Ryman Healthcare Limited (RYM) Earnings Call Transcript & Summary

[Foreign Language] Good morning, everyone, and welcome to Ryman Healthcare's Annual Meeting. My name is Greg Campbell, and it's my pleasure to address you today, my first annual meeting, as your Chair. I would like to welcome shareholders to the meeting, both here with us in person and, of course, online. We look forward to again hosting you at one of our amazing villages once COVID has reduced to the point of risk as appropriate. I'd also like to welcome the many Ryman executive and staff to the meeting who are here with us today. Welcome also to Tim Kerr from New Zealand Shareholders' Association. With so much COVID in the community, we recommend that you wear your masks. You're probably wondering why a number of us are not wearing them. We have been together for a day or so. We had a Board meeting and we've retested each and every day. So -- but when we enter mixing, we will wear a mask. By the way, if you don't have a mask, we can certainly provide you one outside here. Joining me up here this morning are my fellow directors. And what I'd like to do is introduce them and ask them to make themselves known to you. So first up is Joe Appleyard, Hi Joe; Warren Bell, morning to you; Geoffrey Cumming; Claire Higgins to my left here; Dr. David Kerr, and most of you I'm sure will know David; and Paula Jeffs. Anthony Leighs is overseas on a course of Harvard, and he sends his apologies. And George Savvides will be joining us online. And here he is. He is very big isn't he. So also up here on stage are our Richard Umbers, our group CEO, which you'll hear from shortly; David Bennett, our group's CFO and Company Secretary. The agenda for the morning includes a review from me, and then I'll hand over to Richard to give you an overview from his point of view. We will then move to the resolutions before the meeting and then general business where you're going to have a chance to ask any of us any questions. We're looking to conclude the meeting sort of somewhere thereafter 11 a.m. And we really welcome you to join us for a cup of coffee or a cup of tea and some masked talking. You will get a chance to vote on the resolutions and ask questions later in the meeting. And I'll provide you with further instructions as we move through the meeting. But if you encounter any issues, please refer to your virtual annual meeting online portal guide or you can phone the helpline on 0 (800) 220-200. You can send your questions at any time through the online portal by clicking the link shown here on the screen. And I would encourage you to do so as early as possible. This will allow us to answer those questions at the appropriate time of the meeting. Voting of the resolutions will be conducted by way of a poll. Shareholders joining us here today, you would have been validated or given your shareholder voting card. If you are a shareholder and you did not receive on arrival and wish to vote, please make your way to the registration desk outside the room, and the staff from Link Market Services will be able to assist you. Shareholders joining online will be able to cast a vote using the electronic voting card received when online registration is validated. To vote, you will need to get the -- get voting card button or rather click on the voting card button, within the online meeting platform, which is shown here. You'll be asked to enter your shareholder or proxy number to validate. Please refer to the virtual meeting online portal guide or use the helpline specified if you require assistance. Voting will remain open until 5 minutes after the conclusion of the meeting. Notice of meeting. The company secretary has confirmed to me that the notice of meeting has been sent to shareholders and other persons entitled to receive it. Apologies. We have received apologies from [ George Slade and Margaret Cooper ]. Have we got any other apologies. David?

Could I submit an apology on behalf of Professor Don Trow?

Thank you very much. Any other apologies? Thank you. Quorum. The company's constitution prescribes a quorum of shareholders. Based on the information from the registrar, I can confirm that we have a quorum present. Proxies. Proxies have been appointed for the purposes of this meeting, in respect to approximately 256 million shares, representing over 51% of the total number of shares. And I'd really like to sincerely thank shareholders for their level of participation in today's meeting. My fellow directors and I intend to vote all discretionary proxies we have in favor of the resolutions as set out in the notice of meeting. Our annual report for the year ending 31 March, including the auditor's report has been circulated to shareholders. Well, it certainly turned out to be quite a year with plenty of challenges, but just as much to be optimistic about as we look ahead. We delivered a strong result during a period of considerable disruption. Our underlying profit rose 13.6% to $255 million, and our audited IFRS profit rose 63.8% to $693 million. Your dividend for the year was $0.224 per share, the same as last year and in line with our new flexible policy range of paying between 30% and 50% of underlying profit and dividends. The payout was equivalent to a 43.9% of underlying profit. I'd like to start by acknowledging the global events and challenges that have shaped the past, and in particular, the 7 months since January. In fact, we're still having them. It's been an extremely tough time for our residents, for their families and for all of our team. We've had lockdowns, long periods in PPE, Omicron, the flu and a lot of disruption to all of our systems and the ways of working. Through it all, our team have really just rolled with the punches. The resilience, commitment and professionalism of our Rymanians played a key role in helping us adapt quickly and respond decisively to changing circumstances. Their efforts, frankly, were nothing short of magnificent. Our vertically integrated business model proved to be particularly advantageous in maintaining the momentum of the business, allowing us to relocate resources to areas of most need. As a result, we have been able to keep residents and teams safe as well as build for the future, acquiring land, constructing new villages, selling completed and refurbished units and setting a new benchmark in the COVID world for clinical care. These outcomes, in fact, enhanced our reputation in the market and cemented our position as a leader for the retirement sector. We remain absolutely committed to maintaining our leadership position as well as generating increased returns to our shareholders and positioning Ryman for further growth in the years ahead. Providing care that in the words of Kevin Hickman, one of our founders, has got to be good enough for mom or dad is key to achieving this. This ethos captures something truly unique within the spirit of Ryman, and it is what motivates our people each and every day. Our villages continue to be in strong demand. Our low resale stock combined with mature care occupancy of 95% for the year demonstrated this. In a year when we faced increased operating costs and lockdowns, which challenged our ability to conduct sales and at times, continue building, we were pleased with what the team has achieved. As a business that cares for older people, the last 2 years have certainly presented us with challenging, testing all aspects of our operations as, frankly, never before. And as I mentioned before, it still continues to do so. But those years have underlined that in difficult times, there's no better place to live than in a supportive community, with help at hand, with wonderful friends and neighbors. As a company, we have invested a large amount building our care capability over many years, and we are now an integral part of the health system in all of the communities in which we operate. There is, however, no doubt that the wider health system is in some mode of crisis. And the closure of more than 1,000 aged care beds in New Zealand this year alone is going to increase the pressure on an already under-resourced system. Care is in our DNA, and it is part of our core business. The availability of care for our residents is key to them feeling the security, and indeed, this is the success of our model. We'd like to offer more care in the future by finding innovative and different ways to deliver it so that people can age in place with us. Our health system is undergoing fundamental change, as you'll be aware, and we're keen to see how that particular model develops and how we can continue to contribute. However, aged care beds are scarce and getting scarcer in New Zealand, both the New Zealand and, of course, in Victoria. And there's a lot of talk about the problems we face as a society and caring for older people. Our absolute focus is being a part of that solution. Aged care bed supply is tight, and BERL estimates we will need another 15,000 care beds by 2030 in New Zealand, which is one heck of a substantial challenge. The same is true, in fact, for retirement villages with JLL forecasting a shortfall of more than 12,300 units in New Zealand over the next decade. And the issues are almost identical in Victoria, where the population is larger. The bottom line is, residents living in a Ryman village is a form of health insurance in a time of care shortages, and scarcity of care will only increase as the population ages. Earlier this week, the Board met to review progress. We are encouraged with where we're at, but there is a long runway yet until year-end. We remain confident about our growth prospects in the medium and longer term. And we look forward to updating you on progress in November when we release our results for the first half of the financial year. I would like now to hand over to Richard for his views of highlights of the year, but I will speak to you again shortly to present resolutions, the general business of the meeting. Thank you. Richard, over to you.

Thanks, Greg. Nice to see you all here, and thank you for joining us this morning. As Greg touched on, we see continued strong demand for what Ryman has to offer, high standards of care in a thriving community. Our continuum of care model delivers both peace of mind and security and is a benchmark for the industry. And our vertically integrated business model means we can control and benefit from all links in the value chain across development, construction and operations. However, I'd like to start by highlighting some of the key aspects of our results. Underlying profit for the year rose 13.6% to $255 million, reflecting strong demand for the Ryman way of living. We also reported a 63.8% increase in our IFRS profit to $693 million. This is largely driven by movements in the wider property market, which itself also, in part, reflects our strategy over recent years to invest in higher-value locations. Our underlying profit result also included $20.9 million of costs directly attributable to COVID, staffing, security and personal protective equipment, for example, although perhaps the greater impact was the COVID-related skilled labor shortage and supply chain issues in the construction part of our business. Total booked sales rose 8.1% to a record 1,543 units for the year and was a great achievement given the restrictions in our 2 biggest markets. That's Victoria and Auckland, of course. We experienced a significant uptick in sales in Victoria in the last quarter as the restrictions were lifted following the Omicron peak. In fact, the number of transacted sales in the last quarter of our financial year would double what we achieved in the first half. Across New Zealand and Australia, we ended the year with only 120 units. That's just 1.4% of our retirement village portfolio available for resale. As we head into an increasingly volatile and unpredictable macroeconomic environment, managing our debt is a particular focus. We have continued to diversify our debt and have completed 4 separate debt capital market transactions since December 2020. This has resulted in $1.13 billion of diversification across 3 geographies, including the $290 million USPP, which closed just recently, April 2022. We ended the year with $737 million of headroom. This positions us well to continue to invest wisely in the business and able to capitalize on the demand created by a rapidly aging population. Over the year, our debt to debt plus equity gearing ratio has improved to 43%, reflecting our shift towards higher-value villages. This debt is a key factor in supporting our growth plans. It reflects an increase in the number of villages under construction and our investment in quality sites in high-value locations. The benefit of this strategy is also evident in the value of our new sales and in our cash receipts. In fact, our new sales lifted 15.4% to $455.9 million, the embedded value of our portfolio, which includes the resale bank of $1.87 billion, accrued management fees and resident loans is now $2.45 billion, which is not too far short of our total interest-bearing debt position. The realization of this embedded value and potential after-tax earnings over the next 6 to 7 years will support our growth aspirations as the baby boomer generation starts entering our villages. It was also pleasing that despite the challenging conditions, cash receipts from residents rose 18.7% to $1.4 billion for the year. And during the year, we invested $783 million in the portfolio, and our total assets lifted to $10.97 billion. A highlight of the year was the recognition we received for our COVID response. In Victoria, we were recognized for our industry-leading initiatives to encourage COVID safe practices, and we won a Victorian Chamber of Commerce Award for our efforts. Our team was also named Team of the Year in the 2021 LASA Excellence in Aged Services Awards. In New Zealand, we were named the most trusted brand in the aged care and retirement industry for the eighth time by Reader's Digest. That's an extraordinary achievement, which speaks volumes about the consistency of the care we offer. Our overall COVID response has been a marathon effort, and we're incredibly proud of the extraordinary dedication demonstrated by the Ryman team. A particular highlight was our vaccination program, which reached over 13,000 residents and 6,700 team members throughout the course of the year. Now well practiced, we're in the process of delivering a second booster dose to residents and staff. Our commitment to providing exceptional care doesn't waver. In New Zealand, 91% of our established villages have received 4-year certification audits. That's the gold standard of care in the industry. In Australia, our villages continue to achieve excellent results and meet the aged care quality standards. And this, of course, is despite a huge pressure on the aged care sector due to long-term underfunding of the sector and the shortage of specialist care skills. But at Ryman, of course, we offer more than just care. We offer a sense of community for which we are rightly famous. During lockdowns, this meant a rapid pivot to a digital delivery model for all our activities in the entertainment lineup. We created a speaker series featuring various celebrities as well as wellness workshops, French instruction, lessons in acting, sleep meditation and even wine tasting. We are constantly trialing new events and activities. And perhaps the highlight of the last year was our Olympics@Ryman tournament. The use of advanced technology enabled residents in all our villages in New Zealand and Australia to compete against one another for gold medals in the world's first retirement digital village games. I'd like to share with you a video showing some of the highlights of this event. [Presentation]

You really can sense the sense of achievement and celebration in that. And you'll be interested to hear that we picked up 2 Aging Asia Pacific Eldercare Innovation Awards for our approach. So you won't be surprised to hear that we're building on this remarkable achievement. This month, we have 1,300 residents across New Zealand and Australia training for a mass well-being event, which we're calling Walking for Wellness. They will use tracking devices and an app to compete in a race to walk a virtual Abel Tasman walkway in New Zealand and the Mornington Peninsula walkway in Victoria. It's our way of using technology to promote wellness, fun, connection, competition and, of course, good health. And our residents are loving the chance to give it a go. Since the start of COVID, we've sent out thousands of updates to residents and families as we navigated the changing alert levels, lockdowns and traffic light settings. We saw the need to streamline and speed up the way we communicate. And earlier this year, we launched a new resident app that has been successfully trialed in 2 villages. Residents can stay up to date with village news, events, outings and even make bookings for future activities. And we're rolling this out, and we're very excited about where this technology can take us. Although COVID hampered construction across several of our villages, we were still able to welcome residents into their new homes at 3 new villages. That's Raelene Boyle in Melbourne, Kevin Hickman in Christchurch and Keith Park in Auckland. We have also started construction on 4 new villages, Highett and Ringwood East in Melbourne, Takapuna in Auckland and Northwood in Christchurch. These villages will be home to more than 1,100 residents when they're fully completed. Our focus on acquiring and developing sites for new communities and premium locations has made great strides this year with the purchase of several new sites. The sites at Rolleston in Canterbury and Mulgrave and Kealba in Melbourne are well suited to townhouse-style developments. A new site in Coburg North in Melbourne will be an apartment style village. Last month, we also announced we had bought a new site on the shores of Lake Taupo to widespread applause, and the phone has been ringing hot ever since. We also purchased additional land adjacent to our fast-selling Deborah Cheetham Village in Ocean Grove as well as a small retirement village next to our Essendon site in Melbourne. Now these new sites give us plenty of options for future growth, but we do also have to keep an eye on increasing construction and material costs and supply chain challenges. These are real issues, which are likely to continue for some time. In New Zealand, for example, the supply of jib has been a particular challenge, and we've had to secure alternative supplies from overseas to meet our build programs. Our persistent drive for improvement would not be possible without the commitment and dedication of our teams. We depend on our team of committed Rymanians to safeguard our culture of kindness and excellence but also to deliver strong commercial outcomes. It is remarkable what the team have achieved in the past year across our villages, our construction sites and our offices. And I would like to take this opportunity to both express my gratitude to the team for their over and above efforts and to commend them on the exceptional outcomes that they have delivered. Now a particular focus for me over the past 9 months has been getting to know and building the strength of the senior team. Our regional structure supported by specialist group functions is much better suited to capitalizing on the growth opportunities in both markets but are able to respond to local market conditions while, at the same time, drawing on the scale and expertise of the broader business. Australia and New Zealand are both headed by a regional CEO with a dedicated team of general managers. It's also a structure that we can replicate to accommodate further expansion. I recently announced the appointment of our New Zealand CEO, and we were lucky to have an exceptional candidate already on the team. Cheyne Chalmers, who has been our Chief Operations Officer for the past 2 years, has been appointed to the role. She arrived just as the COVID-19 pandemic began, and her leadership throughout the crisis has been exceptional. Cheyne, would you like to just stand up and identify yourself? And Cameron Holland is also here today. Cam, would you stand? Cam, of course, is our CEO for Australia. And I'd also like to take this opportunity to introduce you to other members of the team: Marsha Cadman, our Chief Sales and Marketing Officer; Chris Evans, our Chief Development and Construction Officer; Mary-Anne Stone, our Chief Strategy Officer; and of course, our CFO, Dave Bennett, up here on the stage today at the end. I'd also like to say that Rick Davis, another member of our team, he's the Chief Technology and Innovation Officer, couldn't be here today because, unfortunately, COVID. And there's one further member of the senior team I'd also like to introduce you to. That's Deborah Marris, who joins us in September. She will be our General Counsel and Company Secretary for the group. And of course, all of the senior team will be delighted to chat to you after this meeting. So as well as working on the structure and building the team, we have been focused on defining the strategy for the future. We are, of course, as committed as ever to care as our central purpose, delivered across 4 broad themes: firstly, offering the best continuum of care for aging well; secondly, providing an unparalleled resident experience; thirdly, expanding our village network, particularly in high-value locations; and fourthly, focusing on people, people and leadership, which is central to achieving excellence in all we do, including operating in a sustainable way. And on strategy, we'll be sharing more of this later on in the year. I'm optimistic about the future. And under this management team, I am confident we are well placed to capitalize on the opportunities. In fact, we're up for whatever lies ahead. The Ryman way of living is in high demand. We have an exceptional team, a portfolio of existing villages as well as a strong land bank, all of which points to a bright future. That means a bright future for our residents, for our teams, for you, of course, and Rymanians everywhere. I look forward to meeting as many of you as I can following this meeting. And I'd like to thank you. Thank you for your support and, in particular, for your belief in Ryman. And with that, I'll hand back to Greg.

Thank you, Richard. I've seen that video a few times, and I must say, every time I see it, it really is uplifting and a great piece of work, particularly led by Mary-Anne and the team. So I just want to acknowledge that fantastic piece of work. And residents still talk to me about that. So this is marvelous. Before we give shareholders a chance to ask questions related to the financials or presentations, I'd like to deal with the formal resolutions, if I may. These were outlined in the notice of meeting. There will be an opportunity for shareholders to ask questions on each resolution being put to shareholders. When I call for questions, please clearly state your name before asking the question. I'll take questions from those present here in the meeting first before moving to any questions online from shareholders -- or shareholders online rather. I ask in the interest of fairness to all shareholders attending this meeting that anyone wishing to ask questions to be as concise as possible and be considerate of other shareholders wishing to ask questions. In addition, for the sake of good order, shareholders' questions raised should relate directly to the matter being considered in the resolutions. Now moving to the resolutions. A poll will be held on each of these resolutions. For those of you here today, you will be voting using your voting card or smartphone. If you require assistance with these, please see Link Market Services outside the front door, the door here on your left, my right. For those using the voting cards, please mark your voting intentions on each resolution of the cards, and they will be collected at the conclusion of the meeting. Shareholders voting using a smartphone can swipe left to the follow -- to follow and vote on the resolutions. For those of you voting online, you will need to click 'get voting card' within the online meeting platform. Oh, how things have changed. Please mark your voting card in the way you wish to vote by clicking for, against or abstain on the voting card. Once you have made your selection, please submit vote on the bottom of your card to lodge your vote. Please refer to the virtual meeting online portal guide or the helpline specified if you require assistance in any way to do this. Also a quick reminder that voting will remain open until 5 minutes after the conclusion of the meeting. Results of the vote will be announced via NZX. Each resolution set out in the notice of meeting is to be considered as an ordinary resolution and, as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on that particular resolution. The outcome of proxy votes will be displayed for your information after voting on all of the resolutions. All right. Turning to Resolution 2.1. In accordance with the company's constitution and NZX Main Board Listing Rule 2.7.1, George Savvides, having held office for 3 years, retires from office. He is eligible to seek reelection. George has offered himself for reelection, and I would ask him to introduce himself via Zoom. And thank you, George.

Thank you, Chairman. Good morning, shareholders and ladies and gentlemen. As Greg said, my name is George Savvides. I'm an Australian-based Board member of Ryman Healthcare, and I'm joining you from Melbourne this morning. I was first appointed to the Ryman Board 9 years ago in 2013. I'm pleased to offer myself up for reappointment to the Board of Ryman Healthcare. Apart from the Board, I contribute to the governance of Ryman Healthcare through the membership of 3 Board committees. They are the Audit, Finance and Risk Committee, the Governance nom and Rem Committee and the Clinical Governance Committee, which I chair on behalf of the Board. The focus of the Clinical Governance Committee is to oversight the care of residents from a clinical perspective and to ensure we meet and exceed the regulatory standards and accreditation requirement apply in both New Zealand and Australia. It goes without saying that over the last 2.5 years, the COVID pandemic has required the Clinical Governance Committee to meet more frequently to support management as they have had to deal with the protection of both staff and residents. And we've already heard from the Chairman and the group CEO the magnificent job our management and staff have done in the care of residents. I bring from my former executive career 25 years of CEO experience in both the Australian and New Zealand health care sector. I stood on the Board of the Global Humanitarian World Vision and also share chair the World Vision Australia Board. Today, apart from Ryman, I serve on 3 other boards. They are the ASX-listed IAG, the Australian public broadcaster SBS, which I chair, and the digital technology company, Buildxact. Finally, I believe it's an absolute privilege to serve on Ryman's board to contribute to upholding an amazing culture of resident care and innovation as well as give oversight, along with my other Australian directors and see the rapid growth of Ryman in Australia as well as contribute to the governance of the Ryman Group for the benefit of shareholders and investors. I thank you for considering my reappointment. Thank you, Greg.

Thank you, George. Look, I'd like to ask if there's any questions for George or the Board for that matter concerning this resolution from shareholders in attendance. Hello. Just, please.

Yes, Mr. Chairman. My name is John Boscawen. I've got a number of questions I'd like to ask George Savvides. I might add that a lot of them revolve around the annual report. And I had hoped that we had a chance to discuss the annual report before you put these on resolutions. But given that you've chosen to put resolutions first, let me ask my questions. Mr. Savvides, you've been a director since 2013. And I note that you've been a member of the Audit Committee since 2019. As will become clear to shareholders, I've got a number of concerns about the annual report, which -- and I believe in some aspects are actually misleading. Now that's a very bold statement to make, but one only needs to turn to Page 5 of the annual report. And I mentioned this because as a member of the Audit Committee, your committee is responsible for overseeing the financial documents that are put before the shareholders. So if you turn to Page 5 of the annual report, there are a number of statistics there. I have to put my glasses on. It makes the comment, top left-hand corner, 8,538 retirement village units, 4,229 aged care beds. Now it doesn't say that those are owned by the company or completed by the company. But that's a reasonable assumption to take. Now in actual fact, that's a total of 12,777 units or beds. And by my calculations, 450 of those weren't actually complete at the 31st of March. And that's just one reason why I think that this annual report aspects of it are as misleading. Why as a member of the Audit Committee were you prepared to oversee the publication of a document that presented that material piece of information? That's my first question. I've got several more.

Thank you, John. George, do you have an initial response?

Yes. Well, thank you, John, for that. The question that you've raised is a question that the Audit Committee does address and ensures that it does that in a way that's compliant to the regulatory standard. I think the best thing I can do is to hand over to my -- the Chair of the Audit Committee, my colleague, Claire Higgins, and ask Claire to respond to your questions. So over to Claire, please.

Thanks very much, George. And John, thank you for the question. And I also want to thank you for the engagement you've had already with Richard and David on this topic. If you could bear with me because I think the response is quite technical, and so give me a moment to work through that. At the outset, it's important to say that we're satisfied that the financial statements are correct. The relevant standard is NZ IAS 40 with respect to the fair valuation of investment property. And there are 2 main criteria to be applied as to when this valuation can take place. Firstly, we need to be satisfied that the economic benefits of the investment property will flow to the organization. In our case, we use the existence of a contract for the sale of an occupancy right as satisfying this requirement. We do not include any completely built stock that is not under contract in this fair valuation assessment. Secondly, the fair value of the construction must be able to be reliably measured. Our policy in answering this part is based on the following. For townhouses, the determination is much more straightforward and can be achieved on a unit-by-unit basis, often visually. For serviced apartments and for blocks of independent apartments, the determination that we make is weighted more towards an analysis of the costs incurred to date than a visual inspection. Where a village is approaching completion in its entirety, assessment of the construction costs for the full site become more appropriate as an indicator of being able to be reliably measured. Several years ago, we reviewed our accounting policy and formalized this process and the criteria for recognition. We have engaged with the external auditors throughout the process. They have visited our sites and reviewed the policy, our approach and its application in expressing their audit opinion. As part of this year-end process, I accompanied the valuers and the auditors on their Australian site visits and either David Bennett or Roger Nuttall fulfilled that role here in New Zealand. Having said all that about our process, we do acknowledge that the standard does not refer to the terms built, delivered or near complete. These are terms we have adopted in history to describe the assets that have been fair valued. In our efforts to simplify what is quite a complex concept, we have perhaps confused the messaging. And we acknowledge this, and we'll be considering how best to describe what makes up this investment policy valuation and how it is disclosed for our half year and full year reporting. But we are implementing the standard in this way to appropriately reflect the fair value of the investment properties in order to provide better information to shareholders and interested stakeholders, which is precisely what the standard is designed to do.

Thank you, Claire. Appreciate it. John, did you say you had another question?

I have several more questions, Mr. Chairman. Mr. Savvides, I'm very pleased to hear through Claire that the company plans to improve its disclosure. So let me ask you a question I put to the Chairman when the profit result was announced, and bearing in mind, of course, these are all documents that were signed off by the Audit Committee. In May of this year, you announced underlying profit of $255 million. And you also announced that you had built 419 units and beds in the second half, 419. I put it to the Chairman in May that of those 419, 411 weren't actually complete. You'd completed 8 of the 419, but you hadn't completed the other 411. Now I asked the Chairman to confirm that I was correct, and he wasn't prepared to do that at the time. So I'm asking you today as a member of the Audit Committee. Would you agree with me that 411 of the 419 units and beds you reported as being complete or nearly complete weren't actually complete?

John, I think you're referring to the way we use the language of describing the status of the asset. The Audit Committee's job is to make sure we comply to the standard and to attest to that. And I believe that the annual report is [indiscernible]. I really can't expand any more on that. But again, if my -- if the Chair or the Chair of the Audit Committee wish to expand, I might give them the opportunity.

Claire will talk to that. Thanks, George.

Thanks again, George. John, I think that's why the response -- we believe that we've complied with the standards, but I think it's the descriptions that we're using can be improved. And this reference to build, we have used that as a proxy, if you like, for the compliance -- the language that we've had in the standard.

Mr. Savvides, I'm sorry you weren't prepared to confirm that 411 of the 419 weren't actually complete. I personally don't need you to do that for me because I know it's true. And I know it's true because I visited each of the sites at balance day or soon after. And I've come to this meeting, one, to challenge the way the company presents its financial results but also to try and get improved disclosure. Now while I may know that, there are a number of people in this room who are shareholders who may not know that. And I thought you might have given them the courtesy of telling them that the figures quoted on Page 5 of the annual report actually overstate the actual position by 450. But let's move on. Let's move on. Both you and Claire Higgins live in Melbourne. You will know the company's villages in Melbourne. I visited the John Fludge (sic) [ John Flynn ] Village on the 29th of April. So that's 4 weeks after balance day. I found a building that had 2 tower cranes that were still being constructed, didn't have a roof on, didn't have exterior cladding, certainly had no interior fittings, had no bathrooms, no kitchens. Now I had photographs of mine published by the New Zealand Shareholders' Association and the National Business Review. And I forwarded those photographs to the chair yesterday. And I asked the Chair to forward them to the directors. So I'm assuming you've got those, directors. Now you'll know that site well. I visited that site many times. And I often go and I stand on the platform adjacent to the Royal Australian Society for the Prevention of Cruelty to Animals. And I look over that site. And I did that on the 29th of April. And I could see the building didn't have a roof on it, didn't have cladding. And if you look at the photographs I'm assuming that the Chairman forwarded them to you, I'd like you to tell me and other shareholders why you think that building is nearing completion. It's under construction. It's still not complete. I joined the Zoom meeting offered by your sales team in February of this year. Open to public. Perfectly okay. Done it many times. And they told me that building wouldn't be complete until November. Now as I remember of the Audit Committee, yes, you are responsible for the audit, but you're also responsible -- and I'm happy to quote you the paragraph in the annual report, if you want me to, that says the Audit Committee is responsible for the financial information published. Now the reason that's significant Mr. Savvides is that Mr. Umbers has disclosed that, that building was 95% presold. There's 104 units in that building. So I make that 96, maybe 98 of the 104 units at an average sale price of NZD 1 million and a 25% margin, essentially what you've done is taken $25 million of profit that is yet to be crystallized. The building is still being built. It's still being built, taking $25 million of profit that was -- would have accrued in the financial year at the 30th of March 2023, and you've moved it forward into the new year. I want to know as residents in Melbourne how seriously, Claire Higgins, how you can -- I know. I go to it myself. I'm not standing up here today trying to see extra disclosure for myself. I'm doing it on behalf of the shareholders. Now it might upset a few people, but I'm trying to do it in your interest. So my question -- I'm happy for both Mr. Savvides or Peter answer it. How can you justify building this...

I'm very happy to take that, John. So on the John Flynn side, as I've said, the accounting standards and the way our policies apply the accounting standards is around 2 factors. Firstly, will -- do we believe that the benefits will flow to the entity. And as I've said in the first -- that's the first criteria. And we believe because we have contracts in place that the benefits will flow to the entity. The second criteria is can it be reliably measured. And in our view, the costs on that site are so far advanced that we can reliably measure it. So for the John Flynn site, at the end of the financial year, we had spent almost 80% of the total costs for that site, and we had committed to over 90% of the total costs for that site. On that basis, we believe that we can reliably measure the fair value of those units. And hence, we value them in the financial statements. So that's just to deal with your comment around the bringing forward of profit. Actually, the standard requires us to fair value on that criteria, and that's what we have done. In terms -- sorry, just in terms of the language, I've already acknowledged that the words built, near complete and delivered are not as descriptive as we would like them to be, and we will definitely review them. But if we looked at it from the costs spent to date perspective, then over 80% expended on the site is, I think, a reasonable proxy for a near complete judgment. However, I think that for the layman or if you were going there without the knowledge of the standards, looking at the site and saying it's near complete can be -- that's not what we want to represent, and we will definitely be looking at that.

Look, I'm just a Chair here. I just -- look, I'm just really conscious of time, John. I mean we're happy to engage further on this, as I've offered before. I'm just conscious we've got shareholders that may want to ask some questions, and we've got some business to get through. So...

And that's fine, Mr. Chairman, and I was about to stand and say that I just have one more question for Mr. Savvides. I've got several more questions for Claire Higgins, which I'm happy to ask in general business on this issue, but I just have one more question for Mr. Savvides. Mr. Savvides, in November 2016, Dr. Kerr wrote to me about this issue. He wrote about the issue of recognition and recognizing buildings that have been built or not built. And he said and I quote, this is Mr. Kerr's email, the former Chairman, where residents are 2 to 3 months from moving into major complex stages we have felt comfortable over many years in determining build numbers that reflect the significant time frames to development. So 2 things to focus on. 2 To 3 months before the residents move in and complex stages. I'm prepared to accept this as a complex building. So in November 2016, prior to you joining the Audit Committee, the standard was recognizing buildings that were 2 to 3 months from completion. This building John Flood (sic) [ John Flynn ] is at least 10 months from completion and probably 11. So my final question to you before the resolution is put is when did the Audit Committee change that standard? Was it before you joined the Audit Committee in 2019 or after? And if it was after, why? That's my final question.

John, you referred to a comment from David Kerr, our former Chair. The standard is the standard that sits outside of Ryman, which we comply to. David gave you a description in that reference to the practical approach of engaging residence onto our purchased apartment. But can I just clarify for the benefit of all shareholders the discussion that we made about the John Flynn site? It's the same description at a different time zone, if you were to travel just down the road to the Weary Dunlop site or the Nellie Melba site. At Ryman, we don't build a village adjacent in a single episode. We stage our villages, and we progressively sell each stage. So it's no surprise that you can turn up to any of our villages, in fact, most of them, and you see cranes on site with partly built stages of village construction alongside of completed stages of villages with residents enjoying their habitation there in the village. So a description of what you saw of John Flynn in April, you're absolutely correct. I was there as well in April. I walked around the village trying to understand how we're progressing. And I met residents there who've been living there for some time in the completed state and also had an inspection of the yet-to-be-finalized stages in the construction zone. So what you described is correct physically, but the way we treat the assets in terms of our annual accounts have been described by Claire and our Chair because we comply to the standard in that way. So I hope I have assisted in giving you some understanding of the decisions that we've made at the Audit Committee.

Look, thank you, George. And John, thank you for your questions, and I'm sure there will be further dialogue. So thank you for that. I want to do other questions relating to the resolution of the reappointment of George Savvides. Anyone on here in the room? Anyone online? Mr. King, Dave King.

No. Thank you.

Look, I now propose that George Savvides be reelected as a director of the company. Do I have a seconder? Thank you, David. Thank you. Please mark your voting card in the way you wish to vote by ticking for, against or abstain in the appropriate place of the voting card. Thank you. Turning to Resolution 2.2, 2.2.1. In accordance with the company's constitution and NZX Main Board Listing Rule 2.7.1, Anthony Leighs, having held office for 3 years, retires from the office. He is eligible to seek reelection. Anthony has offered himself for reelection. As mentioned, Anthony is overseas, but he has left us with a video, which he's asked us to play on his behalf.

[Foreign Language] And good morning, everyone. Please accept my apologies for not being at the Annual General Meeting in person. I'm currently doing a course of study at Harvard University in the U.S., now this professional development I'm confident will aid me in fulfilling my governance duties at Ryman really well, if I do have your confidence and am reelected as a director this morning. I have a strong sense of pride in being a director of Ryman, a company which we've admired for a long time. Ryman is a company with such a strong purpose and importantly -- and hard earned an important leadership position in the aged care sector in Australasia. Furthermore, it's a company which has a really exciting future ahead with the opportunity for significant growth and value creation. When addressing the AGM in 2019, I said I wasn't in the market looking for directorships. And I said there wasn't another company in which I would have accepted an invitation to join their Board. That remains true today. I'm not a professional director per se. And I'm not in the market looking to build a portfolio of directorships. I genuinely believe in Ryman, and I genuinely believe that I bring value to the Board through my experience and skills in the property and construction sector. Since joining the Board and being appointed the Chair of the Design, Development and Construction, the DDC, Subcommittee as we call it, we have collectively and significantly raised the bar in regards to our village development performance and our capital expenditure management. The DDC Subcommittee has the primary objective of providing governance over the development, design and construction functions with a focus on ensuring a disciplined and structured approach is taken to capital management and, in particular, capital recycling at a village development level. We've implemented a number of initiatives, which have improved performance and village development outcomes. The job certainly isn't finished, and there's an ongoing program of work to ensure that Ryman remains a world-class designer and efficient construction -- constructor, sorry, of aged care villages. I'm very keen to remain involved and provide specialist input into the very important part of Ryman's value creation journey. For those of you who don't know me, a little bit about my background. I was fortunate to receive superb training in one of the toughest environments, the property and construction sector in the years post the 1987 stock market crash. A change in strategic direction by Downer, then one of New Zealand's largest vertical builders, saw me establish Leighs Construction at the very young age of 21. I subsequently spent the next 30 years, growing -- leading and growing Leighs Construction to become one of the largest and most successful privately owned construction companies in New Zealand. Leighs builds primarily for the New Zealand government, important projects, such as hospitals, universities, schools, even prisons and research bases and health care, quite a step. In 2021, I stepped down from an executive role in Leighs. However, I remain a director and my family proudly retains ownership of the company. I'm now involved in a wide range of development projects from commercial, industrial and residential throughout the country. In addition to my property and construction experience and skills, I believe I bring entrepreneurial, commercial and strategic skills to the Board of Ryman. Since joining the Board, the majority of the director's fees that I've earned have been used to purchase shares in the company, reinforcing, I believe, my pride and passion for Ryman as an organization. Thank you for the opportunity to speak this morning via video. I do sincerely trust I retain your confidence and will be reelected as a director. Thank you, and good morning.

Thank you very much, Anthony. I'd just like to ask if there's any questions on this resolution from people in attendance here today.

Thank you. We have actually received one online, which I'd just like to read now from a shareholder, [ Mr. Robert Reynolds ], who has asked whether there is any conflict in Anthony owning a construction company and his role as a director. What they're referring to there is that we believe there's absolutely no conflict. What we are -- we have disclosed in the annual report is that there was an arrangement for subcontracting labor and equipment to Ryman since December 2019. Those arrangements ceased during 2021 and have been disclosed. So they were at arm's length, and it was actually Anthony's organization. And bear in mind, he is a nonexecutive director, who was providing that during the COVID period. But those arrangements have ceased and, as I mentioned, were fully disclosed in the annual report. Any other questions, David?

No.

No. Thank you. Well, look, I now propose that Anthony Leighs reelected a director of the company. Do I have a seconder, please? Thank you, David. Thank you. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place of the voting card. Thank you very much. Resolution 3 concerns the authorization of the Board to fix the auditor's remuneration. Deloitte is automatically reappointed as the auditor of Ryman Healthcare Limited. Are there any questions for the Board concerning the resolution from shareholders in attendance? Hello, John.

Yes, Mr. Chairman, before I can vote on this, before I'm happy to authorize the directors to assess the auditor's remuneration, I'd like to hear from the auditors. I'd like to hear from the auditors as to why a building in Burwood East that's not built, so it's not complete, hasn't got a roof on, hasn't got walls on it, they think is nearly complete because I don't actually have confidence in the auditors until I hear from them as to why.

Thank you. Thank you, Mike.

Good morning, everybody. My name is Mike Hoshek from Deloitte and I was the audit partner on Ryman for this year. Look, I think the way that Claire has articulated the position is very accurate. The rules governing financial statements are governed by International Financial Reporting Standards. And although they can be black and white sometimes there's also an element of judgment required. And I think the way that Claire has articulated that this morning is the same way that I would have articulated. I think the key thing for us is that Ryman is following a consistent process around how they assess these nearly complete units and that the final valuation of investment property is governed under those standards at fair value. So I think from our perspective, the consistency and the judgments applied and the paper supporting that were very well made through this year, and we supported while we also visited the villages, as Claire mentioned. I think in terms of anything to do with build rate, which are outside of the financial statements, I think those questions are best directed to Ryman.

Thank you very much, Mike, from Deloitte. Are there any other questions, John?

Well, just very briefly. Given you've talked about consistency, how many other Ryman buildings do you know have been built that don't have walls, roofs, windows, kitchens, bathrooms? Have they been consistent -- have you been consistent in recognizing those sorts of buildings in prior years? That's my last question.

Thank you, John. Thank you.

I'm not sure I can answer that question directly, John. But I do think the point that Claire made around the different types of villages that Ryman have is very accurate. So town unit is much easier to understand than a large complex build like the John Flynn area. So that's the only point I'll make there.

Thank you very much. Are there other questions before we move on for that resolution? Any questions, David, online?

No.

No. Thank you. Look, I now propose that the Board is authorized to fix the auditor's remuneration. Do I have a seconder? Thank you, Claire. Thank you. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. It took us a bit longer than we anticipated, but that concludes the formal part of the meeting. Voting cards will be collected by our registry, Link Market Services, who will collect your voting cards as you exit the room. Thank you. For those shareholders online, you can now submit your vote. Our voting will open until the close of the meeting. I'd like to now give shareholders an opportunity to ask any questions, whether related to the presentations, the financial statements or the management of the company. Shareholders can continue to provide questions through the portal, and we will also address questions from the room. If you have a question from the floor, please state your name, whether you're a shareholder or a proxy holder, the name of the shareholder representative. And please wait until we bring a microphone to you so that people in the room can -- online can hear you as well. And then I'll make some closing remarks as we conclude the meeting. So I'd be happy to open up to questions. Thank you.

[ Kim Sedd ], a shareholder. Firstly, I just want to acknowledge David Kerr's service as a shareholder. 28 years is a long time, and it's an awfully long way back to being the GP, just around the corner from one of the villages. I would also hazard a guess that the balance sheet in 1994 was a bit smaller than it is now, too. Firstly, 2 questions, I would share many of John Boscawen's concerns. And a lot of it has to do with interpretation. I realize that. What I would point out that other companies such as Oceania don't book net profit until the resident is actually in residents and the calling off period has taken place. So this is a matter of the degree of conservatism that goes with that particular measurement. And I look through the annual report, just to sort of understand, bearing in mind that John Flynn show up at least publicly back in 2017. The words nearing completion only appear once on the annual report. It's not even in the definition of underlying profit. It's somewhere else in the report. If I look at it from an understanding of underlying profit, that particular section just leaves you with total confusion. So again, I looked at other companies to see what they were doing. And Oceania have a full page of definition about what underlying profit means and what components go in there and at what point profit is realized. So I would encourage the Board and senior management to just look at that whole situation again. And I think it's better to be more conservative than perhaps more liberal in this particular regard, particularly when costs at the 80% or 90% point aren't actually complete. There could well be further costs that arise, particularly in interior fit-out, some things like that with the chip crisis and so on and so forth. So I would just ask that we take a more conservative view when it comes to that. Just moving on to the revenue base. One of the things I've noticed is that for every single employee we have within the company, there is only 2 residents. That's a fairly narrow revenue base. And I'm just wondering what the company have a mind to perhaps broaden that revenue base, bearing in mind that the costs associated with running particularly the care side of the business and the development side of the business are running away.

Good questions. Thank you very much. I was just kind of looking at David Bennett here who is catching my eye and I think you might have a response to that. Thank you.

Thanks, Greg, and thanks, [ Kim ]. In response to that, I think that's one of the sort of key areas of focus for us at the moment, particularly around aged care funding because we have been a large builder of aged care beds for a long period of time. And unfortunately, the government sort of support of the sector hasn't kept up with the level of care that we wanted to deliver. And you've seen in recent years and in our future sites, the size of those key centers are going to be slightly smaller. And that is going to mean a rebalancing of that staff-to-resident ratio because, obviously, the key center is where a significant amount of our staff are based in delivering that exceptional care that the team do. And they've done an amazing job throughout the COVID journey, but it is something that we are obviously looking at in terms of our future build program but also really challenging the government and working with the sector around how we better fund the sector going forward because it's not sustainable for the sector. And you're seeing that with the level of closures coming through in the sector at the moment.

Thank you. The next question regards debt. It's something I brought up before at these meetings. I struggle to fully understand just where all that debt is. And if I look, for instance, at the $500 million that has to do with existing villages and systems, $330 million of debt against systems. But there's no explanation as to what that means. So I'm thinking to myself, is it to do with the development of the apps and so on and so forth? It seems an awfully a lot of money. But also, the real question then is, do the existing villages not generate enough cash to ensure that we don't have to borrow against them to refurbishment, et cetera?

Do you want to...

So in relation to that debt that relates to our existing villages, that is us investing and lifting the facilities and the standard of our villages, constantly going back and making sure that our existing portfolio continues to deliver a really high standard of offering to our residents. And for me, that is really key to unlocking the embedded value that we have when we talk about the $2.45 billion of resale gains and accrued management fees. We only get that if we continue to invest in those existing villages to unlock that. So you are right, we are investing ahead of that cash. But when you look at the size of the embedded value and how that's grown over the last few years, that investment is key to unlocking that going forward.

All right. And just finally, I note that our competitors often supply quarterly information, area and sales and build, that sort of thing. And it's something I've asked about before. Why can't we have a bit of visibility on a quarterly basis about what's happening? And also the other thing that the competitors provide is finished new units, but unsold. This seems to be buried. You can sort of work it out to some degree by minusing build from sales and so on and so forth. But why not be upfront and supply as much information as you possibly can? It can't be commercially sensitive because otherwise the others won't do it.

Point well made, and that's noted, and we'll take that away and give consideration to both those points you raised there regarding disclosure. It is certainly an objective of ours to improve disclosure on many fronts. And I think I mentioned to you we're doing a review across the board and a number of other things that will indicate that. So it is certainly our objective to be as transparent. We have nothing to hide here. And it's about making sure that the accounts can be easily read by our shareholders, understood, and have a very strong and clear idea of the direction and where the company is heading. So point -- thank you for that. We take that away. Thank you, [ Kim ]. Any other questions? Gentleman up there.

[ Ross ], a shareholder. I'd like to ask the directors what effect that they think the softening of the residential property market will have on Ryman.

Look, that's something we're looking -- [ Ross ], wasn't it, I think. Is that right?

Yes.

Yes. Thank you, [ Ross ], thank you for your question. That is something that we are turning our mind to as well. And we look at where our future residents are coming from. And while the market has softened now, we're not seeing that demand falling away in any shape or form. And we are finding that the residents that are coming to us are actually looking for more, not less. And so what we used to do maybe 20, 30 years ago was quite different than what we do in our design. So we used to position and price accordingly. So when someone sold down their house, they had enough equity to move in and the like. But what we're finding now is there are more and more potential customers that have got other sources of capital available to them as well. So by all, we will be keeping a close eye on that. But right now, as I mentioned, our sales are still holding. And if you think about the pent-up gains over the last 12 months, they've been considerable in equity growth even with a slight slowdown in the market today. I don't know whether any directors have got anything to add to that or -- no. So that would be our response at the moment, [ Ross ], and thank you for the question. Any other questions from -- thank you.

Name is [ Andrew Art ]. I just wanted to ask about starting levels, particularly like with nurses where I keep reading a newspaper about shortage of nurses, et cetera. How do your pay rates compare to the hospitals here or nurses moving to hospitals more money? What's it like with recruiting, retention, bringing people in from overseas, et cetera?

It's a very, very live question. And [ Ross ], I think yes? Sorry, [ Andrew ]. I'm sorry, [ Ross ] is over here. Thank you, [ Andrew ], a very live question. There is no doubt that there is a nursing shortage. DHBs are feeling that. I mean you read about it every day in the paper. What I can say is I have been -- as Chair and the Board, we're actively focused on that. And we are still caring for our residents very well, and I think a lot of that credit down to Cheyne and her team. And we had the same issue in Australia as well. Don't we, Cheyne? So as far as the pay rates, we pay the same as DHB. And it is important to make sure that we can maintain, attract and the likes of our staff. We have some advantage over the DHB when it comes to things like shift work and schedule times and the like. So -- and we are somewhat delighted with the recent moves by government, but we'd like to see them more when it comes to immigration of nurses particularly. We are in -- so was the industry. We are rather concerned about the initial offer that was provided by government to nurses in our sector. It doesn't go far enough. And I guess that's what you're seeing when people are exiting the aged care or closing down the number or reducing. The fact of the matter is that people are -- there's more people getting older, and they will need those services. So we are very much positioning ourselves as a company to be a solution and a partner with government as long as they listen. So that would be my response. I don't know, Richard, do you have any further you'd add to that?

That's great.

So thank you, [ Andrew ], Any other questions from members -- shareholders and the -- hi, John.

I do have questions, but I'm just -- I'm very happy for you to take online questions first. I would just like to flag the fact I've got a lot more questions.

Somebody was on the front. I think it was this lady here. Thank you.

[ Jane Amber ] shareholder, I have a query, during your initial address you commented on quite a few areas that are coming up with new villages being built. One of them you mentioned was Taupo and you said -- I understand you see we've just purchased the land. My understanding is that's Maryland and you have leased it. Am I correct?

No. No. Richard, do you want to talk about that? I mean you're involved.

Certainly, the location of it specifically is adjacent to an area that is Marae, but it's actually a freehold purchase that we made, and that has gone through, and we now own that land.

We've certainly had dialogue with [ EVY ]. And they will be neighbors, and we want to be good neighbors.

I was talking about the time when it was announced. And everyone was saying, they purchased it. No, they didn't. I was just saying.

Right.

The other question is because I've been a long-time shareholder, I'm very interested in the fact that the competitors are appearing to have very modern buildings. And because Ryman was literally the first big builder of retirement, their villages are starting to look a little tired, and they don't -- a lot of them don't have cafes in them, which a lot of the new -- the competitors do. So from a point of view of the competitors looking as though they are racing up to Ryman, that to me is a bit of a concern.

No, no, no. And I think you've made a very valid point, it's something that we discuss around the Board table and with the management team.

Yes, I mean I think we set the standard for the industry. And in some ways, it's quite flattering that the competition would be chasing after our standards. I would also say that in parallel to that, we have a very extensive investment program, which is also the subject of an earlier question, investing in those villages and cafes being a good example. Many years ago, they weren't a standard feature. Now they are, and we're increasingly introducing those. And not just cafes but actually significant upgrades across a great number of villages. And I think that's one of the things that we can be most proud of during a time of the lockdown and the difficulties currently in the industry that we've been able to keep that investment program going, which is great for the long term.

Okay. Thank you. Thank you, Richard. Any other questions from shareholders before we move to online? Okay. David, any online questions, please.

Yes. I have got one from Bruce Parkes, [indiscernible] now that we're in an inflationary cycle, what will be impact on the bottom line and the increasing costs [indiscernible]?

Yes. And a very, very good question and quite a live conversation. Look, fixed fees for life is a very strong point of difference for Ryman, particularly when people enter. So we find that as quite a benefit for people coming into a village. The cost inflation, obviously, we're monitoring, and it's very live and well, particularly now with a high inflationary pressure. And of course, the independent and the serviced apartment fees are just one part of the sort of revenue. And we constantly review our procurement contracts. But these are live discussions. And we're certainly acutely aware of that, but it does form part of our price promise and sort of our level of confidence for residents that turn up to our villages. And this is quite an attractive proposition for residents coming in. So -- but who knows what might happen down the track. So thank you, David.

A question from [ Dennis Gottschalk ]. The elephant in the room has not been addressed. While the presentations have highlighted the achievements, the dramatic fall in the share price has not been addressed. What is the Board doing to highlight the value of the company to institutional and other investors?

Look, no, that's right. And we're not hiding from that. We understand the pain and disappointment for shareholders. And we feel that, too. We're acutely aware of that. We are very firmly of the view that we believe we have a strategy and focus. I think we mentioned to you that we need to improve our commercial outcomes in concert to -- with our care. And that is where we're focused on. So we are looking through our management team to execute on that strategy, and that will drive value to shareholders over a period of time. So we're not hiding away from that. And of course, there have been some significant macroeconomic events that have impacted us, in fact, has impacted most markets, in fact, all markets around the world in some way or another. And -- but look, we're not hiding from that. And if someone felt that we weren't addressing the elephant in the room, it wasn't deliberate. We certainly accept that.

Final online question from [ Kevin Taylor.]. Have you considered having a dividend reinvestment plan?

Look, we constantly review our -- as you can mention, our capital management, including our dividend reinvestment plan. At the moment, the answer is no, we don't. We have no plans to introduce immediately. But I guess you never say never. And we continue to review that as we move forward, certainly around our capital structure. Any other questions, David?

That's it.

All right. John, just...

[ Andrew Hall ] again. Just a question around -- to me, Ryman has gone through a very big inflection point with moving to more expensive constructions with almost like apartment-type buildings, moving into more expensive locations in Melbourne, et cetera. With that, does it mean that it's actually taking longer to recycle the capital from a village? And like, for example, even construction taking longer, is being done in the phases. So yes, does it mean that the recycling of the capital is actually taking longer than what earlier?

Look, you're absolutely right. We continue to want to keep raising the bar, [ Andrew ], on what our service offering is. And our residents are asking us for that. The future residents are saying to us what we did 30 years ago -- and I'm sorry, I can't remember the lady's name, but she's referring to what we built 20, 30, 40 years ago is quite different than now, and the market has moved. There is no doubt, though, that we believe having a mix of high-value, best locations and a mix of what we call broad is a nice mix in that process. I mean Melbourne is a classic example whereby the pricing and the demand has been really good in recent times, and we've really found some momentum in Australia. We've been there for 10 years, I think, 2014. So is it taking longer to recycle capital? No, I don't think it is. I think what we need to do is make sure that we recycle the capital when the costs are going underneath us. And there's no doubt that construction costs are going read about it. And delay also is money and time.

I should add it, I mean, I like the way that's going and I actually do like the fact that you have made your dividend policy more flexible to better fund the growth from internal resources.

Thank you. Thank you.

Mr. Chair, I'd like to come back to the issues I raised earlier. And given previously, we were specifically discussing the resolution for Mr. Savvides, let me just make a few general points. And the first thing is for the benefit of the other shareholders, I have been a shareholder of this company for over 10 years continuously. That's the first thing. The second thing is that I encouraged my late mother to move into a -- the Grace Joel village in St. Heliers in Auckland, and she lived the last 6 years of her life there. And I have nothing but the highest regard for the company, for its care and particularly at staff. My mother was cared by Filipinos, Indians, Chinese, a lady Norway, and I have the highest respect. And I haven't come along here to kick a fuss on people, but I've come along certainly to challenge your last accounts, but particularly to raise the issue of disclosure. And I see that aspect of the annual report are misleading, and I do. And my point is that you've had a very, very tough 2.5 years. The focus has been stopping COVID from getting into your villages. And in that regard, I've got the huge respect for the previous Chief Executive, Gordon MacLeod. He had an absolute hospital pass. He had to wake up every day for 1.5 years, not knowing if COVID had gotten to as villages 500 days. But just because you've got those circumstances, there's no reason to tell people that you've got 12,770 units and beds when you only got 12,200. There's no reason to tell people that your village and John Flynn Village in Burwood East is nearing completion when it's not even halfway built. So ignoring the circumstances, these are key issues. And I want to come back to Claire because Claire talked about accounting policy. And with the deepest respect, that's a red herring. The standard you quoted has been around since 2009. I've been visiting Ryman villages since 2011. And now I can talk to you about the village in Orewa, Evelyn Page. Now the last apartment building in Evelyn Page was completed about the 20th of April 2013. And I asked Gordon MacLeod at the time he was a Finance Director, would that be included in the accounts for 31st of March 2013. And he said, no, it's not complete. The apartment building with 30 apartments, but we're not going to include it. So it's been 3 weeks later. We have moved from a situation where you've had a cutoff -- a hard cutoff on the 31st of March, to now where buildings can be counted in your construction figures that are not built and they won't be booked for another 9, 10, 11 months. So with the deepest respect, quoting an accounting standard that's been employed since 2009 is actually misleading. The second thing I'd say to shareholders is the reason I'm pushing this issue, and I'll tell you why, is because this is not the first time this company, in my view, has published a misleading and incorrect and inaccurate result. In 2016, this company said it had built 907 units, and that was a record for the company. Now that was wrong. That was false. That was incorrect. It was subsequently corrected, but it was wrong. And the reason I know it was wrong is I visited that site from the 31st of March. I took photographs. And when I went back to that village later in the year, I saw 40 of the serviced apartments, which the company claimed to have built, didn't exist. They literally didn't exist at the 31st of March. If you imagine a building that's 4 storeys high, if you've only built the first floor, building behind you. If the floor above it's not built, the floors above that can't be built.

John, I'm just really conscious of time. I really hear what you said. You've had a response from the Board. You've heard from the auditors. We're happy to engage it down the track. We agree with you that we can improve the disclosure. I think that's what we've said. But the face of the accounts or the face of the accounts, and we will defend those as being correct. So any feeling that people think that those accounts are wrong, we just need to say we would dispute that, but we're very happy to continue the engagement. I think John you're looking at the time. It's 11:30. And I'm just wondering if there's any other shareholders who have got any questions, John.

Well, I specifically waited, Mr. Chairman, until the other directors, and shareholders had finished. But look, I will bring it to a conclusion. I could ask you again if the 411 to the 419 units built in the second half weren't actually complete. And if you wouldn't answer that question, I could actually go through village by village. But you've clearly indicated you're not going to do that. So what I would do, I'll finish right now. I will simply put this in the hands of the financial markets authority, and I'll leave them to continue the discussions with them.

Thank you, John. That's fine. Just wondering if any other shareholders have got any further questions before I have some closing comments. No. Great. Nothing there, David? Okay. Thank you. Look you've got one more, have you, David?

One more. Yes.

Sorry. Yes.

I live in a village under construction -- sorry, and this is from [ Elizabeth Marks ]. I live in a village under construction with our main block care units, hospital and resident facilities not being available until the end of the year. What strategies does Ryman have to staff this facility? Have you considered offering student nurses 3 or 4 years fees -- free scholarship in return for bonded employment?

Richard, you want to answer that?

I mean you've asked a very specific scenario. I would say more generally, we're very, very conscious of the skill shortage that exists in the market and, in fact, have a number of programs in place, one of which is taking more graduates, for example, but also making sure that the terms and conditions of employment makes us an attractive place to work in a competitive market. So it is a primary focus, and I think we're making great progress on it. But the specific scenario you've just posted...

Which again, I would say is in response to [ Elizabeth ] is we do actually have bonded scholarships for nurses and -- already in play. What I would say is that, I mean, even the DHBs have started bringing in, training nurses and Dunedin is a classic. But the union and others are quite concerned about that. They need to have proper supervision, caring for people appropriately. This is not an easy job. It is a specialist job. Our nurses are highly trained, and it is vital that they provide the appropriate care. And we won't compromise on that, putting a student nurse -- no disrespect to student nurses, but they're new. And leaving them unsupervised or -- which is what's happened -- allegedly happened in Otago with all the DHB down there. So there's no doubt the nursing situation is tight. And we are looking for nurses again offshore so as part of our solution to that. So thank you. I think that was it, David. Was it? Yes. Thank you. Look, before I close the meeting, though, I would like to say a few thank yous. I won't take long. We already have acknowledged the extraordinary contribution made by Dr. David Kerr for Ryman over the years. As mentioned, David has served on this Board for 28 years and has played a huge role in the guiding success of Ryman. I joined Ryman Board a little over a year ago and succeeded David as Chair on 1st of January of this year. His support during my transition period has been greatly appreciated. And we are delighted that we will still have access to his clinical wisdom as he continues to work as an adviser to our Clinical Governance Committee in a very important time. His knowledge of aged care clinical issues is outstanding, and it is so great that he has agreed to stay on. So thank you, David. It's been a pleasure. Thank you. Thank you. Thank you for that. I'd also like to thank the rest of the Board for your support. Owners can be assured you actually have an extremely hard-working Board, and there's no shortage of debate at the table. I mentioned before, one at the time, we're in the midst of an independent review of our skills matrix, our functions and succession planning. And we report back to you when that's complete, much of it confidential. I'd also like to thank Gordon MacLeod. He's not here today. He passed on his apology. And I should have registered that. It slipped my mind. Our former CEO who stood down last year after 15 years on the senior team at Ryman. And we really wish him well in his new endeavors. I've really enjoyed getting to know Richard, as we build our CEO, Board Chair relationship. And I thank you, Richard, for your great work thus far. But I'd also think our residents and families for their support, that's what it's all about. Moving into a Ryman village is a really big decision, and it's one that is built on trust. And we take our responsibilities in that space extremely seriously. The other side of that relationship, of course, is our team. They collectively do a superb job, which is demonstrated by the extraordinary bonds they form with our residents. And I can't thank the 6,700 of them enough for what they do. It is outstanding. We have a hugely experienced senior team across Ryman, who in many ways are the guardians of the culture of the company. We are conscious as a Board how much work so many people put in to make the company the success and how we -- and how hard it has been, particularly in COVID times in the last 2 years. And finally, I'd like to thank you all as owners. Your support is appreciated. This is a long game. We're in unusual times. We've never seen this before, and there isn't a rule book. As we come -- touched on, 2 years of the pandemic, followed by macroeconomic headwinds make for those interesting times. And as I touched on before, this has definitely been reflected in our share price. And believe me, we do reflect on that. We are laser-focused on delivering our care promise, and our commercial potential goes hand in hand. We know this is a special company with an enormous potential to continue to grow and thrive in the years ahead. We, as a Board, look forward to delivering that potential for residents, for shareholders and for other stakeholders. I'd like to welcome you, please, to join us for a cup of tea and a bite to eat and a catch-up. [Foreign Language] Stay safe, and thank you for your attendance.