Ryman Healthcare targets NZX high

ALAN WOOD
Last updated 05:00 07/01/2013

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Ryman Healthcare is aiming to be the No 1 company on the NZX.

It has already moved into the top five and its market capitalisation sneaked over the $2 billion mark recently.

Last year, Ryman was one of the NZX's best performers, with its shares rising 68 per cent.

Managing director Simon Challies said the retirement village operator's performance, including record profit growth over the past 10 years, had attracted the attention of overseas fund managers, which had taken an increased stake in the past six to 12 months.

Challies said it was difficult to compile a total for overseas holdings as many were held by nominees.

"What I can tell you is that the company is attracting a lot of interest from investment funds in Aussie and further afield."

The interest was also being generated by Ryman's strong building programme.

The company, which moved its headquarters to the edge of Christchurch following the damaging February 2011 earthquake, has a 15 per cent profit growth target.

Ryman's share price improved further this year when it lifted its build rate to 700 retirement units and aged-care beds a year, in response to the strong demand it is experiencing for its villages.

"My sense is that people have a high level of confidence in our ability to deliver," Challies said.

"With the growth path we're on, we're No 5 on the index, we've got our eyes on No 1."

Challies is talking about the company's mainly finished Diana Isaac retirement village, located Christchurch.

Sitting alongside building project foreman Donald Mackay, and village manager Jenny Thiele, Challies' focus is on the modern facility Diana Isaac offers - up another step in terms of layout and finishes, and probably costing a bit more per square metre than some of Ryman's other villages.

The 11-hectare property already offers 120 care beds, 80 serviced apartments and 100 townhouses, with more than 300 residents already and 150 staff.

There were 250 builders and contractors employed on Christchurch's biggest build for last year at the peak, Challies said. When the project is finished there will be more than 200 townhouses and 500 residents.

Sales adviser Rachael Harris said there was a strong waiting list, with most residences being occupied soon after completion. Prices for the right to occupy a two-bedroom townhouse for life ranged from $329,000 to $359,000, with residents able to sell back the property less a deferred management fee that grew to 20 per cent over the first five years. Average home prices in the area were about $400,000, Challies noted.

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The red zoning of earthquake-hit properties was not a huge factor in the demand for the properties, Harris said. However, the older residents had made a conscious decision to be in a more security-based community, Thiele added.

The build, on a greenfields site, had been speedier than previous village constructions by Ryman.

The project started in early December 2011. Residents began to occupy the property from May last year and a substantial amount of work was done by August.

Margaret Daniels and her husband, Murray, were among the early occupiers at Diana Isaac. Margaret said she was happy to have made the decision while in her mid-70s. "We saw it when it was paddocks when we signed up.

"Then we saw some pegs in the ground and we found our number," she said.

Challies said while the company had not ruled out further villages in Christchurch, it was now more focused on North Island opportunities, with possible land purchases to be announced in the first months of the new year.

Challies said Ryman was on the cusp of beginning earthworks for a village in Melbourne, with a start likely this month. The first stage, including the central complex, an aged-care facility and some independent living units, had a target completion date of March next year.

When finished the Melbourne facility would house about 350 residents.

In New Zealand, Ryman villages housed between 80 and 600 residents.

It was too soon to start looking at other sites in Australia yet, with the emphasis on building the first Victorian project, Challies said.

Established in 1984, Ryman owns 25 villages nationwide, which offer a combination of retirement living and aged care, and serve more than 6000 residents.

- © Fairfax NZ News

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