Ryman Healthcare reports half-year profit has fallen by half

Retirement village operator Ryman Healthcare has reported its half-year profit has fallen by half on increased operating costs and a deferred tax expense.

Key numbers for the six months ended September compared with a year ago:

• Net profit $94.3m vs $187m
• Revenue $366.2m vs $333.6m
• Booked new sales/resale 827 vs 787
• Unsold units 634 vs 461
• No interim dividend

The company said revenue increased by 10 percent driven by increases in care and village fees.

But operating costs went up too as a result of opening three new main buildings and working to fill care beds and sell serviced apartments. This slashed profits by 50 percent.

Executive chair Dean Hamilton said sales of occupation rights agreements (ORAs) for apartments are up 5 percent, but margins are squeezed.

"The strongest six-month period in the last three financial years, demonstrating that demand for Ryman's product remains strong. Whilst we maintained pricing in a challenging market, this has translated to a compression in resale margins per unit, which are dependent on unit price inflation."

He said Ryman is working to improve business through a new pricing model and improving service efficiencies.

"Our new pricing model recognises that our residents are staying longer and our need to cover village operating costs, which have increased significantly in recent

years (rates, insurance and electricity in particular). The financial benefit of these changes will flow as new ORA contracts are entered, most of which will be realised over a 15-year timeframe."

Nine new sites are under construction with two expected to be completed in the second half of the 2025 financial year.

Hamilton said the second half of 2025 will continue to be challenging.

"Residential housing volumes and pricing continue to be subdued, impacting the ability of prospective residents to settle on ORAs. We expect these conditions to continue through the second half.

"We expect to have negative free cash flow between $50-100 million as settlements are deferred into FY26."

Dividends remain suspended and Ryman intends to review this in 2026.