Ryman Healthcare posted a record annual profit, adding to its run of 15 years of earnings growth, as the hot property market underpinned gains from resales of its occupancy rights.
Managing Director Simon Challies announced today he would be stepping down from his position. Challies is suffering from Parkinson's disease and will hand over to CFO and deputy CEO Gordon MacLeod on June 30.
Challies was diagnosed with Parkinson's Disease in 2011 but has continued in the role since then with the full support of the board.
"I first noticed the symptoms about a decade ago, but it was still a huge shock to get my diagnosis in 2011," Challies said. "I've been determined not to let it beat me."
"This is a demanding job, and I've realised this year that my health was deteriorating and it was taking too great a toll on me personally, and on my family.
"I'm a great optimist and I think having Parkinson's has made me a better MD of a healthcare company than I otherwise might have been. It has given certainly me a degree of empathy and insight into the challenges our residents face, and it has taught me to make every day count.
"I'm sad to be leaving Ryman, but I'm looking forward to spending more time with my family and being able to contribute to the community in other ways."
Challies said he was proud of what Ryman had achieved and the time was right to hand over to MacLeod.
Ryamn's underlying profit, which excludes fair value changes from its property portfolio, rose to $178.3 million in the 12 months ended March 31 from $157.7m a year earlier, the country's biggest listed retirement village operator said in a statement. Operating revenue gained 11 per cent to $289m. At its half-year report, the company forecast annual underlying profit of between $175m to $185m.
Ryman's sales of occupation right agreements rose 9.1 per cent to 1,318, of which new sales jumped 16 per cent to 600 and resales of existing units increased 4.1 per cent to 718. The value of new units rose 16 per cent to $263.3m while resales rose 14 per cent to $311.3m.
"Strong gains from the resale of occupancy rights had driven the result and Ryman had invested a record $525 million to meet the demands of a growing older population," chairman David Kerr said. "We've made good progress thanks to growing resident demand for our unique Ryman-style villages and a strong real estate market."
Net profit included a $325m gain in the fair value of Ryman's investment portfolio, rising to $356.7m, or 71.3 cents per share, from $305.4m, or 61.1 cents, a year earlier. Of that fair value gain, Ryman realised $63m from the sale of new retirement village units, up from $62.4m a year earlier, while realised gains from resales rose to $77.3m from $60.6m.
Ryman is adding to its 31 existing villages, with 13 at varying stages of development, including a foray across the Tasman. The Christchurch-based company wants to open five villages in Melbourne by 2020 and has four Australian sites currently in the design and consenting phase.
The value of that portfolio rose to $3.66 billion as at March 31 from $3b a year earlier, comprising 5,958 retirement village units and 3,281 residential care beds and with a land bank that can add 4,025 units and 1,529 care beds. The company's bank debt rose to $837.5m as at March 31 from $544.9m a year earlier.
The board declared a final dividend of 9.3 cents per share, payable on June 23 with a June 9 record date. That takes the annual return to 17.8 cents, a 13 per cent gain from 2016.
The shares last traded at $8.63 and have gained 6.4 per cent so far this year. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters with a median target price of $8.63.