Thursday, April 29, 2010

Long Term View: Ryman Healthcare Ltd

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO.

The calculation of returns includes dividends and tax credits.

Ryman Healthcare Ltd [RYM.NZ] has been exceptional to its shareholders in terms of returns since its IPO in July at $1.00 and its subsequent listing on 29 July of that year and even better for its owners who founded the company in 1984. 71.9c in net dividends - there are no tax credits - (see chart above) and a 5:1 share split in January 2007 gives RYM a slightly more than 680% return (see chart below for the share price percentage gain against the average of all NZX indexes) over the nearly 11 year listing, an approximate annual net return just over 60%.

This is approximately a 600% better return when compared to the average of all NZX indexes.

: I own RYM shares in the Share Investor Portfolio

Long Term View Series

Auckland International Airport
Air New Zealand
Briscoe Group Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hellaby Holdings Ltd
Mainfreight Ltd
Metlifecare Ltd
New Zealand Refining Ltd
Port Of Tauranga Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd

Ryman Healthcare @ Share Investor

Ryman Healthcare Ltd: Australian Expansion Needs Care
Stock of the Week: Ryman Healthcare Ltd
Why did you buy that stock? [Ryman Healthcare]
Long VS Short: Ryman Healthcare Ltd
Time for retirement?

Discuss RYM @ Share Investor Forum

Download RYM Company Reports

Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A              Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

Buy The Intelligent Investor & more @


c Share Investor 2010

Wednesday, April 28, 2010

Fisher & Paykel Healthcare: 2010 Full Year Profit Result rests on Foreign Exchange Movement

The 2010 full year profit for Fisher & Paykel Healthcare [FPH.NZ] out late May (provisionally 26 May) is a hard one to calculate but it probably wont be a vast improvement on the 2009 FY result.

Indications are that last years $NZ62 million profit is going to be flatish to slightly up on a good revenue rise spurred on by additional innovations in sleep apnea products and the continuation of purchasing of health related products by US health providers.

This figure will vary depending on how much forward foreign exchange cover the company realises as every cent in movement up in the Kiwi/US dollar cross means $2 million less on the bottom line.

From the 2010 Interim Profit Report from last year (see excerpt below) you can see that FPH's profit calculations were based on an average of 64c to the US dollar and over the last 6 months that average would be closer to 70-72c. The forward exchange cover makes the profit calculation hard to calculate.

"Currency exchange rates continued to be very volatile. During the six months, the NZD:USD spot exchange rate ranged from 0.55 to 0.73 with an average spot rate of 0.64. Our hedging policy again served us well. We had in place at 30 September 2009 a mix of foreign exchange contracts and collar options, up to five years forward, with a face value of approximately NZ$600 million. The US dollar and Euro instruments were at weighted average rates of approximately 0.52 US dollars and 0.44 Euros to the New Zealand dollar and are to protect the company from exchange rate volatility." FPH 2010 Interim Report

Having outlined the above though, underlying revenue and profit in US dollars (most FPH business is done in US dollars and translated back to the NZ dollar where their head office is) will be well up and this is the most important indication of company progress.

The exchange rate factor, while important to shareholders in terms of returns in dividends and realised New Zealand dollar profit, should be secondary to real profit in constant US dollar terms.

FPH shares have been steadily rising over the last couple of weeks and closed flat at $3.49 yesterday.

Disclosure I own FPH shares in the Share Investor Portfolio

Fisher & Paykel Healthcare @ Share Investor

Long Term View: Fisher & Paykel Healthcare
Stock of the Week: Fisher & Paykel Healthcare
Analysis - Fisher & Paykel Healthcare: FY Profit to 31/03/09
Schroder Investment Management takes big Fisher & Paykel Healthcare stake
Long VS Short: Fisher & Paykel Healthcare
Big Fisher & Paykel Healthcare trades a curious tale
Why did you buy that stock? [Fisher & Paykel Healthcare]
Drinking and Trading
Share Investor's 2008 stock picks
Fisher & Paykel: A tale of two companies
FPH downgrade masks good performance

Discuss FPH @ Share Investor Forum

Download FPH Company Reports


Bird on a Wire: The Inside Story from a Straight Talking CEO

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @


c Share Investor 2010