When Ryman Healthcare last week revealed a full year audited underlying profit of NZ$255 million it showed a new sale margin of 24.3% and combined margin of new and resales of 25.8%.
This compares to ~16% for the major new village developers like Stockland.
The SOURCE asked Ryman Australia CEO Cameron Holland (pictured below) how the business achieved such a high new sales margin.
“Because we have our own experienced construction teams leading the development of all our villages, we’re able to effectively manage costs in real time," Cameron said.
“We’ve been in this business for almost 40 years, so we have strong, long-standing relationships with subcontractors and suppliers. As a large operator with a long pipeline of developments ahead of us, we’re able to negotiate bulk supply agreements to ensure we’re getting the best deal possible. “A strong real estate market in Victoria has allowed us to maintain solid price growth, which contributed to our strong margin on new sales. Pricing is set in accordance with the unique local factors in any given area, but a two-bedroom unit is typically around 70 per cent of the median house price in the local market,”
“With a deferred management fee capped at 20%, weekly fees fixed for life, and high-quality care available on site, Australians are queuing up to get into a Ryman village. Our DMF is also calculated on entry and we guarantee buyback no later than six months after the unit is vacated, which further sets Ryman apart in the Australian industry.” he added.
Ryman residents do not accrue any capital gains or capital losses.