RYM, ARV: 2 NZX retirement village stocks on investors’ radar in May

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RYM, ARV: 2 NZX retirement village stocks on investors’ radar in May

 RYM, ARV: 2 NZX retirement village stocks on investors’ radar in May
Image source: stockfour, Shutterstock.com

Highlights:

  • Demand for retirement villages (RVs) is likely to grow due to a rapidly ageing population and preference changes.
  • Ryman will announce its FY22 results on 20 May 2022.
  • ARV is due to pay its next dividend in June 2022 after it announces its FY22 results.

The retirement village industry in NZ has been fueled by an ageing population and changing preferences in retirement living. The aged care industry provides all the required care services like homes to older Kiwis and their families.­

Demand for retirement villages (RVs) particularly picked up speed during COVID-19 pandemic-induced lockdowns due to the isolation felt by seniors. As per Stats NZ data, RVs target a population of above-75 and approximately 332,000 Kiwis are of that age currently. This population is expected to increase to 833,000 by 2048.

On this note, let’s see how these 2 retirement village stocks are doing.

Image Source: © 2022 Kalkine Media

Ryman Healthcare Limited (NZX:RYM)

Aged care provider Ryman delivered a strong result in H1 FY22 with underlying profit growing 8.5% on pcp to $95.9 million. The increase in profit was propelled by increased demand for retirement living and aged care despite the COVID-19 pandemic. The Group’s resale margin grew 25% in the period, but the development margin stood lower.

The Group’s total booked sales for the half of 703 units rose 21.8% on pcp. It has invested nearly $406 million into construction, upgrading existing villages and refilling its land bank. Ryman also began work on 3 new sites, purchased extra property to extend exiting sites and got approval for its village in ChristChurch during the period.

DO READ: SUM, RAD, ARV: Retirement villages in news as overall COVID-19 cases dip

Do Read: RYM, ARV, RAD: How are these 3 NZ retirement villages doing in 2022?

Ryman also adjusted its dividend policy from 50% to 30%-50% of underlying profit. It remains positive on coming months and expects an increased demand.

Ryman will announce its FY22 results on 20 May 2022. On 6 May, at the time of writing, RYM was trading at $8.79, down 2.01%.

Arvida Group Limited (NZX:ARV) 

RV operator Arvida sold 327 occupation rights, up 26% year over year, and announced total sales of $325 million for the six months ended March 2022.

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Within the Wellness and Care category, ARV has a number of initiatives in the pipeline. In addition, it has established a new health and disability benchmark for the Maori and Pacific-island populations.

Despite the fact that housing inflation has been in accordance with ARV's projections, the Group anticipates an uncertain outlook. ARV is due to pay its next dividend in June 2022 after it announces its FY22 results.

On 6 May, at the time of writing, ARV was trading at $1.55, down 0.64%.

Bottom Line

The retirement village industry in NZ is likely to grow due to increased demand from the ageing population. However, the sector faces uncertainty in the housing market, wage inflation and other related government moves. 

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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