Ryman Healthcare has booked another record after-tax profit, rising 26% to $305million, through new retirement village units and the strong housing market underpinning rising valuations.
Without the valuation gains, Ryman's underlying full-year profit grew 16% to $158million, also a record for the 14-year-old company.
Ryman's chairman Dr David Kerr said it was a pleasing result, and one which had allowed Ryman to continue investing in critical infrastructure for residents' benefit.
"Good profits and cash flows mean we have been able to invest $369million back into the business,'' he said in a statement.
Dividends for the year grew 16%. The final dividend was set at 8.5c per share.
Forsyth Barr broker Suzanne Kinnaird said the $158million underlying profit aligned with expectations.
"The key differences in the result versus our expectations were both new sale and resales revenues below our forecasts, while the development margin on new stock was materially ahead of our expectations,'' Mrs Kinnaird said.
She said Ryman had new sales of 518 units, of $226million, which was below the previous year and expectations, while unit resales were 690, or $273million, which was marginally lower than expectations, but materially ahead of the previous year.
"This [new sales] can largely be explained by timing, with two large service apartment blocks only being completed at the end of the year. All independent living units built were sold during the period,'' she said.
Mrs Kinnaird said the strong margin performance was a "key highlight'' in the result. Ryman reported full-year gross development margins of 28%, ahead of the previous year of 25% and her expectations of 24%.
"The strong result was underpinned by development at Bruce McLaren, in Howick, and Weary Dunlop, in Melbourne. Development margins in Australia were 35%, helping to underpin the strong performance.''
However, Mrs Kinnaird cautioned that Ryman had guided for development margins to move back within the 20%-25% range for 2017, labour cost pressures were starting to show and higher development costs at Petone were expected to weigh on margins.
Dr Kerr said Ryman was working on securing its fourth and fifth Melbourne sites, putting the company on track to have five villages open in Victoria by 2020.
At a glance
| Total Operating Revenue | Up 15% to $261million |
| Fair value movement of investment properties | Up 26.2% to $274.6million |
| Total income | Up 20.5% to $535.6million |
| Tax paid | Up from $113,000 to $3.9million |
| After-tax profit | Up 26.3% to $305.4million |
•$25million raised in 1999 initial public offering
•Invested $2.1billion in portfolio since 1999
•No fresh capital sought from shareholders
•Dividends $500million paid since float
•14 years consecutive underlying profit growth; from $10million (2002) to almost $160million (2016)
•Assets doubled in 4 years to $4billion
- SOURCE: RYMAN HEALTHCARE
