Creating Shareholder Value

We create value every time we establish a new village, as we know how to cost effectively build and deliver a great service to our residents. A completed village thereafter provides us with a growing tail of realised profits.

The best evidence of this is our performance over a long period of time.  Since listing 12 years ago we have built 3,850 retirement village units and aged care beds, investing over $845 million – all of which has been funded out of operating cash flows, while profits and dividends have grown 12 fold. 

As a result we have reinvested heavily in the business, so the capital base just keeps getting stronger, and have also paid out $200 million to shareholders in dividends since we listed.

Our strong balance sheet and cash flows, together with secure bank funding for work in progress, is a key source of competitive advantage - at a time when many others are struggling with capital requirements.

The Opportunity

There remain many locations throughout New Zealand which are ideally suited for a Ryman village, and we are continuing to see a strong number of land opportunities from which we will continue to pick the best.

Most importantly, we are now entering a prolonged period where the elderly population will increase at a significantly faster rate than ever before.  In fact, the number of people aged 75 years and over is set to increase on average by 12,000 per annum for the next 20 years.

Our confidence in Ryman’s future prospects is therefore not just the result of the quality of what we do – our purpose designed villages meet a very real, and growing, need in the community.

Outlook

Sustainable business is about having the right balance between happy residents and happy shareholders.

Our plans are to achieve continued earnings growth for our shareholders in three ways:

Firstly, we will continue to see a growth on growth effect at completed villages, especially from those villages built in more recent years as they reach their full earning potential.

Secondly, we plan to continue rolling out new villages at our new rate of 550 new units and beds per annum.  Our landbank is in good shape – with enough land to sustain our building programme for at least the next four years.

And finally, you can also expect to see us entering the lucrative Australian aged care and retirement village market, by carefully progressing our first development site once acquired.

We greatly appreciate the trust that residents and their families place in us to provide first class care and great surroundings.  Likewise, we very much value the loyal support we have received from our shareholders.

 

Growth Plans

Our appetite for growth remains.

We plan to lift our build rate to 550 units or beds rooms per annum in New Zealand to meet the growing demand Ryman is experiencing.

We have a strong balance sheet, a proven business model plus an enthusiasm and commitment to challenging ourselves and to being the first choice for elderly New Zealanders.

There are any number of communities around New Zealand which do not enjoy the option of a Ryman style village, and the older population is growing rapidly. The number of people aged 75 plus has grown at the rate of 5,000 per annum for the past two decades, a period in which we have enjoyed strong growth. Over the next two decades the 75 plus population is projected to grow at the rate of 12,000 per annum.

We look forward to delivering on our growth plans, offering great service to our residents and achieving great returns for our shareholders.

On 29 June 2009, Ryman celebrated its tenth anniversary of the company’s listing on the NZX, and becoming one of the Top 10 listed companies in New Zealand over the past decade.

On 29 June 1999, 1600 shareholders invested in the Christchurch-based retirement village provider that was expanding into the North Island and promised significant growth potential. Those shareholders have participated in the remarkable growth of the company – from 7 to 22 villages nationwide, and from a value of $135 million on listing to $1 billion today.

Since listing in 1999 the company has increased profits and dividends twelve-fold without seeking any fresh capital from shareholders.

In celebrating ten years of being listed in June 2009, NZX noted that:

 

“Ryman has been New Zealand’s top performing listed company over the 10-year period, marking its special anniversary with a total return to shareholders of 481%, representing annualised returns of 19%.”