way down and they have a market leading product.
I think two of the most attractive things, (there are others and some of their villages are superb, (others look less attractive), about moving into a RYM village has been their market leading 20% DMF fee and the fixed weekly fees for life. Take those two things away and RYM's premium unit pricing compared to others might come into stark contrast. Good luck to holders.
Quote from: Basil on Aug 02, 2024, 10:55 AMI think two of the most attractive things, (there are others and some of their villages are superb, (others look less attractive), about moving into a RYM village has been their market leading 20% DMF fee and the fixed weekly fees for life. Take those two things away and RYM's premium unit pricing compared to others might come into stark contrast. Good luck to holders.
If their product is so good then they should be at a price premium to the others. They have a great opportunity to increase fixed fees and DMF and still retain the best product for residents. That's why I think share holders will be rewarded.
Quote from: Basil on Aug 02, 2024, 10:55 AMI think two of the most attractive things, (there are others and some of their villages are superb, (others look less attractive), about moving into a RYM village has been their market leading 20% DMF fee and the fixed weekly fees for life. Take those two things away and RYM's premium unit pricing compared to others might come into stark contrast. Good luck to holders.
Hmm - not quite sure I understand the problem?
If you offer customers the cruise experience of their life for the rest of their life, than what difference would it make to these customers whether their heirs get 80% back of their ORA or just 75%? While I am at this stage not sure, whether a retirement home will be at some stage the right place for us, I can assure you that the size of the DMF which would go out of our estate would be the least important decision criterium of all.
Important would be for us the location, the quality of the service, safety, good company, the ability to rely on the company, flexibility when some of the inevitabilities of life occur (like care), within reason the size of the ORA (it doesn't need to be cheap, but it should be sensible) and the predictability of all other costs (i.e. no surprises, though I would not mind some inflation indexing).
Whether they take at the end however 20, 25 or 30% DMF out of the ORA would be clearly the least significant decision criterium for us. I guess its one of these things, it might matter to some, but not to anybody of significance :) ;
I just hope Ryman does not make the mistake to cut their income in an area where it hardly matters to their client base.
Quote from: BlackPeter on Aug 02, 2024, 05:39 PMHmm - not quite sure I understand the problem?
If you offer customers the cruise experience of their life for the rest of their life, than what difference would it make to these customers whether their heirs get 80% back of their ORA or just 75%? While I am at this stage not sure, whether a retirement home will be at some stage the right place for us, I can assure you that the size of the DMF which would go out of our estate would be the least important decision criterium of all.
Important would be for us the location, the quality of the service, safety, good company, the ability to rely on the company, flexibility when some of the inevitabilities of life occur (like care), within reason the size of the ORA (it doesn't need to be cheap, but it should be sensible) and the predictability of all other costs (i.e. no surprises, though I would not mind some inflation indexing).
Whether they take at the end however 20, 25 or 30% DMF out of the ORA would be clearly the least significant decision criterium for us. I guess its one of these things, it might matter to some, but not to anybody of significance :) ;
I just hope Ryman does not make the mistake to cut their income in an area where it hardly matters to their client base.
Very good post BP and I agree 100% about the size of the DMF.
There are however some very powerful psychological factors at play when you offer retired folk a fixed weekly fee for life and locking in their biggest weekly cost for them for the rest of their life, is for many, a huge part of the attraction of the R.V. deal. Wrap that up with the full continuum of care like RYM does and its no surprise that RYM's model of higher end villages with high prices, low DMF and low weekly fees fixed for life has worked well....up until it hasn't worked so well with a falling real estate market and many of their competitors offering more modestly priced units.
Where too from here with more sluggish sales for RYM, while SUM have been trucking along comparatively at a better rate is probably the question occupying the agenda of a lot of their board meetings and I imagine they are conducting studies and survey's which is most likely the reason for the delay in implementing changes
It could be a very smart move to offer a variety of alternative options which I understand is what they are looking at. I understand anecdotally for instance that SUM have been experimenting with lower serviced apartment prices with higher, 40% DMF charges and like you suggested, for some people, they won't care about the higher DMF, it's all about the asking price, weekly fees and whether other aspects of village life are all good.
If I was on the board I would be suggesting the following options:
1. 25% DMF and weekly fees of $X adjusted each year in line with the CPI inflation (This works very well for SUM so there's no need to reinvent the wheel)
2. 25% DMF and fixed fees for life at $X + 30% (30% gives a good buffer for average inflation over the average term of residency)
3. 35% DMF and fixed fees for life at $X
$X per week will vary from one village to another based on the facilities on offer and each village's unique operational costs.
Quote from: Basil on Aug 03, 2024, 11:15 AMVery good post BP and I agree 100% about the size of the DMF.
There are however some very powerful psychological factors at play when you offer retired folk a fixed weekly fee for life and locking in their biggest weekly cost for them for the rest of their life, is for many, a huge part of the attraction of the R.V. deal. Wrap that up with the full continuum of care like RYM does and its no surprise that RYM's model of higher end villages with high prices, low DMF and low weekly fees fixed for life has worked well....up until it hasn't worked so well with a falling real estate market and many of their competitors offering more modestly priced units.
Where too from here with more sluggish sales for RYM, while SUM have been trucking along comparatively at a better rate is probably the question occupying the agenda of a lot of their board meetings and I imagine they are conducting studies and survey's which is most likely the reason for the delay in implementing changes
It could be a very smart move to offer a variety of alternative options which I understand is what they are looking at. I understand anecdotally for instance that SUM have been experimenting with lower serviced apartment prices with higher, 40% DMF charges and like you suggested, for some people, they won't care about the higher DMF, it's all about the asking price, weekly fees and whether other aspects of village life are all good.
If I was on the board I would be suggesting the following options:
1. 25% DMF and weekly fees of X adjusted each year in line with the CPI
2. 25% DMF and fixed fees for life at X + 30%
3. 30$ DMF and fixed fees for life at X
Well, as potential client I could live with your suggestion - and I like it as shareholder (of several RV's) as well, assuming they get the X right and run the numbers along a statistician :) ; Flexibility is always good!
Now we sorted this problem, retirement villages just need to adopt your suggestion and we can move on to more difficult questions to solve!
Quote from: Basil on Aug 03, 2024, 11:15 AMVery good post BP and I agree 100% about the size of the DMF.
There are however some very powerful psychological factors at play when you offer retired folk a fixed weekly fee for life and locking in their biggest weekly cost for them for the rest of their life, is for many, a huge part of the attraction of the R.V. deal. Wrap that up with the full continuum of care like RYM does and its no surprise that RYM's model of higher end villages with high prices, low DMF and low weekly fees fixed for life has worked well....up until it hasn't worked so well with a falling real estate market and many of their competitors offering more modestly priced units.
Where too from here with more sluggish sales for RYM, while SUM have been trucking along comparatively at a better rate is probably the question occupying the agenda of a lot of their board meetings and I imagine they are conducting studies and survey's which is most likely the reason for the delay in implementing changes
It could be a very smart move to offer a variety of alternative options which I understand is what they are looking at. I understand anecdotally for instance that SUM have been experimenting with lower serviced apartment prices with higher, 40% DMF charges and like you suggested, for some people, they won't care about the higher DMF, it's all about the asking price, weekly fees and whether other aspects of village life are all good.
If I was on the board I would be suggesting the following options:
1. 25% DMF and weekly fees of $X adjusted each year in line with the CPI inflation (This works very well for SUM so there's no need to reinvent the wheel)
2. 25% DMF and fixed fees for life at $X + 30% (30% gives a good buffer for average inflation over the average term of residency)
3. 35% DMF and fixed fees for life at $X
$X per week will vary from one village to another based on the facilities on offer and each village's unique operational costs.
Agree and that is the beauty of Ryman. They are the market leader and just by matching Summersets DMF and increasing fees will give shareholders a decent increase in EPS. This is why it's so under valued in my opinion.
Forbar say will add 25 percent
Pricing: increasing DMF to in line with Summerset (SUM) and adjusting village fees will add ~+25% to earnings long term (4, 5, 6)
We expect RYM to increase DMF to 25% and add step through pricing of ~12.5% (in-line with SUM) without any material impact on its sales. This would increase steady state annuity earnings by +20% at maturity, around five to seven years away. Weekly village fees increases could add a further +10% to 15% to annuity earnings. Long term higher care fees increase our earnings further....
The upward trend continues and another good week for Ryman. This is not just retail investors spending their Arvida proceeds.
Quote from: Shareguy on Aug 09, 2024, 05:29 PMThe upward trend continues and another good week for Ryman. This is not just retail investors spending their Arvida proceeds.
Well, yes - already more than a month above MA 100 and SP reaching higher highs. MA 200 later this week?
And fundamentals not bad either, though some other retirement stocks (like OCA) still looking better priced (looking at NTA as well as forward PE).
But I guess its up to everybody's best guess whether they expect the imminent crash of our markets (in this case better burry the gold in the garden) or whether they expect interest rates to slowly drop from here.
Im an optimist and holding some RYM as well :) ;
Good discussion I had with Matt Peek investment manager at Kingfish at the ASM last week about RYM.
He's fully across all the issues I've articulated previously and not impressed at all.
Not selling any more after reducing several times in recent years but definitely not adding any either!
Sees SUM as MUCH better managed and the new Blue Chip in this sector and its notable that their holding in SUM is much higher than RYM.
RYM starting to look quite stretched here on earnings multiples in my opinion given their appalling track record in recent years. It's going to take until the early 2030's to see fulsome effects from changes to their DMF rate and weekly fees. In the meantime, SUM will keep growing underlying earnings and the trend of the last decade of SUM outperforming RYM will continue, in my view. OCA could be a short-term value play, (long term I also think it will continue to underperform SUM), but it seems to have hit a wall at 80 cents so where too from here is anyone's guess?
I think the whole sector is a slow burn from here until we see genuine upward momentum in the real estate market. I think that's going to be painfully slow to eventuate, so I have further reduced my position in OCA.
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$5.00 already. $6 here we come. Go you good thing.
Quote from: Shareguy on Aug 21, 2024, 02:53 PM$5.00 already. $6 here we come. Go you good thing.
Well, yes - TA looks friendly (confirmed above MA200) and fundamentals are still cheap.
They can only gain with interest rates dropping.
I added some over the recent days.
Ryman co-founder Kevin Hickman passed away recently
Did wonders in his years with Ryman and he was an influential figure in the NZ racing industry
Great person who will missed by many
Quote from: winner (n) on Aug 23, 2024, 06:34 PMRyman co-founder Kevin Hickman passed away recently
Did wonders in his years with Ryman and he was an influential figure in the NZ racing industry
Great person who will missed by many
Indeed Winner. Hickman and then Challis were the magic makers at Ryman.
Quote from: Mos on Aug 23, 2024, 06:40 PMIndeed Winner. Hickman and then Challis were the magic makers at Ryman.
Sadly, the magic is gone.
This is positive. Improved disclosure. Separating care costs will make it a lot more transparent and easier to make a case
For the government to accept. And finally addressing pricing. Great move.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RYM/437275/426288.pdf
A LOT of changes in there and a pretty downbeat outlook.
Externalizing future new village construction and undoing all the work Simon Challis did internalizing this and building efficiencies. Interesting. Choice in DMF and fixed fees for life or indexation a good move. Something in there for everyone, bull or bear.
I'd be pretty worried about this ..... Is there another cap raise coming to pay off the banks now?
"Given the continued uncertainty around market conditions in the near term,
we believe a prudent step is to seek amendments to some of our financial
covenant levels for upcoming testing periods. We are in positive discussions
with our lenders who remain very supportive of the business. We expect to
update the market on the outcome of this in the coming weeks."
Forbar like the update. Outperform $7
Quote from: KW on Sep 02, 2024, 03:47 PMI'd be pretty worried about this ..... Is there another cap raise coming to pay off the banks now?
"Given the continued uncertainty around market conditions in the near term,
we believe a prudent step is to seek amendments to some of our financial
covenant levels for upcoming testing periods. We are in positive discussions
with our lenders who remain very supportive of the business. We expect to
update the market on the outcome of this in the coming weeks."
Craigs in their May note did say a CR possible. So one would think that this was already in the share price. The announcement yesterday had a lower build guidance which will help as will over time the change from DMF of 30 % up from 20 %. But yes a CR is a possibility.
Quote from: Shareguy on Sep 03, 2024, 09:02 AMForbar like the update. Outperform $7
Seems very "ambitious". What forward PE does that place them on?
Quote from: Basil on Sep 03, 2024, 11:32 AMSeems very "ambitious". What forward PE does that place them on?
A lofty 20.6 for FY25E BUT a less lofty 13.8 FY26E AND 10.7 FY27E. According to FB report out today
Don't forget no divi and possible cr.................
Quote from: Shareguy on Sep 03, 2024, 09:02 AMForbar like the update. Outperform $7
They must be hoping to get the mandate for the next cap raise ;D
Craig's latest. No cap raise
The update reinforces our view that RYM will eventually turn around and probably doesn't need to raise equity, notwithstanding that it has sought covenant relief (no surprise to us). But it also reinforces that the turn around will take a long time, and even as it comes out the back end RYM will be a much lower growth business than investors have become accustomed to
Forbar look far too ambitious especially in light of the tone of yesterday's announcement. Craigs approach above, far more likely to be correct in my opinion
Gosh huge redundancy's. NZ and Aust ceo jobs gone. Dean has got the axe out with a big drop on overheads coming.
Moving from an internal to an external development model: RYM employs about c.300 FTE in its development team, including staff at head office and a number of employees directly on site (project managers etc). Going forward, RYM will outsource construction, retaining only some elements of design in-house, which is likely to see the majority of its in-house team disestablished. RYM's evolving view is that the internal design-build model has lead to inefficiencies creeping in over time, as long serving managers have not been exposed to evolving industry best practice.
So pricing up and costs reduced...............
Quote from: Shareguy on Sep 03, 2024, 03:23 PMGosh huge redundancy's. NZ and Aust ceo jobs gone. Dean has got the axe out with a big drop on overheads coming.
Moving from an internal to an external development model: RYM employs about c.300 FTE in its development team, including staff at head office and a number of employees directly on site (project managers etc). Going forward, RYM will outsource construction, retaining only some elements of design in-house, which is likely to see the majority of its in-house team disestablished. RYM's evolving view is that the internal design-build model has lead to inefficiencies creeping in over time, as long serving managers have not been exposed to evolving industry best practice.
So pricing up and costs reduced...............
No wonder Forbar calling 7 bucks
They have now dismantled essentially a lot of the foundational principles the company was built on. At its peak, (which was more than a decade ago), RYM could do no wrong. A fully internalized development model Simon Challis had built delivered great units at extremely healthy development margins, the 20% DMF and fixed fees for life were industry leading and there was so little competition they could ask very high prices and had no trouble whatsoever selling them.
To me, it seems with the passage of time and "leadership" of very questionable quality a lot of fat cats inside the company got complacent and lazy, highly questionable practices around accounting issues were instigated in a desperate attempt to keep up the illusion of high growth and no doubt pay extremely high bonuses to management. Meanwhile competition has become rampant and others, notably SUM, kept refining their business model
Externalizing the development model is yet another admission of failure to add to their litany of other failures in recent years. Going forward their growth rate will be a LOT lower than in the past and that's only going to be achievable once the property market stabilizes and starts going up again.
A forward PE of 20 is absolutely ridiculous for a company in the state RYM is in now and Forbar's target is, quite frankly, laughable as are their assumptions around eps growth rates in future years.
As I see it ever since SUM listed, they've eaten RYM's breakfast, lunch and dinner for them. While RYM have gone from one fiasco to another SUM have gone from strength to strength. I think Kingfish's manager is spot on to be holding four times the portfolio allocation to SUM as they have to RYM. Chatting with him after the AGM I think he would like that ratio to be even higher so look out for them increasing their SUM stake more or reducing their RYM stake further.
Its interesting that RYM are still calling the real estate market as very slow or words to that effect and no recovery expected in the next six months. Meanwhile SUM seem to have a lot fewer problems selling their units. I think RYM have some village sites of very questionable desirability, (for example their Lincoln road site in Henderson Auckland which frankly has very little if anything going for it) and that's a key reason they are struggling to sell down their units. Put it this way, I wouldn't give you anything for a unit there but would be all over a unit at SUM waterfront village in Hobsonville if I was a unit buyer.
I think the whole sector is presently artificially buoyed by the ARV cash windfall and reality will bite next year when this cash waterfall stops and the house price recovery proves much slower than many expect.
The one thing for sure you can take out of all of RYM changes including slowing the build rate, is it will make life a bit easier for the others in this sector.
I have worked for Ryman and for Summerset but work for neither now. Summerset had far lower staff to resident ratio in their villages and much higher staff turn over. For people with dementia or who need a full-time care-giver such things matter. At Summerset you were allowed 1 pen a week tops if you lost your pen or it walked you needed to bring one from home. If you used too much paper one week on the printer questions were asked. I mention this as a way of depicting mentality towards everything. Ryman, you could have all the pens and paper you needed. Summerset is the better run business, they manage costs closely and they're probably the better investment but if I had a sick relative I would choose Ryman every day of the week.
I think Summerset runs a business tilted towards affluent 70 and 80 year olds who want company and security but it doesn't offer much care. However, in the long run everyone needs the care and that's where Ryman is best but it's not a great money maker and it's under-funded. If Ryman can better monetise the fact they take better care of you for the rest of your entire life - then they'll be more successful. How they do that is the question I guess.
Disclaimer: Hold neither stock.
Quote from: Basil on Sep 04, 2024, 11:39 AMThey have now dismantled essentially a lot of the foundational principles the company was built on. At its peak, (which was more than a decade ago), RYM could do no wrong. A fully internalized development model Simon Challis had built delivered great units at extremely healthy development margins, the 20% DMF and fixed fees for life were industry leading and there was so little competition they could ask very high prices and had no trouble whatsoever selling them.
To me, it seems with the passage of time and "leadership" of very questionable quality a lot of fat cats inside the company got complacent and lazy, highly questionable practices around accounting issues were instigated in a desperate attempt to keep up the illusion of high growth and no doubt pay extremely high bonuses to management. Meanwhile competition has become rampant and others, notably SUM, kept refining their business model
Externalizing the development model is yet another admission of failure to add to their litany of other failures in recent years. Going forward their growth rate will be a LOT lower than in the past and that's only going to be achievable once the property market stabilizes and starts going up again.
A forward PE of 20 is absolutely ridiculous for a company in the state RYM is in now and Forbar's target is, quite frankly, laughable as are their assumptions around eps growth rates in future years.
As I see it ever since SUM listed, they've eaten RYM's breakfast, lunch and dinner for them. While RYM have gone from one fiasco to another SUM have gone from strength to strength. I think Kingfish's manager is spot on to be holding four times the portfolio allocation to SUM as they have to RYM. Chatting with him after the AGM I think he would like that ratio to be even higher so look out for them increasing their SUM stake more or reducing their RYM stake further.
Its interesting that RYM are still calling the real estate market as very slow or words to that effect and no recovery expected in the next six months. Meanwhile SUM seem to have a lot fewer problems selling their units. I think RYM have some village sites of very questionable desirability, (for example their Lincoln road site in Henderson Auckland which frankly has very little if anything going for it) and that's a key reason they are struggling to sell down their units. Put it this way, I wouldn't give you anything for a unit there but would be all over a unit at SUM waterfront village in Hobsonville if I was a unit buyer.
I think the whole sector is presently artificially buoyed by the ARV cash windfall and reality will bite next year when this cash waterfall stops and the house price recovery proves much slower than many expect.
The one thing for sure you can take out of all of RYM changes including slowing the build rate, is it will make life a bit easier for the others in this sector.
So difficult to please a beagle ... If they increase their building stock, than they clearly are oversupplying an already saturated market (ask the beagle), and if they reduce their build rate then - clearly - their (building-) growth rate drops. How can they dare?
So, they did everything as you asked for and now you are really hitting them hard ...
I recon what you don't seem to see is that their earnings will grow the fastest if they stop building, and clearly externalizing the building activity makes them much more flexible looking into the future. Much easier to stop building new houses, if the builders are not your employees.
All companies improve by focussing on core activities and externalising the rest. I doubt that building houses is a core activity for a retirement village. Looking after its residents, however is.
According to the latest annual reports
Ryman had 964 employees who earned over $100k
Summerset had 545
According to Craig's RYM will also look to downsize its village support office, which employs c.600 people across the Group (note this excludes development overhead; if this is included total support FTE is c.900
Ryman have announced price increases and are going to slash staff numbers. I would suspect that the disclosures over $100k are going to dramatically reduce as building moves to outside contractors and regional support hubs rationalised.
These changes are material and are going to substantially add to earnings.
I'm not expecting any real turn around until second half FY25. Will be restructuring costs so FY2026 onwards is where I'm picking we will see the results.
If the board can execute these changes well and continue with being the readers digest most trusted brand then I'm expecting profitability to improve. I also think the chances of a capital raise are reduced, but still possible.
Craigs latest has a increased TP of $5.93 Outperform.
Disc/ Have recently sold down 25 percent to pay tax and have a low average cost. Plan is to keep the balance long term.
Quote from: BlackPeter on Sep 04, 2024, 02:02 PMAll companies improve by focussing on core activities and externalising the rest. I doubt that building houses is a core activity for a retirement village. Looking after its residents, however is.
There's never been any serious money in care and there never will be. The real coin has always been in property, both developing it and especially reselling it. I think the manager Matt Peak of Kingfish sums the relative situation between SUM and Ryman up really well in his annual review from page 10 in Kingfish's annual report. https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Annual-Report-2024.pdf
I asked him after the annual meeting whether they are interested in Oceania. Too much care in their business model is a brief synopsis of what he said.
Quote from: Glenorchy on Sep 04, 2024, 12:29 PMI think Summerset runs a business tilted towards affluent 70 and 80 year olds who want company and security but it doesn't offer much care.
That's where the serious money is.
Quote from: Glenorchy on Sep 04, 2024, 12:29 PMHowever, in the long run everyone needs the care and that's where Ryman is best but it's not a great money maker and it's under-funded. If Ryman can better monetise the fact they take better care of you for the rest of your entire life - then they'll be more successful. How they do that is the question I guess.
That's a huge "IF"...they have an absolute mountain of work to do and very strong headwinds from Govt budgetary constraints around care costs.
Quote from: Basil on Sep 05, 2024, 09:17 AMThat's where the serious money is.
...................
That's a huge "IF"...they have an absolute mountain of work to do and very strong headwinds from Govt budgetary constraints around care costs.
Agreed that's where the serious money is now. Lifestyle villages. And that may continue to be the case which is why Summerset is probably the better investment right now.
However, care doesn't have to be constrained by the govt. It currently is because we are still serving the Silent generation but when the baby-boomer's need care who's to say what pricing can be put on a premium care product given demand and supply will be seriously misaligned? Is a superior private health offering given it's critical always destined to earn less than a property play given it's more of a choice? I don't know well above my pay-grade.
Quote from: Glenorchy on Sep 06, 2024, 12:36 PMAgreed that's where the serious money is now. Lifestyle villages. And that may continue to be the case which is why Summerset is probably the better investment right now.
For the foreseeable future is how I see it.
Quote from: Glenorchy on Sep 06, 2024, 12:36 PMHowever, care doesn't have to be constrained by the govt. It currently is because we are still serving the Silent generation but when the baby-boomer's need care who's to say what pricing can be put on a premium care product given demand and supply will be seriously misaligned? Is a superior private health offering given it's critical always destined to earn less than a property play given it's more of a choice? I don't know well above my pay-grade.
Think about it in terms of when the baby boomer population are likely to need care. The peak population growth of the boomers was 1961, more people born that year than any other before or since. If on average those people need care from 85 years that's not until 2046 this hits peak demand. OCA charging $3,500 per week at the Helier for care, plus buying into a care suite ORA, may struggle to find many takers at that price for quite some time. They're ahead of the curve for care but much too far ahead of the curve is the problem as I see it. I think certainly for the rest of this decade and probably well into the 2030's the real money is still going to be made from independent living units and those providers who build villages with all the bells and whistles. In the long run those that have a huge amount of care in their business model will do well but they have to navigate the next decade or thereabouts, first.
Quote from: Basil on Sep 06, 2024, 04:57 PMFor the foreseeable future is how I see it.
Think about it in terms of when the baby boomer population are likely to need care. The peak population growth of the boomers was 1961, more people born that year than any other before or since. If on average those people need care from 85 years that's not until 2046 this hits peak demand. OCA charging $3,500 per week at the Helier for care, plus buying into a care suite ORA, may struggle to find many takers at that price for quite some time. They're ahead of the curve for care but much too far ahead of the curve is the problem as I see it. I think certainly for the rest of this decade and probably well into the 2030's the real money is still going to be made from independent living units and those providers who build villages with all the bells and whistles. In the long run those that have a huge amount of care in their business model will do well but they have to navigate the next decade or thereabouts, first.
On the other hand, the over 60's are dying at a far greater rate than usual so maybe there wont be many left to make it to 85. Previous demographic predictions have not yet taken into account the "excess deaths" we are currently experiencing. (And no, its not covid)
Quote from: KW on Sep 06, 2024, 05:07 PMOn the other hand, the over 60's are dying at a far greater rate than usual so maybe there wont be many left to make it to 85. Previous demographic predictions have not yet taken into account the "excess deaths" we are currently experiencing. (And no, its not covid)
And demographic predictions in respect of retirement sector probably hasn't factored in that declining home ownership rates are leading to an increase in over 65s needing to rent ...one recent study came up with a prediction there will be around 600,000 New Zealanders aged 65 and over needing to rent a home by 2048 – a 100% increase on 2022 levels.
RYM share price could really break through the 500 mark many were looking forward
Price will probably go a bit lower from here and hang around the 440's for a while
Don't think the market liked the latest announcement. I reckon that doing away with the regions and centralising everything is fraught with dangers ....let's hope the individual centres run like clock work so this bringing everything back to HQ doesn't put the place into turmoil. Sounds a bit like how our health system after 'restructuring'
Quote from: winner (n) on Sep 06, 2024, 06:09 PMAnd demographic predictions in respect of retirement sector probably hasn't factored in that declining home ownership rates are leading to an increase in over 65s needing to rent ...one recent study came up with a prediction there will be around 600,000 New Zealanders aged 65 and over needing to rent a home by 2048 – a 100% increase on 2022 levels.
Yes, but if there are 600k over 65 needing rent, does this not still leave something like 1.2m over 65 (I made this number up, but should be the right order of magnitude) who have a house and can afford to buy into a RV?
Always look at both sides of the coin ... and don't forget - the baby boomers don't have to splash their billions of money as inheritance to their kids, they can as well use some of it to buy into RV's instead :);
Quote from: Basil on Sep 06, 2024, 04:57 PMFor the foreseeable future is how I see it.
Think about it in terms of when the baby boomer population are likely to need care. The peak population growth of the boomers was 1961, more people born that year than any other before or since. If on average those people need care from 85 years that's not until 2046 this hits peak demand. OCA charging $3,500 per week at the Helier for care, plus buying into a care suite ORA, may struggle to find many takers at that price for quite some time. They're ahead of the curve for care but much too far ahead of the curve is the problem as I see it. I think certainly for the rest of this decade and probably well into the 2030's the real money is still going to be made from independent living units and those providers who build villages with all the bells and whistles. In the long run those that have a huge amount of care in their business model will do well but they have to navigate the next decade or thereabouts, first.
The Aged Care Commissioner put out a report in March of this year that said:
"We are now in a position where the sector is unable to meet the increasing demand for aged residential care, which effects every other part of the health system."
"When aged care beds are scarce, healthcare for older New Zealanders is provided by public hospitals at more than three times the cost. We must ensure a steady supply of aged care beds and smooth transitions from hospitals to aged care to reduce the pressure on older New Zealanders and public hospitals,"That was 6 months ago since then zero steps have been taken to respond to this.
Yes more babies were born in 1961 but the birth rate was still high and getting higher in 1946, 1947, 1948, 1949 and on and on. This is not a problem that begins in 2046 at peak demand it is a situation that arises as soon as demand increases which it will as soon as the first of the boomers begin to need care in any numbers because there were far fewer members of the previous generation.
When the first of the boomer generation born between 1946 - 49 culmulatively needs assistance we will have a serious disconnect between demand and supply. The average age for care is 87/88 but that's the average so there are blessed souls who are sharp of mind and still living independently in their 90's but there are those who draw the short straw and need help a lot sooner. The journeys are unique.
I have no skin in the game, so I'll make this my last comment on this. All I'm saying is that whilst I accept the Summerset business model is of course a good one and has been the better investment to date it is not inconceivable that as the Baby Boomers currently 60 - 78 years of age enter there 80's those offering a good care product will be in a position of offering a scarce product for which their is steadily growing demand and could adapt their business models to monetise that reality.
Fair enough and my compliments on a well articulated post.
Quote from: Glenorchy on Sep 06, 2024, 09:44 PMit is not inconceivable that as the Baby Boomers currently 60 - 78 years of age enter there 80's those offering a good care product will be in a position of offering a scarce product for which their is steadily growing demand and could adapt their business models to monetise that reality.
This is exactly what is happening. The wealthy home owners who can afford to downsize, and pay for a retirement village and the Care ORA, will be lucky enough to be able to access aged care. Those who rent, own a home that is worth less than the village ORA, or who don't have the funds to buy a Care ORA will be left out in the cold.
From a shareholder perspective though, a smaller group of customers who are more profitable, can be worth more than a larger group of customers who are less profitable (or worse, unprofitable). So focusing efforts on the top end of the market will likely achieve greater returns for shareholders than trying to be all things aged care to all people. The problem arises when everyone focuses on that segment of the market, and it ends up over supplied, under utilised, and the business model breaks.
Really awful result which is no surprise as far as I am concerned. Market disappointed with shares currently down 6.5%.
RYM and OCA simply can't seem to stop tripping over themselves and yet in identical market conditions SUM goes from one record result to another. Forget the rest, simply buy the best.
Quote•Total revenue of $366.3 million, up 10% on 1H24.
•Reported net profit after tax (NPAT) of $94.4 million, down 50% from $187.1 million in 1H24.
•IFRS profit before tax and fair-value movements (PBTF) of -$79.8 million (-11.6cps), down from -$17.8 million in 1H24 (-2.6cps).
•Cash flow from existing operations (CFEO)1 of -$7.8 million, down $24.8 million on 1H24.
•Cash flow from development activity (CFDA)1 of -$44.7 million, an improvement of $132.6 million on 1H24.
•Sales of occupation right agreements (ORAs)1 of 827, up 5% on 1H24, with resales up 9% to 603 and new sales down 5% to 224. Gross receipts of $651.4m, up 5%.
•Occupancy on mature aged care centres steady at 96.4% (96.2% in 1H24).
•667 new retirement village units and aged care beds delivered.
•Completed one village (Miriam Corban), opened one village (Hubert Opperman) and opened three main buildings (Miriam Corban, Keith Park, and James Wattie).
Ryman Healthcare Limited (Ryman) has reported a 10% increase in revenue to $366.3 million for the six months ended 30 September 2024, driven by increases in care and village fees following the opening of one village and three main buildings, and growth across the existing portfolio.
Executive Chair Dean Hamilton said: "We were pleased with the operating performance of our villages in the first half relative to the prior year as we remained firmly focused on providing great care and experience for our residents.
"Whilst occupancy remained high for our mature villages, we know there is a cost to opening three main buildings in the period as we progressively fill care beds and sell down serviced apartments. Resident sentiment remains positive – with NPS stable across care and independent living residents. Excluding one-offs, our non-village operating costs were relatively static year on year. However, with lower development activity, we are capitalising less of these costs, impacting reported earnings."
Sales of ORAs were up 5% to 827 in 1H25, the strongest six-month period in the last three financial years, demonstrating that demand for Ryman's product remains strong. Whilst we maintained pricing in a challenging market, this has translated to a compression in resale margins per unit, which are dependent on unit price inflation.
The decline in PBTF from -$17.8 million in 1H24 to -$79.8 million in 1H25 reflected higher growth in reported operating expenses and finance costs – both largely due to lower cost capitalisation.
CFEO declined from $17.1 million in 1H24 to -$7.8 million in 1H25, with solid growth in village cash flows offset by higher non-village and interest costs – both also due to lower cost capitalisation. CFDA has seen a material improvement from -$177.3 million in 1H24 to -$44.7 million in 1H25, driven by steady cash inflows from resident funding and significant reductions in capex on direct construction spend and reduced investment in new land.
Sales and stock of occupation rights
As previously announced, from 1H25 Ryman now recognises ORA sales at the time of occupation. This better aligns with both reporting in the wider sector and with cash flow metrics as the majority of sales are settled when a resident moves in.
Ryman has booked 827 sales of ORAs in 1H25, generating $651.4 million of gross proceeds, both up 5% on 1H24. This was driven primarily by a robust period of resales, up 9% on the back of strong move-ins for serviced apartments, and a steady period for independent units.
Ryman has delivered 387 new retirement units in the period.
Unoccupied retirement unit stock is up 182 units from 974 at March 2024 (10.6% of total stock) to 1,156 at September 2024 (12.1%), predominantly reflecting serviced apartments delivered in three main buildings which opened during the period. Stock at September 2024 includes 522 units under contract.
Governance and leadership update
Newly-appointed CEO Naomi James joined on 4 November and Dean Hamilton will step down as Executive Chair, returning to the role of Board Chair on 29 November, following a period of handover.
Mr Hamilton said: "Naomi's experience leading people through transformation within capital intensive, regulated industries in New Zealand and Australia will make a significant contribution to Ryman. I am really confident in handing over the reins and look forward to supporting Naomi as we all work towards delivering more sustainable value for our Ryman residents, team members and shareholders."
As announced on 22 October, Scott Pritchard has been appointed as an independent director from 1 November 2024. As announced at the 2023 annual shareholder meeting, Claire Higgins will step down on 31 December 2024.
"I'd like to thank Claire for her 10 years' contribution to Ryman and in particular stepping into the role of Interim Chair ahead of the capital raise and Board renewal process," Mr Hamilton said.
"With Scott's appointment, that now completes the Board renewal process, with five new directors joining the Board since June 2023."
Business improvement
Ryman has continued to make progress on its business improvement programme through implementing changes announced in September, including a new pricing model, driving greater efficiencies in its services and support structure, and introducing a new approach to development.
Mr Hamilton said: "Our new pricing model recognises that our residents are staying longer and our need to cover village operating costs, which have increased significantly in recent years (rates, insurance and electricity in particular). The financial benefit of these changes will flow as new ORA contracts are entered, most of which will be realised over a 15-year timeframe."
The implementation of Ryman's new services and support structure has progressed, with a number of changes now confirmed following a period of consultation.
Mr Hamilton said: "Our leaner structure, starting with a reduced executive team, has seen the removal of duplicated functions across New Zealand and Australia, the flattening of reporting lines, and a reduction in our inhouse development function as existing projects complete and we move towards more outsourcing of our design and construction.
"This has been a challenging period for all of team members at Ryman, and I want to thank them for leaning in and supporting the change process.
"The business improvement changes we've implemented will lower costs now and improve revenue materially over time. We have achieved $18 million of annualised savings to date in gross non-village operating expenses. We are targeting a similar level of savings across the Group by the end of FY26," Mr Hamilton said.
One-off costs associated with the business improvement programme to date are approximately $10 million, with $6.5 million recognised in 1H25.
Development update
Several development milestones were achieved during 1H25:
•Three main buildings were completed, and the first care residents were welcomed at Miriam Corban, Keith Park and James Wattie;
•Hubert Opperman (Mulgrave) was opened in August; and
•Miriam Corban was completed.
Ryman now has 49 operational villages – 9 in Victoria and 40 in New Zealand. Ryman has nine sites under active construction (all of which are open). Before financial year-end, it is anticipated that both Bert Newton and James Wattie will be completed, which will reduce sites under active construction to seven.
The 1H25 build rate (on a completed basis) totalled 667 units and beds, including 142 independent units, 245 serviced apartments and 280 aged care beds. We expect to deliver at the top end of our 850-950 build target for FY25.
"We do not intend to commence construction on a new development outside of the nine inflight before March 2026.
"This allows time for our overheads to reduce and for us to work through current stock on hand, while building the internal capability and external relationships to successfully transition to a developer rather than constructor model," Mr Hamilton said.
Capital management
At September 2024, net interest-bearing debt was $2.56 billion, up $0.05 billion from March 2024. Total funding headroom at September 2024 was $455 million (undrawn facilities and cash).
In September, Ryman agreed amendments to its interest coverage ratio (ICR) covenant levels for testing periods through to March 2026. Ryman remains compliant with all lending covenants and obligations at September 2024.
Dividends remain suspended. Ryman intends to undertake a further review of the dividend policy at FY26. Any future dividend policy is expected to be based on cash flow.
"The financial focus of the Board remains on strengthening cash flow outcomes and reducing our debt position over time," Mr Hamilton said.
Significant progress made in financial reporting
Ryman continues to undertake an extensive review of its financial reporting with the goal of enhancing the transparency of its financial results and ensuring greater comparability with others in the sector.
Several changes have been implemented in the period, many of which were signalled at the FY24 results on 27 May 2024 and business improvement update on 2 September 2024.
These changes have impacted 1H25 accounts and resulted in restatements of prior period financials. Key accounting changes include:
•Changing the recognition point for occupancy advances to when a resident takes possession of a unit (previously on signing an application form).
•Increasing the expected periods of tenure used to recognise DMF revenue to nine years for independent units and four and half years for serviced apartments (previously seven years and three years respectively).
•Reclassifying development land as investment property which is held at fair value (previously classified as property, plant and equipment held at cost).
•Adjusting the treatment of occupation advances within the investment property valuation (which previously included a discount to the DMF component).
Outlook
"Current economic conditions remain challenging in both New Zealand and Victoria," Mr Hamilton said. "Residential housing volumes and pricing continue to be subdued, impacting the ability of prospective residents to settle on ORAs. We expect these conditions to continue through the second half.
"Previous cash flow guidance assumed higher 2H25 settlements of new ORAs, which are now expected to be deferred to FY26. We are delivering our programme of main buildings – acknowledging that the capital release from these takes time. We have moderated the pace of development at some of our existing inflight projects, reflecting current stock levels and market conditions."
FY25 guidance:
•Cash flow: We expect to have negative free cash flow between $50-100 million as settlements are deferred into FY26 (previous guidance: targeting positive free cash flow).
•Capex: We expect to spend $625-675 million on total capex, as a result of the slow-down of some inflight projects, and lower investment in land bank sites. This includes $540–580 million on development activity and $85-95 million on existing operations (previous guidance: $700-820 million total, $600-700 million on development activity, and $100-120 million on existing operations).
•Build rate: We expect to deliver at the top end of the previously indicated 850-950 retirement village units and aged care beds.
Ryman's outlook for FY25 is based on current market conditions and its assessment of the future.
"We are well positioned to benefit when residential property markets recover," Mr Hamilton said.
"I am confident that Ryman's history of industry-leading innovation and clear focus on what is good enough for mum or dad, provides us with the foundation to deliver a stronger future and one that balances great care with great financial performance. Our residents will continue to remain at the centre of everything we do," said Mr. Hamilton.
Quote from: Basil on Nov 28, 2024, 04:46 PMReally awful result which is no surprise as far as I am concerned. Market disappointed with shares currently down 6.5%.
RYM and OCA simply can't seem to stop tripping over themselves and yet in identical market conditions SUM goes from one record result to another. Forget the rest, simply buy the best.
I wonder how you would call a really awful result, like a loss?
I guess both revenue as well as NPAT look better than in the previous period. And hey, their used to be tiemes when they got flamed for not delivering enough new units. Now they are getting flamed for delivering them.
Sure, it looks like though they want to prepare shareholders for not so positive cashflow towards EOY. Delivering too many main buildings. Just annoying that without them clients don't want to purchase the units either.
But " really awful" ? Maybe "mixed bag" would be a better way to describe the result?
QuoteI wonder how you would call a really awful result, like a loss?
Maybe with all their attempts to obfuscate the report you missed this:
•IFRS profit before tax and fair-value movements (PBTF) of -$79.8 million (-11.6cps), down from -$17.8 million in 1H24 (-2.6cps).
That's by international financial reporting standards a loss of $79.8m for the half year (a loss of 11.6 cps) as compared to a loss of 2.6 cps in the previous comparable period.
They don't report underlying profit anymore, (unlike the entire rest of the industry), because they are useless idiots.
12% of all units for sale well up on the last report. That's shocking.
I realize they have made more changes to their reporting system than I have had hot dinners this year, so just look at the share price reaction which tells the story for you.
Closing Bell Report ...guy from Hinden Green says -
Sullivan said Ryman had reasonable revenue growth, but the cash flow was negative through deferred settlements, which weighed on the stock.
"As long as that remains, the bigger chance of a capital raise and shareholders don't want to be diluted further. They voted with their feet today."
The only reason they made a "profit" was through accounting chicanery - revaluing all their land holdings at "fair value" instead of at cost. Operating profits are negative, and operating cashflow is negative. Which means debt is going to increase. At what point do their bankers say "enough"?
The capital raising in 2023 was supposed to reduce debt - in their announcement at the time they said it would reduce gearing to 33.9%. In less than 18 months gearing has rebounded to 37.3% and debt levels are back at the same amount they were at the end of FY 2022 prior to the cap raise ($2.5B - up from the $2.3B immediately post cap raise, so another $200M in debt borrowed straight back again).
So after raising $902M and diluting shareholders up the wazoo, RYM is still in the same debt position it was 2 years ago - except now its paying double the amount of interest on that debt)/
RYM2022.png
(March 2022 Balance Sheet)
Another ridiculous statistic - RYM has 1 employee per 2 residents. What are they all doing?
"Ryman has 9575 retirement village units which are home to 15,085 residents: 12,921 in this country and 2164 in Australia. The company employs 7727 staff"
Quote from: KW on Nov 29, 2024, 05:05 PMThe capital raising in 2023 was supposed to reduce debt - in their announcement at the time they said it would reduce gearing to 33.9%. In less than 18 months gearing has rebounded to 37.3% and debt levels are back at the same amount they were at the end of FY 2022 prior to the cap raise ($2.5B - up from the $2.3B immediately post cap raise, so another $200M in debt borrowed straight back again).
So after raising $902M and diluting shareholders up the wazoo, RYM is still in the same debt position it was 2 years ago - except now its paying double the amount of interest on that debt)/
RYM2022.png
(March 2022 Balance Sheet)
Another ridiculous statistic - RYM has 2 employees for every resident. What are they all doing?
"Ryman has 9575 retirement village units which are home to 15,085 residents: 12,921 in this country and 2164 in Australia. The company employs 7727 staff"
2 residents per employee perhaps? Still seems a lot
Quote from: Mos on Nov 29, 2024, 05:19 PM2 residents per employee perhaps? Still seems a lot
Ah yes, my bad. Typo. Will correct it.
As a comparison, Stockland, one of Australia's largest property developers and retirement community owners, with a $12B market cap, employs 1600 people.
Ingenia, another big developer and owner of retirement communities with 11,000 residents, employs 1200 people.
Summerset has 2,470 employees for 8,400 residents.
Are you comparing like with like, on those other contract out the care? Or employ directly?
Still extremely high.
Disc. Wouldn't touch Rym with a barge pole.
Quote from: KW on Nov 30, 2024, 11:53 AMAh yes, my bad. Typo. Will correct it.
As a comparison, Stockland, one of Australia's largest property developers and retirement community owners, with a $12B market cap, employs 1600 people.
Ingenia, another big developer and owner of retirement communities with 11,000 residents, employs 1200 people.
Summerset has 2,470 employees for 8,400 residents.
Yes your point is still well made.
Yes KW's comment is well worth noting. The exact difference is this.
RYM 1.95 residents per employee.
SUM 3.40 residents per employee.
The reason why SUM's business model is vastly superior to RYM's is right there.
Who wants the pleasure of looking up how many residents per staff member at Oceania ?
Okay, no takers...I will. drum roll please....3,000 staff, 4100 residents, that's only 1.37 residents per employee !! No wonder their business model is working so "well" lol
source page 6 of their annual report here https://media.oceaniahealthcare.co.nz/wp-content/uploads/2024/05/30120131/FY2024-Annual-Report.pdf?_gl=1*be5cxe*_gcl_au*MTQ5Mjc1MTI4OC4xNzMyOTMxNjA1
You need to know the breakdown of these employee figures, for them to be meaningful. For a start, how many of those employees are caregivers, RNs, cleaning staff, laundry staff, kitchen staff, ground staff, maintenance staff. Those roles are literally essential roles, that have a direct impact on meeting the needs of residents. Then you need to know how many locally sited management/admin roles there are eg: facility manager, clinical manager, reception etc.
Anything over and above these roles, can then legitimately be looked at and a judgement made as to whether that group of employees is "top heavy" and can realistically be reduced, and savings made. If it turns out that RYM has better caregiver to resident ratios than other providers, that's a good thing! Same applies to OCA. The better the care related ratios are, the higher the quality of care provided should be. Care doesn't just include personal cares and other "tasks" it includes time spent interacting with, and building relationships with residents. I guarantee that aspect of the role is the one residents value the most.
I suspect there is a good chance that savings can be made within the backroom roles - maybe at least some of those roles can be centralised, doing whatever they do, for all facilities, rather than duplicating those roles in every RV.
What I am trying to say is, there is insufficient information to draw any accurate conclusions about any of this, regardless of which RV you are looking at.
By the way, I know nothing about Ingenia, but if they provide a care component, I'd love to know how many care residents they have, and how many care staff/RNs dedicated to that care. Going by KW's figure of 1200 staff to 11,000 residents, either they have no care component, or a very small one.
I don't care how you slice and dice it. For OCA, even with its care intense business model I think only 1.37 residents per employee is absurd and it's why as noted by Craigs analysts, OCA is only making a fraction of the average of what is normal for care providers. Yes, it would be wonderful if staff have heaps of time to spend relationship building with lonely care residents and that's great for a charity...except that this is a listed company with responsibilities to shareholders, something that seems to have been forgotten by management up until quite recently.
RYM have a lot of care in their business model too and 1.95 residents per employee seems at least somewhat more believable they could make a go of things again if they can get the rest of their operation running smoothly.
I think the most important thing for investors to note here, is the stark contrast in employee numbers between these three such that both RYM and OCA are hemorrhaging profusely from village operational losses, (subsidized by property gains) whereas SUM, not nearly as much. This is the key reason SUM goes from one record profit to another while RYM and OCA and languishing in the doldrums
Thanks to KW for starting off this illuminating discussion about staff to resident ratio. It explains a LOT.
Quote from: Basil on Nov 30, 2024, 04:36 PMI don't care how you slice and dice it. For OCA, even with its care intense business model I think only 1.37 residents per employee is absurd and it's why as noted by Craigs analysts, OCA is only making a fraction of the average of what is normal for care providers. Yes, it would be wonderful if staff have heaps of time to spend relationship building with lonely care residents and that's great for a charity...except that this is a listed company with responsibilities to shareholders, something that seems to have been forgotten by management up until quite recently.
RYM have a lot of care in their business model too and 1.95 residents per employee seems at least somewhat more believable they could make a go of things again if they can get the rest of their operation running smoothly.
The reality is, you are not in the slightest bit interested in anything I share with regard to my work related experience, or with my knowledge and skills with regard to care. My comments were not made in defence of OCA. This is actually the RYM thread. They were generalised and applicable to any provider.
You don't understand and you never will. So I give up. You win Basil.
I think the point is, one Operator is doing there job efficiently and the others aren't.
Quote from: Untamed on Nov 30, 2024, 04:44 PMThe reality is, you are not in the slightest bit interested in anything I share with regard to my work related experience, or with my knowledge and skills with regard to care. My comments were not made in defence of OCA. This is actually the RYM thread. They were generalised and applicable to any provider.
You don't understand and you never will. So I give up. You win Basil.
I understand a lot more than you think and yes its about market outperformance, winning, if you like, and beating the index otherwise we might as well just save a truckload of time, buy a bunch of ETF's and be done with it.. OCA were making ~ $19,500 EBITDA per care bed before they were listed and now more than 7.5 years into their so-called transition to making better returns on care, are making much less than half that at $8,500 EBITDA. Radius healthcare the other day with their profit announcement are making ~ $13,500 EBITDA per care bed. Craigs are dead right to call OCA out on being grossly inefficient with their care model. The other thing I understand that I haven't talked about before is this. Its the CFO's job to run the business from an operational perspective like a well oiled Swiss watch and ensure the business is running in an optimal manner for all stakeholders. The one consistent thing with all OCA's management changes over the years is Katheryn Wargh the CFO has always been there and I'm calling it. I think she's a very poor operator. Winner tells me she was there long before the IPO so she should know how to run an efficient operation, (private equity returns as noted above were vastly better). Maybe if she didn't waste so much time on her pet projects like endless ESG grandstanding, returns to shareholders would have been much better over the years. One thing to look for with turning around OCA is for the current CFO to be fired and for the new CEO to being in someone with proven expertise in the industry.
Sheeting this back to RYM and highlighting the difference excellent management makes, RYM used to have the services of the legendary Simon Challis as CEO and shareholders make an absolute fortune under his stewardship of the company. It's never been the same since, not even remotely close. Whether the current bunch of unproven newbie management and directors' lifts RYM's performance out of the quagmire is anyone's guess, flip a coin.
Another example of management making a huge difference is the current SUM CEO Scott Scoullar who was a truly brilliant CFO and then co-CEO understudy to Julian Cook. I happen to know Scott was making many of the key pricing and development decisions long before Julian stood down. Those two have driven a near 1,000% return for shareholders since SUM listed in 2011. Compare that with OCA languishing under its IPO price 7.5 years after listing and currently and likely to for some time, suspending dividends. It's been a disaster by any standards and an unmitigated disaster by comparison with SUM.
Great management makes a great difference. Something to remember when next making investment decisions.
That's exactly the point Dolcile.
Quote from: KW on Nov 30, 2024, 11:53 AM...
Ingenia, another big developer and owner of retirement communities with 11,000 residents, employs 1200 people.
...
I assume you realize that Ingenia has a totally different business model? They own the section, but sell the unit (basically a tiny house which can be thrown away after the departure of the resident) - they don't need to worry about doing maintenance or similar, and if we look at services to the residents, its all done by contractors.
They are basically the Uber Eats of the retirement villages - hardly any employees, little responsibilities and living off clipping the ticket.
Roughly as comparable as Backpacker hostels and 5 star Hotel accommodation. Sure, both business models might have their justification, but comparing them based on staffing levels? Now, who of these two would have a higher staffing demand? Let me guess ...
If you apply the Summerset staff ratio to Ryman, and assume Summerset contract out their building to third parties, then it appears that approx 3291 people are involved in the building side of the business. For 9 building sites. Thats 365 people per building site. I'm pretty sure private builders dont have 365 people on a single building site all day, every day.
To be fair, SUM are known to have a materially lower care component to their business model than RYM.
I think the most telling thing that investors need take note of it is that despite RYM's sterling reputation with care, they can't make acceptable returns on invested capital given the systemic underfunding and have recently taken the drastic step of reconfiguring village developments with a much lower level of care operations. For them to do this, you know the underfunding of care has reached a crisis level. SUM too, tweaking their business model. Where does that leave the likes of OCA in terms of their target being 50% care beds? (presently higher) Up the creek in a grossly underfunded sector without a paddle is where. You can see how horrendous the size of the problem is above. You're never in your wildest dreams going to make acceptable returns on capital employed with only 1.37 residents per employee. In fact, I would day they're so overstaffed, its truly absurd. This staff level comparison that KW kindly started, and Craigs highlighted this issue in their recent note as a major issue for OCA, has proved to me that OCA's problems run far, far deeper than just chronically slow-moving stock. I think shareholders in OCA can "look forward to" the lowest returns in the entire sector forever and a day.
From:
https://businessdesk.co.nz/article/property/analysts-unfazed-by-ryman-walking-back-guidance
(likely paywalled)
In a nutshell:
After Fridays announcement restated Forsyth Barr's Aaron Ibbotson his one-year target price of $7.00 while Jarden's Arie Dekker (a long term sceptic about the future of the sector) raised his target price by one cent to $5.04.
Obviously - analysts are not better in predicting future stock prices than anybody else, but - they are not worse either. At least they give a good idea about the general market vibes. It appears not everybody sees doom and gloom in the recent announcement, but hey - what would they know?
Quote from: Basil on Dec 01, 2024, 02:25 PMTo be fair, SUM are known to have a materially lower care component to their business model than RYM.
How much lower though? Does anyone have the number of aged care beds for both Ryman and Summerset?
A lot.
Quote from: KW on Dec 02, 2024, 11:19 AMHow much lower though? Does anyone have the number of aged care beds for both Ryman and Summerset?
31 Dec 2023 Ryman 4339 care beds versus 9187 retirement units total 13.526 beds/units. app 32.1% care beds.
31 March 2024 Summerset 1284 care beds versus 6087 retirement units total 7.371 beds/units. app 17.4% care beds.
Source for both Rym and Sum most recent annual reports.
Looks like consumers over in Australia start to notice the benefits of the NZ Continuum of Care model - and Ryman is over there at the forefront of delivering.
https://businessdesk.co.nz/article/property/continuum-of-care-ryman-is-shaking-up-the-australian-market
(probably paywalled)
Maybe the pendulum is swinging back - good times ahead for retirement villages with continuum of care already integrated in their offering?
Jenny Ruth un-paywalled her article
https://justthebusinessjennyruth.substack.com/p/ryman-ditches-the-sugar-coating
From Cooper Investors;
During the quarter, we increased our investment in Ryman Healthcare (RYM) reflecting increased conviction in its reversionary VoF attributes.
We have visited New Zealand 3 times in the last 5 months as we sensed opportunity from both a top-down perspective (NZ in recession) and a bottom-up opportunity with RYM specifically.
RYM develops, owns and operates retirement villages in NZ and Victoria and has experienced its own 'Hubris to Humility' cycle with the company generating an exceptional 23% compounded total shareholder return for 20 years to February 2020. Since then, the shares have declined more than 75% as the post covid era exposed fragilities within the business model accentuated by an extremely challenging housing backdrop and economic environment in NZ.
The Brunswick Fund owned RYM for much of the last 20 years. We sold out in early 2024 as we lost confidence in management.
The company has since made significant changes with a substantial Board refresh and a highly competent Acting Executive Chair taking advantage of the crisis to push through a difficult change agenda. This included a broad management overhaul (CEO, CFO, Aus CEO and others), increased conservatism in company accounting (extended DMF tenure, reduction in capitalized interest, revenue recognition changes, and others), a progressive wind-down of their large in-house development team, a planned material reduction in corporate overheads which have grown much more rapidly than their resident base, and a more sensible and economic pricing structure (aligned with peers).
RYM's new CEO, Naomi James, who started in November has a strong track record and has been tasked with executing on the revised strategy and transformation.
These changes will take time to become apparent, however the value latency embedded in the business is now significant.
The unique nature of the business model in NZ in which a resident pays RYM the "right" to occupy the unit (and gets this quantum back minus the DMF upon exit) acts as a form of near free financing for retirement operators. It has many parallels with Regis Healthcare and its Refundable Accommodation Deposits (RADs) where you can grow your business with "other people's money". In effect, this means that if you can get an adequate Return on Asset, the return to shareholders can be exceptional.
In our view, the recent operational changes greatly increase the probability of RYM earning a decent return on their assets and its previous flywheel being re-started over the next few years.
Furthermore, the operating and industry trends are also now positive with:
the NZ housing market beginning to transact again after turnover fell to 30 year lows! (important given residents need to sell their house to move into a Ryman village)
house prices have stabilised after falling by the largest amount in 30 years:
and the supply side ingredients are moving into place with approvals for new retirement units having fallen ~50% in the past 18 months.
Similar to our investment into Regis Healthcare, the demand equation for retirement villages is likely to be exceptionally strong over the next decade with RYM's average age of entry into an independent villa being 83 years old and serviced apartments 87 years old. Most importantly the target market has recently begun inflecting rapidly.
Thanks Gerald for that
Lots thought RYM shareprice would be over 500 by now
Every time it looks like doing that down she goes and even seems to find 450 a tough nut to break through
Maybe it was that press report the other RYM probably need to do another cap raise has caused current
But that Cooper outfit and others are patient they should do OK
This oil tanker is going to take a very long time to turn around - historical 20% DMF and fixed weekly fees will cause pain for years - but could well be reflected in share price.
https://www.rymanhealthcare.co.nz/travel?utm_campaign=rynz_national&utm_source=nz_herald&utm_medium=rynz_hot_incentive_billboard_display_feb25
approx 1.5% effective discount off their high asking prices at certain villages only. Call me "underwhelmed"
Sure, some will fall for this but don't forget that the real estate market has been slow and that includes Ryman's units so don't be afraid to haggle on the price despite what they say about their prices being "fixed". If they tell you their prices are fixed, tell them they need to fix them more attractively. Back in the day, I haggled my parents' unit down in the Peninsula club from $360K to $340K a 5.6% reduction, a much more meaningful percentage reduction than this travel promotion. RYM and OCA for that matter have truckloads of stock on hand. Haggle hard.
Agree 100% Mos. Some people are still occupying units sold to them with the promise of fixed fees for life at $99 per week and all up until recently at 20% DMF Its going to be a very, very long process to reduce the cashflow bleeding at a village operational level.
Until we start to see genuine upward momentum in the real estate market it's hard to see how this sector can perform strongly again. Sideways for the entire sector with minimal yield is how I see it and a good sector to avoid.
Knowing how dogged you can be, they probably thought they had got off lightly at 5.6% discount Basil.
Quote from: Basil on Feb 23, 2025, 04:04 PMhttps://www.rymanhealthcare.co.nz/travel?utm_campaign=rynz_national&utm_source=nz_herald&utm_medium=rynz_hot_incentive_billboard_display_feb25
approx 1.5% effective discount off their high asking prices at certain villages only. Call me "underwhelmed"
Sure, some will fall for this but don't forget that the real estate market has been slow and that includes Ryman's units so don't be afraid to haggle on the price despite what they say about their prices being "fixed". If they tell you their prices are fixed, tell them they need to fix them more attractively. Back in the day, I haggled my parents' unit down in the Peninsula club from $360K to $340K a 5.6% reduction, a much more meaningful percentage reduction than this travel promotion. RYM and OCA for that matter have truckloads of stock on hand. Haggle hard.
They fix the price, then they offer a $20k cashback. This obviously enables some jiggery pokery accounting - increase revenue amount, but assign the cashback to "marketing expenses" or something.
Are we not amused? Same press release, same excuses, same bat channel. Newsflash. Its not "the market" its the fact RYM is an operational ponzi scheme, and without the development "profits" hiding the "operations" losses, this thing is one step from bankruptcy. In a world where house prices are not going up 7% a year for the next 10 years, and where "property revaluations" are not going to make them "statutory profitable" any more, they are in deep doodoo.
Ryman Healthcare Limited (Ryman) (NZX: RYM) has announced today an approximately $1 billion equity raising (Offer) comprising a $313 million underwritten institutional placement (Placement) and an approximately $688 million underwritten pro-rata accelerated non-renounceable entitlement offer (Entitlement Offer).
The purpose of the Offer is to enhance Ryman's financial position in the current market and provide the platform to achieve improved performance and value for shareholders as market conditions recover.
Ryman Chair Dean Hamilton says that the equity raise will reset the balance sheet, reducing pro-forma gearing from 37.3% to 23.1% and providing Ryman with the foundations to deliver further transformation initiatives, with a renewed focus on its operational reset.
The Placement and Entitlement Offer will be conducted at an offer price of $3.05 per share (Offer Price), representing a:
- 21.9% discount to theoretical ex-rights price (TERP) of $3.90;
- 29.2% discount to Ryman's closing price of $4.31 on the NZX on Friday, 21 February 2025
No we are not amused! Why? Where in that press release do they say they are using the funds to pay down debt? Instead they use flowery deflective language such as "enhance Ryman's financial position", "provide the platform to achieve improved performance", "the equity raise will reset the balance sheet" and "a renewed focus on its operational reset". Nowhere do they say the funds are being used to repay debt. Just man up and say it. The bankers want out and shareholders need to cough up.
In addition, this is turning into a cluster. The arrogance thinking they get a second bite at the CR cherry and suck funds out of the market that have better homes for investors. I predict a significant shortfall in the uptake which will overhang the market for some time. Uninvestable IMHO (.....for now).
Quote from: Ferg on Feb 24, 2025, 10:49 AMNo we are not amused! Why? Where in that press release do they say they are using the funds to pay down debt? Instead they use flowery deflective language such as "enhance Ryman's financial position", "provide the platform to achieve improved performance", "the equity raise will reset the balance sheet" and "a renewed focus on its operational reset". Nowhere do they say the funds are being used to repay debt. Just man up and say it. The bankers want out and shareholders need to cough up.
Ryman Chair Dean Hamilton says that the equity raise will reset the balance sheet, reducing pro-forma gearing from 37.3% to 23.1%
They have to do this because their debt levels are back at the same level as it was 2 years ago, before they did the first raise. They raised, paid off the pension fund loan, and then promptly reborrowed the money from somewhere else. So rinse, and repeat.
Quote from: KW on Feb 24, 2025, 10:53 AMRyman Chair Dean Hamilton says that the equity raise will reset the balance sheet, reducing pro-forma gearing from 37.3% to 23.1%
I hear you but taking in funds and not using those funds to pay down debt also mathematically reduces the gearing ratio (but probably not to that extent). I genuinely don't think that is what they will do with the funds.....as you say I also expect the CR funds will be used to pay down debt. But I couldn't see in the press release where they actually say that. To me it is shrinking away from the fact shareholders need to cough up so bankers can get their money out. Shareholders are expected to bear more of the risk without any tangible rewards. Irrespective of the view on that, my message remains they shouldn't disguise with flowery language the fact they are asking shareholders to cough up so they can pay down debts. IMO they shouldn't sugar coat the press release and omit the reality.
Quick edit: I stand corrected. The the fact funds are being used to repay debt is easily found on page 10 of the 4th document released called the "investor presentation". There they say:
QuoteReduces 30 September 2024 pro-forma:
- Net interest-bearing debt from $2.56 billion to $1.59 billion
There we also see the ICR covenant is being waived.
The halcyon days for this sector are over forever, never to return. Vast amounts of unit supply coming from all and sundry, both listed and many unlisted companies chasing too few buyers. Market is absolutely saturated with stock. The legacy of the disgraceful USPP fiasco continues as the original capital raise did nothing other than eliminate that gross stupidity.
Wonder what Simon Challis would make of the disgraceful way this company has been run since he had to step down with health problems ?
Quote from: Ferg on Feb 24, 2025, 11:09 AMI hear you but taking in funds and not using those funds to pay down debt also mathematically reduces the gearing ratio (but probably not to that extent). I genuinely don't think that is what they will do with the funds.....as you say I also expect the CR funds will be used to pay down debt. But I couldn't see in the press release where they actually say that. To me it is shrinking away from the fact shareholders need to cough up so bankers can get their money out. Shareholders are expected to bear more of the risk without any tangible rewards. Irrespective of the view on that, my message remains they shouldn't disguise with flowery language the fact they are asking shareholders to cough up so they can pay down debts. IMO they shouldn't sugar coat the press release and omit the reality.
I suspect they have a recalcitrant lender who is not prepared to extend and pretend and has put the hard word on them. If not all of them lol.
The issue in my eyes is that the last raise was supposed to have sorted their debt level, yet all they did was borrow it all back again. Whats to stop them doing it again? $2.5B debt down to $1.6B debt, but back to $2.6B in another 2 years?
The costs to build are not coming down. Inflation is going to rebound. House prices are not going up. These market conditions are here to stay for some time. If they stopped building overnight, how operationally solvent are they?
Geez, talk about not being upfront. There was a trading update in all that documentation as well
In a trading update with the capital raising material (https://api.nzx.com/public/announcement/447216/attachment/438114/447216-438114.pdf), Ryman said while sales volumes have been steady through to the third quarter of the March 2025 financial year, sales applications have declined "impacting projected sales volumes in 4Q25 and over 1H26".
Free cash flow: We expect free cash flow around negative $100m (previously guided negative $50–100 million range).
Screenshot 2025-02-24 161344.png
Wow, what a total cluster f***
Pretty sure that originally, they were supposed to be cash flow positive in 2H FY25.
Quit the last of my OCA010 corporate bonds today completely exiting the RV sector. The cash burn at a village operational level at OCA is deeply concerning.
I think there's huge systemic problems going forward with vast oversupply in the market and limited demand. Capital gains are going to be harder to come by than hens teeth.
Need to play the acronym game again. What's RYM an acronym for ? A mate reckons "Rooted Your Money" I reckon, Rorted Your Mother.
Quote from: Basil on Feb 24, 2025, 04:32 PMWow, what a total cluster f***
Pretty sure that originally, they were supposed to be cash flow positive in 2H FY25.
Quit the last of my OCA010 corporate bonds today completely exiting the RV sector. The cash burn at a village operational level at OCA is deeply concerning.
I think there's huge systemic problems going forward with vast oversupply in the market and limited demand. Capital gains are going to be harder to come by than hens teeth.
Need to play the acronym game again. What's RYM an acronym for ? A mate reckons "Rooted Your Money" I reckon, Rorted Your Mother.
Rescue Your Mum or I like this one Rapid Yield Meltdown. When I needed the cash some months ago the RVs went first
RYM (and maybe others) are starting to look more and more like institutions and not "villages". Compare these
Screenshot 2025-02-25 RYM.png
ticky tacky on cambridge st peters road...
its almost a verb now
got rymaned...
(smashed up)
Quote from: Habitz on Feb 25, 2025, 06:47 AMRescue Your Mum or I like this one Rapid Yield Meltdown. When I needed the cash some months ago the RVs went first
Reamed
Your
Money. This is what happens when they suck a $Billion out of the market yet again, (much like they did 2 years ago). It just sucks all the wind out of the sails of the market. Its bloody frustrating. If management weren't such completely incompetent Muppets, this never needed to happen.
I think most people's portfolio's today have had a bloody good Rymaning (Reaming).
I still cannot beleive no one really saw this coming. The last one was never enough. Then fancy releasing 4 different apartments on different properties at same time.
RYM have certainly FURBAR'd the NZX. Makes for good picking if your brave enough.
This is out of Herald. Articlr paywalled.
The Herald put a series of questions to James (CEO) this morning:
Q: Interest rates are falling, surely the cost of debt is down for you too and isn't such a problem?
A: "We saw rates move last week, but the property market and economic conditions are still very difficult and we don't have certainty around the timing of when the market might change."
Q: Why did you raise money at such a steep discount to what the company had been trading at?
A: "The offer pricing is based on market conditions, so that pricing reflects the market we're in today."
Q: Can you define growth that was mentioned yesterday as part of the $1b raise?
"The equity raise proceeds will be used to reduce debt and we're also targeting another $500m to be released from the balance sheet. As the market recovers and sales and trading conditions improve, this will give us the capacity for a return to disciplined growth."
Q: How did Ryman go selling sites in Kohimarama and Newtown in Wellington?
A: "The sites at Kohi and Newtown are currently held for sale. Newtown has sold, but has not been announced in the public arena yet because it's not material to trading."
Q: What about Takapuna, which is a hole beside a lake where work for a village is paused?
A: "That is in our landbank and in yesterday's update, we had it in our landbank."
Q: Why are third-quarter sales down so much?
A: "Due to the challenging market conditions constraining the ability of our customers to sell properties combined with elevated stock levels across the industry and the changes that Ryman made to its pricing model and also undertaking an organisational restructure during the third quarter. Of the three, the first two are outside our control, but we expect it to improve with time. The third one is within our control, so that's where we're focused."
Q: What effect is the massive re-levelling work at Edmund Hillary having on the business, what has that cost so far?
A: "That's within our capex guidance. It's a small component of that. That work is now nearing completion. We're hoping to finish in the next couple of months. That has impacted our residents. I want to acknowledge that. It's taken longer than expected."
Q: Why aren't those residents' weekly fees being cut in compensation?
A: "Residents had not been offered a reduction in weekly fees because this is a one-off. We've been doing everything we can to minimise the impact on residents as much as we can. Monitoring [of gas] is part of safe work practices. We're making sure the site is safe for our residents. The bowling green has been resurfaced."
The company owns 49 villages, which are home to 15,337 residents. It employs 7758 staff and has eight new developments under construction.
QuoteReading between the lines of the RYM cap raise it seems that RYM have shot themselves in the foot by raising their DMF to 30% while simultaneously abolishing the fixed fees for life model. what they don't seem to have done is to lower their asking prices; their model was always (IMO) to inflate the asking prices so as to be able to discount the DMF and fix the fees.
Abolishing one side of the equation while hanging onto the other side has chased their buyers away - what was supposed to be a win-win for RYM has turned out to be a lose-lose.
On a positive note though, one might imagine those non-RYM buyers have now headed in the direction of OCA and others
I'd be buying more except for the fact that OCA is still keeping shareholders in the dark about sales progress (so the possibility that they too will try a cap raise is still on the table).
Come on OCA, front up!
This from Poet on the other channel was a good post. I think he's right. RYM units have always been the most expensive in the market and been able to be sold on that basis because of the inducements, (low weekly fees fixed for life and 20% DMF). Only complete Muppets would think you can take away those major inducements and it won't impact sales. I think SUM will be a main beneficiary of RYM's gross incompetence.
I visited a RYM village in Hamilton yesterday. I'd live there and I don't even like Hamilton much. Parklike resort, all it needed were some pearly gates. I asked a few questions, 600 residents, 480 independent living 120 care or apartment. 2% empty spread between the two but with a wait list. 4 years old, great cafe with a view and very reasonably priced. Bowling green well attended on the day. I have seen their new sites in Christchurch and Cambridge, I can't see how it will remain uninvestable over the longer term.
Hope the underwriters have deep pockets. Market is saying they've had enough of them handing around the begging bowl because they can't get the basics right. Match price in opening session at this stage with 4 minutes to open is well south of the capital raise price of $3.05 at $2.90.
RYM's management efforts in recent years no better than OCA bumbling efforts so deserves to be trading on the same metrics in my opinion.
Last stated NTA is $6.02 and this capital raise, (if successful), will reduce that to approx $5 by my calculations. Apply the same ~55% discount to NTA that OCA are trading on and its plausible to make the case they're only really worth 45% of $5 = $2.25!
Of course all the brokerage firms will issue glowing reports in due course that they've turned a corner, trying to extricate themselves from all the shares they got caught with in the underwrite...that's my prediction.
I've seem quite a few RYM villages. Some of them are very nice, (especially the giant Edmund Hillary village but that's sinking into the ground as it was built on a former rubbish dump), and others bear a startling resemblance to a bunch of glorified prison cells.
Quote from: mike2023 on Feb 26, 2025, 08:04 AMI visited a RYM village in Hamilton yesterday. I'd live there and I don't even like Hamilton much. Parklike resort, all it needed were some pearly gates. I asked a few questions, 600 residents, 480 independent living 120 care or apartment. 2% empty spread between the two but with a wait list. 4 years old, great cafe with a view and very reasonably priced. Bowling green well attended on the day. I have seen their new sites in Christchurch and Cambridge, I can't see how it will remain uninvestable over the longer term.
You can have a great product, and still go broke. Its whether or not you have a great business model that matters.
I looked at a number of villages in Chch in 2023. Kevin Hickman (in build stage) was too crowded, no privacy, just an obvious grab for money by stuffing as many units and apartments on a site with no thought given to the amenity of the residents there. Ngaio Marsh (in the photo above) was lovely, but RYM was skimping on their post occupancy refurbs, and merely giving them a lick of paint and new carpet. They still had original kitchens and bathrooms (circa 1999) yet were still charging the same amount as the brand new units in other villages.
Quote from: KW on Feb 26, 2025, 10:24 AMKevin Hickman (in build stage) was too crowded, no privacy, just an obvious grab for money by stuffing as many units and apartments on a site with no thought given to the amenity of the residents there.
Basically, everything they've been developing since Simon Challis left the company.
Quote from: Basil on Feb 25, 2025, 05:55 PMThis from Poet on the other channel was a good post. I think he's right. RYM units have always been the most expensive in the market and been able to be sold on that basis because of the inducements, (low weekly fees fixed for life and 20% DMF). Only complete Muppets would think you can take away those major inducements and it won't impact sales. I think SUM will be a main beneficiary of RYM's gross incompetence.
The irony is if RYM dropped the price of their units, that would enable vendors to drop the price of their houses to get a sale over the line. But they arent, they're doing "cashback" offers (or idiotic travel vouchers). This is because they cannot drop prices without triggering an overall devaluation of their portfolio values, and triggering bank covenant breaches. Caught between rock and hard place.
Hopefully the cap raising will take the bank pressure off and allow them to start meeting the market. Even if this means statutory losses for the next few years. Better to be operationally profitable and take a statutory loss, then to be operationally insolvent while booking statutory profits.
Quote from: Greekwatchdog on Feb 25, 2025, 05:44 PMI still cannot beleive no one really saw this coming. The last one was never enough. Then fancy releasing 4 different apartments on different properties at same time.
Most people did see this coming. Thats why the share price has been in a downtrend since 2021 and the last capital raising did nothing to change that. You only needed to watch the debt level start tracking back up every six months, and you knew that the last cap raising did absolutely nothing except transfer the debt from a private credit provider to a commercial bank.
Quote from: Basil on Feb 26, 2025, 10:27 AMBasically, everything they've been developing since Simon Challis left the company.
This is why their properties are starting to look more like hospitals than villages. What they could do is refurb their older villages properly and charge a premium price, while their apartment blocks are sold to the bottom end of the market. But charging the same for both is not achieving anything - nobody wants to pay top dollar for an old and outdated unit, and they dont want to pay for new units that dont have the atmosphere of the older villages.
Quote from: Greekwatchdog on Feb 25, 2025, 05:44 PMI still cannot beleive no one really saw this coming.
FWIW I saw this coming.
Since the "back up the truck", "You can't have enough" OCA calls from certain posters, I have been a sceptic and have avoided this sector. I once did work for a "not for profit" Charitable organisation which had operated in the 'retirement' sector for over 100 years.
The then Govt funding for care, was such that it made it impossible for them to operate... impossible to even maintain buildings and staff levels to increasingly complex regulations and EQ standards... (and that was in a "not for profit" organisation!) After 100 yrs they sold out of the sector.
I've avoided it ever since.
Chickens coming home to roost IMO.
To be fair, we were sold the story that care suites were going to be transformative for the care industry and radically improve profits. Also, Earl Gasparich was a very personable, likeable and believable guy. I woke up and smelled the coffee years ago and sold most of mine at $1.40 when Tomlinson bought heaps. Some people are still clinging to their delusion in this sector regarding care. Others still think the sector overall can eventually make the same super profits the first mover advantage RYM enjoyed in the early days. They're also holding on to false hope in my opinion. SUM, the only one left with their credibility intact, will make quite good money, (not super profits), when the real estate market starts going up meaningfully.
The three firms arranging and underwriting the current cap raise are Craigs Investment Partners, Forsyth Barr and Jarden, which, as well as their merchant banking and stock broking activities, also have large funds management businesses.
What are the chances that the unwanted underwritten stock they all have to take up will simply be parked in their KiwiSaver (or other) funds, and retail unit holders will wear the fall out?
Yeap, just like when Forsyth Barr did clients a "huge Favour" and stuffed their managed clients' accounts full of unwanted Feltex Shares.
I got the huge hard sell....Man have we got the deal of the decade for you... When you are on the receiving end of some hard sell line like that, don't ask questions, just hang up the phone.
Ryman cap raise is getting interesting with share price trading at $2.99 currently under the $3.05 offer price. Still have $281m to get in the door from the retail component of the rights offer which is not looking promising with shares available at a lower price on market. With the price action indicating quite an overhang already, the underwriters (Craigs, Forbar, Jarden) will need deep pockets to pick up a potentially massive retail component shortfall. Could be a monster overhang after that.
Quote from: Mos on Mar 05, 2025, 12:52 PMRyman cap raise is getting interesting with share price trading at $2.99 currently under the $3.05 offer price. Still have $281m to get in the door from the retail component of the rights offer which is not looking promising with shares available at a lower price on market. With the price action indicating quite an overhang already, the underwriters (Craigs, Forbar, Jarden) will need deep pockets to pick up a potentially massive retail component shortfall. Could be a monster overhang after that.
Yes, it's getting interesting alright ! No doubt all three will issue compelling research with an extremely attractive 12-month price target to try and clear whatever stock they can't "kindly" stuff into managed client accounts. Take such research with a grain of salt I reckon. I reckon the company and brokers have misread how disillusioned the investment community have become with RYM's inept management.
Quote from: Mos on Mar 05, 2025, 12:52 PMRyman cap raise is getting interesting with share price trading at $2.99 currently under the $3.05 offer price. Still have $281m to get in the door from the retail component of the rights offer which is not looking promising with shares available at a lower price on market. With the price action indicating quite an overhang already, the underwriters (Craigs, Forbar, Jarden) will need deep pockets to pick up a potentially massive retail component shortfall. Could be a monster overhang after that.
Yep, looks like the underwriters are already running out of steam. Normally they would really pay attention that the SP doesn't drop below the offer price during the offer period.
Rule of thumb for ok-ish CR's is that SP might drop after the conclusion of the offer period for another 10 to 15%. This would be something like $2.50 to $2.70 bottom, and obviously the band to watch for anybody interested to buy some RYM shares.
Incidentally - $2.50 would be close to 50% of (new, diluted) NTA.
Tempting? Actually, I think I might invest some more money into ARMR (ASX) instead ... hey, this is currently going up like a rocket.
$4.92 I have read is the adjusted NTA.
Put the same discount to NTA as OCA currently trades on at 53% and fair value is $2.30. That's all they're worth in my opinion.
Ended up taking part in the cap raise while overseas. Thought I had done well and was even scaled back on my original order.
Back in NZ with decent internet looks like the price is going to stay below the issue price with a big overhang coming potentially. The underwriters looking like they will be left with a few.
Looks like my eagerness has cost me. Will not be taking up my rights under the retail component.
Welcome back mate. What a bloody fiasco this and the previous capital raise were.
Not with a 40th foot barge pole is how I see it.
Ryman has an excellent record of supplying out standing villages.
Dean Hamilton [the chair] has an excellent record of sorting out a business.
Therefore my late friend's trust, of which I am a trustee of, are supporting the retail part of RYM's capital raise.
Dean must have wondered what did he do wrong to get lumbered with both Ryman and The Warehouse
Quote from: lorraina on Mar 10, 2025, 02:55 PMRyman has an excellent record of supplying out standing villages.
Dean Hamilton [the chair] has an excellent record of sorting out a business.
Therefore my late friend's trust, of which I am a trustee of, are supporting the retail part of RYM's capital raise.
You are right - Ryman used to have an outstanding record of supplying and running outstanding villages. Maybe they still have.
Their first big problem came when they decided to borrow nearly 1$b unhedged and uninsured in the US. No sensible and decent business man would have agreed to these conditions, and that a full board of highly paid directors agreed to them is for me still beyond comprehension.
Ah well, they asked the shareholders to bail them out, and they did.
The second problem was when they decided to allow their debts to creep up again. Good business people would have learned from their first disaster.
Ah well, they asked shareholders again to bail them out, and while not sure yet about the share holders, but the underwriters promised to bail them out.
So - I don't think anybody would disagree with your statement of them providing and running good villages.
I think the question is more about whether they are good and prudent business people. They clearly made big mistakes paid for by their shareholders. They clearly did not learn the first time round.
Sure - maybe they lear something the second time (and I suppose this lesson will still linger around for some time), but maybe not.
From a personal perspective - I didn't foresee their second mistake (and therefore still holding some). I don't intend to throw good money after bad money ... and, if I really want to increase my holding, than I could have got the same shares cheaper on the market - and I think the odds are good that the SP will drop after the offer closing (i.e. the real sale is yet to come).
So - not sure, why it would be a good idea to buy Ryman shares for $3.05, when you could get them already last week on market in the $2.90íes - and you are likely to get them in the coming weeks further discounted? Remember - the underwriters are not interested to turn into long term shareholders.
Buying the shares on offer now is not even a donation to Ryman, but to the underwriters. Not in the business to make donations to companies who like to benefit from companies under financial stress.
Great post BP. The new CEO wants to list RYM on the ASX because "there's no comparable company like it listed there". Hmmm, not sure what rock she has been living under, but SUM is listed there already. Doesn't inspire me with any confidence that the new leader is any less incompetent than the last few.
Quite aside from that, some of their newer villages bear more than a passing resemblance to a glorified prison. Other older villages have lots of expensive issues.
For me, you can divide RYM corporate existence up into two very distinct parts, while they had the excellent management services of Simon Challis and dominated the market, and ever since when competition has become rampant, and the caliber of management is a pale shadow of what it once was.
I called it a SELL 11 years ago in 2014 at ~ $9, three times the price it is now and have never seen any good reasons to change my view.
A few months ago a friend of mine had an accident.
Damaged both legs.Could not walk or get out of bed by himself.
ACC arranged for him to go into care at Ryman's Ngaio Marsh .
I went to a RYM agm there many years ago.It was one of RYM's first village's.
My friend could be best described as being very demanding.
I went to visit him three times.
Village standard was still outstanding.His care was outstanding.
The atmosphere was friendly.Staff even offered me a cup of tea and a biscuit.
So their villages and care remain outstanding.
Just need their financials repaired.
This capital raise will do that.
My friend's accident/accidents.
He was fishing in the Tongariro river.Caught a fish but fell down the bank and hurt his left eg.Could not get out of the river.Luckily his phone still worked after being under water.He rang his two companions who contacted the police and it was a fireman who got him out of the river.Ambulance took him to Taupo hospital.Was later discharged.Following morning he missed the step getting out of his unit,and damaged the other leg.Then off to Rotorua hospital.Flight back to ChCh and next morning to his physio.Physio said hospital.Next day surgery on both legs.
Now what we have learnt from this is if you buy a boat and go fishing at sea, each fish caught ends up costing about $1,000.
However simply fishing in/on a river means one trout can end up costing a great deal more.lol.
Six months later my friend is just about recovered.
Low take up, but not surprising given the market. Underwriters have been left with a few shares.
The effective take up rate by eligible retail shareholders was approximately 42%.
The approximately 53 million of New Shares not taken up under the Retail Entitlement Offer have been allocated to the underwriters and/or to sub-underwriters procured by the underwriters including a range of existing institutional shareholders.
https://www.nzx.com/announcements/448306
Quote from: lorraina on Mar 10, 2025, 09:02 PMA few months ago a friend of mine had an accident.
Damaged both legs.Could not walk or get out of bed by himself.
ACC arranged for him to go into care at Ryman's Ngaio Marsh .
I went to a RYM agm there many years ago.It was one of RYM's first village's.
My friend could be best described as being very demanding.
I went to visit him three times.
Village standard was still outstanding.His care was outstanding.
The atmosphere was friendly.Staff even offered me a cup of tea and a biscuit.
So their villages and care remain outstanding.
Just need their financials repaired.
This capital raise will do that.
My friend's accident/accidents.
He was fishing in the Tongariro river.Caught a fish but fell down the bank and hurt his left eg.Could not get out of the river.Luckily his phone still worked after being under water.He rang his two companions who contacted the police and it was a fireman who got him out of the river.Ambulance took him to Taupo hospital.Was later discharged.Following morning he missed the step getting out of his unit,and damaged the other leg.Then off to Rotorua hospital.Flight back to ChCh and next morning to his physio.Physio said hospital.Next day surgery on both legs.
Now what we have learnt from this is if you buy a boat and go fishing at sea, each fish caught ends up costing about $1,000.
However simply fishing in/on a river means one trout can end up costing a great deal more.lol.
Six months later my friend is just about recovered.
Off topic I know - but I always carry a PLB.
Quote from: Shareguy on Mar 13, 2025, 09:27 AMLow take up, but not surprising given the market. Underwriters have been left with a few shares.
The effective take up rate by eligible retail shareholders was approximately 42%.
The approximately 53 million of New Shares not taken up under the Retail Entitlement Offer have been allocated to the underwriters and/or to sub-underwriters procured by the underwriters including a range of existing institutional shareholders.
https://www.nzx.com/announcements/448306
Congratulations to the new shareholders! Long may they prosper! Lets hope the exercise was worthwhile for them.
New shareprice might now slide towards
Offer price - ((total underwriters fee - underwriters cost) divided by number of shares the underwriters had to take).
Quote"The Retail Entitlement Offer was well-supported in the current market climate"
42%, well supported, really? Good example of corporate B.S. there.
QuoteThis capital raising will enhance Ryman's financial stability and resilience in the current market climate and provide the platform required to achieve an improved level of performance and return to growth as market conditions recover."
Gosh, growth dependent on market conditions improving. Not really confidence inspiring is it ? RYM may be able to grow in due course but they have an enormous amount of work to do when it comes to growing earnings per share due to the vast number of extra shares on issue from the last two capital raises to fix all their management f**k-ups. Not dissimilar situation to Heartland really, such poor management and shareholders have to keep stepping in to fix the problems management created whilst all the while the pigs at the trough keep drawing their huge salaries and bonuses.
There's no acknowledgement of fault and no genuine contrition. Disgraceful.
Quote from: Basil on Mar 13, 2025, 10:26 AM42%, well supported, really? Good example of corporate B.S. there.Gosh, growth dependent on market conditions improving. Not really confidence inspiring is it ? RYM maybe be able to grow in due course but they have an enormous amount of work to do when it comes to growing earnings per share due to the vast number of extra shares on issue from the last two capital raises to fix all their management f**k-ups. Not dissimilar situation to Heartland really, such poor management and shareholders have to keep stepping in to fix the problems management created whilst all the while the pigs at the trough keep drawing their huge salaries and bonuses.
There's no acknowledgement of fault and no genuine contrition. Disgraceful.
Actually - you could say, that it was well supported.
Look at it this way - 42% of all investors paid more for the share than they had to (it was cheaper on market). This might not reflect well on their individual investment skills, but still, while the offer was not attractive, it was still supported by a material number of investors. This is good for the underwriters, and probably better than they expected.
PS: I see $2.91 is the new $3.05 - call it deflation or is it just Ryman shares getting cheaper by the day?
Matt Peek strikes me as a pretty smart guy. Had a good chat with him after last year's Kingfish annual meeting and I was quite impressed with him. I shared with him at the time I thought RYM's best years were behind it. Has some interesting things to say about RYM in his latest newsletter. Well worth a read. https://api.nzx.com/public/announcement/448475/attachment/439714/448475-439714.pdf He's not interested in OCA either.
New week, new low ...
Today SP dropped below $2.90. Currently its $2.87.
Maybe an important lesson for underwriters? Perhaps not even underwriting is a one way road to becoming rich ...
Some people have crunched the numbers and apparently NTA is $4.95 after this capital raise.
For me, the severity of their problems is nearly as bad as OCA which is trading at a 55% discount to theoretical NTA. Maybe a 50% discount really is warranted here now, and fair value is only ~ $2.50 ?
Quote from: Basil on Mar 17, 2025, 09:15 AMMatt Peek strikes me as a pretty smart guy. ...[snip]..... Has some interesting things to say about RYM in his latest newsletter. Well worth a read.
That's a pretty brutal assessment. So KFL have exited their RYM position. It will take time before RYM regains the trust of Mr Market.
Many years, I think. Matt Peek used to work alongside Julian Cook at UBS.
Today's note from Craigs on Ryman below. I think this translates as "we have ended up with a sh*t ton of unwanted underwater underwriter shares - please, please, please buy some"
Thought for the Day: Ryman – Darkest before the Dawn. Stephen Ridgewell has resumed coverage of Ryman Healthcare following a research restriction associated with RYM's recent equity raise. In a detailed note overnight Ridgewell has retained his Overweight with a reduced Target Price of $3.75 (-36%) that largely reflects 1) dilution with the additional equity needed to restore RYM's Balance Sheet and 2) tweaks to longer term assumptions, particularly a reduction in the long-term build rate from 400 to 200 units p.a.
RYM's trading update last month included guidance that it will sell 1471 total units in FY25 (March YE), which is 3% below pcp and 12% below consensus. Cash settlements held up well for most of the year but are guided to be down 33% in 4Q25, following a c.40% fall in sales contracts in 3Q25. The trading update was disappointing, and Ridgewell thinks this can chiefly be attributed to customer indigestion of the c.30% hike in weekly fees and pausing of sales incentives in 3Q25. Since January, new management have taken corrective action, including re-instating incentives, refocusing the sales team, and lowering asking prices at villages with excess stock, with the result that enquiry levels have improved. A likely next step is to (at least partially) wind-back the increase in weekly fees.
The charts below paint the picture – the short term remains tough as the housing market (and broader economy) have troughed but have yet to return to growth - albeit further interest rate cuts should see a pick-up in activity before the end of CY25. While sales velocity remains depressed (2nd chart) the industry is also awash with excess stock after a surge in supply during CY23 (3rd chart) which will take some time to work through the system.
Fortunately, the issues in the retirement village sector are temporary in nature and the path to FCF breakeven (expected late FY26) is clear under RYM's new Board, new management team and restored Balance sheet.
RYM's FY25 result in May will outline its revised NTA which is expected to be between circa $4.50-4.90. Even if you assume the lower end of this range RYM is currently trading at a 38% discount to NTA which is almost double the discount to its recent trading range when issues around debt levels were overhanging the stock.
MET & ARV were acquired for 0.83x NTA ... RYM is currently trading 0.63x NTA (CIPe). RYM is highly leveraged to an eventual upswing in the housing market – we reiterate the Overweight recommendation. See note below.
Quote from: Mos on Mar 19, 2025, 05:53 PMToday's note from Craigs on Ryman below. I think this translates as "we have ended up with a sh*t ton of unwanted underwater underwriter shares - please, please, please buy some"
Thought for the Day: Ryman – Darkest before the Dawn. Stephen Ridgewell has resumed coverage of Ryman Healthcare following a research restriction associated with RYM's recent equity raise. In a detailed note overnight Ridgewell has retained his Overweight with a reduced Target Price of $3.75 (-36%) that largely reflects 1) dilution with the additional equity needed to restore RYM's Balance Sheet and 2) tweaks to longer term assumptions, particularly a reduction in the long-term build rate from 400 to 200 units p.a.
RYM's trading update last month included guidance that it will sell 1471 total units in FY25 (March YE), which is 3% below pcp and 12% below consensus. Cash settlements held up well for most of the year but are guided to be down 33% in 4Q25, following a c.40% fall in sales contracts in 3Q25. The trading update was disappointing, and Ridgewell thinks this can chiefly be attributed to customer indigestion of the c.30% hike in weekly fees and pausing of sales incentives in 3Q25. Since January, new management have taken corrective action, including re-instating incentives, refocusing the sales team, and lowering asking prices at villages with excess stock, with the result that enquiry levels have improved. A likely next step is to (at least partially) wind-back the increase in weekly fees.
The charts below paint the picture – the short term remains tough as the housing market (and broader economy) have troughed but have yet to return to growth - albeit further interest rate cuts should see a pick-up in activity before the end of CY25. While sales velocity remains depressed (2nd chart) the industry is also awash with excess stock after a surge in supply during CY23 (3rd chart) which will take some time to work through the system.
Fortunately, the issues in the retirement village sector are temporary in nature and the path to FCF breakeven (expected late FY26) is clear under RYM's new Board, new management team and restored Balance sheet.
RYM's FY25 result in May will outline its revised NTA which is expected to be between circa $4.50-4.90. Even if you assume the lower end of this range RYM is currently trading at a 38% discount to NTA which is almost double the discount to its recent trading range when issues around debt levels were overhanging the stock.
MET & ARV were acquired for 0.83x NTA ... RYM is currently trading 0.63x NTA (CIPe). RYM is highly leveraged to an eventual upswing in the housing market – we reiterate the Overweight recommendation. See note below.
Translated perfectly. They'll be desperate to unload huge amounts of unwanted shares. That highlighted bit caught my eye. Including the plethora of previously listed and unlisted companies now playing in this sector, I think the market will remain vastly oversupplied for many, many years to come.
My view is that RYM's management have made just as many and just as serious mistakes as OCA management and deserve to be trading at a 50%+ discount to NTA just like OCA are. Comparing RYM's discount to ARV and MET and the metrics they were taken over at is disingenuous as RYM's management have proven they are grossly incompetent. (Matt Peek made his feelings crystal clear about RYM's management and he strikes me as a very smart guy) I actually think OCA are better buying in the low 60's than RYM at the current level and that's a big statement coming from me. That said, I'm not sure there's really any catalyst for OCA to get out of its funk because most of the vast numbers of stock they have for sale, (care suites) is not in strong demand at this point. They will be when the main bulge of the baby boomer population hits their late 80's but that doesn't help them now or any year soon.
Just a great sector to avoid completely for the foreseeable future. I wouldn't even consider SUM at this point. I'd even go further and suggest there's now so many well-funded private and public companies operating in this sector the boom days of super-normal profits for this sector are over and will never return.
The Ryman investment story has really unravelled and the concern around industry oversupply is not helping, although Summerset is still doing well in the same market. Eight years ago a trust I have some involvement with bought a small stake in Ryman at $8.79 and a fortunately a bigger one in Summerset at $5.38. The trust is down 69% on the Ryman investment and up 113% on the Summerset investment. At the time we thought Summerset offered better value but that both would do well through profitable growth. Sobering how wrong we were with respect to Ryman. I feel Fisher Funds and Matt Peek's pain.
It is truly shocking that Ryman has a market value of less than $2.8b having raised $1.9b of new capital from suffering shareholders in the past two years. Thankfully the trust I am involved with steered clear of both capital raises.
I am surprised that no class action suits have been taken with respect to Ryman as they have basically admitted to a multitude of questionable accounting treatments over years. Even after the last disaster, they appear to be foreshadowing another $300m write down hit to come in the near future. As noted in previous posts, I expect it will be a long and painful process to turn around the negative operating cashflows with the changes to DMF and weekly fees only applying to new residents and an average resident tenure of 9 years or so. The fixed weekly fees for current residents and the 20% DMF will be a drag for a long time to come. The indicated partial roll back on increased fees for new residents also indicates that Ryman are struggling to get new residents to sign up at rates that will cover their operating costs.
Quote from: Shareguy on Nov 08, 2022, 07:54 AMCraig's latest views say
Ryman Healthcare is a core holding in the New Zealand market, meeting much of the criteria we look for in a company. It has a high-quality portfolio of assets and is the market leader in the retirement living and aged care sector across Australasia. Its portfolio is diversified across New Zealand and Victoria, and all villages are in well-established areas where people have lived and worked, and wish to retire.
• There are limitations to using some traditional valuation metrics, although on all these Ryman Healthcare is trading at a discount to its long-term averages. While rising interest rates and a soft housing market are impacting sentiment, we don't believe the current share price fails accounts for the needs-based nature of the services it provides, or the discount at which units and apartments are priced relative to the median house price.
Craig's must be wrong I guess.
Your guess when you started this thread was right Shareguy. Craigs were wrong. Badly wrong! This was a few months before the first of the two monster capital raises under new broom Dean Hamilton.
Quote from: Mos on Mar 19, 2025, 10:42 PMI am surprised that no class action suits have been taken with respect to Ryman as they have basically admitted to a multitude of questionable accounting treatments over years.
As an accountant this is why I have disdain for RYM and wonder where the auditors were in all this?
If RYM were listed in Australia I think there would have been a very good chance of a class action lawsuit.
In the years to come in investment analysis courses at Universities around New Zealand, RYM will make an excellent case study for how the market changes over time. Once a situation where RYM dominated the industry and enjoyed first mover advantage, (analogous in the gold mining industry to walking around and picking up huge gold chunks just lying on the ground), to 30 years later, the market is so saturated with supply, everyone in the industry is struggling to a greater or lesser degree and in effect, is analogous to being involved in hard rock mining with far more modest returns.
To me, their key competitive advantage over all the years has been fixed fees for life and low 20% DMF. This was funded by very high asking prices for their units, (nothing is for nothing). Now they have the same or very similar high unit prices, many sites with little or nothing going for them in terms of views, (their Lincoln Road Henderson site a good example with nothing going for it other than proximity to supermarkets), and very high fixed fees or indexed to inflation at moderately higher levels with much higher DMF's. Hmmm, just throw away both your key competitive advantages...what could possibly go wrong...
As you suggest Mos, approx. a decade is a long time for those cheap fixed fees for life to wash through the system. Operational cash burn is something to very closely watch in the years ahead. I think it's telling that when RYM announced the completion of this capital raise they said words to the effect of, "this positions us to grow once the market starts to improve". Clearly, their balance sheet debt level reset is only part of their problems fixed. Growing eps after all that share issuance is going to be a massive challenge.
I remember very well the days when under Simon Challis excellent leadership, RYM promised and delivered 15% CAGR in underlying earnings year after year after year. Now things are so bad they want to dispense completely with using this metric to measure anything. WOW ! That says it all in my opinion. It's never going back to what it once was, I am certain of that.
Quote from: Basil on Mar 20, 2025, 09:47 AMAs an accountant this is why I have disdain for RYM and wonder where the auditors were in all this?
If RYM were listed in Australia I think there would have been a very good chance of a class action lawsuit.
Probably material for a separate thread (Quality of financial audits) - but let's face it: financial audits (any audits) give rarely a reliable view of where a company is going. They normally parrot the impression the relevant CFO wants to create.
Remember CBL? South Canterbury Finance? Hanover Finance? Any of the other 47 (yes, fourty-seven) NZ Finance companies which always passed audits but suddenly and unexpectedly went down?
I guess Ryman just demonstrates that nobody learned from this experience. Too many auditors just parrotting what they are told (or not looking hard enough). But the old saying "he who pays the piper calls the tune" clearly captures it. Just wondering who is paying for all these amazing financial audits?
Quote from: BlackPeter on Mar 20, 2025, 11:31 AMToo many auditors just parrotting what they are told (or not looking hard enough). But the old saying "he who pays the piper calls the tune" clearly captures it.
Yes, hard to argue against that. Its pretty disappointing especially the loss of ~ $6 Billion with all those finance companies. One of the issues is the competitive tendering process for audits and as a result junior and intermediate level staff do a huge amount of the donkey work so firms can remain competitive. The fact is it takes several decades of experience to build up the necessary level of deep cynicism and mistrust to be a really effective auditor. Still...audits are signed off by an audit partner who should have that experience. It's amazing there haven't been more lawsuits against audit firms.
Quote from: lorraina on Mar 10, 2025, 09:02 PMVillage standard was still outstanding.His care was outstanding.
The atmosphere was friendly.Staff even offered me a cup of tea and a biscuit.
So their villages and care remain outstanding.
Dont confuse the product with the business. There is a long list of companies that had outstanding products, but who still went bankrupt or were bought out for peanuts because they couldnt make the financials stack up. Better or best doesnt always = stock market winner.
And its not a given that running a company for the benefit of its customers and employees means that there will be similar benefits accruing to shareholders. In many instances, the great product only exists because shareholders are continually subsidising the users.
Quote from: Basil on Mar 20, 2025, 09:47 AMTo me, their key competitive advantage over all the years has been fixed fees for life and low 20% DMF. This was funded by very high asking prices for their units, (nothing is for nothing). Now they have the same or very similar high unit prices, many sites with little or nothing going for them in terms of views, (their Lincoln Road Henderson site a good example with nothing going for it other than proximity to supermarkets), and very high fixed fees or indexed to inflation at moderately higher levels with much higher DMF's. Hmmm, just throw away both your key competitive advantages...what could possibly go wrong...
Once upon a time those high prices bought you a spacious villa unit in a village style atmosphere, surrounded by lovely gardens, and offering privacy from neighbours. Now it buys you a unit in a cramped village, no privacy, very little garden, with high density apartment blocks hanging over you. The village feels more like a Govt institution.
For this reason, I wouldnt put any credence in their quoted NTA. There $900k villa is no longer worth that. Booking statutory profits from constantly revaluing the villages upwards but without doing any devaluing of villages as property prices fall, has left them carrying a book value far above market value.
They need to cut prices dramatically to catch up. But until they are forced to buy back the units in a timely manner (say 6 months) they will drag out the non-sales for as long as possible, while ex-residents suffer.
Screenshot 2025-03-20 144851.png
Quote from: KW on Mar 20, 2025, 02:08 PMDont confuse the product with the business. There is a long list of companies that had outstanding products, but who still went bankrupt or were bought out for peanuts because they couldnt make the financials stack up. Better or best doesnt always = stock market winner.
And its not a given that running a company for the benefit of its customers and employees means that there will be similar benefits accruing to shareholders. In many instances, the great product only exists because shareholders are continually subsidising the users.
I was bought up believing.
"Give people/customers what they want,and you will get what you want."
Perhaps better said ."being customer driven."
I must admit if I had to go into care I would insist it was with RYM.
Quote from: BlackPeter on Mar 20, 2025, 11:31 AMProbably material for a separate thread (Quality of financial audits) - but let's face it: financial audits (any audits) give rarely a reliable view of where a company is going. They normally parrot the impression the relevant CFO wants to create.
Remember CBL? South Canterbury Finance? Hanover Finance? Any of the other 47 (yes, fourty-seven) NZ Finance companies which always passed audits but suddenly and unexpectedly went down?
I guess Ryman just demonstrates that nobody learned from this experience. Too many auditors just parrotting what they are told (or not looking hard enough). But the old saying "he who pays the piper calls the tune" clearly captures it. Just wondering who is paying for all these amazing financial audits?
External auditors never (not rarely) give a view of where a company is going in the audit report within the annual financial statements, other than statements the company meets (or does not meet) the tests for being a going concern (https://en.wikipedia.org/wiki/Going_concern). Which is very different from an investors view of "is this company going to make money in the future?"
An external auditor's role is to sign off the accounts as showing a true and fair view as at the balance date. They are not providing some sort of warranty or guarantee as to a business not going bust. Investors cannot place any reliance on a clean external auditors report as providing any sort of surety the business is financially sound given there are numerous events that could happen after the audit report is signed, or if there was wholesale fraud within the entity which in some cases can be very difficult to detect if there is collusion between staff members.
The going concern tests can examine events after balance date but this is restricted to the period prior to signing the report. If investors want the going concern test to provide some sort of open ended guarantee, then it would only be possible with a raft of caveats which renders it useless. In any case, no auditors would want to put their name to anything of the sort even with a raft of caveats.
QuoteExternal auditors usually work in conjunction with government agencies [and companies]. They are tasked with providing objective and public opinions about the organization's financial statements and whether they fairly and accurately represent the organization's financial position.
Source: https://www.investopedia.com/terms/a/auditor.asp
At just $2.61 the market is telling RYM directors and management they're failures. I am sure the underwriters are "absolutely thrilled" being underwater as much as they are. Cry me a river, I really don't care. The underwriting gig is normally money for jam so if they get left holding the baby with shitty nappies this time, too bad.
This talk of additional asset write-downs that Matt Peek was alluding too has piqued my interest in terms of a further chapter to this long running fiasco. How much is anticipated, anyone want to opine on that ?
What's the real NTA going to be after these further write-downs ? Maybe $4.50 ? $2.00 maybe on the cards for this poor performer considering its well-known huge operational cash burn problem and slow-moving stock ? Just as well incoming CEO's don't "kitchen sink" all the problems to make themselves look better in future years...Opps, hang on a minute, that's exactly what most of them do. The annual result in late May could be a real shocker.
Quote from: Basil on Mar 24, 2025, 06:34 PMThis talk of additional asset write-downs that Matt Peek was alluding too has piqued my interest in terms of a further chapter to this long running fiasco. How much is anticipated, anyone want to opine on that ?
I could have a stab at it but I'm an information vacuum concerning Rymans. Historically weren't Ryman units more expensive than other operators but only had a 20% DMF which was their point of difference? If so, do we know how much more expensive they used to be?
Not sure its to do with that, but that in itself is an issue. Huge problems with subsidence at the huge Remuera Edmund Hillary village. Trying to stabilize that site, which was built on a former rubbish tip, but will that solve the problem or merely kick the can down the road. Could be write-downs there and at a number of other villages with problems or land held for resale where the prices paid and / or carrying value is no longer realistic in terms of its likely resale value.
Was some talk of ~ $300m write-down a while back, probably just idle speculation but it will be interesting to see how this pans out. The way I see it, there's always more than one cockroach in the kitchen and with the likes of RYM and FBU for that matter, which is another notable example, they just keep on coming out of the woodwork. No matter how many cockroaches you stomp on, they just keep on coming.
Quote from: Basil on Mar 24, 2025, 09:53 PMNot sure its to do with that, but that in itself is an issue. Huge problems with subsidence at the huge Remuera Edmund Hillary village. Trying to stabilize that site, which was built on a former rubbish tip, but will that solve the problem or merely kick the can down the road. Could be write-downs there and at a number of other villages with problems or land held for resale where the prices paid and / or carrying value is no longer realistic in terms of its likely resale value.
Was some talk of ~ $300m write-down a while back, probably just idle speculation but it will be interesting to see how this pans out. The way I see it, there's always more than one cockroach in the kitchen and with the likes of RYM and FBU for that matter, which is another notable example, they just keep on coming out of the woodwork. No matter how many cockroaches you stomp on, they just keep on coming.
Hard to believe that we talking about the star and once darling of NZ's investor community. Ryman Healthcare - this amazing company founded by John Ryder and Kevin Hickman. Didn't they put both into the NZ Business Hall of Fame? This must mean something - Is public acknowledgement and praise in the NZ business world really always the start of the downturn?
So many amazing businesses NZ grew over the past decades. Ryman one of them. And now cockroaches seem to come out of so many cavities.
Potential Ryman write down
Comments from FY25 half year presentation:
p7: "New RV unit pricing structure implemented on 1 October 2024" {which is after the HY reporting period of 30 Sep}
p14: "Choice of 30% or 25% DMF with the latter having a higher entry price"
p14: "Of contracts signed post 1 October 2024 for new residents, approximately three quarters are at a 30% DMF and at list price"
p14: on new pricing...."It is expected to take 15 years for the majority of the benefit to be realised."
p29: Year 5+ NZ annual value growth of +3.4% (Oz +2.6%) and the discount rate for NZ was ~13.6%.
p57: Auckland ILU resale affordability of (1.06/1.18=) 90% {this measures ILU price relativity versus the surrounding area}
p57: rest of New Zealand ILU affordability of (0.70/0.72=) 97%
p57: Oz ILU affordability of (0.96/1.6=) 60%
p57: the affordability percentages for serviced units are much lower.
So it sounds like lower DMF gets a higher price and vice versa and it will take some years for the benefit of the new DMF scheme to flow through the books.
Higher DMF% means a lower unit price which IMV means a write down of current stock. Whether this happens in one hit or as old contracts roll off remains to be seen.
Future growth rates at +3.4% for 5+ years seem optimistic. OCA in AR24 had +2.5% to +3.5% for 5 years plus.
I believe Ryman ILU prices (as measured by affordability percentages) are higher than other RV operators. I don't know the SUM %'s but OCA had 70-72% for apartments and villas in the last HY presentation (p40).
I'm not sure where the RYM discount rate of ~13.6% sits relative to SUM for property valuation purposes but OCA's median discount rate for FY24 was 14.9% (source: p64 OCA AR2024) and the last half year presentation had a range of 14-20% (p36).
Around 75% of non-current assets are in NZ (source:p93 FY24 AR). Let's assume 75% of $10.8b of 'investment properties' (source: p27 FY25 half year presentation) is in NZ = $8.1b.
Each 1% of NZ investment property write-downs is $81m. The question for me is what overall % write down is required? And how much have they booked already? To get to your $300m requires a write-down of around 3.7% on the NZ assets.
The multi-million dollar question.....is 3.7% enough?
Quote from: Ferg on Mar 25, 2025, 09:47 AMp14: on new pricing...."It is expected to take 15 years for the majority of the benefit to be realised."
Many thanks Ferg. Gosh that's breathtaking.
Quote from: Ferg on Mar 25, 2025, 09:47 AMp57: rest of New Zealand ILU affordability of (0.70/0.72=) 97%
So for the majority of Kiwi's by the time they pay real estate agents and lawyers fees there is a net cost to moving into an ILU unit. This is a far cry from the early days when an ILU was typically 70% and incoming residents freed up capital for bucket list activities.
Quote from: Ferg on Mar 25, 2025, 09:47 AMp57: Oz ILU affordability of (0.96/1.6=) 60%
I understand it's about the same for SUM. This confers a substantial advantage in the years ahead on SUM and RYM relative to OCA who don't operate there. This is the one and only encouraging thing in the entire report.
Thanks again mate for your analysis, much appreciated. I see many, many years of ongoing underperformance going ahead, relative to SUM. On the other hand, maybe if it gets down to $2.00, all that's priced in ?
Thanks. It would be interesting to compare some variables between all RV operators, namely ILU affordability, assumed 5+ year growth rates and the discount rates used to value investment properties. This should show who is the most conservative and who is the most aggressive in their portfolio valuation. This leads to believability in NTA and the future impact on inventory turnover, achievable prices and potential resale gains.
I had a good sit down with Earl Gasparich several years ago when he was leading OCA. His comments on this were that the various retirement companies use the same valuers who he thought were very conservative.
If you capitalize the negative value of head office costs and the operational cash burn of villages, the effect on NTA is massive. A secondary issue is the value of old unsold stock. If for example a care suite has been on the market for more than 12 months, it should be discounted by X and maybe 2X if it's been unsold for 24 months. X according to the valuers is about 25% from memory, with OCA. I'm not sure how you capitalize the negative value of grossly incompetent management or boards of directors other than to stay away unless the shares are dirt cheap.
OCA last time I looked, is trading at a 54% discount to NTA and as mentioned earlier in this thread, I see no reason based on recent years evidence of management and directors' inept behaviors as to why the discount should be any less for RYM. Apply that to say, a new post capital raises and post write-downs NTA of $4.50 and fair value is only about $2.07. Allowing a margin of error, that's why I'm not interested in RYM at anything more than $2 and even then, only as a trade as I think the long term returns for any company other than best of breed SUM, will underperform the general market due to the ongoing saturation of unit supply, massive head office costs and cash burn and in RYM's case a 15 year future legacy of insufficient DMF earnings.
P.S. Posted at 5.14 p.m. Closed down another 10 cents to $2.51. Underwriters and all those that took part in the capital raise at $3.05, down 54 cents, (nearly 18%) in a very short space of time.
Quote from: Basil on Mar 24, 2025, 09:53 PMNot sure its to do with that, but that in itself is an issue. Huge problems with subsidence at the huge Remuera Edmund Hillary village. Trying to stabilize that site, which was built on a former rubbish tip, but will that solve the problem or merely kick the can down the road. Could be write-downs there and at a number of other villages with problems or land held for resale where the prices paid and / or carrying value is no longer realistic in terms of its likely resale value.
Was some talk of ~ $300m write-down a while back, probably just idle speculation but it will be interesting to see how this pans out. The way I see it, there's always more than one cockroach in the kitchen and with the likes of RYM and FBU for that matter, which is another notable example, they just keep on coming out of the woodwork. No matter how many cockroaches you stomp on, they just keep on coming.
Ryman 24 Feb announcement (https://www.nzx.com/announcements/447216)
$300 m straight from the horse's mouth Basil - page 28 of 24 Feb Ryman NZX announcement.
Quote from: Mos on Mar 25, 2025, 11:04 PMRyman 24 Feb announcement (https://www.nzx.com/announcements/447216)
$300 m straight from the horse's mouth Basil - page 28 of 24 Feb Ryman NZX announcement.
That announcement says roughly $300m may be needed for:
- a reduction in the level of cost capitalisation
- New care centres to be valued for the first time in FY25
- In assessing care centre valuations, a portion of the valuation may be allocated to internally generated goodwill, which may no longer be recognised on the balance sheet
- the carrying value of development land will be assessed
- Given current market conditions, the valuer may apply greater discounting to buyback stock.
All these were lifted from p28.
Nothing there for revaluing investment properties, in particular the underlying assumptions for independent living units. Unless that is captured in the "buyback stock" line...? If not then it could be $300m for general property and care stuff plus another maybe $300m for investment properties.
Gosh...the cockroaches just keep on coming out of the woodwork...will it ever end ?
Quote from: Basil on Mar 25, 2025, 01:30 PMI had a good sit down with Earl Gasparich several years ago when he was leading OCA. His comments on this were that the various retirement companies use the same valuers who he thought were very conservative.
Your post got me thinking.....
Whilst the 4 listed RV's use the same valuers, they have varying values for discount rates and terminal growth rates, and also unit prices relative to the surrounding suburbs as shown in their affordability graphs & stats.
One RV stood out as being the most conservative on all 3 metrics.
RYM appears to be fully priced so it wouldn't surprise me if there was an adjustment to the investment property valuation on top of the $300m per the CR presentation.
Quote from: Ferg on Mar 26, 2025, 02:49 PMOne RV stood out as being the most conservative on all 3 metrics.
I've looked at that before mate, so I know which one, but their operational cash burn is absolutely atrocious. They're priced where they are for profoundly good reasons that I've alluded to on that thread in this channel and in years past, on the other channel in great detail. The discount rate is different for different types of units too, from memory, from what Earl told me. The real problem is if you have literally hundreds of care suites that aren't selling, all the assumptions about future cash flows become quite theoretical, as do their theoretical values. That's the 2X discount I was talking about yesterday.
For RYM, I'm just amazed there's another $300m of acknowledged issues as well as the other issue that their sales have slowed dramatically since they changed their DMF structure. I'm left wondering what's the next tranche of cockroaches to come out of the woodwork? It's not a question of IF they are going to come out, it's just a question of from which direction lol. New auditors for 2025 I see, so I am sure they will be keen to de-risk their audit from the get-go. Be interesting to see what issues, if any, they uncover. Watch this apace for the report in late May. My contention with RYM is that the market is absolutely saturated with stock and the cash burn at their villages is so bad, another cash issue a couple / few years down the track cannot be ruled out of consideration.
So it only cost $25M to close out the Institutional loan. A saving of $10M against the estimate in the cr documentation.
https://www.nzx.com/announcements/449136
Disc/ I have been buying
A balanced report I thought
https://www.thepost.co.nz/business/360619442/it-end-golden-weather-retirement-villages
I think its useful to sit back and now look at the bigger picture.
I completely disagree with the conclusion reached in the article
Quote"But demand for retirement villages is high, and it's only going to grow, and that's why the sector remains promising for investors."
This very simplistic statement completely overlooks the rules of supply and demand and the sector is absolutely awash with stock. Almost every second advertisement you hear on the radio is from a retirement company.
The facts as I see them.
1. The market is awash with stock and RYM and OCA are really struggling to sell, SUM aren't.
2. Internationally owned MET and ARV together with listed SUM, who are run like a well-oiled Swiss watch are far better situated to continue to supply vast amounts of new stock into the N.Z. market and in SUM's case the Australian market.
3. RYM and OCA have made such a mess of things they are having to dramatically dial back their build rate in future years. This will undermine future years earnings both in terms of margin on new builds and in due course, lower level's of resales.
4. There are a vast and growing number of private companies now serving this sector and I truly believe the market will stay absolutely saturated with stock in the future. This will suppress prices and margins.
5. Housing is still very expensive relative to the average income in N.Z. which really limits its ability to grow in real inflation adjusted terms. This really hamstrings the amount of resale profits companies will make in the future. Resale profits is where the rich vein's of gold have been found in the past but they are far less likely to be prevalent in the future.
6. The super profits in this industry in the past have bene made from unit resales into a booming housing market over a (perhaps once in a 100 year period) where house price growth vastly outstripped the inflation rate for a sustained period of about 2 decades. I think it's unlikely I will see another period like that in my lifetime, (acknowledging I am early 60's so others have a longer frame of reference)
7. Returns on care have been constantly eroded through successive Govt inaction to the point where care no longer provides anything like an acceptable return on equity. I think that problem is highly likely to be enduring for the foreseeable future.
8. We have moved from a situation in the early days of this industry 30 years ago where incoming residents typically paid about 70% of the value of their house for a new ILU. Its close to 100% now for most units across N.Z. for most companies. This makes moving more difficult for many and less attractive for others in that they no longer can free up significant funds for bucket list activities.
9. RYM's management and directors are unproven. SUM's team are battle hardened and proven performers. Trust is earned, not given and RYM's team have many years of hard work to retore the confidence of the investment community.
10. Fixed fees for life, once a common theme and very attractive, are no longer widely available.
11.There's more cockroaches to come out of RYM's kitchen as sure as night follows day.
12. The dividend yield in this sector has always been poor and will always be that way and this makes this sector unattractive for anyone needing decent yield..
Great points Basil. My thoughts in Red
Quote from: Basil on Mar 29, 2025, 03:34 PMI think its useful to sit back and now look at the bigger picture.
I completely disagree with the conclusion reached in the articleThis very simplistic statement completely overlooks the rules of supply and demand and the sector is absolutely awash with stock. Almost every second advertisement you hear on the radio is from a retirement company.
The facts as I see them.
1. The market is awash with stock and RYM and OCA are really struggling to sell, SUM aren't.Yes there is a current over supply. However build rates have been scaled back and demand is only going to increase. Since January, new management have taken corrective action, including re-instating incentives, refocusing the sales team, and lowering asking prices at villages with excess stock, with the result that enquiry levels have improved. When questioned on the call management said that sales weakness did not reflect weakness in NZ or Victoria per se, but was specific to certain locations.
2. Internationally owned MET and ARV together with listed SUM, who are run like a well-oiled Swiss watch are far better situated to continue to supply vast amounts of new stock into the N.Z. market and in SUM's case the Australian market. Don't know about that. Don't forget Ryman are still best in class from a residents experience. Not only readers digest but Ryman Healthcare was named Best Provider Nationwide at the 2024 Aged Advisor People's Choice Awards for Best Retirement Village and Aged Care facilities. This is the fifth time that Ryman secured this prestigious award, which recognises the best of the best in retirement living and aged care across New Zealand.[The awards are based on over 15,000 reviews and ratings from more than 940 retirement and aged care facilities across the country. No question from a shareholders point of view it's been a shambles but most importantly in my opinion the overall offering is well regarded. If they can continue to supply a market leading product then investor metrics will and should improve in my opinion.
3. RYM and OCA have made such a mess of things they are having to dramatically dial back their build rate in future years. This will undermine future years earnings both in terms of margin on new builds and in due course, lower level's of resales. Yes Ryman has lowered the build rate guidance by 50 percent for FY26 and FY27. Makes perfect sense to me and capex is guided to a 45 percent reduction than prior consensus. Ryman state a return to disciplined growth over time with a mix of greenfield developments and expanding/completing existing villages. Also on the call M&A particularly in Australia
4. There are a vast and growing number of private companies now serving this sector and I truly believe the market will stay absolutely saturated with stock in the future. This will suppress prices and margins. Yes agree a lot more competition but all the reports I read say we are going to still have a big shortage. Have a look at this report
https://www.jll.nz/en/trends-and-insights/research/retirement-villages-market-review#:~:text=In%20our%20latest%20analysis%20of,year%20average%20of%201%2C696%20units.
5. Housing is still very expensive relative to the average income in N.Z. which really limits its ability to grow in real inflation adjusted terms. This really hamstrings the amount of resale profits companies will make in the future. Resale profits is where the rich vein's of gold have been found in the past but they are far less likely to be prevalent in the future. Yes agree. Incomes need to rise. As far as prices go there will still be money to be made, but agree that we are are unlikely to see the large increases that we have seen in the past without decent changes in income.
6. The super profits in this industry in the past have bene made from unit resales into a booming housing market over a (perhaps once in a 100 year period) where house price growth vastly outstripped the inflation rate for a sustained period of about 2 decades. I think it's unlikely I will see another period like that in my lifetime, (acknowledging I am early 60's so others have a longer frame of reference) Yes agree see above
7. Returns on care have been constantly eroded through successive Govt inaction to the point where care no longer provides anything like an acceptable return on equity. I think that problem is highly likely to be enduring for the foreseeable future. Yes unless the government funds care adequately a lot of people will be unable to access it unless you are wealthy. Hospitals and family's will bear the brunt. Hopefully it won't come to that....
8. We have moved from a situation in the early days of this industry 30 years ago where incoming residents typically paid about 70% of the value of their house for a new ILU. It's close to 100% now for most units across N.Z. for most companies. This makes moving more difficult for many and less attractive for others in that they no longer can free up significant funds for bucket list activities. Yes agree
9. RYM's management and directors are unproven. SUM's team are battle hardened and proven performers. Trust is earned, not given and RYM's team have many years of hard work to retore the confidence of the investment community.
Yes agree only time will tell. A new ceo who has at least committed $250k in the cap raise is positive. Disappointing that the directors have NOT stocked up other than taking up entitlements in the cap raise.
10. Fixed fees for life, once a common theme and very attractive, are no longer widely available. Yes and I think that was the right move. I had free air for life with my dive bottles with Sportways years ago. Several years later they went broke.
11.There's more cockroaches to come out of RYM's kitchen as sure as night follows day. Yes maybe. Craig's think that there is going to be another write down of the investment property's to reflect slower sales and price cuts.
12. The dividend yield in this sector has always been poor and will always be that way and this makes this sector unattractive for anyone needing decent yield.. Yes agree but I'm holding for capital gain and possible M&A. According to Craig's Ryman at $2.80 trades at 0.57 x price/nta, it's lowest level on record. Even assuming a further (and probably final) $500m write down of Nta in its FY25 year end accounts,this would reduce Nta to $4.5bn or $4.45 per share. So worst case Rymans trading to a 37 percent discount to "worst case" Nta. By comparison Ryman has traded at an average 1.89xnta over the past five years,and 0.81 x since the February 2023 CR.
Note that both Met and ARV which Craig's say has inferior brands were acquired at 0.83 x Nta(with the latter in 2024). With interest rates dropping I'm expecting a lot more interest in NZX listed equities. Time will tell.
Good debate and thanks for sharing your point of view Shareguy. Best wishes with it.
When I went village shopping with my father, the Ngaio Marsh village units were priced at $770k - the same price as the brand new units being built at Kevin Hickman, and the new units at Summerset Avonhead. I thought this was ridiculous pricing, as the NM units were much older, and RYMs idea of "refurbishment" was simply a new paint job and carpet. The kitchen and bathroom (from 1999) were left in their original state.
Today I note these same units are now priced at $695k. With a $15k travel voucher included. The KH units have actually gone up in price and are now $795k.
On the subject of a travel voucher - how useless is that? Most 75-80 year olds (the average age of entry) are well past going travelling around the world. And most of them are on their own, so who wants to go travelling by themselves at that age? My father has free airfares for life (courtesy of being an Air NZ ex-employee) and even he doesnt travel overseas anymore. Most of them wont even be able to get travel insurance at that age. Whoever is doing RYM's marketing needs to get a new job. They have really misread their customer base.
We fly to Sydney on 10th April and return on the 10th May.
Royal Princess is 28 days. Tauranga, back to Auckland, Pago Pago, Tahiti, Hawaii then Los Angles. Big ship and will have to wash hands all the time to be free of Covid.
The above was in an email my brother sent me.He lives in Hobart.He is 84 and his wife is 83.
There will be 3,540 passengers on board if it is fully booked.
Pity they are missing out on the Ryman offer...lol
Quote from: lorraina on Mar 31, 2025, 12:35 PMWe fly to Sydney on 10th April and return on the 10th May.
Royal Princess is 28 days. Tauranga, back to Auckland, Pago Pago, Tahiti, Hawaii then Los Angles. Big ship and will have to wash hands all the time to be free of Covid.
The above was in an email my brother sent me.He lives in Hobart.He is 84 and his wife is 83.
There will be 3,540 passengers on board if it is fully booked.
Pity they are missing out on the Ryman offer...lol
Hope you told them to stay clear of the norovirus or other gastro issues
Quote from: KW on Mar 31, 2025, 11:34 AMWhen I went village shopping with my father, the Ngaio Marsh village units were priced at $770k - the same price as the brand new units being built at Kevin Hickman, and the new units at Summerset Avonhead. I thought this was ridiculous pricing, as the NM units were much older, and RYMs idea of "refurbishment" was simply a new paint job and carpet. The kitchen and bathroom (from 1999) were left in their original state.
Today I note these same units are now priced at $695k. With a $15k travel voucher included. The KH units have actually gone up in price and are now $795k.
On the subject of a travel voucher - how useless is that? Most 75-80 year olds (the average age of entry) are well past going travelling around the world. And most of them are on their own, so who wants to go travelling by themselves at that age? My father has free airfares for life (courtesy of being an Air NZ ex-employee) and even he doesnt travel overseas anymore. Most of them wont even be able to get travel insurance at that age. Whoever is doing RYM's marketing needs to get a new job. They have really misread their customer base.
Jeez, do you suffer the midlife crisis blues?
Neighbors of us still got 10 years ago regular visits from their parents from the States - both (parents) at that stage already above 90! They still might, but they moved to Ossie, i.e. we don't see them anymore that often.
A friend (75) has annual visits from her sister (80+) from Canada.
Another neighbor (late 70íes) is regularly visiting her children in Australia.
Getting a travel insurance at any age is not hard, unless you really have a condition which makes travelling risky, and even then the insurance would only exclude or charge a higher premium for this specific condition. Check: https://www.allianztravel.co.nz/ (and I am sure, there are more insurers).
Quote from: winner (n) on Mar 31, 2025, 01:39 PMHope you told them to stay clear of the norovirus or other gastro issues
I just wrote "enjoy your trip."
What else could I say.?..lol.
Quote from: lorraina on Mar 31, 2025, 12:35 PMWe fly to Sydney on 10th April and return on the 10th May.
Royal Princess is 28 days. Tauranga, back to Auckland, Pago Pago, Tahiti, Hawaii then Los Angles. Big ship and will have to wash hands all the time to be free of Covid.
The above was in an email my brother sent me.He lives in Hobart.He is 84 and his wife is 83.
There will be 3,540 passengers on board if it is fully booked.
Pity they are missing out on the Ryman offer...lol
But is he typical of elderly people in retirement villages? Perhaps ask him if he would still be going on a cruise if he was on his own?
They could just give the person $15k off the price of the ORA and they can buy their own cruise ticket. Or use it to get the knee replacement that they cant get on the public waiting list. Or buy a car. Assuming that everyone wants to spend $15k on overseas travel is just bad marketing.
Also, what happens if the voucher is never used?
Quote from: KW on Mar 31, 2025, 03:00 PMBut is he typical of elderly people in retirement villages? Perhaps ask him if he would still be going on a cruise if he was on his own?
They could just give the person $15k off the price of the ORA and they can buy their own cruise ticket. Or use it to get the knee replacement that they cant get on the public waiting list. Or buy a car. Assuming that everyone wants to spend $15k on overseas travel is just bad marketing.
Also, what happens if the voucher is never used?
I think the answer would be he would decide to live on a cruise ship full time.lol
Interesting Read
https://milfordasset.com/insights/ep27-the-rise-and-fall-of-ryman-whats-next
Thanks for posting. So $10m of assets and $3m market cap......
Quote from: Shareguy on Apr 02, 2025, 06:18 PMThanks for posting. So $10m of assets and $3m market cap......
Only if you believe that the assets are really worth that amount if sold on the open market to a willing buyer. And not just a fictional accounting entry from years of revaluations undertaken by non independent valuers.
10 billion of assets but from that you need to subtract all the Billions of liabilities. The market cap is absolutely not 30% of NTA or anything even remotely like it. Maybe 30% discount to the real NTA, if that.
Has RYM lost its way a bit ? A friend noticed this add https://www.seek.co.nz/job/83651511?savedSearchID=7d5d60e7-7032-4903-a495-0681171431f0&tracking=JMC-SavedSearch-anz-2
Just checked. Share price at $2.50 is more than a decade low. Have to go back all the way to December 2011, just after SUM listed to see the share price at this level. Over that same timeframe SUM have gone from their IPO price of $1.35 to $11.30, more than 8 times your money.
Talk was the post cash issue NTA was supposed to be about $4.95 but another $300m in write-downs to come so maybe its really about $4.50. $2.50 is certainly a huge discount to adjusted NTA but where too from here ? My sense is maybe we are somewhere near the bottom, surely won't go under $2.00 ? but the bottoming process could be very protracted, (2 more years?), with little in the way of dividends to ease the pain.
Maybe it's one for those prepared to play the long game who don't need dividends but its not for me.
Quote from: Basil on Apr 19, 2025, 11:15 AMHas RYM lost its way a bit ? A friend noticed this add https://www.seek.co.nz/job/83651511?savedSearchID=7d5d60e7-7032-4903-a495-0681171431f0&tracking=JMC-SavedSearch-anz-2
...
Interesting. Are you applying?
I guess looking at the job title (Head of Enterprise Transformation), they seem to look for somebody who is doing what rightly should be the CEO's main role, but looking at the jobdescription it might be just a glorious title for a glorified admin job (running already defined improvement projects).
But hey - they seem to have realised they have a problem. Now lets hire somebody to fix it. Easy.
I see the job lists experience with Private Equity or M&A Integration - Skilled in value creation and performance improvement.
Well they are going to need those skills "if and when" that takeover happens. FB are suggesting the time has come to add property exposures to your portfolio.
I see Ryman as great buying at $2.50. Could it go to $2.00? Yes with all the market turmoil, but I doubt it. Our dollar is weak, it's way below even Craig's worst cast scenario of another $500m write down. Interest rates are dropping.
Craig's I think said you can't eat NTA. I'm happy snacking bit by bit. At these prices getting fuller by the week.
I feasted with MetLife and Arvida and think the good times are coming. In the meantime I'm happy to wait.
Disc: Ryman is my largest retirement stock position.
Quote from: BlackPeter on Apr 19, 2025, 12:31 PMInteresting. Are you applying?
I guess looking at the job title (Head of Enterprise Transformation), they seem to look for somebody who is doing what rightly should be the CEO's main role, but looking at the jobdescription it might be just a glorious title for a glorified admin job (running already defined improvement projects).
But hey - they seem to have realised they have a problem. Now lets hire somebody to fix it. Easy.
That was my first thought when I read it. Isn't that someone's job like Simon Challis who used to do it so well ?
I'm an old dog now and not looking for any fresh challenges.
"You can't eat NTA" is arguably the best quote of this decade when it comes to retirement villages. I note the forecast cash burn is still highly problematic in FY26 and that's with them capitalizing both interest and overhead costs related to developments, (capitalization policies under review). What's the wager the new auditors want to kitchen sink a few other historical accounting issues with their first audit this year ? This is a stock for those with more patience than I have and who don't ever want meaningful dividends.
WOW, if I'm reading today's chart correctly looks like someone sold down 39m shares this morning at $2.20.
53m shares were taken up by the underwriters and sub underwriters. I'm thinking the overhang is coming to an end.
Doubled my holdings today. Is now my largest NZX position.
Quote from: Shareguy on Apr 23, 2025, 04:36 PM53m shares were taken up by the underwriters and sub underwriters. I'm thinking the overhang is coming to an end.
Doubled my holdings today. Is now my largest NZX position.
I'm not so sure the overhang is gone. Whoever bought that bunch of shares at $2.20 might want to unload some, and arbitrage a profit. Aside from that I can't see the sector picking up until the housing market does and RYM and OCA with their respective deep systemic issues are arguably only fairly priced around where they currently are. Might take years to get any positive eps momentum is how I see it, meanwhile you're trapped with no dividend or one so small with no imputation credits, it might as well be nothing. Good luck mate...I reckon the whole sector is going nowhere anytime soon and that includes best of breed by far, SUM. Disc: No exposure whatsoever to the retirement sector malaise.
It looks like kingfish earned their fee for February having not only not participated in the capital raise but also sold their entire holding
Still digesting the results but can clearly see why they needed a cap raise
Quote from: snapiti on May 29, 2025, 10:11 AMStill digesting the results but can clearly see why they needed a cap raise
Not surprised you're still digesting it, there's a heck of a lot in there and something for everyone
https://api.nzx.com/public/announcement/452468/attachment/444531/452468-444531.pdf
Matters that really jumped off the pages at me.
1. NTA down from $5.89 to only $4.18 as a result of a whopping $576m of impairments taken, (forecast to be around $300m at the time of the capital raise so investors were VERY badly mislead there).
2. Gearing despite approx $2 Billion raised in the last 2 years is still pretty high at 28.1% and the banks have an interest coverage ratio waiver until Sept 2026 so operationally the business is performing very poorly with circa $100m cash burn.
3. Massive reduction in the FY26 build rate, now forecast at just 266-330 units, down from 950. (My comment, how is it after raising $2 Billion they can't continue their development program at historical rates ?...noting SUM are and that's without any capital raises). Obviously there's a truck load of unsold stock, I haven't even looked at that yet.
4. More than a dozen accounting policy changes...gosh the new auditors have really put RYM's accounting system under the microscope and found it very badly wanting.
5. Sales units forecast for FY26 at 1100-1300, well down on last years ~ 1,500
Comment.
I get it that they have a very good brand and have made changes to DMF and weekly fees but with average ILU tenure being 9 years, that takes a very long time to flow through in any meaningful way. Shareholders should start to see meaningfully better looking operating metrics by about 2030, is how I see it.
Prospects for future dividends look VERY bleak to me and when eventually reinstated will be at a VERY low level and unimputed.
Good place to retire too, a bad place to invest is how I see it. I'm sorry, but I still think that all things considered, this deserves to trade at a ~50% discount to NTA of $4.18 = $2.09.
Final thought...The cockroaches just keep coming at Ryman...and I for one am under no illusion that they have all come out of the woodwork yet.
Others will see it differently and that's fine. Unless it goes under $2 and becomes a very deep value play, its not for me.
Quote from: Basil on May 29, 2025, 10:47 AM1. NTA down from $5.89 to only $4.18 as a result of a whopping $576m of impairments taken, (forecast to be around $300m at the time of the capital raise so investors were VERY badly mislead there).
No disputes from me Basil....one thing I could see with the net asset reduction was there was a deferred tax asset of $259m last year that is nil this year. Possibly part of the plethora of policy changes you mentioned. DTA's are not real in my mind when looking at net assets.
Edit: "net assets" per my post is an all in figure of which "net tangible assets" is a subset. Writing off the deferred tax asset has zero impact on net tangible assets.
Anecdotally, they appear to have had quite a big reset in their unit asking prices. Full page advertising in the Herald yesterday I noted for example 2 brm sunny 89 sq m apartment in their Lynfield Auckland village asking price of only $657K with 12 months free weekly fees and 1 brm Remuera apartment at their premier Edmund Hillary village 63 sq m, asking $795K. Those prices seem pretty reasonable for those suburbs.
P.S. Not surprised Mr Market is not happy. Down 5.4% to $2.28. I think its highly likely that significant broker downgrades will come through tomorrow. Only freeing up an estimated ~ $500m over the next 3-5 years is not very impressive with such a radically lower development program going forward.
I think there is a chance of yet another capital raise in the future to "so called" reset the business. 28.1% gearing after 2 whopping capital raises totaling ~ $2 billion dollars is a really pathetic outcome and a very somber indictment on the board and management !
No doubt - the financials don't look pretty, unless one likes the colour red. And yes, while they found a lot of skeletons, you never know ... though new CEO's tend to be rather good in digging - the worse the starting position, the better their contribution will look at the end.
Sort of wondering how Ryman would have performed without building the 950 new units last year (but obviously up keeping their remaining building substance)? It certainly would have ended the year with earnings instead of with a loss ...
Maybe this is the way to go for all retirement villages: maintain the building substance but drastically reduce the build rate. The market might well do the rest ...
RYM with all their previous creative accounting and practices would make a great case study at University accounting and investment analysis courses on how not to run a company. Its breathtaking to think this once great company that could do no wrong under Simon Challis excellent leadership has fallen so far and so fast. RYM was just over $15 at the start of this decade in January 2020 and now the prospect of it going under $2 despite raising a whopping ~ $2 Billion dollars is now very real. How the mighty have fallen. I still think Synlait is the poster child for all future University courses on the effects of gross ESG extremism though. Many similarities exist between them though in terms of management arrogance and gross recklessness with their development, far ahead of market demand.
Food for thought. Where was the board and previous Auditors with all the prior highly creative practices for revenue recognition and asset valuations going on ? Just as well this is not America as otherwise there would be a shareholders class action lawsuit as sure as night follows day. Even recently, saying there was "up to" $300m in asset write-down's coming with the capital raise and its nearly double that....that would be actionable misrepresentation in many other markets around the world.
Quote from: Basil on May 29, 2025, 10:47 AM3. Massive reduction in the FY26 build rate, now forecast at just 266-330 units, down from 950. (My comment, how is it after raising $2 Billion they can't continue their development program at historical rates ?...noting SUM are and that's without any capital raises). Obviously there's a truck load of unsold stock, I haven't even looked at that yet.
5. Sales units forecast for FY26 at 1100-1300, well down on last years ~ 1,500
At some point the law of big numbers kick in, and the market demand is met through resales rather than new sales. We may be at that point.
Eg. Say there is yearly demand for 1300 new village residents. In the old days, that may have been met by 100 resales, and 1200 new builds. But over time, the number of second hand RV units increases, so now that demand may be met by 800 resales and 500 new builds. Eventually the market will be saturated, and all new demand will be met by resales. The development ponzi will be over.
Now you can pull the demand lever - try increasing demand from 1300 to 1500 so you can build an extra 200 units, but the only way you can do that is by lowering the price and making it more affordable for people to be able to consider retirement village living as an option. RYM and others had gotten so greedy in jacking up unit prices above the median house price in the area (instead of old 70% of the median price) that they had reduced the level of demand instead of increasing it. People couldnt sell their existing houses and have enough money to buy a RV unit. Falling house prices has exacerbated this problem.
So lower prices are a given. Lower build rates are a given. Greater competition between RV operators is a given. The impact of everyone being able to build a granny flat on their section is also going to change the demand dynamic.
In addition, RYM has substantially altered the nature of the product its selling. Moving away from single storey, well spaced out villas that offered space, privacy and had a "house-like" feel - to offering mid-rise apartments and townhouses that are so close together you could probably hear the neighbours flushing their toilets, which have a much more "institutionalised" feel. Do elderly people want to to move into something that feels more like a hospital, than a charming gated housing community?
At this point, start asking if a third cap raise is going to be required in two years time. Quite possibly.
well said KW, hard to put a value on the business, many head winds, no profit, no growth no divi for the foreseeable future, not investable for me
Due to their greed, they have also substantially reduced the size of their target market. This is really an own goal, and is one that is now impossible to undo. They are stuck with it. And I'm talking about how they have changed from being "retirement villages" to becoming "old folks homes".
The average age of entry now is mid to late 70's - its older than even the minimum age of 70. Thats because nobody younger is moving there now due to (a) the imposition of a minimum age of 70 and (b) the old age feel of the places that has resulted from that. Even my dad at 78 commented on it - "everyone is so old there". My Aunt at 75 says she is one of the youngest people in her village - she moved into one of the first villages built in Christchurch when she was 63 and her husband was 65. That would be unheard of today. My Dad's girlfriend who is now 80 also moved in when she was 78.
So while the idea of selling units to really elderly people who wont live in it for very long (thus pocketing the DMF and turning them over quickly) probably seemed like a genius idea to those sitting in the boardroom - it also seriously reduces the size of the demand pool. More than half of the boomer generation will have kicked the bucket long before they become old enough to consider moving in to a retirement village. The average life expectancy of someone born in 1950 is around 72 years old - not 82 like today.
KW your last 2 posts sum up the RV sector extremely well, 1 point I want to reiterate is the boom in RV was because the ave house could be sold and you could move into a RV with some money left over, that pool of poeple has shrunk, now in most area's you cant afford a RV property if you sell an average house.
Also one things most kiwi's like is privacy in their home, the good old "I don't need to talk to or see my neighbor unless I want to and freedom to speak without being over heard when enjoying outdoor living. The design and spacing in todays retirement villages is quite different to the earlier models, very little is on offer that offers any privacy.
Like you say the RV sector likes the age of entry high, for churn, but that combined with the cost factors and a distinct change in site design models (can of sardines comes to mind) is making the RV not so attractive for many.
I do hear that the area's in a new RV that offer the smallest amount of privacy are the easiest to sell and sell for a premium, problem is these only make up 10% of stock
Obviously there in a bit of needs based for older poeple but there is no money to be made in the full care side of things as the Government funding to low.
Like RYM have done some land banking write downs for many others should come (if they are being honest to Shers but land bank values are often subjective so easily fudged on the books)
Quote from: snapiti on Jun 01, 2025, 07:48 AMKW your last 2 posts sum up the RV sector extremely well, 1 point I want to reiterate is the boom in RV was because the ave house could be sold and you could move into a RV with some money left over, that pool of poeple has shrunk, now in most area's you cant afford a RV property if you sell an average house.
Also one things most kiwi's like is privacy in their home and the ability to avoid a person/people, for many different reasons, and freedom to speak without being over heard when enjoying outdoor living. The design and spacing in todays retirement villages is quite different to the earlier models, very little is on offer that offers any privacy.
Like you say the RV sector likes the age of entry high, for churn, but that combined with the cost factors and a distinct change in site design models (can of sardines comes to mind) is making the RV not so attractive for many.
I do hear that the area's in a new RV that offer the smallest amount of privacy are the easiest to sell and sell for a premium, problem is these only make up 10% of stock
Obviously there in a bit of needs based for older poeple but there is no money to be made in the full care side of things as the Government funding to low.
Like RYM have done some land banking write downs for many others should come (if they are being honest to Shers but land bank values are often subjective so easily fudged on the books)
You might be interested how Ryman sales went relative to Oceania and Summerset over the last 12 months. Would have included Arvida and Metlife but they don't report sales numbers to bond holders.
Ryman pretty bad. Oceania and Summerset in line with overall property market. Oceania good on new sales but little growth in resales. Summerset good resales.
Seem Ryman losing share
Make what you will of these numbers
IMG_6160.png
Quote from: KW on May 31, 2025, 11:11 AM...
The average life expectancy of someone born in 1950 is around 72 years old - not 82 like today. [/font][/size][/color]
You might want to review above sentence. You are saying that the averge person born in 1950 is already dead (1850 + 72 = 2022) - which is inconsistent with the facts. The majority of people born in 1950 in any Western style country are still well alive and kicking ... and are now 75 or 76 years old ...
Quote from: BlackPeter on Jun 01, 2025, 10:36 AMYou might want to review above sentence. You are saying that the averge person born in 1950 is already dead (1850 + 72 = 2022) - which is inconsistent with the facts. The majority of people born in 1950 in any Western style country are still well alive and kicking ... and are now 75 or 76 years old ...
Interesting, the internet says that life expectancy for someone born in 1950 is (or maybe was) 72 years (maybe that was life expectancy when they were born in 1950 and didn't account for gains since then
The actual % of people (USA/UK) who were born in 1946 who were still alive in 2021 (75 years old) was 55.8%
And maybe the difference here is accounted for by the difference between the definition of median and average. So the average life expectancy could have been 72 years old but this could still be consistent with the majority still being alive at 75 years old. Infant mortality would account for this difference in the median and the average.
Go figure
Quote from: Poet on Jun 01, 2025, 03:34 PMThe actual % of people (USA/UK) who were born in 1946 who were still alive in 2021 (75 years old) was 55.8%
Which still illustrates my point - by the time they get old enough to want to move in to a RV (75-78 years old) half of them will be dead.
Quote from: KW on May 29, 2025, 03:37 PMAt this point, start asking if a third cap raise is going to be required in two years time. Quite possibly.
Interest cover ratio, (ICR) waiver only lasts until Sept 2026. If banks don't see meaningful debt reduction over the course of the next year when RYM report in May 2026 and their profit and loss statement is not meaningfully improved from this years train wreck, you can expect them to question if the business model is capable of sustaining its current debt level and ask for another capital raise potentially as early as mid 2026. The way RYM have dialed back their FY26 development plans to around 300 units from 950 gives a very good insight into how serious the situation is. Same for OCA however in some key ways such as interest cover ratio, RYM is in worse shape than OCA and the latter is only trading at 41% of book. 41% x $4.18 RYM = $1.71 might be on the cards.
The problem even there, is how has the deep discount to NTA investment methodology worked out for OCA shareholders over the years and of course the answer is, not well at all. The other issues you've alluded too in your post are a great synopsis of most of the challenges facing the company.
I think after the improvements to the balance sheet the companies near to medium term performance is reliant on an improvement in the broader real estate market which is showing no signs of improvement yet.
Quote from: KW on May 29, 2025, 03:37 PMSo lower prices are a given. Lower build rates are a given. Greater competition between RV operators is a given.
Jenny Ruth reports on Summerset
So, I was intrigued when somebody sent me an advertisement for Summerset's St Johns village that promised no weekly fees for two years and anyone signing a contract in the June quarter would have until the end of September to settle.St Johns is one of the few Summerset villages that include high-rise apartments rather than villas and the first residents at St Johns moved in last October.Competition appears to be heating up.
This will apply to RYM Australian retirement villages - further reducing their cashflow
The Albanese government has quietly changed controversial liquidity rules (https://www.theaustralian.com.au/nation/politics/liquidity-rules-spark-alarm-in-aged-care-sector/news-story/5de9230ecf1d315c489d783e8d4dcac0) for aged-care providers (https://www.theaustralian.com.au/health/caring/cha-urges-rental-help-for-agedcare-workers-in-transition-to-new-system/news-story/31b71a658067f7de0772d4742e6e130f) after outcry over reforms that peak bodies warned would risk the financial viability of organisations forced to put aside millions of dollars in cash reserves.
Labor's Financial and Prudential Standards, proposed earlier this year, were initially planned to enforce a minimum liquidity amount of about 35 per cent of providers' quarterly cash expenses plus 10 per cent of refundable deposit liabilities.
However, The Australian understands that following further consultation, the 10 per cent threshold for the refundable deposit liabilities has been reduced to just 2 per cent for the retirement living sector.
The change, communicated to some members of the sector, has been made just weeks ahead of Labor's once-in-a-generation aged-care reform package coming into effect, with alarm raised by organisations still waiting on critical details on how the new rules will be enforced.
I wonder how long before they officially announce an age eligibility decrease to help move properties,
I here this is being discussed at board level at one of the other bigger players in the RV sector.
Quote from: KW on Jun 01, 2025, 11:30 PMWhich still illustrates my point - by the time they get old enough to want to move in to a RV (75-78 years old) half of them will be dead.
The data shows the life expectancy '
at [the time of] birth' (https://www.stats.govt.nz/topics/life-expectancy/) and does not take into account any other factors after that date. For example, improvements in health care and medicines have extended the lives of people well beyond their expectancy at date of birth.
Listed RV's have an average intake age of between 70-75 years, with some at 65. The average age of death 'by natural causes' is 80 for males and 83 for females. There's no stats for gender diverse.
The business models are built around an average 7 years tenure, for utility of the ORA, fees, and ultimately to realise DMF. Interestingly Care suites, for those with higher care needs, tend to have a shorter average tenure of about 2 years.
Updating price relativity between the deeply discounted stocks in this sector.
OCA closed at 60 cents v claimed NTA of $1.53 ~ 61% discount.
RYM closed at $2.06 plumbing new depth's not seen for well over a decade v claimed NTA of $4.18 = 51% discount. (If RYM had the same level of discount as OCA their share price would be $4.18 x 0.39 = $1.63)
Hmmm
Well there is no sugar coating it the result was bad. The most notable was write-downs of $576m which were almost 2x the upper limit flagged in February, with NTA reducing to $4.18 (from $4.95).
Craig's are saying that both ARV and MET were acquired by private equity for .83 x NTA. Ryman currently at 0.53 x NTA.
Has the lowest gearing at 28 percent and no goodwill on its books. The removal of the care goodwill was a big one in the reduced NTA of $180m.
Ryman have taken the medicine and others have not. CEO said on the call that last 2 months have seen positive sales.
The question is what's it worth........
I don't think goodwill should be included in NTA. Its intangible. ;D
Quote from: Apollo on Jun 04, 2025, 08:09 AMI don't think goodwill should be included in NTA. Its intangible. ;D
Yes agree both SUM and OCA don't include. RYM just coming into line.
RYM has an enormous amount of work to do in the years ahead to restore the confidence of the investment community. The clear risk with a very inexperienced board and management team is that ongoing execution of their turnaround plan to restore profitability and eliminate cash burn, takes years longer than anticipated. Management and the board will of course blame the real estate market but the fact of the matter is letting other much smarter operators like SUM steal your sales because they're offering materially better incentive deals is a sign of a culture of ongoing arrogance by RYM.
Matt Peek at Kingfish gave up on RYM, ostensibly because you can't trust management and the board. The latest up to $300m write-down's and it being nearly double that and previous promise of being cash flow neutral and then burning cash at nearly $100m for the year are just the latest examples of a litany of broken promises. Why would anyone believe anything RYM now has to say about the future outlook ?
In terms of any possible future takeover, the clear risk is that a very inexperienced board dismisses any future possible approach as being below intrinsic value and doesn't even put it before shareholders to vote on. From a resident experience my contention is RYM is very similar to the company it was under Simon Challis excellent leadership. From an investment point of view, it's completely different.
Which is the least ugly sister, (so to speak) of RYM and OCA at present prices ? Maybe its better to ask, why bother dating either of them ?
I expect the entire sector including SUM to underperform for the foreseeable future.
Quote from: Buzz on Jun 03, 2025, 07:44 PMListed RV's have an average intake age of between 70-75 years, with some at 65. The average age of death 'by natural causes' is 80 for males and 83 for females. There's no stats for gender diverse.
Higher than that.
https://newsroom.co.nz/2024/02/28/ungrateful-baby-boomers-pose-new-challenge-to-retirement-villages/
Retirement villages, with an average entry age of 75 to 80, are working through the last of the silent generation, born between 1928 and 1945, whom they have done so well off.
Quote from: snapiti on Jun 03, 2025, 06:11 PMI wonder how long before they officially announce an age eligibility decrease to help move properties,
I here this is being discussed at board level at one of the other bigger players in the RV sector.
I dont know if it will help. Nobody younger wants to move into a village where everyone is 80-90 years old. You would actually be quite out of place now if you moved in when you were 65. Unless you had some form of disability that required supervised living arrangements.
Quote from: KW on Jun 04, 2025, 08:27 PMHigher than that.
https://newsroom.co.nz/2024/02/28/ungrateful-baby-boomers-pose-new-challenge-to-retirement-villages/
Retirement villages, with an average entry age of 75 to 80, are working through the last of the silent generation, born between 1928 and 1945, whom they have done so well off.
So, I post a link to Stats.govt.nz and you refute it with a Newsroom article from some nobody journo with no links to source. Ok.
Quote from: Buzz on Jun 04, 2025, 09:26 PMSo, I post a link to Stats.govt.nz and you refute it with a Newsroom article from some nobody journo with no links to source. Ok.
You posted a link to estimated life expectancy. Which is unrelated to what age people are signing up for retirement villages. It doesnt matter how long they live for, if they dont want to move into a village before they are 80. Which is the current problem.
Here's a direct quote from the Retirement Villages Association - you cant be more authoritative than that. Retirement villages are for active, independent older people. The average age of entry is mid to late 70s, however many residents say, "don't leave it too late". https://www.retirementlife.co.nz/questions#
As if RYM didnt need more bad news, it was a Ryman home that lost the elderly dementia patient that has now been missing for 6 days in Christchurch. Just let her wander off after a few hours of being there.
CFO leaves end of July....looks like an internal appointment.
https://www.nzx.com/announcements/453743
How long was he in the CFO seat?
2 years, almost exactly.
Quote from: KW on Jun 10, 2025, 12:08 PMAs if RYM didnt need more bad news, it was a Ryman home that lost the elderly dementia patient that has now been missing for 6 days in Christchurch. Just let her wander off after a few hours of being there.
The body was found in a derelict house in the weekend, not far from her original homes. Managed to wander over / around Hagley Park in the cold to get there.
Call me dumb or cruel..but why aren't all dementia patients once they get to an agreed clinical stage that they are high risk ...either microchipped or have a non removable gps locator band or necklace.
Dementia patients have been wandering off since Adam was a cowboy...we micro chip cats and dogs really it not that bad would it?. at that age plenty of soft skin folds to hide it.
Too many of these wandering off cases end badly. Quite often by simple human mistakes...at least when the human mucks up either carer or patient...at least they could be found quickly and hopefully alive and safe.
I don't think old frail people can survive long in places like South Island climate at this time of year. It's very sad story but surely in today technology driven world there could be some better solutions. This case was needless death.
The cost of a gps band or microchipped is far outweighed by cost of time of police and search and rescue when their asked to find a needle in a haystack
Anyway just my thoughts.
What do you guys make of the poor sales cadence at RYM compared to SUM ?
Comparing chalk and Cheese?
SUM going forward.
RYM going backwards.
Great update. Market thinks so as well..
Gross contracts (lead indicator) have continued to improve, climbing to 91% of the last two prior-year comparatives, up from 75% in Q4 FY25 and 60% in Q3 FY25. This uplift reflects a sustained emphasis on sales effectiveness across a range of initiatives including targeted promotions and sales incentives, price optimisation, and continued investment in front-line development.
FY26 sales of ORAs are currently tracking towards the upper end of the previously guided 1,100 – 1,300 (FY25: 1,523).
https://www.nzx.com/announcements/454880
appears pretty desperate on the face of it that RYM use this sort of metric for comparison, 90% of shit previous results WTF
QuoteTotal sales were 11% below the same period last year, with resales (down 5%) performing better than new sales (down 28%).
For mine, I note this decline comes on the back of record level's of unsold stock.
The way they are radically reducing the build rate this year on the back of 2 x $Billion dollar capital raises in the last two years tells you they have a systemic problem with their ability to sell their stock. As I suggested earlier today, comparing RYM and SUM really is comparing Chalk and Cheese.
Will be interesting to see their cashflow figures. You can always sell more if you lower prices enough. But the lower ORA revenue plus the years free service fees is not going to help their operational cashflow situation. Sales numbers are not everything.
For Bars Review
Ryman Healthcare (RYM) delivered an encouraging 1Q26 sales update, with new sales in line with our run rate and resales +12% ahead. Encouragingly, forward-looking contracted sales continue to recover and are now running at ~90% of their two-year trailing, seasonally adjusted run rate, up from 75% in the prior quarter. One swallow does not make a summer, but we view this as an important step in de-risking the investment case. The key risk since RYM's pricing strategy change and dramatic drop-off in sales has been that it would build resales inventory at a high rate, forcing RYM to buy back units—creating a meaningful cash flow drag. Current resales levels remain insufficient to halt inventory build, but this update is a clear step in the right direction and should materially reduce the rate of inventory build. We are less concerned by continued weak new sales, as inventory can be managed down by further reducing deliveries. NEUTRAL.
What's changed?
Earnings: Annuity earnings increased +16%/+6%/+5% over FY26/FY27/FY28 on higher resale gains, care fees, and lower interest.
Target price: Increased to NZ$2.85 (from NZ$2.65) due to roll-forward and earnings upgrades.
Positive sales update
RYM delivered a positive 1Q26 sales update and now expects FY26 total sales to reach the top end of its 1,100–1,300 range. We lift our FY26 estimate by +50 sales to ~1,290. 1Q26 resales of 264 units were down just -5% year-on-year, despite a material drop-off in contracted sales six months earlier (reflecting contracts-to-settlement lag). New sales were 73 in 1Q26, down -28% on 1Q25, but annualised are in line with our FY26 forecast. RYM's ILU and serviced apartment sales mix has remained steady versus FY25.
De-risking the investment case
With ~1,200 ORAs vacated annually and growing, RYM needs >300 quarterly resales to keep unit inventory steady. As RYM buys back units not sold within six months, the cash flow drag from inventory growth can be meaningful. While 1Q26 likely saw resale inventory build, we come away more confident that RYM has begun to rebuild sales momentum and can lift its resale run-rate above unit turnover in the medium term. We now expect RYM to be around free cash flow breakeven in FY26.
Headwinds alleviating
Two key headwinds of recent years have begun to ease for RYM and the sector. First, turnover in the NZ housing market has improved—year-to-date sales are meaningfully up year-on-year and broadly in line with pre-COVID levels. Corroborating this, both Summerset (SUM) and RYM have delivered positive sales updates. Second, the recent NZ government care funding round delivered an above-inflation (+4%) annual uplift to care fees, which, combined with robust occupancy, should support care profitability.
Quote from: Greekwatchdog on Jul 14, 2025, 08:39 AMWe are less concerned by continued weak new sales, as inventory can be managed down by further reducing deliveries. NEUTRAL.
This is a bit naive. First you need to ask yourself WHY they are having weak sales. If its because the customer does not like the new high density model of villages, and are preferring to buy into their older villages that dont look like old people prisons, then this is a problem that is not going to go away.
Quote from: KW on Jul 15, 2025, 03:27 PMThis is a bit naive. First you need to ask yourself WHY they are having weak sales. If its because the customer does not like the new high density model of villages, and are preferring to buy into their older villages that dont look like old people prisons, then this is a problem that is not going to go away.
WTF does "people prisons" mean? No one is forced into these and they certainly haven't committed a crime to be in one.
I visited my Aunt and Uncle in Chch at Rymans Northwoods property and was very impressed with what I saw.
No one was complaining.
DISC, hold OCA and SUM
Quote from: Greekwatchdog on Jul 15, 2025, 03:31 PMWTF does "people prisons" mean? No one is forced into these and they certainly haven't committed a crime to be in one.
I visited my Aunt and Uncle in Chch at Rymans Northwoods property and was very impressed with what I saw.
No one was complaining.
DISC, hold OCA and SUM
It means that their new villages look like institutions not like spacious gated communities that resemble actual villages of the Ye Olde English countryside style.
Do old people want to live in an institutional environment or do they want to live in a single storey villa with a garden, a garage, and privacy from the neighbours?
RYM changed the product, trying to cram as many housing units as possible into a village, and the result is very unattractive. So its no wonder that the older villages are performing better. Obvously the people who buy them wont be complaining, but the problem is that people arent buying them.
Battery farming old people may not be a lucrative as RYM investors think.
A picture says a 1000 words. This type of village https://www.rymanhealthcare.co.nz/retirement-villages/auckland/murray-halberg is very different to this type https://www.summerset.co.nz/find-a-village/auckland/summerset-at-karaka/
Quote from: Basil on Jul 15, 2025, 04:10 PMThis type of village https://www.rymanhealthcare.co.nz/retirement-villages/auckland/murray-halberg is very different to this type https://www.summerset.co.nz/find-a-village/auckland/summerset-at-karaka/
Still not a people's prison as people have a choice to Purchase these.
And now you see why SUM are in front.
Quote from: Greekwatchdog on Jul 15, 2025, 04:13 PMStill not a people's prison as people have a choice to Purchase these.
And now you see why SUM are in front.
Most people do but there's price considerations as well. RYM have been trying to sell those units at that village at deeply discounted level's to shift slow moving unattractive south facing apartments. I doubt SUM have to discount any of those Karaka homes...probably have a waiting list there.
I've known which is the best retirement company for a very long time. SUM in a league all of their own in my opinion.
Quote from: Basil on Jul 15, 2025, 04:31 PMMost people do but there's price considerations as well. RYM have been trying to sell those units at that village at deeply discounted level's to shift slow moving unattractive south facing apartments. I doubt SUM have to discount any of those Karaka homes...probably have a waiting list there.
I've known which is the best retirement company for a very long time. SUM in a league all of their own in my opinion.
SUM have built what the residents wanted in most cases, Villas. Thou do note that they are venturing more into Care.
RYM had to many of those places come onto the market at once. What was it? 3 of these properties? Add this to RYM cashflow miss management you get a poor share price.
Wonder where things will stand in 3 years?
Quote from: KW on Jul 15, 2025, 04:09 PMIt means that their new villages look like institutions not like spacious gated communities that resemble actual villages of the Ye Olde English countryside style.
Do old people want to live in an institutional environment or do they want to live in a single storey villa with a garden, a garage, and privacy from the neighbours?
RYM changed the product, trying to cram as many housing units as possible into a village, and the result is very unattractive. So its no wonder that the older villages are performing better. Obvously the people who buy them wont be complaining, but the problem is that people arent buying them.
Battery farming old people may not be a lucrative as RYM investors think.
There are apartments all over the show. RYM went on a bender on apartments bringing to the market at once and so far it hasnt paid off. 3 years time will we be talking the same?
Still not a prison so best you come up with a new term. Maybe go look at a dictionary
Quote from: KW on Jul 15, 2025, 04:09 PMIt means that their new villages look like institutions not like spacious gated communities that resemble actual villages of the Ye Olde English countryside style.
That's true that RYM have a lot of large boxy apartments buildings, but it's not true that they don't have the village format as well. The newly finished James Wattie Retirement Village in Havelock North, as an example is mostly villas.
Quote from: Greekwatchdog on Jul 15, 2025, 04:13 PMStill not a people's prison as people have a choice to Purchase these.
And now you see why SUM are in front.
Actually my Dad went to play bowls at the new Ryman village and that was exactly his words "it felt like we were in a prison". Thats direct feedback from the old people.
Opinions are of course subjective but to my eyes some of RYM's villages are very nice and others bear quite a startling resemblance to a modern type of prison, especially some of their Australia village's e.g. https://www.rymanhealthcare.com.au/retirement-villages/melbourne/bert-newton That's absolutely terrible. Not only would I not pay to live there, they couldn't pay me to live there either lol ! No wonder they are having real problems with sales at some of their villages.
Just as well those buying the units have a choice and arent sent their to do time
Some of the ones I've been to are like resorts. People are happy. I think residents have benefited more than shareholders.
I hold no RYM at all.
Quote from: Basil on Jul 15, 2025, 06:44 PMOpinions are of course subjective but to my eyes some of RYM's villages are very nice and others bear quite a startling resemblance to a modern type of prison, especially some of their Australia village's e.g. https://www.rymanhealthcare.com.au/retirement-villages/melbourne/bert-newton That's absolutely terrible. Not only would I not pay to live there, they couldn't pay me to live there either lol ! No wonder they are having real problems with sales at some of their villages.
Another disingenuous example, they are in fact very nice comfortable apartments. I get it that it might not appeal to a current owner of a leafy estate large private and relatively secluded property, especially those who stand to have millions to spend on their retirement accomodation. But not everyone has that perspective, in fact it is probably in the small minority of prospective RYM residents.
This form of RYM bashing is misguided imo, from an investor perspective. There are far more pressing considerations for investors to consider regarding RYM than their apartment builds. All of the listed RV's offer a similar range of living styles, just in varying proportions, so focusing on one aspect of it which adequately suits a certain demographic and price point, and trying to diminish RYM because of it, adds nothing of value to an investor discussion.
From Coopers:
Ryman Healthcare (RYM)
Our worst performer for the year was Ryman Healthcare, a New Zealand based (but with a growing portfolio of assets in
Victoria) retirement village and aged care operator. We underestimated the impact of its October 2024 shift in revenue
model (higher Deferred Management Fee "DMF" and weekly fees) on sales velocity, necessitating a balance sheet
strengthening capital raise.
Given its large housing inventory and improving industry conditions, we had expected de gearing to occur organically –
an error that violated our maxim of "Observation, not Prediction".
Ryman also used the opportunity not only to reset its balance sheet but to increase accounting conservatism, on top of
prior heavy impairments.
Although we were early in this reversionary investment, the medium term outlook remains favourable. Ryman has the
strongest brand in New Zealand, the largest market share of premium assets, the strongest listed balance sheet and a
share price significantly below replacement value.
Demographic trends for aged care are exceptional, and supply of new retirement village assets has shrunk after several
difficult years. That tightening should improve supply–demand dynamics and accelerate the release of more than $800m
in inventory over the near term.
Underpinning our investment proposition and conviction in the stock are the following sources of substantial latent value,
including:
• Back book pricing
• Ryman historically charged fixed weekly fees, which became a significant head-wind when inflation reared its head
post COVID-19. As a result, there are a large number of residents who currently paying <$120 in weekly fees
(average tenure of 9 years). As they vacate (some who will be paying <$90 per week), the incoming resident will pay
market rates of ~$200 per week.
• New residents pay DMFs of ~29 % (in-line with peers) versus 20 % previously—a 45 % rise—which is also at a much
higher unit price.
• Improving aged care economics through higher occupancy, improved funding in Australia (Refundable
Accommodation Deposits), and likely better revenue per bed across their New Zealand portfolio (~4,000 beds) via
the introduction of Care Suites, higher Premium Accommodation charges and/or regulatory change (as occurred in
Australia).
• Corporate cost out given a large opportunity with >$150m in gross corporate over-heads.
• Significant inventory sell down (~600 new units and 661 established units to be re-sold: ~$600m FCF plus then
on-going weekly fees and DMF with high operating leverage).
• Work in progress (WIP) release as progressed developments wind down, plus the sale of land sites no longer
deemed economic or optimal.
• Potential house price appreciation post New Zealand house prices falling 20% and having flat-lined for the past 18
months and, ultimately, development recommencement.
I see on page 7 of todays presentation that there is a further $77m reduction in NTA to come through the next reporting.
Quote from: Dolcile on Jul 16, 2025, 04:13 PMI see on page 7 of todays presentation that there is a further $77m reduction in NTA to come through the next reporting.
Yes, though the NTA is not a 'reduction' per se, as it was technically never there, it is a correction of an accounting error in the removal of an 'net overstatement' of $77m.
Their summary is
"The accounting changes outlined above were extremely complex in terms n/a of scope and technicality. Subsequent to year-end, an issue has been identified in the FY25 financial statements with respect to the investment property valuation2. The issue relates to suspended contributions, where the full balance has been included within NZ IAS 40 adjustments. Due to a change in valuation approach implemented in the FY25 period, a subset of these suspended contributions has also been reflected in the operators interest (external valuation) resulting in a net overstatement of $77 million (equivalent to 7.6cps of NTA) in the carrying value of investment property. The issue will be addressed as part of the half year results in November 2025."
More cockroaches coming out of the woodwork. Hopefully that's the last of them.
We already knew apparently
Ryman notes that the presentation does not include any material information which has not been released to the market previously.
Quote from: Ferg on Jul 16, 2025, 04:41 PMMore cockroaches coming out of the woodwork. Hopefully that's the last of them.
I doubt it. Just like FBU the cockroaches just keep on coming and coming and coming... No worries though Ferg, another billion dollar capital raise in due course should sort this one one out and the next few problems as well ;) All the obvious problems should all be sorted out in a few years time and then all that's left to contend with is just the "minor" issues such as a lack of new stock to sell due to the radical wind-back of new builds, a lack of competitiveness with the cost of new builds after their internal development team has been disestablished, huge village operational cash burn due to legacy issues of residents on super low fixed weekly fees for life and for good measure RYM now have a much more expensive DMF structure that their main competitor SUM who are still on 25%. Hmmm...so really, there's lots of ongoing headwinds and systemic problems to deal with for the foreseeable future, certainly well into the next decade.
Optimists will say that the tremendous destruction of capital that's transpired in recent years is now all reflected in the current discounted price and the way underlying earnings per share have been completely crushed to almost nothing in recent years is irrelevant as underlying earnings per share is no longer a relevant measurement basis. I'm definitely not in that camp.
Curious Ferg, you're an accountant too, what do you think of them no longer using underlying earnings as a measurement yardstick and what do you think Simon Challis would think about that ?
Good report gains 0.80c -- Bad report lose a buck.
RYM_2025-07-16_18-25-34.png
Quote from: Basil on Jul 16, 2025, 05:02 PMCurious Ferg, you're an accountant too, what do you think of them no longer using underlying earnings as a measurement yardstick and what do you think Simon Challis would think about that?
I'm a chameleon and jack of all trades.....accountant is one of many! I can't speak for Simon Challis, but I have been giving some thought to the concept of underlying earnings for RV's. I think it is still relevant, so I am surprised RYM have dispensed with that. Given the increase in ORA on resale is not in the P&L, we can't get away from using underlying. The increase in ORA on re-sale is a genuine cash gain to the RV, but I'm struggling to come up with a sensible alternative to underlying profit.
But something no-one has ever touched on AFAIK is the double counting of the DMF portion of the resale gain, or some might say the resale gain portion of the DMF. There is a sneaky little double count in there but the effect is quite minor (say 30% of 25% of the ORA assuming full occupation term) and the effect is spread over up to 8 years depending on what was sold. You read it here first. ;D
Quote from: Ferg on Jul 17, 2025, 10:07 AMI'm a chameleon and jack of all trades.....accountant is one of many! I can't speak for Simon Challis, but I have been giving some thought to the concept of underlying earnings for RV's. I think it is still relevant, so I am surprised RYM have dispensed with that. Given the increase in ORA on resale is not in the P&L, we can't get away from using underlying. The increase in ORA on re-sale is a genuine cash gain to the RV, but I'm struggling to come up with a sensible alternative to underlying profit.
To move away from this well established reporting methodology is to lose the plot completely in my opinion. No doubt the current board and CEO with their very limited experience think they know how to reinvent the wheel ::)
Quote from: Buzz on Jul 15, 2025, 08:09 PMAnother disingenuous example, they are in fact very nice comfortable apartments. I get it that it might not appeal to a current owner of a leafy estate large private and relatively secluded property, especially those who stand to have millions to spend on their retirement accomodation. But not everyone has that perspective, in fact it is probably in the small minority of prospective RYM residents.
This form of RYM bashing is misguided imo, from an investor perspective. There are far more pressing considerations for investors to consider regarding RYM than their apartment builds. All of the listed RV's offer a similar range of living styles, just in varying proportions, so focusing on one aspect of it which adequately suits a certain demographic and price point, and trying to diminish RYM because of it, adds nothing of value to an investor discussion.
In Christchurch at least, those with money wouldn't be considering either RYM or SUM. They'd be parked up at the Russley (Antony Gough) or Merivale (Metlifecare) villages.
The most pressing concern for investors is "why arent people buying RYM units"? The change in the product mix of units at villages is 100% of utmost importance in answering that question. To ignore it is folly. Just like every other consumer company, if you dont have a product that consumers want to buy, you'll soon go out of business. If your product only appeals to a small number of consumers, then you'll slowly (then suddenly) go broke.
Everyone I know who is looking at moving into a RV want one that is in an area that is familiar to them. They dont consider villages on the opposite side of the city, away from everyone and everything that they are used to accessing. So the quality of the village in the area under consideration is important - because its not like an person who is living on the North Shore is going to move to Papakura because the village is "nicer". They'll pick whichever one is the nicest in their local area, close to friends and family.
Quote from: Ferg on Jul 17, 2025, 10:07 AMI'm a chameleon and jack of all trades.....accountant is one of many! I can't speak for Simon Challis, but I have been giving some thought to the concept of underlying earnings for RV's. I think it is still relevant, so I am surprised RYM have dispensed with that. Given the increase in ORA on resale is not in the P&L, we can't get away from using underlying. The increase in ORA on re-sale is a genuine cash gain to the RV, but I'm struggling to come up with a sensible alternative to underlying profit.
But something no-one has ever touched on AFAIK is the double counting of the DMF portion of the resale gain, or some might say the resale gain portion of the DMF. There is a sneaky little double count in there but the effect is quite minor (say 30% of 25% of the ORA assuming full occupation term) and the effect is spread over up to 8 years depending on what was sold. You read it here first. ;D
In Businessdesk today (paywalled) Ryman tries to explain why they moved away from underlying profit, to cash flow as the measure of financial performance.
https://businessdesk.co.nz/article/property/retirement-sector-faces-reckoning-over-performance-metrics?utm_source=nzh&utm_medium=referral&utm_campaign=nzh-home
Cash flow is very important, its the lifeblood of business, (which is why I foresee RYM unlikely to be able to pay a dividend anytime soon), but it is not, never has been and never will be the correct way to measure profitability. I have no confidence at all in RYM's board or management. Neither does Matt Peek at Kingfish.
Some good insider buying.
https://api.nzx.com/public/announcement/455337/attachment/447829/455337-447829.pdf
Yeah don't they have to? I think I read something about mandatory ownership in the Governance presentation.
Quote from: Buzz on Jul 21, 2025, 10:41 AMIn Businessdesk today (paywalled) Ryman tries to explain why they moved away from underlying profit, to cash flow as the measure of financial performance.
https://businessdesk.co.nz/article/property/retirement-sector-faces-reckoning-over-performance-metrics?utm_source=nzh&utm_medium=referral&utm_campaign=nzh-home
Extract
QuoteMargaret Warrington, defended underlying profit, saying it "has been, and remains, a strong indicator of the performance of our business". "This is a view shared by the majority of the investment community whom we regularly engage. Underlying profit allows for benchmarking performance, understanding how the business grows over time, both through development and from a maturing asset base, and is widely understood." Warrington said Summerset updated its financial disclosures in 2024 and sought widespread feedback afterwards from analysts and investors. "The feedback we received was that underlying profit is still a focus, with almost all analysts agreeing it remains a good measure that forms part of a set of financial statements that also include the balance sheet and cash flow statement."
I'm in SUM's camp. Who are you going to trust here ? RYM's inexperienced board with their multiplicity of egregious errors, accounting changes and mismanagement over recent years or SUM's highly experienced management and board with their impeccable track record ? While I have the upmost respect for Arie Dekker's lead approach with this sector, investment professional's in particular are well placed to understand underlying profit as a measurement base in tandem with the cash flow statement and balance sheet.
Very interesting agm. Some good questions asked.
Snippet as follows
Question from Jeffrey Hogan and Kathleen Hogan. When is the total Board going to resign. Thank you, Jeffrey, and Kathleen. The share market price is poor. You haven't paid out a dividend. It is time for a completely clean out is for poor performance. You can remuneration regardless. Look, that for your questions. The share price performance has been unacceptable, and I totally acknowledge that. And I do expect shareholders to be frustrated by the loss of value in their shareholdings. There has been substantial change. I joined the Board 2 years ago. with a clear mandate from shareholders to create change and to create improvement. There's been significant change in the Board since then, and you have 5 new directors on the board now, and we'll be replacing a new director in the following 12 months. The majority of that Board has been here for less than 2 years. So I think I would ask for support for this Board to demonstrate that we can rebuild value in the organization
At least shareholders had the courage to speak up and vent their spleen, good on them I reckon. OCA annual meeting was a very tame affair by comparison. Might not be next year if the share price is still sixty something cents.
Yes good to see some hard questions. Those still left on the board that were involved in the massive value destruction need to do the decent thing and resign.
Hopefully this becomes a good turn around storey. Don't see any insiders buying OCA recently unlike RYM. Good to hear that the market is showing signs of improvement.
https://businessdesk.co.nz/article/property/ex-rothschild-banker-david-kingston-sees-upside-in-ryman-healthcare
Quote from: anotherday on Aug 01, 2025, 07:57 AMhttps://businessdesk.co.nz/article/property/ex-rothschild-banker-david-kingston-sees-upside-in-ryman-healthcare
Thanks for posting. I agree with David Kingston, will be very surprised if the share price is still languishing around $2.50 this time next year.
Quote from: Shareguy on Jul 31, 2025, 08:51 PMThose still left on the board that were involved in the massive value destruction need to do the decent thing and resign.
Agree 100%.
I am holding similar view with him. I bought at $2.41 and $2.06. RYM is very likely having a turnaround point at present.
The elephant in the room that's going to be hanging around we'll into next decade is the enormous amount of cash being burned through at a village operational level. All those residents on dirt cheap fixed weekly fees for life and the cost to service their needs has been rising MUCH faster than inflation every year. Sure they will gradually pass away but losses per remiaing resident get worse every year.
SUM don't have that problem and have a huge and enduring competitive advantage going forward.
Disc: Small holding in SUM.
Craigs added to Kiwi conviction Portfolio
We have been cautious in adding too much domestic cycle exposure to the Kiwi conviction Portfolio up to this point given still softening conditions and earnings downside risk. Portfolio already includes Sum and FRW as preferred exposure to a cyclical housing and subsequently consumer recovery in New Zealand this addition we are adding Ryman with a 5% weight. Ryman offer exposure to a cyclical recovery in the Victoria and New Zealand housing markets with the former improving sharply in recent weeks. Ryman recently delivered June quarter of sales update a head of guidance and with lead indicators starting to train positive we believe the companies recovery is looking more certain.
Thanks SG. Can I ask, what is the Kiwi conviction portfolio? Ty
Jeez, with that guy Kingston raving on about Ryman and taking a 'meaningful stake', Craigs putting it back on their conviction list and shareguy touting it at every opportunity Ryman has to be a STRONG BUY
My target share price $3.00 by end of August and over $4.00 after half year results in November
Pretty cool eh
Quote from: Basil on Jul 15, 2025, 06:44 PMOpinions are of course subjective but to my eyes some of RYM's villages are very nice and others bear quite a startling resemblance to a modern type of prison, especially some of their Australia village's e.g. https://www.rymanhealthcare.com.au/retirement-villages/melbourne/bert-newton That's absolutely terrible. Not only would I not pay to live there, they couldn't pay me to live there either lol ! No wonder they are having real problems with sales at some of their villages.
Interesting. Just come back from a (actually longer than expected) trip through Singapore, Germany and Southern Australia.
One of the things I learned is that different people do like different places. Maybe its just that some of the retirement villages need to learn how to find the communities who want to live there.
Maybe they just need to replace their marketing manager?
Quote from: winner (n) on Aug 03, 2025, 10:47 AMJeez, with that guy Kingston raving on about Ryman and taking a 'meaningful stake', Craigs putting it back on their conviction list and shareguy touting it at every opportunity Ryman has to be a STRONG BUY
My target share price $3.00 by end of August and over $4.00 after half year results in November
Pretty cool eh
To my mind there's FAR too much emphasis in this sector placed by value investors chasing a discount to NTA as though that assures them of deep value with all the implications that you can't lose long term. How's that worked out for OCA shareholders in more than 8 years since it listed or RYM in the last few years. Its been an absolute bloody disaster.
Share prices follow earnings per share and for RYM the share price has collapsed under a crisis of no earnings, very poor management and truly woeful governance. Whilst the DMF and weekly fee inflation adjustment changes made will improve things over the long run, a flat property market and strong headwinds from operational losses at a village level and much lower development profits going forward, combined, are going to be VERY difficult headwinds to overcome as is getting an acceptable return on care assets which is a much larger part of their model than it is for SUM.
The fact that RYM have dispensed with underlying earnings as their measurement basis means we haven't even got that yardstick to use for comparative purposes anymore ! So its a case of "trust us we know what we are doing" from RYM's board and management and know how to better measure earnings going forward. How can anyone trust them after all the debacles of recent years ?
My contention is that an investment in RYM now amounts to little more than a blind faith experiment in believing the share price will close the gap to NTA over time...but how's that working for OCA shareholders ? Remember too, many of the board responsible from the woeful fiasco's of recent years are still there !
The very clear alternative is a well proven company that has come through all the Covid, recession and house price contraction and slow real estate market headwinds over the last 5 years and still grown underlying eps at more than 13% CAGR for 5 years on a forward PE of just 11.5. Sure the discount to NTA at SUM is nothing like as good as at RYM or OCA but why would they trade at a discount at all with a stellar track record of earnings growth like they have had over the last 14 years since they listed ? Share prices follow earnings not NTA.
RYM's reputation is in tatters and they have an enormous amount of work to do ahead over many years to try and rebuild trust and the respect of the investment community. Furthermore, I am most underwhelmed with their very modest target of freeing up just $500m of capital by radically scaling back development over the next 3 years. That very modest target gives investors a valuable insight into the truly woeful extent of the village operational cash burn in the years ahead that I've been talking about earlier.
You can't sell new units if you're hardly building any and OCA and RYM's radical contraction in their build rates in the years ahead is SUM's opportunity to gain more market share. The way I see it, RYM's share price fully deserves to trade in the doldrums with OCA at about a 50% discount to NTA until they can prove they deserve a rerating. I don't do blind faith experiments with directors and management that don't deserve my trust.
$4 by November when they report. Mate, you have missed your calling as a comedian lol I think the November 2025 report will be very disappointing.
Quote from: Basil on Aug 03, 2025, 01:50 PMShare prices follow earnings not NTA.
Share prices follow discounted cash flows, not earnings. The distinction doesnt really matter for most businesses but it certainly does here.
The NTA is essentially an ultra conservative discounted cash flow analysis so for it to be trading for half of that is absurd.
Reminds me of that old adage "How do you lose 95% of your share investment? You lose 90%, and then the share price halves again".
Quote from: KW on Aug 03, 2025, 03:42 PMReminds me of that old adage "How do you lose 95% of your share investment? You lose 90%, and then the share price halves again".
Have you lost half your house because the neighbour next to you sells their house for half of what it's worth?
My understanding is that valuers are valuing the future cash flow expected from the units themselves. They are not placing a value on the head office costs, (RYM ~ $150m per annum. Most valuers would put a multiple of about 9 on that and say that's negative $1.35 Billion) or the negative cash burn of the villages at an operational level and therein lies the conundrum. While you can have a whole bunch of retirement units with future expected cash flows worth a net present value of just over $4 per share if it costs you ~ $200m in head office costs and village operational losses to run those assets, you can take $200m x 9 = $1.8 Billion off their value, for the cost to operate them. That's why the headline NTA figure the property valuers generate is deceptive and that's why the share price for RYM is where it is. Ditto for OCA with its extremely bloated corporate costs and village operational losses.
This is an overview of why your strategy isn't working. Just my opinion and I accept others will see it quite differently. Always worth checking the consensus of how analysts see it.
Average broker target price one year hence for RYM is $2.87, a 14.8% potential uplift from the current price
https://www.marketscreener.com/quote/stock/RYMAN-HEALTHCARE-LIMITED-6492072/consensus/
For SUM brokers are far more positive with an average price target of $14.38, a potential 26.5% uplift from Friday
s closing price and they pay dividends too ! https://www.marketscreener.com/quote/stock/SUMMERSET-GROUP-HOLDINGS--10089438/consensus/
For OCA brokers expect a 30% uplift https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/
RYM is the least preferred by the professional analysts !!
Quote from: Basil on Aug 03, 2025, 05:55 PMMy understanding is that valuers are valuing the future cash flow expected from the units themselves. They are not placing a value on the head office costs, (RYM ~ $150m per annum. Most valuers would put a multiple of about 9 on that and say that's negative $1.35 Billion) or the negative cash burn of the villages at an operational level and therein lies the conundrum. While you can have a whole bunch of retirement units with future expected cash flows worth a net present value of just over $4 per share if it costs you ~ $200m in head office costs and village operational losses to run those assets, you can take $200m x 9 = $1.8 Billion off their value, for the cost to operate them. That's why the headline NTA figure the property valuers generate is deceptive and that's why the share price for RYM is where it is. Ditto for OCA with its extremely bloated corporate costs and village operational losses.
This is an overview of why your strategy isn't working. Just my opinion and I accept others will see it quite differently. Always worth checking the consensus of how analysts see it.
Average broker target price one year hence for RYM is $2.87, a 14.8% potential uplift from the current price
https://www.marketscreener.com/quote/stock/RYMAN-HEALTHCARE-LIMITED-6492072/consensus/
For SUM brokers are far more positive with an average price target of $14.38, a potential 26.5% uplift from Friday
s closing price and they pay dividends too ! https://www.marketscreener.com/quote/stock/SUMMERSET-GROUP-HOLDINGS--10089438/consensus/
For OCA brokers expect a 30% uplift https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/
RYM is the least preferred by the professional analysts !!
What page of the annual report do you get the 150m head office costs from. Genuinely cannot find a figure close to that.
Quote from: Dolcile on Aug 03, 2025, 08:57 AMThanks SG. Can I ask, what is the Kiwi conviction portfolio? Ty
It's Craig's pick of the current shares that they think will out perform the market with high conviction. Currently up 18 percent PA since inception. Ryman has just been added with 5 percent weighting.
Quote from: winner (n) on Aug 03, 2025, 10:47 AMJeez, with that guy Kingston raving on about Ryman and taking a 'meaningful stake', Craigs putting it back on their conviction list and shareguy touting it at every opportunity Ryman has to be a STRONG BUY
My target share price $3.00 by end of August and over $4.00 after half year results in November
Pretty cool eh
Only time will tell if a strong buy or not currently. Every report I have seen says that we are going to have a big shortage in the future. The property market will recover, it always does. Once the current overhang has been soaked up we will see growth. I see this as a long term play with a business that has taken the medicine and will be lean and mean for when that happens.
Quote from: BlackPeter on Aug 03, 2025, 12:47 PMInteresting. Just come back from a (actually longer than expected) trip through Singapore, Germany and Southern Australia.
One of the things I learned is that different people do like different places. Maybe its just that some of the retirement villages need to learn how to find the communities who want to live there.
Maybe they just need to replace their marketing manager?
Welcome home BP
Quote from: Basil on Aug 03, 2025, 05:55 PMRYM is the least preferred by the professional analysts !!
Yes but they can be just as wrong as us folks.
Quote from: Shareguy on Aug 04, 2025, 06:53 AMOnly time will tell if a strong buy or not currently. Every report I have seen says that we are going to have a big shortage in the future.
A shortage is when supply is not sufficient to meet demand. If units cost $200k then there would indeed be a shortage, as everyone would want one. If units cost $2M there is no shortage, as few people would be able to afford them.
You can have a large demographic, and still price your product in a way that removes demand.
For $200k you can now put a 2 bedroom granny flat on your section and move your parents in. It will be interesting to see what the uptake of this option is going forward.
Quote from: ValueNZ on Aug 04, 2025, 12:27 AMWhat page of the annual report do you get the 150m head office costs from. Genuinely cannot find a figure close to that.
DYOR - I think that figure may have been mentioned in the annual meeting recently, check the transcript, or it may have been in an analysts report.
Quote from: KW on Aug 04, 2025, 10:04 AMA shortage is when supply is not sufficient to meet demand. If units cost $200k then there would indeed be a shortage, as everyone would want one. If units cost $2M there is no shortage, as few people would be able to afford them.
You can have a large demographic, and still price your product in a way that removes demand.
For $200k you can now put a 2 bedroom granny flat on your section and move your parents in. It will be interesting to see what the uptake of this option is going forward.
Hmm - I guess if we comnpare prices, we perhaps should do a fair job.
Not sure, how far your $200k go. Are you sure, you included taxes, rates and all the changes you need to do to your property just to fit it in?
Are you sure, you even included the full granny flat? I note the average pice for a 50sqm granny flat in NZ is already $250k (OK, this is what Google AI tells me and it is supposed to include the taxes ...)
Are you sure you entered whatever the amount is you need to pay for a bowling green, a free of charge gym and a pool?
Had a thought about all the additional jobs which need to be paid by somebody?
While I am sure, that there are plenty of other ways to look after our elderlies ... we need to look at the full costs as well as the full benefits.
Wife's mother has dementia and mobility issues and her sister has her at home still. You have no idea how difficult.
Quote from: BlackPeter on Aug 04, 2025, 10:55 AMAre you sure, you even included the full granny flat? I note the average pice for a 50sqm granny flat in NZ is already 250 m2.
I think you mean $250k? That's $5k a sqm. That's top end, not average.
Quote from: Hectorplains on Aug 04, 2025, 06:07 PMI think you mean $250k? That's $5k a sqm. That's top end, not average.
[/quote
The smaller you build the higher per sq. A lot of expenses in kitchen bathroom etc. A little extra floor and roof isn't expensive.
Quote from: Hectorplains on Aug 04, 2025, 06:07 PMI think you mean $250k? That's $5k a sqm. That's top end, not average.
Yes, I did mean that. Didn't do a disertation, but google AI calls it average. Obviously, still means that there are cheaper ones around.
Quote from: Shareguy on Aug 04, 2025, 06:53 AMOnly time will tell if a strong buy or not currently. Every report I have seen says that we are going to have a big shortage in the future. The property market will recover, it always does. Once the current overhang has been soaked up we will see growth. I see this as a long term play with a business that has taken the medicine and will be lean and mean for when that happens.
I'm in the doubting Thomas camp. I agree with Don Brash's view that house price rises over the three decades to the peak in 2021 is unsustainable and what we witnessed over that timeframe, (which encompassed the early successful years for RYM when it enjoyed first mover advantage), will never reoccur because it was driven by structural changes in society with many families going from 1 income to 2 incomes.
https://www.goodreturns.co.nz/article/976523954/don-t-bet-on-house-prices-rising-faster-than-incomes.html?utm_source=GR&utm_medium=email&utm_campaign=More+borrowers+fix+for+one+year+as+rates+fall
I also think for RYM and FBU for that matter too, the cockroaches will keep on coming...
I see Ryman are now closing down care facilities within villages. That diminishes the prospect of selling the independent units there, and will require their village residents to move out when needing future care. I wonder how many more will be closed?
Thats their brand proposition up in smoke
https://www.chrislynchmedia.com/news-items/breaking-ryman-to-close-care-facilities-at-two-christchurch-villages-sparking-concern-over-aged-care-model/
This is what happens when Govts underfund the sector. Why should the RV companies shoulder the burden?
RYM did mention they were going to do this a few months ago. Reality bites sadly.
Quote from: Greekwatchdog on Aug 07, 2025, 02:07 PMThis is what happens when Govts underfund the sector. Why should the RV companies shoulder the burden?
RYM did mention they were going to do this a few months ago. Reality bites sadly.
Exactly. Unless the government changes the funding model this will continue. Where people go is the question.....
Quote from: Shareguy on Aug 07, 2025, 02:19 PMExactly. Unless the government changes the funding model this will continue. Where people go is the question.....
I do not know RAD's business model well but from what I can see they seem to have a niche below the larger RV companies so don't have the large costs associated.
There are smaller operators out there, just who pays the costs of the resident moving? RYM?
Well great to see Ryman heading towards $3. The ASX Listing, declining interest rates, improving housing market sales all helping. Sums update today also shows that things aren't too bad.
Disc: My largest New Zealand Holding.
there are massive interest cuts coming before 31 March 2026.
Huge percentage gain yesterday on the back of SUM's quarterly numbers.
Caution is warranted extrapolating a general uplift in the sector from SUM' numbers because there's a long track record of SUM doing well while others in this sector languish in the doldrums.
Quote from: Basil on Oct 08, 2025, 07:53 AMHuge percentage gain yesterday on the back of SUM's quarterly numbers.
Caution is warranted extrapolating a general uplift in the sector from SUM' numbers because there's a long track record of SUM doing well while others in this sector languish in the doldrums.
Also the SUM announcement was only sales numbers, with no dollars attached. You can sell anything if the price is reduced enough.
Pretty positive update from Ryman
Sales going better than expected
Should see recent rise in share price continue ...well above $3 over next week ir so
https://announcements.nzx.com/attachment/453981.pdf
Yes Winner very positive. More good news to go with the OCR cut yesterday.
I suggest even $3 will seem very cheap this time next year.
Am I reading this right, RYM has less ORA sales than SUM?
Quote from: Dolcile on Oct 09, 2025, 09:26 AMAm I reading this right, RYM has less ORA sales than SUM?
Yes but RYM's sales mostly comprised of resales, whilst SUM's mostly were new sales.
The SP goes to close to $4 soon, the net book value per share, rather than $3. The debt ratio will drop significantly for FY 2026 and cash flow is not a problem anymore.
Looks like it might hit $3 shortly. Looking forward to the 1H result. Wont be good but i'm picking that forward guidance will be better than expected.
For Bar update
Ryman Healthcare (RYM) has undergone a painful but necessary reset. The rewards for shareholders could be substantial if RYM's new management team can successfully refocus the business to extract value from its existing asset base of ~14,500 units and beds. We estimate recently enacted changes to RYM's deferred management fees (DMF) and weekly fees alone will lift our annuity earnings metric by ~+NZ$75m from FY25 to FY30. That said, it will take time for these changes to flow through to cash generation. Inventory will continue to rise in FY26 on our current estimates, despite positive momentum in quarterly sales volumes, while unit prices and margins will likely be pressured by elevated levels of discounting. We believe investors can afford to wait for further signs of execution to gain confidence in the recovery story and reiterate our NEUTRAL rating
What's changed?
Earnings: Annuity EPS falls -3%/-13%/-8% over FY26/FY27/FY28, primarily on lower resales gains.
Target price: Increased to NZ$3.35, with earnings changes offset by the incorporation of a discounted cash flow (DCF) valuation.
A painful few years are now behind us, the future should be brighter
After almost NZ$2bn of equity raises and a complete overhaul of its management team and board, we believe RYM is now through the worst of the most challenging period in its history. RYM no longer offers the potential development upside (in the short term) that made it a former market darling, but investor returns can be strong if it executes its strategy to release cash from the business and improve underlying village performance. We believe RYM now has the right leadership in place to orchestrate this turnaround and has taken pragmatic steps towards rebuilding returns. The seeds of recovery have been sown but will take time to bear fruit.
Improving sales volumes addresses a key overhang, but risks remain
Improving quarterly unit sales volumes indicate growing market acceptance of RYM's revised pricing settings (base DMF lifted from 20% to 30% and higher weekly fees). We view these positive volume trends as significantly de-risking the RYM investment case, with the build-up of bought-back stock in FY26 increasingly likely to be manageable. However, we continue to see relatively elevated earnings risk—particularly around unit pricing and margins.
Long-term optionality to demographic trends intact
RYM pioneered the 'continuum of care' model, reflected in a NZ care portfolio of ~4,000 beds, which is the largest in the listed sector by some margin. We believe RYM's asset base will become increasingly valuable as demographic trends from an ageing population play out over the next few decades, underpinning our confidence in an earnings recovery over the medium to long term.
Earnings revisions
We make a series of changes to our estimates. The most material near-term adjustment is lowering our resale gains, as we take a more conservative view on unit pricing. This is only partially offset by higher care and village fees, leading to -3%, -13%, and -8% cuts to annuity EPS across FY26, FY27, and FY28 respectively.
We have also remodelled our Australian care forecasts, given the recent changes to government funding and the introduction of RAD retentions from 1 November 2025. This results in modest upgrades to care revenue across our forecast horizon.
Valuation methodology updated (Discounted Dividend Model (DDM) swapped out for DCF)
We have adjusted our valuation methodology to include a DCF (replacing our DDM). Our new target price of NZ$3.35 is based on a DCF valuation of NZ$3.55 and an annuity PE valuation of NZ$3.15, weighted evenly. Our DCF uses a weighted average cost of capital (WACC) of 8.6% and a terminal growth rate of 1.5%.
A good result is how I see it with updated positive guidance (lower costs and lower capex and increased sales at higher DMF)
Pricing model changes fully embedded with significant uplift in average DMF on ORA sales from 20.7% in 1H25 to 28.8% in 1H26
• Sales volumes rebuilding with two quarters of sequential growth; 704 sales in 1H26 (Q1: 337 / Q2: 367)
• Increasing utilisation of recently delivered care capacity and strong growth in room pricing
• Kevin Hickman main building and final stage at Nellie Melba both completed in July 2025
Financial highlights
• First positive free cash flow1 result in over a decade of $56.2 million
• Total revenue up 13%, with growth in both pricing and utilisation, while total costs fell 2%
• Net loss after tax of -$45.2 million (-4.4cps) with reduced fair value movement from the prior year but with property valuations stable in 1H26
• Full bank refinancing achieved of $2.0 billion with an average facility tenor of five years and improved pricing and covenants
Strategic highlights
• Annualised cost-out1 achieved to date of $40 million; FY26 target now lifted to $50–60 million (from $46 million) as turnaround advances.
Updated FY26 guidance:
• Sales of ORAs2 (occupation basis) of 1,300 to 1,400 at higher DMF (FY25: 1,523, previous guidance: 1,100–1,300)
• Annualised cost saving target1 of $50–60 million (FY25: $23 million, previous guidance: $46 million)
• Build rate of 330 including 80 aged care beds and 250 RV units (FY25: 950, previous guidance: 266–330)
• Capex1 of $235–265 million (FY25: $535.3 million, previous guidance: $260–320 million) including $170–190 million on development activity (FY25: $458.2 million, previous guidance: $180-230 million) and $65–75 million on existing operations (FY25: $77.1 million, previous guidance: $80–90 million)
• Ryman's guidance for FY26 reflects the current environment and its assessment of future trends
Craigs thoughts
RYM – STOP PRESS – Ryman 1H26 result just out and Stephen Ridgewell notes there is plenty here for the bulls and bears but the bias in the data is towards the bulls with the market likely to focus on better than expected positive FCF of $54m, net debt reduction, and cost-out guidance increasing, so shares likely to trade up. Here are some of the key points ahead of the conference call at 11am NZT.
NTA $4.06 – there will be some relief that further large write-downs avoided
FCF $56.5m – strong turnaround on pcp and better than we'd expected (we'd expected +ve in 2H26 at the earliest given resale stock build in 1H26)
Operating EBITDAF +193% to $40m – while this is positive and reflects RYM's efforts to cut costs, it excludes resale profits, which were down 34% YoY. After accounting for this, recurring EBITDAF was -3% - a slightly better than expected result (1H26 recurring EBITDAF 51% of FY CIPe – there is no consensus number available for this).
Resales: Resale margin dipped as RYM discounted to clear stock. The decline in resale margin is a little more severe than we'd anticipated but, as noted above, lower resale profits were offset by cost cutting. Resale stock ticked up.
New sales: RYM sold new units broadly in line with deliveries i.e. unsold stock has stabilised at high levels. Unsold SA stock continued to increase and now makes more than half of unsold new stock (by volume). Stock levels should reduce in coming periods as RYM's build rate continues to decline.
GUIDANCE - Settlement volume guidance lifted from 1100-1300 to 1300-1400 – consensus already at 1398 (CIP 1380), so no surprise as consensus had moved up numbers post the 2Q. RYM expecting improved resales but lower new sales as its front book recedes. Annualised cost out target lifted from $46m to $50-60m. Build rate 330, including 250 RV units and 80 beds (prior 260-330). Capex guide reduced to $235-265m (from $260-320m) as RYM releases contingencies on several projects. RYM still confident in realising $1bn of cash from development pipeline. This includes $110m from three landbank sites now under contract – Mt Eliza, Karori, Park Terrace. Further update on landbank strategy to come at next year's investor day (Feb 3).
Jenny Ruth did a rave about Ryman performance titled Has Ryman earned the right to resume a growth strategy?
I think the ? sums it up.
Interesting Ryman provided a figure for annualized per-bed ebitdaf of $15,300
She said that's a sharp contrast from the $29,900 in annualized ebitdar per bed that Radius 🦴 reported earlier this month, up 7% from $27,900 a year earlier.
She doubted Ryman could ever get to an equivalent level because they operate a different model.
Even so the Z Ryman number is still higher than Oceania's $12,400 but she added increasing care profitability isa great opportunity for both.
There's a very, very long journey ahead for RYM to regain the confidence of the investment community. Why bother backing a "maybe horse" when there's SUM other one that's certain to win the race...not that I own any SUM as I think the capital gains model this entire sector is based upon is not going to work very well at all for the foreseeable future.
Two brokers' projections.
Forbar 2028 ....PE 70.7 No divie.
Craigs 2028.....PE 29.8......1.96 cps divie. Yield 0.7%
Quote from: lorraina on Nov 28, 2025, 03:53 PMTwo brokers' projections.
Forbar 2028 ....PE 70.7 No divie.
Craigs 2028.....PE 29.8......1.96 cps divie. Yield 0.7%
I made good coin back in the day but I called it a SELL in 2014 at $8.50 on a PE of 36 and have never reinvested back into it since 11 years and two $1 billion capital raises later and its still lost two thirds of its value, (three quarters of its value in real inflation adjusted terms). You can't eat NTA and if they can't make decent coin and positive cashflow from their assets, (while building enough to replace the ones they're selling) then I would argue the discount to theoretical NTA is completely irrelevant, just as it is for OCA and was for ARV and MET.
Quote from: Basil on Nov 28, 2025, 04:04 PMYou can't eat NTA and if they can't make decent coin and positive cashflow from their assets, (while building enough to replace the ones they're selling) then I would argue the discount to theoretical NTA is completely irrelevant, just as it is for OCA and was for ARV and MET.
Can't eat NTA except for the fact you can.
But the OCA board rubbished that idea.
The future discounted cash generated by those assets will be well more than enough to justify the current market price, buyback or not.
And if all you care about is FCF yield then at no point in history was Berkshire a good investment decision.
Quote from: Shareguy on Nov 06, 2025, 03:19 PMLooks like it might hit $3 shortly. Looking forward to the 1H result. Wont be good but i'm picking that forward guidance will be better than expected.
Not good as expected and it was and we did briefly see a $3. Great buying at $2.05 in June. I think there is a lot more to go from here so have no plan to sell. I expect we might even see a $4 next year.
The Gold Rush is Over
Ryman listed in June 1999 and for more than a decade enjoyed unprecedented demand as the leading listed company in its field. Not only did it enjoy first mover listed advantage there was virtually no competition from unlisted players and we were enjoying an unprecedented sustained period of house price inflation.
Between mid 1999 and the peak of the housing market in late 2021 housing went up 456% whereas general inflation went up only 65% (source RBNZ inflation calculator and their real estate index calculator) so for more than 20 years housing inflation outstripped general inflation by more than seven to one ! Putting some numbers on this, a mid priced house worth $200K in mid 1999 went up to $1,112K whereas if it has just matched inflation it would be worth $330K. This enabled RYM an opportunity to resell licenses to occupy units for two to three times the original development cost and then do it again 10 years thereafter. The sector looked to be invincible and indeed RYM took on market darling status.
Housing became so unaffordable over that timeframe we've seen a sustained drop of 16% since then, despite inflation of 17.5% so housing is less outrageously overpriced in real inflation adjusted terms by a factor of one third than it was at the peak, but still vastly more expensive in real terms that when RYM listed. This sustained correction may have more road to travel due to a much lower pattern of immigration, lack of affordability and sustained efforts by central government to free up more land resources for development.
RYM's model was built upon selling mainly first class units at high prices and charging fixed fees for life and then reselling those licenses to occupy about ten years later for several times the original price. This was always where the real gold was made and is analogous to walking around and picking up huge nuggets of gold just lying on the ground.
It was so lucrative that just like any other gold rush there were soon other players itching to get into the action. Summerset listed in November 2011 at $1.40 and has carved out a niche in the middle segment of the market and done extremely well. In fact it's listing can be traced to when RYM's golden period of first mover advantage ended.
These days there are so many companies trying to extract an advantage from this sector its easy to make the case the market is vastly over supplied and only the very best operator SUM can make any money along with those supplying the picks and shovels to this sector.
My contention is quite simple. In most investors lifetimes, its exceptionally unlikely you'll ever see another sustained period of 20 years where housing outperforms the rate of inflation by 7:1 or even anything remotely similar but that is exactly the sort of sustained extreme bullish real estate environment that's needed for retirement companies to make serious coin again. Its simply not going to happen as housing even after the recent correction is still at unaffordable level's.
SUM have some really significant competitive advantages over RYM now which include:-
They still have a fully integrated internal development model with huge economies of scale.
They are still building new units at scale ~ 700 per annum, (the only one doing so of the listed players as others desperately try and repair stretched balance sheets and rectify slow moving stock issues) which confers huge market share gains to SUM in future years and better economies of scale with their head office costs.
SUM are not saddled with legions of residents stuck on ultra low fixed fees for life that's literally draining the lifeblood out of business operations at a village level. i.e. people still paying for example $99 per week fixed fees for life at RYM's villages are literally laughing all the way to the bank as its probably costing RYM near twice that now to service their needs. This will cause a huge drain on cash flow that will only gradually abate over the next decade or so.
There is only one company on the NZX in this sector worth investing in in my opinion. Only one that has come through the baptism of fire this sector has experienced with their reputation intact. Even SUM will only perform in a mediocre way in a new environment of heightened competition, losses in care and where all you are likely to ever make on a unit is in the initial development margin, (often sunk back into the village with common area facilities) and then the ongoing DMF going forward.
RYM performed well when it had all the sector tailwinds behind it, enjoyed first mover advantage and enjoyed the legendary services of the CEO Simon Challis. None of these factors apply any more. Worse, management that have followed on from Simon have all been underwhelming to say the very least.
There's vast amounts of listed and unlisted competition now for RYM and all now seem to be struggling to eek out even a very modest return on assets, a situation I expect will continue indefinitely. RYM have done themselves no favors with the myriad of accounting standard changes and highly questionable and quite frankly misleading original accounting practices. Two 1 billion dollar capital raises has avoided the ship sinking but I see systemic weaknesses now in their business model and while the good ship Titanic is now very unlikely to sink, it lacks some of the key drivers it once had and the analogy I see is it will limp along with bent propellors at a very mediocre cruising speed.
My 2 cents worth. Others will see it differently and think this sector will return to its glory days at some stage soon. Good luck with that.
Average of 4 professional analysts sees this getting to $3.20 one year hence and its rated an average hold.
Assets that cannot grow in real inflation adjusted terms and cannot give you a half decent dividend yield, investing money there is a dead end in my book. If all you can ever make with villages is the DMF maybe that's an acronym for Dead Money Forever in this sector ?
Great post Basil
I think you've summed up the current situation in the sector well
Half year report says they made 538 resales but bought back 619 ORAs ...81 units added to stock pile of unsold stock
I think this is indicative of their overall performance
Quote from: Basil on Nov 29, 2025, 02:16 PMThe Gold Rush is Over
Ryman listed in June 1999 and for more than a decade enjoyed unprecedented demand as the leading listed company in its field. Not only did it enjoy first mover listed advantage there was virtually no competition from unlisted players and we were enjoying an unprecedented sustained period of house price inflation.
Between mid 1999 and the peak of the housing market in late 2021 housing went up 456% whereas general inflation went up only 65% (source RBNZ inflation calculator and their real estate index calculator) so for more than 20 years housing inflation outstripped general inflation by more than seven to one ! Putting some numbers on this, a mid priced house worth $200K in mid 1999 went up to $1,112K whereas if it has just matched inflation it would be worth $330K. This enabled RYM an opportunity to resell licenses to occupy units for two to three times the original development cost and then do it again 10 years thereafter. The sector looked to be invincible and indeed RYM took on market darling status.
Housing became so unaffordable over that timeframe we've seen a sustained drop of 16% since then, despite inflation of 17.5% so housing is less outrageously overpriced in real inflation adjusted terms by a factor of one third than it was at the peak, but still vastly more expensive in real terms that when RYM listed. This sustained correction may have more road to travel due to a much lower pattern of immigration, lack of affordability and sustained efforts by central government to free up more land resources for development.
RYM's model was built upon selling mainly first class units at high prices and charging fixed fees for life and then reselling those licenses to occupy about ten years later for several times the original price. This was always where the real gold was made and is analogous to walking around and picking up huge nuggets of gold just lying on the ground.
It was so lucrative that just like any other gold rush there were soon other players itching to get into the action. Summerset listed in November 2011 at $1.40 and has carved out a niche in the middle segment of the market and done extremely well. In fact it's listing can be traced to when RYM's golden period of first mover advantage ended.
These days there are so many companies trying to extract an advantage from this sector its easy to make the case the market is vastly over supplied and only the very best operator SUM can make any money along with those supplying the picks and shovels to this sector.
My contention is quite simple. In most investors lifetimes, its exceptionally unlikely you'll ever see another sustained period of 20 years where housing outperforms the rate of inflation by 7:1 or even anything remotely similar but that is exactly the sort of sustained extreme bullish real estate environment that's needed for retirement companies to make serious coin again. Its simply not going to happen as housing even after the recent correction is still at unaffordable level's.
SUM have some really significant competitive advantages over RYM now which include:-
They still have a fully integrated internal development model with huge economies of scale.
They are still building new units at scale ~ 700 per annum, (the only one doing so of the listed players as others desperately try and repair stretched balance sheets and rectify slow moving stock issues) which confers huge market share gains to SUM in future years and better economies of scale with their head office costs.
SUM are not saddled with legions of residents stuck on ultra low fixed fees for life that's literally draining the lifeblood out of business operations at a village level. i.e. people still paying for example $99 per week fixed fees for life at RYM's villages are literally laughing all the way to the bank as its probably costing RYM near twice that now to service their needs. This will cause a huge drain on cash flow that will only gradually abate over the next decade or so.
There is only one company on the NZX in this sector worth investing in in my opinion. Only one that has come through the baptism of fire this sector has experienced with their reputation intact. Even SUM will only perform in a mediocre way in a new environment of heightened competition, losses in care and where all you are likely to ever make on a unit is in the initial development margin, (often sunk back into the village with common area facilities) and then the ongoing DMF going forward.
RYM performed well when it had all the sector tailwinds behind it, enjoyed first mover advantage and enjoyed the legendary services of the CEO Simon Challis. None of these factors apply any more. Worse, management that have followed on from Simon have all been underwhelming to say the very least.
There's vast amounts of listed and unlisted competition now for RYM and all now seem to be struggling to eek out even a very modest return on assets, a situation I expect will continue indefinitely. RYM have done themselves no favors with the myriad of accounting standard changes and highly questionable and quite frankly misleading original accounting practices. Two 1 billion dollar capital raises has avoided the ship sinking but I see systemic weaknesses now in their business model and while the good ship Titanic is now very unlikely to sink, it lacks some of the key drivers it once had and the analogy I see is it will limp along with bent propellors at a very mediocre cruising speed.
My 2 cents worth. Others will see it differently and think this sector will return to its glory days at some stage soon. Good luck with that.
Average of 4 professional analysts sees this getting to $3.20 one year hence and its rated an average hold.
Assets that cannot grow in real inflation adjusted terms and cannot give you a half decent dividend yield, investing money there is a dead end in my book. If all you can ever make with villages is the DMF maybe that's an acronym for Dead Money Forever in this sector ?
Great post Basil, I agree with your points. However I am confident that Ryman will continue its upward climb. The investor day will be a key catalyst. The resumption of dividends I think will be much sooner than consensus as will the speed of the turn around.
With an improving property market Ryman stands out as a perfect M&A target says Craig's.
Craigs say that both ARV and MET were acquired by private equity for 0.83 x NTA. Currently at 0.72
I'm picking that this time next year Ryman shareholders will have a bit more to cheer about.
Good luck with it Shareguy. I find it extraordinary that after raising $2 billion dollars they're still losing money and with no credible internal development team left and making losses on assets, I can't think why anyone would want to take them over. I guess there's a very slim chance but many OCA shareholders have been waiting for their get out of jail free card for many years.
I can see why SUM could be a target. Making real money on assets, underlying profit forecast of $1 a share this year, highly experienced board and management and highly skilled team running a fully integrated development model that's easily scaleable in Australia. Still at a discount to NTA too. Even at a 20% premium to NTA I reckon SUM a much better prospect for private equity because they make serious money and the business is easily scaleable
MCK much more likely to be taken over than OCA RYM or SUM in 2026 by a factor of many times in my opinion. I'm playing that possible takeover game.
Quote from: winner (n) on Nov 29, 2025, 03:50 PMHalf year report says they made 538 resales but bought back 619 ORAs ...81 units added to stock pile of unsold stock
I think this is indicative of their overall performance
This aligns with what my Dad at Summerset says - units are "sold" but still empty, waiting for the occupier to sell their home so they can settle and move in. How many of these "sales" later fall through due to the purchaser not being able to sell their house, or not being able to sell their house at the price they need to buy the RV unit?
Quote from: KW on Nov 30, 2025, 09:35 AMThis aligns with what my Dad at Summerset says - units are "sold" but still empty, waiting for the occupier to sell their home so they can settle and move in. How many of these "sales" later fall through due to the purchaser not being able to sell their house, or not being able to sell their house at the price they need to buy the RV unit?
I presume if a unit is counted as 'sold' then a deposit has been paid?
(So the risk/cost of the 'sale' falling through is reduced/mitigated??)
Quote from: Left Field on Nov 30, 2025, 10:30 AMI presume if a unit is counted as 'sold' then a deposit has been paid?
(So the risk/cost of the 'sale' falling through is reduced/mitigated??)
The deposit is $3000 and is fully refundable. So no. This is the risk when you have RV units priced higher than the average house price - most elderly living in old, unrenovated homes struggle to sell their house for more than what home buyers can buy a brand new home for. Thats why they used to be priced at 70% of the average house price in the area, but now they are actually more expensive.
Quote from: KW on Nov 30, 2025, 09:35 AMThis aligns with what my Dad at Summerset says - units are "sold" but still empty, waiting for the occupier to sell their home so they can settle and move in. How many of these "sales" later fall through due to the purchaser not being able to sell their house, or not being able to sell their house at the price they need to buy the RV unit?
I thought your dad was at Ryman's Kevin Hickman Village.?
This may have already been mentioned.
I understand from their website that weekly fees are no longer fixed.
...........................................................................................
I was wrong. New entrants actually have a choice of a fixed fee or one that is indexed.
Quote from: lorraina on Nov 30, 2025, 11:20 AMI thought your dad was at Ryman's Kevin Hickman Village.?
He originally wanted to go there, but I persuaded him to look at the others before committing, and in the end we all thought that Summerset Avonhead was the best pick. He wouldnt have to put up with construction going on for years, and all the facilities were already built and operating. Plus the villas are more private, and less crammed in.
His original reason for wanting to go to Ryman was his friends had put a deposit on an apartment there, but they later decided to cancel and just buy a normal apartment (non RV) instead. So it turned out for the best.
Quote from: KW on Dec 03, 2025, 02:58 PMPlus the villas are more private, and less crammed in.
I think that's been one of the key aspects of SUM success over the years.
RYM had a license to print money in their first 12 years with first mover advantage and they printed money so fast they almost ran out of paper lol but its really interesting to have a look at their performance since SUM listed in Nov 2011.
Over the last 14 years SUM has gone from $1.35 to $12.50, 9.25 times your money and paid a consistent modest dividend.
Over the same timeframe RYM has gone from $2.43 to $2.89, (should have gone to at least $3.39 just to match inflation with no return over those 14 years, source RBNZ inflation calculator), engaged in two value destructive capital raises especially the first billion dollar one in 2023 at $5 and failed to pay a dividend in recent years. They have also disestablished their entire internal development model, radically dialed back their build rate and are now lead by an inexperienced board and new fairly inexperienced management team.
SUM have basically eaten RYM's breakfast, lunch and dinner ever since they listed.
Basil "SUM are not saddled with legions of residents stuck on ultra low fixed fees for life that's literally draining the lifeblood out of business operations at a village level. i.e. people still paying for example $99 per week fixed fees for life at RYM's villages are literally laughing all the way to the bank as its probably costing RYM near twice that now to service their needs. This will cause a huge drain on cash flow that will only gradually abate over the next decade or so. "
Great post above Basil. The piece quoted above is exactly what I was referring to many posts ago. Ryman's fixed fees for life is very uneconomic after years of high inflation. The upcoming auckland average rates increase of 7.9% to pay for city rail link operating costs won't help. My Mum is 8 years in to her tenure at a Ryman village hopefully with many years to come and is on a very low weekly fee that that can never be increased and only 20% DMF. I think capital gain for Ryman over the period would be pretty much zero with weak outlook ahead.
Quote from: Basil on Dec 03, 2025, 03:50 PMI think that's been one of the key aspects of SUM success over the years.
RYM had a license to print money in their first 12 years with first mover advantage and they printed money so fast they almost ran out of paper lol but its really interesting to have a look at their performance since SUM listed in Nov 2011.
Over the last 14 years SUM has gone from $1.35 to $12.50, 9.25 times your money and paid a consistent modest dividend.
Over the same timeframe RYM has gone from $2.43 to $2.89, (should have gone to at least $3.39 just to match inflation with no return over those 14 years, source RBNZ inflation calculator), engaged in two value destructive capital raises especially the first billion dollar one in 2023 at $5 and failed to pay a dividend in recent years. They have also disestablished their entire internal development model, radically dialed back their build rate and are now lead by an inexperienced board and new fairly inexperienced management team.
SUM have basically eaten RYM's breakfast, lunch and dinner ever since they listed.
Actually - Ryman was around (or even over) $15 once. Was this Couta's 1 RYM equals 2 SUM? SUM wasn't always that positiv - I think we prepared even at some stage a letter to their board for Norahs funny share dealings?
So - RYM still holds the higher top. Will they come back? Who knows, but we know how difficult it is to accurately predict the future ...
... and yes, personally I would as well prefer a nice and secluded villa rather than sitting in a box in a huge multi-storey retirement cage. Having said that - our kids live in Singapore in a nice appartment somewhere above the 20th floor level - and I can't remember any issues with neighbours or similar. You just don't hear them. It is possible to create nice and friendly appartments in large house blocks. Haven't tried though the RYM houses so far.
Good to see that the ceo has topped up.
https://www.nzx.com/announcements/464222
Quote from: Shareguy on Dec 11, 2025, 02:48 PMGood to see that the ceo has topped up.
https://www.nzx.com/announcements/464222
Average now $2.83 for her $750k worth of shares
In the money now
And next target will be $3.05 where she nobly participated in cap raise
Shareguy - that 3 bucks net week?
Quote from: winner (n) on Dec 11, 2025, 04:01 PMAverage now $2.83 for her $750k worth of shares
In the money now
And next target will be $3.05 where she nobly participated in cap raise
Shareguy - that 3 bucks net week?
Hopefully. But it will happen............
Quote from: Shareguy on Dec 11, 2025, 04:29 PMHopefully. But it will happen............
WOW ~ 5 million went through just after the close. You doing a small top up mate ?
Quote from: Basil on Dec 11, 2025, 05:25 PMWOW ~ 5 million went through just after the close. You doing a small top up mate ?
Ha, No not me. I have more than enough as it is.
https://stockhead.cmail19.com/t/d-l-gthidtk-yupddjlly-j/
Quote from: lorraina on Dec 13, 2025, 11:55 AMhttps://stockhead.cmail19.com/t/d-l-gthidtk-yupddjlly-j/
Thanks for posting. Very positive
As the over 80s cohort triples to 3.5 million people over the next four decades, Ryman and Regis as rare ASX entrees to a sector with dead-certain growth prospects.
Doesn't look like we are going to see $3 by years end
Wonder how long in to 2026 it'll take to get there .... and continue rising from there
Quote from: winner (n) on Dec 31, 2025, 11:06 AMDoesn't look like we are going to see $3 by years end
Wonder how long in to 2026 it'll take to get there .... and continue rising from there
Hmm - analyst consenus is $3.22. Even if we assume they are right (they rarely are), you still might wait some time.
Just looking at the analyst consensus of my watchlists - over the last 12 months they got it right in 41% of their predictions (i.e. SP went to the predicted price or higher), and the reminder was wrong or pointless (i.e. consensus lower than original price).
But I guess predictions are better during boom years - so, if we just moved through the low point, things might be better next year.
In a longer timeframe I think all retirement villages should have plenty of opportunities. Baby boomers retiring plus all the people who want to come here to avoid the next world war ... but whether this happens next year or a couple of years later ... who knows?
Anyway - I've got a number of retirement villages in my war time portfolio. Property and production facilities did well after both WW 1 and WW 2.
Despite the context, this might be a good opportunity to wish everybody a great 2026. We can't stop liars and bullies running the largest countries on earth, but we can try to still find a good place to live despite the mess created by them.
Good luck & all the best ...
Well we got to $3 briefly and finished the year well up from its lows.
The investor day on Feb 3 I'm picking will be positive and will hopefully push it over the $3.
Craigs reckons they will announce a land bank reduction from 4421 units to 2965 which is huge (33%). Future focus to be on completing villages and less capital intensive greenfield sites.
I think Ryman is worth a punt - but not much more than a punt. Like Promisia.
I think that the demographics are a positive, but that over time the politics are a negative.
Still, a punt's a punt for all that. . . is five years a short enough time
Shareguy. ...share price got got to $3.00
Where to now?
Quote from: winner (n) on Jan 12, 2026, 02:50 PMShareguy. ...share price got got to $3.00
Where to now?
We got there before Winner and it did not hold. The investor day I think will be a catalyst.
At least they caught it before it got really out of hand. Article paywalled
https://www.nzherald.co.nz/property/ryman-healthcare-one-of-many-companies-snagged-by-237m-holiday-pay-problem/premium/QGMNER6KSVAAHGRALAVBM3ZBK4/
Quote from: Shareguy on Jan 09, 2026, 08:44 AMWell we got to $3 briefly and finished the year well up from its lows.
The investor day on Feb 3 I'm picking will be positive and will hopefully push it over the $3.
Craigs reckons they will announce a land bank reduction from 4421 units to 2965 which is huge (33%). Future focus to be on completing villages and less capital intensive greenfield sites.
Quite extraordinary that after two ~ $1 Billion capital raises they have dialed back their future development plans so radically. Meanwhile over at Summerset who have always followed the development pathway RYM are now finally pursuing, their build rate remains unabated despite no capital raisings. Chalk and cheese those two companies. Discount to NTA is a red herring in my opinion.
Can't even get holiday pay calculations right and have to use external consultants. My goodness...
Latest update is not bad news and will improve confidence that the worst is behind them. Market should like it.
https://www.nzx.com/announcements/465910
Quote from: Shareguy on Jan 15, 2026, 10:41 AMLatest update is not bad news and will improve confidence that the worst is behind them. Market should like it.
https://www.nzx.com/announcements/465910
Update seems to have down like a lead balloon eh Guy
Thinkmit says that whatever they intend doing it's going to be a long hard struggle to show aby tangible improvement in performance
I don't think so Winner, just a down day on the market. There was no real bad news which is the second release without bad surprises. We need the housing market to start to improve, but I am confident that patience will be rewarded.
Summary from Craigs
Improve recurring cashflows by $150m by FY29, at the top end of its prior $100-150m target range. RYM aims to double (1) EBITDA per care bed from $15k to $25-30k by FY29, and improve yield on Retirement NTA to 5% over the next decade, through a combination of reducing vacancy (with Serviced Apartments a focus), price increases and cost reduction (partly enabled by regulatory reform). RYM's 5% target yield on NTA at Group-level looks consistent with SUM's yield on mature villages.
(2) Recommence paying dividends from FY28, with a payout ratio of 20-50% of CFEO. We agree RYM should pay dividends out of cashflows, but argue CFEO will be too volatile on its own (given working capital movements). RYM's target implies a dividend yield of 1.0-2.5% of NTA.
(3) Reduce gearing from 28% as of September balance date to 20-25% by FY29, but then may potentially increase to 20-30% long term.
(4) Reduce its greenfield landbank to 1940 units and beds, below our prior estimate, as Ryman has decided to exit two broad acre sites, at Rolleston (354 units/beds) and Kealba (264 units/beds), due to concerns around competition and demographics in their catchments. Ryman's divestment programme will now see it sell 9 sites in total, raising $200m. Ryman will retain the high density sites at Essendon, North Cobourg and Takapuna as we had thought likely. Overall, RYM's reduced landbank points to a build rate of c.200-300 units and beds per annum long run (vs CIPe c.260), though it is likely to be less than this over the medium term.
Meanwhile SUM are building approx 700 units per annum and likely to ramp up further in the years ahead as they expand in Australia. Hmmm.
Quote from: Basil on Feb 05, 2026, 01:21 PMMeanwhile SUM are building approx 700 units per annum and likely to ramp up further in the years ahead as they expand in Australia. Hmmm.
Which may or may not be good.
I guess this is one of the things you only notice afterwards .... didn't at the last crisis the fast growers have the biggest issues?
Quote from: BlackPeter on Feb 05, 2026, 03:32 PMWhich may or may not be good.
I guess this is one of the things you only notice afterwards .... didn't at the last crisis the fast growers have the biggest issues?
SUM have gradually increased their their build rate over the 14 years they've been listed with no drama's of any significance and no need to raise fresh capital.
All I'm saying is its staggering that RYM was once building ~ 1,000 units a year, and now even after 2 x $1 Billion capital raises is reduced to only building 200-300 units. Surely you'd agree that's a pretty spectacular fall from grace. Not only is their about a quarter of the former new build development margin going forward, that's on a vastly expanded number of shares and in the long run if you're not building decent numbers of units it obviously impacts the number of resales. My contention is quite simply, RYM is a pale shadow of the company it once was and SUM are going to continue to eat away at their market share in the future.
Quote from: Basil on Feb 05, 2026, 09:18 PMSUM have gradually increased their their build rate over the 14 years they've been listed with no drama's of any significance and no need to raise fresh capital.
All I'm saying is its staggering that RYM was once building ~ 1,000 units a year, and now even after 2 x $1 Billion capital raises is reduced to only building 200-300 units. Surely you'd agree that's a pretty spectacular fall from grace. Not only is their about a quarter of the former new build development margin going forward, that's on a vastly expanded number of shares and in the long run if you're not building decent numbers of units it obviously impacts the number of resales. My contention is quite simply, RYM is a pale shadow of the company it once was and SUM are going to continue to eat away at their market share in the future.
No doubt about the past, and how both of the companies will look in 5 or 10 years from now - nobody knows.
Looking at the value of the share is it however not difficult to see, that Rymans SP is (compared to the underlying value) lower than SUM. Pretty easy to see, why the market gives SUM a bonus and RYM a discount.
Based on that do I think that RYM has based on curent SP rates a better chance to increase its value than SUM. Not hard to imagine in a handful of years a RYM share trading again between 5 and 6 dollars (i.e. doubling). Personally I'd think that Ryman will double its current SP earlier than SUM.
As I said ... no one knows how the businesses are run in 5 or 10 years and how they perform, but at this stage I see RYM's shares just as much higher discounted than SUM.
Anyway, hold both, but admittedly - more in Ryman.
Quote from: BlackPeter on Feb 06, 2026, 09:33 AMBased on that do I think that RYM has based on curent SP rates a better chance to increase its value than SUM. Not hard to imagine in a handful of years a RYM share trading again between 5 and 6 dollars (i.e. doubling). Personally I'd think that Ryman will double its current SP earlier than SUM.
I remember the days when many Ryman zealots were adamant 1 RYM was always going to be worth 2 SUM.
Now its about 4 times the other way round lol.
Share prices follow earnings per share and that's why OCA has gone nowhere other than range trade since they listed nearly 9 years ago and also why with no earnings RYM is completely lost in the wilderness and likely to stay that way for years. They even want to reinvent the way they measure earnings....gosh, all hope is lost when they abandon underlying profit which has been the benchmark in this sector forever and a day.
Buying retirement companies based on discount to NTA is a big mistake in my opinion but each to their own.
Quote from: Basil on Feb 06, 2026, 02:25 PMI remember the days when many Ryman zealots were adamant 1 RYM was always going to be worth 2 SUM.
Now its about 4 times the other way round lol.
Share prices follow earnings per share and that's why OCA has gone nowhere other than range trade since they listed nearly 9 years ago and also why with no earnings RYM is completely lost in the wilderness and likely to stay that way for years. They even want to reinvent the way they measure earnings....gosh, all hope is lost when they abandon underlying profit which has been the benchmark in this sector forever and a day.
Buying retirement companies based on discount to NTA is a big mistake in my opinion but each to their own.
Hmm - clearly coutas longterm proposition re RYM:SUM was wrong ... but lets face it, I never supported his theorem. The same is true about your current downtalking of RYM. Will change with the trend, and trends do change.
That's the thing with cyclical companies - some praise them at high and dump them at low, while others buy them at low and sell tham at high. Personally I prefer the second strategy.
Not quite sure about your remark buying based on NTA? I don't think I ever did that or recommended that. At best it is one of many indicators (and depends on the quality of the assetts as well). My financials are looking at NTA, past and future PE, analyst assumptions, risks, market predictions. But sure - my future predictions are as good or bad than everybody elses - which includes you as well.
I called RYM a sell in 2014 at $8.50.
I remain happy with that call.
Some people get it that this company has two parts to its history. When Simon Challis was CEO and after that. Management quality since he left has been poor to say the least.
Oliver Manders assessment of the RYM investor day ...
https://www.nzshareholders.co.nz/scrip-article/a-new-course-for-ryman-healthcare/
As far as I can see the article can be accessed by everybody. If there are however problems, just join the NZSA - a great way to help them to help NZ shareholders! Anyway - if you are not a current member, why not join them anyway?
I threw a whole bunch of the recent forum posts from here into AI along with their recent Investor Day information pack and got the following.
1. The DMF contract book turn is doing the heavy lifting and nobody's talking about it
75% of incoming residents are already signing on 30% DMF terms. The legacy book is largely on 20%. Ryman expects around half the portfolio to be on the new terms by FY29. This isn't aspirational — it's arithmetic. Every resale that settles mechanically upgrades the DMF rate on that unit permanently. Even if property prices go sideways and management execute nothing else, DMF cash collections are growing materially each year just from turnover. This is the closest thing to a free lunch in the entire investment case and it barely rates a mention.
2. The serviced apartment pivot is the most interesting strategic move and got zero airtime
Q3 new serviced apartment sales were 40 — more than double Q2 and the best quarter in the dataset. Meanwhile everyone's focused on independent living unit sales easing (which was explicitly flagged as expected post-Nellie Melba Stage 4).
The Investor Day reveals they're piloting a fundamentally different serviced apartment model — flexible à la carte services, "age in place" capability, premium care suites. They're trying to turn what is currently the highest-vacancy product in the portfolio into an assisted living platform that bridges independent living and full aged care.
If this works, it creates a recurring service revenue stream that didn't exist before and addresses the biggest occupancy problem in the portfolio simultaneously. Average entry age for SAs is 85.7 years — right in the sweet spot of the demographic wave. Early-stage pilot, so execution risk is real, but the strategic logic is sound.
3. The Resident Fund product is quietly brilliant and nobody mentioned it
This is new and genuinely innovative. When a resident moves from independent living to aged care, instead of Ryman paying out their ORA equity and then trying to attract new capital into the care room, the resident can carry their equity across. The daily room premium gets discounted as an incentive.
The worked example in the deck: Ryman collects $31k in premiums plus saves $33k in interest over a 24-month care stay. $8.3m retained since pilot launch with 15%+ conversion rates. 30% of care residents already transfer from within Ryman villages, so the addressable base is large.
This is a genuine competitive moat. Standalone aged care operators can't offer it. It solves the cash-out/cash-in timing mismatch that has been one of the fundamental problems with the business model, and it eliminates the DMF tenure risk on the care side.
If they can scale this to even 30–40% conversion on internal transfers, the impact on net cash flow is meaningful. I'd like to see this broken out in future results reporting.
4. The $800m stock overhang — do the maths against market cap
The deck quantifies unsold stock at ~$800m across 1,335 units: $470m in new sales stock and $330m in paid-out resale stock where the previous resident has already been repaid.
Market cap is ~$2.5 billion. The paid-out resale stock alone is pure cash release — no development spend, no refurbishment beyond what's already done. Selling through that $330m would be equivalent to ~13% of the market cap returning as cash to the business. Combined with the $200m+ land divestment target ($110m already contracted), you're looking at potential $500m+ cash release over the next 2–3 years.
The constraint is obviously housing market conditions and pricing discipline. But even at a modest selldown pace, the cash generation from existing stock is substantial.
5. The question nobody is asking: what happens if the NZ housing market actually recovers?
All of the targets in the Investor Day appear to assume flat-to-modest property price growth. The $150m CFEO improvement is built on occupancy, contract book turn, cost savings, and care margin — not property price appreciation. Property prices aren't even mentioned as an assumption.
Think about what that means. If Auckland (where a big chunk of the portfolio sits) recovers even 10–15% from here over the next 2–3 years — which is not aggressive given it's already well off peak — the upside to resale margins, new sales pricing, and capital gains is entirely incremental to the guided $150m. The entire Investor Day framework is essentially built on a "no property recovery" base case.
6. The real bear case isn't the one people are debating
The actual risk with Ryman at this point isn't whether SUM is a better operator (it clearly has been). The risk is time.
No dividends until FY28. CFEO improvement phased over 3+ years. Political dependency on NZ care funding reform (recommendations due before the election — what if the election changes the calculus?). Housing market recovery timing uncertain.
If you're earning 5% in a term deposit and Ryman takes 3 years to re-rate to $4.50, your annualised return is roughly 16% — excellent. But if it takes 5 years, it's roughly 9% — still decent but you've carried meaningful single-stock risk and illiquidity for that. The margin of safety in the price protects your capital, but the opportunity cost of being early is real.
Quote from: Shareguy on Jan 12, 2026, 04:20 PMWe got there before Winner and it did not hold. The investor day I think will be a catalyst.
That $3 seems to be getting further and further away..... $2.48 as I post
Quote from: winner (n) on Feb 20, 2026, 02:48 PMThat $3 seems to be getting further and further away..... $2.48 as I post
Yes agree, the investor day disappointed and signs the housing market were turning positive especially in Auckland where Ryman have a lot of unsold stock have stalled. It's not just Ryman, it's a sector wide issue, which is reflected in the other listed operators share prices as well.
Even though Rymans FY26 year guidance is for 1300 to 1400 total sales Ryman reported 2% quarter on quarter growth in third quarter but when you back out the two villages that were closed in Christchurch new sales were down.
Ryman have a lot of unsold stock especially serviced apartments. No divi till 2028 has not helped either.
On the positive they are sorting their stuff out and are still a quality offering with a much lower debt profile. I see it as a longer term safe play waiting for attention.
Quote from: Shareguy on Feb 21, 2026, 07:46 AMI see it as a longer term safe play waiting for attention.
I don't foresee anything that's going to break the Auckland real estate market out of the multi year malaise its been in. Prices have continued dropping despite substantial reductions in mortgage rates and the immigration level's simply aren't there. What happens to prices when interest rates start going up again ? Investors dumping rental properties because of grossly inadequate net yield after all compliance and repair costs, rents falling, baby boomers leaving the big smoke to retire somewhere more peaceful and free up some capital, honestly I could write an entire page on the reasons why I believe the Auckland market in particular could stay stuck in the doldrums for many years to come which is in my opinion going to seriously impact all companies in this sector, especially RYM with its substantial number of unsold Auckland units. RYM's business model simply doesn't work when real estate prices are in a sustained downturn. We're four and a half years into this real estate downturn. What if it lasts a whole decade or even longer ?
Thought to ponder. What's makes this a safe investment ? People thought the value made it safe at the $5 mark a few years ago with the first capital raise, then surely it was safe at the $4 mark a while later, then $3 at the following capital raise, surely that was the bottom and then after the underwriters cleared the overhang, surely that was the bottom but no, the downtrend is back and its well and truly broken below the 200 day MA and back stuck in a downtrend. The 6 month chart looks truly awful. Is $2 the bottom ? Maybe $1.50 ? Slower sales could easily see them kick the can down the road with the extremely modest dividend they seem to have penciled in for FY28. This could stay stuck in the doldrums for many years and all that while you get no dividends or dividends so incredibly low they might just as well be nothing but the real loss is the returns you could have got elsewhere investing in a quality company that really is growing earnings. This is not a "safe" investment in my opinion.
Quote from: entrep on Feb 18, 2026, 01:47 PMIf you're earning 5% in a term deposit and Ryman takes 3 years to re-rate to $4.50, your annualised return is roughly 16% — excellent. But if it takes 5 years, it's roughly 9% — still decent but you've carried meaningful single-stock risk and illiquidity for that
What's the yield if the price 5 years from now is $2 ?
just posting this for those who haven't seen it.
https://www.sharesies.nz/learn/shared-lunch-cash-never-lies-ryman-healthcare
these stocks seem get a good bump when featured.
Quote from: HAWKDOG on Feb 26, 2026, 06:27 AMjust posting this for those who haven't seen it.
https://www.sharesies.nz/learn/shared-lunch-cash-never-lies-ryman-healthcare
these stocks seem get a good bump when featured.
Posted two weeks ago, though?
Quote from: Basil on Feb 25, 2026, 10:42 PMWhat's the yield if the price 5 years from now is $2 ?
$2.90 to $2.00 over 5 years, no dividends for the first two, modest dividends from FY28:
Without dividends: (2.00 / 2.90)^(1/5) − 1 = roughly −7.1% per annum
If you assume ~30 cents total in dividends across years 3–5 (which is roughly the midpoint of the 20–50% CFEO payout range): (2.30 / 2.90)^(1/5) − 1 = roughly −4.5% per annum
Meanwhile your term deposit returned 5% risk-free. So the real opportunity cost in that scenario is −9.5% to −12% per annum relative to the alternative — compounded over five years, that's a devastating gap of roughly 40–50 cents of cumulative wealth per dollar deployed.
Good work Entrep. Under that scenario for RYM investors what's the wealth destruction per dollar relative to Turners if we assume the share price of TRA grows for the next 5 years at their previous 5 year EPS CAGR of 12% + dividend yield of 6% also growing at a 12% CAGR ?
This may look like an outrageous question but it's not. Its asked to illustrate the real opportunity cost relative to a high performing growth stock.
Quote from: entrep on Feb 26, 2026, 09:05 AMPosted two weeks ago, though?
Yup
Had a positive bump after it
RYM in scathing alleged abuse of an elderly alzheimers patient in their care.
Details in RNZ interview today @ 9:05 am with Kathryn Ryan.
https://www.rnz.co.nz/national/programmes/ninetonoon
Daughter speaks out about her mother's horror treatment at care home
"The daughter of a woman injured in a Ryman retirement village is speaking out after her mother's arm was broken and shoulder dislocated after being pulled over by a care worker. Janice Foreman's injuries were captured on internal camera footage, released to her daughter Nicky, and seen by Nine to Noon.
The carer seen in the footage yanking on Janice's arm moments before the footage shows her lying on the floor, has since left Ryman. Janice remained on the floor for some time, with no one coming to comfort her, and other stepping over her as she cried in pain. It was six hours before she was finally taken to Auckland City Hospital,"
Quote from: Left Field on Jun 29, 2026, 09:21 AMRYM in scathing alleged abuse of an elderly alzheimers patient in their care.
Details in RNZ interview today @ 9:05 am with Kathryn Ryan.
https://www.rnz.co.nz/national/programmes/ninetonoon
Daughter speaks out about her mother's horror treatment at care home
"The daughter of a woman injured in a Ryman retirement village is speaking out after her mother's arm was broken and shoulder dislocated after being pulled over by a care worker. Janice Foreman's injuries were captured on internal camera footage, released to her daughter Nicky, and seen by Nine to Noon.
The carer seen in the footage yanking on Janice's arm moments before the footage shows her lying on the floor, has since left Ryman. Janice remained on the floor for some time, with no one coming to comfort her, and other stepping over her as she cried in pain. It was six hours before she was finally taken to Auckland City Hospital,"
No information available which shows whether this was an accident and maybe lack of staff training to look after accidents - or whether this was open abuse.
I had in the family two people with alzheimers - and both fall, injured themselves and died afterwards ... without any staff causing the injuries.
What I am saying is - clearly - it doesn't sounds good. But using this based on the available information to run down Ryman is just nonsense.
Maybe a good time to investigate this for the authorities and for us to wait for the report?
Quote from: BlackPeter on Jun 29, 2026, 10:37 AMNo information available which shows whether this was an accident and maybe lack of staff training to look after accidents - or whether this was open abuse.
I had in the family two people with alzheimers - and both fall, injured themselves and died afterwards ... without any staff causing the injuries.
What I am saying is - clearly - it doesn't sounds good. But using this based on the available information to run down Ryman is just nonsense.
Maybe a good time to investigate this for the authorities and for us to wait for the report?
Listen to the interview then judge for yourself. It is far from "just nonsense"
Video evidence tampered with... but remaining footage shows extreme lack of care.
Ryman staff member involved was sacked....
The mother's jewellery 'disappeared"
The govt agency tasked with reviewing this only has 2 staff tasked to this complaint and was unable to investigate until over 12 months after the event.
Go figure.
Quote from: Left Field on Jun 29, 2026, 10:46 AMListen to the interview then judge for yourself. It is far from "just nonsense"
Video evidence tampered with... but remaining footage shows extreme lack of care.
Ryman staff member involved was sacked....
The mother's jewellery 'disappeared"
The govt agency tasked with reviewing this only has 2 staff tasked to this complaint and was unable to investigate until after 12 months after the event.
Go figure.
You picked the words "just nonsense". Interesting way to argue with yourself.
As well - if the things you state in your post are true, then they don't need a 2 person government department, but NZ police (who clearly has more staff) to investigate. Just approach them, that's what they are for.
I'm sure this goes on in every aged care home. Hiring a lot of untrained and unskilled workers who have recently immigrated here and don't speak English well - is always going to end up with people working in jobs for which they are unsuitable. You cant vet foreign workers, cant do police checks, cant do vocational checks. All these workers need is a piece of paper saying they did some course at some organisation, and thats enough to get them a visa and a job. There are no quality checks these days.
And despite that, elderly people are still safer in an aged care institution than in their own homes. Since 88% of elder abuse is committed by family members.
"Elder abuse is a hidden crisis affecting an estimated 1 in 10 older New Zealanders. The most recent national figures from the Age Concern New Zealand network recorded 2,817 alleged abuse cases in a single 12-month period. Of these, 88% of the alleged abusers were family members."