RYM-Ryman

[anotherday]

there are massive interest cuts coming before 31 March 2026.

[Basil]

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.

[KW]

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.

Also the SUM announcement was only sales numbers, with no dollars attached.  You can sell anything if the price is reduced enough.  

[winner (n)]

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

[Shareguy]

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.

[Dolcile]

Am I reading this right, RYM has less ORA sales than SUM?

[ValueNZ]

Am 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.

[anotherday]

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.

[Shareguy]

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.

[Greekwatchdog]

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%.

[Shareguy]

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

[Shareguy]

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).

[winner (n)]

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.

[Basil]

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. 

[lorraina]

Two brokers' projections.
Forbar 2028 ....PE 70.7      No divie.
Craigs 2028.....PE 29.8......1.96 cps divie. Yield 0.7%