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Creating Shareholder Value

We create value every time we establish a new village, as we know how to build and deliver a great village and service to our residents in a cost-effective way. Once completed, a village provides us with a growing tail of recurring income.

The best evidence of this is our performance over a long period of time. Since listing in 1999 we have built more than 500 retirement village units and aged care beds, investing over $3.1bn – all of which has been funded out of operating cash flows, while profits and dividends have grown 31-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 $690 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.

Projected 75 population growth 2015


30 years of exceptional demographic growth is ahead of us

Construction

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.

Over the next 10 years the rate of growth in the 75 + population lifts significantly with the number of people aged 75+ in New Zealand and Victoria is forecast to nearly triple over the next 30 years. In New Zealand, the population in this age group will rise from around 300,000 today to over 850,000 in 30 years’ time. In Victoria, it will lift from around 400,000 today to over 1.2 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.


Outlook

Construction_2Sustainable 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 are building momentum in the lucrative Australian aged care and retirement village market. Our aim is to have five villages open in Victoria by 2020.

And finally, we plan to continue rolling out new villages in New Zealand and Victoria and expect to match the New Zealand build rate in Victoria by 2020 (two villages in New Zealand and two villages in Victoria). Our landbank is in good shape with enough land to sustain our building programme for at least the next four years.

NZ aged care bed demand