Ryman seeks 70% 5-year growth, mulls ASX listing
Ryman Healthcare [NZX: RYM], New Zealand's largest retirement village operator, plans to increase resident numbers by 70 percent in the next five years in New Zealand and Australia as it also mulls an ASX listing.
Ryman chairman David Kerr told the company's annual general meeting in Auckland it had bought a new site in Hamilton and was close to signing up for one in Melbourne that would help its strategy to increase resident numbers from 9,000 currently to 15,500 by 2020.
Kerr said the group had a strong capital base to speed up its development plans and had identified Melbourne and Auckland as having the greatest potential because of projected demand from the ageing population.
It plans to build five villages in Melbourne and at least 10 in Auckland by 2020 while the other 400 units of the additional 1200 per year planned will be in other parts of New Zealand. Previously the company has built between 700 and 800 units per year.
Chief executive Simon Challies said the company currently housed 2,000 of Auckland's 76,000 people aged over 75 years and by 2020 its share will have moved to 4,500 out of a projected 95,000 aged over 75.
One shareholder, John Boscawen, asked why the company wasn't being even more ambitious in its expansion plans, given projected demand. "You're targeting 1,200 units but why not 2,000 or 2,500? There is a huge opportunity."
Kerr said the company was fairly conservative and in the business of looking after older and more vulnerable people.
"We can't afford to trip up. So we don't want to run so fast that we trip," he said.
Kerr said he was pleased with progress in Melbourne where Ryman officially launched its first village less than a year ago. It has almost sold all of the first village, is close to starting work on its second site at Brandon Park, and has a village site in eastern Melbourne close to settling. The market opportunity in Melbourne is more than a third larger than in Auckland.
In Auckland, work is under way on villages at Birkenhead, Greenlane and Pukekohe and it's in the final stages of completing the Bruce McLaren village in Howick where the annual meeting was held. Other new villages planned include ones in Devonport, Newtown in Wellington, and Tropicana Farm in Auckland.
Another shareholder, Aaron Bhatnagar, asked whether the board was considering an ASX listing, given two of its rivals had gone down that road.
Kerr said it was something the board was seriously considering but it wanted to wait until the planned alignment of Australian and New Zealand listing rules was complete.
One of the key benefits would be that many of its residents also want to be shareholders in the company and there would be growing demand for shares as its gets more residents in Australia, Challies said.
The company has also unveiled a new paperless records system called MyRyman that has cost an estimated $10 million to develop. Challies said they went hunting for a system that would allow staff to spend less time on paperwork and more time with residents but there was nothing in the world that met their needs so they've developed their own. It's about to be beta-tested in one of its Christchurch villages and Challies expects the system to be rolled out in all its villages by the end of next year.
The system, which includes fitting wifi in the villages and a tablet in each resident's room, should save between 10 percent to 20 percent of the time staff spend on paperwork, Challies said.
Some 20 Ryman staff will also hit the catwalk at the end of August for the annual Fashion Week where they'll launch new Ryman uniforms designed by Annah Stretton. Challies said 240 staff put their names forward to be models and the problem was whittling down who would get to do it.