Fletcher Building's boss says he is not keen to 'get greedy' on Gib prices this year, while Ryman Healthcare's boss explains what led to its surprise $900m capital raise.
Video / NZ Herald
An analyst historically critical of Ryman Healthcare’s financial management has boosted its underlying earnings guidance and lifted its target share price by 4 per cent after a ‘strong’ full year result.
In a note sent to clients on Monday morning, Forsyth Barr senior equity analyst Aaron Ibbotson said he wasencouraged by the retirement village company’s “good cost control”, its shift towards building lower density villages and its progress in Australia.
“If RYM continues on this path and the New Zealand housing market does not substantially deteriorate from here, both of which we expect, we believe RYM will be one of the best mid/large cap equity stories in NZ over the coming 12 to 18 months,” his note read.
He kept an outperform rating on the stock, lifting his 12 month target price to $8.20, from $7.85, with expectations for underlying earnings to rise by 3 per cent this financial year, increasing to 5 per cent then 7 per cent in the following two years.
Ryman’s (RYM) share price was $6.06 before the market opened on Monday, up 12 per cent in the past week, although down 34.5 per cent in the past year.
“It has been a difficult three operational years for aged care as well as property development; we believe we are seeing the first signs of normalisation.”
Ryman Healthcare results
Last week Ryman, the country’s largest listed retirement village developer and operator, revealed a 67.8 per cent fall in net profit in the year to March 31, due to a revaluation of unrealised gains on its property portfolio coming in 84 per cent lower at $73.7m.
Revenue rose 12 per cent to $571m in the year with growth coming from resales of existing units, while costs also rose, by 14.4 per cent - a number Ibbotson was positively surprised by.
