RYM-Ryman

[Greekwatchdog]

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/

Still not a people's prison as people have a choice to Purchase these.

And now you see why SUM are in front.

[Basil]

Still 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.

[Greekwatchdog]

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.

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?

[Greekwatchdog]

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.

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

[Buzz]

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.

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.

[KW]

Still 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.

[Basil]

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.

[Greekwatchdog]

Just as well those buying the units have a choice and arent sent their to do time

[mike2023]

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.

[Buzz]

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.

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. 

[Gerald]

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.

[Dolcile]

I see on page 7 of todays presentation that there is a further $77m reduction in NTA to come through the next reporting.

[Buzz]

I 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."

[Ferg]

More cockroaches coming out of the woodwork.  Hopefully that's the last of them.

[winner (n)]

We already knew apparently

Ryman notes that the presentation does not include any material information which has not been released to the market previously.