Ryman Healthcare Limited Analysis

Overview

Ryman Healthcare limited (RYM) is the largest provider of retirement living options for New Zealanders over the age of 70. The company provides a range of retirement living and care options, including independent townhouses and apartments, serviced apartments and care centres providing resthome, dementia and hospital-level care.

RYM was established in Christchurch in 1984. It was listed in June 1999 followed a public offering of 30 million shares at a price of $1.35. In January 2007 the company implemented a 5:1 share split. In 2014 RYM opened its first village in Melbourne and plans to build four more in Victoria by 2020.

As at July 2016, RYMs 30 retirement villages in New Zealand and Australia provided homes for over 10,000 residents and employed more than 4,000 staff.

Performance

The following information was extracted from Ryman Healthcare Limited's full year report, released on 29 May 2025:

Financial highlights

-Extensive two-year financial reporting review complete providing improved transparency and comparability

-Operating earnings before interest and taxation, depreciation and amortisation and fair value adjustments (EBITDAF) up from $14.8 million to $45.5 million reflecting improvements in both village and non-village performance

-Net profit after tax (NPAT) of -$436.8 million, down from -$169.7 million in FY24 (restated) impacted by several one-off and non-cash items

-Free cash flow of -$94.2 million, in-line with the equity raise outlook

-Net interest-bearing debt down $840 million to $1,665 million, predominantly driven by $1.0 billion equity raise

Strategic highlights

-Operational reset well underway with $23 million of annualised cost removed in the second half and targeting double this by the end of FY26

-Balance sheet strengthened following completion of $1.0 billion equity raise reducing gearing to 28.1% and improving resilience in challenging market conditions

-Portfolio, strategy and capital management review is underway and will complete in FY26

Financial results

Ryman Healthcare (Ryman) reported FY25 revenue of $760.7 million (up 10% on restated FY24) and NPAT of loss of -$436.8 million (restated FY24: -$169.7 million), impacted by one-off costs and non-cash asset write-downs and a higher interest expense.

Net tangible assets (NTA) per share declined from 589.7cps at 30 September 2024 to 418.2cps at 31 March 2025, driven predominantly by financial reporting changes to valuations and cost capitalisation, and additional shares on issue from the equity raise.

Free cash flow of -$94.2 million was in-line with the February outlook. This was up from -$186.9 million year on year reflecting moderated levels of development spend.

As previously signalled, the FY25 financial statements were significantly impacted by accounting changes across revenue recognition, valuations and cost capitalisation. All FY25 outlook, cost savings and capital management targets outlined at the time of the equity raise were met or exceeded. The completion of the financial reporting review did mean that additional NTA impacts were identified and reflected in the accounts.