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 14 years ago we have built 5,400 retirement village units and aged care beds, investing over $1.26bn – all of which has been funded out of operating cash flows, while profits and dividends have grown 16 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 $290 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.
30 Years of exceptional demographic growth is ahead of us
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. The opportunity in Victoria, Australia, is even larger.
The company has doubled its underlying profits over the last five years. This has been achieved during a time where the 75+ population has been growing at a relatively flat rate of 5,000 per annum.
Over the next 10 years the rate of growth in the 75 + population lifts four fold.
So, we are now at the point of inflection for the aging of the 75+ population - and this significant lift will continue for the next three decades. In fact, Statistics NZ estimates the number of New Zealanders aged 75 plus will almost triple to 731,000 over the next thirty years. In Victoria the outlook is similar, with the number set to triple to 1.1 million.
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 in New Zealand. 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 have lifted our build rate to 700 units and beds 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. Statistics NZ estimates the number of New Zealanders aged 75 plus will almost triple to 731,000 over the next thirty years. In Victoria the outlook is similar, with the number set to triple to 1.1 million.
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 $3.0 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%.”