Key Points:

A big expansion drive and strong demand for more properties pushed the half-year profit of retirement village operator Ryman Healthcare up 22 per cent.

Ryman made a record profit of $34.7 million after tax, up on the $28.3 million in the corresponding period last year.

David Kerr, Ryman's chairman, said the company had opened new villages in Auckland, Palmerston North and Christchurch.

A Nelson village will open at the end of the year and Ryman had built more than 3000 units.

It also has a large landbank and has the capacity to almost double its size. Kerr said the company had the ability to build nearly 2000 retirement village units on 13 sites. The company already owns 17 villages.

Ryman, a sharemarket darling because of its star performance, is held by a number major institutions and fund managers who perceive growth opportunities. The prospect of more elderly people shifting into retirement villages and Ryman's stellar results have drawn strong interest.

Simon Challis, Ryman's chief executive, said major stakeholders were investment company Emerald Capital with 14 per cent, Fisher Funds with a a 10.2 per cent stake, ING holding 7 per cent and Ryman founder Kevin Hickman also with 7 per cent.

Forsyth Barr analyst Jeremy Simpson said yesterday's result was stronger than he expected and gave even more confidence about the full-year result. He issued a "buy" recommendation, assessing it as medium/low risk and issuing a $2.78 valuation.

Ryman has a market capitalisation of $1 billion and its half-year result was from total income of $67 million.

On October 31, it opened its largest new project, the Edmund Hillary Retirement Village in Remuera where 600 people will live when the project is finished in two to three years. Ryman is developing 250 independent units, 60 serviced units and 130 rest home and hospital beds on the site.

This month, Hamilton, Hindin, Greene broker James Smalley said his firm's clients had been buying up the stock recently because of the anticipated effect of a major reporting standard change. The half-year result was the first time Ryman reported under the new International Financial Reporting Standards and Kerr said that if the old standard had been used, the company's profit would have been up 23 per cent for the half-year.

The new accounting standards have seen gains in the value of residents' homes recognised in the profit and loss statement for the first time.

Simpson said Ryman had enjoyed positive aspects of a large and geographically spread property portfolio delivering a product which was enjoying increasing demand. The company had the scale, track record and in-house expertise to manage risk around its substantial development work.

"These factors mean it is unparalleled as a sustainable long-term New Zealand-focused growth story."

Goldman Sachs JBWere analyst Matt Henry also sees Ryman as the industry leader, operating a high-value business model in a fundamentally attractive sector.

Ryman shares closed yesterday at $2.07. Its 52-week range is from $1.84 to $2.75.