Yovich & Co. Weekly Update - 19 November 2012

Nov 19, 2012 | Commentary

This Week's Themes

  • All of the indices I follow fell last week with the New Zealand market resisting the sell off as well as it could due to some strong results.
  • Moa Group Limited (MOA.nz) listed last Tuesday and has been well received by the market. The IPO was oversubscribed and has traded at a premium over the listing price of $1.25. Current price is $1.34.
  • U.S. markets are still sliding due to the uncertainty of how they are going to avoid the “Fiscal Cliff”, although the market was up on Friday on positive comments about how negotiations were progressing in Washington.
  • European markets continued their weakness with low industrial production and Greece’s recession deepening.
  • The Kiwi remains robust despite weak retail sales figures and uncertainty in Europe and the US.

Investment News

Ryman Healthcare (RYM.nz) – Half Year Results:

Ryman delivered another fantastic result with record underlying profit of $48.1 million, an increase of 16% on last year.  The result has enabled Ryman to increase their interim dividend to 4.6 cents per share, with a record date of 30 November and paid on December 7th.

In the past 6 months they have had some notable milestones:

  • Completion of the Diana Isaac Retirement Village in Christchurch.
  • Sales of occupation rights lifted 15% to 447 units.
  • Opened 226 new rest home, hospital and dementia rooms.
  • Received planning approval for their first Melbourne village.

Ryman now has new villages planned for Waikanae, Howick and Melbourne, along with the recently announced development in Petone. The growth of Ryman has been impressive with a total of 25 villages nationwide and 6,500 residents. With the New Zealand government recognising that there is a need for an additional 12,000 to 20,000 aged care beds needed to meet the demand over the next 15 years and Statistics New Zealand predicting that the number of people aged 75 and over is set to double in the next 20 years to 516,000 people, there is certainly plenty of future growth in the industry.

Ryman continues to be a top performer on the NZX with share price growth of 1,529% since listing in 1999 and a divided return on the initial cost of 33.7%.

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Jarrod Goodall



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