When Ryman Healthcare opened its first continuum of care facility in Australia, Weary Dunlop Village, it had 21 similar facilities in its homeland of New Zealand.

Today, it has 38 operational villages in NZ and seven in Melbourne, with another six being developed in Victoria.

At the board’s annual meeting, it revealed that the company’s Australia division, headed by CEO Cam Holland, made a reported net profit after tax of over NZ$130 million, or NZ$3 million more than its New Zealand operation in FY23.

The devil is in the detail. The much-larger New Zealand operation made over NZ$486 million in FY22, much more than its colleagues in Australia.

The answer is all to do with accounting and debt. Ryman Healthcare was forced into the early repayment of long-term US private placement debt at a cost of NZ$158 million. The operator had to ask shareholders for NZ$902 million of equity to strengthen its balance sheet and pay down this debt in February.

Ryman Healthcare Australia only had to account for NZ$2 million of the debt. 

The company had tapped the US market for debt as it sought to align its long-dated assets with long-dated debt, raising US$300 million in February 2021 and US$200 million in April 2022. It cost a total NZ$855.5 million to repay the debt and associated swaps before their due dates in 10 to 15 years. 

Ryman Healthcare has been in Australia for about 12 years now, so an underlying (operational) profit of $69 million is a strong result.