A record volume of resales of units in its retirement villages has boosted Ryman’s first half profit with the second half expected to be stronger than the first, the company says.

The retirement village owner’s net profit rose 11 percent to $188.3 million in the six months to September, which included unrealised gains on the value of its portfolio.

“The first half result has been achieved against a background of tough market conditions in Melbourne and Auckland, so we are satisfied with what has been achieved,” chairman David Kerr said.

The first half underlying profit rose 6 percent to $103m, with full-year profits expected to lift in line with the growth in the company’s building programme.

“We have significantly lifted our land bank over the past three years to match our growth aspirations in New Zealand and Victoria,” said chief executive Gordon MacLeod, adding construction was expected to be under way at 12 sites by March, compared with eight sites last year.

The second half of this financial year is expected to deliver an underlying profit in a range from $250m to $265m, which was an increase of between 10 and 17 percent on the year earlier.

Ryman will pay shareholders an increased interim dividend of 11.5 cents per share in line with the increase in underlying profit.

Cash generation was strong in the half, with operating cash flows up nearly 18 percent to $256.1m.

Total assets rose more than 17 percent to $7.26 billion, reflecting strong demand and ongoing development in New Zealand and Melbourne, where the company has been building its portfolio of retirement villages.

MacLeod said the focus continued to be on delivering new villages, with the recent purchase of two sites – Highett in Victoria and Northwood in Christchurch, taking land bank to 7074 units and beds.

“The 22 sites in our land bank, 10 of which already have development under way, represent the equivalent of 66 percent of our existing portfolio.

“On development of the existing land bank, over the coming years Ryman expects to be providing homes and care for more than 20,000 people,” MacLeod said.

Ryman is targeting a build rate of 900 units and beds this year, up from 757 in the 2019 financial year.

Care occupancy at its established villages was running at 97 percent, with just 1.6 percent of the retirement village portfolio available for resale at the 30 September balance date.

This article was originally published on RNZ and re-published with permission.

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