Record profit for retirement village operator

22:38, May 16 2012

Retirement village operator Ryman Healthcare has announced a record underlying profit of $84 million, up 17 per cent on the prior financial year.

It is the 10th year in a row the company has posted a fresh record profit.

The Christchurch based aged care and village operator said unrealised valuation gains lifted the reported net profit to $121m in the year to March 31, 2012.

Chairman Dr David Kerr said the company was maintaining its target of 15 per cent growth in underlying profit in the year to March 31, 2013.

He said the result was a significant milestone, as it marked ten years in succession of record profit results for the company.

Ryman shareholders will receive a 17 per cent increase in their annual dividend, increased to 8.4 cents per share. The final dividend of 4.5 cents per share will have a record date for entitlements of June 8, and will be paid on June 22.

Kerr said the company faced some major challenges in Christchurch over the past 18 months given the earthquakes, and had responded with a performance which had exceeded its own targets.

"The company built 710 retirement units and aged care beds during the year, up 24 per cent on the previous year, and well ahead of its target build rate of 550 units and beds per annum," he said.

"The lift in build rate reflected the significant investment we made in hospital and dementia facilities this year, and our decision to fast-track new Christchurch facilities post-earthquake."

The company is building a new facility in Christchurch at the Diana Isaac, Mairehau village at which it has already completed and sold some independent units.

Kerr said the Government had recognised the need for an additional 12,000 to 20,000 aged care beds to meet the projected growth in demand over the next 15 years.

New Ryman villages were opened in Gisborne and Tauranga during the year, and the new village in Christchurch welcomed its first townhouse residents in March.

"We are experiencing strong demand for our villages, which has spurred us on to keep building at the rate of 700 units and beds per annum in New Zealand," Kerr said.

Operating cashflows were up 27 per cent to $169m for the year, allowing the company to self-fund the bulk of its building activity, the company said.

Bank facilities were increased to meet the additional working capital required to build at a higher run-rate in New Zealand, and to fund the company's expansion into Australia.

The company recently received planning approval for its Waikanae village, and was currently working through the planning process for its Melbourne and Howick villages. Several new sites in New Zealand were under active consideration.