Creating Shareholder ValueWe 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 13 years ago we have built 4,550 retirement village units and aged care beds, investing over $970 million – all of which has been funded out of operating cash flows, while profits and dividends have grown 14 fold.
As a result we have reinvested heavily in the business, so the capital base just keeps getting stronger, and have also paid out over $240 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.
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.
In addition to this, the ageing of the 75+ population is now at a point of inflection – with long term exceptional growth for the next 30 years.
There are currently estimated to be 262,000 people aged 75+ years, who are the primary market for our villages - and this number has only been growing at a steady rate of 5,000 per annum for the past 15 years.
By 2016 that growth rate will have more than doubled to 11,000 per annum. With the advent of the baby boomers in 2022 this number will lift again to 18,000 per annum, and this growth rate will be sustained for at least 20 years.
Within the next 20 years the population 75+ will have more than doubled to over 538,000.
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.
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 700 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 three 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 at Wheelers Hill, Melbourne.
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.
Our appetite for growth remains.
We plan to lift our build rate to 700 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 25 villages nationwide, and from a value of $135 million on listing to over $1.5 billion today.
Since listing in 1999 the company has increased profits and dividends fourteen-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%.”