Watchdog puts retirement village operators under scrutiny
TORONTO: A watchdog has put all stock exchange listed retirement village operators under close scrutiny as the business model comes under significant pressure.
The Shareholders Association is eyeing the retirement village sector after listed companies with billions of dollars of assets reported late last month.
Oliver Mander, association chief executive, said three issues were at the forefront.
These were debt management, government reforms and cash-flow management.
Ryman Healthcare’s decision to stop working at three sites and sell two others was an obvious move in a period of high interest rates, he said.
That was the result of increased focus on debt management.
“Debt is a critical factor for the sector,” Mander said.
The company last month reported net profit after tax fell 4 per cent from $193 million a year ago to $186.7m for the six months to September 30, 2023. It made $139m underlying profit, up slightly on the $138m it made at this time a year ago.
Mander wasn’t surprised about Ryman’s decision on five sites saying that was the right path for that company, ensuring they could get positive cash flow in the future.
Ultimately, the decision was about capital allocation so seemed reasonable, he said.
Richard Umbers, Ryman chief executive, last week said Ryman “paused” the development of a new village in Melbourne’s Ringwood East, expansion of Murray Halberg in Auckland’s Lynfield and development of a new lakeside village on the North Shore’s Takapuna.
The company will sell its Kohimarama site, abandoning a controversial $150m plan, widely opposed in the area when announced two years ago.
