Rising star Ryman Healthcare's growth strategies are expected to underpin improved revenue and profits of between 15 per cent and 20 per cent when it reports its half-year performance later this week.
The listed aged care provider at present has 25 villages across New Zealand with more than 6000 residents. It announced in July that Petone would be home to its 28th village.
Earlier this year it lifted its new-bed build rate forecast from 550 annually to 700.
About a year ago Ryman shares were around $2.59 before steadily climbing to a year-high of $4.12 in mid-September, and have since been trading at just over $4.
Both Forsyth Barr and Craigs Investment Partners brokerages maintain a "buy" recommendation on Ryman stock, with both forecasting at least 15 per cent revenue gains for the half to September.
Craigs Investment Partners broker Peter McIntyre said a key indicator for Ryman was its heavy reinvestment this year.
"Ryman is leveraged to New Zealand's ageing population, which provides solid and sustainable market growth," he said.
"Ryman's competitive advantage lies in its capability to develop its own facilities."
McIntyre highlighted strong historical cashflows in recent years, of $149.4 million in 2010, $133 million 2011 and $169.2 million in 2012, as being sufficient to support ongoing developments.
He forecast about 15 per cent gains to both underlying profit and total operating revenues, of respectively $47.1 million and $85 million.
Forsyth Barr broker Peter Young forecast revenue for the first half of 2013 to increase by 18 per cent to $148.5 million, with earnings before interest tax, depreciation and amortisation up similarly to $84 million.
"Strong gains are expected for all areas of Ryman's operations," Young said.
With its expanding village portfolio, care fees would "grow strongly" and there would be increasing levels of premium payments.
"Despite the subdued economic environment, Ryman has continued to hold up its high occupancy levels and enjoy high levels of pre-sales for its new villages," Young said.
The occupancy and pre-sales were critical factors for driving growth in the sales prices.
McIntyre said Statistics New Zealand had estimated that during the next 20 years the number of New Zealanders over 75 would more than double, from 250,000 to 516,000.
In Australia the over-75s would double to 2.8 million.
Ryman's first village project for Melbourne is being designed now.
However, Young cautioned that the growth rate was at risk for the first 12 months' operation of new care developments and extensions, as they were "typically loss-making" during the first year until occupancy rates increased.
Young was forecasting a realised gain of $33 million from the villages portfolio, from new sales and resales of existing occupancy advances, plus an estimate of as yet unrealised gains of $26 million.
20% top end of increased revenue forecast
25 villages throughout NZ
700 new beds a year