How did NZX-listed retirement villages fare in FY22?

Highlights

• RYM reported a jump in profits by 13.6%
• OCA reported an EBITDA increase of 16%
• SUM reports a jump in profits by 9.2%

New Zealand is home to some of the most well-equipped and well-managed villages in the region.  Demand for retirement villages may go up in future. According to the latest projections by Stats NZ, people aged 65 and above will be more than 1 million by 2028. This may boost the demand for retirement villages across New Zealand. 

The report also said that while there are currently about 842,000 people aged 65 and above, their numbers would continue to increase over next 50 years. It is estimated that the number of people in this older age group could reach 1.3 million around 2040 and 1.5 million by about 2050.

Let’s discuss how these prominent retirement village stocks fared in FY22.

                                                                              Image Source: © 2022 Kalkine Media

Ryman Healthcare Limited (NZX:RYM)

RYM is a leading retirement village operator in New Zealand, which reported strong growth in FY22  despite COVID-19-related disruptions. It reported an underlying profit of NZ$255 million, which was up 13.6%. Audited reported profits increased 63.9% to NZ$692.9 million. The Company’s total cash receipts were up 19% at over NZ$1.40 billion. Total assets were also up from NZ$9.17 billion to NZ$10.97 billion.

RYM rewarded its shareholders with a final dividend of 13.6 cps, taking the total dividend for the year to 22.4 cps, which is 43.9% of the underlying profit. The record date for the dividend was 3 June and the payment date was 17 June 2022.

A total of 16 new villages are under construction. In its annual meeting, RYM revealed that the demand for aged care homes was increasing with new residents looking for security and good living. It said there was a need for 15,000 aged care beds and another 24,500 retirement units by 2033.

On 6 September 2022, the stock was trading up 1.13% at NZ$8.98 at the time of writing. 

Oceania Healthcare Limited (NZX:OCA)

Oceania announced its full-year results for FY22, in which it reported an EBITDA of NZ$76.2 million, up 16.2% over pcp. Its sales were in 450 units across living apartments, villas, and care suites. There are 550 units and care suites under construction, and 300 units are scheduled to be completed by 31 March 2023. Total assets of the company increased to NZ$2.2 billion compared to NZ$1.9 billion. OCA has an operating cash flow of NZ$105.5 million compared to NZ$96.0 million for the 10 months to 31 March 2021. This reflected strong first-time sales and resales in the period. The final dividend announced by the company was 2.3 cps paid on 21 June.

OCA also announced a dividend reinvestment plan (DRP).

On 6 September, the stock was trading flat at NZ$0.970 at the time of writing.

Summerset Group Holdings Limited (NZX:SUM)

It is one of the leading retirement village operators in New Zealand. In its half-year results announced recently, it reported an underlying profit of NZ$82.5 million, up 9.2% over pcp. Its total assets were NZ$5.4 billion, up 22.9% over the same period. SUM has been working extremely hard to keep its residents safe amid the arrival of the Omicron variant in New Zealand.

The Company reported that there was a strong demand for its units. Even as prices of residential properties grew significantly in last two years, SUM did not increase the prices. It delivered 223 units during the reporting period, which was the highest first-half figures ever recorded.

It announced an interim dividend of 10.7 cps with a record date today. The dividend is to be paid on 19 September.

On 6 September, the stock was up 0.18% at NZ$10.920, at the time of writing.