KEY POINTS:
Ryman Healthcare has topped a list of New Zealand's 15 largest listed companies for being the fastest value-creator for shareholders over the last five years.
Boston Consulting Group's latest value-creators report found the retirement village operator delivered an average total shareholder return of 49 per cent per annum
in the five years to the end of 2007.
During that time Ryman's revenue grew at a compounded annual growth rate of 25 per cent while maintaining an ebit (earnings before interest and tax) margin of 18 to 25 per cent - a performance which saw its market value grow from $165 million to $1.03 billion.
Second to Ryman was New Zealand Refining, which grew total shareholder returns by an annual average of 46 per cent - followed by Trustpower, on an average of 45 per cent.
But while Ryman was the fastest value creator, Fletcher Building came top when it came to creating the greatest value for shareholders.
The building and construction giant returned $4.78 million to shareholders in the five years to December 2007.
Telecom - New Zealand's largest listed stock - came in second place, returning $4.11 million.
David Tapper, co-author of the report and managing director of Boston Consulting Group's Auckland office, said achieving profitable growth had been the key driver for strong total shareholder returns.
But at the same time, he noted, the first four months of this year had seen a downturn in all major sharemarkets following the deterioration in global economic conditions.
The poor performance of stocks has seen average returns from New Zealand's sharemarket performance dragged down from 16 per cent to 12 per cent, while returns from Australia's All Ordinaries have slid from 21 per cent per annum to 17 per cent per annum.
However, New Zealand's sharemarket has maintained its position in relation to key market indices, equalling the performance return of Europe's S&P 350 and staying above Japan's Topix and the S&P 500, which have both seen average investor returns drop from 13 per cent to 11 per cent from this year's downturn.
Tapper said it was impossible to know at this stage which New Zealand stock would prove to be the strongest earner for shareholders in 2008, but strong returns were likely to come from companies able to maintain a healthy cashflow and who are able to use the money to "invest against the tide".
"Experience shows that companies who reinvest cash in the face of a downturn tend to outperform those who return cash to shareholders or use it to repay debt."
Tapper said reinvesting when sentiment was not so good meant companies paid less of a premium for acquisitions, and there was more talent available for organic growth.
TOP EARNERS
Best 2002-07 returns
* Ryman Healthcare 49 per cent
* NZ Refining 46 per cent
* Trustpower 45 per cent
Largest value creators
* Fletcher Building $4.78 million
* Telecom $4.11 million
* Contact Energy $3.57 million
