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Ryman Healthcare: Profit and Risk Management in an Aging Society

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We are living in an aging society. In most countries in the developed world, birthrates have been falling since the 1960s, and the average working population age has increased. As the fraction of the population requiring support in old age has increased, and the proportion of workers who can save and pay taxes has shrunk, there have been huge changes in how society provides for its retirees. Among the most pressing issues is suitable accommodation.

Ryman Healthcare, a listed New Zealand company, has monetized wealth in retirees’ property to provide specialized housing. It has performed well financially and provided homes for thousands of seniors. What were the risks in its business model and its options for expansion, for instance into China?

Learning Objective:

  1. Practice in calculating operating metrics by using values taken directly from published financial statements

  2. Discussing the wide range of business risks in a company, quantifying their size and deciding how they can be mitigated

  3. Contrasting Ryman’s model for retirement care with reverse mortgages, often marketed to retirees, and Project Financing, typically used for large capital-expenditure-heavy projects

  4. Discussing the strategic challenges and opportunities for Ryman, including possible expansion into China

  5. Comparison of different methods of retirement provision and financing in different regions of the world

Year of Publication: 2018
Ref. No.: 17/597C
Discipline: Finance & Investments
Industry: Healthcare Services & Facilities
Country: New Zealand
Languages: English
Pages of Text: 9