BREAKING: Ryman Healthcare, a Christchurch-based retirement home operator, has just announced its first positive free cash flow in a decade, reporting $NZ56.2 million ($A49.1 million) for the six months ending September 30, 2023. This marks a significant turnaround from a negative cash flow of $NZ52.5 million ($45.9 million) in the previous half. However, despite this breakthrough, the company still posted a net loss after tax of $NZ45.2 million ($A39.5 million).
In a statement released on Thursday, Ryman indicated that this positive cash flow reflects a crucial shift in its financial stability, although it contrasts sharply with the previous year’s profit of $NZ82 million ($A71.7 million), which was inflated by favorable property valuations. Ryman’s revenue surged by 13 percent to $NZ413.8 million ($361.8 million), while costs decreased by 2 percent.
Ryman Healthcare operates 40 retirement villages across New Zealand and nine in Melbourne. The company recently listed on the Australian Stock Exchange on October 1, 2023, while maintaining its primary listing in New Zealand. Chief Executive Naomi James expressed optimism, stating, “The business has stabilised, momentum is returning, and we are delivering results with meaningful progress achieved against FY26 priorities.”
Ryman’s financial strategy is gaining traction following a $NZ1 billion equity raising earlier this year and a recent refinancing of $NZ2 billion in bank facilities. As of September 30, the company reported $NZ1.65 billion ($A1.44 billion) in net debt, a reduction of $NZ14.1 million ($A12.3 million) from the previous six months.
In terms of sales, Ryman reported selling 674 units in the first half, an increase from 452 in the previous half, but a decline from over 800 units sold in earlier halves. The company noted that local property markets are recovering at varying rates, with Victoria performing better, while regional New Zealand shows mixed results, and Auckland has yet to exhibit significant improvement.
In response to market conditions, Ryman has scaled back its development activity, reducing its projects from seven to four sites currently under development. Following this announcement, Ryman’s ASX-listed shares rose by 2.4 percent to $2.57, reflecting a total gain of 12.7 percent since the company’s listing.
As Ryman Healthcare charts its path forward, the focus remains on stabilizing operations and enhancing financial health as it navigates the complexities of the retirement village market. Investors and industry observers will be keenly watching upcoming developments in the company’s recovery strategy.
