Ryman profits on track

MICHAEL FOREMAN
Last updated 13:15 30/01/2014
Ryman
Supplied
Ryman Healthcare's Jane Mander Retirement Village in Whangarei.

Relevant offers

Industries

We won't own cars any more - we'll share them, forecasts Toyota NZ boss Pound falls to 30-year low against US dollar amid anti-global sentiment Maersk shipping line changes NZ route Revamped Smith's City pushes into profitable Auckland International hotel Sofitel Wellington fights $350k development fee - and succeeds Taranaki engineers need to 'get creative' to survive Fiat Chrysler accused of concealing defect in Jeep Grand Cherokee Countdown harnessing the skills of older workers Duncan Garner: Tax the tourist tsunami and give us citizens a break APN settles New Zealand tax dispute with Inland Revenue

Despite increasing wage costs in the aged-care sector, retirement home operator Ryman Healthcare remains on track to report profit growth of 15 per cent in the 2014 financial year, Forsyth Barr says.

While the brokerage has increased its target price for Ryman shares from $8.30 to $8.81, it has downgraded its recommendation from "accumulate" to "hold", given the company's strong share price gains over the past year.

Ryman's shares were trading today at $8, up 73.5 per cent on their price a year ago but below a peak of $8.38 reached this month.

Forsyth Barr aged-care analyst Jeremy Simpson said the brokerage had taken a slightly more positive view of Ryman's Australian operation after successful sales "off the plans" at the Wheelers Hill village site near Melbourne.

Forsyth Barr has made minor downgrades to its near-term profit forecasts for Ryman, by 1 per cent this year and 2 per cent for 2015, partly reflecting increasing wage-cost pressures.

Ryman last year increased caregiver pay rates by 5 per cent for the second year in a row – a move that makes the company one of the top payers in the sector.

With the rapidly ageing population in Australia and New Zealand, there was increasing demand for retirement village accommodation and aged care, in particular Ryman's hospital and dementia facilities, Simpson said.

"Ryman remains very well positioned, given its fully integrated villages, strong brand and track record," he said.

"Longer term, having a high-quality aged-care service will also be a strong driver of demand for the retirement village units."


Ad Feedback

- Business

Special offers

Featured Promotions

Sponsored Content