Jeremy Hutton: Milford Asset Management Equities Analyst on Ryman Healthcare's market struggles

Former market darling Ryman Healthcare's recently had a tough time financially - and the share price has dropped.

Investors are already down over 30 percent, and experts have raised concerns.

Milford Asset Management's Jeremy Hutton explains further.

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Episode Transcript

Speaker 1 (00:00):
Jeremy Hutton, Milford Asset Management is with us.

Speaker 2 (00:02):
Hey, Jeremy, good evening, Heather.

Speaker 1 (00:04):
Ryman Healthcare. What's going on here?

Speaker 2 (00:08):
Yeah, retirement village operator Ryman Healthcare. They're still languishing and
the share price is nearing a fifteen year low of
nearly two dollars now. Recall, Ryman has raised almost two
billion dollars of fresh equity from our investors over the
past few years, and half of that was in February
this year, and that was at a share price of

(00:28):
three dollars and five cents. So unfortunately, investors are already
down thirty percent on the fresh money they put in
this year alone. And part of the issue here is that,
you know, there's still limited good news story for Ryman
and a hard story for investors to back. And unfortunately
the update this week was a bit more of the same.

(00:49):
You know, Ryman's still struggling to clear some of its
excess retirement units and still asking for a bit more
patients from investors and trying to improve the profitability of
the business. So investors are going to have to wait
a little bit longer for the turnaround story here.

Speaker 1 (01:05):
Jeremy, how much of the trouble that it is in
at the moment is caused by the slow local housing market.

Speaker 2 (01:12):
Yeah, you're correct that the retirement village sector and companies
are heavily exposed to the housing market, and Rayman has
continued to call out that the conditions are still very
challenging for them. This impacts them as they do struggle
to sell the units that they're building every year, and
they do bring more to market every year, and they're
also struggling to get the prices that they want. Now Rayman,

(01:35):
they've responded, you know, they are reducing their build rate materially,
They've slashed this number, and they've also reduced some of
the big debt load that it has by those equity
raisers I mentioned earlier. But it still feels like the
company needs a much more buoyant property market to try
and regain some momentum. And I suppose the problem is
here is that you know, the data we're looking at

(01:56):
and hearing is that despite you know, some of the
interest rates mortgagerate reductions coming through, it's still really hard
for the housing market out there. So perhaps you know
a bit more patients still required on Ryman.

Speaker 1 (02:07):
I want to ask you about Infertill. I mean this
is a business that is exposed to a lot of
the global themes at the moment. How do they go
in their results?

Speaker 2 (02:16):
Yeah, Infratill has a great track record of investing in
businesses attached to those growing global themes. And one of
those and the most important investment they have is an
investment in Canberra Data centers and that's the market leader
in data center construction in Australia and New Zealand, and
it's also directly exposed to that really hot AI theme.

(02:38):
Has been a little bit more volatile this year in
AI with some of that spend slowing globally and that's
impacted Camber Data Centers and therefore Infertil a little bit
as well. But the management team there they still remain
super confident in hitting their build program and if they
do hit those targets, there should be a lot of
upside and interest in the Infantile, in the Infantil stock

(03:00):
if that happens.

Speaker 1 (03:01):
Good stuff. Hey, Jeremy, thank you so much for talking
us through that. That's Jeremy Hutton of Milford Asset Management.
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