Ryman Reports $171 Million Net Loss with $188 Million Free Cash Flow in FY26

Financial Turnaround and Cash Flow Milestone

Ryman Healthcare (NZX:RYM, ASX:RYM) has marked a pivotal year in its transformation journey, reporting a near doubling of operating profitability to $88.3 million EBITDAF and generating $188 million in free cash flow for FY26; the first positive free cash flow in over a decade. This turnaround reflects disciplined cost management, with $57 million in annualised savings achieved over two years, and a more focused operating model that has strengthened earnings quality and cash generation.

Despite a net loss after tax of NZD 171 million, improved from a $514 million loss the previous year, the company’s financial resilience is bolstered by a balance sheet reset completed in November 2025. This reset includes lower-cost debt facilities with no bank maturities until FY31 and over $600 million in available debt headroom, positioning Ryman for sustainable growth and capital flexibility.

Strategic Shift to Sustainable Growth

Ryman has deliberately moved away from a rapid, development-led growth model driven by capital gains, pivoting instead to sustainable value creation. The refreshed strategy prioritises maximising returns from the existing $12+ billion property portfolio, improving asset utilisation, and disciplined capital allocation. Development activity has been scaled back with only two villages under construction at year-end, down from seven the prior year, and future projects will be pursued selectively based on strong demand and clear return expectations.

This strategic recalibration aims to grow high-quality recurring earnings, enhance cash flow resilience, and reduce capital intensity. The integrated retirement living and aged care model remains central, serving over 15,500 residents across 47 villages in New Zealand and Australia, with a focus on care-centred living for the rapidly growing 80+ demographic expected to double by 2050.

Operational Highlights and Resident Experience

Operationally, Ryman maintained high aged care occupancy at 96%, with strong demand for premium care accommodation reflected in rising room premiums and Refundable Accommodation Deposits (RADs) in Australia. The Resident Fund initiative, rolled out across New Zealand villages, has enhanced funding flexibility for residents transitioning to care, supporting long-term sustainability.

Resident satisfaction remains a cornerstone, with Ryman named Best Group Provider by Seniors New Zealand for the sixth time and New Zealand’s Most Trusted Brand in aged care and retirement living by Reader’s Digest for the eleventh time. The company also invested $222 million in village upgrades and new developments, including the opening of the Kevin Hickman Village main building and the Richard Hadlee Village naming ceremony, underscoring its commitment to quality living environments.

Sustainability and Governance Enhancements

Ryman reached a sustainability milestone with the commissioning of its solar farm in Northland, New Zealand’s first commercial-scale renewable energy source dedicated to retirement villages, expected to supply 66% of the villages’ electricity needs and reduce carbon emissions by 3,200 tonnes annually.

Governance saw continued board renewal with the appointment of Hamish Rumbold and the planned retirement of Paula Jeffs. The Board maintains strong oversight through four committees covering audit, remuneration, clinical governance, and nominations, with a focus on risk management, ethical standards, and transparency. The external audit by PwC highlighted the valuation of investment properties and aged care centres as a key audit matter, confirming the robustness of valuation methodologies and assumptions.

Capital Management and Dividend Outlook

Ryman introduced a new capital management framework in February 2026, setting prudent capital parameters and prioritising cash generation, recurring earnings growth, and flexibility to pursue high-return growth opportunities. This framework lays the groundwork for a planned return to sustainable dividends by FY28, targeting a payout of 20–50% of cash flow from existing operations per share.

The company’s dual listing on the ASX, achieved in October 2025, broadens its investor base and access to funding, particularly supporting growth ambitions in Australia.

Remuneration Aligned with Performance

Executive remuneration has been realigned to shareholder interests, with the CEO and Senior Executive Team incentivised through short-term incentives (STI) linked to cash-based financial metrics and long-term incentives (LTI) tied to total shareholder return hurdles. The CEO’s FY26 STI payout was 60% of base salary, reflecting strong delivery against a Company Scorecard focused on cash flow and operational improvement.

Director remuneration remains stable, with ongoing shareholding requirements to strengthen alignment with shareholders. The Board continues to emphasise diversity, accountability, and performance in governance practices.

What to Watch Next

Ryman’s shift to a more disciplined, sustainable growth model and its balance sheet reset provide a clearer runway for value creation. However, execution risks remain around the timing and scale of development projects, the evolving regulatory environment in aged care across New Zealand and Australia, and macroeconomic pressures including inflation and construction costs.

Investors will be watching how Ryman manages these dynamics while progressing its $150 million sustainable cash flow improvement target by FY29 and advancing its dividend reinstitution plans. The company’s ability to maintain high resident satisfaction and operational excellence amid these transitions will also be critical to sustaining its competitive edge.

As Ryman navigates this reset, the interplay between demographic tailwinds and operational discipline will define its trajectory in a sector facing mounting demand and regulatory scrutiny.