Ryman Healthcare's Patrick Hogan village. Photo: Supplied
The large retirement village provider Ryman Healthcare has posted a 98 percent drop in full-year net profit, though revenue rose 18 percent.
The company said the bottom line was hit by a combination of $283.9 million in one-time costs, and a drop in the value of its properties.
"We know we need to improve our financial performance and the board and management are aligned on this intent," chairperson Dean Hamilton said, who was acting as executive chairperson while a search for the next chief executive continued.
Key numbers for the year ended March compared with a year ago:
- Net profit $4.8m vs $257.8m
- Property portfolio value $251.8m loss vs $156.8m gain
- Underlying profit $270m vs $301.9
- Revenue $669.0b vs $583.8m
- Expenses $1.01b vs $ $809.1m
- *Impairment loss $243.8m vs $ $11.0m
- Total value of assets vs $$12.5b
- Dividend nil vs nil
"The reported profit result was clearly disappointing as the company took the hard decision to reassess the carrying value of a number of its assets in light of the current economic environment and also place higher hurdles on new developments," Hamilton said.
The 11 percent drop in underlying profit reflected lower margins on new developments which had higher costs to complete as result of construction inflation, the delays and higher interest costs.
Ryman's net interest bearing debt rose by $210m to $2.51 billion.
"The financial focus of the board is to strengthen cash flow outcomes from existing operations and to recycle capital on new developments. Over time, we aim to grow the value of Ryman whilst gradually reducing our net debt position," Hamilton said.
"Our areas of financial focus are on improving the financial performance of our existing villages, improving the efficiency of our new developments and creating a sustainable and fit for purpose structure to support our village and new development activities. We need to get fit for the future."
Impairment losses on properties development sites for sale or under review
- Kohimarama, Auckland (acquired in 2018) - $16.3m - now held for sale
- Karori, Wellington (acquired in 2017) - $37.6m - now held for sale
- Takapuna, Auckland, (acquired in 2020) - $56.5m - moved from active construction to land bank
- Ringwood East, Victoria, Australia (acquired in 2019) $55m - moved from active construction to land bank
- Mt Eliza, Victoria (acquired in 2016) $36m - future development uncertain
Hamilton said current economic conditions remain channelling in New Zealand and Victoria.
"it is unclear when interest rates will begin to decline and support improved housing markets conditions and liquidity."
The company expected to complete between 850 and 950 village units and aged-care beds in the 2025 financial year, with spending of $700-$820m in capital.
However, it did not provide a profit guidance.
"Key to our performance in FY25 will be our ability to maintain high occupancy in our existing facilities and settle new units and beds as they come onstream throughout the year," Hamilton said.