Ryman Healthcare stock was propelled to new trading highs yesterday after a record annual result by the retirement specialist.
Shares were selling for about $3.40 - eventually closing at $3.34 - after chairman David Kerr released what he called an exceptional result, the 10th in succession, telling shareholders how their dividends would rise 17 per cent to 8.4c a share for the year.
That was greeted by Deutsche Bank analysts James Schofield, Chris Byrne and Geoff Zame as a very solid result and they praised the company's momentum.
"We believe that Ryman will deliver on this guidance," they said after Kerr revealed development rates rose from an annual target of 550 units to 700 units "and we agree with their strategy of getting on and building while the rest of the sector, bar Summerset, is in a state of flux".
Before the result, Ryman, with a market capitalisation of $1.2 billion, had a 52-week trading range of $2.39 to $3.25.
The analysts focused on underlying rather than reported profit because the latter included unrealised gains, they said.
The company had a consistent record of under-promising and over-delivering which they see as a strength of the management.
OnePath's Craig Tyson was also pleased. "Another stellar result from Ryman, a 27 per cent increase in operating cashflows driven to a large part by an increase in the company's build rate to 710 units during the year," Tyson said.
"Investors also get a 17 per cent increase in the dividend to 8.4 cents a share, in line with the growth in underlying profit but have also seen the share price increase over 30 per cent from a year ago to $3.40 today."
The company was a rare species in the corporate world, creating a great product for customers and tremendous value for shareholders, year after year, he said.
Goldman Sachs NZ analyst Matt Henry had expected underlying profit of $82.4 million yet Ryman delivered $84 million.
"It's modestly better than what we were looking for, not dramatically, just incrementally but obviously another very strong underlying performance from the business with all facets performing well," Henry said.
Ryman opened villages in Gisborne, Tauranga and Christchurch's Shirley in the financial year and was looking to the Australian market for growth, starting with Melbourne.
The final dividend of 4.5c a share will be paid around June 22.