Ryman Healthcare's Miriam Corban retirement village. Photo: Supplied
- Ryman Healthcare raising prices for new residents
- Suspends any new building projects
- Revamps structure - three senior executives made redundant
Retirement village operator Ryman Healthcare is raising prices, slowing construction, and cutting senior jobs as it looks to restore its finances.
The company, which operates 49 villages in New Zealand and Australia, is raising the deferred management fee (DMF) paid by residents when they leave a village, to 25 or 30 percent, depending on the initial entry price paid, from the current 20 percent.
The weekly fixed charges for new residents will also be raised or they can pay fees indexed to rises in NZ superannuation or Australia's consumer price index.
Executive chairman Dean Hamilton said the existing agreements with current residents would be unaffected but its prices needed to rise.
"The general population is living longer, our residents are staying longer and costs have increased across the board. As a result, we are increasing our DMF and weekly fees for new residents to ensure we can sustainably provide the facilities and services."
Chief financial officer Rob Woodgate said the price increases would take time to have a "meaningful financial impact".
"Given our new pricing structure will only apply to new ORAs (occupation rights agreements), and deferred management fees are collected (in cash terms) when residents vacate, it will take time for the changes to fully mature into our portfolio."
Ryman's full-year profit crashed to $4.8 million from $257m as it wrote down the value of assets and costs growing faster than revenue gains.
Building slow down
Hamilton said current building work on 10 villages would continue, but no new projects would be started before March 2026. The company had enough land in store to cover its needs until the end of the decade.
"It makes sense to pause and wait for construction costs and interest rates to weaken from recent high levels, while releasing capital from current inflight developments as these are completed and sold down."
He said the current environment remained challenging, which made it difficult for would be residents to sell their houses and buy into villages, and there was little prospect of an improvement in the short term.
Hamilton said the pace of future development and expansion would, in part, be dictated by policy moves by the New Zealand and Australian governments on future funding of the sector, which was insufficient.
In other internal changes, Ryman, which is without a chief executive, was revamping its senior management resulting in the loss of its New Zealand and Australian chief executives and company secretary, and would also outsource its design and development work.