RYM-Ryman

[Basil]

Some 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

[Untamed]

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.

[Basil]

From behind the paywall in that article - Extracts "

The 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".

"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.

[KW]

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

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

[winner (n)]

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

[Stockgathering]

Maybe also look at skills of the CEO, how relevant is retail experience to RYM?

[BlackPeter]

Maybe 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.

[Stockgathering]

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.

[winner (n)]

Maybe 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

[Arbroath]

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

[BlackPeter]

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

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 ...

[Teitei]

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 ...

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?

[winner (n)]

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?

Great buying at these prices though ..... riches will follow just as there's always sunshine after rain (Dire Straits)

[Teitei]

Great 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.

[BlackPeter]

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?

Buying cheap and selling dear works for me. How are you operating?