Ryman boss steps down

Long-serving chief executive Simon Challies is leaving on June 30.

Ryman Healthcare managing director Simon Challies has announced he will stand down on June 30 for health reasons.

At the retirement village company's annual results briefing this morning, Mr Challies said he had been diagnosed with Parkinson's disease in 2011.

"I first noticed the symptoms about a decade ago but it was still a huge shock to get my diagnosis in 2011," Simon said. “I’ve been determined to not 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 managing director 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."

“I’ve had an incredible 18 years at Ryman and I am really proud of what the team has achieved together. The time is right to hand over to deputy chief executive and chief financial officer Gordon Macleod, who I know has the same passion as I have for looking after our staff and residents. We have a very strong and loyal management team and the company is in great shape for the huge growth we see ahead."

Mr Challies joined the company as chief financial officer in 1999 and took over as chief executive in 2006 from Ryman co-founder Kevin Hickman.

In its results for the year to March 31, Ryman 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.

Underlying profit, which excludes fair value changes from its property portfolio, rose to $178.3 million in the 12 months ended March 31 from $157.7 million a year earlier, the country's biggest listed retirement village operator said in a statement. Operating revenue gained 11% to $289 million. At its half-year report, the company forecast annual underlying profit of between $175-185 million.

Ryman's sales of occupation right agreements rose 9.1% to 1318, of which new sales jumped 16% to 600 and resales of existing units increased 4.1% to 718. The value of new units rose 16% to $263.3 million while resales rose 14% to $311.3 million.

"Strong gains from the resale of occupancy rights had driven the result and Ryman 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 $325 million gain in the fair value of Ryman's investment portfolio, rising to $356.7 million, or 71.3 cents per share, from $305.4 million, or 61.1 cents, a year earlier. Of that fair value gain, Ryman realised $63 million from the sale of new retirement village units, up from $62.4 million a year earlier, while realised gains from resales rose to $77.3 million from $60.6 million.

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 in the design and consenting phase.

The value of that portfolio rose to $3.66 billion as at March 31 from $3 billion a year earlier, comprising 5958 retirement village units and 3281 residential care beds and with a land bank that can add 4025 units and 1529 care beds. The company's bank debt rose to $837.5 million as at March 31 from $544.9 million a year earlier.

The board declared a final dividend of 9.3c per share, payable on June 23 with a June 9 record date. That takes the annual return to 17.8c, a 13% gain from 2016.

The shares last traded at $8.63 and have gained 6.4% 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.

(Additional reporting BusinessDesk)

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