The head of New Zealand's biggest listed retirement village owner/operator is quitting the company which has just announced a 60 per cent reported net profit rise.
Ryman Healthcare chief executive Gordon MacLeod is going after 15 years in senior roles, prompting a global hunt for his replacement. No reason was given for the unexpected departure.
MacLeod said time had been set on when he would leave: "It was a tough decision. It's a combination of life events, I suppose. I turned 50. It's my 15ths year at Ryman and I would like to do some different things in my life and spend time with my kids who I've not ignored, but not spent much time with in recent times. The Ryman job is all-consuming."
A daughter, 18 is at university while a son, 22, is a professional musician.
"I'm genuinely interested in a lot of different businesses so there might be a range of things I get involved in - directorships, business I might take a small stake in or advisory roles."
Chairman David Kerr said MacLeod had played a key role in Ryman's success.
In his years there, it had opened 10 new villages and met its target of opening five villages in Victoria by the end of 2020.
Ryman's market capitalisation grew from $4.2 billion to $7.2b and shareholders got dividends of $448.5m over his tenure as CEO, Kerr said.
"Gordy has been a huge contributor over many years. He's led Ryman superbly during some difficult times and we'll truly miss him.
"A talisman of his leadership has been his extraordinary ability to relate very positively to all the many stakeholders in the company. He has shown himself to be an absolutely authentic leader.
"He leaves the company in great shape with a strong executive team in place on both sides of the Tasman," Kerr said.
Meanwhile, Ryman has just reported a full-year underlying profit of $224.4m, with a second-half driven by record sales.
Audited reported profit, which includes unrealised fair value gains on investment property, increased 60 per cent to $423.1m in the year to March 31, 2021.
Shareholders will get a final dividend of 13.6 cents per share, taking the total dividend for the year to 22.4 cents per share, which is half of underlying profit. That is a drop in dividends.
The record date for entitlements is June 4 and the dividend will be paid on June 18.
Ryman has also just announced it will build new villages at Karaka in Auckland and Cambridge, furthering its geographic dominance in the upper North Island's 'golden triangle'.
MacLeod said the amount of Government financial support for people in high-needs care was not enough.
"The long-term residential care subsidy is not [enough]. There's an increasing gap between a fair rate of return and what's paid by the Government. The sector is working with the Ministry of Health and Government officials. It's not sustainable," MacLeod said.
The current Government residential long-term care subsidy of around $1100/week "should be divided by seven to get around $150/day. How many places can you stay in in Auckland where you can get 24/7 nurses, GPs, medication dispensing, three meals a day and a room serviced?"
Asked what that $1100/week should be lifted to, MacLeod refused to say "but it's a pretty significant uplift. The sector is working with a consultant and it's a pretty significant uplift. It will require a step-change," he said, referring to the need to pay staff working in that area more as well.
Ryman has 2290 serviced apartments "where we can provide rest home level care" as well as 4087 additional rest home, hospital and dementia level care. Ryman residents in those places can either pay a refundable accommodation deposit or a rental amount, MacLeod said.
That is different to Oceania Healthcare which sells occupational rights agreements to its premium care suites, in that $1100/week Government or self-funded category. Those Oceania high-level premium suites sell for up to $350,000 each.
Ryman was founded in Christchurch in 1984 and owns and operates 41 retirement villages here and in Australia. It has sold licenses to occupy to 12,500 residents and employs 6100 staff.
It has 12 new villages under construction and a land bank of eight sites in New Zealand and five in Australia - all in Victoria.
In December Ryman achieved its long-term target of having five villages open in Victoria by the end of 2020, and Ryman has another six villages in the pipeline in Australia.
Ryman has bought new village sites at Essendon in Melbourne, and at Karaka and Cambridge in New Zealand.
Ryman has sold a Coburg site in Melbourne after opting to buy a more attractive site in nearby Essendon.
Approval was received to build new villages at Ringwood East in Melbourne, Northwood in
Christchurch and two Auckland villages at Takapuna and Kohimarama.
Ryman's total assets grew by 19.5 per cent during the year. The company has diversified $825m of debt funding.
A $150m retail bond issue in New Zealand, a US$300m USPP private debt
placement and a A$250m institutional term loan were all oversubscribed, MacLeod said.
"The debt issuances allowed us to take our plans to a wider audience of funders and we
were delighted with the response. We ended the year with a stronger balance sheet and
new diversified long-term debt funding with weighted average tenor of nine years with
plenty of headroom.
"We have had record cash collections of $1.18b during the year to support our largest building programme and we are planning to have 14 villages under construction - seven in Australia and seven in New Zealand - later this year," MacLeod said today.
Ryman has a market capitalisation of $7.1 billion and has been trading around $14.40 on the NZX, up $1.79 or 14 per cent annually.