Ryman Healthcare Board sets “high threshold for new developments”

The New Zealand-based operator used its Annual Shareholders’ Meeting to outline the direction of the business.

Chair Dean Hamilton believes Ryman Healthcare is now back in control of its performance and its future.

The Weekly SOURCE reported Ryman's FY26 Annual result in May showing the business had an improvement in operating profitability, had cut costs and returned to positive free cash flow for the first time in more than a decade.

“This is not a short-term business recovery. It reflects a structural shift in how the business operates – a more disciplined, more resilient, and more commercially focused organisation,” the Chair said at the meeting on Tuesday (28 July).

“Our priorities are simple: improve cash generation, grow recurring earnings, and maintain balance sheet flexibility with the option to grow when conditions are supportive.”

At its peak in 2022, Ryman had 16 villages under construction, with debt growing to over NZ$3 billion by the end of that calendar year.

“With capital constrained, independent living units were prioritised to generate cash and support capital recycling, while main buildings were deferred,” said the Chair.

Hamilton said those deferred buildings included many of the amenities, care centres and serviced apartments that had been promised to residents.

“Over the past two years, we delivered five of these deferred main buildings.

“While that was the right thing to do for residents and the long-term health of the business, it has created a near-term earnings headwind as we absorb the operating costs and fill the significant new care and serviced apartment capacity that came online.”

Looking ahead, the Chair said Ryman would continue to take a more disciplined approach to development.

“In terms of new villages, we ended the year with only two sites under active construction. This is intentional – reducing risk, lowering capital intensity, and improving resilience. We still have a significant amount of available land at new sites and existing villages, but going forward, development will be selective, demand-led, and at a controllable scale.

“Development remains an important part of our future – but only when conditions and returns support it, rather than being driven by an “always on” development programme.

“With our shares trading at a significant discount to NTA (Net Tangible Assets), the Board has a high threshold for new developments.”

Chief Executive Officer Naomi James added that Ryman is focused on four key drivers of shareholder value:

• leading the industry in care-centric living;
• growing recurring earnings;
• lifting returns from our existing portfolio; and
• allocating capital in a disciplined, value accretive way.

She noted that in Australia, Ryman is already providing over 50% of Serviced Apartment residents and over 20% of independent residents with Support at Home packages.