This article first appeared on GuruFocus .
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Free Cash Flow:Positive free cash flow of $188 million.
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Operating EBITDAF:Doubled compared to previous periods.
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Revenue Growth:Operating revenue increased by 10%.
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Cost Savings:$57 million in gross annualized cost savings since FY24.
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Net Debt:Reduced by $94 million to $1.57 billion.
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Development CapEx:Reduced to $222 million, below guidance of $235 million.
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Cash Release Target:$169 million delivered in FY26.
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Occupancy Rates:New care centers reached 90% occupancy.
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Revenue per Bed:Up 6% in New Zealand and 9% in Australia.
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EBITDAF per Bed:$20,200 in the second half of FY26.
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Land Sales:$147 million contracted, with $72 million received in cash proceeds.
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Interest Costs:Annualized gross interest costs reduced by $68 million since February 2025.
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Average Cost of Debt:Reduced to 5.9%.
Release Date: May 25, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Ryman Healthcare Ltd ( RYHTY ) reported a doubling of operating EBITDAF and delivered positive free cash flow of $188 million for the first time in over a decade.
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The company has a strong and flexible balance sheet, with successful bank refinancing and $147 million in contracted land divestments.
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Ryman Healthcare Ltd ( RYHTY ) has improved its portfolio quality by reducing the number of active construction sites and closing older villages.
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The company has seen significant occupancy growth in new care centers, with some reaching 90% occupancy ahead of expectations.
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Ryman Healthcare Ltd ( RYHTY ) has achieved $57 million in gross annualized cost savings since FY24, at the top end of their guidance range.
Negative Points
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The company faces mixed market conditions, with competitive pricing environments in some regions affecting resale margins.
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Ryman Healthcare Ltd ( RYHTY ) has a higher level of resale stock in regions with subdued property market conditions, such as Auckland.
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The company has not provided explicit guidance on sales volumes for FY27, reflecting uncertainty in demand due to macroeconomic conditions.
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There is a risk of further valuation discounts on unsold stock if sales velocity does not improve as expected.
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Ryman Healthcare Ltd ( RYHTY ) has not prioritized acquiring new land, focusing instead on improving performance in the existing asset base.
Q & A Highlights
Q: Can you provide an outlook on the resale margin for FY27 given the 600 basis point reduction in FY26? A: Matthew Prior, CFO: In a flat market, resale margins are expected to moderate. The rate of moderation is slowing, with the full year margin at 19.9%, down from 20.3% in the first half. Factors like the mix of service departments and regional performance, such as Auckland, influence this. We expect the resale margin to continue moderating but at a slower rate.
Q: Are there plans to purchase new land in the next 12 to 18 months to add to the land bank? A: Naomi Margaret James, CEO: Currently, our focus is on improving performance in our existing asset base. We are assessing our development opportunities and are not prioritizing new land acquisitions at this time. We aim to re-earn the right to grow and will consider new acquisitions when market conditions are more supportive.
Q: What is the Board's stance on capital management options, particularly regarding debt levels and asset realization? A: Naomi Margaret James, CEO: We are within our capital management framework's gearing target of 20% to 30%. The Board is mindful of shareholder value and will consider options like reinvestment, debt reduction, dividends, and buybacks, depending on market conditions and shareholder value.
Q: Can you provide insights into the current resales and stock levels across villages? A: Naomi Margaret James, CEO: Resales stock is higher in more subdued and competitive regions like Auckland. However, we are seeing improvements across all regions. Our focus is on driving sales to reduce stock levels, as indicated by the moderation in stock build and payout balance in the second half.
Q: How does the company plan to achieve the target of matching resales volumes with unit turnover by the end of FY27? A: Naomi Margaret James, CEO: We are increasing marketing spend to support this target. The focus is on improving sales effectiveness and marketing to drive resales performance. This initiative is already underway and will continue throughout the year.
Q: What is the risk of further write-downs if sales velocity of unsold stock does not improve? A: Matthew Prior, CFO: The independent valuer applies a discount to villages with unsold stock. Selling down unsold stock alleviates this discount, improving valuation. Conversely, if unsold stock increases, the discount would be considered in valuations.
Q: Why are Ryman's staffing levels higher compared to industry averages, and is there a plan to review this? A: Naomi Margaret James, CEO: We focus on margin rather than absolute cost. Our villages have a higher care weighting, and we are optimizing costs and rostering to manage this. As occupancy increases and reforms progress, we expect margin improvements.
Q: Can you provide more context on the FY27 sales cadence and its seasonal impact? A: Naomi Margaret James, CEO: Seasonality affects sales, with the fourth quarter typically strong. April was mixed due to long weekends and adverse weather. We are seeing similar levels overall, with stronger performance in service-assisted living compared to independent living.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
