Ryman Healthcare Limited

FY26 operating revenue increased 10%, driven by fee growth across aged care and retirement living plus a 2.6% increase in residents. Management said operating EBITDAF doubled, and free cash flow was $188 million, the first positive free cash flow in more than a decade. Gross annualized cost savings totaled $57 million since FY24, and FY26 capex was $222 million, slightly below the $235 million guidance. Net debt finished at $1.57 billion, down $94 million year over year, while the average cost of debt was 5.9% after refinancing. For care, second-half EBITDAF per bed was $20,200; revenue per bed rose 6% in New Zealand and 9% in Australia; care cash flow was $81 million; and revenue in care grew 7% in the second half versus 3% expense growth. For FY27, management said retirement living will focus on reducing vacant stock and lifting resales to match turnover by year-end, care performance should keep building, and build rate and capex will be lower due to a more disciplined development approach.

Naomi James framed FY26 as an inflection point, saying the last two years of work are now showing up in better performance, cash generation, and balance sheet strength. She emphasized that Ryman is becoming more care-centric, with only two sites under construction, a higher-quality portfolio, and more flexibility through the cycle. Her tone was confident but measured: she highlighted demand in care, acknowledged uncertainty in retirement living and property markets, and repeatedly pointed to FY27 as a year of execution rather than expansion.

Matthew Prior focused on margin recovery, cash conversion, and balance-sheet repair. He cited operating revenue up 10%, EBITDAF doubling, NZ EBITDAF margins expanding 250 basis points, $57 million of gross annualized cost savings since FY24, and free cash flow up more than $280 million year over year. He also noted net debt of $1.57 billion, industry-low gearing below 28%, $675 million of debt headroom, annualized gross interest costs down $68 million since February 2025, and an average cost of debt of 5.9% after the refinancing.

Analysts pressed on resale margins, divestment timing, capital allocation, land buying, and whether sales momentum is easing. Management said resale margins are moderating but at a slowing rate, with independent resale margin still at 27% and mix toward service apartments weighing on the average. On capital management, Naomi said the board is working within a 20% to 30% gearing framework and is considering reinvestment, debt reduction, dividends, and buybacks depending on what best supports shareholder value. Management also said it is not prioritizing new land purchases right now, is focused on existing assets and selected divestments, and sees more growth opportunity in care occupancy and service-apartment product changes than in independent sales.