Ryman Healthcare Limited (RYM) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Ryman Healthcare's Annual Shareholder Meeting. I hope you enjoyed the highlights of the past year that's beautifully showcased in the video. My name is Claire Higgins, and I'm Interim Chair, having assumed the role in November 2022. It's my pleasure to welcome all shareholders to the meeting here in person and online. I would also like to thank -- to welcome all of the Rymanians who have joined us today, including the senior executive team. Joining me this morning are fellow directors, Warren Bell; Jo Appleyard, Anthony Leighs, Paula Jeffs, James Miller, Dean Hamilton and Geoffrey Cumming. Also on stage are Richard Umbers, our Group CEO; Deborah Marris, our Group General Counsel and Company Secretary; and Dave Bennett, our Group Chief Financial Officer. We have the following order to today's proceedings. I will make a few comments on the year that's past, after which I will hand over to Richard for his overview of the year and future outlook for the business. Following this, we will move to the meeting resolutions and then on to general business where you will have the opportunity to ask questions. We aim to finish the meeting by 11:30 a.m. and we invite you to join us for refreshments afterwards. You will have a chance to ask questions and vote on each of the meeting resolutions as they are considered. I will provide further instructions as we move through the meeting. However if you encounter any issues, please refer to the virtual Annual Meeting online portal guide or you can find the help line on 0800-200-220. You can send through your questions at any time via the online portal by clicking the link shown here on the screen. I would encourage you to do so as early as possible as this will allow us to answer these questions at the appropriate time during the meeting. Voting on the resolutions will be conducted by way of a poll. For shareholders joining us in person today, you would have received -- have validated or been given your shareholder voting card. If you are a shareholder and did not register 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 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 click on Get a Voting Card button within the online meeting platform, which is shown here. You will be asked to enter your shareholder or proxy number to validate your voting card. And voting will remain open until 5 minutes after the conclusion of the 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. We have not received any apologies today. 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 have been appointed for the purposes of this meeting in respect of approximately 427 million shares, representing approximately 62% of the total number of shares. I'd like to sincerely thank shareholders for participating in today's meeting. My fellow directors and I will vote all discretionary proxies we have received in favor of the resolutions as set out in the Notice of Meeting. And as detailed in the Notice of Meeting, all directors unanimously support each resolution. Our annual report for the year ended 31 March has been circulated to shareholders. This is available online on the Investor section of our website and the NZX. I would describe this past year as a crucial year in the history of Ryman Healthcare. The Board and management team are working closely together to reposition the business for improved performance, both in the near and longer term. Importantly, we have continued to deliver great care to our residents and build trust in our brand, and we continue to be true to our purpose. Having said that, we recognize that our shareholder returns have been unsatisfactory. In addition, the equity raise earlier this year and the suspension of dividends were significant decisions that have impacted shareholders. We recognize this and are working hard to rebuild your faith. Firstly, we have taken the time to fully understand the factors that led to the equity raise. We must be honest and face into the fact that there have been matters within our control and actions we have taken over a number of years, particularly in regards to the pace and complexity of growth that meant that we did not have enough resilience in our balance sheet to withstand significant shifts in our environment. The onset of COVID and its effects on costs, supply and labor constraints and particularly construction cost inflation, together with the effects of interest rate rises and a flat real estate market, tested this resilience. Ultimately, the best decision for the business was to raise equity in February of this year. We believe it was an important step to reduce the level of debt in the business and reset our capital structure. This is particularly important given the near-term outlook for a more challenging environment. And it's also in the context of the scale of committed developments we have underway, and we will deliver on the promises we have made to our residents to deliver a continuum of care to them. On behalf of the Board, I want to take this moment to thank all shareholders who supported the equity raise. This year, we have also focused on resetting the business and have taken important steps towards repositioning Ryman for the future. This shift in strategy is designed to deliver both care and improve financial performance. Being great is critical to having a sustainable future. This includes a heightened focus on our development returns, particularly cash recycling, and ensuring we're building the right villages in the right place with the right mix of independent living and care. We will continue to review our land bank in light of this and have already made changes to build prioritization -- to our build prioritization and land bank. At the same time, we are reviewing the performance of our completed villages. Opportunities to improve care returns and overall village returns are all being considered. Our strategy reset will take time to play out. We invest in long-dated assets, which have significant lead times and take a number of years to build. We are also looking at how we measure our success. Underlying profit has been too prominent in driving some of our decisions. It needs to sit alongside other metrics, which more closely align with cash flow. We have commenced and we will be relentless in lifting every rock to improve performance and transparency and deliver the returns that you are entitled to expect from this company. As stated at our full year results, the Board will consider the resumption of paying dividends in FY '24, taking into account trading performance, cash flow and market conditions. The Board is currently in the process of reviewing the dividend policy, and we will look to provide an update at the time of the interim results in November. Following the capital raise, Dean and I have been engaging directly with investors. We heard very clearly your call for increased disclosure and transparency. We've made some steps towards this in both the full year presentation and the annual report, in particular, in the areas of recognition of units in the portfolio and our lending covenants. We have quite some way to go, and we'll be continuing this theme of improving transparency and disclosure. During the year, we conducted a full Board review of skills, tenure and composition. We recently announced a sequence of changes to the makeup of the Board. I stepped into the role of Interim Chair in November 2022. And I would like to thank my predecessor, Greg Campbell for his contribution to Ryman. We have focused on refreshing Board leadership and bringing in new capability to the company, and we're very pleased to announce the appointments of Dean Hamilton and James Miller. Both joined the Board as directors on 1 June and are standing for re-election today. Following his previously announced intention, George Savvides retired from the Board on 1 June, and I'd like to thank George for his contribution, particularly as Chair of the Clinical Governance Committee. And long-standing directors, Warren Bell and Jo Appleyard, retire today. I'd like to express my gratitude to Jo and Warren for their dedication and commitment as members of our Board over many years. Jo has brought deep knowledge in the areas of industrial relations, consenting, people, health and safety and clinical governance over her tenure. And Warren has been the previous long-standing Chair of our Audit Committee. He brings the passion and understanding of many of our residents and shareholders to the Board table and has been a strong contributor over many years. Personally, I would like to thank them for the support they have given me over the last 8 months. It is deeply appreciated. And I know that I speak for the entire Board management when I thank them and wish them the best. In addition, Geoffrey Cumming has announced that he will not seek reappointment when his current term expires in 2024. And as you will have seen in the Notice of Meeting, I have agreed to stand for re-election for a further 18 months in order to assist with Board transition. This will complete a significant renewal of the Board by December 2024. Ryman is on a journey. We are positive about the future, and we remain committed to providing impeccable care, and we are absolutely committed to the long-term financial success of the business. I'd like to acknowledge the resilience and professionalism of Rymanians across the business. Thank you all for your hard work and commitment throughout this past year. And a very special thank you again to our shareholders. We appreciate your continued support and belief in Ryman. I will now hand over to Richard for his perspective on the year, but will speak to you shortly to present the resolutions and general business of the meeting.

[Foreign Language] Thank you, Claire. Nice to see you all here. Thank you for joining us this morning. Before I talk to the year that's been, I'd like to take this opportunity to introduce my team. There have been a number of changes to our senior executive team this year, further strengthening our bench of experience. Please let me introduce you to our newest team member, Di Walsh, who joined us in January this year as our Chief People and Safety Officer. Deborah Marris joined us in September 2022 as General Counsel and Company Secretary for the group. Cheyne Chalmers is also here today, our CEO for New Zealand. Cameron Holland is here today, our CEO for Australia. Chris Evans, Chief Development and Construction Officer; Mary-Anne Stone, Chief Experience and Engagement Officer; Rick Davies, Chief Technology and Innovation Officer. And of course, our Chief Financial Officer, Dave Bennett, up here on the stage today. As previously announced, Dave will be transitioning into the Chief Strategy Officer role and will remain as the CFO until a new appointment is made. We're currently hiring for the new CFO, and we hope to be able to make an announcement on this shortly. I also acknowledge the extraordinary contribution made by the broader Ryman team, who worked tirelessly day in, day out to deliver on our promise. The strength of the Ryman team gives me every confidence that we will deliver on our care promise, reposition the business to capitalize on the future opportunities and improve the financial performance. This year, we have taken steps to reposition the business for future success, but it has not been an easy year. We've had to navigate a number of challenges, including a tough economic environment, severe weather events and the tail end impacts of COVID-19. So just to touch on the headline metrics for FY '23. Our IFRS profit decreased by 62.8% to $257.8 million off the back of a lower revaluation uplift on investment property and costs associated with the early prepayment of the USPP debt. Our underlying profit increased by 18.4% to $301.9 million, and our portfolio of retirement village units and aged-care beds increased by a net 821 in FY '23. As highlighted at our full year results in May, we have introduced new metrics to provide a broader perspective on how the business is tracking and which are more aligned to our refresh strategy. Our operating EBITDA, which focuses on the performance of our existing operations, continues to grow, reflecting the investment we've made in recent years. We invested over $1 billion in our portfolio in FY '23, which was a driver of negative free cash flow. However, the repositioning of our development pipeline will enable us to target positive free cash flow by FY '25. Our equity raise at the end of the financial year was a major event for shareholders and the business. Strengthened our balance sheet, enabling the repayment of debt and leaving us much better able to execute on our strategy. I'd like to thank all of our shareholders who participated. The total cost of repaying our USPP notes and associated swaps was $855.5 million, which contributed to net debt reducing from $3 billion at September 2022 to $2.3 billion at March of this year. As Claire touched on, we also increased disclosure in several areas, and we continue to review our disclosures in light of feedback we have received in order to improve transparency. Before I talk to the strategy, I'd also like to reiterate that our core purpose remains unchanged. Freedom, connection and well-being for people as they grow older. We will continue to offer care that is good enough for mom and dad and deliver unparalleled resident experiences. And we need to do this in a commercially sustainable way. Ryman will continue to operate a vertically integrated business model that is building, selling and operating our retirement villages with an offer that provides a full continuum of care. This year, we've refined our strategic initiatives to improve capital efficiency and performance, including an increased focus on cash recovery from development as well as improving returns from our existing villages. Three areas we focused on to support this include: rebalancing our portfolio to lower density townhouse-style developments; right-sizing our care offering in new villages; and introducing care suites and other design innovations to meet growing market expectations for a premium care offering. Turning to our existing villages, including -- these initiatives include optimizing our pricing strategy, including a trial of alternative DMF structures; maximizing resales via our refurbishment program; and increasing our focus on operational efficiencies. This represents a significant shift in our strategy, and it will take time to execute. Turning to development. A significant level of construction activity remains underway on both sides of the Tasman. During the FY '23 period, we completed our Linda Jones Village in New Zealand, and our Charles Brownlow and Raelene Boyle villages in Australia. At the time of our full year result, we had 9 sites under construction in New Zealand and 5 in Victoria. Following our result, I'm pleased to announce that we have opened another 3 villages with the first residents now moved into Northwood in Christchurch, Cambridge in the Waikato and Bert Newton in Victoria. A number of legacy projects still under construction will take time to complete. In addition, a significant component of our near-term program is main buildings, which in isolation don't recycle capital and, in a number of cases, have larger care centers than we would build today. They are, however, a critical part of our offer and a part of the promise we made, a promise to existing residents when they moved in. We continue to monitor the market closely and to manage our pipeline in light of the sales velocity. We remain cautious about market conditions and are particularly mindful of the lagged impact of high interest rates on the housing market. We therefore anticipate our portfolio increase towards the lower end of our $750 million to $800 million outlook for FY '24, and therefore, net investing cash flows towards the lower end of our $800 million to $1 billion range. As signaled previously, we are reevaluating our land bank with the intention of including more open plan developments for a better commercial return and improved capital recycling. Our developments have long lead times and a number of existing projects must be brought to a close. Other projects will be re-prioritized to optimize returns. You can expect us to continue bringing new villages to market and carefully selected locations based on local demand and a strong commercial model. During the year, we sold Mount Martha in Victoria, and new town is currently being held for sale. We will continue to evaluate the feasibility of all our developments before commencing construction. Care. Care is paramount to what we do. It's in our name. We're the market leader, and we have been for some time. In Australia, our continuum of care is widely talked about as a game changer. At the opening of the new apartment block at our Nellie Melba Retirement Village, Victorian Premier, Daniel Andrews, praised the quality of staff and the vibrant community at our village. Throughout the year, Ryman has maintained the highest standards of care and resident experience, both remain key priorities. 82% of our new villages have 4-year certification. In Australia, all 4 of our operational care centers received a 4-star rating following the launch of a new rating system for aged care. Aged-care occupancy for mature villages has improved steadily throughout the second half of FY '23 to over 96% at the year-end. I should also take this opportunity to comment -- to make a comment about the broader aged-care market. We continue to see a decline in the overall availability of care beds because of funding pressures and skill shortages as demonstrated by the closure of over 1,200 beds in New Zealand in 2022 alone. I want to assure you that we are actively campaigning both for a rewrite of the aged residential care contract in New Zealand and for a co-contribution model in care in Australia. We continue to deliver improvements to our resident experience, lifting industry standards and seeking to exceed resident expectations with ongoing investments in technology to enhance our activities program. Our recently launched resident app is a platform to improve access to a wider range of activities and services within our villages. It's now being used by over 2,500 residents in 20 villages. Similarly, hospitality platform, Saffron, piece of technology is now being rolled out to all villages to enhance our food offering. Our active aging event for residents this year was walking for wellness, which saw more than 700 residents participating and walking a combined total of 43,000 kilometers. Winning the New Zealand Reader's Digest Most Trusted Brand award, our 9th win since 2015, is testament to the quality of our care and the dedication of our people. Our team did a remarkable job in responding to the ongoing impacts of the pandemic and adverse weather events, including Cyclone Gabrielle. They went above and beyond to ensure our residents were kept safe and well cared for. The launch of the company's sustainability strategy during the year was a major milestone in our journey to a sustainable future. As part of creating our strategy, we undertook a formal engagement process that helped us identify the most critical issues that are impacting our stakeholders. For the first 12 months, we identified 3 priority areas, including climate change, quality care through future-focused dementia design and indigenous engagement. As a step towards addressing our environmental impacts this year, Ryman secured an exclusive agreement with renewable energy developer, Solar Bay, and Mercury Energy, a first for the retirement sector. The solar farm is expected to generate 30 gigawatt hours of renewable energy, which is a significant proportion of the approximately 40 gigawatt hours we currently use across the whole of New Zealand in a year. Our full sustainability strategy is, of course, available on our website. Looking ahead, our underlying profit guidance for the FY '24 period remains in line with that given at our full year result. As highlighted, it has been a transitional year and we are still in a challenging macroeconomic environment. However, this year, we have taken important steps to reposition the business for the future and continue to be positive on the long-term aged and wealth demographics in both New Zealand and Australia. But it is going to take time. Ultimately, we want to deliver great care and great financial returns to shareholders. I'd like to again acknowledge and thank our people. That is 7,200 Rymanians who come together each day to develop our village communities and deliver quality care and exceptional resident experiences. They make our culture unique. And they play an integral role in our overall business success. We thank each of them for their dedication and commitment. I would also like to say a special thank you to you, our shareholders. We're grateful for your ongoing support and for your confidence in our capacity to deliver in the future. And of course, I look forward to meeting some of you following this meeting. Claire, back over to you.

Thanks very much, Richard. We will now move to the formal meeting resolutions, which 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 will take questions from those present here in the meeting first before moving on to any questions from shareholders online. I ask that in the interest of fairness to all shareholders attending this meeting that anyone wishing to ask questions be as concise as possible and be considerate of other shareholders wishing to ask questions. And for the sake of good order, shareholders' questions raised should directly relate to the matter being considered. Now moving to the resolutions. A poll will be held today on each of today's 5 resolutions. For those of you here, you will be voting using your voting card. If you require assistance with this, please see Link outside the room. And for those of you present at today's meeting, please mark your voting intentions for each resolution on the voting cards and they will be collected at the conclusion of the meeting. For those of you voting online, you will need to click Get a Voting Card within the online meeting platform. Please mark your electronic voting card in the way you wish to vote by clicking for, against or abstain. Once you make your selection, please click Submit Vote on the bottom of the card to lodge your vote. Please refer to the virtual meeting online portal guide or use the help line specified if you require assistance. 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 the NZX. Each of the resolutions 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 the resolution. The outcome of proxy votes will be displayed for your information after voting on all resolutions. There will be an opportunity for shareholders to ask questions on each matter being put to shareholders. And I ask again that the questions raised should relate directly to the matter being considered. When I call for questions, can a shareholder please -- present in the room, please raise your hand and wait until a microphone is provided to you. Clearly state your name, whether you are a shareholder or, if a proxy holder, the name of the shareholder represented. And I'll take questions, as I've said, from those present in the meeting before moving to any online questions. Turning to Resolution 1. Pursuant to Section 207T of the Companies Act 1993, Deloitte is automatically reappointed as the auditor of Ryman. The proposed resolution is to authorize the directors under Section 207S of the Companies Act to fix the remuneration of the auditor, Deloitte, for the ensuing year. Are there any questions of the Board concerning the resolution from shareholders in the room? Thank you. Are there any questions online?

There are no questions online.

I now propose that the Board is authorized to fix the auditor's remuneration. Do I have a seconder? Thanks, Anthony. Thank you. Please mark your voting card in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. Turning to Resolution 2. Under NZX Listing Rule 2.7.1, a director appointed by the Board must not hold office without re-election past the next Annual Meeting following the director's appointment. Dean Hamilton was appointed as a non-executive director with effect from 1 June 2023. Dean is considered by the Board to be independent. And Dean, accordingly, retires and offers himself for re-election. He will now introduce himself.

Thank you, Claire. [Foreign Language] Good morning. My name is Dean Hamilton. I joined the Board on the 1st of June this year, and I seek your support for re-election by shareholders. By way of background, I've had a working career across both finance and commerce. It feels a long time ago now, but I studied at Victoria University in Wellington, graduating with a Bachelor of Commerce. In finance, I started out as an equity analyst, moving into investments and then later as an investment banker, advising on mergers and acquisitions and capital raisings. And during that time, I lived with my wife and family in Melbourne for some 7 years. In commerce, I've held general management and CEO roles across food and general manufacturing. Most recently, I was the CEO of Silver Fern Farms, New Zealand's largest red meat processor and exporter. And at the time, New Zealand's second largest industry manufacturer behind Fonterra. We had revenue of over $2 billion, some 7,000 staff, some 21 sites, and we exported around the world to over 30 countries. Alongside the team there and with the support of the Board, we led a substantial program of change and improvement across profitability, debt reduction and working capital improvement. We also improved our staff engagement, our engagement with our 15,000 farm suppliers as well as the consumer trust in the Silver Fern Farms' brand. The company has since continued to grow and perform. Some 5 years ago, following the Silver Fern Farms' role, I moved into Board governance. I'm currently the Chair of Fulton Hogan, another large successful Christchurch-based business with operations in New Zealand and Australia. I'm also a Director of Auckland Airport and the Warehouse Group. I'm excited by the potential to take on the Chair role at Ryman. From what I've seen, Claire has done a great job since taking on the Interim Chair role in November last year at a challenging time. And I appreciate Claire's offer to stay on for a period to help the Board through the current transition. The company has a proud history. It is the industry gold standard for care. I know that Ryman plays an important part in people's lives and makes a significant social contribution. We need to maintain this great care, but at the same time, drive improved financial returns. It has been a tough few years for shareholders. We need to find a more sustainable balance. If elected, I look forward to bringing my experiences across finance, across commerce and across governance to help on that journey. I would appreciate your support today to be elected as a director of Ryman. [Foreign Language] Thank you.

Thank you, Dean. Are there any questions for Dean or the Board concerning this resolution from shareholders in the room? John?

Mr. Hamilton, you are a man, obviously, of considerable accomplishment in business. So thank you for putting your name forward for this position. I've come to this Board meeting to ask you questions and the directors other questions. But let me briefly start by saying that I encouraged my mother to purchase the service department of Graco stroller in 2014, and she passed away 6 years later, and she had nothing about the high standard of care during that time of visiting, which is daily over 6 years. So I have a huge respect for this company. And I also acknowledge the huge difficulties that the previous CEO, Gordon MacLeod, had with COVID [indiscernible]. Having said that, I've been very critical of the way this company has been run in the last couple of years, in particular with disclosure. Now I suspect I'll probably vote for you, but it would give me a great deal more confidence if I knew that you had quickly come up to speed on some of the issues that this company faces. So if I can refer to Page 7 of the annual report, it summarizes that there are 4,456 care beds, 9,142 retirement units, or 13,600 units in total. I just simply ask you, of those 13,600, how many roughly aren't actually completed? How many are actually earning the company any revenue, within the nearest 100?

Actually, I couldn't tell you the answer today. The annual report predates my appointment. So someone who was on the Board, signed off on the accounts at the 31st of March.

Okay. Well, [indiscernible] let me make that easy for you. It was 700. It was 700 units reported only assets that don't actually -- haven't actually been completed and don't actually earn revenue for the company. If I turn to Page 5 of the annual report, it talks talked about the company being in the sixth year of its Integrated Reporting framework and it talks about encouraging the business to report against issues most material to the stakeholders. Can I ask you, do you think that the number of assets that company has, how many beds, how many units regarded as material? And if you do if that's the case, when you take up the position at Ryman, will you commit to providing greater disclosure? So shareholders -- I feel I know the company very well. I visited all of its villages and its construction sites throughout Australasia. But there are other shareholders in this room who haven't got the benefit of my knowledge and experience. And I think this company couldn't prove its disclosure great deal. Thank you very much. I've made my point.

Thank you, John.

Thanks very much, John. Are there any other questions for Dean? Are there any questions online?

There are no questions online.

Thank you. I now propose that Dean Hamilton be re-elected as a director of the company. Do I have a seconder, please? Thanks, Anthony. Please mark your voting cards in the way you wish to vote for by ticking for, against or abstain in the appropriate place on the voting card. Now turning to Resolution 3. Under NZX Listing Rule 2.7.1, a director appointed by the Board must not hold office without re-election past the next Annual Meeting following the director's appointment. James Miller was appointed as a non-executive director with effect from 1 June 2023. James is considered by the Board to be independent. James accordingly retires and offers himself for re-election, and he will introduce himself now.

Thank you, Claire, and good morning, shareholders. It's important that you know a little about me, what I have to offer, what drives me, if I'm going to represent you on the Board of Ryman Healthcare. Firstly, I'd like to give a brief recap of my career to date before secondly looking at my governance role at Ryman Healthcare. As the youngest of 5 boys and a sister, I developed a very tough spirit at a young age. I was born and raised on a farm outside [indiscernible]. My early career was in [indiscernible] Wellington before settling in Auckland. I'm a qualified accountant, a certified securities analyst professional and a fellow of the Institute of Chartered Accountants, Institute of Directors and the Institute of Finance Professionals New Zealand Limited. I hold a Bachelor of Commerce from Otago University, and I'm a graduate of the Advanced Management Program at Harvard Business School. My commercial experience is well documented. I'm an experienced commercial director with strong skills in managing the audit and risk function. I'm currently on the -- currently Chair of the Audit and Risk Committees for Mercury Energy and Vista. My current Board roles, Chair of Channel Infrastructure and a Director of both Mercury and Vista. I previously held Board positions with the NZX as Chair, Auckland International Airport, the Financial Markets Authority and Deputy Chair of Accident Compensation Corporation and at that I was Chair of the Investment Committee. At ACC, I learned about the profession of health care services at scale. I have a particular focus on the financial numbers and shareholder wealth creation. My years in share breaking has given me a specialist understanding of market economics, the value drivers of a company and appreciation of how the investment market perceives us. For me, Ryman Healthcare has great appeal. I'm delighted to be involved with the company that has the best brand in the market with a leading market share with its core position as a retirement health care provider. This sector has well-known strong demographic drivers as the baby boomer generation retire. Clearly, following the pandemic and cost of living issues, we need to ensure that our cost structure and capital allocation remains tightly aligned with the reality of the current business environment. I'm passionate about returning Ryman Healthcare to its former financial glory and to deliver value for customers, shareholders and to be a great place to work. Shareholders, it's a privilege to stand here today seeking election as a director on the Board of Ryman Healthcare, and I ask you for your support. Thank you.

Thanks very much, James. Are there any questions for James or the Board concerning this resolution from shareholders in the room? Thank you. Are there any questions online?

There are no questions online.

Thank you. I now propose that Johns Miller be re-elected a director of the company. Do I have a seconder? Thank you, Anthony. Thanks very much. 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. Next, we move to Resolution 4. Non-executive director, Paula Jeffs, retires by rotation pursuant to NZX Listing Rule 2.7.1 and offers herself for re-election. Paula is considered by the Board to be independent. Paula accordingly retires and offers herself for re-election, and she will now introduce herself.

Thank you, Claire. [Foreign Language] Good morning, everyone. Thanks for the opportunity to say a few words as I offer myself up for re-election at an important time for the company and amidst a period of significant Board renewal. I ask for the opportunity to serve on the Board for another term as the company navigates a period of transformation to ensure we're achieving sustainable and profitable returns for our shareholders, whilst maintaining our Ryman point of difference of our promise of being good enough for mom and dad. A bit about me. I'm an Australian and I live in Melbourne and joined Ryman as a Director in 2019. Ryman is the only director position I hold as I also work full time as the Executive General Manager for People, Safety and Transformation at Melbourne Water. My experience includes executive roles in listed and public organizations, working deeply with Boards from the management side. This includes 8 years of working in health care, helping to shape culture, workforce, health and safety and clinical education. I have led large workforce reform and business transformation programs in highly regulated service organizations to adapt and respond to changing environments. I hold undergraduate qualifications in psychology and media as well as post-graduate qualifications in business and industrial relations. I'm also a graduate member of the Australian Institute of Company Directors and a member of the Australian Human Resources Institute. Whilst I'm not a career director yet, I hope you'll agree that I bring relevant experiences and skill sets that complement our Board, and that I offer continuity while we undertake a period of renewal. For the majority of my term, I have been the Chair of the Board's People and Safety Committee. The committee carefully monitors and governs Ryman's performance and compliance with our health, safety and workforce obligations. As part of that work, the committee completes a deep dive at each meeting into a critical safety risk, taking insights from these into annual Board site visits where we observe how these risks are managed in action. This practice is one example of how we support Ryman's commitment to safety first that flows from the Board table through to our team working on the tools and in the villages. The committee also supports the development and monitoring of people plans to attract, retain, reward and secure our valued teams who are the heart and soul of delivering on our Ryman promise to our village residents. Since April '22, I've also been a member of the Governance, Nominations and Remuneration Committee, which has supported the interim chair in facilitating our Board renewal program. Should I be re-elected, it's planned that I will transform from the G&R Committee to join the Clinical Governance Committee, where I can contribute my experiences in clinical governance to support Ryman's strong reputation for delivering outstanding care, which is our distinct point of difference from competitors. In offering myself up for re-election, I commit to ensuring we preserve Ryman's strong culture of care and resident experience, while we do focus on driving stronger performance and shareholder value and steer the organization for sustainable long-term growth. Thank you.

Thanks, Paula. Are there any questions for Paula or the Board concerning this resolution from shareholders in the room? Thank you. Are there any questions online?

There are no questions online.

Thank you. I now propose that Paula Jeffs be re-elected a director of the company. Do I have a seconder? Thank you. Thank you very much. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place. Thank you. Turning now to Resolution 5. Given that this resolution refers to myself, I will hand over control of the meeting to Anthony Leighs, Deputy Chair.

Good morning. Non-executive director, Claire Higgins, retires by rotation pursuant to NZX Listing Rule 2.7.1 and offers herself for re-election. Claire is considered by the Board to be independent. The Board unanimously supports the re-election of Claire for a period of 18 months. Claire has agreed to assist the Board for a period of transition as a number of directors retire and new directors are brought on to the Board. The Board is also seeking an orderly change in the Audit, Finance and Risk Board Committee, of which Claire is Chair. This change is intended to occur at the same time as the company recruits a new Chief Financial Officer, as has previously been announced. The Board's intention is for James Miller to take over the Audit, Finance and Risk Chair role post this year's interim result later this year. Claire will now make some comments.

Thank you, Anthony. Today, I am seeking your support for an 18-month re-appointment to the Board. I was initially appointed to the Board in 2014, almost 9 years ago. And for those of you who are not aware of my background, I am a fellow certified practicing accountant and a fellow of the Australian Institute of Company Directors. I have been a company director for over 20 years with a variety of experience across health care in both the public and private sectors, private health insurance, superannuation, manufacturing, emergency services and water management. During my time with Ryman, I've taken the lead in the establishment of what was initially the Health and Safety Committee, now People, Safety and Remuneration Committee. And I also took on the Chair role the Audit, Finance and Risk Committee. I am an active participating Board member and have visited, at some time or other, almost all of Ryman's villages, constructional land sites. In November 2022, I agreed to take on the role of Interim Chair until a new Chair of the Board could be appointed. And in the past 8 months, I've been working productively with the Board to deliver the capital raise, Board renewal and support Richard and the management team with the delivery of the shifts in strategy. I am proud to be working for Ryman. The Ryman team that I've met throughout New Zealand and Victoria are truly dedicated to our purpose. And I'm also very pleased that Dean James and -- Dean Hamilton and James Miller have agreed to join the Board. Their skills, style and leadership are important to the future of Ryman. As part of that recruitment process, I agreed to re-stand for re-election and to stay whilst the Board transition takes place for up to 18 months. And it is on the basis of this transition plan that I'm seeking re-election. Thank you.

Thank you, Claire. Are there any questions for Claire or the Board from shareholders in the room? John?

John Boscawen speaking. Claire, firstly, let me thank you for taking on this position as acting chair. You didn't see that coming and that would have been a considerable inconvenience to you. So let me thank you first and put that on the record. The second thing, you mentioned in your earlier presentation that you and Mr. Hamilton have [indiscernible] and found a requirement for increased disclosure. If I take you back to Page 7 of the annual report, which summarizes those numbers of beds and number of units I referred to earlier, you will see along the side of the word, care beds, a very small #3. And if you look at the footnote, small #3 refers you to Appendix 23 in the company's annual presentation. So for shareholders who are on time to go to that degree of digging, they can actually calculate that there are 700 units -- approximately 700 units, which the Board is reporting as part of its asset banking as not having been completed. I appreciate you staying on the Board for the next 18 months, but it would give me more confidence if you actually took on Board what your shareholders were telling you. So my question to you is, do you think hiding the fact that there are 700 units from beds which aren't actually completed in a footnote that refers to appendix 20 through another document, do you think that's adequate disclosure?

Thanks very much, John, for your question. And firstly, I would like to say that I want to acknowledge actually the passion that you have for this business, not just from your mother's perspective, but also -- no, I know the passion that you have for actually visiting the sites and understanding the business so deeply. I want to acknowledge that because I think it's an absolute credit to you. So that's firstly what I would like to say. Secondly, what I would like to say is that we did make a commitment last year to improving disclosure. And as I said earlier today, we haven't gone far enough yet. I'm disappointed that I hadn't picked that one up actually. But we did put much more disclosure in the table around the recognition. But as I acknowledged earlier today, we've got further to go, and we will continue to work on that very hard and improve it. And actually, a lot of what Dean and I were doing the first week -- first and second week of July, in fact, was gathering and listening. And it's not just in this area, we've got more disclosure to make, there are other areas that we've got some real improvements to make and I personally and absolutely committed to doing that. And I know from the conversations we've been having at Board, we're all end with management, I should say, with Richard and the team, we're all absolutely committed to doing that. So there's definitely improvements we can make.

Are there any other questions from shareholders in the room for the Board. Just please wait for the microphone.

I'd like a summary, a 1- or 2-page summary of how the company is going over a 10-year period, so that you can look at the history and so that anything that is hidden or not disclosed comes up to launch?

Thank you. Are there any other questions from shareholders in the room? Do we have any questions online?

We have one question online from John Bruce Roberts. As a new shareholder, I'm picking up from this meeting that there have been issues around disclosure of information for shareholders. You acknowledged this in your Chairman's address. Why has it taken so long for the disclosure issues to be resolved and how can shareholders have confidence that you, as continuing Chairman will address this issue in a timely manner?

Thanks very much for the question. Just firstly, I will not be continuing as Chair. Dean will be taking over as Chair after this meeting, well, Monday, I think. I think the other thing I would say is that we've been -- it's been a pretty busy year with the capital raise. And we have been talking at length about doing further work on our disclosures. With Dean and I -- as I answered to John, Dean and I, rather than just speaking of 1 or 2 disclosure issues, we've been collecting disclosures that people would like to see us do differently, and we're on a journey in that regard. But you have my absolute commitment, and I think other members of the Board, and Dean, you may wish to comment, are absolutely committed to listening and continuing to make changes to how we disclose matters through the annual report and more broadly. Dean, did you...

I've been on the Board for 7 weeks. I think, from what I've been able to observe, there isn't a culture of hiding. I think we just need to be careful around that because it's quite a strong statement. So I think we can improve disclosures. The accounts are certified by directors, are signed off by auditors. I think you can have trust in those. Can we improve our disclosure? My initial observation and the feedback is definitely we can, and we'll be doing our best to do that.

Thank you, Claire and Dean, and thank you for those questions. I now propose that Claire Higgins be reelected Director of the company. Do I have a seconder. Thank you. Ann. Please mark your voting cards in the way in which you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. Thank you.

Thank you, Anthony. I would now like to give shareholders the opportunity to ask questions, whether related to the presentations, the financial statements or the management of the company. Shareholders online can continue to provide questions through the portal, and we will also address questions in the room. I think we've got you. Thank you. If you are asking questions from the floor, please state your name, whether you are a shareholder or if a proxy holder, the name of the shareholder represented, and please wait until we bring a microphone to you so that people in the room as well as online can hear you. I'm just going to ask if there are any questions online, first of all, and then we'll bring questions to the floor. Hayden?

We have 14 questions online. The first question is from Brendan Jarvis, when do you expect to start paying dividends?

Thanks very much, Brendan. As I mentioned earlier is that we're actually currently in the process of reviewing the dividend policy, and we will look to provide an update at the time of the interim results in November. And yes, so that's the plan. We're right in the middle of doing that review at the moment.

Your next question is from [Ian Gross]. As a comment, it's encouraging to see a closer representation of our customers' gender by having a greater number of women on the Board and exec than most other listed companies. Well done, keep it going.

Thanks, Ian.

Your next question is from [Zam Yu]. How do we see -- how do we, as Ryman benchmark, took [indiscernible] that built at 3,400 per square meter on average of also about 800 new homes in their past 12 months as compared to Ryman building about 800. Are we building on par to market costs or lower or higher?

That's a good question although I don't know the answer to it off the top of my head, to be honest. Anthony, do you have any comments on this?

I don't have a specific number to benchmark. But what I can say is that we are building efficiently. But what I'd also like to say is the current executive team had a very significant improvement in systems and disciplines, ultimately resulting in better control of their construction spend than what we may have had historically.

The next question is from [Sam Yu]. Do we see a faster recovery in better market conditions for our Australia business versus the NZ market? How do you see the Australian market doing for the overall business relative to the NZ market?

Richard I might pass this to you.

Certainly, we have seen significant differences in the way the market has responded post COVID in terms of the speed of the interest rate rises that have taken place in Australia compared to that in New Zealand. Equally, we've seen a difference now and New Zealand is already in a recession position. And of course, Australia isn't. So there are certainly differences in the overall market conditions in both markets. All of that has an impact on us as indeed, the post-COVID effects of inflation and building costs and so on have effectively -- affected us differently in the different markets. . We have moved to a regional leadership structure with now a CEO for New Zealand and a CEO for Australia specifically to allow us to be able to respond to those different market conditions in different ways and respond to both changes in local demand and also changes to the environment in which we're trading in. So I would argue that we are well prepared to be able to address those differences as they exist.

Your next question comes from Brian Leaning and Susan Leaning. It appears that forecast funding requirements were previously not properly matched to the development budget forecasts. This would seem a pretty basic management control, hence the need for belated and large equity raising. This future requirement was also not noted as a key audit matter in the previous financial year. Are the directors happy they have better control over future development and funding requirements going forward?

I think there's certainly some issues for us around alignment between -- in the past between underlying profit and our cash flows, and we are much closer to that on the go forward. The only thing I would say is that the current environment is quite tricky. And so we'll have to be reviewing those forecasts and alignment, watching them very closely as Richard mentioned about the uncertainty in the markets. But there's definitely an intent and behaviors actually to be much better across those and much closer to them.

Your next question comes from [Margaret Gordon.] I'm pleased to learn of Ryman's initiatives with respect to renewable energy as Ryman is taking further initiatives such as adding solar panels to village rooftops in future or at least building in the internal infrastructure, wiring, et cetera, for its easy implementation as well as providing on-site charging for resident vehicles.

We, in fact, have quite a number of pilots and trials in play currently. We are in a number of locations actually already using solar in the business. And our shift into addressing through our ESG strategy, a number of climate initiatives is leading us exactly down this route. Obviously, we have a very large portfolio, and it isn't something we click our fingers and immediately it appears, but we are very keen to progress in this direction.

Your next question comes from [Robert and Megan Todd.] Why did the Board not adequately prepare Ryman for the peak of the property cycle, increasing lending rates, building cost escalation and labor constraints like other operators in the retirement sector?

Thank you for this question. I would like to refer back to the comments I made earlier today. We embarked on a significant growth plan, particularly into Australia and into Auckland. Some of those sites were more complex than we anticipated. And so as we were coming in -- before COVID, we recognized in fact, that there was some tension around the balance sheet, and we were working very closely with management on plans to remediate that. Unfortunately, with COVID arrival and the subsequent increases in costs, et cetera, and then last year with the interest rates and the flat real estate market, we didn't get ahead of that as quickly as we would have hoped. But on the go forward, we are absolutely adopting a far more conservative position to the balance sheet, and we'll continue to be working very closely on monitoring that.

Your next question comes from Thomas and Julie at Devlin. At the 2022 AGM, Mr. John Boscawen raised several issues that questioned the integrity of the annual accounts. Shareholders were concerned at the allegations and the rather weak defense by auditors, has this resulted in any changes with regards to the '23 annual accounts. If so, please explain?

We did look very closely at the integrity of our accounts after the questions that were raised to reassure ourselves that we believed that the accounts were prepared in accordance with the accounting standards and satisfy ourselves around the integrity of those accounts. And we have done that again, obviously, this year and last year, and I think we've acknowledged again today that there are improvements we can continue to make to our disclosures. We made some improvements in the 2023 annual report with regards to these near complete units. But following our discussion, we still have, Dean and I in our journey, not just about this particular item, but other areas where we can certainly improve our disclosures and we'll be continuing to work on that.

The next question comes from [David Townsend] and has requested that each of the directors for reelection today respond? Do you agree with David that taking on expensive USPP debt was the right thing to do?

I wouldn't stand before everyone today and say that the USPP didn't end up to be a very expensive circumstance for the company. What I would say is when we took on the USPP debt, we were looking at aligning our long-dated assets with long-dated debt. Unfortunately, these circumstances we found ourselves in over the last 18 months, in the last little while required us to unwind that debt. Dean or James or Paula, do you wish to comment?

Look, I'm happy to have a comment. I think firstly, I wasn't on the Board at that time. So I do caveat my comments was that. But in reality, that would have been a Board decision, not -- I think it's very unfair to single at an individual and maybe a comment that they made in that context. So in the organization, we will have to take responsibility for that. But yes, I would make observation that the U.S. private placement of itself wasn't expensive. It was actually when we had to pay it back it became expensive. That was a long-dated instrument. There were hedges around it currently because it's U.S. dollars, so currency hedges, interest rate hedges. That would have been all fine if you had held it for 10 years, but the changing environment, the changing business performance required that to be repaid. And when you break that, there was enormous pain financially to be held. So I think we should be careful about describing that private placement is expensive. It was actually the repayment that was expensive. So I think in 100% hindsight, the moves in the operating environment, the moves and the company's performance since that was put in place that led to the requirement to repay it, the repayment was what was expected. So yes, that was obviously a challenging situation, and it was difficult for the company and obviously, ultimately, expensive for shareholders. So I just do think we need to be very conservative when we think about long-dated debt. It's good until it's not.

Yes. Look, my comment is, I actually read the article online as it came out. I flipped it through to clear. And sometimes when you're getting unviewed by report and you can just have some unfortunate words of a [indiscernible] and I could see it be a problem. So I'm seeing this today, it's pretty tough because you're doing it in a large situation. But looking at the end of the day, the cost for shareholders is unacceptably high. That's extremely clear result in the capital raising and a lot of difficulties for the company. So take those readers going forward. We've got the message.

And I'd just add that the tone of the conversations at the time around the Board table were very reflective of the comments that Dean has made.

[indiscernible]

I'll be here for the time that we need to answer the questions. So I wouldn't dare cut you off. Yes. Sorry, just I do want to follow up on the comments there that it's really important that we, the Board, recognized that these decisions were not taken by one individual. They were taken by the Board, senior management, they were deliberate decisions that we made at particular times. It's not the responsibility of one person. It's a collective responsibility.

The next question comes from [David Townsend.] What material changes can you commit to, to protect shareholder interest in the future and give them confidence that you weren't worth millions of dollars of money and need to come cap in hand to fund [indiscernible] also?

This is a really good question. So thank you to David for raising that. And I guess I hinted at this in my speech, and that is the balance between underlying profit as a measure for the business and cash flow. And we have already commenced shifting the dial in that regard. And also, I think Anthony pointed to a lot of the work that's being done around our developments. And I think the other thing that I would like to point out in this regard is Richard has embarked on building a very good executive team as well, and we're all committed to a conservative posture in the first instance, but absolutely making sure that we're not -- we don't find ourselves in these circumstances again. Dean?

Yes, I think that's a good summary. I just think a lot more conservative approach, particularly in the near term. The environment in New Zealand and Australia is uncertain. I just had to read the newspapers about that. And so I think we need to adopt a very conservative stance, and that will be key for us going forward. So I think that will be the key material change. We have to have a lower appetite for risk and a more conservative approach to the way in which we fund our business. And I think the whole Board is very attuned to that.

[indiscernible] I've attended one Board meeting, and I can reassure you all that it was strongly raised yesterday, this very same. So...

Yes. To build on that, I think in the 3 years that I've been on the Board, the evolution of what's being focused on, I can assure you that the Board and management are razor-focused on this. And I think another material thing that we've demonstrated that we're serious about is the significant Board renewal that we're going through, which has meant some well-regarded colleagues that stepped away to allow us to attract the caliber of people like James and Dean and to be able to continue that skills mix and reinjection in to the -- sort of to the company.

The next question comes from [Karen Home]. What is happening on the corona site in Orland?

Richard?

It's currently held within our land bank, and we're evaluating the options for and reprioritizing and looking at all of our land bank that has been previously mentioned, but it's certainly a part of our land bank currently held.

Your next question comes from [Rose Parks.] Ms. Higgins mentioned that environment faces a more challenging environment. What are the main challenges that you see is in the business?

Good question. Thank you very much. I think the first thing I would call is the uncertainty around the economic environment. it's not clear whether there will be further interest rates or not in both Australia and New Zealand. And I think the other thing that -- well, there's a few other things, actually. Certainly, the real estate industry in both New Zealand and Australia is uncertain. We've seen some signs of recovery in Victoria, but there are also some areas that aren't as strong. So I think there's just a lot of uncertainty in that area. And whilst construction costs have started to come off, it's unclear as to how those things are going to work their way through. And so I think we just need to be really mindful of -- in fact, all of the things that I mentioned earlier in my speech; labor supply, supply costs, construction costs, interest rates, the real estate market, there's just a lot of uncertainty in that area still in my opinion.

The next question comes from [Andrew Mackenzie.] Richard mentioned a commitment for better funding of care beds in New Zealand. Is this request of the government a Ryman request? Or is there some industry push for a bit of funding of care bed that Ryman is a part of?

We work very closely with both the ACA, the Aged Care Association and the RVA, the Retirement Village Association, who are actively lobbying on behalf of the industry, for improved conditions for the whole sector. As it relates to care, it's principally the Aged Care Association and one of our team is a representative on that board in fact, Dave Bennett. So we're actively involved. But of course, we're very conscious that it's impossible for us to directly work with competitors of ours in the market. So we work with an industry association. But in addition to that, we actively engage with government in its own right to make sure that our view is heard. As market leader, we are a key component in an overall health ecosystem for the nation, and we see a responsibility that comes with that. So we actively engage in politics as well.

The final question online comes from [Sam Yu]. Do you see a lower construction cost or stabilization in the near future given you are a vertically integrated business and a constructor of a large scale?

This is definitely a question for Anthony.

Thank you Claire. Well, I think as you mentioned before, we're certainly seeing a very subtle easing of resource pressure and construction cost inflation. But both of these are still at significantly elevated levels. And it's quite uncertain as to how the industry is going to play over the next 12 to 24 months. In relation to vertically integrated business and a constructor of scale, we do have benefit that we do build at scale on both sides of the desk, and I can assure shareholders that the team are looking very hard as to how we continue to evolve our construction business and our delivery methodology so that we get both cost efficiency and certainty of cost.

Well, on that basis, do we have any questions in the room? And you've been waiting very patiently. So thank you.

Consider retail shareholder. As late as 2018, I was raising issues at this with David Bennett and Gordon MacLeod about a debt [indiscernible], the lack of cash flow and the lack of disclosure. If I could see that as a retail shareholder without accounting experience, why didn't the Board see it coming?

Thanks very much. I think it's a very good question, and it's one we've reflected on quite a bit actually. Part of the story of Ryman is making commitments for developments that take a long time to develop and build. And part of the commitment we make to our residents is when we start on those, we make a promise to them about the continuum of care that we will deliver. We did see the debt going up through that time. What we didn't see was COVID or the impacts of that, but I'll put that aside. We were working very closely with the management team in order to redress that. And the complexity of some of those sites meant that the costs to build those were more than we expected. And so it was a very fine balance between promise to our residents and the costs that we were seeing. I think in [indiscernible], we sure could have it at the beginning. If we had foreseen some of the challenges around the additional cost of COVID, the shutdowns of the industry, the inability to sell during that time and then the ensuing cost increases, we would have gone harder, I think, and did what we did last year, which was pausing some of those builds. Now the difficulty with that is, yes, we paused some builds over the last little while. But of course, we still have the promise to our residents. And as Richard has talked about, we've still got some village centers that we are under a commitment to our residents to build out. And so the journey through this is longer than what we would hope. But it's that balance of that commitment. So I think in answer, we did see it, we didn't react as hard or as fast as in hindsight, I wish we did. And that's definitely a regret from my perspective.

I've got about 2 or 3 other questions. Given that response, why was the USPP repaid with $158 million worth of penalties and swap costs rather than pay off some of the other bank did or hold capital raise on the balance sheet, which would have effectively given us another $158 million to do something else for?

It's a really good question, and it's important that we answer that properly. When we decided to embark on that capital raise, one of the reasons for that was that we saw vulnerability around the covenants, and so we were engaging with both our bankers and the USPP holders around the renegotiation of the covenants to make sure that we didn't have risk to the balance sheet. Unfortunately, the USPP holders, as they're inclined to do, I've now learned, find this is a real leverage point for them. And ultimately, we had very little decision other than to repay those.

[indiscernible] This getting [indiscernible] cost billions of dollars extra than what was originally envisaged, not to mention the interest costs that have mounted on holding the [indiscernible]. That consent has been gained at the expense of [indiscernible] the village. How do you expect to make any money out of that site, given that you can't just double the price of each unit to recover those costs?

We probably can double the size of each unit actually. The -- I would say to you that when I said earlier about the real estate market in Victoria, there are pockets of areas that aren't growing as well. There are pockets of areas in Victoria that are absolutely going crazy. And I would say to you that the Mornington Peninsula is one of those areas. And one of the reasons why I know that also is because the superannuation fund that IT is the real estate industry fund for Australia. And we have member elected directors on that Board from the industry, and I'm hearing that directly from them. So that would be one thing I would say. But Richard, do you want to comment further on [indiscernible]?

I would just say that we are looking to reevaluate all of the sites in our land bank, as I mentioned earlier. And it is not our intention to rush out and build ones that were less well than others. And that prioritization is necessary when the macroeconomic conditions and the business cases that we built under completely different circumstances now stack up differently in the current light of, say, for example, the current cost of capital and so on. So all the sites will still be retested before we put a spade in the ground to make sure that we can ultimately deliver for shareholders in that. And that reprioritization means that some sites are being developed earlier than we originally intended, and some will be delivered later. It has taken a considerable time. You'll be aware that we had to go to VCAT to get the permission for that. It is a terrific site. And from our observations of the retirement patterns, it will be one of the most desirable locations that people have they can retire to and a location that we will be able to secure a premium on the real estate, on the units that we're selling there that I believe will make it a worthwhile investment for us nd for shareholders.

Just two more questions. Cambridge, you mentioned really scaling of care. The Cambridge site still [indiscernible] proposed. That sort of area with at least [indiscernible]. And what I'm going to [indiscernible] to that particular area. Why is that such a [indiscernible] just the sheer volume here in the area, plus the difficulty of [indiscernible]?

Up until quite recently, our standard model was really 120 care beds, that is 40, 40, 40 of each of the different levels of care. 80 -- 60 to 80 is now typically what we are now building, and therefore, 80 would be within that bracket. And the reason we do that is because we sell a proposition based on the continuum of care. And our intention is that anybody that buys an independent unit from us as their needs change, we have to be able to guarantee them access into a care facility. And it's a major part of our sale proposition. People buy into Ryman because we offer care. It's a fundamental part of what we do which is not true for some of those competition that you're referring to. So in this particular case, it happens that Cambridge is a very desirable location and those independent units that have already for sale are actually selling very well. So I believe it's a good proposition and a good market for us.

This company and other companies cost of and highlight the 75-plus age group has been the target market and often include graphs that show how that didn't [indiscernible] to increase in years to come. Yet the market, we're actually at is the homeowner market, which is declining as a ratio of those people that are approaching 75, we use the research that actually backs up that particular part of the equation rather than just the gross 75-plus age group?

In fact, just to give you some picture of who actually is a resident to us. Our average age of people coming into a Ryman is actually 80, and for higher levels of acuity care, it's actually higher than that. So we're looking after a particular niche with very particular needs who we then design the proposition for. Sorry, where did your question then go to?

Well, it's really between those side of the business rather than [indiscernible] of the business. The future of a man has always been projected on the bases of the age rather than how you manage them, which is...

Sorry. Particularly, one of the particular demographics that's changing as a result of the aging profile is not just around age, but it's also around wealth demographics. And what we find with the retiring baby boomers is the wealthiest generation in history and have higher aspirations than any generation in the past. And we believe there is a real willingness of that cohort to actually look after themselves in aged care by buying into a premium proposition. . And so there is some competitive advantage for us buying into a market with a premium proposition with an aging and increasingly wealthy demographic. And in Australia, the connection to home ownership is less secure anyway because people typically have superannuation funds as well as their own home. And we have found again that we can access and tap into a different profile of resident in the Australian market compared to the historic model that has been the mainstay of the business in New Zealand.

Other questions?

My name is Andrew [Ott]. Last year, I stood here and expressed concern about the capital intensity of the built that's been discussed here. And I would just like to say, thank you. You've, I think, addressed my concerns. It sounds like you've got that well in progress. But it's like, I meant [indiscernible] supertanker, it takes a while to turn the ship around. I've actually got 2 questions. First is just on the continuum of care. Like you've talked about how important that is, and that's been my understanding. With the reduced number of beds that's going to be built in future villages. If someone -- I mean, if those beds are full and someone needs here, is it going to be possible for them to get care where they already are in the village and not be forced to actually move into another village?

Can I answer that? We have -- if you were to model the people joining when they first come into independent living and how many of those would progress through, a provision of 80 care beds leaves us with a very significant buffer to make sure that we can guarantee that there will be a bed for somebody when they reach that stage. And it is very rare in the progression through that, but it happens on a particular day. What typically happens is that our team, our trained nurses who operate within the villages are working with the families in connection with the residents through the whole time. And it is more of a planned progression through the stages. It's not something that happens on a particular day that somebody needs a higher order of care.

And with that -- would you be less inclined to have people coming in from outside of the [indiscernible] care bed and even keep a care bed empty for people in the village?

In practice, keeping it empty is not necessary because there is quite a bit of change as people move through the various stages. So beds become available in a reasonably frequent nature. So keeping a bed open is not necessary, in fact, to be able to guarantee the continuum of care. But what I would say is that what we're very keen to do is make sure that while we provide a guarantee of a care bed for people who are in the Ryman village and part of the Ryman community, we're no longer able to be able to guarantee a position for people who are in a local hospital or indeed in one of our competitors. And we should remember that the economics of care are hardly inducing us and incentivizing us to be providing care beds for the broader society. We provide them for our residents who in practice have joined waiting lists and in some cases, have paid a premium to buy into the premium end of the market, and we think we should be looking after them as our first source of priority rather than the broader need of the rest of the nation, that's the cold reality of it.

One other question. I have heard that -- we've been told that other village operators are saying that because of Ryman's [indiscernible] guarantee, that can result in poor quality services?

Really? I would perhaps refer you to the extraordinary positive sentiment that we get from our residents. I would say that research after research shows that we offer the very best of care. And I believe we set the standard in the industry, and I have a feeling that that's just marketing nonsense to be honest.

I've been waiting for the opportunity. My mom is in the [indiscernible] and the care is amazing. So I think that, that's false. Other questions, John? Sorry, I didn't you...

I'm Frank [Stewart.] I'm a shareholder and also represent the shareholders association. And we're pleased to see that you're working on disclosure and on the capital issues. The question I have is with New Zealand elections coming up, are there any sort of policy changes, government policy changes that you might be fearful of or expecting, particularly in view of the noise made about fee structures and fairness of capital returns to people who exit your homes?

Obviously, we operate in 2 markets. In Australia where a recent change of government has already taken place, what we're seeing is quite a number of policy adjustments over in Australia, which to many extent, are actually assisting not just us, but the sector as a whole. The time before an election is quite often an uncertain time and policy is quite difficult for governments to articulate and they run up to election because they just don't know if they're going to be in play. And to some extent, we would anticipate that any legislative change is likely to be under the umbrella of a new government. And hence, the point that I made earlier that we're very active engaging with both sides of politics, in fact, all sides of politics to make sure that people really do understand the essential role that we play in the ecosystem of care for people across the nation.

Any final questions? Please.

My name is [indiscernible]. I am a shareholder also. I would like to ask about the Northwood Village that's being built in Christchurch. And for the sect of people who are not here or don't know where that is, it's about 6k to 7k from the CBD. It is founded on the west by the main North, which is very busy road, bounded on the north by Radcliffe Road, on the east by the railway line and on the south, the Styx Reserve. Whereabouts on that side is the care dementia rest home part going to be built. I know it's been alluded -- we've heard this morning that people have already moved in to houses on that site. And in my driving along Radcliffe Road and the main North Road, the houses are right up to [indiscernible]?

That is correct. I know the site well. And we have already opened the independent living houses that people are moving into along the main road frontage. I have to say it's proving to be quite a popular village. Given the particular requirements of people who are in the care, which are obviously slightly different, that's actually set back more into the middle of the development, and they won't be exposed to the road noise and any local disruption. It's been designed with that in mind.

And so will there be a quick plan [indiscernible]?

Part of the resource consent that we obtained in order to be able to develop the site required us to make improvements to that wetland and to be able to maintain it as a habit as part of the development on the site.

[indiscernible]. There's no other shareholders, let me ask my last questions. And in fact, I had 3 or 4 questions to ask, but I know that time is precious. So what I'll do is I'll ask them, but I won't expect an answer, but I would like an answer to my last question. If you feel -- feel free to comment on the others, if you wish, but I really want as an answer to my last question. And the first question would have been on Page 16, it has talked about our portfolio of units, on Page 16 of the annual report through first paragraph. Our portfolio of units and beds increased by 821. 519 are fully completed units and beds, and 302 that are near complete. Now I was going to ask you to reconcile that number of 302 nearly complete with Appendix #22 in the financial presentation because Mr. Hamilton took exception to using the words hiding previously. But if you go to appendix #22, you will find the 58 units at Murray Halberg were covered and [indiscernible] at the 31st of March and still we're at the end of May. The 56 service departments nearing [indiscernible] and the 50 care beds that claim to be complete and part of that 821, once again, covered in scaffolding. The 60 service departments [indiscernible] 69 age care beds at Keith Park are covered in scaffolding, including some of the independent apartments. The 22 villas at Northwood weren't complete. The 22 villas at Cambridge weren't complete. The 47 units appeared [indiscernible] weren't nearly complete. And certainly, the 43 at the care center at Debrecen, which you say your mother's at, madam Claire, you will know it very well because I was at the end of May, and it was still a construction site was getting closer to opening, but it was still a construction site. So clearly, the 53 service departments and the 120 aged care beds. So that's [indiscernible] why I think promotion is being held from shareholders. That would have been my first question. My second question would have been in reference to the comments I made at the AGM last year, and as Chair of the Finance and Audit Committee, you will recall that I criticized the company for claiming profits on units that weren't even remotely complete. And in particular, I referred to the John Flood Building [indiscernible] (01:41:22) east. And you'll recall that the company said the entire building was complete. The CEO said that 95% of the units were sold, so you'd recognize 95% of the units of the profit since you recognize the full $20 million profit. And so that building was due to be completed in November, it wasn't actually completed until January, February of this year. So I would have asked you how you accounted for your extra costs, whether you just capitalize them? Or would you reflect that through the profit statement because you've already taken the profit, you've taken the profit a year earlier. And maybe if you hadn't, you might have been more circumspect and during that second long-term placement in the states. But in my final question, and the question I would like an answer for. When I came along here last year, I felt I was the only person challenging the Board. And I had a number of comments. And when I went home and looked at the video of the Annual General Meeting, anything I said or any criticisms I made, weren't recorded, they've been edited out. Now today, I'm not the only person who's been critical. So my question is, when you put a video of this AGM up, are you going to edit it to delete the criticisms of the company from the shareholders? Or would you have the courage to actually put it up as the AGM happened?

Thanks very much, John. And I think the questions that you ask of more detail, we will take those away and make sure that we respond to those. In terms of your last question, I will say that I was not aware that, that video had been edited. So I apologize for that. It's not my intent and I don't believe it's the Board's intent to hide things or -- and as I said in my speech earlier, not be transparent. So please let me take that and follow through with that. Thank you. Do I have any other questions? Thanks very much. I really appreciate all of those questions. It's been important for us to be able to stand here and be accountable to you in this meeting. Before concluding the meeting, I would like to express my gratitude to several individuals and groups. Firstly, I want to extend my appreciation, as I said earlier, to my fellow Board members for their support during my 8 months as interim Chair. You've worked tirelessly, and I appreciate it. I have thoroughly enjoyed building a stronger relationship with Richard. And I'd like to acknowledge and thank him for his leadership, his style, his drive and his absolute commitment to Ryman's purpose things. And I extend those same thanks to the senior executive team who have worked closely with myself and the Board across the year. We've asked a lot of you and you continue to deliver on. So I want to express my sincere thanks. Also to all of our residents and their families for their unwavering support, we do understand that choosing to move into a Ryman Village is a significant decision based on trust, and we take this responsibility seriously. The other essential aspect of this trust is our remarkable teams. Our employees consistently deliver outstanding work is exemplified by the extraordinary relationships they foster with their residents, and we remain committed to being good enough for mom and dad. And a very special appreciation goes to our shareholders. We deeply value the continued belief in our purpose, and we are committed to delivering future successes, including improved shareholder returns and enhanced commercial outcomes. We recognize that this company possesses exceptional potential to flourish in the coming years. And as a Board, we eagerly anticipate fulfilling that potential. Now please I invite you all to join us for refreshments, some warm [indiscernible], hopefully, and an opportunity to catch up. Thank you very much for coming along today. Thank you.