Ryman helps market to highest close in three months

The New Zealand sharemarket broke through the 12,000 points mark, with a 1% rise, spurred on by a solid earnings performance from a revitalised Ryman Healthcare.

Friday, May 19th 2023, 6:32PM

by BusinessDesk

The S&P/NZX 50 Index rose steadily all day and finished at 12,099.74, up 123.65 points or 1.03% – the highest close for three months. The index gained 1.35% for the week and has increased more than 5.2% so far this year.

There were 93 gainers and 30 decliners over the whole market with 35.77 million shares worth $116.55m changing hands.

Ryman Healthcare’s annual result was keenly anticipated following its $902.4m capital raise in March to reduce its debt level. The country’s biggest retirement village operator didn’t disappoint.

Ryman rose 46c or 8.21% to $6.06 on trade worth $8.3m after reporting an 18.4% increase in underlying profit to $301.89m and revenue from continuing operations of $570.97m, up 12.2%, for the year ending March. Underlying profit is expected to be in the range of $310m-$330m for the 2024 financial year.

Reported profit decreased 62.8% to $257.83 because of lower revaluation gains on property and costs associated with the early repayment of US Private Placement notes following the capital raise.

Ryman told the market that debt gearing was 33.1%, down from 45.3%, and aged-care occupancy improved to more than 96% for mature villages.

Growth in unit resales offset softer new sales and Ryman is presently building 14 villages, nine in New Zealand and five in Australia. Ryman talked about a development pipeline of lower-density villages with lower peak debt and improved cashflow profile.

Shane Solly, portfolio manager with Harbour Asset Management, said Ryman was executing its new strategy in a careful and measured way and it produced a solid annual result.

“Ryman is showing good momentum and this has helped sentiment in the retirement village sector. As we go through the reporting season and companies beat earnings expectations, like Serko and Ryman, it can only be positive for the market – just like we’ve seen in the United States,” he said.

Solly said Pushpay shareholders will be paid next week following the $1.6 billion takeover, and some of that money should find its way back into the market.

Fellow retirement village operators Summerset Group increased 41c or 4.73% to $9.07, and Arvida Group gained 3c or 2.59% to $1.19.

Mainfreight rebounded $2.81 or 4.08% to $71.70; Freightways added 19c or 2.08% to $9.34; a2 Milk gained 12c or 2.12% to $5.77; Contact Energy was up 10c to $8.10; and Fletcher Building continued its good run with a rise of 5c to $5.03.

Other gainers were Turners Automotive, up 12c or 3.27% to $3.79; Restaurant Brands, increasing 23c or 3.54% to $6.73; Pacific Edge, rising 3.5c or 8.33% to 45.5c; and Task Group, up 2.5c or 5.75% to 46c.

Scales Corp added 11c or 3.41% to $3.34; Carbon Fund increased 4c or 2.34% to $1.75; Marlin Global Fund was up 3c or 3.49% to 89c; Napier Port collected 5c or 2.07% to $2.46; and Rakon gained 3c or 3.06% to $1.01.

My Food Bag Group was up 2.5c or 13.51% to 21c after reporting a 60.8% fall in net profit to $7.85m on revenue of $175.69m, down 9.4%, for the 12 months ending March.

The meal-kit company told the market that inflationary pressure on households and low consumer confidence resulted in subdued demand and “we have undertaken a reset of our business spanning our leadership, supply chain and brand positioning".

My Food Bag delivered more than 15.8 million meals, including its low-priced Bargain Box, at an average order value of $130.11, up from $126.33 in the previous year.

The company, which listed in March 2021 at $1.85, is planning to delist from the Australian Securities Exchange because of low daily trading volumes on the exchange and to reduce costs.

Ebos Group was down 40c to $43; PGG Wrightson decreased 7c to $4.31; and Foley Wines declined 4c or 3.05% to $1.27.

Investore, which owns large retail buildings, was unchanged at $1.45 after reporting annual revenue of $60.25m, up 3.4%, and a net loss of $150.2m because of a $185.2m reduction in the value of its $1.1 billion portfolio. It recorded gross profit of $35.2m.

Investore has a 99.5% occupancy rate, net tangible assets per share of $1.84, down from $2.32, and is looking to sell $25m-$50m of non-core assets “to prudently position the balance sheet".

NZ Windfarms gained 0.008c or 6.3% to 13.5c after announcing the fast-track consent to repower its Te Rere Hau windfarm in the Tararua Ranges has been granted.

Hallenstein Glasson’s group chief executive, Stuart Duncan, is stepping down on Nov 17, and its share price gained 3c to $6.03.

Tags: Market Close