Golden years boost Ryman payout

A 9 per cent profit dive did not deter listed retirement village operator Ryman Healthcare from increasing dividends and the business is expected to pay out even more money next year.

Ryman, which owns 21 retirement villages, made $66.1 million in after-tax profit in the year to March 31, 2009, down on last year's $72.6 million. But it paid out more because realised profit was up from $50.5 million to $53 million.

ING analyst Stuart Williams said Ryman had already met the consensus of analysts' dividend forecasts this year and next year the company could be more generous and pay what analysts believe could be as much as 5.9 cents per share.

"Plus they repaid $4.5 million debt out of cashflow and we like that. They don't have to sell assets and this shows that their business model is such that they can retire debt in the normal course of business," Williams said.

Various ING entities own just under 10 per cent of Ryman, long perceived to be a darling stock due to the rising number of elderly New Zealanders. ING's stake is worth about $80 million.

Williams encouraged people not to focus on yesterday's announcement of a profit dive, saying it was caused by Ryman complying with accounting standards and that the business was growing and had good expansion opportunities.

Large retirement village development projects at Whangarei and Orewa were at a stage which should enable profits to flow into the 2010 results, he said.

Last year's 5c dividend was increased to 5.2c and although Ryman gave little guidance on next year's earnings, it broadly predicted good times.

David Kerr, Ryman's chairman, said the retirement business was thriving and getting stronger and he indicated board support for analysts' expectations that Ryman would pay more next year.

"We are well-placed to achieve growth in our realised profits and dividends in the year ahead," he predicted.

Ryman had 1986 retirement village units last year but now has 2264 units. Its residential care bed numbers has risen from 1394 last year to 1519. Its landbank last year gave it the capacity to develop 1170 units but this year it has enough land for 1138 units.

Kerr said demand for Ryman's units was also growing and sales of retirement village units were up 3 per cent.

Total assets rose from $1,021,670 to $1,173,787. The final dividend of 2.85cps will be paid on June 26.