Ryman Healthcare Ltd.

Welcome, everyone, and thank you for joining us for our FY '26 full year results. With me today, I have Matt Prior, our CFO; and Hayden Strickett, our Head of Investor Relations.

Today, we will run through the significant progress we've made and how this is translating into improved performance. Reflecting our strategy refresh, we will talk to retirement living and then to aged care, showing the differences of these earnings streams.

And we'll leave time at the end for your questions. Let's start with the highlights on Slide 4.

FY '26 marks an important operational inflection point for Ryman with the work undertaken over the last 2 years now translating into improved performance, cash flow generation, and balance sheet strength. Earnings momentum is building with growth in recurring earnings and significant costs removed, we've doubled our operating EBITDAF.

And for the first time in more than a decade, we delivered positive free cash flow of $188 million. This has been delivered in mixed market conditions, demonstrating the resilience and sustainability of the actions taken.

We now have a strong and flexible balance sheet with the completion of our bank refinancing during the year. This, alongside our new capital management framework and $147 million in contracted land divestments, provides Ryman with much greater resilience and flexibility through the cycle.

Moving to Slide 5. Before I step into our FY '26 financial results, I want to touch on our portfolio as it stands at the end of the year.

We now have only 2 sites actively under construction, lowering our exposure to inflation and construction costs and property cycles. Following the closure of 2 of our oldest villages and transfer of those residents to newer ones, we have a higher quality portfolio.

Our portfolio has an average village age of less than 12 years and an average age of entry for independent residents of over 80 years, reflecting our care-centric offering. While our asset and resident base has been growing, our team member numbers remain unchanged.

And as we maintain the quality of care and resident experience, we know is paramount to our future success, with a lower overhead structure. And as we work to improve our financial performance, as you can see on Slide 6, we are equally focused on our residents and our team, improving our customer NPS scores year-on-year, continuing to win a number of industry awards, and keeping our team who enable all of this engaged through a period of change.

Slide 7 gives you a performance snapshot of the year that's been. On the left, our financial performance, growing recurring earnings and cash flow and materially reducing capital spend.

Retirement Living is in the middle, where we have delivered FY '26 sales in line with guidance and the building sales performance at a higher and more sustainable level of DMF. And on the right, aged care with strong occupancy, earnings growth and capital inflows.

Now starting with Retirement Living on Slide 9. As a reminder, we reset our contract terms back in October 2024.

And as you can see, these changes are now embedded in the market with the deferred management fee for new residents averaging 30% and weekly fees for new residents up 63% on unit turnover. While these changes do take time to flow through the portfolio, we've done the hard yards in the market, and it's a step change that will drive a significant uplift in long-term value and sustainability.

Turning to Slide 10. You can see we now have 17% of our Retirement Living portfolio on the new weekly fees, which is predicted to grow to around half the portfolio by FY '29.

And with reset pricing, we are seeing growth in both serviced and independent fees per occupied unit. This will progressively flow through the portfolio over time, driving strong growth in future recurring revenue.

On to Slide 11. As you know, our sales team have been implementing a number of initiatives to improve our sales effectiveness after having made the necessary changes in DMF and weekly fees.

We've had a focus on lead quality, improving the number of contracts that converted and the number of contracts that have settled within 90 days. We have seen this flow through to improvements in net resales across all regions despite mixed market conditions.

And in the last quarter of FY '26, we saw applications exceed turnover for the first time since October 2024. This is the key lead indicator we watch as we work to reduce resale stock and payouts.

Turning to Slide 12. Importantly, targeted sales and marketing has meant that these resales are coming from new residents at higher weekly fees and deferred management fees rather than internal transfers.

It's the combination of these resales and new sales to new residents that will accelerate the shift in our portfolio from old to new contract terms in the coming years. Moving to pricing on Slide 13.

We continue to see a highly competitive environment in some regions with a broad range of incentives at play in the market. As part of our strategy to rebuild sales and lower the levels of stock, we are using targeted pricing with adjustments targeted at a village and individual unit level, this has led to only a modest fall in average pricing.

Resale margins have continued to moderate as expected, reflecting the lower house price inflation environment of recent years. Importantly, as you can see from the cash generation chart, our pricing is converting to cash.

This gives good transparency that our headline new sales metrics and our resales pricing are aligned. And we are maintaining the quality of our contract book with a stable age of entry, as I mentioned upfront, and unchanged resident tenure after having moved to a more realistic rate of DMF revenue recognition back in FY '25.

Looking at Slide 14 and our resales, you can see that the growth we had been seeing in paid-out stock has moderated with improving sales effectiveness and our pricing model changes now embedded. Our focus heading into FY '27 remains on increasing sales volumes to match turnover, growing occupancy on our new contract terms and releasing capital from paid-out stock.

While our resale stock did increase last year, pleasingly, the portion that is contracted has also lifted, giving us confidence in sales catching up to turnover and reducing the vacant stock we have. As I'll talk to shortly, we also see opportunity to grow the uptake of existing and new care capital products from residents transferring from retirement living to care.

This presents a meaningful opportunity with approximately half of retirement living residents moving to care at some point. Moving to Slide 15.

We have seen independent new sales volumes greater than new stock delivery over the last 4 halves now. In FY '26, you can see independent living apartment stock down 55 units and service apartment stock down 39 units.

With unoccupied new sales stock value at 31 March of approximately $400 million, there remains a meaningful cash release opportunity ahead for Ryman. Now let's look at aged care on Slide 17.

We have opened 5 new care centers in the last 2 years. And over the next 3 years, we'll open 1 each year.

Growing occupancy at these new care centers will be a key revenue driver for Ryman. Driven by care demand and our sales initiatives, we've seen significant uplift in occupancy in all our new care centers across FY '26, ahead of our expectations.

Demonstrating the strength in care demand, you can see Keith Park in Auckland opened in August 2024, Bert Newton in Melbourne opened in November 2024, and Kevin Hickman in Christchurch opened in July 2025 have all now reached 90% occupancy. On to Slide 18.

We are seeing New Zealand premiums up underpinned by the sustained demand for our care offering. Consistent with premium trends in New Zealand, we have also seen strong growth in RADs in Australia, reflecting sustained demand for our high-quality accommodation offering and mature care centers.

We know that paying for care is a significant cost for residents and families. And so we have introduced a new product we call the Resident Fund, which is exclusive to Ryman residents.

It makes the transfer from retirement living to care seamless with residents taking their capital with them. This differentiates us in the market compared with care being offered under a DMF contract, which is not always a match with the needs of residents and their families when transferring to care.

And we have already seen $17 million of capital retained since the launch of the product in the second half of FY '26 with plans to further grow this in FY '27. The growing level of premium penetration across our care beds, over 80% in both Australia and New Zealand, together with high occupancy in mature villages and growing occupancy in developing villages, demonstrates we are getting our pricing and product offering right in the market.

Moving to Slide 19. You can see the benefit of the higher premiums and rate inflows into our revenue and cash flow.

Revenue per bed is up 6% in New Zealand and 9% in Australia. And with only 1 new care center opening in FY '26 compared to 4 in FY '25, cash flow from care capital was steady at $81 million, a key contributor to our strong free cash flow result.

Importantly, these earnings are driven by occupancy, care demand, and resident acuity rather than housing market conditions. The flexibility of our portfolio is one of Ryman's strengths.

As our populations age and government policy changes increase care in the home and the acuity of residential care, the scale and flexibility of our care portfolio becomes increasingly important. During FY '26, we saw this reflected in growing demand for swing beds and hospital-level care, providing rest home care into a small but building number of service departments.

Slide 20 gives an update on the highly active policy environment as the New Zealand and Australian governments work to address the growing shortage of aged care beds. Australian reforms are in place.

And in the coming year, we will start to see the benefits of the 2% per annum retention on RADs signed after 1 November, 2025. On a new incoming RAD, which in FY '26 averaged AUD 747,000, this equates to around AUD 15,000 per bed per annum.

In New Zealand, the government Ministerial Advisory Group recommendations are expected in the coming weeks with a government response anticipated ahead of the New Zealand election. We expect some similarities with reforms introduced in Australia, which have supported more efficient utilization of aged care and hospital capacity.

Slide 21 updates on our progress towards the $25,000 to $30,000 operating EBITDAF per bed target we set ourselves at the Investor Day in February. For the second half of FY '26, we were at $20,200 per bed.

This has helped -- this has been helped by the Australian aged care funding reforms. We expect aged care profitability to continue improving as occupancy grows across developing villages, premiums, and RADs increase and operational efficiencies continue to build and in New Zealand, as the necessary funding reforms progress.

As our care earnings grow as a proportion of the group, we will continue to build a more diversified, resilient, and recurring earnings profile. Now let's talk to development, starting with Slide 23.

With a more disciplined approach to development, we have now reduced the active sites under development to 2. This materially reduces the capital intensity and risk profile of the business compared with prior years.

The Richard Hadlee main buildings will open in the second half of FY '27 and Patrick Hogan in FY '28. In addition, the redesign of Hubert Opperman is progressing well, and we have recently submitted our planning permit application.

The remaining stages are expected to improve the timing and recycling of capital with construction expected to start later in FY '27. These 3 main buildings represent the final ones to complete our developing villages.

And together with the next 2 stages of townhouses at Patrick Hogan, represent the total capital work we view as committed at this point with an estimated total cost to go of $190 million. With this limited development activity underway and half of our FY '27 development CapEx already locked in under fixed price contracts, our exposure to cost escalation and housing market conditions is significantly reduced.

On Slide 24, you can see the significant growth in occupied units across all 10 villages with new stock delivered in the past 2 years. And it's been great to see such broad-based new sales, including in Auckland, with all of our developing villages contributing.

On Slide 25, you can see we have now contracted $147 million in land sales of sites that did not meet our revised development criteria. From these sales, we have so far received a total of $72 million in cash proceeds.

Following further feasibility review of the Coburg North site, we have now included this in our land bank to be sold and have increased our target for land divestments to around $250 million. Moving to future development on Slide 26, which remains a key enabler of future growth.

We have retained 5 greenfield sites in markets with enduring demand and in FY '27, we'll be prioritizing the best opportunities for future development across the portfolio. We are both mindful of the impacts of recent oversupply in the market and are anticipating there will be benefits that flow from the current market conditions with a likely moderation in development activity at the same time that demand is continuing to grow and more disciplined capital allocation across the sector.

I'll now hand over to Matt to run through the financials and capital management.

Thanks, Naomi. Our key financial metrics on Slide 28 showcase a year defined by renewed momentum across the business.

In an environment that continues to evolve, we have delivered strong operational performance, strengthened our balance sheet, and positioned the business for sustainable long-term growth. Today, I'm pleased to take you through the financial results and the drivers behind our performance.

Slide 29 shows our operating profit and loss, which highlights the year's revenue growth outpacing expenses. And with that discipline, a doubling of operating EBITDAF, a clear sign that our strategy is working.

Operating revenue increased to 10%, supported by fee growth across aged care and retirement living as well as a 2.6% increase in the number of residents. DMF improvement was modest this year as expected due to the change in accrual recognition periods in FY '25.

But as we transition to the front book of 30% DMF contracts and the legacy 20% contracts roll off, DMF revenue will accelerate and support growth in out years. Ultimately, it is the improvement in profit measures per share that underscores a year of progress.

And in shifting away from non-cash underlying profit, we are better able to connect our results to cash flow. Slide 30 breaks out our operating earnings and shows the lift in margins from strong performance in our New Zealand and Australian villages.

Our transition to a clearer operating model combined with new contracts and fees, a sharper focus on care performance, and a disciplined management of non-village costs is now showing in the numbers. In New Zealand, EBITDAF margins expanded 250 basis points with steady half-on-half improvement as we tightly managed cost growth.

In Australia, revenue accelerated and in the second half was up 21% from occupancy in developing villages, stronger care and village fees, and rising RAD imputed interest. Moving to Slide 31, where I want to thank our teams for the work to deliver $57 million in gross annualized cost savings since FY '24, which is at the top end of our guidance range of $50 million to $60 million that was upgraded at the first half result.

Total savings have come from reshaping our non-village functions, driving operating efficiencies across villages, and embedding stronger procurement practices. Operationally, in developing villages, we are seeing higher occupancy now flowing through to meaningful revenue growth.

And in our mature villages, we are achieving margin expansion through a deliberate combination of pricing initiatives and continued cost focus. Together, these outcomes demonstrate our operating model is building momentum across the portfolio.

Slide 32 is a highlight of the result with aged care the standout contributor to our improved performance over the year. As this segment reporting is new since our first half result, this is a half-on-half comparison.

And an important call out on this slide is to note that there are $75 million of support costs allocated across the 2 segments as detailed in the appendix. In the second half, revenue in care grew 7% against a 3% rise in expenses with this operating leverage equating to 32% growth in EBITDAF.

EBITDAF per bed lifted 31% to just over 20,000 from higher occupancy, strong premium pricing, and better operational efficiency. Following investor feedback, we are also providing our EBITDAF per bed in each country, which for FY '26 reached NZD 15,000 in New Zealand and just over NZD 32,000 in Australia in New Zealand dollar terms.

In retirement living, revenue growth remained modest as the transition to the front book continues. And while refurbishment cost reclassification affected reported EBITDAF, excluding this change, performance improved over the year.

Turning to our non-village performance on Slide 33. The charts on this slide tell the story of how we've continued to reshape our cost base with the results now becoming clearer in our numbers.

Over the past 2 years, the company has moved from a regional structure to a functional operating model, and that shift, combined with cost discipline, is driving a leaner, more efficient organization. Gross non-village costs are down 25% and headcount has reduced 39% since FY '24, reflecting the structural progress we've made.

A lower overhead platform gives us the flexibility to scale in line with market conditions. And to continue to drive our sales uplift, we will make near-term investments in selling and marketing capability.

In the longer term, we won't stand still with improvements in systems, digital capability, and AI-driven productivity supporting a target of normalized non-village costs below $100 million by FY '29, a measurable commitment to sustaining efficiency and strengthening our margins. Slide 34 is cash flow from existing operations with a core part of our strategy focused on growing recurring cash flow in the business.

From what we have presented in the doubling of earnings, you can also see this in our cash flow from village operations, which has particular relevance to the progress against our target of $150 million improvement in sustainable CFEO by FY '29. Within CFEO, net resale cash flow was softer, reflecting a $53 million increase in bought back stock as well as a lower resale margin.

Importantly, net retail receipts exclude $22 million of repaid ORAs from closed villages, which have been reclassified to CFDA, which is also where the proceeds from these land sales will be recorded. FY '26 also includes $18 million of net one-off cash costs relating to transformation, legacy payroll remediation, and other non-village items, some of which have been accrued in previous years.

Slide 35 shows cash flow from development activity as well as free cash flow. Robust new sales, moderating development spend, and our land bank divestment program drove a strong cash flow outcome for the year with CFDA increasing by over $200 million.

Development CapEx reduced materially as our build program moderated with active construction sites decreasing from 7 to 2. We also saw a reduction in capitalized non-village expenses and interest, reflecting less work in progress and reduced cost capitalization.

As development reduced and we completed a number of projects with contingency released, our FY '26 CapEx spend of $222 million was slightly below our guidance of $235 million. Altogether, free cash flow across both CFEO and CFDA increased by more than $280 million year-on-year, demonstrating the strength of our operating model and the benefits of disciplined capital allocation.

Turning now to capital management. On Slide 37, you can see our investment property values have increased 2%, supported by FX movements and new additions, but partly offset by fair value adjustments.

I would note that there has been a material decline in the New Zealand dollar to the Australian dollar over the period, impacting asset values as well as net debt, which is shown on the following slides. Across the year, we delivered 250 new units alongside continued investment in main buildings at villages such as Kevin Hickman, Richard Hadlee and Patrick Hogan, all of which positions us for future value growth.

The movement in fair value on both new and existing units reflects market conditions and our targeted price adjustments during the year. Slide 38 shows the valuation uplift we are seeing in aged care, which is aligned with the improved financial conditions across the sector.

Book values per bed increased year-on-year with New Zealand up 11% and Australia up 16% or 6% on a constant currency basis. Whilst valuation practices vary across the sector, Ryman's approach is aligned with accounting standards and our care center book values reflect land and buildings only.

Despite this uplift, Australian bed values remain around 3x higher than those in New Zealand, which are well below the cost to build, highlighting the current differences in funding and the operating settings between the 2 countries. But New Zealand is well-positioned for improvement as funding reform progresses.

Slide 39 highlights that during the period, we've strengthened the balance sheet with net debt down $94 million to $1.57 billion at the end of the financial year. I'd note that the reduction in net debt is lower than our reported $188 million cash flow, largely due to currency translation, which resulted in approximately $90 million of headwind due to the strength of the Australian dollar.

However, our Australian dollar assets also increased in New Zealand dollar terms, meaning that the impact from currency on our net assets is broadly neutral. Our property portfolio now sits at $12 billion.

And overall, our net tangible asset value is broadly unchanged from FY '25 and stands at just over $4 billion or $4 per share. I should acknowledge that our share price is presently trading at a meaningful discount to NTA, but also note that the recent asset sales have been realized in line with their book value.

Ryman's Board is very conscious of shareholder value, and it recognizes the high threshold for allocating free cash flow in consideration of capital management options. Turning to Slide 40, which revisits the full refinancing of our $2 billion in bank facilities announced at the time of our first half result, which provided improved pricing and no bank maturities until FY '31.

With $675 million of debt headroom and an industry low gearing level under 28%, we have a substantial liquidity buffer that supports disciplined growth. To maintain the diversification of our funding sources, we are also assessing options for our retail bond maturing in December.

Overall, our balance sheet is resilient, flexible, and positioned to support the next phase of growth. My final slide, Slide 41, highlights the substantial reduction in our annualized gross interest costs, down $68 million since February 2025 from the combined benefit of the equity raise, improved cost of debt and positive free cash flow.

Post refinancing, our average cost of debt is now 5.9%, around 30 basis points lower than in March 2025. And with 2/3 of our interest exposure fixed over the next 2 years, we have locked in stability at a time when certainty matters.

Given this, we are well-positioned to navigate the current rate cycle while continuing to strengthen the balance sheet. I'll now hand back to Naomi to talk to our strategic priorities and outlook.

Thanks, Matt. Starting on Slide 43, we set ourselves the target of making a $150 million improvement in sustainable cash flow from existing operations back at the time of the capital raise last year.

We went further at the Investor Day in February this year, outlining how we would reach this target by FY '29. Today, we are reporting our achievement against this target with $47 million of improvement delivered in the first year across care, retirement living, and support services.

Within our care business, we have improved occupancy, increased revenue per bed, and closely managed our costs to grow care margin. We have delivered overhead and procurement cost savings as well.

The reset in revenue in retirement living takes longer to flow through to cash with the rate of turnover and tenure, particularly the reset of DMF, which in cash benefit terms largely sits beyond and in addition to the $150 million CFEO target for FY '29. We are achieving this in a subdued operating environment, giving us increased confidence in our FY '29 target.

On Slide 44, you can see our progress against our $500 million cash release target with $169 million delivered in FY '26. We have a further $75 million cash release locked in with contracted land divestments that are due to complete over the next 2 years.

There is still significant opportunity for future release of cash with $420 million of unsettled new sales stock, $281 million in paid out resale stock, and a further $100 million in land sales targeted. On to Slide 45.

We talked to you at the Investor Day about how we were looking to evolve our service department offering to attract a broader customer base with flexible assisted living and care offerings. This will increase demand and accelerate uptake of the stock we have available.

Demographic demand is growing, and we expect government policy settings will expand this further. However, we recognize we must evolve the product offering to accelerate uptake and ensure it matches the needs of our customers.

Firstly, our Ryman Select product, in the current economic climate, we are introducing more flexible entry pathways. At selected villages, we are offering a choice in the services residents take up so they can choose what services they need and add more later as their care requirements change.

Secondly, we are piloting a Premium Care Apartment offering. This provides our residents with 24/7 clinical care in a high-end premium accommodation.

Occupancy of our service apartments currently sits just below 80% on average across our mature and developing villages, and we see significant opportunity for cash release by increasing this to 95%. Turning to Slide 46.

As we talked about at the Investor Day, while we are focused on turning around the business, we are also thinking about our future and building our long-term competitive advantage. To do this, we must create a more scalable, adaptable, and digitally enabled business than we have today.

Dr. Rachna Gandhi, who joined us earlier this year, has been leading this work for us, which we are calling [ One Ryman ].

You can see the value creation we are targeting on this page by returning our team's time to resident care and experience, improving our sales effectiveness, reducing administrative burden, and removing structural costs. The value of this work will extend beyond our FY '29 target time frame.

And as the work progresses, we will update the market on the benefits and costs. I won't talk to the next slide.

It's just there as a reminder of the strategic framework and priorities we outlined at the Investor Day in February. Moving to the outlook on Slide 49.

As you all know, with the Iran conflict yet to be resolved, the outlook has changed and uncertainty has heightened in recent months. As we did all through last year, we will be providing quarterly updates through the year, but wanted to provide an update at this point, partway through the quarter, on our most recent sales performance and what our sales teams are seeing on the ground.

We have continued to see growing demand for both care and service apartments. This highlights the resilience of our care-centric offering and the diversification benefits of having around 50% of our portfolio capacity in care and assisted living.

While demand for independent living is seasonal, our teams are seeing cautious customer sentiment, reflecting continued global events and housing market impacts. Year-to-date, total retirement living resales and contracts have been broadly flat on the prior corresponding period, with service apartment contracts making up a higher proportion of the mix.

We are beginning to see some fuel cost surcharges emerge, particularly in development. Importantly, with only 2 sites under construction and 50% of our development expenditure in FY '27 locked in, we are not expecting material impacts to development CapEx.

We will continue to monitor and respond to the impacts on property markets and cost inflation through the year. While market conditions are uncertain, Ryman enters the year a stronger and more resilient business with prudent gearing, long-tenored debt, improved operating performance, and significantly reduced development exposure.

Our FY '27 guidance is outlined on Slide 50. In Retirement Living, we are reducing vacant stock and targeting to lift the rate of resales to match turnover by the end of the financial year.

Care operating performance is expected to continue to build with increased occupancy and operating initiatives growing our EBITDAF per bed. And our build rate and capital expenditure is lower, reflecting our more disciplined approach to development.

Finishing up on Slide 51. Our focus for FY '27 is clear, cash flow generation, capital management, and growing our care earnings.

We will grow our earnings from care with increased occupancy, pricing, and efficiency improvements. We will reduce vacant stock and accelerate the uptake of our service departments through our new service department offerings.

We will be working to offset inflationary impacts and progressing opportunities to further reduce our operating cost base. We will continue to release cash through both our land bank divestment program and continued moderation in our development activity.

We will progress our One Ryman program to build a more digitally enabled, efficient and customer-centric business for the future. And our Board will continue to assess the best use of released capital to grow shareholder value while maintaining prudent gearing and liquidity.

Thank you, and I'll now open up the line for questions.

Thanks for your ongoing commitment to transparency, very good materials provided. Just on the refi margin outlook for FY '27, I mean, obviously, there was a 600 basis point reduction in that in '26.

And you sort of talked to the early trading conditions in '27. I mean should we be sort of expecting that like within what you're sort of seeing, in sort of mid-teens looking likely at this stage for FY '27 resale margin?

Arie, thanks for the compliment on our disclosures as well. We work hard to do that.

In terms of resale margin, you're right. Look, in a flat market, you would expect resale margin to moderate.

I think that's well-understood. To the extent it's moderating, it is moderating at a slowing rate.

So if you look at the first half result, we had a resale margin of 20.3% and now the full year we're at 19.9%. So it is slowing in terms of its rate of moderation.

There are mix factors involved in that. We've talked about Auckland before having a higher embedded resale margin and Auckland has been more subdued as a market for us during FY '26.

And there's also the mix of service departments, which you can see have a lower resale margin than independent departments, and that's also a factor to the extent of recently seeing better growth in SA. I would just finish though by saying our resale margin on independents is still pretty healthy at 27%.

But as you would expect in a moderating price environment, we would expect resale margin to come down, but at a moderate more slowing rate than what you've observed previously.

Yes. I mean it was that mix of service departments, which was a factor in sort of asking whether you were seeing sort of potential for mid-single-digit -- mid-double-digit, sorry, in the teens.

Okay. Just on divestment proceeds, you've given a clear indication there in terms of the timing for what's contracted.

In terms of where you're at on, say, sale proceeds for including those sites in Christchurch that you've closed, should we -- is it possible in '27, '28 that we'll see divestment proceeds over and above what's contracted?

Arie, yes. So in terms of the 5 sites that we've identified for divestment, we'll be progressing those sale opportunities in the coming year.

The exact timing of the cash proceeds is, obviously, dependent on what gets finalized there. But I would expect us to be making progress on those divestments in the coming year, and we'll update as we go forward on that.

Yes. And then just on any intention to purchase land in the next sort of 12 to 18 months to sort of add to the land bank?

Or is that not a priority for the business right now?

I think right now, our focus is really on driving the performance in the existing asset base. As we've said previously, we're very conscious of needing to re-earn the right to grow and getting our existing portfolio performing.

And we are going to be doing the assessment across our development book of what are the best opportunities there. So not a focus right now on acquiring new land.

But certainly, as we get further progressed on assessing what we've got on proving what we've got, that's something we want to get back to for the future, to be ready when the market conditions are more supportive.

Sure. And then just maybe a final one for me.

Just turning to the comments you've made with regards the high threshold for new investments, which makes sense. But I guess just picking up a little bit more on the Board's consideration of all capital management options.

I guess a couple of questions. Firstly, where would you -- where does the Board sort of see debt levels needing to get to before it might prioritize capital management over debt repayment?

And then, I guess, also just on the comment regarding asset realization. I mean would it be fair to say that you haven't looked to divest anything with any substantial managers' interest at this point, so it has been more bare land valuations that you've been achieving value against from a book value sense?

Yes. Perhaps if I answer the second one first.

So yes, that's right. We've really been selling undeveloped land to-date.

In terms of the first one, I'd refer you, Arie, back to the couple of slides we had in our Investor Day presentation on capital management and the new capital management framework that the Board has approved. We've got a pretty clear gearing target range in that capital management framework, which we're currently sitting within.

That's frame -- a target of 20% to 30% gearing. And so -- and we also, in that presentation, highlighted the range of options for use of free cash flow from reinvestment in the business, development, growth, reducing debt, return to dividends when we have positive CFCO and also the option of buybacks.

So they're the options that the Board will look across, but very much be coming at that from a perspective of what is best value for shareholders.

Yes. I mean I understand that framework, but I guess there's a bit of a signal being provided in this presentation.

And so, I guess, I am sort of interested like is there a level of core debt or that the business needs to get down to before capital management options would be considered, for example? Just trying to get a bit of a sense of whether those sorts of thresholds exist.

Well, what I'd say, again, is we are in our capital management framework in terms of the balance sheet gearing. And also that assets right now are trading effectively below the cost to build.

So the Board are mindful of that in how they deploy free cash flow, and they'll be looking at all the options, but also doing that in the context of current market conditions.

Well done on the result. It's obviously great to see you guys targeting getting the resales volumes back in line with unit turnover by the end of FY '27.

Are you able to just give us a steer of where the current resales inventory is today across villages? Is there a handful of villages with quite elevated stock?

Or is it more kind of evenly spread across the portfolio?

Will, yes, I think we've previously indicated that our resales bought back stock is a bit higher in regions that are more subdued and more competitive like Auckland and lower in some of the other regions that have had stronger property market conditions. So that remains the case.

When we look at our resales performance, we are getting improvement across pretty much all regions. So it's really a matter of just continuing to drive that and then get it back to eating into those stock levels.

And you would have seen, in the half-on-half comparison in the pack, that moderation in stock build and in payout balance build that occurred in the second half.

Okay. Great.

And then thanks for the new disclosure around the EBITDAF per bed in Australia and New Zealand. So obviously, Australia, a lot higher than New Zealand at the moment, but would just be interested in if you could give us a rough idea of what level of profitability you've assumed in Australia and New Zealand in terms of the FY '29 target that you put out in the market?

Yes. Well, we haven't given you explicit guidance in terms of the breakdown of the $20,000 to $25,000 EBITDAF per bed for FY '27.

That is new guidance for us in terms of giving EBITDAF per bed range. And look, to the extent that we achieve the midpoint of that range, it would be great growth on FY '26, but we're not giving you the split between the 2 countries.

But clearly, by virtue of giving you each of the countries individually, you can see where we're at and the work needing to be done. But New Zealand is a much larger part of the portfolio.

So there's much more opportunity there for us to elevate EBITDAF per bed.

Well, just one thing I'll add on. Sorry.

I was just going to add that New Zealand and Australia are probably going to be at different points in their reform programs in FY '29. So don't view FY '29 as that's an ending point or anything like that.

I think if you think about the cost of these facilities that we're building, our facilities have probably averaged around $0.5 million a room. We do need to get better earnings through that part of the business to get an adequate return.

And so that's really just a midterm target, if you like, as to where we're wanting to make sure we get to in the next couple of years.

No, that makes sense. I guess if I ask another way, just trying to understand, I guess, what level of improvement in New Zealand is baked in from the funding reforms that's currently ongoing to the FY '29 target?

So we haven't provided a breakdown, Will, of how much from different sources. We do think there will be benefit from funding reforms through that period of time.

But we're equally not waiting for that. We're making sure all of the levers on our side of the fence are being addressed, and we'll continue to do that.

You can see, Will, that the occupancy uplift really is such a key part for us in New Zealand. So to the extent it's in our FY '27 outlook, it's very modest as a contributor.

The real main upside in care is that occupancy component. We've had the higher acuity mix from hospital growth, as you can see in our presentation, but just getting from the 90.9% last year to now 92% this year in care occupancy drives a lot of operating leverage.

Congratulations on the progress in cost out, particularly. I'd also like to echo Arie's comments on Ryman's disclosure, which is excellent and sector leading.

Just first question on the trading comments. I just wanted to touch on the comment that the resales are steady so far in FY '27.

You didn't comment on new sales. So last year, Ryman had a couple of large blocks completing in the first half '26 from memory, which helped boost new sales in the first half.

Would it be fair to assume, that just given the macro backdrop, that new sales are tracking lower so far in FY '27 relative to last year and that total sales are also tracking below last year?

Stephen, so yes, you're right. The new sales are going to have a different profile because of the build rate.

And as we've signaled, the build rate is moderating. New sales will moderate with that.

And new sales are also quite lumpy based on timing of stage releases and building openings and things like that. So we've separated the resales out because that really gives the best like-for-like indication of performance that we wanted to provide.

But new sales is much more connected with the build rate and as we continue to sell down through the stock we have.

I agree with separating that out just a year ago, you talked to total sales, of course. So it's just a bit of a change in how you're signaling there.

That's fine. And then just, I guess, secondly, in terms of the target you've got for [ market ] resales to termination rates by the end of the year.

You signaled an increase in marketing spend to support that, which is kind of new to me. Can you give a rough outline of the quantum of spending?

And is this something that's already started to happen in the first half? Has this been activated?

Or is this a plan for later in the year that, that will be rolled out, if you like?

Stephen, so in our segment disclosure at the back, you can see we break out marketing individually, and it's around $20 million in terms of total spend across the group in FY '26. In the non-village component, it's about $6 million, again, looking back at the appendices and the disclosure we provided.

We're not giving kind of an explicit quantum increase in FY '27. We're trying to be directionally helpful.

It's obviously linked to us driving our resale performance over the course of the year. And to the extent you would see, it is over both halves.

It's something that we're looking to move on given the significance and the importance of our resale performance.

I just presume it's material, though, for you to call it out. And I guess the -- just to be clear as well, just move under that, is that simply brand spend going up?

Or does it also led to perhaps increasing incentives?

So we're not going to break down the composition of the increase other than it's just across sales and marketing effectiveness. And the marketing effectiveness piece is the one that I'd index more to across those 2 elements.

Understood. Okay.

And then one last one for me. Just in terms of the land bank.

So we've seen Coburg North added to the for-sale bucket since the Investor Day, which is perhaps not a huge surprise given it's a small intensive site, it was perhaps more of a surprise to see it still in the development bucket in February. I mean I guess how committed is Ryman to the 5 greenfield sites still in the development land bank and particularly the more intensive sites at Essendon, Ringwood East, and Takapuna.

I mean just noting, obviously, seeing a lot of build cost inflation, housing markets a bit tougher, like the economics of those developments would be looking tougher, not better since February. Just any comments you can provide there, please?

So we've -- you might remember at Investor Day, Richard Stephenson had just started with us, at his first week. He's been in the business now for 3 months.

I think from the fact we've appointed someone to that role, we're clearly signaling that we do want to continue to develop. But one of the things for Richard in his first year is to, really, form a view on exactly your question, Stephen.

And it's probably fair to say that there's a bit of redesign in how we look at those sites to get a better outcome than we might have done in previous developments. So that's something we'll be able to update on later in the year as that work progresses.

Firstly, just on free cash flow. So that improvement to $188 million, could you help us bridge how much of that is structural compared to cyclical?

So particularly because of lower near-term development and we have some land sales in there. So could you provide any color on normalized free cash flow in the medium- to long-term?

Good question, Bianca. So I think about it more in the context of CFEO being that recurring component of cash generation for the business.

CFDA, I think we're being relatively explicit on in terms of our disclosure. The more important element is probably the linkage to the $47 million in achieved CFEO improvement towards our $150 million target.

So I'm not answering your question directly. But to the extent that the components are split across the village operating component of CFEO and the non-village component of CFEO with some changes in our one-offs on non-recurring costs, I think that's quite an explicit guide to our calculation of the $47 million achieved in the year.

To the extent you can see our progress against the $500 million target. And to your question, I think our exposure is pretty explicit.

Most of our growth in EBITDAF and cash flow during the year came from care to the components of CFDA that came from land sales and other, I think it's relatively explicit in the pack.

Okay. That's helpful.

And then just on the valuation discount applied to unsold stock, could you just talk about the risk of further write-downs if sales velocity doesn't improve as expected?

Sorry, can you say that again, Bianca? Sorry, you just garbled with it.

So on Slide 37 of the presentation, you talk about the valuation discounts applied to unsold stock. And I was just wondering if you can talk to the risk of further write-downs if sales velocity doesn't improve for the year as you expect?

Yes. Sorry, Bianca, I've got you now.

So across our villages, the independent valuer does have regard to villages where there's unsold stock and applies a discount within their valuation for the level of unsold stock. And so to the extent that you can sell down unsold stock in those villages, it alleviates that discount and you get an improvement or a buffer to our valuation.

So I think there's just an intuitive linkage there to performance and our valuation in terms of the unsold stock discount. But to the extent, to your point, if it's reversed, if there's a greater degree of unsold stock, the value would have regard to that in terms of the same discount.

Okay. And then lastly, just on guidance.

So you provided guidance on build and CapEx, but not on sales volumes this year, whereas you did last year. So just wondering if that's reflecting more limited visibility on demand given ongoing macro uncertainty?

Or if that's -- yes, just how you're thinking about guidance going forward?

Yes. We're conscious, Bianca, of just that level of uncertainty.

We also, were the only one in the market putting out guidance. And so given we've moved to the quarterly reporting, the combination of those things has meant that we think the right answer is to be clear on what we're looking to achieve through the year and then update you each quarter as we go into the year.

Just in terms of the FY '27 sales cadence to-date, can you just provide some more context around how you're thinking about that? Obviously, the sort of fourth quarter seemed like it was tracking up given you're saying it was meeting terminations.

Can you just talk through how much of a sort of seasonal impact there usually is in that sort of first quarter versus the fourth quarter? And also given it's sort of flat, I think the first quarter of '26 is probably a pretty easy comp given you're just sort of getting through some of the changes.

So just some context around whether you think that's a sort of good starting point or a bad starting point for the FY '27 year. Yes.

Thanks, Nick. So look, seasonality is definitely a factor.

The fourth quarter is typically a reasonably strong into the year. and we certainly saw that through last year.

April can be a mixed month. We had 2 long weekends.

We had some pretty adverse weather in Wellington. So we saw all of those things impact sales through April as would often occur.

And I think as we head on through the quarter into sort of a more normal trading period, the guidance is, as we've sort of indicated to you, that we are seeing overall similar levels, but definitely stronger on the service assisted living side than on the independent side. Some regions stronger than others.

Wellington, for instance, has probably been a weaker region through the start of the year. But these things can be fairly lumpy.

So we don't want to equally overstate only sort of 1.5 quarters in where we're at, and we'll make sure we update that at the end of the quarter.

That's good. And then in terms of the commentary around getting to sort of covering terminations by the year-end, how much do you think terminations will grow over the year as the portfolio matures?

Yes. So Nick, we gave in the back of the pack, the F '26 number, which was 1,237 turnovers in FY '26.

So to the extent that you'd expect that number may be slightly higher in FY '27 as the portfolio matures.

That's good. And then the combination of the sort of mix of what you're selling, i.e., selling buyback stock and the sort of time to complete sales, as you've alluded to, has been improving.

Even if you didn't achieve the sort of full coverage, do you think you can work through some of the buyback stock on a net basis given the mix of what you're selling?

I think we're definitely focused on both, if you like, absolute stock numbers and buyback levels, Nick. So I would say that's got -- that both have got equal focus and we'll be looking at how we can continue to manage what has been historic growth in that through this year, even in more challenging potential property conditions.

Okay. And then just in terms of mature villages, you've given the sort of EBITDAF number, which is somewhat helpful.

I know sort of from the village accounts, there'll be more color once those come out. But do you have any number around what you think the mature village yield on valuations are?

No, Nick. So we're not giving a yield measure at this stage.

It's a long-term target for us beyond FY '29. And it's RV only, as you know, and really sensitive to that front book roll-forward effect.

There's a lot of value within the front book to roll forward, but it does take time. So it is something that's really FY '29 and beyond in terms of an ambition.

Our focus really in the near-term is our 2 targets, the $150 million and the $500 million. That's the focus of management in the near-term that we're getting after.

But we'll certainly think on our level of disclosure going forward to the extent there's opportunities to provide that level for your question.

We have one web price question from [ David Townshien ]. Why are Ryman staffing levels, which represent a large operational expense compared to Ryman's competitors far above the industry average?

Is there a plan to review this?

Thanks, David. So we think about village performance through a margin lens rather than an absolute cost lens.

We obviously have a greater weighting towards care in our villages compared to others, and we're seeing that swing as well towards higher acuity within care. So the business benefits from occupancy.

And as we continue to increase occupancy, optimize our costs and our rostering, we are very focused on managing that. We are also in Australia, meeting care minutes, which is a great outcome with the reforms that have happened there.

So as you see that occupancy growth, as you see the changes that have occurred in pricing and funding reforms and continuing work to manage the cost side, we'd expect that all to flow through to margin inflation.

There are no further questions online. I'll pass back to Naomi.

Thanks, everyone, for joining us today. Just to wrap up, we enter FY '27 with a significantly stronger and more resilient business than we were operating 2 years ago.

Our focus remains on growing recurring earnings, generating sustainable cash flow, and allocating capital with discipline. New Zealand government reforms are well underway.

And importantly, demand for our care offering continues to be driven by demographic and clinical need. The momentum we've seen in FY '26 gives us confidence in the pathway towards our FY '29 targets.

Thanks for joining us today.