Ryman Annual Meeting 2019 Media Release and Presentation
Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch, New Zealand 8140
Media release – July 25, 2019
Annual Meeting release: Ryman Healthcare celebrates 20 years with
shareholders
Ryman Healthcare has celebrated a remarkable 20 years as a listed company with
shareholders at its annual meeting at Evelyn Page Retirement Village in Orewa.
Dr David Kerr, Chair of Ryman, thanked shareholders for their loyal support, and said the
best was yet to come.
Ryman listed in July 1999, raising $25 million to fund its expansion into the North Island.
In the two decades since, Ryman has invested $3.7 billion in a portfolio of villages in New
Zealand and Victoria, creating homes for more than 11,200 older people on both sides of
the Tasman at 36 communities. Ryman has never asked shareholders for additional capital.
Ryman had also returned more than $800 million in dividends to shareholders, and Ryman
shares are now worth more than 40 times their value at float.
The company was now one of New Zealand’s best loved brands, and more than 1 million
Kiwis have a stake in the company through KiwiSaver.
“It’s been a remarkable success story, more so than I think anyone involved at the time
could have imagined,’’ Dr Kerr said.
“We were unloved when we listed, the offer was under-subscribed and almost didn’t
happen.
“I believe we’ve been a success because we have never lost sight of what we were set up to
do – provide the best of care for older people.
“We’ve been blessed with a team of people with kindness and compassion in their DNA
who have built a wonderful culture of care.
Ryman’s co-founders John Ryder and Kevin Hickman listed to provide the capital they
needed to gear up for the enormous growth in the ageing population expected when the
Baby Boomers retired.
That boom is only just about to hit, and Ryman has a record pipeline of villages to develop
to cope with the growth ahead.
Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch, New Zealand 8140
“We’ve come a long way since 1999, but I have the real sense that we are only just getting
started,’’ Dr Kerr said.
Chief Executive Gordon MacLeod thanked the company’s 11,200 residents for their support
and for the trust they placed in the team.
Ryman’s latest surveys of independent residents and team members showed they were
happier than ever, Mr MacLeod said.
Ryman would continue to invest in improving the experience of living in a Ryman village, he
said. Ryman invested $552 million in new and existing villages during the year, up from $478
million last year.
Pay had been increased for all staff, and experienced nurses had received a substantial
increase in the last financial year.
“We’ll also continue to invest in our people, in their pay and in their development, and in
making sure they get home safe every day,’’ Mr MacLeod said.
“They’re the heart of our organisation and we want them to love the experience of working
for Ryman.’’
Ryman has 20 villages with more than 7,000 units and beds in its landbank, equivalent to 65%
of its current portfolio. Work is targeted to be under way on 12 sites during the year
subject to consents and approvals, with Ryman entering a record expansion phase.
There is significant development work under way at four new villages - Nellie Melba in
Melbourne, William Sanders and Murray Halberg in Auckland, and Linda Jones in Hamilton.
Ryman had just received a resource consent to build a new village at Scott Rd in
Hobsonville, and work will be under way on the village soon.
Ryman has also received Overseas Investment Office (OIO) approval for a new village at
Riccarton Park in Christchurch, and the OIO has also granted Ryman a standing consent to
purchase 500 hectares of non-sensitive residential land at 20 sites over the next three years
in New Zealand. This means Ryman can purchase the land without requiring individual
approvals.
Mr MacLeod announced that Barbara Reynen-Rose, Ryman’s Chief Operations Officer, has
signalled her intention to retire in the next six months after more than 26 years at Ryman.
“Barb’s overseen the set-up of 31 care centres, been responsible for thousands of staff and
our clinical care for 26 years. She has instilled the importance of offering the very highest
standards of care into her teams and they will carry on that mantle.’’
Mr MacLeod said recruitment of her replacement was under way.
Dr Kerr said trading was satisfactory in the first quarter and development will be weighted
to the second half of the financial year.
He thanked shareholders for their continued support.
Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch, New Zealand 8140
“We have a band of loyal shareholders who have understood that we are in this for the long
haul. We are excited about the future for Ryman and we are determined to build as many
Ryman communities as we can to meet the important social need of caring for older
people.’’
New village programme:
Brandon Park, Melbourne (Nellie Melba): Village and care centre open.
Lynfield, Auckland (Murray Halberg): First residents in, village and care centre under construction.
Devonport, Auckland (William Sanders): First residents in, village and care centre under
construction.
River Rd, Hamilton (Linda Jones): First residents in, village and care centre under construction.
Burwood East, Melbourne: Development approval received, earthworks under way.
Geelong, Victoria: Development approval received, work under way.
Lincoln Rd, Auckland: Consent received, site works under way.
Havelock North, Hawkes Bay: Consent received, early site works due to start.
Coburg, Melbourne: Preliminary site works completed.
Hobsonville, Auckland. Consent received.
New villages in planning and design phase:
Aberfeldie, Victoria.
Ocean Grove, Victoria.
Mt Martha, Victoria.
Ringwood East, Victoria.
Mt Eliza, Victoria.
Kohimarama, Auckland.
Riccarton Park, Christchurch.
Bishopspark/Park Terrace, Christchurch. (Subject to Overseas Investment Office approval)
Karori, Wellington.
Newtown, Wellington.
About Ryman: Ryman Healthcare was founded in Christchurch in 1984 and owns and operates 36
retirement villages in New Zealand and Australia. Ryman villages are home to 11,200 residents, and
the company employs over 5,500 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 Ltd, 92 Russley Rd, Avonhead, Christchurch, New Zealand 8140
Ryman Hobsonville
---
Annual
meeting
RYMAN HEALTHCARE
25 July 2019
Underlying profit
growth since listing
6
-
$50m
$100m
$150m
$200m
$250m
199920002001200220032004200520062007200820092010201120122013201420152016201720182019
Total assets
7
-
$1bn
$2bn
$3bn
$4bn
$5bn
$6bn
$7bn
Sep 15Mar 16Sep 16Mar 17Sep 17Mar 18Sep 18Mar 19
Bank debtTotal assets
Population
growth 80+
9
-
0.2m
0.4m
0.6m
0.8m
1.0m
200820132018202320282033203820432048
NZ total population aged 80+Victoria total population aged 80+
Audited full year highlights
Underlying profit* up 11.5% to $227 million
Reported (IFRS) profit down 16.0% to $326
million
Full year dividend increased to 22.7 cents,
in line with underlying profit growth
Operating cashflows $401 million, up 15%
Land bank lifted to 7,000 beds and units
* Underlying profit is a non-GAAP measure and differs from NZ IFRS profit for the period. Refer to slide 34
for a breakdown of underlying profit.
11
Evelyn Page
The ‘gold standard’ of care
4 year certification
Source: Ministry of Health. Sector average reflects the
percentage of care centres with four years’ certification
for providers with 15 or more care centres. The sector
average excludes Ryman. Data at 15 July 2019.
15
84%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
RymanSector average
16
William Sanders
Linda Jones
Burwood East
Lincoln Road
Highton
Havelock North
Hobsonville
Aberfeldie
Ocean Grove
Lifting the
build rate
Murray Halberg
Riccarton Park
Nellie Melba
Target in 12 months
Subject to resource and building consent and
various regulatory approvals.
Barbara Reynen-Rose
Special Resolution 2: Constitution
21
The NZX Listing Rules have been amended by NZX following their review
in 2018. The new NZX Listing Rules came into effect on 1 January 2019,
subject to a six-month transitional period. They have applied to Ryman
from 1 July 2019.
A class waiver was also issued by NZX, providing that issuers may defer
updating their constitution to comply with the new NZX Listing Rules,
provided they do so at their next Annual Meeting following transition to
the new NZX Listing Rules.
Ryman seeks shareholder approval to amend Ryman’s constitution in
order to comply with the new NZX Listing Rules.
Resolution 3.1: Anthony Leighs
22
Ryman’s constitution and new NZX Main Board Listing Rule
2.7.1 require that any director appointed by the board must
retire from office at the next annual meeting but is eligible to
seek election.
Director Anthony Leighs retires in accordance with this
requirement and offers himself for election.
23
Under new NZX Main Board Listing Rule 2.7.1 a director must
not hold office past the later of three years and the third
annual meeting after their appointment without being re-
elected by shareholders.
Director George Savvides retires in accordance with this
requirement and, being eligible, offers himself for re-election.
Director David Kerr retires in accordance with this requirement
and, being eligible, offers himself for re-election.
Resolution 3.2 & 3.3: George Savvides and Dr David Kerr
24
Deloitte is automatically reappointed as the auditor of Ryman under
section 207T of the Companies Act 1993. Pursuant to section 207S of the
Companies Act 1993.
This resolution authorises the board to fix the auditor’s remuneration.
Resolution 4: Auditor’s remuneration
Annual
meeting
RYMAN HEALTHCARE
25 July 2019
=== IR PAGE TRANSCRIPT: Webcast transcript ===
Ryman Healthcare AGM
25 July 2019
Page 1 of 46
Start of Transcript
David Kerr: Tēnā koutou katoa everyone, my name is David Kerr and I am currently the
Chair of your Board of Directors. I would like to welcome you all to this 20th Annual
General Meeting of Ryman Healthcare as a listed company.
Both the Board and the Management Team really enjoy the engagement with yourselves,
the shareholders.
Today represents a very significant milestone for us. Those 20 years as a listed company
have flown by so I am really delighted that so many of you are able to join us here at
Evelyn Page Retirement Village in Orewa here today.
I would also like to thank the residents of the Evelyn Page for welcoming us into their
home. So they’ve been very generous.
So Jill Clark, where's Jill? Can I see Jill? Oh, there's Jill. Jill and her team do a fabulous
job here, and this has been a great success as a village. It opened about a decade ago.
Thank you Jill for your warm welcome here today, we really appreciate that.
So just looking around I can confirm that we have a quorum present. I would also like to
watch - to offer a warm welcome to everyone who is watching on our webcast.
We have a number of motions to approve today. Could I ask that any shareholder who is
seconding a motion, could they please clearly state their name for the record.
In accordance with the Company's constitution and the NZX listing rules voting on
resolutions will be carried out by way of a poll. Voting on resolutions for this Annual
Meeting will be undertaken electronically or on your allocated piece of paper.
Each share held by a shareholder counts as one vote.
The results of that poll will be available on the NZX later today.
So my fellow Directors and myself will vote all discretionary proxies we have received in
favour of the resolutions, as set out in the Notice of Meeting.
You should have either an electronic voting card or a piece of paper that has been set up
for you when you registered. I'm assuming everybody has exactly that. Is anybody lacking
in those options? No, great.
If you put your hand up we will get someone to help. Very good.
So look, we're going to start with some overviews from myself and Gordy. Then you'll hear
Ryman Healthcare AGM
25 July 2019
Page 2 of 46
from some of our directors as well.
During the meeting there will be time for questions from yourselves as shareholders, or in
other words our business owners.
If you have a question just if you hold up your attendance card. If you could wait until
someone brings you a microphone so that all of us in the room can hear you, and also
people watching on the livestream can also hear.
If you're a member of the media or you're not a shareholder and you have question please
talk to us after the meeting. We're very happy to answer any questions you have at that
time.
So in addition to the delicious morning tea treats that you're going to have at the end of
this meeting we are offering you a chance to tour the village, and also to have your blood
pressure checked by the Stroke Foundation. Yes, I might take a break and do that now.
The Foundation has been our charity partner for the past year. In the coming year we will
fundraising for the Breast Cancer Foundation, both here in New Zealand and in Australia.
As part of the agreement with the Stroke Foundation we funded the purchase of the Stroke
van t hat you can see outside. Over the past 12 months the van has travelled the length of
New Zealand and has taken blood pressure recordings on more than 10,000 people. These
recordings are undertaken free of charge of course.
We have agreed to support the v an for another three years. We’re funding an identical van
in Victoria as well. About 1% of the people who have used the van have discovered they
had critically high blood pressure and were clearly in danger of either a heart attack or a
stroke. So, we know it is truly a lifesaver.
So, help yourself to a check from the Stroke team after the meeting.
We have also arranged a tour of Evelyn Page's Men's Shed for anyone who is interested.
They are toy makers and they supply Starship. They have sent toys to Neve, the First
Baby, and also to the recent royal arrivals in London.
So, this is a picture of them on the screen now.
As a special treat we have also arranged Blackjack bowler and Commonwealth Games
medallist Wendy Jensen who has kindly come along today to provide some bowling lessons
for any of you who are interested afterwards. You just need to roll on up to the green after
the meeting.
Ryman Healthcare AGM
25 July 2019
Page 3 of 46
Now before we get into the formalities, I would just like to take an opportunity to introduce
the Board and our team.
So, if we start at the far end, Jo Appleyard. Jo Appleyard is a partner with Chapman Tripp.
She is a particularly skilled litigator and advocate, specialising the commercial,
employment and resource management law.
Her s kills are sought after by many of the larger corporates nationally, and her experience
in relation to civil disputes is particularly wide and varied as she acts on all manner of
commercial issues.
So Jo's been a member of the New Zealand Markets Disciplinary Tribunal since 2011 and is
a member of our health and safety subcommi ttee, our clinical governance subcommittee,
and the development and construction subcommittees. Quite busy Jo isn't it really.
Coming towards me next from Jo is Warren Bell. Warren is a very experienced public and
private company director. He is currently the Chairman of Hallenstein Glassons who
operate both here in New Zealand as well as in Australia.
He is also the Chair of St George's Hospital, which is the largest private hospital in the
South Island, and he is a Director of a number of private companies. He is Chair of our
audit and financial risk committee, along with being Deputy Chairman.
Then next is George Savvides. George Savvides lives in Melbourne and he has 20 years'
experience in the Australian healthcare industry. He was for 14 years the Managing
Director of Medibank, Australia's largest health insurer.
This means he's got really wide knowledge of both the systems and the structures that
underpin the Australian healthcare sector. He's got extremely good connections with
people relevant to thi s Company, both at state level and at federal level in Australia.
He is the Chairman of NextScience and Deputy Chair of Australian broadcaster SBS and a
Director of IAG. George is a Fellow of the Australian Institute of Directors and he Chairs
our clinical governance committee.
George has made a huge contribution since joining us five years ago.
Then Claire. Claire Higgins is a professional director and she is a consultant who also has
extensive board experience in Australia and New Zealand. She has had ext ensive
experience in senior management roles with BHP and OneSteel. She is based in Melbourne
also where she's Chair of REI Superannuation Limited.
Ryman Healthcare AGM
25 July 2019
Page 4 of 46
Claire Chairs our health and safety committee. You can see that with industry experience
at companies such as OneSteel and BHP she has got a great feel and knowledge around
health and safety. This health and safety is an area we regard as being very important.
Going to the far end we have Anthony Leighs. So, Anthony joined our Board last year. He
is the Managing Director of Leighs Construction, which he founded in 1995. He has built it
into a leading commercial construction contractor.
Anthony is a former Chair of the New Zealand Registered Master Builders Association. He
Chairs our recently created development a nd construction subcommittee of the Board and
has really added very significant construction expertise to the Board.
Now there is an invisible person, Geoff Cumming. I'm not sure, Geoff, can you hear me?
Geoff Cumming: Yes, I can, thank you.
David Kerr: Thank you Geoff. So Geoff rejoined the Board following the retirement of
Kevin Hickman. Geoff can't be with us in person today, but he's joining us via a link from
Canada. We can bring him up on the screen if that was required.
He has been a long-term supporter and shareholder in the Company. Geoff is an economist
by training, and he's got more than 30 years' experience as a chief executive, director and
inves tor. I think he's served on more than 25 corporate boards in a range of companies.
He is Canada-based, but he is a New Zealand citizen. He is with us in person the vast
majority of the time. In fact just yesterday and the day before we had Board meetings and
Geoff was there on Skype actively contributing.
So the technology worked, which always amaze s me, but it did work. It was very valuable.
So his input is really important.
So then I just noticed looking out that Bill Raynor is here. Bill , can you stick your hand up?
Thank you Bill, good to see you. Bill's from Grey Power. We've had a long and very
supportive relationship with Grey Power over a good many years, and it's good to see you
here today Bill.
Then with me of course we have Gordy MacLeod, our Chief Executive, whom many of you
will know. Just beyond him Dave Bennett, our Chief Financial Officer.
So the Notice of Meeting has been distributed and accepted as read as in accordance with
normal practice.
So are there any apologies that anybody would wish to register? I'll take the silence to
Ryman Healthcare AGM
25 July 2019
Page 5 of 46
indicate no. So I do not need to move the motion rel ating to apologies. We don’t have any
submitted - fine. That’s good, so we don’t need to move or second that motion.
Moving along, I will just to go the Annual Report. So this document of which we are very
proud. We have prepared this using the integrated reporting framework.
This year the title of All about people is carefully devised. We know as a Board that if we
look after our residents and our staff very well everything else that we hope for as a
Company will follow.
So you’ve heard us talk before that the care we provide must be, in the words of Kevin
Hickman our co-founder, good enough for Mum.
It’s what the Board and the management team believe is critical, and what makes us, I
believe, a success as a company. There’s nothing more important, really. It’s a core value,
and I believe it’s one of the reasons we have been successful.
So when you review this annual report, you could say that we are an organically
sustainable business. As y ou know, we only grow organically, we don't grow by acquisition.
The r epo rt se ts out the story of the Company and talks about how we have used the six
capitals to create value over time , and you can see those demonstrated on pages 32, 33,
these pages here.
So the capitals we report on are people, how we care for them , how we devel op and learn,
ho w we create and nurture communities, how we create financial certainty, how we share
our knowledge, and how we plan to continue to build our economic assets, and care for the
environment.
It also expl ains in the report how our model works, and how we intend to grow using our
resources sustainably and continuing to put care at the heart of everything that we do. We
always have, and we’re going to continue to do so. As I said before, it’s what makes us
successful.
I'm going to move that the ann ual report, and the auditor’s repo rt be taken as read. So
I'm moving the motion. Could I have a seconder, please?
Thank you very much, sir. Could I just have your name?
Graeme Howard: Graeme Howard.
David Kerr: Graeme Howard, seconded the mo tion. I'm going to put the motion - all those
in favour, please say I.
Ryman Healthcare AGM
25 July 2019
Page 6 of 46
Multiple speakers: I.
David Kerr: Again st. I declare the motion carried. Thank you.
As I mentioned a moment ago, it’s 20 years since we listed on the NZX, and you can see
the 2 0th birt hday cake over here, that we’ve had presented to us. I've just re-read
recently the prospectus that we launched, and apart from some quite serious ageing
changes in this director’s picture, not a lot has changed.
[Laughter]
David Kerr: Even with an airbrush. We set up back then to become the preemin ent
provider and operator of healthcare facilities for older people. The aim was to provide
tailored care and integrated villages that meant residents could stay in the vill age safe in
the kno wle dge that their health needs would be managed to the highest possible standard.
You might be interested to know that the share market list ing al most didn’t happen, in
fact, the very first attempt in 1997 to list, did not succeed, and we had to pull the float.
Then two years later, in 1999, almost on the eve of the listing, the Australian backers got
cold feet. This is not about Australia, I'm sorry. (They) almost got cold feet and tried to
pull the listing at the very last moment, so it’s be en a remarkable succe ss story, more so
than I think anyone involved at the time could ’ve imagined. We were pretty unloved when
we listed, the offer was undersubscribed, and almost didn’t happen. A lot of people wrote
us off, but John and Kevin, and the rest of the team kept on going.
They predicted a bright future for integrated aged care companies, and in the pros pectus,
they were thinking long-term back then. Their horizon was more than 30 years out, during
which, the population aged 65 and over would more than double. So, I suspect the so-
cal led elevator pitch, which is the description of what a company does in the time restraint
of an elevator ride, is that we look after older people, and we try to do this better and
better every moment.
So whil e the intentions of the pros pectus have not changed, the size and scale of Ryman
has. In 1999, when we floa ted, we had eight villages worth $53 million, and a little over
1000 residents, and around 530 staff. Today, we have 36 villages, 11,200 residents, and
5500 staff. Our total assets are worth $ 6.7 billion, and we have net assets of $2.2 billion.
We raised $25 million in that hard one IPO, to reinvest in the business, and our market cap
at that time was $135 million. Today, the market cap is well over $6 billion.
In 1 999, Ryman needed capi tal to grow, which our IPA share holders really provided to us.
Ryman Healthcare AGM
25 July 2019
Page 7 of 46
At the time, we though that the $ 25 million investment would give us the impetus to
exp and into the North Island, and we sure did expand. We now have a total of 23 North
Island villages, and another six in the pipeline.
We’ve continued to focus on our planning being long-term, and our thinking being long-
term, and not fallen into the trap of short-term decision-making. However, it’s worth
spelling out today that at this 20-year mark, what an extraordinary one we have really had
over the last two decades.
For those of you brave enough to buy in at the IPO , and who have held on ever since - and
I know there are a fair few of you - your shares are worth more than 40 times what you
paid when you first inv ested. As w ell as that capital growth, you’ve enjoyed a growing
stream of dividends. Since 199 9, we ’ve paid out dividends of more than $800 million,
always equal to 50% of the underlying profit.
That ability to return a sustainable profit while continuing to provide the very best of care,
proves that profit and purpose are comfortable companions. Today, because of our
success, more than one mill ion kiwis have a stake in this Company through KiwiSaver. So
our corporate success today will help working people of today build the foundation for a
comfortable reti rement.
This very significant growth has been funded by our efficient use of the capital that we
recycle from the selldown of our villages. B y the continued support of our banks, who have
really been long-term partners alongside yourselves, the shareholders. Remarkably, we
have not been back to shareholders for more capital than the original $25 million that was
contributed in 1999. That investment has allowed us to prov ide h omes and care for more
than 30 ,000 people over the last 20 years. Not to mention, creating jobs, and fulfilling
careers for many more.
I believe we’ve been a succ ess because we’ve n ever lost sight of what we were set up to
do, and that’s to provide the best of care for older people. We have been blessed with a
team of people who have kindness and compassion in their DNA, and have built a
wonderful culture of care. We’ve build superb assets, valued as I said at more than $6
billion, that will provide care for generations to come. Th at inc ludes more than 3000, rest
home , hospital and dementia-care beds.
That growth in our asset base hasn't happened by chance. By putting aside that 50% of
the underlying prof it each year, it enables us to reinvest in growth. We built a large quality
portfolio of villages, which really are a springboard for the future. It's a legacy of
Ryman Healthcare AGM
25 July 2019
Page 8 of 46
compounding investment that we bel ieve will continue to deliver in to the future.
Of course, we're proud of this. I also have the sense that is just really the beginning.
We've come a long way since 1999, but I have the real sense that we're really just starting
to get going. It's pretty early days in terms of the aging population. The first of the baby
boomers that Kevin and John were gearing up for are now only just entering their
seventies. We're expecting them to arrive in large numbers from about 2025 onwards. We
see an extraordinary growth potential ahead, a huge potential to continue to evolve our
model.
Of course, there's no shortage of competition. To be honest, we feel competition is good
for us , but we do enjoy some key competitive advantages. These would incl ude, firstly the
quality of our people, and our culture and our commitment to high-quality care and
continuous innovation.
The second thing I’d identify would be our fair terms for our resi dents, including fixed fees
and indeed the lowest fe es of the bigger players in the market.
Thirdly, our reputation. Our loyal residents and their fam ilie s, and the high degree of trust
they have in us.
Fourthly, our business model and the history of long-term investment, which enables us to
build and recycle the capital ef ficiently, and gives residents and their families the certainty
that we will be here for the long haul, and not suddenly evaporate like some operators
have done.
We want to build as many Ryman communities in New Zealand and Australia, bringing
care , comfort and security wherever we can. We want our team to get home safe each day
to their families. We want our staff to love working for us, and to build their careers with
us. It's a statement of the obvious possibly, but our staff and management are critical,
really, to our success.
The management team in particular, deserve acknowledgement. I've just had a couple of
days of Board meeting, and they truly embrace the culture. They are what you might
describe as being a real force for good. They love the purpose of what this Company does.
They treat the mo ney and the allocation of capital with great caution. It's your money, not
theirs. They manage to display the right balance between confidence and paranoia.
By that, I mean they demonstrate the confidence in the business model and the way in
which we operate, and the care we provide. But they're also a ware and paranoid about the
Ryman Healthcare AGM
25 July 2019
Page 9 of 46
challenges, such as changes in the economy, changes in the political environment, the
risks of a care crisis , the challenges of staying in front of the competitors in the sector. Our
social purpose is to meet the need for care for older people. The demand for this is only
going to grow as t he population changes.
So, to come back to the present, I'd remind you we reported another solid year when we
released the annual result back in May. Audited underlying profit rose 11.5% to $227
million. R eported IFRS profit , which of course includes unre alised valuations, declined 16%
to $326 million. Now, that is actually most easily explained on page 77 of the Annual
Report, where you see that the gains that are a result of the re-evaluations of $ 185 million
in 2018, that's last year, and $102. 4 million in 2019.
You'l l recall that the 2018 full year result was boosted by changes to the independent
value assumptions, but there were no significant changes to the ass umptions in the 201 9
year. So, altho ugh the value of the investment properties increased, the value increase
was not as great as the year before because the changes in the assumptions were not
repeated.
The full year dividend, as you will be aware, was lifted to $0.227 per share, in line with the
growth and the underlying profit. Net assets reached $2.2 b illion, up from $1.94 billion.
Importantly, our operating cash flows rose 15% to $401 million, with cash receipts from
residents exceeding $1 billion for the first time.
That allowed us to invest $552 million in new and existing villages during the year, up
from the earlier year of $478 million.
The underlying profit of $227 million reflect how the Company actually has been trading,
and it's the way we use - it's the number we use to determine our dividend. The result
came within the range that we had set at the half year result, which was between $223
million and $238 million, and was in line with the market consensus.
The medium-term target, which I'm sure you are really interested in, continues to be a
doubling of our underlying profit every five years. This means we'll be able to increase the
underlying profit by approximately 15% each year over the medium-term.
We to ld our audience at the May full year results, that we fell short of that 15% long-term
target for two reasons. Firstly, we took some longer-term strategic decisions to reinvest in
the business, which we believe will help performance in the out years. These included a
nurse pay settlement that added $5 million to our wages bill, and this was important as
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our nurses are a really critical part of our care package.
Secondly, the re-sales volumes were flat. As you know , it's hard to predict the number of
re-sales we get in the short-term. We expect the volumes to grow in the medium-term, in
lin e with the steady portfolio growth that has occurred over recent years. We're very
focused on growth, but not just for growth's sake. We're not interested in comp romi sing
that core value of putting the resident first. So, w e think it was a solid result given the
decline in the Melbourne housing market, and a cooling off in the New Zealand market,
more particularly may be in Auckland.
Despi te these developments, the villages remained in demand during the year. Occupancy
at our established care centres was at 97%. While re-sales were flat, we sold almost all
our stock that came up.
We take that as a positive sign that the villages are hitting the mark in term s of what our
residents seek.
As a t 31 March, we had only 1% of our re-sale stock unsold. The build rate during the year
lifted by 42% and we have 20 new villages either in development, or in our land bank.
That gives us a great platform for growth in the years ahead, as you can imagine.
We' ve been keeping a close eye on the housing markets here in Auck land, and also in
Melbourne, as you'd expect. T he market in Melbourne is sho wing signs of recovery which is
great to see. It's worth noting that the cooling in both markets follows long periods of
quite high house price inflation. The fundamentals underpinning both markets are sound,
though. New Zealand in particular has a chronic under-supply of housing, which has failed
to keep pace with our population growth. This is most acute in Auckland, where we have a
large developme nt focus.
So, with respect to the current year, we had a Board meeting, as I mentioned, over the
last couple of days. I can advise you today that trading was satisfactory in the firs t
quarter. The development program is weighted towards the second half of the financial
year, though.
Loo k, it's now my pleasure to hand over to Gordon MacLeod to talk to you about the year
from his perspective. Thank you very muc h.
Gordon MacLeod: Hello everybody. Thanks David.
I don't think David's quite right about the prospectus comment, how everyone has
changed a lot, because David's like one of those ageless people. If you look at him - if you
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look at the photo back from 20 years ago it looks about the same today, I reckon.
David Kerr: Plast ic surgery.
Gordon MacLeod: Last time I was here at Evelyn Page was to open the bowling - the new
bowling green out there actually, which loo ks superb. We - when we built it, we built it a
bit short, so we had to fix it up , and the village residents were delighted with the change.
If there's any bowler - or, actually Tony Rickerby, who is one of the big stalwarts of the
bowli ng community here, it rolls pretty well now, doesn't it?
Gordon MacLeod: Yes, that's good. I’m delighted to be here today at Evelyn Page. It's
real ly the first village where I got my full sense of a Ryman development from start to
finish. I joined in January 2007, and in about my first week actually, Kevin Hickman and
Simon Challies and I came up, and we had a look at the site that we'd just acquired here.
We hadn' t paid for it yet, but we were having a look around. Carmel Fisher came up as
well. Some of you might remember Carmel was one of the founders of Fisher Funds, and
she was interested to see it.
You c ould just tell, standing on the site, that it would be a beautiful village. Of course, it
was the first experience of seeing the v ision of our development and design people to take
a bare piece of land and then create this - what is a really beautiful setting for today.
So, it was a big purchase for us back then. We actually paid $20 million for this land back
in 2007. So, it was a very big purchase. We were able to afford it because of our business
model of recycling capital. The settlement for the land was going to be in June that year,
and that was exactly the same time as a whole bunch of independent apartments were
being settled moved in on, at Edmund Hillary in our first stage of apartments there.
I remember I was on holiday in Mooloola ba with my family, counting the cash-in from
Edmund Hillary, as the payment was made for the land here. That mode l of recycling
capital and being able to wor k across multiple sites at once has stood with us through to
today.
Th ere were a number of battles along the way. Getting consent wasn't easy, and we were
also hit by the Global Financial Crisis, or the GFC, partway through. In 2007 - if you think
about the his tory, in 2007 investment bankers would come and see me regularly, and they
would say that we should do a share buyback. That was their big idea in 2007, and that we
should gear up the balance sheet significantly, because we had a lazy balance sheet
apparently. We should buy our own shares back on the market.
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We didn't do that. By 2008, they were telling us that we should do some acquisition of
othe r companies on the market, and that would - and then by 2009, by the time the GFC
hi t, they were telling us that we should do a capital rais ing . I sa id to them, we don't need
to do a capital raising, because we didn't do the ideas from 200 7 and 2008. So, that was a
good position to be in.
We also spent a lot of time - we've got a good reputation here in New Zealand now, a
really strong reputation. I a ctually personally spent a lot of time up here on the North
Shore during '08 and '09, talking to local lawyers in the North Shore in Auckland. Because
people didn't really know particularly who Ryma n was. There were a lot of developers who
were struggling. There was a Knightsbridge devel opment I think up here, which some of
you might be aware of, that was in receivership I think at the time. Lawyers who were
signing off on their client contacts, they were worried about things like whether we would
be able to build this community centre, or whether we would complete the ongoing build of
the village.
All those sorts of battles that sometimes you take for granted today, we never lose sight of
the fact of our heritage , of having to fight for our brand and build our reputation. In fac t,
an Auckland fund manager told me at about the same time, that this would be the very
last Auckland development we would do because we would never be able to find any more
land in Auckland. But we were able to find a couple of things along the way.
He also said that we'd never be able to sell Evelyn Page down in 2009, 2010, because of
the property market. Again, we were able to sell it down really well, and Tony , you were
he re on the ground at the time. Thank you for the huge amount of work you did during
that time, and the team.
The construction team faced a number of challenges, and the village actually set a Ryman
record for our largest single concrete pour. It's still urban legend in the Company. It was
the largest pour in Auckland since the Sky Tower. In fact, it was bigger than the Sky Tower
pour, I think. We haven't stood still since we opened. We've expanded the village centre.
We've put in emergency generators, and a Never Alone system for residents. We've
retrofitted air conditioning, sorry that we didn't do that in the first place. We only - and
we've just recently extended the bowling green as well. So, we just look to keep villages
up to date, and invest in them, and make sure that we meet the needs of what we're
learning as we go.
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Gordon MacLeod: So there have been some tru e Ry man stars at this village along for the
ride, and whilst this isn't a Group comment, it’s inte resting to get down to a village level to
understand how our people development works. So Matt Hutchinson was the project
manager, he was responsible for building the village, and then he went on to build Bert
Sutcliffe in Birkenhead. Today, he ’s a re giona l construction manager, overseeing our
Will iam Sanders and Murray Halberg builds.
Paul Sutton did a great job at getting this village started up and running as a village
manager, and he’s now over in Melbourne as our Victorian operations manager.
Lyn n Ch arlton, she was a village manager here too, she did a magnificent job, and in fact
in 2018, won Village Manager of the Year, and she’s now doing a great job for us as a
regional manager in Auckl and, making sure that our newest villages run really smoothly.
So you can kind of see that through the various people involved in the village over time,
and that’ s just a snapshot, that we create career opportunities where people can progress,
and we provide great opportunities for our people.
So really in short, Evelyn Page has been a great success story. We were told it wouldn’t
work, we had to win the community over, and now it’ s part of the fabric of Orewa, and the
centre of life for our residents, and also their families. The care centre here is a place of
kind ness, and we’ve got incredibly dedicated staff who work for us.
I remember one afternoon I was here about three or four months ago, there’s a lady who
visits eight rest homes and hospitals around the Orewa, Red Beach area, and she’s been
doing that for 10 years. She came and got me, and said to me, I just want to talk to you
about your staff, because they ’re incredible. And to the extent that when her mother
needed care, there was no question for her that her mum would come into the special care
unit here at Evelyn Page, having seen all the other care facilities.
So it was a great message to me that the staff do an incredibl e job, and we do the right
things.
So in relation to that, people are our scarcest resou rce, so looking after our people, and
making sure that we’re developing our next generation of leaders, who can share our
val ues, they’re kind of things that I obsess about really. As David mentioned, we’re a care
company, and a big focus for us in the past two years is making sure that the regard that
we have for our team is recognised in their pay.
We’ve just increased pay again, and the Ryman adult entry age for our villages is now $20
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an ho ur, whi ch is $2.30 above the minimum wage. In addition, we’ve also had increases
for our caregivers, as part of the government’s equal pay settlement, and las t year we
increased nurses’ base pay to align with the DHB settlement, and we were one of the few
people in the aged care sector to do that. So what it means is that we’ve now lifted our
median hourly rate by 33% for our registered nurses, and for our caregivers, over the past
two years.
So our form ul a for success is simple really, it’s about happiness. So having happy residents
and happy staff members means that shareholders should do well. Our surveys show that,
and overall, our residents and our team are actually happier than ever. In fact, our last
staff survey results showed an increase in engagement of 50%.
It’s a great endorsement, but we are by no means complacent, and when we look at these
surveys and stuff, we really focus on what are the frustrations and things that we need to
do better.
We’ve also invested heavily in people development and in training, and also in
apprenticeships, particularly in construction, and identifying our leaders of tomorrow, and
making sure that they have a really clear future career path with us, where they can real ly
meet their potential. If you think about the stories of Matt and Paul, and Lynn, people like
that, they’ ve had wonderful career opportunities with us, and ofte n opportunities that
perhaps you wouldn’t be able to get anywhere else.
We’re also developing the Ryman Academy, to ensure that our leaders get a world-class
education, primarily through our Lead Development Program, and through an Advanced
Lea dership Program with the Melbourne Business School. So we’ve got great people, but
we’re going to need ple nty more. We hope to double the size of the business roughly every
five years, and so finding more great people that share our values is a key part of what
we’re focus ing on.
David talked about the demographics that underpinned Kevin and John’s thinking 20 years
ago, and it’s really interesting that the demographic change has not actually started yet for
us. The first baby boomers, based on our average age of entry won't really arrive at our
villages until 2025, that’s in six years’ tim e. Then that demographic growth continues for
four decades. It’s the most unprecedented change human history.
So that’s what’s at the heart (of what we do), and so what we need to do is we need to
plan to do things differently and better over time, and that’s at the heart of things like
Proje ct [Delight], which is focused on improvements to the experience of independent
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residents, and also our Digital First Strategy, where we’re rolling out more technology of
villages.
So for example, for the first time, we ’ve appointed a customer experience role, who is an
ex highly successful village manager, so we ’re really focused on the resident experience.
We’ve also made great progress in raising the standard of our care even higher, 84% of
our New Zealand villages now have four-year accreditation from the Ministry of Health,
which is really the gold standard of care. The average for our competitors, as you see on
the graph there is 40% for larger operators.
On the development front, we’ve just received consent for our Hobsonville site, which is
our newest in Au ckland, so well done to the development team, and we’re hoping to get
started on that just probably in about six months’ time or so.
Also hot off the press, we ’ve received Overseas Investment Office approval for our new
Riccarton Park site in Christchurch, and the Ove rseas Invest ment Office has also granted
us a standing consent to purchase 500 hectares of non-sensitive residential land at 20
sites over the ne xt three years in New Zealand, if those sort of opportunities arise. This
mea ns we can purchase land without requiring individual approvals, which is a significant
achiev ement by the team.
So all going well with consents and development applications, we are targeting to have
work underway on 12 sites in the coming year, and we're about to move into our biggest
ever build program.
In total, we have 20 villages in our land bank with more than 7000 beds and units to
develop. That's the equivalent of 65% of our current portfolio, so we have an extraordinary
platform to meet the demand that we see ahead and we'll just keep on adding to the land
bank as opportunities arise. We' ve got some great opportunities we're looking at right now
in New Zealand in Victoria to add to that.
I would just like to let you know that our Chi ef Operation s Officer, Barbara Reynen-Rose
(that’s her there with Albie , who won the first Kevin Hickman award actually, at our
awards this year, had a fantastic recognition for his job). Barbara has signalled her
inte ntion to retire later this year.
Barb has made an incredible contribution to Ryman for more than 26 years. She has
overseen the setup of 31 care centres, been responsible for thousands of staff and all of
our clinical care for all of those years. She has instilled the importance of offering the very
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highest standards of care into her team, and they will carry on that mantle because that's
the culture that we've built over that time. She' s deci ded that the time has come to spend
more time with her husband Laurie , her cocker spaniel Harry and her grandchildren and we
wish her all the best. So I'd like to recognise her, please.
In fact , Barb would have been here today but she got the flu, ironically, being involved in
care and she can't join us, but Barb, if you're watching, we acknowledge your amazing
contribution and I'm sure the shareholders would have loved to have shaken your hand at
the end of today. I hope you're well.
We' ll be recruiting a new Chief Oper ations Officer as soon as we can.
I'd like to introduce the rest of the senior team. Dave Bennett is our Chief Financial Officer;
he's up here there with me. He's m uch better than the last CFO; that's what I always say.
It's really true too. He's very, very tall as well. Stand up, Dave. Look how tall he is.
[Aside discussion]
He does, yes. Actually, I don't - I actually try and avoid arguments. Yes.
We' ve got Debbie McClure, who's our Chief Sales and Marketing Officer. Debbie, where are
you? Here she is. Hello. There she is. A lot of you probably recognise her. Debbie has done
a 2 7-year tour of duty for Ryman; i sn' t that incredible? Every year end and every half year
when we count the sales and Debbie's counting them in one by one with huge dedication
across her team and she also has been instrumental in Melbourne. You' ve been living there
for five years, Debbie? Been living there for five years so it's been a really - played a really
big part in spearheading our operations on the ground there.
We' ve also got Tom Brownrigg. Where's Tom? Here he is , her e's Tom. Tom is our Chief
Construction Officer; he's our builder. He's been with us for 13 years and it's amazing
when you think of sites; when they are at their peak, when they are at their most busiest,
you would have, say , 400 to 500 people on site per day across a number of different sites.
We' re hoping to build across 12 different sites this year, and it's a huge responsibility and
we're really grateful for the work that you do, Tom, in overseeing that work. It's not -
Auckland is certainly not the easiest market at the moment to work in and requires a lot of
dedication and hard work from the team. So, thanks, Tom.
We' ve also got Nicole Forster. Where's Nicole? She's our Chief People and Technology
Officer. She's been with us for eight years, by the way. A huge part of Nicole's focus is on
the people side of things to make sure that we've got the development and the education
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and the retention strategies to make sure that the culture of the Company and the people
that we have are just first-rate and we continue to grow our teams.
Her team have been, and herself, have been really responsible for the leadership
development programs that we've been putting in place over the last couple of years. She
also has a nother significant portfolio, which is technology. The technology side of things at
Ryman is a lot more complex now than what it used to be a few years ago. We' ve got
thousands of tablet devices installed in resident aged care rooms; we're really focused on
our digital strategy, and so Nicole's technology team have been doing a huge amount of
work in the las t couple of years. So, thanks, Nicole.
We' d also like to introduce to you Jeremy Moore. Where is Jeremy? Jeremy has stepped up
as our Acting Chief Development Officer and it's great to see that already we've seen a
couple of land purchases come through, a couple of consents, some Overseas Investment
Office approvals, so the team is getting off to a great start under your leadership, Jeremy,
and we're really enjoying having part of you with the senior team.
The senior team will be around after the meeting, and it would be great for you to have a
chat with them because it's really interesting to speak to people who are looking after
different parts of the business.
Jus t finally on the team, we operate a 24/7 business; things go wrong. Sometimes it's
quite serious, and so for me to know that I've got a team of people who are just complete
dedicated 24/7, I thi nk yo u c an be pretty proud of the sort of people that represent you as
shareholders as Ryman.
I would also like to thank you, our shareholders. One of our shareholders and residents,
John Harwood - John, could you perhaps stand up? I know it's very embarrassing. John
and his wife Marlene - hi, Marlene - were kind enough to let us feature their investment
story in our Annual Report.
John has been a resident here at Evelyn Page. As Chief Executive and in previous role as
CFO when I come up here, I'd always enjoy catching up with John and getting some
feedback on the ground from a visitor and a resident point of view. Last time I popped in
to see John, his cat was nicely asleep on his table in the loung e and I disturbed the poor
old cat and it ran out the door. That sort of loyalty and the positive impact it's made on
your life being here at the village and as a shareholder, it's humbling to hear that and
thank you for sharing those stories with us.
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People like John tend to worry about the same things that I do. John recently asked me
how Ryman was going to - how we were going to keep growing while maint aining the
same culture and philosophy. What he said to me was how are you going to make sure you
Ryman-ise everybody? That's a great way to look at it: how are we going to make sure we
Ryman-ise everyone.
I think that the answer really lies in our prospectus that David mentioned from 20 years
ago, and really our story has remained the same. Our intentions haven't altered in 20
years. The faces may change, we'll get bigger, but the fundamentals haven't altered. What
it's really about is making sure we pass down those stories from our founders and the
people who have really built this Company and share those stories with our people as they
come and make sure that they share those same values as well.
I guess we're in a world that is changing faster, I think, than at any other time in history.
Probably a lot of people might agree with that, but I think we need to really think about
the things that will not change, because some things that we want as human beings I
believe will stay the same. That means that the fundamentals for what we need actually
won't change at all, because at its core human touch is not some sentimental indulgence, I
don't think. It's a biological necessity. That's why what is uniquely Ryman, which I think is
doing stuff right and doing things that will be good enough for your mum, is at the core of
what we do.
The need for beautifully built communities where people come together, the touch and
laughter of a caregiver, the care of a nurse as she che cks your blood pres sure and holds
your wrist and arm and talks about your day, the companionships of new friends and
family, all of these things are things that people truly need and I believe they will always
need. I see that Ryman can be an ever-increasing force of good in this world and we look
after older people like our very own family.
We help older people to be seen with respect and dignity by society; we create jobs and
lifetime careers that are filled with purpose and with meaning. We do ne w things and we
get some of them wrong because the doing new things is actually hard. We develop our
people to be the very best they can be and to do what is good enough for your mum , your
very own family. I believe that if we do those things right, then success will follow for all of
us as residents, as staff and as shareholders. Thank you very much. Back to David.
[Applause]
David Kerr: Great presentation Gordy, great presentation. Some of you who were at the
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AGM last year might remember that one of the shareholders asked a very pertinent
question about what risks did we think about. Thinking about that, I thought it was such a
good question that I thought it might be useful for me to invite Warren Bell, our Deputy
Chair and chair of the Audit and Financial Risk Committee, to talk about the risks that the
committee focus on, just so you are on the same page as what he's thinking about.
Thanks, Warren.
Warren Bell: Good morning, everybody. As David said, obviously Ryman is a very busy
organisation and Company and faces a whole lot of risks on a number of fronts. I'll just
touch on five of the major ones, and none of these will come as a surprise to you. I'll just
go through those briefly; I won't take up too much time.
Obviously, you've heard Gordy talk about the number of people we can have on
construction sites, up to 400 or 500 people, he said, at one point. He also t ouched on the
number of sites that we will have underway with build programs next year, and I think the
number he mentioned was 12. One of the key areas of focus and management of risk for
us every day of the week when we get out of bed are all the health and safety related
issues around village development, but there's also health and safety issues within exis ting
villages. It's a very key focus for Ryman and the management team and people every day
as they get out of bed and go to work. We obviously want everybody to get home safely at
the end of the day so that is a really high priority for us which naturally we spend quite a
bit of time and focus and have some dedicated resources in this area, in both New Zealand
and in Australia.
That was the first one I wanted to touch on. The second one won't surprise you either, and
that is really around high-quality clinical care, and the support and the governance role
that the health and - the cli nical advisory committee monitor the progress of our
organisation around that area.
Obviously, we're a care company; we all know that, and we are all aware that we have
quite a large number of residents within our villages who can have some very complicated
health needs from time to time, so c aring for our people is always an area that needs
really key management. You would have seen the reference there to Barbara retiring after
26 years
She has been a key driver in making sure that Ryman's performance in that clinical
support area is second to none. So that is a really major priority, and that's hardly a
surprise either.
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The third point, and it was touched on briefly in Gordy's presentation, we're only as good
as the people in our organisation. So the quality of our people is right up there. It's always
a greatest asset in a care company like ours.
If you don’t get that right then obviously that can be a major risk on a number of fronts.
So recruiting the right people. Developing them, challenging them, and also making sure
that the appropriate staffing levels within the villages are there day in and day out.
So that is an ongoing risk day to day that we have to manage in each of our villages in
both countries.
The next one I'll just touch on briefly, and that is the pipeline going forward. You will see
that 12 sites are being built on next year, and I think the number up there was 20 sites in
the land bank.
So on e of the disciplines around running a company like Ryman is to do that journey in an
orderly and well-reasoned manner, and make sure that we don’t go too fast. That we
execute properly and that we get the right quality outcomes at the end.
So it's very easy to say, you should be expanding faster and brighter and going faster in
both countries. But we' ve got to be very careful that our execution is of the quality that we
want, and that we don’t go too fast so that one of the wheels falls off.
So the last but not least thing I just wanted to touch on, and that really is to make sure
that our Ryman residents and patients get an experience which is second to none. That's
easily said, but that is a constant area that we work in, on day in and day out. That is
really, we want to be the premium brand, I think we all know that.
So that's about really making sure that we are really at the front end of our resident and
patient experience, and are the premium performer in our industry sector.
So that was just the five areas that I just wanted to touch on. None of them will be a
surprise to you. But the disciplines around making sure that we execute those are really
important to the Ryman brand going forward and to what we do day in and day out.
There are obviously a whole host of other risks, so we don’t just have five. But they were
the ones I just wanted to touch on today. So thank you David and thank you.
David Kerr: Thanks Warren, that's a really helpful summary and I'm sure the shareholders
appreciate it.
So look, I now call for any discussion or questions at this stage, including on the Annual
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Report or the Notice of Meeting. This is your chance to ask questions. So if you just raise
your card and we will get a microphone to you.
As in every other year, we will also be available to mix and mingle after the meeting has
formally ended. So if you prefer that forum we will certainly be there too.
So questions.
Graeme Brady, Village Resident: Good morning. My name is [Graeme Brady] and I am a
resident of Evelyn Page Village. I have two questions. (1) Is Ryman Healthcare intending
to expand beyond the Victoria? (2) Is a listing to be made on the Australian Stock
Exchange?
My reason for enquiring is the shocking state of Australian aged care. Briefly, I was in
Australia in May and saw an extensive report in The Australian newspaper outlining the
serious shortcomings in many of the aged care facilities in New South Wales.
Last week I was in Brisbane and on Saturday the headline on the front page of the
Courier-Mail in bo ld type was, Aged Care Shame File, which is - and that was the Saturday
paper heading.
The Editorial went on at length to contrast a shocking happening which occurred some 20
years ago with what is still taking place now. A full page spread lists 16 facilities in
Queensland, two of which are public companies, with details of the serious risks to
residents. That was the - another age weekend newspaper.
One example is, failed 12 quality standards including clinical care, infection control,
behaviour management, staffing and wound care. Staffing levels and skill mix are not
sufficient to cater for complex health needs.
The next full page spread details the emergency eviction of 70 residents from Earle Haven
at the Gold Coast. The result of a dispute between the wealthy owner and the company
contracted to run the facility, which then closed down.
Things have been so bad that a Royal Commission of Inquiry is currently at work.
There is only a handful of aged care companies listed on the Australian Stock Exchange. So
there is plenty of scope for a company such as Ryman with its excellent record to do well.
Also being named the most trusted brand in the retirement industry for the fifth time.
I speak from first-hand experience, having lived at Evelyn Page Village for eight years.
During that period my wife was in the special care dementia unit for three years. I spent
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time with her every morning and afternoon and never had the slightest concern about her
treatment or that of the other residents.
The newspaper pages are, I will leave down at the counter at the back for anyone who
wants more information.
Just fi nall y, my wife, as I said, had been in special care. Her last month was spent in the
hospital. When she died that morning the news went upstairs to the special care unit. The
staff there came down one at a time to give me a big hug. I really appreciated that no end.
Thank you.
Gordon MacLeod: Thank you Graeme. It's very humbling to hear of your experience. So
it's been a bit shocking reading some of the revelations from the Royal Commission
actually.
I think that mistakes can happen in care. We provided seven million hours of care per
annum and it is a human endeavour. Put up your hands if you’ve never made a mistake.
No-one - oh, John. None today so far, yes.
So it is a difficult business. But we pride ourselves on doing everything we possibly can to
get it right. I guess what David talked about, the sort of decisions that we make which,
yes, do hit our profits in the short-term.
Things like paying our registered nurses at the rate that nurses should be paid for aged
care, which is the same as the District Health Board public hospital nurses. Doing that
without government funding to the tune of $5 million this year.
That sort of thing is really crucial for providing good care. Because without that what the
general aged care sector has seen is an exodus of registered nurses into public hospitals.
So Graeme, you would have had continuity of the caregiving and nursing staff no doubt....
Graeme Brady, Village Resident: Yes, that was so important.
Gordon MacLeod: ...during your experience, and it was really important for you and your
family.
It's very difficult to achieve that unless you invest in people. That's what we do with
training and pay and that sort of thing.
So look it does create, without criticising the operators in Australia, which would be very
impertinent of me to do so. I do believe that there is a very strong opportunity for us in
the Australian market because we do have a very strong care philosophy.
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It's interesting that the unions in Australia did university research and global research as
to what sort of staffing ratios should be required in aged care. In fact our staffing ratios
exceeded, were greater than, what the Australian Nursing Federation recommended.
So that gives us comfort that we've got our staffing right. We seek to pay well and have
good conditions for our people. You see that in New Zealand where 84% of our care
facilities have four-year certification or more.
So taking that into the Victorian environment we mustn’t be complacent, we mustn’t be
anything other than just humble about what we bring into the market. But I think that we
have a wonderful opportunity in that market to provide great care to Victorians.
I think the question that leads on from that Graeme, that you asked was, might we go
somewhere else outside of Victoria? The answer to that is, yes. The reason is that there
will be other opportunities for us in Australia.
Probably the next one shouldn’t be the Northern Territory though, that's probably a bit far
away. Or Western Australia, it's a bit of a long plane right. But there's very large
opportunities across the Eastern Seaboard of Australia.
But what we are really focused on right now is making sure that we have a very solid base
in Victoria and that we do that really well. Sort of similar to what Warren said, that the
wheels don't fall off by trying to do too much too quick.
So really get it right, build our teams there. That, yes, we've got a great opportunity in
Victoria actually and beyond. David, you wanted to speak to the listing?
David Kerr: Oh, yes, so Graeme, we have indeed from time to time discussed dual listing
on the Australian Stock Exchange. We have been fascinated at the cost of that, it's rather
a lot of money we find to spend to just dual list.
We seem to have a pretty good international base of investors in the Company being New
Zealand listed. So our focus has not been on progressing that to date.
As you rightly point out, the care tragedies that have been so well-publicised in Australia
have done no good to share markets over there in terms of the care provider. So look, it’s
not something we’re actively pursuing at the moment.
So look, it’s not something we’re actively pursuing at the moment.
Graeme Brady, Village Resident: Thank you.
Gordon MacLeod: Thank you very much, Gr aeme , for those questions.
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David Kerr: Good questions. Thank you. Dave, just across here.
Ian Rae: (Devonport Peninsula Precinct Society, Chair) I'm Ian Rae of Ngataringa
Peninsula, and Chair of Devonport Peninsula Precincts Society. In June 2017, the Society
reached an agreement with Ry man in the Environment Court, on the form of the new
William Sanders Retirement Village in Devonport. That agreement was reached after 421
public submissions to a commissioner’s hearing on the proposed development, and
consi derable exp ense and effort by the community. I’d like to ask, what has Ryman learnt
from that particular development proceeding?
David Kerr: Loo k, thank you for the question, a really good question. It was a really
valuable learning experience. I think that we have learn t to be - as I say to my
grandchildren - using our listening ears, and listened more carefully to the community.
We’ve also established a group within the Company who consult very early, before we get
anything - I don't mean the word set in concrete - but before we get any plans set, we like
to consult early and actively now. That’s an ongoing activity with people with that
responsibility.
So I can assure you it was a good learning experience for us, I suspect it wasn’t such a
good experience for yours elve s, but we are much more attentive, I can assure you.
Iain Rae: (Devonport Peninsula Precinct Society, C hair ) Yes, I can a ssure you , there are
positive outcomes for the com munity as well. One o f the learnings for our Society was that
we see that there shou ld be a collaborative c onstruction, a collabo ration early on with the
public , if they should so d esire, in large developments which affect them. To that end,
another member of the Society, and myself, are standing for the Local Board in the
forthcoming Local Board elections.
As a supplementary question, I’d like to ask what learnings from the Devonport experience
Ryman is applying to its new proposed development in Karori, Wellington, where likewise,
there are similar cultural and heritage issues on the site, and likewise, there is strong
advocacy from the architect industry about the proposed reuse and lifetime cycle of
reusing sustainably existing institu tion al buildings.
Gordon MacLeod: So what we’re, Iain, is we are actively engaging with council, with the
local community, by h aving drop-in days with Her itage New Zealand as well, and also with
a number of local politicians and local councillors. So we’re getting a good read from them.
We’ve also had correspondence from, as you say, some of the archite cts as well.
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As you can imagine, there’s a range of use, a very wide range of use, and we also have to
take into account safety issues as well, for the sort of building that we do build, whereby
it’s vital for a very seismically active area like Wellington, that we take into account safety
measures for a 24/7 elderly care centre versus what we can achieve from a h eritage point
of view.
We’ve also engaged a very well-respected heritage architect to make sure that we get
advice, and really his buy in for thoughts that we have, and we continue to work through
and show plans to people as we can. So it’s one of those situations where it’s a dialogue.
We’ll be showing what we think, the rationale for that, the overlay of any safety concerns
me might have for he ritage buildings.
For people who don't know , it’s a 1970s university concrete construction. We will just work
it through until we get to a position where we can build what will be an amazing village for
Karori. Ideally, with everyone feeling that they’ve been at lea st heard, and we’ve worked
through the process, okay.
Just Iain, while you’re there. I want to thank you for keeping involved with us, because
sometimes after an experience like that, like you came to the [Karakia ] when we set up
the site, to lease the site, for the safety of our staff, and you came to the naming of the
village . I want to thank you for the - it’s a difficult process, but it hasn’t stopped you
remaining engaged with us. So I appreciate that.
David Kerr: The community is welcoming the new residents too, with open arms, so thank
you.
Gordon MacLeod: Yes, thanks Iain.
Neil Anderson: (Shareholder) My name’s Neil [Anderson], I'm a shareholder. Fir st of all, I
wanted to say - I don't want to be critical , I want to be actually positive about what the
Company’s doing because I think the Company is moving in a very good direction, but
there are always ways to improve.
One of the things that is quite interesting, and some people here may have heard me at
other shareholders meetings banging on about making sure there is gender equality on
Boards. I'm afraid, this Board needs to move better in that direction, and my question is,
what are you doing about that. When I look at your annual report and your executive
team, and your medical advisory team, you have more than 50% female participation and
gender equality in the peo ple that are running the business for you, who are managing the
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business for you , but y our Board doesn't reflect that. So, that's one question.
I also want to raise the question about staff safety. You talked about it quite a lot in both
the Chair's report and the Chief Executive's report, and I thin k you say you want the staff
to go home safely. Well, unfortunately in the care sector, there has been in increasing level
of ACC claims for care workers for things like bad backs, for several issues that there are. I
know this company is trying to do something. I'm aware from the fact that you actually do
engage closely with the unions that are involved, E Tu and the nurses’ union , in tryi ng to
do that. There is at the moment a move to try and get a new safe staff - safe staffing
guide for the care industry.
My question is, what is Ryman doing - because actually y ou're doing quite well at it, but
what are you doing to make sure that the care industry does do that in a better way, and
has a better, safe staffing guide?
Finally, in your annual report, you talk about training staff. You talk about apprenticesh ips
and doing staff training. But i t's mostly in the construction side that you talk in your annual
report, and it doesn't make it clear what you're doing to bring through young people into
the care industry, because that's vital.
There is - if you have a look at what's happening in the demographic of New Zeala nd in the
care industry, it's actually - you're bringing in immigrant workers to make the industry
work well. I don't have a problem with that. I don't have a problem, but I do think that we
need to be doing better as New Zealand, in educating and teaching, and bringing through
young people from the community here into the care industry.
Th at's my third question; what are you doing about that?
Neil Anderson: (Shareholder) I just want to say, I'm positive about what the Company is
doing. I'm not negative. But I want to see that it does it better.
David Kerr: Look, those are great questions. Maybe if I take the first one, which is around
gender equality, and Gordon and I will merge on the second and third points.
The question of gender equality is something I'm going to talk about very shortly around
governance changes and our plans at the Board level. I can really only assure you that we
are acutely aware of the inequality at the Board, and are in the process of addressing that.
I can't give you a specific person just at this moment, but I will talk to that point very
shortly. That's a good question.
The second one was around health and safety of care staff, was that - yes.
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Gordon MacLeod: Yes, I'll pick that up. With our care staff, exactly right, one of the most
frequent injuri es fo r care staff would be manual handling injuries. What we did, was we
actually introduced a programme which built on there - so, ACC have got guidelines on
safe handling of aged care residents. What we did, was we took that - those guidelines,
and then we applied our own expert knowledge to it. We came up with a thing we called
Ryman Moves.
Ry man Moves is a - really a bespoke manual handling training for all of our staff nationally.
It's supported by physiotherapists at each village, so that people get good induction
training and trai ning on it. There are champions within each care floor in relation to it.
We have really good videos for each individual move. We make sure that the equipment is
right. When we do - if someone does suffer an injury, then what we do is we record that
injury and we try and make sure we learn lessons from it, and that people get - if
som eone, for example, used a hoist in a way that wasn't as good as it could have been,
then that's a training opportunity to help that person out.
I'm pleased to say that generall y within our aged care business, the number of handling-
related injuries overall is actually declining. That's a res ult of Ryman Moves. I'm really
pleased with the result of the work that the team have done on that, and particularly
mak ing it Ryman-specific, you know? Instead of using ACC material, it kind of makes it
feel more in the family. There's a few - so, there's a few staff that are stars of the training
video, using slip sheets and hoists and all sorts of things.
The second one was in relation to ...
David Kerr: Can I just interrupt you, Gordon?
Gordon MacLeod: Yes.
David Kerr: Just on that same point, so we have a h ealth and safety subcommittee, and
just so you're aware, the injuries are recorded and notified to the health and safety
subcommittee , where a number of the Board members sit. In fact, it was Monday, would
you like to speak to that at all, Clair e?
Claire Higgins: Yes, so we had a health and safety committee meeting on Tuesday, and
there we receive sep arately the construction in ciden ts information, and near misses as
well. We also receive the operations data. We are acutely aware we have a historic record
of where - what parts of the body are being injured.
The other point that I wanted to make, is we've also recently established som e staff safety
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forums. Rather than it being a top-down approach to health and safety, it gives us the
opportunity to hear from the staff both in construction and in operations, about the things
that are concerning them with regards to occupational he alth a nd s afety.
Gordon MacLeod: Then in relation to training, yes , you're right, a big focus for
apprenticeships last year was in relation to construction. The construction industry in New
Zealand should not have let go of apprenticeship schemes all those years ago. Big mistake.
Big mistake. Anyway, we are where we are.
So, rather than waiting for industry to deal with it, or the government, we 're developing
our own apprenticeshi p schemes. We've got a number of apprenticeships work ing for us
around the country now. In fact, Iain thinking about in Narrow Neck, Devonpor t, some of
the guys there for their apprenticeshi p they had to use Linea - you know , Linea board, for
a thing. We don't actually have any Li nea board at the village we're doing. So, what we
decided to do was build some little school play huts out of Linea board, and they were
delivered to the local school. That was part of their apprenticeship sign-off program, part
of the Ryman construction team doing that. So, that's been really successful around
apprenticeships for construction.
We're also doing apprenticeships for chefs, for example in our kitchens. Because that's a
really high - obviously a really difficult area, requires a l ot of specialty and training. As you
may know , we cook fresh on site. At lunch times there's a choice of three fresh-cooked
meals. So, the - and the quality of our present ati on is really important. So, we've got
apprenticeship schemes coming through in that.
In relation to the caregiver point that you make, what we do is we actually get out to -
we're getting out to more schools, because caregiving and being involved in aged care is a
tremendous career opportunity for people. I can't think of another career which has more
future growth, has a greater purpose really, and has an opportunity to do good and be
successful, and have career progression.
We've got people who are village managers who started off as a caregiver, or a service
departme nt co-ordinator. Helping to de-mystify - it's sort of de-mystifying the media stuff
on aged care. It's unfortunate that most of the media stories about aged care are really
negative, because it sort of maybe puts younger people off. It's our obligation to overcome
that, get out to schools, talk to people and help them understanding it's ac tually a great
career option.
Neil Anderson: (Shareholder) Thank you.
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Bob Stevens: (Shareholder) Good morning. [Bob S teven s], shareholder. My question is on
competition. Some - or one in particular that I know of, company, is adverti sing that there
will be no - that the owner will get the capital gain. Your comments on that?
Then where the share market is your - what's happening with your shares these days?
Have you any comments on that, please?
David Kerr: Yes, I could deal with t ha t.
Gordon MacLeod: Shall I do the second one, around the share market?
David Kerr: You will all be aware that the share market has ha d a lift jus t recently, but
look to be really brutally honest, we don't focus on the share price. We focus on doing the
job, a nd that's pretty much the focus of the Board. If we do the job correctly, and do the
job well, then the share price will look after itself.
So, people ask ed m e recently, before the li ft in the market, what's wrong? What' s wrong?
It was the same business a s a year ago, and as today. So, our focus is very much on
delivering really well.
The share market is - improved in Australia quite clearly. Partly the election, people feel a
bit more confident with the change of government. Interest rates, cash rate's d ropped,
hasn't it? Th at's been a bit of a stimulus. I thi nk that there's a general feelin g of optimism
in Australia, and that's driven the share price along. I think also some international buying
is evident. So, we observe it, but we don't look at it minu te by minute, and fret about it.
Bob Stevens: (Shareholder) Yes.
Gordon MacLeod: It's not done too bad. It's - two years ago it was $8, and it's $ 13 today.
That's $5. That's $2.5 billion increase. It does absolutely go through period of volatility and
flatness, and it can be rather difficult to predict some weeks. You think, why has it gone
down $0.50? We've actually been doing really well thi s week, but no one - anyway. That's
just the vagaries of it. You've got to look at it over a period of time, r ight?
David Kerr: Twenty years ago, it was $0.27 equivalent.
Gordon MacLeod: Yes. Yes. In relation to the competition, you're probably referring to an
operation in Tauranga, perhaps, who has talked about having no capital gain for a new
development there. Is that the one?
Bob Stevens: (Shareholder) No, I'm talking about in Drury.
Gordon MacLeod: In Drury, is it? Okay. What I find is a common thread for - and look, I'm
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loathe to criticise them, because I take the high road - is that they tend to not provide
care, or invest in the care - the quantity of the care services that we do. So, here at Evelyn
Page for example, we've got a 120-bed care facili ty, secure dementia, rest ho me, ho spita l.
[Graham] has spoken to the tremendous and very powerful impact that has on the lives of
our residents when that care is required.
So, the no capital gain, really largely apartment-style developments, or townhouse-style
developments, which also attract a deferred management fee. They may have no capital
gain, but I'm not sure what the value proposition is for entering into one Because our
business model is that what's really important is that t the best of our abili ty, that we look
after people for as long as we possibly can as their care changes. I'm not sure th at those
business models are able to do the same thing.
So, I guess it's just a choice.
Joeri Sels
: (Shareholder Representative) Hello, ladies and gentlemen. My name is Joeri
Sels . I am not a shareholder, however I am here on behalf of a larger and relatively new
shareholder from Germany.
I am a shareholder representative.
The name - who has bought a 1% stake in the Company. The name of the shareholder is
Investmentaktiengesellschaft fuer langfristige Investoren. So, apologise that's a terribly
long name, and most investment bankers in Germany wil l call it simply [Langfr ist ].
So, the man behind La ngfrist is Norma n Rentrop. He's a very prominent man in Germany,
and he's known as a publisher, as author, and as investor.
The c ompany is Bonn based , it's the former capital of Germany. They are so-called value
investors. For them, they are thinking in really long-term, sometimes 10 or 20 years. For
them, the understandability, and the sus tainability of the product or service is very
important, and t hey will emphasise the integrity, the significance of the integrity and the
quality of the management.
So I myself, am here because I have advised La ngfrist for more than 10 years, back in the
'90s when I wa s working in Germany as sale-side analyst, and some eight years ago I
emigrated from Germany to New Zealand with my family.
To cut a long story short, on b ehalf of Langfrist, I would like to thank the Board and the
management for the excellent performance achieved in '19 and needless to say, it is hoped
that you will be able to proceed to focus on the long-term, on the value-accre tive long-
term objectives rather than looking into the short-term things. So, a t housand thanks from
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Langfrist in Bonn.
David Kerr: Thank you, Joeri; those are very kind words. Look, the faces will change but
we hope that the culture and the intent of this Company will never change.
Col in Upchurch: (Shareholder) Good morning. My name is [Colin Upchurch], shareholder.
Following on from some of the questions we've had, I'm afraid this is going to seem
perhaps a little bit dry. First ly, congratulations to the Board. I'm pretty pleased with the
way this Company has been going over the many years that I've been a shareholder, so
congratulations for that. Financials to me look pretty good and the balance sheet is pretty
strong, so those are all things that I like.
Just one little dry, rat her t echnical question, quite small in terms of dollar impact, but I
just always like to understand. One thing I'd just like a bit of feedback on: intangible
assets.
I see in the balance sheet we've had an increase of $7 million-odd in the year and I note
that we've had amortisations of nearly $3 million so to me in rough terms that means
you've spent $10 million in the year on intangible assets, and I don't know what they are.
Perhaps you could just give me a bit of background what they are and what the write-off
scenario is, because I don't like intangibles being around for longer than is good practice.
David Kerr: Thanks, Colin. I think that sounds like a perfect question for Dave Bennett, the
Chief Financial Officer.
David Bennett: Thanks, David. Thanks, Colin. The intangible asset is primarily related to
our myRyman development that we've been doing. You would have heard us talk in the
past about the template-based application that we have developed, which has actually also
driven changes to our care model and how we develop care. So, it's primarily related to
that and it's just been amortised out over an estimated life of between seven to 10 years.
The additions this year have just been further enhancements to that as we've brought
more and more development to the system. We continue to invest in that. We' ve seen
myRyman as a real advantage for us in that it's world-leading. We looked at what we could
buy off the shelf and there was nothing available that did what we wanted, so we decided
to develop our own system and the returns that that has delivered to us from a clinical
aspect have just been amazing in terms of the data that we're now getting and the
analysis we can do with that data.
Colin Upchurch: (Shareholder) Thank you. That's pretty clear. A supplementary question
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then if this is so goddamn good, when does it go to market as a subsidiary company and
what sort of returns are you projecting?
Gordon MacLeod: It's interesting, Colin, because our Chief People and Technology Officer,
Nicole, asked the same question of us yesterday: would we like to as a Board think about
com mercialising it. So, that's a potential. That is a potential - but maybe not, but it is a
potential.
Gordon MacLeod: It could be regarded as a really important point of difference and
competitive advantage so it's just those things that have to be balanced here.
David Bennett: We wouldn't be too keen to sell it to competitors though.
David Kerr: Is there another question? Oh, ma dam.
Unidentified Female Participant: (Shareholder) Good morning, everybody. I'm sorry I was
late this morning, but I drove down through a pea souper from [Pine Lake]. I hav e never
spo ken before at a meeting of this kind and I am very proud to be a shareholder of
Ryman.
It's not exactly a question, it's a comment, because just yesterday I was speaking with
somebody who said that they have a friend who have been looking for somewhere to
retire. She is an ex-nurse and she ha d looked everywhere around our city, and her
comment is I would invest in Ryman but I wouldn't live there. That is because as a nurse
she feels that the quality of the care in the actual care facility areas and the hospital are
possibly not as good as we actually have seen elsewhere.
I t hink it's wonderful to feel that we are all shareholders in a Company that is doing
remarkably well and we all look forward to our dividends, but I would like to think that the
- I know you've said on and off that your emph asis is on caregiving, but this was just an
off-the-cuff comment that picked up just yesterday and had no intention of saying
anything at all today.
I thought it was just a little wake-up call to think if the Company is doing so well, maybe
there is a need to invest more in the actual basic care and hospital treatment for people
who are not in these wonderful units that you can buy your own and people who can live
independently. Please make sure you're taking care of the ones who really need the care. I
think that was what she probably meant and why should would invest in Ryman but not
live within a Ryman village. It's just a wee bit of a criticism, I suppose. Thank you.
Gordon MacLeod: Thank you for that comment. It's obviously disappointing to hear
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bec ause we have throughout the country, all the villages that I go to, I guess the best
endorsement that I ever see is that we have staff members who have family members in
our care centres. We have residents, like Graeme who have their husbands or wives in our
care centres, and they provide a greater level of scrutiny about what we do than any
regulator could ever do. I know visiting Evelyn Page just this morning I've caught up with
probably five or six different residents who have their husbands or wives in our care centre
and I c an tell you they were glowing in relation to how the staff have been looking after
them.
If you look at the data, when the industry average for larger providers is to only have 40%
of care facilities with four-year certification, but we have 84%, that shows the clinical
quality. The staff rosters that we have in terms of staffing of our care centres, we actually
staff above what the Australian unions recommend, which is unheard of really in the
sector. We' ve invested a considerable amount of money in myRyman to ensure that we
have real-time care available in people's rooms without all the paper-based systems and
that we get great data and specifics about each indivi dual resident and that's making great
progress.
Then to recognise the great work that our staff do for caregivers and nurses in particular,
for both to have received 33% pay increases over the last two years, I think rightly reflects
their contribution. So, very, very saddened to hear that comment and perhaps it's hard to
have 100% fans, but we'd love to talk with her at any point to perhaps allay her fears.
David Kerr: If I could just add, I as a general practitioner visit care facilities and I always
feel c omfortable. I know I'm going to be biased; I feel really comfortable about the level of
care we provide. We' ve gotten no w to the stage where our medications advisory
committee can identify the medications that our older residents in care are receiving and is
now providing advice to general practitioners saying is this still needed, could we reduce
that.
In our clinical advisory committee we monitor very closely how long people are on what
are called psychotropic medicines, which are the ones that settle people down. We are
drilling down to very high levels of detail to try and ensure that the care that's provided in
the villages, not only by our staff but by the visiting doctors is at the right standards. I
think that big efforts are being made.
Graham Howard: (Shareholder) Hi. My name is [Graham Howard]. I'm not only a
shareholder but I'm also a resident here and have been here for the last 9.5 years. In
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relation to the comment there, I've visited the rest home, the hospital and also dementia
upstairs and on every occasion without exception the staff have been absolutely fantastic.
When we have functions down here in the centre here, they bring the care from the rest
home and from the hospital down to the functions here and the quality of the staff is just
really outstanding. I can't praise them enough. Since Jill has been here, it's absolutely
fantastic. I give her top praise as the village manager.
You made mention of capital gains. When we came in here, we were aware of capital
gains. From my - or my wife and myself, we were quite happy that we didn’t get the
capital gains in view of what Ryman's provide. When we go up there or down there, we
can't take the capital gains with us and the famil ies are quite happy in their own
environment at the moment, so for what you, Ryman's provide for us is again outstanding.
I wish to congratulate you, the Board and the staff and partic ularly Jill Clark here; she's
outs tanding for us. Thank you.
Tony Mitchell: (Shareholder) Thank you. Tony Mitc hell , the Chair of the New Zealand
Shareholders Association. Firstly, I would like to congratulate you on 2019 and the very
good report, well-written and again, a very good read. It was thoroughly enjoyable.
I have a couple of questions and actually, the first one is related to the risk area. It's to
the Board, and look, I know that it's not easy for boards but you do have a lot of
responsibility. I was very encouraged to hear about the health and safety area with
regards to the measurement and also the form of checking that you're doing directly with
the forum. That will certainly make sure that whilst management migh t be confident,
they're also a little bit paranoid as well and making sure that they're rootin g out what else
migh t be at risk.
The three risk areas that I'm going to ask for the Board to consider are around the staff,
the hea lth a nd safety and also the suppliers. Because the pressure that's on boards these
days is not just to delegate through to management to ask the questions of the employees
or with the suppliers , but as you know, you do have to go and figure out how else - check
the checker, basically.
My question for the health and safety is what else are you doing to make sure from a
board level, with your Board workplan, that you are checking that the processes are
conti nuously being refreshed and reviewed, outside of asking management at a Board
meeting. That would be the first one. I think you've covered off the metrics very, very well
and engaging the staff, so pushing ma nagement to the side and engaging directly, I
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commend you for that.
The second one was around the risk that was highlighted in the Annual Report regarding
staff. Staff is the biggest risk area, as I read it in the report. I was very pleased to see all
the activ ities that are going on but no doubt whilst there's confidence, th ere's also still
paranoia. What is the Board doing to make sure that you are mea sur ing that risk and also
checking that what has management said being done will be done to resolve the staff risk.
The third one on risk, and I thought you did a superb job with covering most of the
dimensions that boards are asked to look at. They've got to deliver for the residents, their
customers. They' ve got to deliver for their employees. They've got to deliver for the
environment and also socially. But also, we're seeing in the UK now that you also have to
make sure you're delivering for suppliers so organisations are treating all suppliers fairly
and building long-term relationships.
So that’s no w in UK law, and I know that Rob Everett from the FMA is considering that
here in New Zealand. So my ques tio n for the Board is, how are you measuring the long-
term relationships with suppliers? I accept that there is vertical in tegration, which again, is
a great thing , so you’ve got control over a lot of that supply chain, but those organisations
will still need to be able to use suppliers as well.
So again, that is to the Board. My role is to make sure that the Board is asking the right
questions in the right way, and looking after the shareholders’ investment in that. So the
risk for staff health and safety, and suppliers. Thank you.
David Kerr: Look, thank you, Tony, for the question. So maybe if I could pass to Claire , as
the chair of our health and safety subcommittee of the Board, first of all.
Claire Higgins: (Health and Safety Sub committee of the Board, Chair ) Thanks, David.
Thanks Tony, that’s a very good question, and maybe I can just talk a little bit more about
the broader approach that we take to health and safety from the Board level.
So we certainly have our committee, and we receive the regular rep orts from the team
regarding the statistics, as you’ve said. We also have a close look at any significant
incidents, so we look at the approach that management have taken to understanding what
the causes are, and what the corrective actions are. We have a program of initiatives that
we monitor at that committee.
Sitting on top of that, I think as you say, how do you, as a director, feel the approach to
health and safety within the organisation? We’ve done a couple of things there. Gordy and
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the te am ran a very successful Safer Together Forum last y ear, where several of the Board
me mbers attended, that was a full day - I'm just trying to remember whether it was a
couple of days, but it was a full day, but it was packed full of activities.
So that gave us the opportunity to chat with people throughout the organisation, so not
only were there the leaders from the organisation, but there were representatives from all
the contractors a t that Safer Together Forum as well. So the opportunity to engage with
the contractors directly was really helpful.
The o ther thing that we’re particularly doing, and we’re continually trying to enhance this
process, is having a program for the directors to visit the sites. So not only the villages
operationally, but the construction sites. So for exa mple , last week I spent a day going to
the three Australian sites that were either under const ructi on, or as a village. So went both
into the construction side of things, not with Tom, but actually with the project manager
on site, and had the opportunity to engage with the spotters or the safety representatives,
or even just some of the contractors.
This week I actually came to New Zealand a week earlier, and I vis ited all the New Zealand
sites. So both villages, and in New Zealand, where we have the rebuild of the Figaro
buildi ng at Malvina Major. So on that site, donned the safety boots and the gear, and went
out into the Figaro building with the project manager.
So what we’re trying to do is actually as a team of not just the management team, but the
Board, is actually have so me visibility on the sites, but also go out to the sites , not
escorted by the executive team, but with an opportunity to engage at all levels of the
organisation.
David Kerr: Thank you, Claire. Tony, l think the second one was around staff. So we have
obvi ously a very active recruitment program, and one of the reports that we always have
from management is actually on people capability. So the Board have been encouraging
management to k eep that very active , and to a ctually encourage more training
opportunities, and for that end, we’re developing what we’re calling the Ryman Academy.
Now, at this time, it’s probably more a virtual academy than a physical space, but this is a
way of us demonstrating to our staff that this is a career opportunity, and that you may
grow your skills and competencies by staying with this Company.
We also undertake on a regular basis, and have reported direct to the Board, net promotor
scores, which is an assessment of how much you’re engaged in the Company. I can advise
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that the net p rom oto r score for our staff is in excess of 50%, which is unusually high. The
net promotor score is quite a complex tool, and 50% doesn't sound very much, but I can
assure you that internationally, that’s a score of which we can be very proud.
We undertake - each of us, we have a schedule where each of the directors visit villages,
muc h as Claire described around health and safety. I visit villages not with a health and
safety lens on, more so, how ’s it going, talking to residents, talking to staff. So we actually
have to tick off what we’re doing to contribute to that independent bank of knowledge. So
it is quite an active thing for the Board.
Now, I think the third one was suppliers. So we have a direct report to the Board from our
proc urement team. In fac t, that was yesterday, was our procurement team reporting to
us . We see quite a bit of the sub contractors and contractors on sites, obviously, when we
visit, but also, we have some long-standing relationships, which if I saw those changing, I
would be concerned about.
An example would be Sy denham Joinery in Christchurch, who have done our kitchens
forever, and those sorts of relationships are reported to us by the procurement team. I
gather that they open around 14 n ew contracts a month, but they also close down a
similar amount. So we rely upon paying on time, having good long-standing relationships
where we agree the quality, and we don't bicker about the price unusually.
So I think that it’s a very strong procur ement program. I should, when I talk about that,
identify that Philip Mealings , who is our Chief Procurement Officer, has been with the
Company 20 years at least , and has been a beaver on the shareholder's behalf I can
assure you. He works at this 24 hours a day. So we enjoy having presentations from him
and getting to enquire directly of him. Does that answer your question adequately?
Gordon MacLeod: The other thing we do with sup pliers is we pay them on the 20th every
month. We don't late pay. Even though we're a big company and we're paying - our
mo nthly payment runs are often $40 million. So you could have a few invoices that don't
get through and we'll process them the next day or the day after. We' re not like a big
corporate that goes, well, tough, you 're going to have to wait. We will do it. That's why we
engender loyalty like you wouldn’t believe, because we're probably the best payer that any
of our suppliers deal with. So we might drive a hard bargain, but they'll never get payment
debt terms than with us and we pride ourselves on that.
The other thing is when the directors visit villages and construction sites, if there's any
concerns t hey'll come back to me or the right people with their con cer ns. Like Claire went
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to a site last week and got some feedback from a village manager that she felt would be
good for me to know, and we've been able to action that. So they're not just a royal
walkaround where everyone is hello, hello, Claire, director, and then tell them all the good
stuff. We want people to just speak straight and that's why we don't want it to be a
chaperoned visit. Also, if people do give some negative feedback about what we're doing,
we take it on board and we cele brate the fact we've got the opportunity to f ix something.
David Kerr: About a year ago, Kevin Hickman, one of our founders, visited a village in
Christchurch and he came away absolutely indignant. I was speaking to him and I said,
what's the problem, Kev? He said , there' s a carpet tile in the front area that's got a stain
on it. So we quickly got that carpet tile replaced. So we want these villages to feel wow,
we want them to feel good. Because these villages are not villages, they're people's
homes. So we have that obligation and we embrace the obligation. Are there any other
questions?
Jill G regson: (Shareholder) Hello, my name is Jill Gregson and I am a shareholder with
Ryman and also an employee with Ryman. I am a regional sales manager with Ryman
Heal thcare. I have my parents in a Ryman village, my in-laws in a Ryman village , I've had
three aunts and two uncles in a Ryman village. So all the family. I've got a very big family.
I just wanted to say that, in my role as a regional manager, I go around to all the villages
- well, several villages in the north and through the care centres and through the
independent living. My parents and my in-laws certainly wouldn't be there if I didn't think
that it was good enough for mum. I'd just like to say that I'm very proud to be a
shareholder and a Ryman employee and to have my parents getting the care that they're
getting in a Ryman village.
We have needed care for them. My parents have actually lived in two Ryman villages, one
in Whangarei and now they're in Logan Campbell in Auckland. In both places we have
needed to call on th e staff for care at different times and it has been absolutely
outstanding. So I just wanted to put that out there, to say thank you to Ryman for the
care for all of my family. Thank you.
David Kerr: Thank you, Jill. I can assure you, we didn 't ask - I didn't know she was going
to say that.
David Kerr: John.
John Boscowan: (Shareholder) My name's [John Boscowan], I'm a shareholder. I'm not a
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staff member. I wasn't expecting to say this and I'm only saying it because the
microphone was immediately behind me. My mother is a resident of Ryman Grace Joel.
She was in a serviced apartment for four years. She' s been in the care centre for the last
nine months. Like others here this morning, I can't speak more highly of the care that
she's had. I'm very, very, grateful to you, Gordon, and for your staff, thank you very
much.
Gordon MacLeod: Thanks, John.
David Kerr: I think we're done? Right. So, you'll be aware that the NZX listing rules have
been amended following a review that the NZX undertook in 2018. The new listing rules
came into effect on 1 January 2019 with a six-month transitional period, and so they have
applied to Ryman since 1 July. A class waiver was also issued by the NZX, providing that
issuers may defer updating their constitution to comply with the new NZX listing rules,
provided they do so at the next annual meeting, which for us is now, following transition to
the new listing rules.
So, therefore, we're seeking shareholder approval to amend Ryman's constitution in order
to comply with the new NZX listing rules. So I now move that the amendments to Ryman's
constitution be approved with effect from the close of this meeting. Do I have a seconder
for that motion? Thank you very much, sir.
Ken Hooper: (Shareholder) Ken Hooper, shareholder.
David Kerr: Ken Hooper. Thank you. If you could please mark your voting cards in the way
you wish to vote, ticking either a for or against or an abstain in the appropriate place on
the voting card. Then before we move on to the next phase of the me eting, I'd just lik e to
bring you up to date with some of the discussions that the Board have been having most
recen tly. The whole issue of Board succession planning and appropriate skillset of the
Board table and independence have been a live discussion for us, both at the Board table
and at the Governance Nominations and Remuneration Subcommittee of the Board.
So some commentators or analysts and shareholders have expressed concern about
lengthy tenure, on the basis that it threatens independence that a longstanding director
might have. As a consequence, th at the direct or might not be exercising his or her duty to
represent all of you, the shareholders or business owners. A consequence of this could be
that the testing of management's decisions also is not as robust as it might need to be.
So there are reasons why one looks to refresh the Board from time to time. On the other
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hand, you could argue that a director with longer tenure has deep knowledge of all the
different facets of a company and, as a consequence, has continued value. So it's very
difficult to assess how independent a director is if you're not in the room to see the
interactions that go on between the Board and management. But the Board has turned its
attention to that question of independence of directors. I'll leave one of the other Board
members to comment on my personal situation, but there are two other members'
situations that I think could be explained a little more fully. Firstly , there's Geoff. Geoff,
are you able to hear me?
Geoffrey Cumming: Yes, I am.
David Kerr. Thank you. Geoff has a very significant shareholding in the Com pany. He's
held this for many years and I can absolutely assure you that his interaction at the Board
table , between the directors and between the Board and management, displays all that
one would want in the way of independence. However, because of his extensive
shareholding, one might be concerned that he would not exercise his duty on behalf o f all
shareholders. So I don't believe this to be the case at all. But in order that there can be no
misconception, you'll note that he's been regarded as not being independent.
Now, Jo Appleyard, as I mentioned earlier, is an extremely valuable source of advice at the
Board table. She' s a partner in Chapman Tripp. Chapman Tripp provide legal services to
Ryman, but of course Jo herself doesn't provide any legal services to Ryman. We have
clear protocols in place with Chapman Tripp to ensure that Ryman can obtain impartial
legal advice from Chapman Tripp , or from any other firm that Ryman chooses. However,
the concern might be that she would profit from an y interaction that her firm has with
Rym an Healthcare. So I can advise that the size of the fees paid to Chapman Tripp by this
Company identifies it to be only a small percentage of the legal fees r eceived by the firm.
For these reasons, we regard her as being independent. I can also advise that in terms of
her interactions and advice at the Board table, she behaves in an exemplary way.
If I turn my attention to the second issue , which is of Board composition and succession
planning. For some time we've been attentive to getting the right skills around the table
that are critical for the Company's continued growth and development. As a Company, we
don't go for high-flying names, I'm sorry, colleagues. We focus more on diversity and skill.
To that end, we appointed Anthony who's proven himself to be absolutely invaluable,
bringing the perspective of an experienced building and property development company
owner.
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We recently undertook a skills matri x process of the whole Board, which identified that the
appointment of the next director should, and could, come from people capability, talent
management, people development area and it would be of the female gender. We've
started this process of seeking out such a person and we'd anticipate an appointment will
be made before too long. George Savvides and I spent some quite extensive time in
Melbourne last week interviewing a number of possible people.
We' ve also been having discussion about succession planning for the Board members.
While I can' t yet advise that we have a conclusion to that discussion, I can advise that we
haven't lost sight of the importance of the discussion, and that you can be confident that
that whole area is very much work in progress.
So if we turn our attention to the election of directors. In accordance with the Company's
constitution and the new NZX main board listing rule 2.7.1, Anthony Leighs, having been
appointed by the Board, retires from office. He is eligible to seek election. Anthony has
offered himself for election. So maybe, Anthony, if you could introduce yourself now.
[Appl ause]
Anthony Leighs: Good morning, everyone, and thank you, David, and thank you for those
kind words earlier. Can I just say how incredible excited and proud I am to have been
inv ited to be part of Ryman. I haven't been in the market looking for directorships. I'm at
a stage of my career where that hasn't been a priority. I can say that there would not be
another company in New Zealand that I would have accepted an invitation to join a board
from at this time. But Ryman, the combination of the values, the principles, the success to
date, and probably more so the calibre of the people, both on this Board and the senior
management team that I inte ract with, have driven me to be attracted to this Company
and to be really quite thrilled to be invited to be involved.
There's no doubt about it in my mind, Ryman is a care business, which we've talked about,
but a very significant element of the Company's future success is going to be on its ability
to deliver the bricks and mortar, so to speak, across a growing trans-Tasman build
program. I'm confident in my potential capacity as a director that I can make a positive
con tribution to the achievement of our business goals in that regard.
So just a little bit about me. I was trained as a - I did a management cadetship at Downers
in the late eighties and early nineties, back in the day when Downers had a very heavy
involvement in vertical construction in New Zealand. I was extraordinarily lucky on two
fronts. One, my t raining, I started with the business, started with Downers, at the start of
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1988. That was a period post the '87 stock market crash and, for the four years that I was
there, probably one of the toughest environments for a construction business in some
ways in the history of New Zealand.
One might argue now that the last few years are just as tough, but also the senior
management team very much took me under their wing and I didn't really receive the
cadetship training that most of the young project managers did. I received an exceptional
level of training in how to run a construction business.
I then established Leighs Construction in the mid-nineties. It was a start-up business. We
employed two people on day one and I was one of them and we've since, over the cour se
of a bit over 25 years, built Leighs Construction to be one of New Zealand's leading and
most trusted and probably most successful pri vately-owned commercial construction
companies.
Leighs builds social infrastructure throughout New Zealand, we build schools, universities,
hos pitals, prisons, research laboratories and commercial buildings. We also build offshore
for the New Zealand Government. We do a range of work that we are the first and only
company to ever build for the New Zealand Government on the Antarctic continent.
As a business Leighs is a little bit different to your average builder and I believe that the
background that I have there and the background, as David alluded earlier too, chairing
Master Builders for a long period of time and being involved at an industry governance
level, I've got some good skills to help Ryman achieve its goals.
Just in closing I'd just touch on the Development and Construction Subcommittee. Since
being part of the Boa rd since late last year I have chaired the inaugural Development and
Construction Board Subcommittee. This committee has the primary aim of enhancing the
quality of the Company's development and construction performance. There's a wide range
of areas that we focus on, but the key of those being, is to ensure that the design, consent
and construction delivers upon the Company's business plan goals to ensure that
innovation and progress that improves the resident experience of living in Ryman villages
through design and built form is enhanced.
Also, to ensure that the Ryman model of recycling capital is met on every village
development. I think it's great that that subcommittee has been formed and I am thrilled
to have been asked to chair it.
There's absolutely no doubt in my mind that Ry man has a hugely successful future ahead
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of it. Significant value is going to be developed and as I noted earlier, I'm incredibly proud
and very excited to be part of it. Thank you.
David Kerr: Thank you Anthony. I am delighted to move that Anthony be elected a
Director of the Company. Do I have a seconder? Thank you, sir.
Alan Pearce: (Shareholder) [Alan Pearce].
David Kerr: Alan Pearce, thank you very much. Could you please mark your voting cards in
the way that you wish to vote by ticking for, against or abstain in the appropriate place on
the voting card. I hope I'm not rushing you but I know that I'm standing between
yourselves a nd morning tea.
In accordance with the Company's constitution under the new NZX Main Board Listing
Rules, George Savvides and myself retire after having held office for three years. We offer
ourselves for re-election at today's meeting. So George, would you like to address the
Shareholders?
George Savvides: Thank you David. Good morning everyone. Well , I joined the Ryman
Board in 2013, so about to move into our seventh year and it's been absolutely a privilege
to be able to serve the Board and the Shareholders in this role. I am a member of the
Audit Committee and also a member of the [Nom and Rem] Committee and I also chair
the C linical Governance Committee of the Board.
Some of the work that we have undertaken at the committee. Gordy has already spoken
about our amazing accreditation level, a four-year accreditation, 84% of our New Zealand
villages. Just a standout and we monitor the progressive renewal of those accreditations at
the Committee. We monitor the resident wellbeing with some key measures. We are
concerned about infection, we are concerned about falls, we monitor the satis faction
around food and laundry services. As more villages get added onto our resident scale and
footprint we continue with that complexity as well with more people to monitor.
We are concerned about complaints. We investigate them. We lo ok at resident satisfaction
surveys and also the next of kin, making sure that they're happy with the way mum and
dad are being looked after. We also monitor the significant implementation of the
myRyman system which is a standout piece of technology that makes a paperless
environment much more focused around caring for residents.
One of the significant pieces of work in the last year has been the work on the dementia
review investigation that we have undertaken with an international expert visiting our
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villages and providing very important feedback for our continuous improvement in that
area.
I want to thank Shareholders for the opportunity that I have had to be able to serve on the
Board and I am happy to offer myself up for re-election. Thank you.
David Kerr: Thank you George. I have pleasure in moving that George Savvides be re-
elected a Director of the Company. Do I have a seconder for that motion? Thank you very
much.
Unidentified Female Shareholder: Seconded.
David Kerr: Thanks. So, w ould you kindly mark your voting cards for, against or abstain in
the appropriate place? N ow look, I'd like to just maybe hand over to George at this point
as the Chair or a member of our Governance Nominations and Remuneration Committee.
Thank you.
George Savvides: Thank you David. Before David ta lks about his own re-election I just
wanted to outline the Board' s view of David's independence. David has been a Director
since 1995 and has been the Chair since 1999. The Board considered David's tenure as a
Director when determining his independence under the NZX Listing Rules. David every
year offers his resignation from the role of Chair to the Board and invites the Board to
discuss his candidature while he is absent from that particular part of the meeting.
We have once again unanimously resolved to reappoint him as Chair of our Board. We are
satis fied that David's length of service does not compromise his independence as a
Director. It is our view he continues to bring independent judgment to the role and he acts
in R yman's best interests in a manner that is unaffected by his tenure. His contribution as
Chairman of the Board is deeply appreciated by all the members of the Board. Thank you,
David.
David Kerr: Thank you George. Look, I'm tired of me so you must be absolutely exhausted
of me by this stage, but just to - so those of you who don't know my background. I am a
general practitioner, general medical practitioner and I have been qualified now for about
45 years, whi ch fr ightens me every time I think about it.
I g uess my whole life has been spent working enm eshed in families and people. General
practice is partly about providing medical care, making a diagnosis and pills and tests and
all that sort of stuff, but it's also about helping navigate their way through life. I love what
this Company does and I have since I first made contact with it in around 1994.
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As a Company we help older citiz ens and often vulnerable older citizens navigate their way
through their older years. So, you can see that my personal north star and the Company's
purpose are closely aligned with the Company's purpose being it's got to be good enough
for mum. The other thing that really appeals to me about this Company is that we make
things, of course, but more importantly we have an impact on people and many people in
addition to our residents.
It's pretty wonderful to talk to members of our staff about their roles and how that has
impacted on their lives, to talk with the subcontractors like the joinery company I
mentioned a short time ago, who make the kitche ns and of course there are many, many
subcontractors who have been loyal to this Company as we are loyal to them. Then there
are the young people on the places when I visit construction sites, young apprentices, who
start at apprentices, acquire skills, capability and they get going through their adult lives.
It's great to see that.
Like many of you, as Shareholders, I have enjoyed the evolution of this Company from
quite small beginnings. While you might note that I've got several other Board
commitments, everyone understands that this is my primary responsibility. This is where
I'll always come first. So, you could say I'm committed both in terms of responsibility and
purpose and I'm really very fortunate to have a group of engaged skil led Directors at the
Ryman table who feel similarly. I see my responsibility as partly just to be the oil that
makes the Board work as effectively as possible, but also to put in my two pennies worth
from time to time based on many years of navigation of life and things like that, so look, I
offer mys elf for re-election. Thank you.
George Savvides: Thank you David. I m ove that David Kerr be re-elec ted a Director of the
Company. Do I have a seconder? Thank you.
Seconded.
George Savvides: Thank you very much. Could you please mark your voting cards for,
against of abstain on your voting device? Thank you very much. Back to David.
David Kerr: Thank you George. Look, before I declare the meeting closed, I'd just like to
thank you all for your attendance and your support of Ryman. We have always had an
incredibly supportive lo yal family of Shareholders and we appreciate your support greatly.
George Savvides: David, there's one more resolution.
David Kerr: There's one more resolution. Oh, the auditors. Oh, how could I forget?
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David Kerr: How could I forget? I can see our auditor sitting in the audience. Pau l is
havi ng a quick panic. Right, I also retreat. Okay, I now move that the auditors - the
Direc tors be authorised - the auditors fixing the auditor's remuneration, I don't think so -
no, I now move that the Directors be authorised to fix the auditor's remuneration for the
ensuring year. Do I have a seconder for that motion? Thank you very much John. Could
you please mark your card for, against or abstain in the usual place?
So look, thank you very much for your attendance. We really do appreciate it. We enjoy
the A GM, we enjoy the face to face contact and we enjoy the mingling before and after, so
you can be confident we are going to have AGMs with this sort of interaction going
forward. So incredibly grateful to your support. We appreciate it greatly. We have got
morning tea for you, a birthday cake and we are looking forward to having some further
chat. Thank you very much.
End of Transcript
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