Thank you for standing by, and Welcome to the Ryman Healthcare Full Year Results Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Dean Hamilton, Executive Chairman. Please go ahead. Kia ora. Welcome to the Ryman full year result presentation. My name is Dean Hamilton. I'm the Executive Chair. With me today was supposed to be Rob Woodgate, our CFO, but unfortunately, he tested positive for COVID yesterday, and so is an apology for today. We've got quite a bit to get through today. We've got an hour. The intention is I'll speak for around 40 minutes and then open for Q&A. If we don't get through all the questions, I invite you to follow-up through Hayden, and we'll do the best we can to answer those over the course of the day. Before we get into the numbers, I wanted to provide some context on change. Having joined the board a year ago, becoming chair two months later, the board and management have been working hard to oversee significant change at Ryman. Shortly after I joined, I met with a number of you. There was a strong message of wanting to see change. Hopefully, we can show that we've listened, and we are well down that path. Just walking through the key areas of change, we've had the board refresh. We've had three members retiring in the last 12 months, and we have four new board members now in their seat. We have two further retirements in calendar 2024. There is a new chair of the board and there are new chairs of all board subcommittees. In terms of management refresh, we had the group CEO resignation on the 22 April 2024, and I am stepping into the executive chair role while a group CEO search is underway. We've had a number of new executive appointments. We have a new Group CFO, we have a new head of corporate finance and treasury, and we have a new Chief Transformation and Strategy Officer, having combined two previous roles. We've leaned into resetting our remuneration. We have a new minimum share purchase plan for directors, and the majority of the SET are on a reset remuneration structure as of the start of this new financial year. I'll touch on both of those later. In terms of performance measures, we really are gonna focus today on what we believe are the future key performance metrics of the organization. We're gonna transition our build rate discussion from near complete to completed and able to be occupied. We're gonna be moving towards a focus on settlement of sales with an accounting recognition policy also under review there, and we've really leaned into improving our financial disclosures, which we'll touch on over the course of the day. We've leaned into our balance sheet assessment. We believe we've taken a much more conservative approach. As we transition that, this has led to a number of non-cash items running through the P&L and balance sheet, which has made for obviously a messy result to to read through as we transition. Strategic urgency, the Fit for the Future program has commenced. We're underway. We've got a real focus on improving our new developments, driving up the profitability and efficiency of our existing villages. Over time, resetting our revenue models and really considering what scale of service and support sits outside our villages. On assurance, we issued our first external auditor independent policy earlier this year. We currently have underway a RFP for a new auditor for 2025. We expect to complete that process and have that announced at the annual shareholder meeting, and obviously, during the year, we suspended our dividend. So a lot of change happening in the organization. Just to get everyone centered on the non-financials, at Ryman, we have 48 open villages. Nine of those still have construction going on. We have 10 greenfield sites, five in New Zealand, five in Australia, excluding the three sites now held for sale. Have over 9,180 retirement village units, over 4,300 care beds across both countries, and a land bank of some 5,370 units and beds. Also announcing today, pleased to have won for the 10th time, the Reader's Digest Most Trusted Brand in New Zealand for aged care and retirement villages category. In terms of the financials, by way of introduction, we met our earnings guidance, reporting NZD 270 million of underlying profit, in line with the guidance of NZD 265 million-NZD 285 million that were released in February. We will be focusing on our new financial metrics, which is cash flow from existing operations, cash flow from development activity, and the IFRS profit before tax and fair value movements. There have been a number of changes in our accounting estimates, which have impacted the result, and we'll go through those in the subsequent pages. We've purposefully increased our disclosures today, breaking down our operating expenses gross, and that is capitalized, showing that by village, and non-village. We've moved our disclosure on resales cash flows to include unit refurbishment and direct selling costs, so we can see a net cash flow. We've broken down our receivables, and there's a clearer reconciliation between the manager's net interest and the carrying value of our investment property. Further changes are under consideration. As mentioned earlier, our accounting recognition potentially moving to settlements rather than sales, and breaking down our village P&L between care and retirement living. We're making good progress on that, and, and I'm optimistic we'll be reporting on that later in this financial year. The financial metrics, we've highlighted the three that we're focused on. Cash flow from operations was NZD 43 million, which was up NZD 52 million on the prior year. Cash flow from developments was a negative NZD 230 million, albeit a NZD 150 million improvement on the prior year. Net debt of NZD 2.51 billion, which was in line with 30 September 2024, as we had guided. IFRS net profit before tax and fair value, a significant loss of NZD 324.5 million for the year, after NZD 284 million of one-off costs, which we'll detail, subsequently. Obviously, a disappointing outcome as we reset the balance sheet carrying values to what we believe are more conservative levels. On the statutory P&L, you'll have the full annual accounts with you, I'm sure. These and the associated notes will hopefully provide additional information. At a high level, it was pleasing that our revenue was up 18% to NZD 690 million. We'll break that down on the next page. Total expenses up 25%, but excluding one-offs of NZD 40 million was up 16%. We've taken impairments of NZD 243 million, which we'll detail later. We had a lower fair value movement of only NZD 180 million positive, as we moved to an independent valuation of our investment property rather than a directors' valuation. This has seen the removal of a 30% DMF market participant adjustment, which was previously adopted by directors in assessing the revenues from future residents. There's been a substantial income tax credit, the net impact of further tax losses this year as we get to deduct interest capitalized to new developments. We have reduced further taxes in future years, given the removal of the 30% DMF from future cash flows down to 20%, and both of those tax credits have been offset in part by the law change in New Zealand, which is seeing the loss of tax depreciation on commercial buildings. Revenue, we've provided a breakdown of revenue across care, service apartments, and independent retirement units. We've shown the drivers between volume and price. You'll see in the table there, we had total care revenue increase of 20%. In there, we've got imputed income of RADs, which is a new accounting policy for Ryman. Given the scale of that balance in our Australian business, we ourselves and our auditors looked to the accounting policy and treatment of those in the Australian market, and the majority of the larger players now treat those as leases under IFRS 16, and the requirement is to infer the income, interest income on those RADs into revenue and equally take the same number out of expenses, such that our net profit before tax is unchanged from this accounting treatment. So if we include the notional imputed income on RADs, it was up 20%. Excluding it, it was up 18%. We've had a 6% increase in occupied bed days, which is pleasing as we're filling up our new villages, and our total revenue per occupied bed day was up 14%, which is a combination of two things: we're filling beds in Australia, which have a higher daily rate, and secondly, there was a 9% increase in New Zealand funding from July 2023. On the service side, revenue was up 15%, 6% on volume, 9% on revenue per occupied day. Again, a combination of filling up our SAs and increased revenue per unit. On the independent RVs, a combination of village fees and deferred management fees allocated there is up 13%, 6% growth in occupied unit days through our new village developments, and a 7% increase in revenue per occupied day. On the expenses, we've shown our gross expenses and split this between capitalized and the P&L, and village and non-village. We've got NZD 30 million of one-offs running through our gross and our P&L, NZD 27 million through the employee line, and NZD 3 million through the admin line. More on that in the next page. Our building and grounds costs are up NZD 11 million or 17%. Yet our insurance and rates are all up significantly, and I think that's obviously not just common to Ryman. Those costs are up across the board for most organizations, if not every organization in Australasia. Our direct selling costs are shown here. These are our sales staff, plus our new resident incentives. Growth in this line has been through the incentive line, not our direct selling staff costs. We've got some noise running through the capitalized versus non-capitalized approach. Our villages in 2023 had NZD 16 million of capitalized costs. This was largely new village marketing and losses on new village openings that were capitalized. That was down to NZD 8 million in FY 2024. Going forward, that will be nil. The impairments and one-offs, obviously significant non-cash impairments and one-offs through the P&L. The bottom part of the table shows our impairments of NZD 244 million. We've taken a hard look at our land bank and at our paused sites. In our land bank, we've taken two more sites to the for sale held for sale, that being Kohimarama and Karori, and we've written those down to independently assessed market valuation. We no longer believe those two sites can justify the further incremental investment required to complete them, and we believe that we are better off selling those. Our Mount Martha site settled during the year, and our Newtown site is currently under unconditional sale, hopefully settlement later this year. In terms of our land bank sites, we've looked obviously at all of our sites, in particular three we felt uncomfortable with the carrying value for. Takapuna and Ringwood were started, but we've taken those back to the land bank, and Mount Eliza, we've also refocused on. All three are challenged on the current design and the current market in terms of build costs, the cost of debt, and the known returns on care. We've written all three down to independent market valuation. We like all those three sites. We may well develop on these, but all three need a redesign from what was originally intended. Lastly, in the impairments, we have the care center impairment of NZD 23 million. There's a much larger care center impairment, which we'll touch on shortly. This is the piece that runs through the P&L, essentially, where there aren't sufficient reserves to take this back through. The balance of the care center impairment under accounting rules runs through reserves. If we move up to the one-off costs, we have costs relating to swap amendments of NZD 10 million. That dates back to November 2022. Gross NZD 14 million, offset by a NZD 4 million gain. That will be the last that we see of that, other than a NZD 4 million gain. The NZD 4 million gain stays through to 2028, the original date of the swaps. The close of our employee share schemes, we had a myriad of employment and leadership share schemes that are well underwater, given what's happened to our share price. We've had to work our way through those. We believe that will be sufficient to wrap up those schemes. The Holidays Act accrual, another NZD 18 million on top of the NZ$6 million, is obviously disappointing. We're not alone on this in New Zealand. This has been a common issue for New Zealand companies through the interpretation of the Holidays Act in New Zealand as to how we accrue for leave payments when people go on leave. For us, this affects some 20,000 staff back to 2010. The advice during the year we received was new advice that we don't believe we can offset overpayments with underpayments. This has required an additional accrual. We now sit at close to NZD 25 million of accrual. We will start to pay this in cash over the next two years. Our focus on cash flow from existing operations. This is how we think about our open villages. Three pieces within here. Firstly, the... If you look to the table on the right, our village operations. We lost NZD 12 million in cash, which was a NZD 40 million reduction on the prior year. The DMF was up, which is as we'd expect, but our cash expenses were NZD 50 million above our care and village fees. We're not alone in this. The, the weekly fee shortfall is impacting all retirement village operators in New Zealand, and our weekly fees are not keeping up with our rising costs. This has been exacerbated by our fixed fees for life. It has not worked well in the really high inflation environment that we've had in the last three years. By example, we have some 2,500 residents in our New Zealand villages paying less than NZD 120 a week. If that was marked to our today's rates, that would add an additional NZD 10 million to our P&L. There has also been a movement in net working capital between the two years, which has exacerbated that change. In terms of further down the cash flow statement, we have our resales. Net, NZD 149 million, up a pleasing NZD 47 million. We've had a good year on cash settlements. Our units were up 13%, our prices were up 6%. We now show the refurbs and sales costs to get to net. The sales costs shown there are for the resales line, and as discussed earlier, that increase of NZD 9 million is primarily increased resident incentives in what's a tighter market. You'll see below the non-village cash flow of NZD 75 million, some NZD 8 million ahead of last year, and lower net interest, with a lower average net debt in FY 2024 post the rights issue, more than offsetting the higher interest rate environment. Moving to cash flow from development activity, a NZD 150 million improvement to a negative NZD 230 million. New receipts were down slightly to NZD 509 million. Our volume of new sales settlements was down 17%, our average price was up 11%. A combination of fewer openings, particularly in Australia, and a slight build in new stock, some 60 units, more uncontracted new units at 31 March this year than prevailed last year. Our capital spend overall was NZD 181 million lower than last year. We had NZD 57 million on final payments on previous land acquisitions. We spent NZD 502 million on direct construction, and we capitalized NZD 108 million of interest based on the roughly NZD 1.5 billion of land and WIP that we're carrying in our balance sheet. Free cash flow on the next slide is the combination of the previous two slides, existing operations and development. A combined negative free cash flow for the year of NZD 187 million, a pleasing NZD 203 million improvement on the year before. We continue to target a positive number for free cash flow in FY 2025. Underlying profit. We're aware the business has historically reported against underlying profit, and we guided to it, given the outlook provided in the cap raise in the full year last year. Why we like it less than cash and IFRS P&L? The margins are on sales, not settlements. It includes an assessment of near complete sales, and the development margin is only on the independent units. It doesn't capture the cost of the balance of the site, such as amenities or care. For these reasons, we believe cash flow from operations, separately reviewed to cash flow under development, is a much more informative way of assessing the performance of the business. We'll touch on those margins later on when we talk about ORA settlements. In terms of our balance sheet, a number of changes to the balance sheet. There's a number that are simply moving between the categories as we go across between aged care and investment property. Others are write-down, and lastly, the impact of a change estimate of market participant on the investment property, as discussed. We've broken it down on the right-hand side, but in property, plant, and equipment, assets held for sale, and investment property. The property, plant, and equipment has our land bank in it, has the care assets in it, and has WIP on care assets. The assets held for sale are the three sites that we've spoken about, which we're carrying at NZD 75 million. And the investment property, you'll notice the significant number there of NZD 399 million. Directors are required, under accounting rules, to provide a market participant test when assessing for fair value. Directors had previously used 30% as a DMF on future residents as potentially what a new participant would do. But we have reassessed this. It's now a tougher economic environment, and some of our bespoke pricing has demonstrated that there is price sensitivity to a 30% DMF. We believe it's appropriate to take a much more conservative approach to valuation, and we've assumed a 20% DMF for future residents. In terms of capital management, our total equity stood at NZD 4.4 billion, down NZD 246 million year-on-year. This is a combination of a NZD 4.5 million profit being more than offset by the balance of the care asset write-down, taken through reserves as required under accounting rules. The NTA now stands at NZD 6.01, excluding intangibles and deferred tax assets per share. Our gearing is up slightly to 36%, given reduction in equity. We were in full compliance with all bank covenants at 31 March 2024. In terms of funding, our weighted average tenure of our debt at 31 March 2024 was 3.1 years. This has improved slightly post-balance date as we refinanced the NZD 136 million out into FY 2026, as highlighted. We have no drawn debt due in the next 12 months. We have 63% of our funding is at fixed interest rates. Our weighted cost of debt is up 110 basis points to 6.5% year-on-year. Moving forward to settlements of ORAs. These next two slides are on a cash basis, so these are settled ORAs, which is what we're focusing on internally. The units were down 70%, as discussed, fewer new unit deliveries in Australia, and as we show later in the stock slide, carrying 60 more unsold units than March 2023. We had good 11% price growth year-on-year, albeit that can be influenced by location. As you can see, we're averaging over NZD 1 million now for independent units. On the resale side, we had 13% growth in volume to 1,060 units, which is pleasing. A unit price growth of 6% on average in what we believe is a flat or declining house market, again, also pleasing. We're starting to see growth in volume in Australia as our villages mature, and I'll call out that 500 serviced units were resold and settled, shows continued demand for that product in our mature villages. Linking back to underlying profit, we show the booked sales of ORAs and the gross margins on this page. So this is not on settlement, this is on booking the sale. Gross development margin on new sales was 23% in the old language, down from 29%. Combination of construction cost inflation and delays, increasing our cost to build, and secondly, a mixed impact as we work through our higher-margin villages, which are now rolling off. Again, the booked resales of ORAs tying back to the underlying profit, similar trajectory to settlements, gross margin at 28%, down from 31%. In terms of our stock, we have 400, a t balance date, we had 436 units that were completed, available for sale, but not contracted. This represented 4.8% of our 9,187 units at 31 March 2024. This is a slight improvement on the 450 uncontracted, completed units at September. On the top chart, new units are up on March 2023, dominated by independent apartments, Murray Halberg, Miriam Corban, Keith Park, Deborah Cheatham. Our serviced apartments are down to 43 unsold. On the bottom chart, our resale units at 198 are down on September and are similar to last March. In terms of development, it's been a busy year. Two villages are completed, William Sanders and John Flynn. Three have opened, Northwood, Patrick Hogan, and Bert Newton, where construction is continuing. We have 10 active sites, and we're working our way through these. We've had a strong focus on our land bank, putting Ringwood and Takapuna back into it, and deciding that Kohimarama and Karori no longer work for us and are holding them for sale. We're certainly adopting a very disciplined approach to new capital allocation. We're raising the hurdle on new developments, and there's no doubt in a 6%-7% interest rate environment and construction inflation where it is, and a softer sales environment, we need to be very disciplined about allocating new capital. In terms of capital recycling, our inability to recycle development capital over the last five years has been a major source of pain. As shown in the table, of the current 10 projects in flight, we expect they will fall NZD 500 million short of recycling after their first sell down. Not on this page are the six recently completed villages. They will also fall short by a collective NZD 280 million. In short, we've overbuilt and not been able to recover it in price. A combination of factors: We had too much on our plate. At our peak, we had 14 open sites. The physical scale of our amenities and care were too large. Construction inflation has been significant through COVID, and added to this, the 400 basis point increase in interest rates that occurred largely after the commencement of these large builds, has made a significant difference. The capital intensity of what we were building exacerbated all of these factors. We had to pause and slow, given our capital envelope, and that just compounded costs, interest, and allocations. I think the team has now got their hands firmly around the 10 in-flight projects, and we're confident of delivering these on time to cost, assuming no further deterioration in the environment. The good news out of all of this, if there is, we are delivering high-quality product that will grow in value over time through high occupancy and DMF growth. The remaining capital recycling is estimated at a positive NZD 800 million, so this is on a to-go basis. NZD 600 million on these 10 sites and a further NZD 200 million on the remaining sell down of the prior six recently completed villages. So some NZD 800 million dollars positive recycling still to come. In New Zealand, we have 6 villages underway. We'll finish Miriam Corban shortly. Our care center opened in early May and is starting to fill. We have five in the land bank and three not here that are for sale; Newtown, Kohimarama, and Karori. In Australia, we have four underway. We'll finish Bert Newton this year, five in the land bank. Our build rate. We've shown the 736 build rate for FY 2024 under our previous methodology. Going forward, we'll report against completed and able-to-occupy units. It's much simpler, it's more objective, and it ties more closely to settlements and cash, which is our ongoing focus. Build rate on our new methodology. Going forward, we intend to guide to a three-year completion estimate, with the first year with some specificity. The next years, two to three years, we will combine, given the fact that things can slide across balance dates. For FY 2025, we expect to complete 850 units-950 units. 650 units of these are in the main buildings at our four sites looking to complete. For FY 2026 and FY 2027 combined, we expect to complete 1,000 units-1,200 units. So looking over the next three years, we expect to complete 1,850 units-2,150 units, or on average, 600 units-700 units over that period. Our land bank of 5,371 units, some 3,100 in New Zealand and some 2,200 units in Australia. Approximately half of the bank is at sites currently under construction. We bought a new site at Deborah Cheatham. On the back there, as you can see in the picture, this will be a great incremental NPV to this successful site. A quick run-through of the development portfolio. The William Sanders in the top left is complete. Murray Halberg in the top right is completed for now. We're not going to start the last 116 units. We will reassess this later after we've sold down the current stock. Miriam Corban, I was there a couple of weeks ago. Main building looks great. It's opened, and is starting to fill. We'll be off this site in a couple of months' time. Keith Park, good progress, main building to open later this year. Patrick Hogan, a more traditional townhouse-style development. We are working our way through those, townhouse releases. James Wattie, getting nearer the end of James Wattie. Key milestone is a main building to open in the next couple of months and progressively filling that. Kevin Hickman, I was there the other week. A lot of construction going on here. Good progress on the main building that you'll see in the center of the site. Northwood, we're working our way through this recently opened Christchurch village. Nellie Melba, you'll see in the photo, the final Stage 4 is underway. It's now out of the ground. We have a small block of land to sell in the foreground. This has been a highly successful development for Ryman. We've recycled our capital, and we're currently running at full occupancy. Bert Newton, we expect to complete this, this financial year and be off site. Mulgrave, I was there a couple of weeks ago. It's gonna be a great site. Our early releases have all sold out. Deborah Cheatham, likewise, was there. We're making good progress on the new townhouses, as you can see, working from left to right in that picture. The main building opened a year ago, and it's filling up. It is, however, fair to say it's a competitive market down on the peninsula for care. Strategy, as discussed at the start, I think we're making good progress on the hygiene factors, whether that's our disclosures, our accounting estimates, our key metrics, our board and management refresh, our remuneration. Obviously, the key question is: where to from here? As a board, we are seeing it increasingly clearly. We have a well-respected brand in care and retirement living. We're in an industry that we know will have increasing demand for a long period of time. But what we need to do is urgently rebuild our balance between great care and great financial performance. In doing that, the resident has to be at the center of everything we do. We create value at our villages. Everything else we do needs to be in support of that. We need to create a culture of performance that coexists with our core care DNA. We've got NZD 13 billion of assets that we need to drive improved performance on. We have five key focus areas to drive our business improvement. One is the performance of our 48 villages. How efficient are we at these villages? We believe there's opportunity in labor and in procurement. In terms of revenue, as a generalization, I believe we are under-rewarded for our great product and services. On care, the government funding models just aren't working. Governments need to lean in, and more on that shortly. In retirement, the sector is suffering from weekly fee shortfalls, given the sharp rises in rates, electricity, insurance, and labor. We are no different. We need to look into what is the optimal revenue mix of weekly fee, DMF, or a step through from independent to serviced. At 20% in fixed fees for life, I believe we're underpricing our great product. For new developments, we need to reset what we build next. We have to recycle capital and get positive NPV on every project. We need to determine how much care and where. If the Australian government are first to fix their model, which it looks like they're about to be, then we would definitely build differently there. And lastly, what scale of amenity do we provide? In services and support, what do we do outside of our villages? Our overhead has grown faster than resident numbers over the last five years. We need to get fitter in this area. Underpinning all of this, we need to drive a performance culture that balances great care and great financial performance. I believe there's plenty of opportunity for our improvement. Aged care. This has been an area of significant deterioration in performance in the sector and at Ryman over the last five years. Government funding has simply not kept up with the rising cost of providing that care. That said, Ryman has kept building care, presumably thinking it would get fixed. However, to date, it has not. I walk through our facilities, and our wonderful staff are providing outstanding care to vulnerable older people. Quite simply, this has to be paid for. I do think we're finally seeing a likelihood of change by governments in New Zealand and Australia, as they see a breaking aged care industry with closing beds and not enough new builds. That will shortly become a healthcare industry problem in our public hospitals in New Zealand and Australia. In Australia, we've been working closely with the government and the Aged Care Taskforce, which reported recommendations to the Australian government in March 2024, including support for a co-contribution model. We believe this review is a positive sign and are waiting to see the final proposed legislation. In New Zealand, stage one of a review by Te Whatu Ora, which was commenced under the previous government, and the Sapere report, which is well worth a read, outlines failings of the current model. Stage two of this review is underway, with recommendations on potential future funding expected to be provided back to Te Whatu Ora in June, July this year. You will have seen on Friday a further review announced in New Zealand, with the Select Committee inquiry into aged care under the new government will commence in July, also looking at potential options for future improved funding. The model needs urgent change to ensure bed numbers are not only retained, but there are incentives for significant new builds to be built. With over 4,000 care beds across New Zealand and Australia, we are intently interested in being part of the solution, and we see a light at the end of the tunnel. On sustainability, we've made good progress across our sustainability goals this year. We've released today on our website our 2024 sustainability report. In our annual report, due out next month, we will include our first climate-related disclosures. At Ryman, we remain committed to decarbonizing our operations. In terms of governance and remuneration, the top four positions on the board of directors are all new in the last 12 months. Both Jeff and Claire will be retiring this calendar year, Jeff at the upcoming ASM, Claire at the end of the year. Importantly, we have four new chairs of all of our standing committees. We've stood up an interim committee to oversee the executive chair with Paula, James, and Anthony. Paula will chair that committee and become the lead independent director, while I'm temporarily in an executive role. The executive team, we're underway with an executive search for a new group CEO. We've got a relatively new executive team, all of whom I'm pleased to say are committed to driving improved performance. On remuneration, we want to provide transparency. On Richard's departure, we made a final payment of NZD 1.5 million under the terms of his contract. That included NZD 225,000 of at-risk entitlement that he had relating to the FY 2024 year. This represented 12% of the total available at-risk remuneration of some NZD 1.84 million. Richard forfeited his FY 2024 LSS compensation and any future LTI. There's a non-compete for six months. While I am temporarily the executive chair, my chair fee will be suspended. I will be paid NZD 100,000 per month and have committed to reinvest a third of this into Ryman shares. There are no additional incentives. We've made significant progress on executive remuneration. We wanted to simplify to move to more market normal structure. We wanted the at-risk components to be more closely aligned with shareholder outcomes. In terms of the board, we've also adopted a new minimum share plan, with the requirement for each director to purchase shares equivalent to their base fee over five years. We believe we're making significant progress on remuneration alignment. In terms of looking forward, in general, the economic environment remains challenging. Higher-for-longer interest rates are having an impact on housing values and liquidity in the market. We're still seeing inflation in our costs, insurance, rates, electricity, nurses, caregivers, as will the whole industry. Key for us in FY 2025 will be our ability to maintain our current high occupancy rates and sell and settle new units and beds as they come on stream through the new main buildings. We've provided three outlook statements as we get our turnaround underway. We continue to forecast positive free cash flow for FY 2025. We expect to spend NZD 700-NZD 820 million of CapEx across new and existing operations. We expect to complete 850-950 new beds and units. In summary, we've listened, and we are making changes. We know we need to improve financial performance, particularly in a challenging macro environment. We believe we've got a clear line of sight to making those improvements over the next two years to three years. We do need to keep the resident at the center, and we need to balance care and great financial performance. We will continue to take a very disciplined approach to capital allocation. Thank you, and I'll now open it up for questions, firstly by phone and then by web. Thank you. If you wish to ask a question via the phones, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two, and if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Bianca Fledderus from UBS. Please go ahead. Morning, Dean. First of all, thanks for the increased disclosure. That's appreciated. So first question from me is, you are stepping in as executive chairman, of course. You are also on a few other boards. So given you have these other directorships and you don't live in Christchurch, could you just talk us through how you manage your time, I guess, and how much time on average you're spending on Ryman? Sure. Sure. No, that's a good question, Bianca. You will have seen that I have gone to what we call light duties at Auckland Airport, which essentially, whilst I've retained my directorship, I'm not participating in that board, or any subcommittees of the board. So I've effectively, reduced that load by 1. In terms of time spent at Ryman, it'd be fair to say that has been, you know, three to five days a week, or arguably seven last week. But yeah, so spending time, I'm doing that visibly, so I'm at least three days in either the Christchurch office or the Melbourne office. And so, yeah, I expect to operate at, at that level. So at least three days visibly, and obviously available for the rest of the week, remotely and by VC. Okay, great. Thanks, that's very helpful. Then moving on to your developments. So with the new methodology, the FY 2025 step up is 200-300 units and beds, compared to FY 2024. That seems like a decent step up. So, a big part, as you say, is driven by the opening of the four main buildings. But besides those completion, how realistic is that number? Yes, I think, yeah, we need to be careful when looking backwards, though, as again, the old methodology versus the new methodology, and at some stage, we have to transition to a new methodology. And I think, Bianca, that's obviously, t hat transition will create some noise, but, you know, we need to move from sales to settlements. We need to move from kind of near completes to complete. So, you know, we're very intent on that change. So in terms of the units that we expect to complete this year, we're highly confident of those numbers. Yeah, a lot of those buildings are near, well, that's odd, I'm not going to use the word near complete. But they, we've got a clear line of sight, in particular to those main buildings. They're all four will be completed and opened this year. We've got a high degree of confidence in the FY 2025 completion number, Bianca. Okay, thank you. And then after that, so for 2026 and 2027, so that's of course a bit lower, so 500-600 units and beds a year. Could you just talk about your strategy after that? So I guess your longer term build rate, and also, given you're moving more to broadacre, how much land you have to buy in the near term, I guess, to sort of deliver on that? Sure. Yeah, I think the average of those subsequent two years is 600, or 500-600, I suppose, on that two years, and then 600-700 over the three years. Yeah, look, we're happy with that outlook. I think beyond that, you know, we will need to have started in the next year or so some of the 10 sites that are in the land bank. You know, we've got some broadacre sites, principally in New Zealand at Rolleston, at Taupō, and at Karaka. I would anticipate getting at least one of those underway in the next 12 months-24 months. And in Australia, it's going to be largely around resetting these, what were substantial builds, and redesigning those, to reduce our peak capital spend at Mount Eliza and at Ringwood. So, you know, I'm confident we've got reasonable sight within our land bank. We continue to look at land, but I also think part of the future for Ryman will be, particularly in a higher interest rate environment, is what is the right size of land bank? Ultimately, you're trying to shorten the kind of cash-to-cash cycle of these things, and at two percent interest rates, you saw the whole industry have a bit of a land grab to large land banks. I expect you'll see that reduce over time and with a, you know, higher degree of conviction in what you've got and a confidence of getting those through to cash in a reasonable cycle. You'll see the write-downs we're doing now are on bits of land we've had since 2016, 2017, 2018. You know, if you're holding those for seven or eight years, you know, the buildup in cost in your balance sheet makes it quite prohibitive. Yeah. Thank you. Okay, and then last question from me. So your ICR does look quite tight, and it will, of course, lift again to two times mid-next year and then 2.25x after that. Are you still comfortable with the current level, or are you talking to banks about it at all, or just comment on that, please? No, that's fine. Yeah, no, we're comfortable. You know, the step up to two is not until September 2025, and in that period, we'll obviously would have dropped off the weaker second half that we've just gone through in FY 2024, so that will help us. That was quite a weak period. I think our first half, second half underlying numbers were very similar, which is unusual for us, so that'll be good to cycle off that. So no, at the moment, we're comfortable with our liquidity, we're comfortable with our covenants, and yeah, no, no discussions with our lenders. Okay, great. Thanks. That's all for me. Thanks, Bianca. Thank you. Your next question comes from Arie Dekker from Jarden. Please go ahead. Well, good morning, and thanks for the thorough presentation. First question, I guess, you know, you've been clear that some of the settings on the RV side are low, so the weekly fees, you know, arguably the DMF as well at 20%. But you've also made comments, obviously, about being realistic about the current macro environment. Can you just sort of talk to when we might get sort of visibility on when you'd look to sort of improve, I guess, the fee settings, you know, on what is a market-leading RV proposition? Yeah, no, good question, and obviously, the weekly fee portfolio is such a blended rate. You know, we have, obviously, we review that quarterly, but there's been some periods in the past, in late 2017s and 2018s, where they weren't reviewed for a period. So, you know, people that have been there for a while, as I said, some NZD 2,500, are now paying NZD 110. In our new, in our current settings, they are at least double that number. So we'll obviously, as we mature through those people, that'll help our P&L. But even today's numbers, I don't think are the right numbers, and so I think over the next six months, Arie, we will need to lean into those things. I think, I think we do have a great product. You know, you just walk around it. The scale of amenity, the access to the continuum of care, and the quality of what we build, I think at 20% in fixed fees for life is the, is the wrong setting. So, you know, I think we'll be leaning into that before the end of the calendar year. Great. So yeah, it doesn't rely on a new CEO coming in place, and the move also, which seems very sensible, to remove that 30% assumption in the valuation around market DMF shouldn't be read as a signal that you are tied to the 20%. No, that's right, Arie. Yeah, no, we're certainly not waiting for the new CEO. I think the board and this management team are very clear on what needs to be done, so, you know, we'll be making those changes, I suspect, ahead of a new CEO being in the seat. You've, you've given some positive comments there around, your comfort in the covenants, so that's good. I mean, core debt's obviously sitting. I mean, there's different ways of sort of looking at it, but it's sort of sitting at a reasonably high level. Should we sort of take the comments elsewhere in the presentation around, you know, your objective to bring debt down over time, as you focus on value, as being kind of the approach to the core debt, where you'll look to deal with that over time through, you know, cash profitability, potentially, the, you know, the capital management settings in terms of dividend and just balancing, you know, the amount of development you've got underway with the debt balances. Is that how we should sort of think about it? Yep, that's exactly how you should think about it. Yeah, I think you know that, that debt, you know, you can calculate that various ways. You can look at our P&L interest, or you could work it backwards from the 2.5. You know, take off the cash recycling, you know, take off the unsold stock, take off our land bank. You know, either way, you're probably gonna get a number slightly above NZD 1 billion, and so, you know, that's, that's a number we believe we need to pay down, and we'll pay that down through those settings. Being cash flow positive for one area will be critical, and we're keen to work down that core debt number over time, and I think we will be conservative about our review of our dividend policy in a couple of years' time, FY 2026, like we promised. You know, any look at that will need to be cash-based. So yep, we can see a line of sight to gradually paying down that core debt, and it'll all be about improved performance and recycling our capital on our new debt, so that we're not bringing over more core debt when these new developments don't recycle. A small acquisition of adjacent land that you called out, there's a couple more sites, you know, reasonably sizable ones, for divestment. Do you think that the next land acquisitions will be sort of around, I guess, recycling some of those divested sites into land acquisitions? You know, just can you talk briefly about your approach and where you're at on, you know, willingness to purchase land at the moment? Yeah, no, we'll definitely, we'll definitely look at land, Arie. I think we also will probably going forward run a tighter land bank. I think, you know, when you've, a s I said, I think the whole industry ran towards a bit of a land grab. You know, people were being rewarded for having big land banks, and, you know, the cost to carry it at 2% was very little, and you had inflation in your land. So I think that was fine for people, but I think when you look now, they are expensive assets to carry. I think people will need to be more disciplined in terms of the scale of what they carry versus what they can eat through at the other end, particularly in a potentially softer market for, you know, the next 12 months. So yeah, we're happy with our current land bank. We can see our way through the next three years, four years. So we're not panicked to buy new land. But yeah, we will look to new land, and I think in part it'll be influenced by where we get more confidence on the care settings. You know, does Australia move more quickly to create, you know, put more profitability back into care that would justify our continuum of care model? If they don't, do we look at land banks near our existing facilities and use the care as a satellite? So we just build retirement and fill up the beds at nearby integrated facilities, so we'll look at that. And in New Zealand, if the government doesn't move on, you know, improving the profitability of care that would justify new investments, yeah, we will, you know, we'll really tail down the scale of care that we do and really reorientate that solely towards Ryman residents, rather than the current model, which allows Te Whatu Ora to put people into our beds. So yeah, I think we'll take a considered approach to land. We will recycle if we get the opportunity, but I think going forward, you won't see, and I can only speak for ourselves, as big a land bank as maybe what you saw in a 2% interest rate environment. Great, and then last question from me. You know, and I think, you know, the time you're putting into the role is pretty clear in the presentation today and the turnaround, so that's great. It may be in the materials, but can you just confirm, if you're able, whether you will be in the process for, for- Yeah, no, I won't. No, I've said I won't be. I'm keen to get back into the chair role, and yeah, hopefully, we can find somebody, you know, to take the business for the next five to seven years, which we're optimistic we can do. So no, I've purposely not put my hat in the ring. Thank you. Your next question comes from Aaron Ibbotson, from Forsyth Barr. Please go ahead. Hi there. Good morning. Good morning, again, and many thanks for some excellent disclosure and what seems to be a pretty sizable reset of how you report and think about the business. I just got a couple of small questions. So first of all, I'm just keen to you know know if you have a view of capital allocation in New Zealand relative to Australia. Is that something you have given any thought? You know, you've got a background in both countries as well, so you know, with your initial impression of the business, do you think a pivot in either direction is worthwhile, or do you think the current settings are roughly right? Thank you. Yep. Good question, Aaron. Look, I'm comfortable we've got, yeah, a 50/50 land bank, five in each place. I think over the foreseeable future, you know, we won't see a massive pivot from one to t'other, particularly as our broad acre land bank primarily sits here in New Zealand. I think in large part it's going to be impacted by the care settings of each government. I think if this series of reviews by the government, you know, fails to create a material change, and the Australian one does, the legislation follows the recommendations of that task force, I think we'll probably be more purposeful in our investment in Australia. But, yeah, I'm optimistic both governments will get to the same logical conclusion, that the wave of aged people coming into both countries, you know, they want to keep out of their hospitals. The evidence shows that when they go through an aged care facility such as ours, when they do finally present in hospital, they're actually presenting in better shape. So the overall cost to the healthcare system is much reduced. So I'm optimistic we won't have our hand forced to go one country or the other. But if we do, you know, I think in all likelihood, we'll probably increase our bias towards Australia. But at the moment, we, you know, we're seeing opportunities in both countries. Thank you. That makes sense. Secondly, and I guess this is a bit of a detailed one, but, just so I don't end up double counting in my model, and it might be somewhere in the disclosures, but, the 736 units you reported delivered on sort of old methodology for this year, how many would you have reported on the new methodology? Just so I assume a few of those 736 are showing up in the FY 2025 actual delivered. Yeah. I'll get you to follow-up with Hayden after. This is, this is kind of a little detailed spreadsheet that we've got here, Aaron, as we move from, you know, the near completes, they obviously would, there was an element of double counting last year's near completes as we fall into this year's completion rate. So at some stage, we need to, we need to go cold turkey over. I think on the new methodology, the FY 2020 build rate would have been around 637 units. I'm just looking on page 32 of the presentation. But if you want to get into detail on that, Aaron, just get, get in touch with, with Hayden, because there is obviously that element of, they, they sit in both numbers in terms of the old methodology to the, to the new. Yeah, I'm very keen that the organization moves to completions. This whole near complete thing, the amount of time and energy that goes around visiting these villages, figuring out whether it's half complete or not, is a waste of energy. You know, we need to focus on getting things done and turning it to cash. That sounds very good. My final question, and apologies to get back to your debt covenants, but you know, all of your three main peers, smaller peers here in New Zealand, have shifted to a combination of sort of development facilities, which sits outside of these ICR covenants. And I appreciate your reiteration that you're comfortable with your covenants, but have you given any thought to maybe moving some of your non-core debt into a development facility just to make the rest of us stress slightly less about it? Yeah, we've thought about that. I think, first up, we certainly don't need more debt. So I think NZD 2.5 billion is enough debt for the organization. So, you know, doing that kind of splitting between the two to try and find more debt is, is not the answer. I think the key would be whether you thought that reduced the covenant measurements on, on one part versus the, the other. And ultimately, you know, those pieces are not non-recourse, is my understanding. So, for example, if we've gone into to decide that we're gonna do one of our developments at Keith Park, and we thought it was gonna cost us NZD 300 million, and we set up a facility, we put NZD 100 million dollars of equity into it, and lo and behold, it costs NZD 400 million, you know, we'll be reaching into our pocket to find the extra one hundred, I'm sure. It won't be from the bank. So I think we need to be kind of objective as to what that's actually doing, having a dev co versus op co. I don't think it kind of gets you out of overspends. Whether it creates a different covenant structure, it's well worth looking at. But I think we need to do that for the right reasons, 'cause as I say, we're not looking for more debt, and we're not looking to create non-recourse, 'cause in reality, it won't be. You know, if you're halfway built in a Ryman village, you're gonna have to finish it like anyone with their brand on those things. So it'll be around interest, covenants, and whether it's leverage only versus an interest covenant. We need to investigate further, but on our current covenants, you know, we are comfortable. But yeah, we'll continue to look at where there's a better way to fund the two elements of the business, acknowledging that it won't be non-recourse if you do put it into a dev co. Okay, that was it for me. Thank you very much. Thanks, Aaron. Thank you. Your next question comes from Stephen Ridgewell from Craigs IP. Please go ahead. Good morning. Thanks for the presentation, guys. Just a couple of questions from me. Dean, you noted, you know, that Ryman is still interested in acquiring land, but will hold a lower land bank in the current, you know, higher interest rate environment. And the guidance for a lower build rate over FY 2026, FY 2027 does provide helpful clarity over the kind of near-term trajectory. I just wonder if you could give indications for how, you know, the board's thinking about perhaps build rate beyond that period of time, even approximately. Is that sort of run rate over FY 2026, FY 2027 a reasonable indication for, you know, Ryman's, you know, development aspirations on even perhaps a more slightly longer term view than the guidance provided? And then, you know, I guess to the extent that you do acquire new land, you know, one presumes that, you know, that'll be focused on, you know, broad acre sites, please. Yeah, I think, I think we've got more like anything, Steven, you got more visibility the closer it is to you, isn't it? So I think we've been very much focused as we think about our capital management around that three-year perspective. So, you know, we're, we're confident that we've got good line of sight to that level of build. The year after that, you're probably in the ground - to actually be a completion, you're probably in the ground next year. And so I think what will determine that will be, you know, our success in driving increased financial performance in the core business. Are we creating headroom for ourselves as we go? And And are we completing these developments to time and to schedule, in terms of what's to go? So are we releasing that NZD 800 million that we think from today we've got coming out of the recently completed and the completed? So I think that'll impact our confidence. I can't see us being less than that NZD 600-NZD 700 on average over a three-year period. I think whether we build confidence and financial capacity to be higher and get really confident that we can recycle, so therefore not bring core debt back over to weigh on the existing operations, will be important, I think. But, you know, placing NZD 30 million and NZD 40 million dollar land banks-beds is not substantial. It's what you then spend on top of those things to get consent, you know, the accumulation of interest at 7% compounding per annum. You know, you quickly get to a book value that, that doesn't support the you know, the large spends that are to come. So hopefully that answers the question, Steven. I think we've got reasonable visibility for three years. I don't think it comes down from that level, but our performance will dictate, you know, confidence to go up and above that. Yeah, no, that is helpful. Thanks, Dean. And then, like, you talked a little, quite a bit on the call as to the needs, you know, for the, for government funding to increase for care, particularly in New Zealand. I mean, I guess if you don't get that, you've alluded to some strategies you could employ, but, you know, to what extent do you see upside to private funding? You know, I guess the, especially given the New Zealand government's fiscal position isn't great. I mean, it seems like it's gonna be hard to get a lot more funding, you know, for a number of sectors. You know, how much upside do you see in terms of both PACs and perhaps the potential to roll out, you know, the ORA model or the Care Suites model across both the existing and future developments? Thank you. Yep, good. I think that's two. If I could just break that down into two bits, I think, Stephen. In terms of, you know, the model that Australia's talking about, it's a combination of some increase in government funding, but then opening it up for co-contribution, particularly in what in Australia they call the hotel-type services, which is essentially food and those things. So they're looking at a combination of the two, not just falling, 'Cause like every government in the world, Victorian government's got no money, so they're looking at co-contribution by people who can afford to do that, and I think that's a positive over there. And then in New Zealand, I think they will ultimately go to that model as well, you know, increasing the minimum or the maximum annual contribution in New Zealand, and also an increased contribution by the government. So again, I don't think the whole weight of the solution will fall on the government. There is a large part of the population that can afford to and is not being required to pay over and above that level. So I think our existing 4,500 beds can benefit from that. You know, and you put some maths across those beds and put that into per days and what a change in the per day rate will be, you know, our operating leverage will be substantial on that. In terms of the Care Suites piece, I think as we look forward, that'll be part of the solution, but that's quite hard to reconstruct backwards into our 4,000 beds, Stephen, at scale. You know, we're doing 10 here, five there, but, you know, on a 4,500 bed unit portfolio, I don't think going backwards with a Care Suites product will be material for Ryman. But obviously, in new developments, I think we'll look to a combination of suite and bed. So the Care Suites obviously takes it completely outside of the private sector, but look, I'm optimistic the biggest gain for Ryman, and I think a fair reward for the, you know, NZD 1 billion odd that we've got tied up in care, will be a change to the settings for straight care payments for aged, aged services. Great. Thanks. Thanks, Dean. That's all for me. Thanks, Steven. Thank you. There are no further phone questions at this time. I'll now hand back to Mr. Hamilton to address your webcast questions. Right, are there any webcast questions? None. There are no webcast questions. Okay. Well, thank you very much. I really appreciate the attendance today. As we said, you know, we're the turnaround is underway. We've listened. We're creating change. I'm personally optimistic that there is plenty of room for opportunity for improvement, and we appreciate your time, and we look forward to keeping you informed, and no doubt speaking to a few of you over the next few days. Thanks very much again.