Criterion: Aged-care operator Ryman eyes the spoils on both sides of the Tasman
With retirement villages and nursing homes in Victoria and NZ, Ryman is playing the ageing demographics theme on both sides of the ditch.
ASX-listed aged-care operator Ryman operates both in New Zealand and Victoria
Under new CEO Naomi James, the company has undergone a far-reaching financial overhaul
The company expects to benefit from aged-care reforms on both sides of the Tasman
For Ryman Healthcare (ASX:RYM) CEO Naomi James, it’s a great time for the retirement and aged-care operator to be straddling both sides of the Tasman.
In its native New Zealand, Ryman is the biggest operator in a sector where scale is paramount.
Here, Ryman has encroached into Victoria over the last decade, investing more than $2 billion in nine facilities.
But James reckons that as well as weeding out poor practices, Australia’s aged-care reforms have greatly improved the economics for operators such as Ryman.
The company operates in retirement villages, assisted living and nursing home sectors.
“As a listed stock exposure to housing demand and shortages and a growing ageing population, we are a unique proposition,” she says.
Facing similar demographic pressures, New Zealand is pondering its own reforms. And with the 44-year-old underarm arm bowling incident finally forgiven, Wellington is tipped to use Australia as the template.
Getting into shape
Ryman listed on the ASX On October 1, as an adjunct to its primary NZ listing.
Having taken on the job in November last year, James tackled performance issues including poor cash flow from tardy sales of new retirement units.
She also oversaw a $1 billion capital raising.
“We have had a significant reset and the heavy lifting has been done,” James says.
“We have addressed the accounting issues, reset the capital structure and moved to sharper focus on cash-based metrics.”
Ryman last month reported revenue of NZ$413.8 million for the first half to September 2025, 13% higher.
The company lost NZ$45.2 million.
But behind the ugly bottom line, Ryman recorded its first positive cash flow in more than decade – NZ$56.2 million.
DMF = Delightful Money Flows
Ryman has benefitted from a standardised deferred management fee (DMF), of 30% on new retirement village sales.
A DMF refers to the proportion of a new resident’s fee that is taken off the selling price of the unit on disposal.
James says the 30% is in line with the market. It also compares with Rymans’ average 28.8% for the half, compared with 20.7% a year previously.
A higher DMF means greater spoils in a rising property market, bearing in mind that retirement village valuations tend to track general trends
“This means the forward book builds significantly as units roll over to new terms which will build in value over time,” James says.
What if property prices tumble?
Nah – won’t happen.
Those reforms are pretty RAD
Ryman is also benefitting from the Australian aged-care reforms, which more sharply delineate the cost of clinical care (funded by the government) and everyday expenses (funded by the resident).
In effect, the government tips more into the pot, but residents stump up more for the everyday stuff if they can afford to do so.
Did we mention that it’s complicated?
A key benefit for operators is their ability to retain 2% of new refundable accommodation deposits (RADs) annually, for up to five years.
This means less money for deserving/non deserving heirs when the resident departs.
James says that with a new RAD in Australia exceeding $800,000, this should deliver a “meaningful” increase in revenue.
Get bigger or go home
The local Aged Care Act means “care economics” have become increasingly challenging, with requirements such as decent tucker.
This has caused a wave of consolidation, especially in the more fragmented Australian market.
Currently, more than 75% of Ryman’s revenue derives from NZ, where it has 4000 aged-care beds.
Ryman has 700 beds in Victoria – a similar sized market to Kiwiland – and is eyeing interstate expansion.
James says Ryman operates in the “sweet spot” of facilities with 80-100 beds, which can leverage facilities such as kitchens and laundries and roster staff more efficiently.
She is confident NZ pollies will learn from the Australian experience and cherry-pick the best of the reforms, while going easy on compliance costs.
In recent years, ASX-listed retirement/aged-care operators Japara, Estia and Aveo have been subsumed by private interests.
With a similar market cap to Ryman, Regis Healthcare (ASX:REG) is more heavily exposed to the nursing home business.
As the over 80s cohort triples to 3.5 million people over the next four decades, Ryman and Regis as rare ASX entrees to a sector with dead-certain growth prospects.
This report does not constitute financial product advice. You should consider obtaining financial advice before making any financial decisions.
Originally published as Criterion: Aged-care operator Ryman eyes the spoils on both sides of the Tasman
