RYM, OCA, SUM: 3 retirement village stocks in news post Budget Day

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RYM, OCA, SUM: 3 retirement village stocks in news post Budget Day

 RYM, OCA, SUM: 3 retirement village stocks in news post Budget Day
Image source: karelnoppe. Shutterstock.com

Highlights

  • Aged care providers have been facing a massive shortage of nurses due to pay gaps, and the Budget did not announce anything to solve the issue.
  • Ryman posted a 13.6% rise in profits for FY22.
  • Oceania registered a 16.2% rise in EBITDA in FY22.

NZ announced its much-awaited Budget on 19 May. It has made the health sector one of its top priorities, announcing $13.2 billion in new spending in the industry over the next 4 years.

However, the Budget failed to announce anything to solve the pay parity gap that exists in aged care homes and hospitals.

Aged care providers have been facing a massive shortage of nurses, forcing them to refuse services to the elderly and the old. Nearly 800 residential aged care beds have been closed across the nation in the past 6 months due to staffing issues, as per the New Zealand Aged Care Association (NZACA).

The reason for the shortage faced by the sector is the pay gap between the hospital and aged care nurses.

Let’s see how these 3 RV stocks are doing on this backdrop.

Source: © Urchenkojulia | Megapixl.com

Ryman Healthcare Limited (NZX:RYM)

Aged care provider Ryman Healthcare announced its FY22 results on Friday. The Group delivered a strong result, posting a 13.6% rise in its underlying profit of $255 million. The results came on the back of resilient business amid COVID-19 and a strong recovery in Victoria.

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The Group continued to experience strong demand for aged care in NZ and Victoria. Ryman bought 4 new sites during the year and bought extra land at 2 existing villages. The aged care provider has 29 new villages in the development pipeline that will provide homes for further 9K residents and expected capital earnings of over $6.8 billion.

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The Group paid a final dividend of 13.6cps, taking the FY22 dividend to 22.4cps.

On 20 May, at the time of writing, RYM was trading at $9.84, up 7.66%.

Oceania Healthcare Limited (NZX:OCAASX:OCA)

Another retirement village operator Oceania also revealed its FY22 performance on Friday. The Group registered a 16.2% rise in EBITDA of $76.2 million and made 450 sales across its villas, care suites and apartments in FY22 ended 31 March 2022 compared to a year before.

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Strong first-time sales and resales led Oceania’s operating cash flow to increase to $105 million in the year compared to $95 million for 10 months to 31 March 2021. The Group will pay a final dividend of 2.3cps on 21 June 2022.

 DO READ: From KPG, RBD to OCA- 5 NZX small caps flying high in 2022

On 20 May, at the time of writing, OCA was trading at $1.04, up 0.97%.

Summerset Group Holdings Limited (NZX:SUMASX:SNZ)

independent living and care options provider Summerset delivered strong results in 2021despite facing COVID-19 challenges. The Group registered a 44% rise in its underlying profit of $141 million and a 136% rise in NPAT of $544 million in 2021 compared to 2020.

Summerset built 619 units and 52 care beds in 2021. It also opened two new main buildings at its Richmond and Avonhead villages. The Group paid a total dividend of 18.5cps in 2021.

On 20 May, at the time of writing, SUM was trading at $10.89, up 3.91%.

Bottom Line

An increasingly ageing population requires government to incentivise the training of nurses and make nursing a good career to attract more in the retirement and aged care sector, which plays a central role in NZ’s healthcare sector.

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

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