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Speaker 1: Right now, let's have a look at the market's Jeremy

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Speaker 1: Hutton from Milford Asset Management as with us, Hey, Jeremy.

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Speaker 2: Hey, Rian, how are you going? Yeah?

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Speaker 1: Good? Thank you? Shareholders feeling the pain this with the

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Speaker 1: capital rays from Ryman Healthcare.

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Speaker 2: Yeah, retirement village operator. Ryman is conducting a second massive

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Speaker 2: capital raise in as many years, asking the market for

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Speaker 2: another one billion dollars, and this is following the nine

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Speaker 2: hundred odd million it raised in February twenty twenty three.

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Speaker 2: So Ryman had to raise this money at quite a

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Speaker 2: big discount to try and get investors on board. The

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Speaker 2: offer price was at three dollars and five cents, and

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Speaker 2: that was almost thirty percent lower than the last closed

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Speaker 2: price on Friday before the deal. So the proceeds are

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Speaker 2: again being used to pay down debt. But the last

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Speaker 2: FADS was done at five dollars in twenty twenty three,

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Speaker 2: and Ryman at its peak was almost at fifteen dollars

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Speaker 2: in the boom time, so it's been a really painful

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Speaker 2: reset for Ryman shareholders as well.

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Speaker 1: Certainly has now a new CEO at the helm, Is

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Speaker 1: she clearing the decks and calling the bottom here?

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Speaker 2: Yeah? Potentially you know, this should take Ryman to a

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Speaker 2: much more comfortable place. Naomi James is the new CEO.

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Speaker 2: She's still relatively new in the role, but clearly of

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Speaker 2: the view that the large interest bill on the debt

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Speaker 2: was impacting the business operationally, putting a lot of pressure

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Speaker 2: on other parts of Ryman. And she has coupled this

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Speaker 2: big debt reduction with plans for big cost savings as well,

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Speaker 2: so trying to find another one hundred million dollars per

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Speaker 2: year of cost savings. So hopefully, you know, this is

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Speaker 2: the last reset for Ryman, but it is a massive

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Speaker 2: change from the former high flyer that we saw a

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Speaker 2: few years ago.

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Speaker 1: Certainly, especially when you look at that share price coming

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Speaker 1: off the pig of fifteen dollars that you mentioned, what's

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Speaker 1: the growth that looked like?

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Speaker 2: Yeah, that's the big question still out there for investors.

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Speaker 2: Ryman previously had the mantra of build, build, build, and

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Speaker 2: build its retirement units at pretty much any cost. And

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Speaker 2: you know, this did enable huge growth of the business,

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Speaker 2: but that was in more buoyant property markets, but it

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Speaker 2: also did add a huge amount of debt and clearly

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Speaker 2: overextended the business too much. Times have change now and

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Speaker 2: so has Rayman's near term retirement unit build rate. The

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Speaker 2: go forward build rate that they've guided to has been

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Speaker 2: slashed to about a quarter between a quarter and a

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Speaker 2: third of what it was this year. So huge changes

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Speaker 2: in their growth profile going forward.

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Speaker 1: Yeah, big shift. How does it look against its competitors?

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Speaker 2: Yeah, it's interesting, you know, it's a very big change

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Speaker 2: in the retirement village model intors. Investors will need to

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Speaker 2: think about that. Ryman's effectively running the business morph on

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Speaker 2: a cash flow focus, where its key pair Somerset, is

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Speaker 2: still continuing to go all in on growth. So it

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Speaker 2: does present an interesting trade off or a decision for

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Speaker 2: investors if they want to pick between these two retires

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Speaker 2: and operators.

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Speaker 1: How's this effecting, because obviously this has been a massive

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Speaker 1: story this week, one of the bigger ones from over

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Speaker 1: reporting season. How's it impacting the wider inst x?

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Speaker 2: Yeah, the inst X has had a really tough month

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Speaker 2: today so far. In February, you know, it was down

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Speaker 2: over five percent at one point, mainly as investors were

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Speaker 2: weighing up this large capital raise. And what tends to

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Speaker 2: happen in these capital raises, particularly the bigger ones, is

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Speaker 2: that investors do sell a lot of other shares to

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Speaker 2: help fund funder this, so it does create a bit

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Speaker 2: of sogginess in the market, but I do note that

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Speaker 2: the inst X did bounce back a bit today, up

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Speaker 2: about one percent, so investors perhaps have got their head

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Speaker 2: round this big rhyme and capital raise and have a

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Speaker 2: little bit more confidence.

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Speaker 1: Jeremy, thank you, Jeremy Hutton Milford Aesset Management. For more

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