New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Ryman&nbsp;Healthcare</h2>
<p><strong>FY20 Result Preview&nbsp;</strong></p>
<p><strong>OUTPERFORM</strong></p>
<p>Ryman Healthcare (RYM) will report its FY20 result on 12 June and we are forecasting steady EPS growth of +6.4%. Of interest will be the trading outlook and development rates in NZ/Victoria. We are confident about RYM's business model given its 'needs-based' focus. OUTPERFORM.</p>
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<h3>Conservative expectations in place — development outlook is of particular interest</h3>
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<p>Prior to COVID-19, RYM had underlying FY20 EPS guidance of +10% to +17%, with a strong 4Q expected after only +6% EPS growth in 1H. On 7 April we downgraded our FY20 forecast by -7.5% (underlying profit of NZ$241.5m, up +6.4% on pcp) given the abrupt end to buoyant trading in March and a conservative view on the impact of the virus. While significant uncertainties remain, given what has transpired since then there is upside risk to our FY20 and FY21 forecasts. Comments on current trading, near-term outlook and development rates in NZ/Victoria are of interest.</p>
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<h3>Steady numbers — dividend intact</h3>
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<p>We are expecting underlying&nbsp;EBITDA&nbsp;growth of +8.3% driven by solid gains in both aged care revenues (increased bed numbers and higher funding and premiums) and management fees (portfolio expansion), as well as a sharp lift in new sales volumes offset by higher operating costs and lower development margins. We expect&nbsp;RYM&nbsp;to maintain its 50% dividend payout ratio and get a modest lift in&nbsp;NTA.</p>
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<h3>Investor briefing for 12 June</h3>
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<p>Webcast:&nbsp;10am (NZ time) viewing at&nbsp;<a href="https://edge.media-server.com/mmc/p/et2o6dsr" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://edge.media-server.com/mmc/p/et2o6dsr&amp;source=gmail&amp;ust=1591833534155000&amp;usg=AFQjCNGWMSxVKgMyr0GP7KFANMft3Ngf3w" rel="noopener">https://edge.media-server.com/<wbr>mmc/p/et2o6dsr</a>; or pre-register at:&nbsp;<a href="https://s1.c-conf.com/DiamondPass/10006630-invite.html" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://s1.c-conf.com/DiamondPass/10006630-invite.html&amp;source=gmail&amp;ust=1591833534155000&amp;usg=AFQjCNEz2FeWYXsSbV9FIY9KLphFPTO2XQ" rel="noopener">https://s1.c-conf.com/DiamondP<wbr>ass/10006630-invite.html</a></p>
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<div><strong>Jeremy Simpson CFA</strong></div>
<div><a href="mailto:jeremy.simpson@forsythbarr.co.nz" target="_blank" rel="noopener">jeremy.simpson@forsythbarr.co.<wbr>nz</a></div>
<div>+64 9 368 0022</div>
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Ryman&nbsp;Healthcare
FY20 Result Preview&nbsp;
OUTPERFORM
Ryman Healthcare (RYM) will report its FY20 result on 12 June and we are forecasting steady EPS growth of +6.4%. Of interest will be the trading outlook and development rates in NZ/Victoria. We are confident about RYM's business model given its 'needs-based' focus. OUTPERFORM.


Conservative expectations in place — development outlook is of particular interest


Prior to COVID-19, RYM had underlying FY20 EPS guidance of +10% to +17%, with a strong 4Q expected after only +6% EPS growth in 1H. On 7 April we downgraded our FY20 forecast by -7.5% (underlying profit of NZ$241.5m, up +6.4% on pcp) given the abrupt end to buoyant trading in March and a conservative view on the impact of the virus. While significant uncertainties remain, given what has transpired since then there is upside risk to our FY20 and FY21 forecasts. Comments on current trading, near-term outlook and development rates in NZ/Victoria are of interest.


Steady numbers — dividend intact


We are expecting underlying&nbsp;EBITDA&nbsp;growth of +8.3% driven by solid gains in both aged care revenues (increased bed numbers and higher funding and premiums) and management fees (portfolio expansion), as well as a sharp lift in new sales volumes offset by higher operating costs and lower development margins. We expect&nbsp;RYM&nbsp;to maintain its 50% dividend payout ratio and get a modest lift in&nbsp;NTA.


Investor briefing for 12 June


Webcast:&nbsp;10am (NZ time) viewing at&nbsp;https://edge.media-server.com/mmc/p/et2o6dsr; or pre-register at:&nbsp;https://s1.c-conf.com/DiamondPass/10006630-invite.html




Jeremy Simpson CFA
jeremy.simpson@forsythbarr.co.nz
+64 9 368 0022




Ryman Healthcare

Ryman Healthcare: FY20 Result Preview