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BUSINESSDESK: Ryman Healthcare, New Zealand’s largest retirement village operator, posted a 17% increase in underlying profit to a record -beating guidance - after it sped up its building programme to meet demand for units.
Its shares late morning rose to an all-time high, reaching $3.42, up 5.2% on the day.
Underlying net profit rose to $84 million in the 12 months ended March 31, from $72m a year earlier, it said. That marks 10 years of profit growth.
Sales rose about 20% to about $155m.
Ryman lifted its build rate by 24% to 710 units and aged care beds on the previous year. That is well ahead of its target build rate of 550 beds annually.
New villages were opened in Gisborne and Tauranga, while Christchurch welcomed its first townhouse residence in March.
"The lift in build rate reflected the significant investment we made in hospital and dementia facilities this year," chairman David Kerr said.
"We are experiencing strong demand for our villages - which has spurred us on to keep building at the rate of 700 units and beds per annum."
He cited estimates by Statistics New Zealand that the number of Kiwis aged 75 or over will more than double to 516,000 over the next 20 years, boding well for the long-term prospects of rest-home operators.
Across the Tasman, the outlook is similar, with the number aged 75 plus, doubling to 2.8 million.
The stock has risen 53% in the last two years and is rated as "outperform" based on the consensus of five analysts, polled by Reuters.
It last traded at $3.25.
Shareholders will receive a 17% increase in final dividend to 8.4 cents per share to be paid out June 22.
The Christchurch-based company received planning approval for its Waikanae village. It is undertaking the planning process for its Melbourne and Howick villages.
The company said it is also reviewing several other sites across New Zealand.
Operating cash flows rose 27% to $169m, enabling the company to self-fund the bulk of its building activity.
Profit after tax increased about 20% to about $120m.