Ryman first half underlying profit of $85.2m, up 11.4%

Half Year Results22 November 2017RYMHealthcare

RYMAN HEALTHCARE
HALF YEAR RESULTS
30 September 2017

FIRST HALF
HIGHLIGHTS
Underlying profit up
11.4% to $85.2 million
Reported profit up 8.4%
to $202.6 million
Interim dividend lifted to 9.5
cents per share
$5.3 billion of total assets
Fourteen new villages in
the pipeline

Ryman statistics as at September 2017. Statistics for other pro
viders are as at their latest balance date.
CONTINUUM OF CARE OFFERING
‐
1,000 2,000 3,000 4,000 5,000
6,000 7,000 8,000 9,000 10,000
Ryman
Metlifecare
Summerset
Arvida
BUPA
Oceania
Care beds and serviced apartments
Independent living

STRONG CLINICAL OUTCOMES
50%
31%
13%
23%
36%
25%
38%
0%
10%20%30%40%50%60%
Ryman Provider A Provider B Provide
r C Provider D Provider E Provider
F
Percentage of villages with 4 year certificationIncludes aged care providers with 15 or more villages

Delicious new food offerings
Ryman Moves

MYRYMAN

MYRYMAN –ROLLOUT COMPLETE BY AUGUST 2018

Chris Beckett and
Barbara Reynen‐Rose

LEADERSHIP
PROGRAMME

14 NEW VILLAGES IN THE PIPELINE
Pukekohe ‐NZ
Rangiora ‐NZ
Birkenhead ‐NZ
Greenlane ‐NZ
Petone ‐NZ
Brandon Park ‐Victoria
Lynfield‐NZ
Devonport ‐NZ
Burwood East ‐Victoria
Coburg ‐Victoria
River Road ‐NZ
Hobsonville‐NZ
Mount Eliza ‐Victoria
Newtown ‐NZ
Geelong ‐Victoria
Lincoln Road ‐NZ
Park Terrace ‐NZ
Mount Martha ‐Victoria
Final Stages
Village Open
Construction
Consenting
Design
Village
Pipeline
of 14
villages

BRANDON PARK
Melbourne

LYNFIELD
Auckland

MT MARTHA
Victoria

FOURTEEN SITES IN THE PIPELINE
River Road, Hamilton

POPULATION GROWTH 75+
‐ 175,000 350,000 525,000 700,000 875,000 1,050,000 1,225,000 1,400,000
0
5,000
10,00015,00020,00025,00030,00035,00040,000
2006‐2011 2011‐2014 2014‐2018 2018‐2023 2023‐2028 2028‐2033 2033‐2038
2038‐2043 2043‐2048
NZ avg annual increase i
n population aged 75+
Victoria avg annual increa
se in population aged 75+
NZ total population aged 75+ (RHS)
Victoria total population aged 75+ (RHS)

Proud new sponsors of the Coburg Lions

UNDERLYING PROFIT GROWTH
0
50
100150200250
200220032004200520062007200820092010201120122013201420152016201
72018
$ Millions
First half
Second half
Target range

RESALES BANK
*As at 30 September. All
other years at 31 March.
The resalesbank represents the extent that the current price ex
ceeds the price paid
by the current resident for the unit's occupancy rights
‐
100 200 300 400 500 600 700 800 900
2014
2015
2016
2017
2018*
$Millions
New Zealand
Melbourne

TOTAL ASSETS
0123456
Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14
Sep 15 Sep 16 Sep 17
$Billions

0%5%
10%15%20%25%30%35%
2012 2013 2014 2015 2016 2017 2018*
Group development margin
Margin excluding Bob Scott
DEVELOPMENT MARGIN
*Represents first half only
Target range

SALES PRICING VS MEDIAN HOUSE PRICE
0
200400600800
1000120014001600
Melbourne
Auckland
$Thousands
Median house price ‐ area
Ryman ‐ Independent
Ryman ‐ Serviced

CAPITAL PROCEEDS
* Indicative occupancy advances
0123456
Sep 2012
Sep 2017
Mar 2022 *
$ Billion
Gross Occupancy Advances

LONG TERM CAPITAL EFFICIENCY$25m raised at IPO in 1999Invested $2.8bn in portfolio since1999with no fresh capitalDividends of $630m paid since floatSelf‐funded growthStrong balance sheet

APPENDICES

Gordon MacLeod
Chief Executive
11 years at Ryman
Barbara Reynen‐Rose
Group Operations Manager
25 years at Ryman
Debbie McClure
Group Sales and Community
Relations Manager
27 years at Ryman
Jenn Poskitt
Marketing Manager
8 years at Ryman
David King
Corporate Affairs Manager
4 years at Ryman
Andrew Mitchell
Development Manager
11 years at Ryman
Tom Brownrigg
Construction Manager
12 years at Ryman
Taylor Allison
Design Manager
17 years at Ryman
Nicole Forster
Group Shared Services Manager
6 years at Ryman
APPENDIX 1:
MANAGEMENT TEAM –125 YEARS AT RYMAN
David Bennett
Chief Financial Officer
4 years at Ryman

APPENDIX 2:
REPORTED PROFIT UP 8.4%
Underlying profit $85.2M
Unrealised revaluations of RV units +$118.3M
Deferred tax expense ‐$0.9M
Reportednet profit $202.6M

APPENDIX 3:
STATISTICS
* 112 units/beds built during first half offset by 20 serviced
apartments which have been redeveloped at Malvina Major
Sales of Occupation Rights
Half year
Half year
Full year
Sep‐17
Sep‐16
Mar‐17
Existing units
Independent
184
166
327
Serviced
210
185
391
394
351
718
New units
Independent
111
184
437
Serviced
46
59
163
157
243
600
Portfolio and Build RateRetirement village units
Independent
4,241
3,894
4,131
Serviced
1,819
1,756
1,837
6,060
5,650
5,968
Units built
112 *
303
621
Aged Care Beds
3,281
3,281
3,281
Beds built
0
160
160
Total Portfolio
9,341
8,931
9,249
Total build
112 *
463
781

APPENDIX 4:
MARGIN
Half year
Half year
Full year
Sept‐17
Sept‐16
Mar‐17
NewSales
$000s
$000s
$000s
Reference
Realised Fair Value movement –
new RV units
(Note 3)
15,612
23,004
6
2,959
Sale of occupation rights–new
RV units
(Key statistics)
90,520
110
,522
263,282
Gross development margin %
17%
21%
24%
ResalesRealised Fair Value movement –
existing RV units
(Note 3)
52,844
34
,638
77,286
Sale of occupation rights–exis
ting RV units
(Key statistics)
201,
830
147,102
311,348
Gross resalesmargin %
26%
24%
25%
Possum Bourne, Pukekohe

APPENDIX 5:
INVESTING CASH FLOWS
$38 m
$59 m
$62 m
$195 m
$154 m
$133 m
$26 m
$9 m
$22 m
$15 m
$29 m
$17 m
0
50
100150200250300
H1
H2
H1
2017
2018
$Millions
Purchase of land
New villages
Projects
Village upgrades

APPENDIX 6:
INVESTMENT PROPERTY SUMMARY
CBRE Nominal Unit Price Inflation Assumption by Year
Discount
Rate
as at 30 September 2017
12345+
Auckland
1.0%
2.0%
2.4%
3.0%
3.5% 12.50%
Rest of New Zealand
0.9%
1.5%
2.0%
2.8%
3.3% 13.39%
Melbourne
3.6%
3.6%
3.6%
3.8%
3.9% 14.00%
Growth rates and discount rates a
re the weighted average rates
of the individual villages in each region.
Birkenhead, Auckland

APPENDIX 7:
OPERATING CASH FLOWS
Half year Half year Full year
Sep‐17 Sep‐16 Mar‐17
Operating cash flow
$000’s $000’s $000’s
Resident receipts
129,971 109,348 227,665
Refundable accommodation deposits (net)
1,069
838 572
Development sales
130,324 115,834 246,116
Resales
162,523 141,706 285,476
Total receipts from resid
ents
423,887 367,726 759,829
Interest received
160
302 476
Payments to suppliers and employees
‐132,753 ‐100,634 ‐214,028
Payments to residents
‐109,078 ‐99,924 ‐212,548
Interest paid
‐7,105 ‐6,224 ‐10,930
Net operating cash flow
175,111 161,246 322,799

APPENDIX 8:
CAPITAL MANAGEMENT
*Gearing ratio calculated as net debt / net debt plus net equit
y
As at
Sept‐17
000’s
As at
Sept‐16
000’s
As at
Mar‐17
000’s
Net debt
945
703
838
Net equity
1,805
1,463
1,652
Net equity plus debt
2,750
2,166
2,490
Gearing ratio *
34%
33%
34%
22%32%42%52%62%72%
‐
1,000 2,000 3,000 4,000 5,000 6,000
Sept 15 Mar 16 Sept 16 Mar 17 Sept 17
$ Millions
Total assets and gearing ratio
Net debt
Total assets
Gearing ratio *
‐
100 200 300 400 500 600 700 800 900
1,000
Debt
$ Millions
Use of Debt
Projects and Head OfficeGeneratorsOther village capexVillage refurbishments andimprovementsNew Sale debtorsDevelopment WIPUndeveloped Land

APPENDIX 9:
Resale Stock
As at Sept‐17 As at Sept‐16 As at Mar‐17
Total Resales stock
46
47
32
Total retirement portfolio
6,060
5,650
5,968
Resale stock available percentage
0.8%
0.8%
0.5%
0.9%
1.4%
1.0%
1.3%
1.4%
1.2%
0.8%
0.5%
0.8%
0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
2014
2015
2016
2017
2018
Available resales stock
Average

APPENDIX 10:
VALUE OF CONTRACTS NOT BOOKED
‐
50
100 150 200 250
Sept‐15
Mar‐16
Sept‐16
Mar‐17
Sept‐17
$ Millions
Note: Presales are uncondition
al occupation rights agreements w
hich have been entered
by residents but have not been booked as the unit is not yet ne
ar complete

APPENDIX 11:
RESIDENT AVERAGE AGE & TENURE
808182838485868788
Sept‐12 Mar‐13 Sept‐13 Mar‐14 Sept‐
14 Mar‐15 Sept‐15 Mar‐16 Sept‐16 Mar‐
17 Sept‐17
Years
Independent
Serviced
Care centre
As at
Sept‐17
As at
Sept‐16
As at
Mar‐17
Resident average age (years)Independent
82.2
82.3
82.3
Serviced
87.5
87.5
87.6
Care centre
86.2
86.2
86.1
Half year
Sept‐17
Half year
Sept‐16
Full year
Mar‐17
Average tenure ‐vacated residents (years)
Independent
5.4
4.7
4.9
Serviced
2.9
2.6
2.7

APPENDIX 12:
CASH MANAGEMENT FEES
Half year
Sept‐17
Half year
Sept‐16
Full year
Mar‐17
$000s $000s $000s
Reference
Accrued Management Fees –Openin
g
(Note 4) and PY financials 270,3
70 227,154 227,154
Less: Accrued Management Fees –Closing
(Note 4)
‐297,249 ‐246,409 ‐
270,370
Movement in Accrued Management Fees
‐26,879 ‐19,255 ‐43,216
Plus: DMF income
Income statement
33,756 27,306 60,988
Plus: Revenue in advance mo
vement
(Note 2)
4,362 3,716 7,670
Plus: GST / accommodation credit
adjustment
Not disclosed
‐5
896 ‐1
,751
Plus: Movement in resident l
oan
Not disclosed
3,649 1,123 5,017
Cash Management Fees
14,883 13,786 28,708

APPENDIX 13:
LAND BANK
Hospital
Dementia
Resthome
Serviced Independent
Total
NEW ZEALANDExisting SitesJean Sandel
New Plymouth
‐
‐
‐
‐
59
59
Kiri Te Kanawa
Gisborne
‐
‐
‐
‐
26
26
Bob Scott
Lower Hutt
‐
‐
‐
‐
74
74
Bert Sutcliffe
Auckland
‐
‐
‐
‐
151
151
Possum Bourne
Pukekohe
‐
‐
‐
‐
29
29
Charles Upham
Rangiora
‐
‐
‐
‐
57
57
Campbell Road, Greenlane
Auckland
40
40
36
82
91
289
Total NZ Existing Sites
40
40
36
82
487
685
New SitesDevonport
Auckland
40
36
36
77
192
381
Lynfield
Auckland
42
42
40
86
332
542
River Road
Hamilton
40
40
40
93
248
461
Lincoln Road
Henderson
40
40
40
80
170
370
Hobsonville
Auckland
40
40
40
80
250
450
Newtown
Wellington
28
20
28
46
55
177
Park Terrace
Christchurch
35
20
16
66
53
190
Total NZ New Sites
265
238
240
528
1,300
2,571
Total New Zealand Landbank
305
278
276
610
1,787
3,256
AustraliaNew SitesBrandon Park
Melbourne
80
39
80
94
328
621
Burwood East
Melbourne
40
40
40
78
163
361
Mount Eliza
Melbourne
40
40
40
70
315
505
Coburg
Melbourne
35
35
36
85
221
412
Geelong
Victoria
4040406288270
Mount Martha
Melbourne
28
24
28
56
79
215
Total Australian Landbank
263
218
264
445
1,194
2,384
Total
568
496
540
1,055
2,981
5,640

APPENDIX 14:
ASSET BASE
Hospital
Dementia
Resthome
Serviced
Independent
Total
(as at 30 September 2017)Anthony Wilding
Christchurch
80
33
35
50
110
308
Bert Sutcliffe
Birkenhead
40
40
40
81
106
307
Bob Owens
Tauranga
40
40
40
79
218
417
Bob Scott
Petone
40
40
34
89
180
383
Bruce McLaren
Auckland
41
40
42
74
192
389
Charles Fleming
Waikanae
40
40
40
79
201
400
Charles Upham
Rangiora
40
40
40
93
205
418
Diana Isaac
Christchurch
40
40
40
79
256
455
Edmund Hillary
Auckland
114
30
50
60
373
627
Ernest Rutherford
Nelson
49
25
20
75
124
293
Essie Summers
Christchurch
41
24
30
58
22
175
Evelyn Page
Orewa
60
37
20
66
248
431
Frances Hodgkins
Dunedin
‐
‐
51
32
42
125
Grace Joel
Auckland
77
‐
20
80
69
246
Greenlane
Auckland
‐
‐
‐
‐
24
24
Hilda Ross
Hamilton
68
40
43
51
167
369
Jane Mander
Whangarei
60
32
20
71
183
366
Jane Winstone
Wanganui
30
‐
39
50
54
173
Jean Sandel
New Plymouth
39
33
39
62
171
344
Julia Wallace
Palmerston North
43
21
20
50
111
245
Kiri Te Kanawa
Gisborne
46
15
34
62
79
236
Malvina Major
Wellington
90
‐
30
39*
117
276
Margaret Stoddart
Christchurch
‐
‐
41
25
20
86
Ngaio Marsh
Christchurch
81
‐
30
40
119
270
Possum Bourne
Pukekohe
40
40
40
84
230
434
Princess Alexandra
Napier
60
24
24
54
70
232
Rita Angus
Wellington
49
‐
20
50
99
218
Rowena Jackson
Invercargill
70
26
61
46
103
306
Shona McFarlane
Lower Hutt
59
‐
20
50
130
259
Woodcote
Christchurch
‐
‐
49
7
18
74
Yvette Williams
Dunedin
57
30
3
32
‐
122
Weary Dunlop
Melbourne
30
20
32
51
200
333
Current Units & Beds
1,524
710
1,047
1,819
4,241
9,341
*Enhancements to the serviced apartment offering at Malvina Maj
or has resulted in a 20 unit re
duction in the asset base from p
reviously reported.

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumberDate
Nature of event
BonusIf ticked,Rights Issue
Tick as appropriateIssuestate whether:Taxable/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
Interim
X
YearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISI
N
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISI
N
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlemen
t
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick i
f
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FWP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -
Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
last business day of the week.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quotin
g RightsSecurity Code:
Cease Quoting Rights 5pm:
Commence Quoting New SecuritiesSecurity Code:
Cease Quoting Old Security 5pm:
$Nil$Nil
1 December, 20178 December, 2017
$47,500,000
Date Payable
$3.135 cents$Nil
In dollars and cents
9.5000000 cents
$NZ$Nil
Enter N/A if not
applicable
03 366 406903 366 486122112017
Ordinary SharesNZRYME0001S4
EMAIL: announce@nzx.com
Notice of event affecting securities
1
Ryman Healthcare Limited
David BennettDirectors' Resolution

---

RYMAN HEALTHCARE LIMITED
KEY STATISTICS

Sept 17 Sept 16 Mar 17
Half Year Half Year Full Year
Unaudited Unaudited Audited

Underlying Profit ($m) 85.2 76.5 178.3
Plus: Unrealised fair value movement ($m) (note 3) 118.3 118.2 184.7
Plus: Deferred tax expense ($m) (0.9) (7.7) (6.3)
Reported Profit after tax ($m) 202.6 187.0 356.7

Operating Cash Flows ($m) 175.1 161.2 322.8

Earnings per share (cents) – Basic and diluted 40.5 37.4 71.3

Dividend per share (cents) 9.5 8.5 17.8

Net Tangible Assets per share (cents) – Basic and diluted 361.1 292.5 330.4

Sales of Occupation Right Agreements

New Units (no.) 157 243 600
Existing Units (no.) 394 351 718
Total (no.) 551 594 1,318

New Units ($m) 90.5 110.5 263.3
Existing Units ($m) 201.8 147.1 311.3
Total ($m) 292.3 257.6 574.6

Asset Base

Retirement Village Units (no.) 6,060 5,650 5,968
Residential Care Beds (no.) 3,281 3,281 3,281
Total (no.) 9,341 8,931 9,249

Landbank - to be developed
Retirement Village Units (no.) 4,036 * 3,850 4,025
Residential Care Beds (no.) 1,604 * 1,315 1,529
Total (no.) 5,640 * 5,165 5,554

* includes Mount Martha site which went unconditional in October 2017

Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch 8140

MEDIA RELEASE NOVEMBER 23, 2017
Ryman reports first half underlying profit of $85.2 million, up 11.4%
Highlights:
 Underlying profit up 11.4% to $85.2 million
 Reported (IFRS) profit up 8.4% to $202.6 million
 Interim dividend lifted to 9.5 cents per share
 Full year underlying profit expected to be between $195-$210 million (+9% to +18%)
 Total assets $5.3 billion, up 19% on September last year
 Seventh site in Victoria secured, 14 new villages in the pipeline
 Continued investment in people and systems to support long term growth and to improve
the resident experience
Ryman Healthcare’s underlying profit rose 11.4% to $85.2 million thanks to continued
growth in resale volumes and demand, and the company has secured its seventh site in
Victoria.
Ryman shareholders will receive an increased interim dividend of 9.5 cents per share, in line with the
growth in underlying profit. The dividend will be paid on December 8, and the record date for
entitlements is December 1.
Chairman Dr David Kerr said strong gains from the resale of occupancy rights had driven the result,
as Ryman’s unique villages and high-quality care offering continued to be in strong demand.
“We are pleased to be able to report another good first half result and we have a great pipeline of
villages to develop. We are in a very strong financial position, and our total assets are now $5.3
billion.’’
Ryman continued to expand its landbank, buying a site for its seventh village in Victoria at Mt Martha
on the Mornington Peninsula. The landbank in Victoria is now close to matching New Zealand,
reflecting Ryman’s plans to expand at the same pace in both markets.
Work is now well under way on three new villages in Auckland and one in Melbourne, and in
addition to this Ryman has another 10 villages in its landbank. Dr Kerr said the development team
was busy looking for new sites in Victoria and New Zealand with long-term demand just beginning
to take off.
“We know that we have great demand ahead but we will only be successful if our residents and their
families love what we do. Our latest survey results show that the investments we’ve made in
improving the resident experience have hit the mark, and our retirement village residents are telling
us they are happier than ever.’’

Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch 8140

“As a board, we are also delighted to see that we are achieving consistently excellent external
clinical audit results, which shows that our care is of the highest quality and is continuously
improving.’’
Occupancy in Ryman’s established care centres was running at 97% during the first half, well ahead
of the industry average of 87%.
Dr Kerr said it was pleasing to see resale volumes at Ryman’s villages grow by 12%, despite volumes
in the real estate market dropping by more than 20%.
“We are keeping an eye on the property market like everyone else. It is also important to
remember that moving into a Ryman village is usually a decision based on health needs, rather than a
purely market-driven decision.’’
Chief Executive Gordon MacLeod said village staff had been given further pay increases and
improved entitlements. A new leadership programme is also being rolled out to support Ryman’s
current leaders and identify the next generation needed as the company grows.
Ryman remained concerned about New Zealand’s immigration settings and would continue to lobby
at a Government level to support members of the Ryman family who were born outside of New
Zealand, Mr MacLeod said.
“A great resident experience depends on staff who are passionate about caring for people. It takes
years of training and commitment,’’ Mr MacLeod said.
“We are about to experience huge growth in demand and the reality is there is likely to be a
shortfall locally.’’
On outlook, Dr Kerr said full year underlying profit was expected to be in the range of $195 million
to $210 million.
“We have reviewed how we are going and we are expecting a busier second half with construction
activity weighted towards the end of the year. We are expecting steady growth for the full year as
we make further progress at Birkenhead, Greenlane and Brandon Park. We are also busy getting the
next generation of villages through the design and consenting process, so we have a springboard for
future growth."
Dr Kerr said Ryman’s long-term focus remained to double underlying profits every five years and to
expand with new villages in communities where better retirement living options and high-quality care
were needed. Ryman is on track to increase profit for the 16th year this year.
“Our long-term goal remains to grow to meet the massive amount of demand we see ahead as the
population ages. Each new village we build represents a long-term investment in care for the
communities we operate in, and the villages create a new economic engine to support our future
growth as a company.’’
“That focus on care and meeting a long term social need and the commitment of our wonderful staff
make Ryman a very special company.’’

Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch 8140

New villages under construction:
Greenlane, Auckland: First stages nearing completion.
Brandon Park, Melbourne: Construction under way.
Devonport, Auckland: Earthworks under way.
Lynfield, Auckland: Earthworks under way.

New villages in planning and design phase:
River Rd, Hamilton
Burwood East, Melbourne
Mt Eliza, Victoria
Coburg, Melbourne
Geelong, Victoria
Hobsonville, Auckland
Lincoln Rd, Auckland
Newtown, Wellington
Park Terrace, Christchurch
Mt Martha, Victoria
About Ryman: Ryman Healthcare was founded in Christchurch in 1984 and owns and operates 31
retirement villages in New Zealand and Australia. Ryman villages are home to over 10,500 residents,
and the company employs over 4,500 staff.
Contacts: For media information or images contact David King, Corporate Affairs Manager, on 021
499 602 (+64 21 499 602) or email david.king@rymanhealthcare.com.
For investor relations information contact Michelle Perkins, Investor Relations Manager, on 027 222
9684 (+64 27 222 9684) or email michelle.perkins@rymanhealthcare.com.

---

RYMAN HEALTHCARE LIMITED
UNAUDITED RESULTS FOR ANNOUNCEMENT TO THE MARKET

Reporting Period Six months to 30 September 2017
Previous Reporting Period Six months to 30 September 2016

Amount (000s) Percentage change
Revenue from ordinary activities $165,176 + 19.0%
Total Income from ordinary
activities
$351,951 + 11.9%
Underlying Profit
1
$85,249 + 11.4%
Profit (loss) from ordinary
activities after tax attributable
to security holders
$202,630 +8.4%
Net profit (loss) attributable to
security holders
$202,630 +8.4%

Interim Dividend Amount per security Imputed amount per security
9.5 cents Not imputed

Record Date 1 December 2017
Dividend Payment Date 8 December 2017

Audit The financial statements for the six months ended 30 September 2017
have not been audited.

Comments Refer to Media Release below

1
Underlying profit excludes deferred taxation, taxation expense and unrealised gains on investment properties
because these items do not reflect the trading performance of the company. Underlying profit determines the
dividend payout to shareholders, and is reconciled to reported profit in the key statistics attached to this release.

RYMAN HEALTHCARE LIMITED
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

Six Months
Ended
Six Months
Ended Year Ended
30 Sept 2017 30 Sept 2016 31 March 2017
unaudited unaudited audited
Note $000 $000 $000
Revenue

Care fees

130,494 111,072 227,391
Management fees

33,756 27,306 60,988
Interest received

201 304 456
Other income

725 157 355
Total revenue

165,176 138,839 289,190

Fair value movement of
investment
properties

3 186,775 175,810 324,966
Total income

351,951 314,649 614,156

O
perating expenses

(130,506) (107,477) (225,573)
Depreciation and
amortisation ex
pense

(9,832) (7,129) (14,934)
Finance costs

(8,045) (5,360) (10,660)
Total ex
penses

(148,383) (119,966) (251,167)

Profit before income tax

203,568 194,683 362,989
Income tax expense

(938) (7,677) (6,295)
Profit for the
period 202,630 187,006 356,694

Earnings per share:
Basic and diluted (cents per
share
)

40.5

37.4

71.3

Note: all profit and total comprehensive income is attributable to Parent Company shareholders and is from
continuing operations.

The accompanying notes form part of these interim financial statements.

RYMAN HEALTHCARE LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

Six Months Ended Six Months Ended Year Ended
30 Sept 2017 30 Sept 2016 31 March 2017
unaudited unaudited audited
$000 $000 $000

Profit for the
period 202,630 187,006 356,694

Items that may be reclassified subsequently to profit or loss:
Fair value movement and reclassification
of interest rate swa
ps (523) (1,200) 1,790
Movement in deferred tax related to
interest rate swa
ps 146 336 (501)
Gains / (losses) on hedge of foreign
owned subsidiar
y net assets 150 4,061 1,102
(Losses) / gain on translation of foreign
o
perations (251) (7,175) (1,392)

(478) (3,978) 999
Items that will not be reclassified subsequently to profit or loss:
Revaluation of property, plant and
e
quipment - - 56,513

- - 56,513

Other com
prehensive income (478) (3,978) 57,512
Total comprehensive income 202,152 183,028 414,206

Note: all profit and total comprehensive income is attributable to Parent Company shareholders and is from
continuing operations.

The accompanying notes form part of these interim financial statements.

RYMAN HEALTHCARE LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

Issued
Ca
pital
Asset
Revaluation
Reserve
Interest
Rate
Swap
Reserve
Foreign
Currency
Translation
Reserve
Treasury
Stock
Retained
Earnin
gs
Total
Equity

$000 $000 $000 $000 $000 $000 $000

Six months ended 30 Sept 2016
(unaudited):
Opening balance
33,290 176,806
(6,680) 1,356 (15,900) 1,138,653 1,327,525
Total comprehensive income for the
period
- - (864) (3,114) - 187,006 183,028
Treasury stock movement - - - - (5,446) - (5,446)
Dividends paid to shareholders - - - - - (42,500) (42,500)
Closing balance 33,290 176,806 (7,544) (1,758) (21,346) 1,283,159 1,462,607

Year ended 31 March 2017
(audited):
Opening balance
33,290 176,806
(6,680) 1,356 (15,900) 1,138,653 1,327,525
Total comprehensive income for the
period

-
56,513 1,289 (290) - 356,694 414,206
Treasury stock movement
-
- - - (4,640) - (4,640)
Dividends paid to shareholders
-
- - - - (85,000) (85,000)
Closin
g balance 33,290 233,319 (5,391)

1,066 (20,540) 1,410,347 1,652,091

Six months ended 30 Sept 2017
(unaudited):
Opening balance
33,290 233,319 (5,391) 1,066 (20,540) 1,410,347 1,652,091
Total comprehensive income for the
period
- - (377) (101) - 202,630 202,152
Treasury stock movement - - - - (2,295) - (2,295)
Dividends paid to shareholders - - - - - (46,500) (46,500)
Closin
g balance 33,290 233,319 (5,768) 965 (22,835) 1,566,477 1,805,448

The accompanying notes form part of these interim financial statements.

RYMAN HEALTHCARE LIMITED
CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2017

The accompanying notes form part of these interim financial statements.

As at
30 Se
pt 2017
As at
30 Sept 2016
As at
31 March 2017
unaudited unaudited audited
Note $000 $000 $000

Assets
Trade and other receivables 248,034 215,626 256,614
Advances to em
ployees 6,264 5,231 4,884
Property, plant & equipment 1,011,950 860,716 1,013,547
Investment
properties 3 4,002,859 3,341,831 3,661,445
Intan
gible assets 13,390 - 8,329
Total assets

5,282,497 4,423,404 4,944,819

E
quity

Issued ca
pital
6
33,290 33,290 33,290
Asset revaluation reserve

233,319 176,806 233,319
Interest rate swa
p reserve

(5,768) (7,544) (5,391)
Forei
gn currency translation reserve 965 (1,758) 1,066
Treasury stock

(22,835) (21,346) (20,540)
Retained earnin
gs

1,566,477 1,283,159 1,410,347
Total e
quity

1,805,448 1,462,607 1,652,091

Liabilities

Trade and other payables 7 77,491 125,162 149,855
Employee entitlements 18,491 14,610 16,167
Revenue in advance 49,064 40,748 44,702
Interest rate swaps 8,010 10,477 7,488
Refundable accommodation
de
posits
29,485 27,660 28,473
Bank loans (secured) 945,038 703,475 837,520
Occupancy advances
(non interest bearing)
4 2,277,429 1,966,871 2,137,274
Deferred tax liability (net) 72,041 71,794 71,249
Total liabilities 3,477,049 2,960,797 3,292,728

Total equity and liabilities 5,282,497 4,423,404 4,944,819

Net tangible assets per basic and diluted
share (cents)
361.1

292.5

330.4

RYMAN HEALTHCARE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

Six Months Ended Six Months Ended Year Ended
30 Se
pt 2017 30 Sept 2016 31 March 2017
unaudited unaudited audited
Note $000 $000 $000

O
perating activities

Recei
pts from residents

423,887 367,726 759,829
Interest received

160 302 476
Payments to suppliers and
em
ployees

(132,753) (100,634) (214,028)
Pa
yments to residents

(109,078) (99,924) (212,548)
Interest
paid

(7,105) (6,224) (10,930)
Net o
perating cash flows 2 175,111 161,246 322,799

Investin
g activities

Purchase of property, plant &
e
quipment and intangible assets

(114,965) (109,191) (192,364)
Purchase of investment
properties

(106,683) (155,595) (314,920)
Capitalised interest paid

(10,985) (7,789) (16,991)
Advances to em
ployees

(1,380) (1,824) (1,477)
Net investin
g cash flows

(234,013) (274,399) (525,752)

Financing activities

Drawdown of bank loans
(net)

107,697 162,059 293,554
Dividends
paid

(46,500) (42,500) (85,000)
Purchase of treasury stock (net)

(2,295) (5,445) (4,640)
Net financing cash flows

58,902 114,114 203,914

Net increase in cash and
cash e
quivalents

- 961 961
Cash and cash equivalents at
be
ginning of period

- (961) (961)
Cash and cash equivalents
at the end of
period

- - -

The accompanying notes form part of these interim financial statements.

RYMAN HEALTHCARE LIMITED
ACCOUNTING POLICIES

1. STATEMENT OF ACCOUNTING POLICIES

Reporting entity

Ryman Healthcare Limited is a profit-oriented entity incorporated in New Zealand and develops, owns and
operates integrated retirement villages, resthomes and hospitals for the elderly within New Zealand and
Australia. Ryman Healthcare Limited is a Financial Markets Conduct reporting entity for the purposes of the
Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013, and its financial statements comply
with these Acts.

The Company and its wholly owned subsidiaries comprise the Ryman Group (“the Group”).

Basis of preparation

The unaudited condensed consolidated interim financial statements have been prepared in accordance with
Generally Accepted Accounting Practice in New Zealand (“NZ GAAP”). They comply with the New Zealand
Equivalent to International Accounting Standard 34 (NZ IAS 34) “Interim Financial Reporting” and International
Accounting Standard 34 (IAS 34) “Interim Financial Reporting”.

The financial statements for the six months ended 30 September 2017 and the comparative six months ended 30
September 2016 are unaudited.

These financial statements have been prepared under the same accounting policies and method of computation as
the Company’s Annual Report as at 31 March 2017. These financial statements should be read in conjunction with
the financial statements and related notes included in the Company’s Annual Report for the year ended 31 March
2017.

The financial statements were approved by the Board of Directors on 22 November 2017.

The information is presented in thousands of New Zealand dollars ($).

All references to AUD refer to Australian dollars.

RYMAN HEALTHCARE LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

2. RECONCILIATION OF NET PROFIT AFTER TAX FOR THE PERIOD WITH NET CASH
FLOWS FROM OPERATING ACTIVITIES
Six Months Ended Six Months Ended Year Ended
30 Se
pt 2017 30 Sept 2016 31 March 2017
unaudited unaudited audited
$000 $000 $000

Net profit after tax 202,630 187,006 356,694
Movements in balance sheet items:
Occu
pancy advances 167,034 131,894 326,259
Refundable accommodation
de
posits 1,012 (642) 171
Accrued management fees (26,901) (18,595) (44,966)
Revenue in advance 4,362 3,716 7,670
Trade and other
payables (8,317) 6,730 13,100
Trade and other receivables 8,580 4,187
(36,798)
Employee entitlements 2,324 182 1,739

Non-cash items:
De
preciation and amortisation 9,832 7,129 14,934
Deferred tax 938 7,677 6,295
Unrealised forei
gn exchange loss 392 7,772 2,667

Adjusted for:
Fair value movement of investment
properties (186,775) (175,810) (324,966)

Net o
perating cash flows 175,111 161,246 322,799

Net operating cash flows include occupancy advance receipts from retirement village residents of $292.8
million (six months ended 30 September 2016: $257.5 million and year ended 31 March 2017: $531.6
million). Also included are net receipts from refundable accommodation deposits of $1.1 million (six
months ended 30 September 2016: $0.8 million and year ended 31 March 2017: $0.6 million). Net
operating cash flows also include management fees collected of $14.9m (six months ended 30 September
2016: $13.8 million and year ended 31 March 2017: $28.7 million).

3. INVESTMENT PROPERTIES
Six Months Ended Six Months Ended Year Ended
30 Se
pt 2017 30 Sept 2016 31 March 2017
unaudited unaudited audited
$000 $000 $000

Balance at beginning of financial
period 3,661,445 2,996,305 2,996,305

Additions 155,041 179,642 342,869
Net foreign currency exchange
differences (402) (9,926) (2,695)
Fair value movement:
Realised fair value movement:
- New retirement village units 15,612 23,004 62,959
- Existin
g retirement village units 52,844 34,638 77,286
68,456 57,642 140,245
Unrealised fair value movement 118,319 118,168 184,721
186,775 175,810 324,966
Net movement for period 341,414 345,526 665,140
Balance at end of
period 4,002,859 3,341,831 3,661,445

RYMAN HEALTHCARE LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

3. INVESTMENT PROPERTIES (continued)

The realised fair value movement arises from the sale and resale of occupancy advances to residents.
Investment properties are not depreciated and are fair valued.

The carrying value of completed investment property is the fair value as determined by an independent
valuation report prepared by registered valuers CBRE Limited as at 30 September 2017. Significant
assumptions used by the valuer include long term house price inflation (which ranges from 0.5% to 3.5%
nominal (30 September 2016 and 31 March 2017: 1% to 3%)) and discount rate (which ranges from 12%
to 16% (30 September 2016 and 31 March 2017: 12% to 16%)).

Investment property includes investment property work in progress of $198.4 million (six months ended
30 September 2016: $177.9 million and year ended 31 March 2017: $186.5 million), which has been fair
valued at cost.

The CBRE valuation also includes within its forecast cash flows the Group's expected costs relating to
rebuild works at Malvina Major. The estimate of the gross cash outflows included for remediation works
is $17.5m over an 18-month period. The estimates are based on currently available information.

4. OCCUPANCY ADVANCES (non interest bearing)

Occupancy advances comprise the following balances:

Six Months Ended Six Months Ended Year Ended
30 Se
pt 2017 30 Sept 2016 31 March 2017
unaudited unaudited audited
$000 $000 $000

Gross occupancy advances (see
below) 2,574,678 2,213,280 2,407,644
Less: management fees & resident
loans
(297,249) (246,409) (270,370)
Closin
g balance 2,277,429 1,966,871 2,137,274

Movement in gross occupancy advances:
Opening balance
2,407,644 2,081,386
2,081,386
Net foreign currency exchange
differences
(305) (8,174)

(2,189)
Plus: Net increases in occupancy advances:
- New retirement village units
- Existin
g retirement village units
90,520
52,844
110,552
34,638
263,282
77,286
Increase/(decrease) in occupancy
advance receivables 23,975
(5,122)

(12,121)
Closin
g balance 2,574,678 2,213,280 2,407,644

Gross occupancy advances are non interest bearing.

5. DIVIDEND

On 22 November 2017 an interim dividend of 9.50 cents per share was declared and will be paid on
8 December 2017 (Prior year: 8.50 cents per share). The record date for entitlements is 1 December
2017.

6. SHARE CAPITAL

Issued and paid up capital consists of 500,000,000 fully paid ordinary shares (30 September 2016:
500,000,000 and 31 March 2017: 500,000,000). All shares rank equally in all respects.

RYMAN HEALTHCARE LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

6. SHARE CAPITAL (continued)

Basic and diluted earnings per share has been calculated on the basis of 500,000,000 ordinary shares (30
September 2016: 500,000,000 and 31 March 2017: 500,000,000). Net tangible assets is represented by
net equity.

Shares purchased on market under the senior executive share scheme are treated as treasury stock until
vesting to the employee.

7. TRADE AND OTHER PAYABLES

Trade payables are typically paid within 30 days of invoice date or the 20
th
of the month following invoice
date. Other payables at 30 September 2017 includes $39.3m (30 September 2016: $71.1m and 31 March
2017: $95.6m) in relation to the purchase of land.

8. OPERATING SEGMENTS

The Ryman Group operates in one industry, being the provision of integrated retirement villages for the
elderly. The Group operates predominantly in New Zealand with some operations now within Australia.
In presenting information on the basis of geographical areas, net profit, underlying profit, and revenue are
based on the geographical location of operations. Assets are based on the geographical location of the
assets.

New Zealand
$000
Australia
$000
Group
$000

Six months ended 30 Sept 2017 unaudited
Revenue 155,994 9,182 165,176

Underlying profit 80,899 4,350 85,249
Plus: Unrealised fair value movement 118,470
(151) 118,319
Less: Deferred tax ex
pense (938) - (938)
Profit for the
period 198,431 4,199 202,630

Non-current assets 4,596,719 431,480 5,028,199

Six months ended 30 Sept 2016 unaudited
Revenue 131,989 6,850 138,839

Underl
ying profit 73,858 2,657 76,515
Plus: Unrealised fair value movement 108,108 10,060 118,168
Less: Deferred tax ex
pense (7,677) - (7,677)
Profit for the
period 174,289 12,717 187,006

Non-current assets 3,867,365 335,182 4,202,547

Year ended 31 March 2017 audited
Revenue 275,493 13,697 289,190

Underl
ying profit 172,830 5,438 178,268
Plus: Unrealised fair value movement 173,817 10,904 184,721
Less: Deferred tax expense (6,295) - (6,295)
Profit for the period 340,352 16,342 356,694

Non-current assets 4,269,071 414,250 4,683,321

RYMAN HEALTHCARE LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

9. COMMITMENTS

The Group had commitments relating to construction contracts amounting to $87.9 million as at 30
September 2017 (30 September 2016: $60.6 million and 31 March 2017: $68.6 million).

10. SUBSEQUENT EVENTS

In addition to the dividends as per note 5, the group entered into an unconditional sale and purchase
agreement in respect of a land acquisition in Victoria for AUD$14 million in October 2017.

=== IR PAGE TRANSCRIPT: Webcast transcript ===

Ryman Healthcare
Ryman Healthcare Interim Results Briefing 2018
23 November 2018

Ryman Healthcare Page 1 of 30
Start of Transcript
David Kerr: Morena. Tena koutou katoa. Good morning everyone and welcome to Ryman
Healthcare's half year results presentation. My name is David Kerr. I'm Chairman of the
Board of Ryman Healthcare. To my right I have well known Gordy MacLeod, our Chief
Executive, and beyond him, of course, is David Bennett, our Chief Financial Officer. So
thanks to everyone who has made it along this morning and welcome to everyone who is
watching live.
This morning's format includes an overview of our progress from me, followed by
presentations firstly by Gordy and then by David. Gordy will give you an operational
review of the first six months and David will then give you some greater detail on our
financial results.
At the end of the presentation we want to open the session up for questions from the floor
and then following that we'll take questions of any callers who are on the conference call
line. We'll bring a microphone around to those of you with a question in the room in order
that you're easily heard. It's also important the people on the webcast can hear you
clearly and so for those of you listening on the phone conference the operator will advise
you when you can ask a question. We anticipate wrapping up around 9:45, but that
obviously depends on the questions that you bring to the table.
So our results today reflect a good start to the year. We're pleased to see the amount of
momentum building for the second half. The headline numbers were the unaudited
underlying profit rose 13.9% to $97.1 million. The reported or IFRS profit, which includes
the unrealised fair value gains on investment property, was $169.5 million, which is 16.3%
down from last year and David will give you some more detail on that shortly.
Our underlying profit, however, which reflects our trading and is used to determine our
dividend, showed a pleasing increase and we're expecting our full year underlying profit to
be in the range of $223 million to $238 million.
The half year dividend has been lifted to 10.8 cents per share in line with the growth in the
underlying profit with a payment on December 14 and a record date of December 7. The
operating cash flows increased 24.4% to $217.8 million. We have 16 new villages in the
pipeline; nine in New Zealand and seven in Victoria. We're in a strong financial position to
support our care ambitions.

Ryman Healthcare
Ryman Healthcare Interim Results Briefing 2018
23 November 2018

Ryman Healthcare Page 2 of 30
We passed a significant milestone in the first half with assets reaching $2.1 billion, up
13.7% on September 2017. There are two main themes that you will see run through our
presentations today; firstly, the investment in the business we've undertaken over recent
times and secondly, the momentum we have attained that will underpin our growth over
future years.
In terms of investment, the fundamental passion we have as a company is to care for our
residents as well as we possibly can. As I've said on previous occasions, this is at its heart
a care provision company. We are acutely aware that our employee experience is
absolutely critical to the delivery of high quality care. We have invested extensively in our
staff over the last couple of years. Most recently it was the significant investment in our
registered nurses remuneration at a cost of $5 million this year.
Across the aged care sector in New Zealand there are well over 500 vacancies for
registered nurses. The Aged Care Association has said publicly that there is a torrent of
registered nurses leaving the sector. This company has a total of five full-time vacancies
for registered nurses and I suggest to you that this reflects the investment we have made
not only with respect to remuneration but in the experience that our staff have in working
for us.
In addition, despite the steady increase in demand for aged care services we're seeing
many smaller operators being seriously challenged by the inadequate government funding
model that exists for aged residential care and the recent introduction of the pay equity
settlement has further challenged many. We have seen some well-respected operators
closing purely for financial reasons recently.
In terms of the actual work experience of our staff, we're aware that the drivers of staff
engagement, in addition to being paid fairly, relate to three discreet areas; purpose,
mastery and autonomy. Staff are engaged when they have a purpose, they understand
their role, they like it, they feel a sense of passion for it.
They also have to feel that they are acquiring mastery of the skills that they need for that
purpose. They want to be the best at what they do, and finally they want autonomy. They
want to be trusted in their role. Trust is essential in care and we have a huge amount of
trust in what they do.

Ryman Healthcare
Ryman Healthcare Interim Results Briefing 2018
23 November 2018

Ryman Healthcare Page 3 of 30
We know we have a highly engaged workforce with a passion for care. They love caring
for our residents. We see that in every village every day. Our staff are wonderful and
they honestly make us proud.
Our investment in tools such as myRyman platform, which is now fully operational in New
Zealand, is proving to be very successful. This aims to assist with both mastery and
autonomy and the residents' experience. I visit villages on a regular basis and I'm always
keen to talk with the staff and the residents.
Without exception the staff tell me that the recent further increased levels of functionality
that the platform is delivering has really changed their work experience. More time is
made available to care because assessments and reports are largely done on the
myRyman app with the resident in their room. The resident and the family then have
greater awareness and greater engagement with the care that we're providing and they
also can read the tablet in the family member's room.
Furthermore, the regular audits that are undertaken both by the Ryman internal audit
team and the Ministry of Health external auditors have been further enabled to quite
significant degree by the myRyman application. The auditors have been delighted at the
comprehensiveness of the tool. I'm sure this is one of the factors in our achieving four-
year certification, which is the gold standard in certification, for so many of our villages.
In July 2017 we had 15 villages with this level of certification and 14 with three-year
certification. As of today, we have 23 villages with four years’ certification and seven with
three years' certification. What a wonderful effort by all our care staff who've worked
together so hard to achieve that result.
Investment in our leadership program across the whole Company has also been an area of
significant focus, and this is a program that will clearly continue in perpetuity. That, of
course, is focussed on the staff acquiring mastery and greater autonomy. We're committed
to developing capable committed staff because we know that that will translate into a
better experience for our residents.
The physical environment has also been a further area of investment. Gordy will talk to
you about the new villages, but one needs to remember we are also undertaking a major
refurbishment on at least two villages each year. This slide shows you the Rowena Jackson
and Malvina Major villages which have both undergone major refurbishments in recent
times.

Ryman Healthcare
Ryman Healthcare Interim Results Briefing 2018
23 November 2018

Ryman Healthcare Page 4 of 30
This enables us to deliver on our desire to keep all the villages as contemporary as
possible and ensure that the care facilities and the common areas such as the kitchens and
the recreational areas are kept up to date and deliver on the expectations that our
residents have now of the Ryman brand.
As a Company that provides care our learning orientation remains high. We are keen to
continue to improve the care provision, and this is of course underpinned by both the
combination of research and innovation. We recently commissioned the Stirling University
from the United Kingdom to undertake an audit of the physical spaces and environment
that we develop for our residents with dementia. They are the international authorities on
care facilities for residents with dementia and cognitive impairment.
We held a two day summit with them, getting them together in one room with our
builders, our nurses, our clinicians, architects, property team, as well as key contractors.
From that engagement we've learned ways in which we can improve our design here
further.
We've also engaged a medical practitioner who is a well-regarded researcher. Her skills,
combined with the investment that we've made in business intelligence and data collection
over recent years enable extensive comparisons between village operations, as diverse as
the frequency of falls, the frequency of infections and the value proposition of some
prescribing by my medical colleagues.
I can see some really exciting opportunities start to unfold with scope for not only
improving what's being delivered now, but also some proactive observational research on
such critical matters as our residents' quality of life while living in the different parts of the
villages.
The village experience is important in many ways and we're acutely aware that social
isolation and loneliness is a potent cause of poor health in our society. It's even been
regarded as being as negative to your health status as an individual smoking 15 cigarettes
per day.
The final area of investment, which in some ways leads me to comment on the momentum
of the Company, is in the formation of a specific development and construction
subcommittee of the Board. This obviously has Board members contributing, but also
external expert advice is being obtained. Anthony Leighs who recently joined the Board is

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the founder and Managing Director of the well-respected Christchurch commercial building
company, Leighs Construction.
He's proven himself to be an excellent appointment. He has extensive experience in this
arena and he's undertaken leadership of this subcommittee It's been really great to see
the executive leaders of our areas in construction, design and development embrace the
value proposition of such a committee as we look to double our build rate over the next
few years.
If we just reflect for a moment Ryman in many ways has actually four quite significant
companies under one umbrella. We are a care provision company. We're a property
development and construction company, a property management company and a real
estate sales company. The direction we're moving to as a Board is to ensure that these
different areas receive greater focus by subcommittees of the Board, who obviously then
would report to the Board, but this hopefully enables the Directors of the Company to keep
their focus on deep dives into specific areas of challenge and keep themselves focussed on
the medium and long term forward planning and value creation.
Coming back to the matter of momentum, I think it's probably worth noting that we aren't
in pursuit of growth purely for growth's sake. The driver for us with respect to growth is to
deliver what we believe is a high-quality experience in residential living and care to as
many older citizens as possible. Our purpose is what drives us rather than the pure desire
for growth.
As you'll see from our land bank across New Zealand and Australia, and particularly in
Victoria, 50% of our planned build will continue to be care related. The momentum the
Company has built up is very significant. We've talked previously about five villages
opening by 2020 in Victoria, and this target continues to be realistic. We've recently
acquired a further site in Victoria, taking the total sites we own in that state now to nine.
Suffice to say the demographics - which I'm sure you all understand well - will continue to
deliver a strong flow of residents to the sector. The first slide shows you the current
demographics which have driven our growth to date. This next slide shows you the growth
opportunity that exists over the next 40 years.
These demographics and our unique village offering underpin our medium-term target,
which remains to double our underlying profit every five years. That works out to be, on
average, 15% growth per annum. Naturally, given there's always variability in the short

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term, and given the size of the developments that we undertake, this will vary from year
to year.
It's now my pleasure to hand over to Gordy. Thank you for listening.
Gordon MacLeod: Thanks David. Good morning everyone. Thanks for joining us on the call
today. As David said it's been another good six months. The two stand-outs for me really
have been the progress that we've made on care which David has covered off really well,
and also the level of momentum that we're achieving in the business.
First, I'd like to start off by talking about the safety of our people. In the month of
September we closed 10 construction sites for the day and had representatives from all
our offices, villages, for Safer Together, which was a one-day Ryman safety summit. It was
the first time we've ever done something like this.
We got 350 people together in one room to talk about safety. This included leaders from
our villages and construction sites in New Zealand and Australia, as well as subcontractors
and people in roles such as gardening and maintenance. I think of it like you can send out
all the safety memos that you like, but people need to hear safety messages, I think, from
the horse's mouth, the people who lead the business.
I made it really clear that our staff have my express permission to stop what they are
doing if they don’t feel safe doing it, to stop others doing unsafe things and to speak up if
they weren't being supported to work safely. Everyone at Ryman should feel confident to
do what they need to do to keep themselves and their people safe. We don’t want anyone
working for Ryman or with Ryman who doesn’t take safety seriously. You may think that
some of this should always be a given, but when you're dealing with the complexity of the
human condition, I can tell you that it requires a lot of hard work actually.
We've had great feedback from the team and, as you can see from the slide, we set the
day up so that it was interactive, not just a series of lectures. In fact, just a couple of
images there at the top left-hand side. We set up some driving modules so that people
could see what it's like to experience driving when they are tired and how much that
impairs your performance.
On the bottom left hand side there, in the hoist, that’s Tom Brownrigg. He's our Chief
Construction Officer. It's a real enlightening for him to be in a resident hoist. He said to us
afterwards he was amazed how vulnerable he felt in that position. It all helps to
understand the point of view and empathy for the resident as well.

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We've also achieved a lot of momentum in our leadership development program. More
than 280 leaders will have completed development sessions by the end of this year and
our senior leaders have been actively participating in leadership coaching sessions. I've
been getting great feedback on the investment that we're making in our leaders right
across the business.
We've also stepped up our apprenticeship scheme which we are running in partnership
with the building and construction ITO. It's no secret that New Zealand has not trained
enough skilled builders for a long time. We now have 12 construction apprentices in
training and we're constantly on the look-out for talented tradespeople to foster and
develop into the Rymanians of tomorrow. There's a pic of Jamie and Rory who I met a few
weeks ago. They're loving their job.
We opened a new office in central Melbourne, actually on St Kilda Road, and we've gone
from three staff in Melbourne two years ago to 16 staff today. We have recruited right
across the board from community relations, development, construction, marketing,
through to operations and sales management. Our design and development teams have
also grown in the first half, and the construction design team in our Auckland office is now
well-established. I saw them yesterday and they had a ton of work up on their whiteboard,
so that’s good.
Four years ago, Ryman had a total of 16 staff dedicated to development and design. Today
we have a team of 60, including specialist teams concentrating on design concepts,
construction design, visual design and a new team dedicated to interiors. Developing
villages is a long-term game. It takes time to find the right site, complete concept design
work, get consent and then complete all the detailed building design consent work and
agree all the pre-start conditions with local councils. That’s just before construction even
gets under way.
We've needed to make this up-front investment over the last couple of years because
we're going to be doubling our build rate as we ramp up in Victoria. We need to build the
teams now to be able to do that, and it takes time to get the output from more resource in
this area, but I tell you we will reap the benefit over the next three to four years.
Momentum is really building now in Victoria. We've just bought our ninth site at Ocean
Grove, which is a lovely seaside town about a 90-minute drive from Melbourne's CBD and
30 minutes from Geelong. The site already has development approval for a retirement

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village in aged care and it's in a great location. Ocean Grove is an established and thriving
community with strong demand for retirement living options. There's a really nice retail
precinct just down the road. The town centre is very nice actually, and the 3.7-hectare site
will allow us to build a traditional townhouse style village in the area.
I was doing some highly technical market research last week by having a couple of flat
whites in the centre of Ocean Grove, including at the Driftwood Café, which was very nice.
I can tell you there were lots of very friendly locals and a lot of older people. It just had a
great feel, so I think that’s going to go really well.
There's a beautiful four-hour drive from Ocean Grove taking in our sites in Melbourne and
across to our new sites in Mount Eliza and down to Mount Martha. It might not look it, but
in that distance is a population roughly the size of New Zealand. When I did it the other
day it made me realise why Melbourne is noted as being one of the fastest growing cities
in the developed world. It's also regarded as one of the world's most liveable cities.
If you have a look at the map you can see what a great spread of sites we have now, from
Ocean Grove in Geelong, back through the centre of Melbourne, across through the south-
eastern suburbs, and also down to the Mornington Peninsula. For true Rymanian fans it
can be the new Melbourne drive perhaps.
The development team has done a really great job of strategically building clusters of sites.
You can see the clusters of two or three in different areas. We can develop our brand in
distinct markets and with different styles of villages. You can tell from the map that our
construction team will be able to get a roll on with new sites in a much smaller geographic
setting in a way that is quite different to how we've had to work in New Zealand over the
last 34 years where we've had to go from Invercargill to Whangarei, Gisborne, Wanganui,
you name it.
So just a quick reminder, we bought a site at Aberfeldie in July and you can see its
proximity to central Melbourne. Development applications are due to be lodged in the next
few months for this site and for Mount Martha and Mount Eliza.
We have received development approvals from Burwood East and also the Coburg sites in
Melbourne and we're poised to start work as soon as we can once final prestart conditions
are confirmed by the councils. There's actually quite a lot to do to get underway on sites
in Melbourne.

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We're also in advanced discussions with the city council about our new village at Geelong.
We can see an artist impression there. I was at Geelong as well a couple of weeks ago
and it's actually really beautiful for those of you who haven't been. Sort of lovely seaside
sort of frontage. A lovely old-fashioned pier. Nice sort of central shopping. Yeah, it looks
really nice there.
Our site is a great location as well. There was also a significant milestone in the first half
to welcome our first residents at Nellie Melba which is our second village in Melbourne. As
you can see from the picture, the village looks amazing.
I appreciate there's been a significant gap between finishing our first village in Melbourne
and opening our second village. However, we have learnt a lot and we're still learning a
lot. You know, we learn new stuff every month actually. So, it's really good.
So, we're really building momentum in Victoria. So, to sum up, we've got two villages
open, two with work about to start, and we're about to submit another three development
applications in the next two to three months.
We're also hoping for a positive outcome with Geelong maybe December/January. The
feedback we get on the ground from residents and potential residents is that they love the
Ryman difference. And it's becoming better known.
They like our fair terms. They like our lower DMF. They like our continuum of care. They
like our fixed weekly fees. They like the way we do activities and they like the feel of the
village. So we're starting to really develop that.
The fact that we can look after people for the rest of their days as their health needs
change, I think is becoming increasingly important for the older cohort of people. So we're
building the same sort of trust in our brand in Victoria that we've worked hard to develop
in New Zealand over the last 34 years.
It's quite interesting, a lot of people in Melbourne, a lot of prospects. They do the due
diligence and they do actually know people in New Zealand and they ask and they get
good feedback from people who have been at or live at villages or work at villages. So
that aspect is actually working quite well for us.
The 80 plus population of people in Victoria is going to grow to more than one million over
the next 35 years or so. And so you can see why Victoria is an exciting opportunity where
we can bring Ryman to more and more communities.

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So we're just as busy in New Zealand. We've just received in the last - when was it?
About two days ago. We've just received consent for our new Lincoln Road village in West
Auckland. There she goes there. We haven't built it yet though, that's just a really good
picture.
The first phase of the village will have 200 care beds and assisted living apartments and
130 independent living units. We're also pleased to be back under way at River Road in
Hamilton. We attracted excellent interest at our public meetings in September.
You can just see sort of in the foreground there, in about the middle of that photo, the
Waikato River and it runs back along sort of diagonally to the right there. So it's a really
beautiful site.
We had a four-month delay though which unfortunately, which we advised shareholders of
at our AGM. Because we had found pre-European bone artefacts. So, we've had to work
with local iwi and Heritage New Zealand and in the last four months, we've been able to
recommence work. So that's good.
Next week, we're going to welcome our first residents at - we still call it Tropicana but the
official marketing name is Lynfield. Tropicana being Tropicana Drive on the way to the Bill
Subritzky estate. We've had great interest from locals actually.
There was a really nice subdivision built there about 40/50 years ago and a lot of those
residents are going to be moving into the village. We've had a lot of good stories about
them. So, we're looking forward to that happening. You can see the sort of views
actually. In the setting of that village, it's beautiful.
Our Devonport site is not far behind. And there is Hansel and Gretel, which is the name of
the two cranes. Matt Hutchinson, our Project Manager, couldn’t resist naming them. They
can lift six tonnes I'm told, at a diameter radius of 60 metres. Yeah, the construction team
get pretty excited about those sort of statistics. So again, you can see the views are going
to look over to central Auckland.
Consents are also due to be lodged in the next few months for Karori, Havelock North, and
Hobsonville. So, we have a pipeline of nine villages in New Zealand, with work underway
at three.
Overall, across Victoria and New Zealand, we have 16 new villages in the pipeline. Six of
which are either underway or just about to get underway. The development team I can

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assure you, is always looking for new opportunities and we have a number of sites under
due diligence as well which we haven't talked about today.
It's also important that we give back in ways that are meaningful. Our charity partner this
year is the Stroke Foundation. The foundation wanted to put a special stroke van on the
road so that it could extend its blood pressure check program.
So, we bought a van for them so that they could get going and the foundation is well on its
way to completing an additional 50,000 blood pressure checks in its first year. Elevated
blood pressure can have significant consequences and having identified and treated early
on can help prevent strokes. The van is going to shopping malls, A&P shows, building sites,
and is calling in at all of our villages. In fact, my brother sent me a text photo of it from
the A&P show in Christchurch last week, when he was getting his done. We’re delighted to
be able to help improve the health of thousands of New Zealanders in this way.
In October, Prime Minister Jacinda Ardern presented Japanese inventor Takanori Shibata
with the 2018 Ryman Prize. The prize is our annual award for the best work anywhere in
the world, to enhance the life of older people. We’re also really excited about partnering
with the Antarctic Heritage Trust, and we’re going to be taking people on a virtual reality
tour of Sir Edmund Hillary’s Scott Base Hut in the Ice around our villages, and also around
airports and major features of New Zealand. So we’re going to bring the Ice to a whole
bunch of people, including me, who probably would never otherwise get there in their life.
In Melbourne, we’ve sponsored exhibitions of the art of Jack Chalker at the Caulfield RSL,
and the Heidelberg Rehabilitation Hospital. His artwork was on the top right-hand side.
Jack was a prisoner on the death railway with Sir Weary Dunlop during World War 2. He
risked his life to record as a prisoner of war to record the work of Weary, that he did to
keep men alive. His art amazingly was also used as evidence at the Tokyo War Crimes
Tribunal.
In that painting you see Weary Dunlop on the far right, doing surgical work. So, it’s
wonderful to be able to support things like that, that pay tribute to people that we are
privileged to use names of for our villages, including Edmund Hillary as well.
We’re also delighted to be the principal sponsor of the Royal New Zealand Ballet season of
the Nutcracker, which is on now. That is a stunning photo, isn't it? You might think it’s
unusual I guess for me to be talking about this sort of stuff at an interim results
presentation, but we see it as a very important part of what we do. We actually put a lot of

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effort into these sort of activities, we like to contribute and give back to society, and it’s a
very important part of the company’s DNA, going right back to the founders.
So what’s this all about really? Why do our staff go to such amazing lengths? Well a great
example from my recent travels is a lady called Margaret Doerner, whose husband was in
our dementia or special care unit at Essie Summers in Christchurch. Margaret is an artist,
and she decided to help her husband, and the other residents suffering from dementia, by
running art classes as a form of therapy. You can see Margaret in the picture with
Rosemary Deane, who is the village manager, and me.
She’s teamed up with Lavinia, the activities coordinator in the special care unit, who’s top
left-hand side there, and this year was their third year of running an exhibition of the
residents’ art within the dementia care unit. They run a special exhibition at night time on
a Friday night, and residents and families and friends, they all come along, nicely dressed
up like it’s like a proper art exhibition, which it is, and residents just love the classes. Their
families can't believe what they’ve achieved, it takes a huge amount of patience, and
we’ve made their art into a calendar to raise money for the Stroke Foundation.
When you look at some of the artwork, most of that artwork is done within about one hour
because people struggle to recall painting techniques for the next class, and you have to
start again.
So when I think about what we do every day, and I think about the 24/7 nature of what
we do in visiting villages, and that sort of thing, it makes me very proud to work for
Ryman. It’s the sort of thing that also makes me very determined to bring what we do to
as many communities as we can in New Zealand and Victoria, and that’s like what David
said, it’s not about growth for growth sake, it’s because we want people to have the same
sort of opportunities as they enjoy right now at our villages, and many other communities.
That’s why I think you as shareholders can feel proud of your investment in Ryman. We’re
successful because we do good things for people. So that’s all from me at the moment,
we’ve had a good first half with a lot going on. We’re seeing good momentum that will
continue to grow in the second half, as we gear up for the years ahead, and I'm about to
hand over to Dave Bennett, our CFO.
But just have a look at that picture there, Bert Sutcliffe at night. When I was there for the
opening of our Crowe block, probably about two weeks ago, I spoke with Graham, and
he’d supplied an amazing picture from his apartment, of Bert Sutcliffe at night. I just think

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it’s one of those photos that’s really cool, so I thought I’d leave that up there while Dave
comes up. Thank you.
David Bennett: Thank you, Gordy. Good morning, everyone. So, it’s time for a few
numbers. Our underlying profit of $97.1 million is an increase of 13.9% on last year, with
the big driver being new sale gains which were up 110%. Reported IFRS profit, which
includes unrealised fair value gains on investment property, was $169.5 million, $33.1
million less than last year.
The reason for this drop was that last years’ first-half result was boosted by changes to the
independent valuation assumptions. As I explained this time last year, CBRE, who are our
independent valuers, lifted our five-year-plus long-term growth rates from 2.8% to 3.4%,
which is an increase of 0.6%. So when you think about it, with gross occupancy advances
of close to $3 billion, and the compound impact of this change, this contributed
approximately $70 million to the unrealised valuation uplift in the first half last year.
So it’s important everyone realises that this was a one-off, and if you exclude this one-off
change, our unrealised valuation gain has actually increased from $48 million last year, to
$73 million this year. The valuation gain of $73 million this half was due to 168 new units,
and also a 4% uplift in pricing, reflecting strong demand for our village offering.
Our operating cashflows were $218 million in the half, and that’s up 24.4%, as we’ve
benefited from cash collections at some very high-value sites over the last half. In fact,
strong cashflows have continued into the second half, and we’re actually expecting
approximately $50 million of settlements over the next two weeks, so this shows the value
of those sites completing, particularly stages at Lynfield and Nellie Melba. These strong
operating cashflows have allowed us to invest a record $304.5 million in new villages and
the Naki offering.
Investing cashflows were spent as follows. $208 million building new villages. $48 million
on land, with the land bank of beds and units lifting 8%. $28 million was invested in
upgrading existing villages, and $20 million on a range of projects, which included
continued investment in our IT infrastructure, new care hubs and further development of
myRyman.
With such major investment during the half, our working capital debt, or bank debt, has
increased to $1.2 billion. We regard this as productive debt, as we invested the bulk of it in
new villages, where we recycle capital in which establishes a growing tail of occurring

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cashflows. We have a very strong financial position, with total assets of $6.2 billion, and
shareholder equity has lifted by 13.7% to $2.1 billion, compared to this time last year.
We continue to have very supportive banking partners, they understand our growth plans,
and strongly support us. Our debt to debt plus equity ratio is 37%, up by 2% from March
this year. We have also increased our bank facility to $1.5 billion, and over 80% of this has
a tenor of over three or more years.
In the half our growth development margin was 27%, which is higher than our target
range of 20% to 25%. This is a direct result of the Nellie Melba Village in Victoria, which is
a very high-margin site for us. We expect our full-year margin to be back within our
normal range of 20% to 25%.
The resale bank of gains still to come currently stands at $855 million. These pent-up
gains mean we can expect our resale earnings to keep growing, even if the housing market
was flat for several years, because volumes increase as villages mature. Deferred
management fees also reset to new price levels with each resale, creating a compound
effect.
In fact, when our current portfolio matures we would expect annualised resale volumes of
approximately 1300 units, and margin of approximately $150 million, and the deferred
management fees would life to about $135 million per year. So what this means is that we
can expect our profits to lift by over approximately $100 million, based on what we have
already built.
Demand remains strong for our offering as well, with only 78 units, or 1.2% of our
portfolio available for resale at the end of September. So this represents basically one
months’ vacancies. We also have our highest ever value of presales, of $214 million in our
new villages.
Our Care demand was also strong, as we averaged 97% for the half at our established
villages, which is a great result. If you put that into perspective, that the age-care sector
in general is averaging around 88%. So the team are doing a great job, and the demand is
very strong.
Affordability of our units is also something that we monitor very closely. Our residents in
Auckland and Melbourne free up significant amounts of capital when they move into a
Ryman village, in fact, property prices in Auckland would have to drop 20% before the
residents stop freeing up capital, and 34% in Melbourne.

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We also have the largest service department portfolio in the sector, with approximately
30% of our retirement village unit portfolio, being service department, which are priced
even lower, and are purely needs-based decisions.
So what triggers our ability to grow is simple, a model of recycling capital at each village.
Since listing in 1999, and raising $25 million, we have now invested $3.4 billion in our
portfolio, and paid out a growing dividend stream to shareholders of more than $740
million, but we’ve never had to raise any new capital.
So finally, as David said, the outlook for the full year has an underlying profit range of
$223 million, to $238 million. This would be growth of between 10% and 17%. Our
expectation on the full year have been impacted by the two things we told you about at
our annual meeting in July. Firstly, we had the unexpected four-month delay at Hamilton,
and of course pay increases for nurses, which will cost us $5 million this year.
We’re expecting our build rate to be 800 beds and units for the year, which is about 50%
up on last year. This 800 includes 300 age-care beds, and 50 apartments at Malvina Major,
where we are rebuilding our Figaro apartment block. In terms of the full-year 2020, we
expect the build rate to lift to over 900, subject to villages receiving the necessary
consents.
So thank you very much, and I’ll now hand back over to David. Thank you.
David Kerr: Look, thank you, Gordy and Dave, those are great presentations. The
observant amongst you will have noticed that the slide showing the operation cashflow,
those lovely meaty operating cashflows, out to the side was some steak. You’ll also notice
that the underlying profit growth slide, out to the side was some dessert, some sweet
fruits. So those are examples of the sorts of meals that our residents are now having.
So look, I’d like to open the session up for questions from the floor, and then following that
we’ll take questions from any callers who are on the conference line. We'll bring a
microphone around to you with those with a question in the room so that you're heard, as
I said at the beginning, and so that people on the webcast can hear you clearly. For those
of you listening on the phone conference the operator will advise you when you can ask a
question. So let's have some questions please.
Stephen Ridgewell: Thanks. Just the first one on the aged care business, if I may. At the
AGM you flagged an increase in nurse wages, and no doubt well deserved. Just interested
in your thoughts though on - if you can provide some comments on the profitability of the

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aged care business and whether these large-scale facilities that Ryman had been building,
120-unit facilities, are still warranted given the funding environment in New Zealand,
particularly compared to what you can return in Australia?
Gordon MacLeod: We're very committed to them, Stephen, because in our opinion a 120
care bed facility is very appropriate for a village where there might be, say, 200 or more
independent living residents and in addition to that we're also committed to our service
department and assisted living offering as well where we would typically be looking to build
anywhere from 60 to 80 of those at a village in a typical sort of configuration.
So we still very much are absolutely focused on doing approximately about 50% of our
build as care related and 50% as independent related, and the reason for that is that
although people are living longer they are also living frailer and we're seeing medically
more - it's called a great compression of some of the co-morbidities towards the end of
people's lives. So it's absolutely vital at that time when people really do need quite
intensive assistance with their life and medications everything that villages are able to
cater for that and deliver on the promise of a continuum of care.
So when we look at the profitability of the care business it's obviously enhanced for us
because we do run at 97% occupancy and it's also enhanced by the fact that we receive
room premiums for the majority of our rooms. We do have people come in and don't pay
a room premium, so that's okay. But we tend to target getting a room premium for all the
rooms that we build. So that actually means that our care business is profitable.
If it purely stood on its own you would maybe look at it and wonder about the return on
equity, so I'm not going to go into the numbers on that. But I and the board actually don't
do that for a really simple reason, that if you think about the villages you have visited,
Stephen, there's no segregation, there's no Berlin Wall between one part and another.
The villages truly are a seamless integrated being and community and I see that the care
business drives as much the retirement village earnings as vice versa. I cannot in my
mind separate them and that is why we don't do segment reporting under international
standards because we genuinely don't look at the business that way. That's why we're
focused on an overall underlying profit because all parts contribute.
Stephen Ridgewell: Thanks. Then just maybe one on the guidance range 223 to 238, are
you able to give us a bit of a flavour as to what would need to happen to get to the top
end of the range and perhaps also the bottom and any comments you can make on

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allowance within that range for performance in Melbourne, which has been quite topical
(given the housing market is under pressure) under pressure, particularly in the last
quarter. So any comments on that would be helpful, thanks.
Gordon MacLeod: So it's more around the sales, the new sales and resales of retirement
village units. It's not really around any care sensitivity, if you like, nor DMF. So when we
look at it we take a view that we get about 80 units come up for resale a month, but if you
had two or three months where it was a lot less than that or a lot more than that, that
actually could materially - you could have millions one way or the other given the margin
associated with each unit now. So that adds a degree of variability, Steven.
The other thing is that we could sell more actually at some of our villages between now
and the end of March than what we're planning. It's possible and its what sales are
targeting. So that reflects the higher end of the range and the lower end of the range
probably just reflects probably more of a disappointment of how many vacancies we get on
resales, which we don't know about yet, and perhaps any softer sales at any of our villages
we were able to book.
Stephen Ridgewell: Thanks for that, Gordy, and just one last one from me. Are you able
to provide any approximate indications of where net debt might end up at the end of the
year given your visibility on the investment plans and unexpected cash flow recycling?
Thank you.
Gordon MacLeod: We just don't tend to forecast debt, but I guess the helpful comment
from Dave earlier on was that we've got $50 million coming in the next two weeks and we
will continue to be cashing up sites quite well I think over the next few months.
Stephen, one of the things about the first half result which I thought was really good when
I went through it with the team one afternoon a couple of weeks ago was the operating
cash flow increase actually. Seeing that come in at over 24% on the back of a really
strong last month - last couple of months sales-wise, so they were obviously always going
to be debtors, it was great to see that strong operating cash flow performance.
If you coupled that with the record amount of presales of $214 million when I was looking
at our historical statistics yesterday actually, in the 2016 financial year in the whole of
2016 our new sale value was $222 million. So it's amazing how time moves on that we're
sitting here where presales would have represented an entire year's activities only two
years ago.

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David Kerr: I think it's worth repeating also that our bank debt, 80% of that is purely
designated for the development that we’re undertaking at the moment. What happens to
the bank debt will be determined by what development we’re undertaking. The actual core
debt is actually relatively small for a company of this size with a balance sheet such as we
have.
Gordon MacLeod: Which does give me the opportunity to give another statistic which I was
hoping to give out, which is we hit over 10,000 beds and units in our portfolio in
September. We got to just over 10,000 so it was quite a milestone for the Company,
actually, and our land bank at 6000 too. When you think about the fact the land bank has
to be funded and a lot of it is also in progress and it’s taken us 34 years to get to our land
bank of 6000, you can see why there’s some debt to fund that.
David Kerr: We didn’t script that answer, Steven.
Gordon Macleod: I’ve just been dying to – as soon as I saw it hit 10,000. I just missed it.
Arie Dekker: I’ll kick off on debt too. Good morning. I think, David, you mentioned the
facility has been increased to $1.5 billion, which I guess gives you almost $300 million
headroom again. I guess just in terms of – the syndicate is five; as the debt keeps getting
bigger given your growth and visions, what’s your approach going to be to diversity of
funding and I guess potentially duration as well?
Just one other thing on debt. I think at the full year you were around 11% or 12% interest
rate hedging, which has obviously been very beneficial for you over the last few years at
that low hedging position. Can you just comment on where you are at the half year and
what the outlook is for interest rate cover for the business, if you are increasing it?
Gordon Macleod: I guess in terms of the five banks – as I mentioned, we’ve got five very
supportive banks that were all willing to participate in the increase.
David Kerr: In fact, they oversubscribed.
Gordon Macleod: Yes, oversubscribed on that. There are other parties we talked to and we
do talk to but there’s also the option of the retail bond that we will consider potential in
due course. At the moment, we are very happy with the banking partners we have and the
relationship we have them and the support they’ve given us.
Arie: What was the total oversubscription?
Gordon Macleod: There’s about another $125 million, I think it was.

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Arie: Plus the other bank.
Gordon Macleod: Plus the other bank who was willing to come in, so about $250 million
odd we could have – above, yes. The reason for that, [Arie] is that when banks look at us
from a funding point of view, they can see that we’ve got an enormous health care
business supporting a highly-specialised asset class driven by need and which has got the
fundamentals of residential housing behind it with basically like a 50% deposit
underpinning it too.
If they think about repayment, the majority of debt is working capital debt. It’s the land
bank and it’s the work-in-progress at places like the slides you saw at Narrowneck and
Tropicana and when people move in that will be paid for. They can see that that part of the
– if that’s the total debt, that part of the debt will just go like that if we were to stop
development.
So that’s repayment for banks, which are low, and then there might be say $100 million or
$150 million of core debt where we’ve done stuff at villages to keep them refurbished and
what have you, and given our significant earnings, the ability to service any level of debt,
even the full debt is very straightforward, even just with our recurring income. Even if we
made no development earnings at all, our covenants would still cover us just purely on a
recurring income basis. So, serviceability is comfortably covered in sales repayment.
Gordon MacLeod: Plus we’ve got the retail bank of $855 million and accrued DMF of about
$350 million so there’s another $1.2 million [that ends up cash] in the established part of
the business as well. We’re obsessed about recycling capital, don’t get me wrong, but that
is the business model of Ryman and we just have to have times where if we’re building up
the land bank, say in Melbourne, we’ve had to accept the fact I guess that we’ll just have
slightly higher debt while we’re doing that.
And on the hedging, we’re at similar levels to what we were at year end; we haven’t
changed our approach to that in the half. We’ll continue to monitor that, but as you say
we’ve benefited from that. It just annoys me that they’re always out on the money.
There’s still a fair value loss on the face of our balance sheet for about the last five years,
all because of swaps.
Arie: They can change quickly when they do.
Gordon MacLeod: Well, I know.

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Arie: I guess moving to the other bit that interested me and was the theme of a couple of
questions I had. David, I guess like you and the business, I’m trying to look at it from the
four segments I guess you mentioned: care provision, property development, property
maintenance and a real estate business, but it’s not always easy to from a forecasting
perspective put all that together.
I won’t go over care again, because Stephen has already had a go at that, but just in
terms of I guess the real estate sales business, you guys touched on it a lot through the
presentation and it’s a huge part of what you guys are. Sales and marketing expenses in
terms of both over the resales engine and then what you do on the development side and
all the work you do on the brand and that sort of stuff, what sort of orders of magnitude
are you investing in the sales engine and the brand in this business and how much of it is
catalysed and how much of it’s expensed?
Gordon Macleod: None of it is capitalised. We don’t really run around disclosing it, to be
honest, because I wouldn’t want to provide a benchmark for competitors, but it’s millions.
Unidentified Company Representative: Yes, I’m sure it is. Tens, probably.
Gordon Macleod: No, it’s tens of millions.
Arie: Okay. Then just in terms of the resale margin, which you disclose as gross,
obviously. I think your portfolio has significant differences to some of the operators in
composition, including met. In terms of the amount you spend on refurbishment, some of
the investment you do around the villages which you do on a rolling basis, as I think you
referred to there, what sort of percentage of resales turnover of revenue is that each year
off the gross margin?
David Kerr: I don’t know that we calculate it in that way. In fact, at the back of your
information pack, it identifies line by line the refurb costs and what we invest in refurbs.
We don’t really see it in that line. As I said in the presentation, it’s much more about
meeting the expectation of the resident and the promise that Ryman has, so we’ll do
whatever is required. In fact, at Malvina Major, it was quite a major refurbishment, partly
because of the earthquakes but partly also that it just really didn’t match the promise that
we make to people.
Gordon Macleod: You’re probably looking at about for an individual village it could be in the
region of $4 million to $5 million to do a 15-year refurb of the common facilities and the
community centre, the kitchen, that sort of thing. Then for a serviced apartment each time

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as a resident moves, between each time, it really depends on the tenure but on a typical
basis first time around there might be things like new drapes, Arie, but it might be some
time actually before things like kitchens need to be replaced, so that might not be for 10,
15 years. The same for independent living units.
Because we do all of our construction in-house, all of our buying in-house, I think when I
looked at it last a while ago, for an independent unit you might be looking at $5000 to
$10,000 the first time around and maybe second time around anywhere from $15,000 to
$25,000 depending on what work needs to be done for the kitchen and the bathrooms,
and new drapes and carpet at 15 as well, 15 years.
Arie: Sure. then just closing out on this. The village CapEx that you disclosed separate to
the project or the care systems, that would comprise maybe $10 million a year on
upgrade, if you’re doing a couple of villages a year, and then there would be the
refurbishment in there as well. What would be the split between investing back in the care,
which is PP&E investment I guess, and the IP investment with the refurbs?
Gordon Macleod: [Unclear].
David Kerr: Yes, probably, but I think [Dave] could probably come back to you and work it
out.
Gordon Macleod: Yep, work it out.
Arie: Okay, cool. Thanks. That’s all from me.
Jeremy Simpson: (Forsyth Barr, Analyst) Jeremy Simpson at Forsyth Barr. Well done on a
good result, guys and great to see the momentum continuing across all parts of the
business.
I’m interested in the high-level feedback you got from Sterling and what they think of what
we’re doing regardless of the concerns around looking after people with dementia in New
Zealand?
Then just a bit on – in terms of the pipeline, I’m interested in some thoughts on – what
your thoughts are around Karori given the size of the opportunity there. You had a bit of
unfunded private debt [book] for a while and whether there’s learnings from there and
what you can say around that.
Gordon MacLeod: Perhaps David, as someone who’s actually got medical knowledge, could
answer the Sterling question.

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David Kerr: Sterling obviously had not met with us before and they were not familiar with
the fully integrated village that we run. Their experience was much more with special care
units or dementia care facilities. They were fascinated at how we manage to provide the
full continuum of care. I think it’s fair to say that they were impressed at what we offer but
they had lots of really great little ideas about how to improve.
I would say the small detail that to us is a small detail but to a person with dementia or
cognitive impairment is important. At the safety day, one of the things we did was we had
a virtual reality headset that you put on which gave you the impression of being
cognitively impaired, and such simple things as the clear definition of colour between the
carpet and the wall so that a person could sense when they were near the edge of the
room and stuff like that. All of that really brought to life to me some of those critical sort of
things. It’s at that level that they were able to make really constructive comments.
Gordon MacLeod: And Karori. I’ve known the Karori suburb for probably – I’m based in
Christchurch but my dad grew up in Wellington and as my dad’s brother Ken and his wife
Judy, they lived in Karori for about 45 years, so I’ve been to Karori a lot so I know it’s a
very special place. The difficulty has been that a lot of locals weren’t happy about the fact
that the university sold that site to us, but obviously that’s got nothing to do with us,
that’s just a – I guess it’s more of a political thing. Anyway, that’s happened now, and we
move on.
What we’ve done is we’ve had lots of drop-in days with the community. There’s a number
of interest groups there, Jeremy, who have given us their full and frank views on a whole
bunch of stuff around how they’d like to see it developed, things that they are concerned
about, and so what we do is we just take all of those into account and we have to sit down
and think about how can we make it work.
One thing that we will be – well, we are doing is we’re working with a heritage architect
because there is potential at that site to retain some of the older buildings where there’s
real historic and cultural significance to events that happened there and with some of the
brutalist architecture, where some of the site may be able to be integrated in with the
village. What we need to do is we will be talking through more detailed plans with people
like the Historic Places Trust (Heritage New Zealand) in the community over the next
couple of months as well. They’re never easy; you’ve got to work with the community
hard. But look, we want to build a village that just looks great. And there's real interesting
architectural opportunities there.

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And I know from my family connections that it's an excellent site for the village and it will
be in very, very strong demand there because there is very limited offering, and that is a
very large suburb. So we will end up with a very successful village in Karori.
David Kerr: There's a definite shortage of retirement units and care beds in that area. But
I think one of the challenges has been that the community has used the facility itself. And
so we are keen to try and continue that opportunity for the community.
So that's where we're sort of listening acutely to see how we can help make that happen.
Jeremy Simpson: Is that in regard to like the sports venues?
Gordon MacLeod: Yeah, things like dance halls and performance halls, netball courts. Like
there's a whole tonne of stuff.
David Kerr: Market days.
Gordon MacLeod: But you have to stand back and look at what you can work onsite,
maybe what you can do offsite. So we're really committed to try and make it work.
Because we want it to be something that people feel good about.
Jeremy Simpson: Just lastly from me, resales pricing is a little softer than I was expecting.
Can you give some feedback on what's happening on pricing generally for like for like if
you like, and on village by village basis?
David Bennett: So like for like, the pricing hasn't changed. It's actually probably gone up
since the end of the year. What you're seeing though is just a bit of a mix of what has
actually come up.
So the units coming up have been I guess at our more regional sites and villages. So
that's pulled the pricing back. So that's why it's hard to just look at it at that granular
level.
Gordon MacLeod: Yeah, pricing is up.
Yeah, but the mix can be quite significant. Because you get some our very - well, some of
the high end villages and it can affect the weighted average price quite a lot. Yeah.
Jeremy Simpson: Great. That's all from me. Thanks.
Marcus Curley: Three questions from me. I just wondered if you could talk a little bit
about the competitive dynamic in New Zealand at the moment. I suppose some of your
peers are talking about higher inventory levels, some of their villages are [held] to sell.

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I suppose the other thing I note is your comments around care profitability. You know,
smaller players going out of the market. Obviously different messages from different
people. I just wondered if you could give some views on how you see the market at the
moment in New Zealand?
Gordon MacLeod: Okay, so from a peer point of view, we just absolutely don't comment on
competitors. We're very respectful of what people do. From our perspective, what are we
seeing? I guess the best summary of it is in the actual results really, which is we have got
incredibly high pre-sales.
We've got resale stock at the same level we've had for the last five years at 1.2% which
has been our average for the last five years. Of the portfolio care occupancies, 97%.
We've had strong operating cashflows.
So the basic metrics that we look at to see whether we're performing in the market are
healthy and good. Look, I don't actually follow too much what competitors' view on those
sort of things is. I did read one in Australia last week which talked about sales being off.
It sounded pretty significant actually, like 38% or something. That may be a legacy issue
they have with some of the media commentary they had a year before that.
David Kerr: I'd just add, Marcus, that in terms of the care, one has to remember that
we've been in this business for 30 years and invested very heavily in acquiring the IP. You
can see, from the presentations, that we continue to invest in both skill and quality of care
provision.
That's not easy to duplicate. So it's not an easy market to be in and peoples’ expectations
increase year on year. It is challenging for other operators.
Gordon MacLeod: I spend a lot of - I probably would go to a village every week. One of
the things I do is always have lunch with our serviced apartment residents or afternoon tea
with independent residents and stuff like that. Obviously have a bit of a social chit chat.
But I really like to find out why they bought, particularly people that have bought in the
last 12 months.
The things that are really important for people are the full continuity of care. I have met a
number of people, at every single village, where either the husband or someone's wife
unfortunately is in the dementia unit.

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Okay? So it's - and people - our average age of entry for independent is 78.5 years old. I
just find people are more - I guess some people, you can be quite pragmatic at that stage
of your life, that there may be health changes ahead for you.
So that full continuum of care is hugely important for people. You know that our villages
are 50% care related and that's a big deal. The other thing that people I think are, and
society is becoming more conscious of fairness.
So the Ryman difference, which is the lowest DMF in the sector at 20%, fixed weekly fee
for life, don't charge any fees when you vacate the unit and all that sort of stuff, is more
widely known than maybe even we think when we speak to people.
It's a very important part of the bargain of trust that we form. So perhaps that's the
context for the fact that the overall metrics we've talked about today are in reasonable
shape.
Marcus Curley: Secondly, can you talk a little bit about why you're so confident in five
villages in Australia? Clearly the progress has been slower than you would have thought.
What gives you the confidence? You know, five by 2020 just seems a long way away from
just opening the second in the end of 2018.
Gordon MacLeod: That's fair enough, Marcus. So we probably should clarify, 2020, I would
regard that as New Year's Eve on 2020.
[Laughter]
John Boscawen: Not New Year's Day?
Gordon MacLeod: Not New Year's Day, no. Maybe one resident, you know? Sleeping in a...
[Over speaking]
Gordon MacLeod: I’ll be the village manager. So look, yeah, it was a big time between the
first and second village, Marcus, and that was frustrating for us, and I know it was
frustrating for shareholders. I think that what we do is we learn a lot during those - they’re
the times that you learn the most probably. When you get frustrated and you think, oh we
should have resourced up a bit more, or maybe we should have tackled that issue in a
different way.
But Brandon Park is a very large-scale village, and it was a tremendous achievement to
get that approved, and now to get that open. I think that if we’ve got two villages - so if

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you think about it, well how do you get five sites opened? First of all, you’ve got to buy
them, so now we’ve got nine, and they’re great.
You can see from the map of Melbourne, they’ve quite cleverly, all around the border of
Melbourne, and different clusters. They’re not all big, metro, big intensive apartments, or
villages, there’s a mix. So you’ve got to buy the land. Then you’ve got to get them
consented. So we’ve had two consented now - oh four - four consented now. Burwood,
Coburg, Weary Dunlop and Brandon Park. So we need one more to get our fifth. We were
hoping that we would’ve heard from Geelong this month actually, but the meeting with
council’s been deferred to 18 December.
Ocean Grove, though, already has a development approval for a retirement village and
age-care facility, so we’ll hopefully move quickly on that. And our preliminary discussions
with local council about Aberfeldie have been really positive.
So just to give you a bit of a flavour, we’ve got some good development approval progress
happening, with three being submitted. Then you’ve got to start building them, so one
built, one open. Coburg and Burwood East, I hope that we’re building there in the next two
to three months. There are various prestart conditions of councils that just take time, so
we’ve been doing things with Burwood, for example, where we’ve been discussing some
refinements, the urban design, look and feel of the village. That’s good because it will
actually give it a better long-term outcome.
So by the end of March, hopefully we’ll be building at three sites. Then ideally, in the next
- by say this time next year, we might be building at Geelong as well. We might be
building at Ocean Grove. We might be starting to look at Aberfeldie.
So there are just a number of points of momentum where if I would go back - and I
remember sitting on these meetings two or three years ago, it was all just a question
about where’s Brandon Park at?
What you’re hearing is we’ve got a lot more irons in the fire now, and that’s what gives us
confidence about that.
For me, at a certain point in time, we’ll be looking well beyond 2020. We’re committed to
the Victoria market, we want to get a roll on there, we want to match the New Zealand
build rate there, and to think to have developed a really wonderful portfolio of sites there,
we’re on the way.

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David Kerr: I think, Marcus, that the impatience was shared at the board level as well. We
were very aware of that gap. But one has to remember that the Brandon Park one, Dame
Nellie Melba Village, is actually the size of Edmund Hillary, it is a really big village. I think
that we learnt a lot from the first village, and we then have had to spend some time
building some strength.
You heard Gordy talk about the increase in the number of people in design, and that takes
time to get the right people. We’ve been building in New Zealand, we built Weary Dunlop
largely out of New Zealand, now we’re actually building our team in Australia, which will
enable us to go with much greater speed.
So I feel confident. They keep telling us we’re going to have five by 2020. We promised
five by 2020, so we will do it, but I think Gordy’s point that we do actually have a much
longer-term horizon that we’re aiming at, for that particular number.
Marcus Curley: Then just finally, with the residential house turning down in Australia, can
you talk a little bit about - and I know you’re obviously just selling one village at the
moment, so the experience around selling that relative to a housing downturn may be
pretty limited, but on the flipside it’s an opening opportunity to be more aggressive on land
purchases at their prices.
Gordon MacLeod: Yes, to the second question. So we’ll be our usual fussy selves though.
They have to be great locations. In relation to - if you want to bring up the slide, slide
people, on the median house price one - it’s got the two nice ladies with the golf clubs,
looking at it - anyway, while they bring that up, the most important thing I think, Marcus,
in a market where there is price risk, is it there’s great affordability for people, and that
the shape of the village that you’re building is driven strongly of needs.
If we were building a lifestyle village, I believe that they may struggle because you may
decide if you’re sitting on the paper, reading the paper every day, every day incredibly is
another story - basically a photocopy of the last story the previous day, which is the
housing market’s got a problem. That can put people off, and if they actually fit in well,
and they don’t need to move, what happens is they don’t move.
What we found during the GFC, which was where housing transactions in New Zealand
dropped by two-thirds, prices dropped by 10%, days to sell doubled from 30 to 60, and
that all happened in six months, was that the stuff of life continued. So people who are
needing to come into care, people needing to come into service departments, who are

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typically about 86 or 87, and you can see from that graph, incredibly affordable in any sort
of market, that stuff happens.
So you’re left just really talking about what’s the risk with independent? So independent
are about 50% of our portfolio, and the average age of entry is 78.5. So it’s the older
elderly. When you speak to people about their story of why they came to the village, one
on one, it’s usually some sort of life event, or health-related story, to be honest. Even in a
market like Melbourne, David Bennett mentioned that the house prices would have to drop
34% before someone wasn’t freeing up additional capital.
It will still be affordable, ironically, and in Auckland, 20%. So we like the fact there’s good
head room, there’s plenty of affordability, and these are a compelling offering for people,
with really fair terms, and good service.
David Kerr: As you said earlier, it’s a needs-based decision. It’s not a lifestyle decision. So
the last few dollars in the house price are not what’s critical to the person selling their
home.
Marcus Curley: On that slide, the lower price point will cost for you in Melbourne versus
Auckland, does that continue as the villages roll out?
Gordon MacLeod: It may not. No, it may not. Auckland’s got a number of key villages in
there, which some of them are quite high. Some are a bit higher priced.
David Bennett: Yes, and as a village matures we get closer to the local median house
price. But on the first sell down we are typically selling at a bit more of a discount, and so
that chart reflects that in Auckland there are a lot more mature villages than there are in
Melbourne. It’s a great time to buy in Melbourne, if you’re a resident. If you thought the
prices were coming down, now is good.
David Kerr: Any other questions in the room? Are there any questions from people calling
in?
Operator: Thank you. If you wish to ask a question, please press star one on your
telephone, and wait for your name to be announced. If you wish to cancel your request,
please press star two. If you’re on a speakerphone, please pick up the handset to ask your
question. Your first question comes from Jason Familton, from Accident Compensation
Corporation. Please go ahead.
Jason Familton: Good morning, guys.

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David Kerr: Hi Jason.
Gordon MacLeod: It’s nice and clear. Hello.
Jason Familton: I've got three. The first one’s a comment. As a Karori resident, I'm pretty
interested in what you’re going to do with the village.
Gordon MacLeod: Another interest group!
Secondly, just a question, can you just give some CapEx guidance for the full year?
Gordon MacLeod: We actually haven’t tended to it, I have to say, Jason.
Jason Familton: Why is that?
David Bennett: We’ve given profit guidance and build guidance.
[Over speaking]
Jason Familton: Do you know how much you’re going to spend on [unclear]?
Gordon MacLeod: We just haven’t given CapEx guidance in the past because I think that
the overall parameters we give guidance on, people tended to be able to work with those
parameters for a long time.
Jason Familton: Okay. Just this massive area of variance out there in the analyst
community around what you might spend on CapEx, so it’d be good to get some guidance.
Secondly, can you just talk to how many sales and resales that you’ve actually settled in
the first half?
Gordon MacLeod: Not off the top of our heads. No. We don’t actually give that - we’ve
never actually disclosed that data. The data we have disclosed is the build rate and the
sales rate, so probably the closest proxy to perhaps what you’re thinking about, Jason, is
that when I looked at it yesterday, in the last 18 months we’ve built 650 beds and
retirement village units, so let’s forget about the beds, and in that same period, we’ve
done sales of I think 626, so they’re pretty much matched.
There’s obviously some stock, as there usually is, around completed serviced apartments,
where they can take about 18 months to sell down after completion, simply because you’re
dealing with 86-, 87-year-olds, and there are only a certain amount of people with that
need in the community at any one time.

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Jason Familton: Okay. Can I ask the question a slightly different way? Can you talk to the
receivable balance, and I guess how many units are related to as at 31 March, and how
many units were related to as at 30 September?
Gordon MacLeod: No. Honestly Jason, we just don’t track it like that. We’ve obviously got
detailed cashflow stuff that we manage the business on, but I don’t look at the number of
units in our debtors at March and September.
Jason Familton: Okay.
Operator: Thank you. Once again, if you wish to ask a question, please press star one on
your telephone, and wait for you name to be announced.
David Kerr: Take that as no. Great, look thank you to everyone for coming and joining us.
As you’ve identified, we’ve had a very good first half, great momentum, and great
progress in the way we deliver care. So now we can just have some informal discussions.
So thank you very much.
End of Transcript

Notice of Half Year Result Announcement Transcript of Ryman Healthcare half year results

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