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Jeremy Hutton: Milford Asset Management expert on Ryman Healthcare leading the NZX for July · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk sed be
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  Speaker 2: Jeremy Hutton's all the Milford Asset Management for our market
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  Speaker 2: update tonight. Hey Jeremy, Hey Eran.
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  Speaker 3: How you going.
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  Speaker 2: You're good? Thank you. Ryman we're talking Ryman Healthcare. They've
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  Speaker 2: been leading the INSIDEX so far in July. Is the
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  Speaker 2: worst do you think now passed for them?
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  Speaker 3: Yeah, that's correct. Ryman Healthcare, the fairly embattled retirement village operator.
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  Speaker 3: They're leading the index boards so far this month. In July.
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  Speaker 3: The share price is up fourteen percent, and this was
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  Speaker 3: mainly driven by a stronger than expected unit sales update
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  Speaker 3: over the April and June period. So that's the first
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  Speaker 3: quarter of their financial year. But it just shows to
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  Speaker 3: me how much the stock market is expectations driven, because
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  Speaker 3: I wouldn't say that the sales were great. I mean,
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  Speaker 3: they're still down ten percent versus the same quarter as
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  Speaker 3: last year, but they are a lot stronger than what
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  Speaker 3: Ryman was expecting at their result in May. They are
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  Speaker 3: expecting down twenty to thirty percent. So know the market
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  Speaker 3: reasonably happy that at least there's some clear evidence that
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  Speaker 3: sales are on an improving trajectory.
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  Speaker 2: Is there any read through at all on the housing
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  Speaker 2: market from the operators the retirement village operators.
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  Speaker 3: Yeah, that the retirement village operators do trade is a
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  Speaker 3: little bit of a proxy for the New Zealand housing market.
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  Speaker 3: Their share prices have ripped really high when the times
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  Speaker 3: are good, but as we're all well aware, they've had
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  Speaker 3: a tough couple of years and that's also reflective of
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  Speaker 3: the housing market too, and you know that's continued into
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  Speaker 3: twenty twenty five. We've had pretty much no price growth
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  Speaker 3: in the housing market in New Zealand over twenty twenty
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  Speaker 3: five and that does impact the retirement village model over
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  Speaker 3: the long term. They do need that price growth. But
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  Speaker 3: I suppose on the positive side, and what's tending to
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  Speaker 3: drive the share prices of these retirement villages and the
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  Speaker 3: short term is more sales volumes in the housing market,
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  Speaker 3: so more transactions, more liquidity, and that has stead been
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  Speaker 3: increasing this year pretty consistently, around ten percent above last year.
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  Speaker 3: So having that, you know, more liquidity in the market's important.
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  Speaker 3: You know, they can clear their stock quicker. For the
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  Speaker 3: retirement village operators, New residences can have that confidence to
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  Speaker 3: commit to buying a new unit.
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  Speaker 2: Which is obviously good for Ryman. Is it going to
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  Speaker 2: turn that share price around because it's fallen well eighty
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  Speaker 2: percent over four years.
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  Speaker 3: Yeah, it has been a really torrid time for Ryman shareholders.
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  Speaker 3: I mean the business has had a lot thrown at it,
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  Speaker 3: the construction cost inflation boom during the COVID times, huge
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  Speaker 3: interest rate hikes, They've had too much debt, and then
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  Speaker 3: into the sluggish housing market as well, so shareholders have
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  Speaker 3: had to stump up. They've supported two huge equity raises.
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  Speaker 3: Almost two billion dollars in fresh money has had to
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  Speaker 3: go into this business. But now there's a new management
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  Speaker 3: team and new CFO, new CEO. They're taking a time
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  Speaker 3: to form their new strategy, but investors will take a
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  Speaker 3: bit of confidence in the SALESMANI And you know, if
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  Speaker 3: we get a few more interest rate cuts from the
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  Speaker 3: rbn Z this year and that starts flowing through into
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  Speaker 3: the housing market, then you know Ryman and the other
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  Speaker 3: retirement village operators could be in for a much better
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  Speaker 3: time going forward.
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  Speaker 2: Jeremy, appreciate your time tonight. Jeremy Hutton, Milford Ethic Management.
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