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Ryman Healthcare Limited

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Comprehensive Company Analysis

INVESTMENT RESEARCH GROUP LIMITED

July 25, 2013

RYM.NZ

25th July, 2013

Healthcare

Contents
1.0 Introduction ............................................................................................................................................................. 2
2.0 Analyst Recommendations & Revisions ..................................................................................................................2
3.0 Highlights .................................................................................................................................................................2
4.0 Business Description ................................................................................................................................................4
4.1 Revenue Breakdown: ..........................................................................................................................................4

4.1.1 Care Fees: .....................................................................................................................................................4

4.1.2 Management Fee: ........................................................................................................................................5

4.1.3 Resale: ..........................................................................................................................................................5
4.1.4 New sales: ....................................................................................................................................................5

5.0 Industry Overview and Competitive Positioning .....................................................................................................5

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5.1 The Ryman Difference .........................................................................................................................................8

6.0 Investment Summary...............................................................................................................................................8

6.1 Ryman continues to deliver resounding results: .................................................................................................8

6.2 Rymans Position: ................................................................................................................................................9
7.0 Financial Analysis ...................................................................................................................................................10

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7.1 Earnings ............................................................................................................................................................. 10

7.2 Cash Flow .......................................................................................................................................................... 10
7.3 Balance Sheet & Financing ................................................................................................................................ 11
8.0 Management & Substantial Investor Overview: ....................................................................................................11
9.0 Investment Risks ....................................................................................................................................................12
9.1 Property Cycles:.................................................................................................................................................12
9.2 Political risks: .....................................................................................................................................................12
9.3 Interest rate risk: ...............................................................................................................................................12

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9.4 Tax risk: ............................................................................................................................................................. 13

10.0 Market Consensus ...............................................................................................................................................13

11.0 Summary .............................................................................................................................................................. 13

Appendices ..................................................................................................................................................................14
Appendix i: 5 Years Consolidated Income Statement (Historical) ...........................................................................14
Appendix ii: 5 year Consolidate Balance Sheet (Historical) .....................................................................................15
Appendix iii: 5 year consolidated Cash flow Statement (Historical) .......................................................................16
Appendix iv: Relevant Links .....................................................................................................................................17

Investment Research Group

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RYM.NZ

25th July, 2013

Healthcare

Ryman Healthcare Ltd

Current Price: $7.05

1.0 Introduction

Ryman Healthcare Ltd (RYM) is the largest listed developer, owner and operator of retirement and aged
care living in New Zealand. With 25 villages across the country, Rymans 3,500 staff offer serviced and
independent apartment living, as well as rest home, hospital and dementia care to over 6,000 residents.
The company was founded by Kevin Hickman and John Ryder in 1982 and was listed on the NZX in 1999.

2.0 Analyst Recommendations & Revisions

1 Month 2 Month 3 Month

Ago
Ago
Ago

0
3
2
0
1

0
3
2
0
1

2
2
1
0
1

2
2
1
0
1

2.83

2.83

2.33

2.33

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1) BUY
2) OUTPERFORM
3) HOLD
4) UNDERPERFORM
(5) SELL

Current

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1-5 Linear Scale

Mean Rating
Consensus Recommendation

Hold

*Source: Reuters Analyst consensus 25th July, 2013

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3.0 Highlights

Strong balance sheet: Ryman Healthcare has a current ratio of 1.06 and a debt to equity
ratio of just 31.5%. The company often collects payment for the properties before construction
begins. This allows the company to fund new builds with very little debt. Also low debt to equity
ratio enables Ryman to have the cushion for increased funding to support their future growth.

Advantageous demographics: Statistics New Zealand forecasts an increase of 53.5% of

people over the age of 65 from 2016 to 2031. Management indicates that Ryman is shifting
focus towards targeting their services at the 75 plus market for several reasons. Welcoming
guests in the higher age bracket results in higher turnover of units as residents health is further
deteriorated and higher level care is required sooner after arrival. Also due to the higher level of
care required by the older residents, Ryman can charge higher care fees.

Investment Research Group

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RYM.NZ

25th July, 2013

Healthcare

Robust dividend growth: Ryman has had a steady dividend

growth over the past 12 years, achieving a 5 year average annual
growth of 17.61%. We attribute this to strong profits emerging
from the companys healthy earnings. Ryman has paid out $290
million in dividends since listing in 1999 without issuing additional
capital.

Shares on Issue:

497.58M

Open Price:

$7.05

Market Cap:

$3.507B

PE Ratio (ttm):

27.35

Expansion and opportunity in Australia: The Company

purchased new sites in the Auckland suburb of Birkenhead along
with Petone in Lower Hutt and informed about more land
acquisitions in the year ahead, as they increase New Zealand land
bank from three to four years stock. Ryman plans to take the
expansion into Australia one step at a time, beginning with its first
village in Melbourne. Ryman have commenced construction in
Melbourne and plans to open it in 2014.

Key Statistics

27.35c

DPS (ttm):

10.0c

Div Yield (ttm):

1.42%

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EPS (ttm):

146.89c

*calculated on the basis of 25th July

open price

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*PE Ratio = Price-to-earnings ratio; EPS = Earnings per share; ttm = trailing
twelve month period; DPS = Dividend per share; NTA = Net tangible Asset
per share.

NTA:

Investment Research Group

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