Ryman Healthcare Stock

Good morning, and welcome to Ryman Healthcare's 2026 Annual Shareholder Meeting. I'm Dean Hamilton, Chair of the Board. Thank you for joining us here in Auckland and to those who are joining online. After a number of requests, it's nice to be here in Auckland for this year's annual meeting. And hopefully, a number of our recent shareholders have been able to make it along today.

Before we begin, a few brief housekeeping items. Bathrooms are located on the first floor in the atrium. Should the fire alarm sound at any point, please leave the room immediately via the fire doors and proceed down the internal and external stairwells. The evacuation assembly point is located in the car park behind the building. Please follow the instructions of all staff at all times. Can I please ask that you all take a moment to ensure your cell phones are switched to silent mode. Thanks, Hamish, including directors.

As a reminder, today's meeting is a hybrid meeting. For those online, if you have any technical issues, please refer to the virtual portal guide or phone the helpline on 0800-200-220. If you are online and have questions, you can submit them 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 the time to answer these questions at the appropriate time during the meeting.

Voting on the resolutions will be conducted by way of a poll. All resolutions in today's meetings are ordinary resolutions and to be passed, require approval of 50% of the votes cast on each resolution. For shareholders joining us in person today, you would have had validated or been given your shareholder voting card on the way in. 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 staff from MUFG Corporate Markets 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'll need to click on the Get a Voting Card button within the online meeting platform, which is also shown here on the screen. Voting will remain open until 5 minutes after the conclusion of the meeting. I declare that we have a quorum of shareholders and the meeting is now open.

This morning, I'll start by outlining the progress we've made strengthening the business and starting to rebuild long term value for shareholders. Naomi James, our Chief Executive, will then take you through performance, strategy and outlook. We'll move to formal business before opening for questions. Following the conclusion of the meeting, we invite you to join the Ryman Board and Executive team for some light refreshments.

Joining me today are my fellow directors, from my left, Scott Pritchard, Paula Jeffs, James Miller, Hamish Rumbold, Kate Munnings and David Pitman. Over the last three years, we have deliberately strengthened the Board to ensure we have the capability required for Ryman's next phase. This has been a significant period of Board renewal, bringing new capability across governance, customer, digital, operational performance, development and capital markets experience. We were pleased to appoint Hamish Rumbold in May. Hamish brings deep expertise in customer, digital and operational performance, capabilities that are we believe are directly relevant to how we are improving the business today. Hamish will speak more to his experience later in the meeting.

As previously announced, Paula Jeffs will retire at the conclusion of this meeting. Paula has made a significant contribution for a period of real change for Ryman, and we thank her for that. As part of the normal Board rotation, I, along with James Miller and Hamish, will stand for re-election today. Also joining me on stage this morning is our CEO, Naomi James. The Ryman senior executive team are all here today, and I encourage you to introduce yourselves to them over refreshments following the meeting. Representatives from our auditor, PwC, and our share registrar MUFG are also in attendance.

FY '26 marks a clear turning point for Ryman. Over the past two years, we have taken decisive action to reset the business, strengthening governance, changing leadership, restoring financial strength, improving transparency and reshaping how we operate. That work was necessary. We believe that Ryman is now back in control of its performance and its future. In FY '26, we saw tangible results. We saw a material improvement in operating profitability, we saw meaningful cost reductions and a return to positive free cash flow for the first time in more than a decade. We are achieving this in a challenging environment, with the last three years being reported as New Zealand's most prolonged housing market slump in 15 years and the Victorian housing market also suffering through wide-spread tax changes in Australia.

This is not a short-term business recovery. It reflects a structural shift in how the business operates, a more disciplined, a more resilient and more commercially focused organization. We acknowledge that our share price is not where it needs to be. Your board and management are very aware of this. We are shareholders. Whilst there was a partial recovery to $3 per share as recently as January this year as investors saw green shoots in the New Zealand economy, the subsequent global disruption caused by the Middle East conflicts and reduction in consumer confidence that followed, and housing market becoming weaker has contributed to those gains [ essentially ] has being given back.

Whilst the share price retreat has been very disappointing, our focus as a Board remains firmly on what we can control: Execution, performance, and disciplined capital allocation. As we stated at the full year results, we will consider all capital management options when allocating our free cashflow. We are building a stronger business, and we are confident that, over time, this will be reflected in improved shareholder returns.

A critical part of our reset has been restoring financial discipline and strength. In FY '26, we completed the balance sheet reset. Today, Ryman has a strong and flexible funding position, no bank maturities until fiscal year '31 and significant liquidity headroom. We also had the lowest gearing among New Zealand's listed retirement village operators, giving us real flexibility as we work to improve the performance of the underlying business. Building on that foundation, we introduced a clear capital management framework in February this year. Our priorities are simple: improve the cash generation of the business, grow recurring earnings, and maintain balance sheet flexibility with the option to grow when conditions are supportive and only when conditions are supportive.

In June, we completed a $150 million retail bond offer, which was strongly supported with demand of more than $400 million, reinforcing confidence in the business and re-establishing Ryman as a repeat issuer in the retail debt market. We believe we now have a well-balanced funding structure. The Board reiterates its intention to return to dividends from FY '28, importantly paid out of operating cash flows not funded by debt as it had been in the past.

We have made a deliberate shift in how we approach development. Historically, growth was heavily driven by the construction of new villages. At its peak in 2022, Ryman had 16 villages under construction, with debt growing to over $3 billion by the end of that calendar year. The business was on a treadmill it couldn't enough get off. With capital became constrained, independent living units were prioritized to generate cash and support capital recycling with the main buildings where the amenity and care was, that were deferred. Those main buildings contained many of the amenities, our care centers and serviced apartments we had committed to residents.

Over the past two years, this Board has delivered five of those deferred main buildings. While that was the right thing to do for residents and the long-term health of the business, it has created a near-term earnings headwind as we absorb the operating cost and fill the significant new capacity in serviced apartment that we brought on at one time. Today, our focus is different. Maximizing value from our existing portfolio and improving cash flow, with the goal of returning to disciplined growth only when we are very confident this will deliver returns for shareholders. With our shares trading at a significant discount to NTA, the Board has a very high threshold for new developments in this environment. Therefore, our biggest opportunity is to maximize the performance of our existing portfolio of 47 villages.

Management are focused on driving up occupancy, improving revenue per room across care and independent living and reducing our overheads. Management have made significant progress in increasing care premiums, bringing up to date our independent living weekly fees in line with cost inflation, and increasing our deferred management fees on independent units from 20% to 30%. However, it takes time for these changes to be reflected in reporting earnings as they only are affecting new residents. For the year just passed, only 17% of our retirement residents were on our new terms. And we estimate by 2029, only 50% of our residents will be on these new terms.

The other part of performance is the inflation in our retirement units over time. These have over time closely matched the inflation in house prices more generally. We clearly have less control over the second component of our overall returns. We know that achieving both improved operating earnings and inflation in our retirement units will be critical to long term shareholder returns. In terms of new villages, we ended the year with only two sites under active construction. This is intentional; reducing risk, lowering capital intensity and improving resilience. We still have a significant amount of available land at new sites and existing villages, but going forward, development will be selective, demand-led and at a controllable scale.

Alongside this repositioning, we continued to deliver a number of important building milestones during the year. We completed and opened the beautiful main building at Kevin Hickman Village in Christchurch, which Naomi and I opened earlier in the year. We welcomed residents to the newly completed stages at Nellie Melba Village in Melbourne, and we have marked the official openings at Keith Park Village in Hobsonville and James Wattie Village in Havelock North. These openings are important not just as construction milestones, but as a signal that recent development activity is now transitioning into occupancy, care delivery and cash flow. Across the portfolio, we welcomed more than 3,700 new residents during the year who now call Ryman home. Development remains an important part of our future but only when conditions and returns support it, rather than being driven by Always On development program.

Rebuilding long term value for shareholders is the Board's focus, and we've been very deliberate in how we've approached it. We have reset the business across governance, leadership, strategy, capital structure, financial reporting, executive remuneration and operating discipline. All of this, whilst keeping the resident at the heart of everything we do. We know we need to provide a great experience for residents and for our shareholders. On the latter, we know we have work to do.

We have made significant improvements in our financial reporting and transparency. Whilst this has been challenging to work through, the improved transparency, more conservative accounts and greater comparability with others will put us in a stronger position going forward. Executive long-term incentives are now directly aligned to shareholder outcomes, and both the Board and executive leadership have minimum shareholding requirements. During the year, we successfully completed our secondary listing on the ASX. This overtime will expand our access to capital, improve liquidity and reinforces our long-term commitment to Australia, a market we believe with significant structural demand for what we offer. Ryman is now operating as a more disciplined business with a strong focus on returns.

We remain committed to our sustainability journey and have continued to mature our approach, as set out in our latest climate-related disclosure report. In FY '26, Ryman's Scope 1 and 2 market-based emissions decreased by 30% compared to the prior year, and representing a 58% reduction compared to our 2021 baseline. The Ryman Healthcare Solar Farm in Northland became fully operational, making Ryman the first retirement village operator in New Zealand to secure a dedicated, commercial-scale renewable energy source. Whilst the solar farm is owned by third parties, our commitment essentially underwrote the development. This milestone reflects our commitment to residents, communities and the environment, and will supply around 60% of our New Zealand village electricity needs, so significant indeed.

In terms of our people, if we look across our whole workforce of 7,800 employees, we have around 80% female representation. And our gender pay gap is essentially at nil in both New Zealand and Australia. We are also pleased to report that we have 48% female representation across the top two levels of leadership and the Board. We acknowledge that the Board gender diversity will reduce post Paula's retirement, the Board continues to consider diversity as well as required skills and capability in making new director appointments. This is a point in time, and we are committed to improving our Board gender diversity over time.

Throughout this reset, one thing has not changed, our purpose: To enhance freedom, connection and wellbeing for people as they grow older. That remains central to how we operate and how we create value. Ryman today is stronger, more disciplined, and better positioned for the future. As we enter this next phase, it's also important that the way we present Ryman reflects who we are today. Special communities built around our unique home-for-life proposition, supporting residents with freedom, connection and wellbeing and the reassurance that care is there as their needs change.

Last month, we refreshed the Ryman brand to better express our purpose and the confidence, care and connection at the heart of our villages. In simple terms, it's all taken care of. This is not a change in who we are, it's just a clearer expression of what makes us special. To our shareholders, thank you for your patience and continued support as we progress this next phase of the journey. Rest assured, we are very, very focused on rebuilding value for you, our shareholders. To our team, thank you for your ongoing commitment for delivering great care, every day. To our residents and their families, thank you for your trust in Ryman and for being part of and contributing to our village communities.

With that, I will now hand over to our Chief Executive, Naomi James.

Thank you, Dean, and thank you everyone for being here today. FY '26 marks an important point in time for Ryman where the business is resetting and is now translating into improved performance, stronger cash flow and a more resilient balance sheet. Our focus is now firmly on unlocking long-term value from that foundation.

I want to start by sharing a couple of the insights from our investor day earlier in the year, which shared the basis for our refreshed strategy. To understand the opportunity ahead for Ryman, it's important to start by stepping back and looking at the market we are operating in. The demand for care-centered living is clear and compelling. The population aged over 80 across New Zealand and Australia was expected to double by 2050, with demand already outpacing supply. In New Zealand alone, there is a projected shortage of more than 10,000 aged care beds by 2032. This demand is already evident today, and it's increasingly shifting toward assisted living and higher-acuity residential care needs.

That trend plays directly to Ryman's strengths. More than half of our portfolio is now weighted toward aged care and serviced apartments, positioning us well to benefit from these long-term demand trends. Our integrated model provides residents with a genuine home for life, supporting them as their needs evolve from independent living and assisted living through to hospital-level and dementia-level care. While this positions us strongly for the future, it's also important to acknowledge that Ryman has not always captured this opportunity as effectively as we could have.

So, when we refreshed our strategy in FY '26, we focused on two things; building on what Ryman does well and being honest about what needed to change. We want to maintain the industry leading resident experience and high-quality clinical care which have been the foundation of our organization's purpose and values, driving resident satisfaction, brand and community trust. At the same time, we needed to address what has got in the way of our financial success. Ryman held weekly and deferred management fees very low for a long time. Costs escalated, particularly through COVID, leading to significant operating deficits.

The company chased a larger and larger portfolio of development projects which created a compounding risk profile. Non-village costs grew faster than resident numbers, and the company had not scaled its processes and systems to match the size of the organization. The lack of financial performance transparency, alongside the strong growth in property prices, meant the financial impact of this was not entirely visible.

As Dean spoke to earlier, we have shifted from a model that relied heavily on development and capital gains to one focused on sustainable value creation. Put simply, this represents a deliberate shift away from a development-led model to one focused on optimizing existing assets and generating sustainable cash flow. We are focused on four key drivers of shareholder value: leading the industry in care-centric living, growing recurring earnings, lifting returns from our existing portfolio and allocating capital in a disciplined, value-accretive way. We are maximizing returns from the assets we already have, lifting occupancy and improving utilization across both retirement living and care.

Care sits at the center of our model. It delivers better outcomes for residents and more stable, resilient earnings profile over time and is increasingly a key driver of earnings growth. We are being more disciplined in how we allocate capital, with a clear focus on returns and ensuring capital is only deployed where it's value accretive. This strategy was designed to reduce capital intensity, improve cash conversion and deliver more consistent and predictable earnings over time. Importantly, these initiatives are already underway and are driving the improvements we saw in FY '26. For the first time in more than a decade, Ryman generated positive free cash flow of $188 million, which is a significant milestone for the company.

Earnings momentum is building. Operating EBITDAF, which is our preferred measure of operating profitability, almost doubled over the year, driven by strong revenue growth and broad-ranging cost-out initiatives which have delivered $57 million in annualized savings over the last two financial years. Our reported loss before fair value movements and tax has also substantially reduced. These outcomes reflect the benefits of a more disciplined operating model and a clearer strategic focus as we build a more resilient and sustainable business for the long term.

Looking at our FY '26 result, it's clear we still have a way to go. Which brings me to the targets we've set for FY '29, shared at our Investor Day in February. These targets are how we measure the turnaround in financial performance in the near term, as we improve cash generation, grow recurring earnings and increase balance sheet flexibility. In FY '26, we delivered $47 million of sustainable cash flow improvement from existing operations, driven by occupancy, pricing and cost out, which puts us on track for our FY '29 target of a $150 million improvement.

We are releasing significant cash from the balance sheet, with $169 million of our $500 million target achieved last financial year. This was driven from both selling down new stock and our land divestment program. To the end of FY '26, we had settled or contracted $147 million of land sales. And in May, we lifted our land divestment target from $200 million to $250 million. We delivered aged care EBITDAF per bed of nearly $18,000 in FY '26. With a continued focus on lifting occupancy and utilization across our aged care centers, we are targeting to lift this metric to $25,000 to $30,000 per bed by FY '29.

From here, execution is about consistency. Continuing to convert these initiatives into reliable, repeatable performance, while ensuring future growth is disciplined and value-accretive. We are executing this turnaround at pace and in a housing market that remains subdued. In this environment, it's pleasing to see the signs of the benefit of our strategy coming through, with improvement in our serviced apartment sales evident in our latest quarterly update.

As Dean noted earlier, the housing market remains challenged, impacting independent living sales and we have seen a shift in the sales mix towards serviced apartments in a highly competitive environment. Total Q1 FY '27 resale volumes have remained in line with the same period last year and net resales contract volumes increased by 7%, with serviced apartments accounting for a higher proportion of the mix. Occupancy in mature care centers remains high at 96.1% in Q1 FY '27, unchanged from Q4 FY '26.

We're encouraged by these indicators, but success at Ryman isn't measured solely in financial or operational metrics. Ultimately, the strength of our business depends on the experience of our residents and the quality of care we provide every day. More than 15,500 residents call Ryman home, and we deeply value the communities they help create across our 47 villages. The quality of care and resident experience remains strong. Resident satisfaction remains high, reflected in strong Net Promoter Scores and continued external recognition across the sector.

In FY '26, Ryman was named Best Group Provider by Seniors New Zealand for the sixth time, with a further 14 awards recognizing individual villages. Diana Isaac Village received the Enduring Excellence Award of 2025, reflecting more than 5 years of sustained high performance, an honor awarded only six times in the past decade. We are proud to offer our residents choice in retirement living, and the confidence of knowing they have access to high-quality care as their needs change.

I want to acknowledge and thank our team members across all of our villages for the care they provide to our 15,500 residents each and every day. I also want to thank our residents and their families for the trust they place in us, and the contribution they make to the vibrant and supportive communities that make each Ryman village so special. Maintaining a high-quality resident experience is essential, and we also recognize that customer expectations are evolving. To support and continue attracting future generations of residents, we need to evolve our offering alongside those changing needs.

This evolution is about better matching customer demand and supporting occupancy, pricing and models of care over time. The market is changing. Residents are looking for more choice, more flexibility and greater confidence that care will be available as their needs change. The strongest growth across the sector is in assisted living and aged care, and that is where Ryman is positioned. Our villages are designed to support residents through every stage, providing choice, flexibility and reassurance that care will be there when it is needed.

We are introducing more flexible pathways into village living, including initiatives like Ryman Select, which give residents greater control over the services they choose and the ability to adapt those services as their needs change. We are also expanding our premium care offering, combining high-quality accommodation with 24/7 clinical support and piloting premium care apartments to meet demand for higher-acuity, higher-expectation living and improving how residents transition into care.

Another example is the Resident Fund, which is unique to Ryman and helping make the transition into aged care simpler for our residents. We know that moving into aged care can be a significant financial decision for residents and their families. The Resident Fund was designed to make that transition simpler by allowing residents to use equity from their village home to help fund their aged care accommodation premium. This reduces the day-to-day cost of care, provides greater flexibility and choice and helps residents move into the right level of care when they need it. The response since launch has been encouraging. The product is supporting smoother transitions into care for residents while also increasing capital retained within the business.

And we see further opportunities to refine and expand the product over time as part of our broader focus on meeting the growing demand for care-led living. The Resident Fund is a good example of how we're adapting our model to meet changing resident needs. Importantly, it's also consistent with the broader direction of aged care funding reforms, which increasingly supports more integrated care and greater choice for older people.

There is now broad recognition on both sides of politics in Australia and New Zealand of the importance of the aged care sector funding reforms, not just to ensure care is available for older people, but to ensure the health system is there for all Kiwis and Australians. Aged care is healthcare. A strong aged care sector is key to a sustainable health system, providing care in the right setting and helping ensure hospital services are available to those who most need them. The direction of travel is clear: more care delivered in the home, greater integration across aged care and the wider health system, and closer partnerships between public and private providers.

As demand grows and care needs become more complex, providers like Ryman will have an increasingly important role to play. This will ensure people receive the right care, in the right place, at the right time. Ryman is well positioned in this environment. Our integrated model aligns directly with where policy settings are heading. Importantly, this supports better utilization of existing assets which directly improves returns.

In Australia, following recent reforms, Ryman is already providing over 50% of serviced apartment residents and over 20% of independent residents with Support at Home packages. In New Zealand, we are awaiting release of the recommendations of the Ministerial Advisory Group on funding reforms and are expecting to see the government's response ahead of the New Zealand election later this year. The aged care and retirement living sector have a critical role to play to ensure the growing health needs of a much larger older population are met, and the health system can deliver for all Kiwis. The urgent reforms in New Zealand represent the critical next step to ensure the sector is able to play this important role.

To conclude, I want to highlight the investment proposition for Ryman today. While the global environment remains uncertain and housing markets remain mixed, the structural demand for care and retirement living is clear. We have reset the business, strengthened the balance sheet, reduced development risk and reestablished cash flow. Demand remains strong, particularly in care-centered living, and we are aligning our offering, operating model and capital allocation to meet that demand more effectively. We now have a disciplined strategy, a clearer earnings profile and a more resilient operating model. The improvement in our financial performance, even in mixed market conditions, demonstrates that this model is delivering improvements. Bringing this together strong structural demand, a lower-risk, cash-generative model and disciplined capital allocation positions Ryman very differently today than two years ago. Thank you for your continued patience as we progress our transformation.

With that, I will hand back to the Chair to move to the formal business of the meeting.

Thank you, Naomi. Before we move to general business and your opportunity to ask questions, we will now move to the formal meeting resolutions, which were outlined in the Notice of Meeting, which you all have. Each resolution set out in the Notice of Meeting is to be considered as an ordinary resolution and as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution.

For those of you here today, you'll be voting using your voting card. Please mark your voting intention for each resolution, and the voting cards will be collected at the conclusion of the meeting. If you require assistance with this, please see MUFG outside of the room. For those of you voting online, you will need to click Get Voting Card within the online meeting portal. Please mark your electronic voting card in the way you wish to vote by clicking for, against or abstain. Once you have made your selection, please click submit vote on the bottom of the card to lodge your vote. 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. The outcome of proxy votes received prior to the meeting will be displayed after.

There will be an opportunity to ask questions on each matter being put to shareholders. For the sake of good order, shareholders' questions raised should relate directly to the matter being considered. There will be time later to ask general questions. When I call for questions, can shareholders please -- present in the room, please make your way to a microphone stand on either side of the room and clearly state your name. I will take questions from those present 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 also wishing to ask questions.

Now turning to Resolution #1, that the Board be authorized to fix the remuneration of PwC as auditor of Ryman Healthcare Limited for the ensuing year. The Board unanimously recommends that shareholders vote in favor of Resolution 1. Are there any questions of the Board concerning the resolution from shareholders in the room? Are there any questions online?

There are no questions online for Resolution 1.

Thank you. Could you please mark your voting cards now?

[Voting]

Moving on to the second resolution. I will ask James to lead this.

Under NZX Listing Rule 2.7.1, a director appointed by the Board must not hold office without reelection past the next annual meeting following the Board -- following the director's appointment. Dean Hamilton was appointed to the Board with effect from 1st of June 2023. Dean accordingly retires and offers himself for reelection. Dean is considered by the Board to be independent. The Board unanimously recommends that shareholders vote in favor of Resolution 2. I would now like to invite Dean to introduce himself and to speak to his reelection.

Thank you, James, and apologies, you'll be hearing a bit from me today. Good morning, and thank you for the opportunity to offer myself for reelection to the Board of Ryman. As James said, I joined the Board in June 2023, some 3 years ago, and I became Chair a couple of months after that at the ASM in July 2023. I joined the Board with a clear mandate for change from shareholders. Shareholders have lost confidence in the company, in the Board, in the strategy and in the company's financial reporting. As a Director and Chair, we have overseen significant change over this period. We have progressively ushered in a new Board. We've introduced new management. We've raised new equity. We have simplified and refinanced our debt. We've increased transparency of our financial performance. We've signed off on what we believe to be a much more conservative balance sheet with substantially less director judgment involved.

We've changed management long-term incentives to be aligned with shareholder returns, not underlying profit. We've significantly reduced overheads that were in the business. We've materially reset pricing in our retirement living. We've completed those village centers that I referred to earlier that have been deferred. And we've quickly wound down the scale of new development to reflect current conditions from 16 to 2. Importantly, we have reset our medium-term strategy to focus on maximizing the value of our current portfolio and getting match fit for the future. By most measures, that is a lot of change, and it has required a lot of time and effort by a lot of people.

All of this has occurred in a very challenging residential property market and in a temporarily oversupplied retirement unit market. This is a multiyear turnaround to rebuild shareholder value. The share price performance has been disappointing. I fully acknowledge that. We have all lost money. Whilst a number of the issues impacting the share price have been Ryman specific, I would note that the other listed companies in New Zealand are also now trading at steep discounts to NTA, suggesting some wider industry issues at play on investors' minds.

Ryman was the first to take the pain and lead into change. I'm optimistic that we will be the first to emerge on the other side. I believe we've been brave where needed, leaned into some hard decisions and have now built a much more solid Ryman. As I look back with the benefit of hindsight, the scale of changes required to move the company away from build it and they will come strategy, which was coming on start quickly with rising construction costs, rising interest rates and poor development controls has certainly been beyond my initial expectations.

We are turning the corner. The job is by no means done, and I would urge you not to judge the outcome at half time. My first 3 years as a Director have been about helping uncover the issues, prioritizing the changes and overseeing the reset. The next 3 years, should I be reelected, is about overseeing the execution of our strategy, ensuring we maintain a great experience for residents, but importantly, also building much better returns for shareholders.

I believe my strong governance experience, my prior CEO experience in running a large complex business through a significant turnaround and more recently, my understanding gained at Ryman over the last 3 years means I have the skills and experience to continue to add value as a Director of Ryman. It would be a privilege to continue to serve as Director of Ryman, and I would appreciate your support in being reelected. Thank you.

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

There are no questions in relation to Resolution 2 online.

I now propose that Dean be reelected a Director of the company. Thank you, and please mark your voting cards now.

[Voting]

Thanks, James. Moving on to the third resolution. Under NZX Listing Rule 2.7.1, a director appointed by the Board must not hold office without reelection past the Annual General Meeting following the director's appointment. James was appointed as a Non-Executive Director by the Board with effect from the 1st of June 2023. James accordingly retires and offers himself for reelection. James is considered by the Board to be independent. The Board unanimously recommends that shareholders vote in favor of Resolution 3. I'd now like to invite James to introduce himself and speak to his reelection. Welcome, James.

Thank you, Dean. It's a privilege to speak to you today as I seek your support for reelection to the Board of Ryman Healthcare. Over the past 3 years, I've had the honor of serving as an Independent Director and as Chair of the Audit, Finance and Risk Committee. During my time, I have led strong financial stewardship and effective risk oversight to support Ryman's strategic ambitions. This includes the reset of financial reporting, equity recapitalization, bank debt refinancing and the recent bond issue. All this work has laid the foundation to move back to a growth phase and a return to dividends in the future.

For me, personally, the total shareholder return during my tenure has been one a bit of disappointment. And while I can point to an array of causes, the buck always stops at the top. I sympathize with your position as shareholders. However, I do believe Ryman is now well set up for success under the leadership of Naomi James. My background as a chartered accountant and a fellow of the Institute of Chartered Accountants and the Institute of Directors has grounded my approach in integrity, accountability and transparency.

Looking ahead, I believe we are now well into the recovery phase with a strong focus on the core of what Ryman is known for, superb care of the elderly in a vulnerable time in their life. Disciplined cost management, disciplined capital allocation and shareholder wealth creation. I believe the company remains well positioned to deliver value for its customers and shareholders and to be a great place to work. Thank you for the ongoing trust and the opportunity to serve. I'd be honored to continue contributing to Ryman Healthcare's success in the future, and thank you.

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

There were no online questions in relation to Resolution 3.

Thank you. I now propose that James Miller be reelected as a Director of the company. Thank you. Please mark your voting cards now.

[Voting]

Moving on to the fourth resolution. Under NZX Listing Rule 2.7.1, a director appointed by the Board must not hold office without reelection past the next Annual General Meeting. Hamish Rumbold was appointed as a Non-Executive Director by the Board with effect from May this year. Hamish accordingly retires and offers himself for reelection. Hamish is considered by the Board to be independent. The Board unanimously recommends that shareholders vote in favor of Resolution 4. I would now like to invite Hamish to introduce himself and speak to his reelection. Hamish?

Thanks, Dean, and good morning, everyone. Thank you for the opportunity to speak today as I seek your support for reelection for the Ryman Healthcare Board. I'm a passionate Kiwi, who has lived and worked across New Zealand, the U.K., India, South America. And I graduated from the University of Auckland with a Bachelor of Commerce and a Bachelor of Property, plus ongoing leadership training and global executive programs throughout the world.

Throughout my career, my main focus has been on delivering strong commercial results by connecting the customer experience with technology, data and digital tools. I started out in large-scale retail with Lion Nathan, Foodtown, Woolworths before spending 10 years overseas working with major international businesses such as Sainsbury's, BP and Cencosud in South America. When I moved back to New Zealand, I joined Air New Zealand, first leading customer experience and engagement and the Airpoints business and later running digital data and customer technology worldwide. After that, I was CEO of a software engineering firm across Australia and New Zealand and most recently spent 5 years as Chief Digital and Technology Officer of Kiwibank.

During this time, I also served as an Independent Director on Fidelity Life Board and was on the Prime Minister's Cybersecurity Advisory Committee. In 2024, I moved into full-time governance to help drive growth for great local New Zealand businesses alongside Ryman. I also serve as Non-Executive Director for the Warehouse Group, for the House of Travel Holdings, for LIC, and as Chair of OrbitRemit and International Money Transfer business across Australia and New Zealand.

In my view, Ryman provides a critical role to society and to residents across the Tasman. We deliver a true connected continuum of care, providing independent living through rest homes through to hospital care, all under one roof, which I think becomes increasingly important as more and more people grow older. As Ryman moves forward in executing its strategy, consistently maintaining high occupancy and reaching our target to bring non-village costs down under $100 million, it will require a well-managed and governed transformation that delivers smart, targeted investments in modern technology, streamlined processes and unified data systems. This is where my background fits in.

I've spent my career leading large-scale digital transformations. I know what it takes to succeed. Starting with the customer, simplifying processes and using data and technology to take out friction and cost. I bring this lived experience to Ryman to support and test as we execute the strategy, providing governance to ensure that the technology investments deliver genuine operational savings whilst enhancing the residents' experience. We have important work ahead of us to keep turning this business around. I'm deeply committed to this iconic Kiwiborn company, and I bring both a shareholder and a customer lens to the governance table.

I would greatly appreciate your support for my reelection and to keep serving the Ryman Healthcare Board. Thank you.

Thank you, Hamish. Are there any questions for Hamish or the Board concerning this resolution from shareholders in the room? Are there any questions online? Sorry, I didn't see that. Could you please make your way to the microphone? No rush, that's fine.

Barbara O'Connor from the New Zealand Shareholders' Association. And I'm really grateful to see the skills that Hamish brings. My question is can he give the time needed to help -- turn this company around when he's got five independent director roles?

Yes, that's a good question. I'll have a go at answering that because that was certainly -- and I can hand to Hamish as well -- that was certainly one of the questions that we discussed. Trying to find a person with Hamish's experience took us some time. We ran through a whole recruitment process, and we couldn't find who we wanted, then we came upon Hamish. And we're delighted that we found it all in one place. So that made it easy. But we did discuss capacity. Do you have the capacity? It's a big business. We've got a lot of work to do. But ultimately, he's a governor. He's not going to be in the business. I think that's really important. There's a clear distinction in management and governance. And what we want Hamish to do is help govern these processes.

So from a capacity perspective, we spent time talking about that. He got us comfortable that with those other opportunities, a number of them are much smaller businesses than this. We felt he had the capacity to do that. But maybe, Hamish, do you have anything you'd like to add?

Look, always a really important consideration, and thanks for the question. I think to Dean's point, the Boards vary in size and commitment, and I'm 100% committed to a full-time nonexecutive career. So I can commit all my energy and time to that.

Are there any questions online?

Your first online question comes from Stephen Mayne. Could Director Hamish Rumbold and the Chair comment on the recruitment process that led to his appointment to the Board? Was a headhunter involved? Did the full Board interview Hamish as a group? And did they interview any other candidates? Did Hamish know any of our directors before engaging with the recruitment process?

Thank you, Stephen. I think as I intimated, we ran a full process with an outside recruitment agency. We interviewed three or four people that were shortlisted out of that. A subcommittee of the Board did that. We didn't think we had the right answer there, so we paused that process. And then I obviously sit on the warehouse Board and Hamish appeared there. And I actually thought to myself, actually, we've got the answer right under my nose here.

So I introduced Hamish to the balance of the Board. All of the Board interviewed Hamish. I've obviously had the opportunity to watch Hamish for 3 to 4 months already at the warehouse before he had those interviews. So there was an extensive interview recruitment process. It was unsuccessful. We couldn't quite find what we had, but we're delighted when we found Hamish under another bush in another place. So whether you knew other directors, Hamish?

No, I did not know.

And that was actually the first time I've met you as well. So there's no history there apart from that. So we're delighted to have Hamish. I think that mixture of customer and technology and transformation, we found through the recruitment process it was very hard to find in one place and with governance experience. So now we're delighted.

There are no further questions online in relation to Resolution 4.

Thank you. I now propose that Hamish Rumbold be reelected a Director of the company. Thank you. Please mark your voting cards now.

[Voting]

I would now like to give shareholders an opportunity to ask questions, whether related to the presentations, whether related to the financial statements or the management of the company. Between us, we will do our very best to answer these. Shareholders online can continue to provide questions through the portal, and we'll also address questions from the room. We've received some questions in advance. And given the efforts I've made, I will seek to address those first.

If you are asking a question from the floor, please state your name and whether you are a shareholder or if a proxy holder, the name of the shareholder that you're representing. Please make your way to the microphone stands when asking your question so that those in the room and just as importantly, those online can hear you clearly. We also ask that you limit yourself to one question at a time so that everyone who wishes to participate has the opportunity to do so.

Hayden, could we please read the pre-submitted questions from shareholders?

Your first pre-submitted question comes from Jeffrey and Kathleen Hogan. It has been some time since shareholders received a payment. What is the time frame to recommence paying dividends?

That's a very fair question. As I reported in my Chair speech and as Naomi referred to, we've publicly stated a strong intent to return to dividends in FY '28. We've indicated that they will be between 20% and 50% of our cash flow from operations. And importantly, that won't be from debt. We will not be borrowing to pay dividends as it happened in the past. So we continue with that intent, and we strongly expect to be in that position.

Hayden, any other questions?

Your next pre-submitted question comes from Robert Rose. It would be nice to have some Board members that are not from property, IT or finance backgrounds. You have people on the Board and executive team from Air New Zealand, the Warehouse Group and Fletcher Building, which does not give me confidence.

It's a bit tough, James. You've just gone on the Fletcher Board trying to fix it, but 3 to 5 minutes. Look, I actually believe that it's a very good Board. I'm really delighted with what we've been able to attract. And there is a lot of diversity on the Board. I think without being rude to my Fletcher friend or my IT or property colleagues on the Board, if I looked at someone like Kate, originally trained as an aged care nurse, moved to law, having seen the light and then moved into operations, culminating and running 80 Ramsay hospitals in Australia, an enormous largest hospital fleet in Australia. So a strong care background, then moved into the Chief Executive of a listed IVF business, Virtus. So Kate brings enormous depth across aged care, care more generally and legal background. So I think she's very, very diverse.

In terms of Hamish brings customer -- strong customer lens, not just IT lens, and I think that's what makes him different. Myself, I've spent half of my career in finance markets and half my career in operations, having previously run Silver Fern Farms, which is one of New Zealand's largest food processing businesses. So I think I bring a mixture of finance and operational experience. So apart from those other skills, which I do think are important, care is important, finance is important, property is important.

And Paula, obviously stepping down now, but has run large-scale people teams. So I actually think the Board is well -- the shareholders are well served by the Board, and there's a lot of depth there and experience.

Your next pre-submitted question comes from Ian and Margaret. When will the next dividend be coming up?

How many of these are going to get? Same answer. We're very conscious of it. We've stated our intention of FY '28 and nothing has changed.

The next pre-submitted question comes from Andrew. The Labor Party is promoting its plan to make retirement village operators repay residents within 3 months after they depart and that this change in law would be retrospective. Could you and your team please discuss how this would impact Ryman and also its impact on the aged care sector more broadly? Would such a change result in a deterioration in Ryman's cash flow and in turn, resulting in higher debt levels?

Thank you, Andrew. I think it's important let me just set the scene in terms of what we do now. So Ryman, our current setting is to repay after 12 months or the earlier of the person moving in, and we pay interest after 6 months. That's the position in Australia. That's the proposed position by this government under legislation under review. What the Labor Party -- and we support that because it's actually in line with where we are now. What the Labor Party is proposing is something substantially different. That's repaying after 3 months of departure and doing that retrospectively to everyone who signed a contract that didn't say that. So that would be significant in a number of fronts.

Effectively, every operator in New Zealand would have to buy back every person who's departing because the irony there is from a residential property, if you're selling your residential property, it's at least 6 months plus for you to sell and get money from your property. If you decided to leave, you're probably going to do the wallpaper, you probably might do the painting, replace a few bits and bobs. You're going to put it on the market, you might sign a contract and there'll probably be 3 months to settlement. So what they are proposing here is very abnormal. It's abnormal to go backwards in time. So for us, we would not support that change. And ultimately, that financial burden that they're putting on operators that doesn't exist now will ultimately come at a cost to residents. Weekly fees will have to go up. DMS will have to go up because there's no free lunch here.

So I think it's a relatively narrow view of that. It's going to be the political run-up to the election. So as an organization, we think that will ultimately be at a cost to residents and also see less retirement living and aged care built, which seems to be an odd setting as the population is aging. So we're not supportive.

Your next question comes from Christopher McMillan, which relates to the recent resident incident reported on by RNZ. Can you please explain how an incident of this nature could occur and what safeguards are in place to protect residents, their property and to ensure the quality of care expected at Ryman? What actions has the company taken in response to this incident? And what additional steps will be taken to reduce the risk of similar incidents occurring in the future?

Look, this was a very unusual and distressing event. The organization has unreservedly apologized to the family. I personally apologize to the family. It's very unusual in Ryman for this to happen. The person involved with it is now an ex-employee. It fell well short of our standards. And while someone might say that's one incident with 15,000 residents, one incident is one too many. So the Board takes that very seriously. We were made aware of it immediately, and we've tasked management with reviewing and making sure that does not happen again. But to provide a little bit more detail, I'll hand over to Naomi.

Thanks, Dean. And as Dean has already said, just again, acknowledging the distress of this incident and the unreserved apology that the company has made to the person and their family involved. There are two things I'll just touch on more broadly, which is how we respond if there is a significant incident of this kind as well as what we're doing to invest in and lift our clinical governance right across the company. So in the case of a significant incident, which, as Dean mentioned, is rare, the management response is immediate. And that is everything from launching an independent review and investigation of what's occurred, reporting to regulatory authorities where we need to do that, reporting to our Board so that they can have oversight of the response, making sure we're engaging with the family to keep them informed of what's occurred. And then most importantly, the learnings that come from incidents that help us improve and prevent something similar occurring again.

We have, over the last year, done very extensive across all our villages speak up training, which is about making sure all of our almost 8,000 staff not just feel comfortable and know how to raise concerns, but also see it as their responsibility to make sure the care is being provided to the standards that each of our residents should be able to expect. And similarly, we've made investments across the board in lifting our clinical governance through things like having very clear lead indicators of clinical quality and performance, having that visible across every single one of our care centers and having that seen centrally so that we can -- where we do need to provide a bit more support to villages or to individual residents or teams at different points in time, we can proactively do that. And that's all part of our response in making sure we are meeting the standards that should be expected.

So a rare event, but totally unacceptable. Do we have other questions?

Your next pre-submitted question comes from Andrew Ott. And this is a question for the auditor. I view the role of PwC as auditor of Ryman as being very important. And consequently, I do read your audit reports. My question is about your approach and reasoning in your decision and use of materiality of $30.5 million in your audit work. You have chosen net assets as the benchmark. I'm a long-term shareholder in Ryman. In my view, the most important part of Ryman's accounts is the cash flow statement. Both the directors and management do spend time in discussing Ryman's cash flow, and they now pleasingly have much greater focus on generating free cash flow.

In my view, the value of Ryman's net assets is totally dependent on its ability to generate free cash flow over the long term. So from my perspective, if I was to worry about the accuracy of Ryman's accounts, my focus would be on the cash flow statement and not the book value. I may be misunderstanding your audit approach, but could you please discuss your approach to materiality and how this impacts on my focus of Ryman's cash flow and not the book value?

Sam, could I ask you to stand up, take responsibility?

First and foremost, thank you very much for that question. It's a very thoughtful one. And I'm also very pleased that I know shareholders read the financial statements, but it's also extremely pleasing as an auditor to realize the independent auditor's report also gets the time of day and is scrutinized. So the question also itself shows a genuine understanding of Ryman's business. So I do want to give it a proper answer, and I do thank you for your time.

So materiality itself is a concept which is used to plan and perform the audit of the financial statements as a whole. Materiality is essentially the threshold we use to judge whether a misstatement, whether that's individually or in aggregate, could reasonably influence the economic decisions of users of the financial statements. It guides us in the nature, our timing and the extent of our audit procedures. Auditing standards allows us to choose a benchmark appropriate to the entity. For a company like Ryman, net assets is often the most stable and relevant benchmark because the balance sheet is dominated by long-lived property assets. And the net assets is a key metric, which focuses on an asset-intensive retirement village operator, but also as a shareholder, both reflects the capital and income returns that are generated.

Our profit-based benchmarks or cash flows can be volatile from year-to-year, particularly given fair value movements on investment property, but also the reselling of ORA contracts. So that makes it a less stable anchor for materiality. So the use of net assets is simply the starting point for setting overall audit materiality. It certainly does not determine which parts of the financial statements receive our attention.

As noted, we've set at $30.5 million in the current year. And this is what we call as our overall materiality. But in practice, we use low materiality thresholds when performing our procedures, which also affects the quantitative or the qualitative aspects of the balance we're testing. And it's certainly not only does it cover just the dollar value.

I would also like to highlight that in our audit opinion for those that haven't read it, it expressly covers Ryman's statement of cash flows. So it doesn't just solely focus on the P&L or the balance sheet, which you can see on the first page of our report. I'll happily read out the opinion if that's of benefit, but that's probably about 15 or 20 minutes.

But I don't think we're going to do that.

No. Thank you. But after the meeting, if there's any other questions on the floor, I'm more than happy to talk about our audit approach to any of the shareholders.

Good question. Thanks for the answer, Sam.

There are no further pre-submitted questions online. I'll hand back to you, Dean.

Thanks, Hayden. Do we have questions in the room?

Yes. Michael, shareholder. I just noted that you've got an interest in a solar farm up north. I'm just wondering, do you have solar panels on your villages? It just seem to make sense to me to be generating the power where it's used.

It's a good point. And the answer is no, we don't have solar on our villages. But we have entered into a long-term undertaking to offtake from this solar village. And essentially that solar goes into the grid. And obviously, we don't know whether we're buying that electron or not. So we'll obviously be buying the electrons that are closest to us. But we have supported that significant build through our multiyear commitment, enough electricity to supply about 60% of our needs. So that's not our capital tied up, we've just committed long term.

We did look at the alternative of putting it all on our villages, but there's lots of complications around retrofitting those onto roofs in terms of health and safety, particularly if you think what -- a lot of the stuff, we've got our biggest routes are probably on our care centers. And so that's not without risks, not without insurance issues as well. So we felt actually we're better to more quick -- it would be much more quicker just to build in one place, so we have supported that. So we did look at both. You've got weight, for one. These buildings never had their top roofs thinking they're going to be taking weight. And also you've got fire issues as well. But primarily, it's weight. They weren't designed to have weight.

Other questions in the room?

It's Evan. I was wondering how is the Resident Fund? Is it by financial institute or is it by Ryman?

I'll have a go at this. And if I get it slightly wrong, Naomi, I'll hand to you. It's by the resident. So the resident has put capital when they first moved into independent living. And then when they want to move from resident living to care, that capital less the DMF transfers with them. So that actually stays with Ryman and they use it as a payment profile, they can pay their care fees out of that capital sum. So it allows them to transfer with that capital. So it's not new capital, it's the original capital just comes with the resident. Happy to catch up with that afterwards, Naomi or Rick can talk to about that afterwards if that wasn't clear. Okay. Apologies. We'll make it clearer afterwards.

Other questions inside the room?

Hello Board. Just a shareholder, Gordon Wallace. So what I'm going to say is it's been a long road, considering we had 16 sites, and thank goodness, you have obviously slashed and burned to get down to 2. I know it must have been a hell of a lot of work to get all this done, but you're projecting 3 years, which I could understand because of the major situation you've had to do. But I just hope I'm still alive in 3 years because when I look around this room -- when I look around this room, some will be flicking up daisies. And all I'm going to say is I'm so pleased the Board has been refreshed. And here's hope it happens. That's all.

And you're fortunate to have such a good label wall, Ryman as a -- because you didn't have that, it'd be bloody trouble. But I must admit, I agree with that other person when they said different people on the Board have come here and said from warehouse and other places and you go, they haven't done too well, even Fletchers. But what I would like to say is it sounds good, there's hope it happens, and I'm still around to see it. But I want to know how you get on with your staff in terms of so many people leaving the country. Is that a situation you have a problem with? Thank you.

Thank you, George. First, I hope everybody is here in 3 years' time as well. If we look at the weather outside, we should have come to Auckland way earlier, I think, George. But look, I think in terms of the staffing piece, when we came into COVID, we were struggling to recruit. It was taking a long time to recruit registered nurses and caregivers. To the government's credit, they changed the settings.

And if you walk into one of our villages, a lot of the people who work in those villages are from foreign countries. And you walk around and the care they provide is fabulous and they're doing work that Kiwi people don't necessarily want to do. So I think we actually owe a lot to that. The government changed the visa settings. And so currently, we are absolutely fine in terms of recruiting registered nurses and caregivers. That may change in the future. But today, we're in good shape on those things. And long may that last.

Naomi, do you have any particular insights on that?

Yes, it definitely varies by region in terms of particular skill sets. But broadly, it is -- we've got access to the skills we need. Sometimes the regions can be a little more tricky. And pleasingly, also even in New Zealand, we're training a large number of nurses locally. And so that pipeline for aged care, for health care is coming through in a level that supports the demand that's there. So the country, so if you look at the number of nurses we're training in New Zealand, that's supporting the growing health care and aged care demand. So that's well placed in terms of where we are in the country today.

Other questions in the room, please? We'll do next -- sorry, just someone behind you, but we'll deal with you next probably.

Yes. Malcolm Stokes, shareholder. I wasn't intending to say anything, but after your last speaker, I thought I might add a few words. I personally have a lot of confidence in what your people are doing. And one of the things that I take confidence in is the number of shares that the Board, the Chair, the CEO have purchased in the last little while. And it's not an insignificant amount. It's -- and so I'm on board with that. And I've followed suit with you guys. And as far as people leaving the country, we've got it covered. We're in Australia anyway. So if they stay there for a while, we'll track them there. And as far as living longer, hopefully, I'll be here certainly 3 years, who knows. But anyway, chins up and well done. I think you're doing a great job.

I appreciate that support. Thank you very much.

So Barbara O'Connor, talking as a personal shareholder this time. I'm pleased you're in Auckland, and I hope you looked at the New Zealand Herald today to see how prominent Ryman Healthcare is. I'm really interested to know the relative importance of word of mouth for getting people into the villages vis-a-vis the advertising. Because at the moment, it looks like you're keeping the New Zealand Herald afloat.

Yes. Look, it's a very good question. One we were discussing yesterday as a Board actually. I think it's ultimately a combination of things, isn't it, in terms of how we -- how new residents hear of us. We've got very high awareness in New Zealand, very high consideration in New Zealand and strong preference. But that always needs to be refreshed. And so we do advertise in traditional channels on the newspaper and TV. You are open to come to our website. We do digital marketing, but also that word of mouth from residents who have had a good experience that feel safe, that feel they're still part of a community, I think, is absolutely critical. And so I think it's ultimately a combination of the two. One without the other will not be successful. So we're very conscious that our existing resident is our most important resident, the second one is the future one. So very focused on doing a good job for our current residents.

Gold, a small shareholder, but a long-term shareholder.

All shareholders are good shareholders, don't worry about that.

I bought into Ryman a long time ago. It was one of the very first shares I bought. I'm mainly specialized in New Zealand shares, and I'm 84 now, and I live in a retirement village. It's not a Ryman one, but I'm still a shareholder. And I probably bought in when the shares were about $2 thereabouts. And I've seen them go stratospheric. My son has worked for them as a computer-aided designer, architectural work. And here I am, I'm still a shareholder.

But I do want to congratulate the whole Board, the refreshed Board for what it's set about doing, the path it's taken. And it looks to me as though you're on absolutely the right path provided you keep measuring KPIs and doing those sorts of things that you measure the outcomes and you take action if they stray from your planned path. I could see the Board was going so wrong, it kept buying probably way ahead of its needs, and it got into trouble. It got into extended debt. And the whole ship was tipping over. So I'm so pleased that you took the radical action of divesting so much. One property that I would like to ask about is the old fire station, Takapuna. Has that been sold? Or what's happening to that? Because that's an eyesore. It's a terrible shocking eyesore rusting, reinforcing steel, et cetera. Please, can you tell me what's happened to that?

Well, I drove past the other week actually, and I agree. Look, we have kept ownership of that. It's not for sale. We think there is an opportunity there potentially to build.

I agree too. I think it's a wonderful site.

Selwyn is not too far down the road that's got a lot of care, especially with site is a relatively small site. So we will be going upwards, spectacular views. So yes, that's not in the to-sell bucket in terms of that $250 million target. So we're reserving our right to try to create a positive answer for that site because it is a great site.

Well, I'm still a believer in retirement villages. I happen to live in one because my wife got spinal stenosis 3 years ago, and she couldn't climb stairs in a 2-story home any longer. So we live in the village, and we like it. It's not what I wanted, but it's what we needed. And so...

That's the case now.

Yes, it is.

Thank you very much. I appreciate those comments and a good question. I would just go online for a little while, and then we'll come back to the room. And so Hayden, we've got questions, any questions online?

We do. Your first online question comes from Stephen Mayne. Dean Hamilton appears to be in breach of the Australian Shareholders' Association workload guidelines sitting on four major boards and chairing two of them, Ryman and Fulton Hogan. Was this issue raised during the pre-AGM governance roadshow with investors and proxy advisers? And what is the response to this? Has there been a protest vote against his reelection today based on overboarding concerns?

No. So when we met with all the major shareholders and we went for all the proxy advisers, which is ISS, Glass Lewis, New Zealand Shareholders' Association, no one had an issue with that. Fulton Hogan was unlisted, which is less of a workload than a listed business. And so no, there has been no issues raised, Stephen, about the level of my directorships.

The next online question comes from Stephen Mayne. New Zealand is becoming a governance backwater as it continues to resist mandating annual voting on remuneration reports, which is standard in many countries. Will the Chair undertake to consult with major shareholders and lead a Board discussion on the issue of whether you will voluntarily put up a rem report resolution for an advisory vote at next year's annual meeting. This is the law in Australia, and we are dual listed on the ASX. So why don't we step up and respect shareholders by adopting Australian market practice?

Look, we're a New Zealand company at the end of the day. So we don't abide necessarily by Australian law. We do list on that exchange, but we are a New Zealand company, and that doesn't require remuneration up for votes. But if you think about what that's really doing, it's talking about disclosure, the ability to question, the ability to review. And I think shareholders in New Zealand get all of that. When we go to see the major shareholders, we go through all the rem, how we set our STIs, how we set our LTIs. You will see in our annual report, incredibly increased disclosure. I think New Zealand has come a long way in that. And I think Ryman is right at the forefront of that.

If you look in the remuneration section, the way we look at our STIs, we've broken it down right by every area for the short-term incentive, what our targets were, what the outcomes were. We even look forward to next year. These are the new areas in terms of what we're going to focus on. We disclosed our LTIs in terms of the share performance and relative to the benchmark. So I think essentially, the ability for you to ask questions today about remuneration, the question for shareholders to ask it in the roadshow at any stage, I think achieves what you're trying to deliver in those things. So at the moment, we're going to abide by New Zealand rules. The NZX does not require that. And so we don't have the intention of putting the remuneration report up for vote. As to when New Zealand is becoming a backwater, I'm not convinced.

[indiscernible]

That's in a governance roadshow, which we published on the website for everybody to see. So there's a presentation that would have been released in early June that we go to see the major shareholders, and we discuss.

Why?

To get their direct feedback, they are major investors in the business. We probably saw people that own collectively 50% of the shares. We stand here today in front of people who might own 1 share to 5,000 shares. You've got the equal ability to communicate and have input.

Excuse me, sir, would you mind stepping up to the microphone? The listeners online can't hear your question.

That's fine.

Okay. Other questions online?

Your next question online comes from Stephen Mayne. Well done for the strong sales performance at Bert Newton Village in the latest quarter. How much, if anything, are we paying Bert Newton's families for naming rights to a Bert Newton Village project in the Southeast Melbourne suburb of Highett? What is the history of this naming arrangement? And do we have any other residential facilities, which are named after individuals apart from Richard Hadlee Village and Patrick Hogan Village?

Well, Stephen, we've got 47 villages named after individuals. And I think it's a fabulous thing that people -- famous New Zealand, famous Australians trust Ryman to have their name on our door. I think it's a fabulous piece. In terms of the payments, they are different by individual. They're relatively minor and they're all about kind of trusted relationships over time and legacy for these people in physical buildings. So yes, they've all got names of famous New Zealand and famous Australians. We're very proud of it.

Your next online question comes from Stephen Mayne.

I think we might just pause. I think that's -- we have 4 or 5 of them. Why don't we come back to the room briefly, and then we'll go back? But I think let's -- maybe I'll not go back to Stephen, we might go back to somebody else. I think in fairness, I think we've answered four of those questions. So why don't we come back into the room?

Kevin Aldworth, I'm a shareholder. I've been a shareholder since 2022, and I came to the AGM in 2023. And I was a little bit apprehensive with what was going on, how the company was being operated, what the directors were doing, what the executives were doing. But the minute I heard Dean Hamilton speak, it turned my head, and I knew we had the right person. And the last 3 years have shown that, that decision was correct. And I think the current directors and the executives are doing a fantastic job with this company. And you're only halfway through, like Dean said, you're halfway, you're at half time. Play the second half really well, is all I can say.

Thank you very much. Any other questions in the room? There are different questions online. I'm conscious of time. I'm looking over at a sausage roll, which I love, but I'm very conscious of my obligations here. So have we got other questions Hayden online?

We do. Your next online question comes from Andrew. On debt levels, New Zealand political environment is increasingly focused on the time frame within which existing residents must be repaid. Whilst Ryman has reduced its debt levels, the obligations owing to residents is very substantial. We have seen how quickly Ryman's balance sheet can deteriorate if the selling and reselling of units slows. So I believe Ryman needs to have a very strong balance sheet to cater for such an environment. I would like to see Ryman target debt levels of around $500 million or even, in fact, lower.

I think that's an observation. Is that a question? I think as we've said, our current debt is around $1.5 billion. As Naomi talked about, we have a goal of another $500 million of cash coming out of the balance sheet, which we're very confident we can achieve. We've got, as we talked about earlier, some excess land that we think we owned too much land at the point in time. We've built some lovely villages, and we've got the opportunity to sell those units down now. So we can clearly see a path to $1 billion of -- and so we think that lowest leverage in the industry gives us great flexibility because you never know what's around the corner, and you can't live with high leverage. And so we don't want to be back in that position again. So I'd agree with Andrew.

Your next question online comes from Monica Benson. I'm very concerned on the media report incident of an elderly lady and the difficulties of the daughter to get the video of what happened. My mother is also in the same village. I would like to hear what has been learned and addressed since such an event occurred.

Yes. I think just we reiterate that was a very regretful event. Management, we even got an independent review of processes. We've made changes that's been very visible from day 1 to the Board. We've apologized. As I said, it's a rare event, but one event is one too many, and we have certainly learned from that. So I empathize and I think we've made definite progress.

Your next online question comes from John Boscawen. Congratulations on your achievements to date. As part of your restructuring, you stopped work on sites at Takapuna and Ringwood in Victoria. In each case, you invested a significant sum of money. Are you satisfied that sufficient preventative maintenance is being done on each site to enable work to be recommenced should you wish to do so? And if so, what are you doing?

Yes, we are. I've been to both sites personally. And the Ringwood one, we were quite well underway, massive big bit of concrete there with an underground car park that we've had to fence off. We're optimistic we will get back to both of those places. The property team is in charge of making sure that those don't deteriorate to the point where we can't go back. So yes, I think we are very aware of that opportunity, and we want to create and maintain the option that we can go back. They are two good sites. Hayden, anymore?

The last online question comes from Stephen Mayne.

It's the last one. Let's give it and then we'll go.

Thank you to Paula for her nearly 7 years of service on the Board. It is always helpful for investors to have access to some exit perspectives from retiring independent directors. In her final contribution as a Ryman Director, could Paula please comment on what she regards as the two best decisions Ryman made during her time on the Board? And does she have any regrets?

I actually personally don't think that's a question that will go there. Paula has chosen to retire. I think it's the right time after 6 to 7 years and focusing on other commitments. I've really appreciated your time, Paula, hearing whether you've got regrets or not. I'm not quite sure it's particularly helpful. So with due respect, I don't think we'll ask Paula to come to the microphone for that.

There are no further questions online.

Come back into the room. Any further questions before we adjourn?

I'm Bill Williams, I'm a shareholder for a long time, myself and also my company. We see a picture here, which we're looking at quite a long time, and that would be a pretty upmarket trendy sort of probably one of the best pictures you could display of what Ryman has to offer, wherever that might be. But I'm also aware of how old a lot of our Ryman villages are. We're one of the first in the marketplace in a big capacity and evolved quickly and grew rapidly. A lot of the villages are quite secondhand now. They don't represent today, they don't represent anything like that. And I wonder what the Board has to say about how you're going to -- we're moving on, how you're going to keep up with the play and what we can do with some of these older, less attractive, less with the times villages, rooms, facilities, the whole package.

That's a very good question. At the end of the day, we've got a portfolio. We've got 47 villages of various ages and stages. So we're very conscious of that. I think if you weighed by village age and by unit age, it's roughly around 10 years old, if you look across the average. Some brand new, some 30, 40 years old, dating back. They all have their own programs of reinvestment. Obviously, the advantage of a brand-new one, you don't have to do too much to it. And if you think about every time we have a new resident coming, those rooms are all redone. So every single room is going to -- we'll get a new kitchen and those things. So actually, on an individual room, it will look more modern and potentially the shared amenity because those rooms are new.

We're conscious that we had two villages in crisis that were small, were old, and we actually didn't think we could bring them back up to a Ryman standard. So we've moved the residents to other villages in Christchurch, and we'll sell those two sites, one in Hornby and one in Riccarton. I think that's the extreme of the portfolio and the other extreme we got a brand-new village. But I think we've got to be very conscious of those. They are 50-year-plus assets. How do we keep them fresh, competitive when someone opens a fresh one, two doors down. So we are very conscious of that.

So a program of maintaining modern facilities, adding cafes and those things that a modern retiree is expecting in those places, not all of our villages have had those and doing great refurbishments and people leave. So it's a very good question and a key thing that we have to get right in terms of maintaining those villages.

[indiscernible]

Yes, I think potentially those two that we dealt with would fall into that category. We do have a review of all 47, and we have plans with all 47. I think they sit as obviously unsuitable for you for future Ryman work. I don't think there's 20 of those.

Okay. With no further questions at this time, I now bring the 2026 ASM to a close. I'd really like to thank you for your attendance here today and invite those of you present to enjoy light refreshments with the Board and the executive. And please feel free to ask more questions or get elaborations if I wasn't clear, my apologies. But thank you very much for attending and safe travel to home. Thank you.

Thank you for standing by, and welcome to the Ryman Healthcare Full Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Naomi James, Chief Executive Officer. Please go ahead.

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.

[Operator Instructions] Your first question today comes from Arie Dekker from Jarden.

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.

Your next question comes from Will Twiss from Forsyth Barr.

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.

Your next question comes from Stephen Ridgewell from Craigs Investment Partners.

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.

Your next question comes from Bianca Murphy from UBS.

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.

Your next question comes from Nick Mar from Macquarie.

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.

There are no further phone questions at this time. I'll now hand over to Hayden Strickett to address any webcast questions.

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.

And welcome, everyone. Thank you for joining us today. It's great to see so many of you here, including many investors who've traveled from Australia. This morning, some of you visited our William Sanders Retirement Village located in Devonport, just across the harbor from Auckland CBD. William Sanders is a great example of a vertical high-density village in a metro location, which has filled quickly since opening in 2019, with strong demand from people wanting to stay in the Devonport area.

As you toured the village, you will have seen our continuum of care model in action. From independent and serviced apartments to the care center, providing respite, hospital and specialist dementia care, all in the one location. Hopefully, you saw firsthand the commitment of our team that they have to caring for our residents and how much our residents value the choice, support and community they experience living in a Ryman village.

For those not able to make today's tour, we have included a link in the presentation to a short video of William Sanders and its residents to give you a glimpse of that special Ryman Village experience. Having had the opportunity this morning to visit one of our villages, this afternoon's presentation will be more financially focused. We will introduce our refreshed strategy and the financial drivers underpinning it.

This will demonstrate our near-term focus on growing recurring earnings, how we will approach the range of portfolio growth opportunities we have across the business. And as we committed to do at this time last year, we will update you on our new capital management framework and dividend policy. With me today, I have the Ryman management team. This is essentially a new team with the right capabilities and skills to execute and deliver on our refreshed strategy.

As you'll see today, we have evolved the team to how they operate, and they have already delivered a number of the key initiatives driving the bottom line. On stage with me, I have Matt Prior, our Chief Financial Officer, who leads our finance and procurement teams. Matt joined Ryman in 2025 and brings the capital markets and health care experience needed to drive improved financial performance. Rick Davies serves as Ryman's Chief Customer Officer with responsibility for sales and marketing.

Since joining Ryman in 2019 as Chief Technology and Innovation Officer, Rick has played a key role in strengthening the organization's technology, innovation and data capabilities with his portfolio later expanding to include customer sales and marketing functions. Marsha Cadman, our Chief Operating Officer, leads our village and care operations across New Zealand and Australia.

Marsha rejoined Ryman in 2024 and brings deep experience leading large-scale operational performance transformation across complex asset-intensive organizations. Also in the room are Di Walsh, our Chief People and Safety Officer, who is leading our workforce transformation; and Marie Bonnemaison, our Chief of Transformation and Corporate Development. Marie joined Ryman in 2024 and is responsible for driving the company's transformation strategy and corporate development to drive long-term value creation.

I'm also pleased today to introduce Richard Stephenson, who has just joined our team this week as our new Chief Development and Property Officer. Richard brings deep sector experience with over 20 years in property development and asset management in the retirement living and aged care sectors in New Zealand and Australia.

Finally, I'd like to introduce Dr. Rachna Gandhi. Rachna has recently joined Ryman's senior executive team as Chief Enterprise Strategy Systems and Governance Officer, to lead the design of our enterprise-wide operating model, processes and systems over the coming year. She brings expertise in enterprise transformation, digital strategy and AI-enabled innovation with significant experience leading change in regulated environments.

Looking at the agenda for today. Following my quick overview of our business and an introduction to the refreshed strategy, I'm pleased to welcome Cam Ansell, Managing Director of Ansell Strategic, who will present on the future of aged care and retirement living. Ansell Strategic operates in New Zealand and Australia and advises aged care operators, investors and governments on strategy, investment and performance improvement.

Rick and Marsha will then talk to our plans to improve our sales effectiveness and operational performance. After a break, I will run through our approach to portfolio growth, and Matt will talk through the new capital management framework and dividend policy. We encourage you to question our entire team on everything we talk about in the 3 Q&A sessions as well as the breaks we have today.

We will be doing our best to keep the time, so can I ask that you save your questions for these times. After I wrap up at the end of today, our Chair, Dean Hamilton, will share a few words on the Board's perspective. Dean and Scott Pritchard, another of our directors, will join us for the drinks following the conclusion of the presentations. James Miller is also here with us today for the first part of the presentations.

Ryman has a clear plan to deliver value for both shareholders and residents. And there are 6 key messages to take away from today. Our strategy refresh is focused on growing our recurring earnings, optimizing the over $12 billion property portfolio we own today and getting back to value-creative portfolio growth. Ryman's portfolio is uniquely placed with flexible capacity to meet the most strongly growing areas of demand in care and assisted living.

We are targeting $150 million in sustainable cash flow improvement by FY '29, the top end of our previously announced target range with growing occupancy, reset pricing and cost efficiency initiatives. We expect strong cash generation through the release of at least $500 million by FY '29, with key levers, including $800 million of new and paid out resale stock and at least $200 million from identified land sales following the completion of the land bank review.

We have significant optionality for how we grow in the future with over 2,500 units and beds in uncommitted developments and market demand and care capacity in our existing villages to support higher return brownfield expansion. Moving forward, we have a new capital management framework, which alongside a reset balance sheet will underpin a return to dividends from FY '28 and a disciplined approach to investing shareholder capital and growing shareholder returns.

Let's start with a brief introduction for those investors new to Ryman. I won't go into great detail on these slides as many of you are familiar with our business, but it's worth spending 5 minutes on as the continuum of care model is central to our refreshed strategy. We offer integrated retirement living and care at each of our villages, providing homes to over 15,000 residents today. And the true continuum we offer attracts residents with an older average entry age compared to others in the sector.

Ryman is a household name in New Zealand, and we've built that brand recognition in Victoria with the investments made. Our customer ratings lead the sector, reflected in the awards we continue to win. Ryman led the industry in developing the continuum of care model in New Zealand. The concept was a resident-focused approach to meeting changing needs through aging at a single location, providing a home for life.

Today, we operate 3 distinct products: independent living, serviced apartments and residential aged care with increasing levels of service along the continuum as customer needs change. We have a sizable property portfolio valued at $12 billion, comprising large sites with scale to support this range of product choices at each site.

Our retirement living portfolio includes 1-, 2- and 3-bedroom independent villas and apartments as well as serviced apartments, which are typically situated in our main buildings in the heart of the village. Also situated within our main buildings are our care centers, which offer multiple levels of care from low acuity rest time or respite care through to hospital, dementia and palliative care. On average, our villages have 300 to 400 residents each.

And the efficiency this scale brings enables us to provide a different level of choice and service to our residents and is a key source of value you will hear us reference through the presentation. Our revenue model sits across this continuum for our customers and property footprint. Matt will step through in detail how the model generates a return later in the presentation.

Here, I would like to highlight that in simple terms, capital gains from property drives returns on the left-hand side in retirement living and margin on services drive returns on the right-hand side. As Cam will talk to shortly, the market is increasingly shifting to more assisted living and higher acuity care.

As this plays out, we see significant opportunity to differentiate our retirement living offering and increased revenue from services right across the portfolio. While we have operated in the past 3 distinct products across the continuum, we have the ability to adjust the level of service we provide, not just across the villages, but for each individual resident.

This ability to flex and adapt our portfolio will become increasingly important in the future. As well as having this industry-leading value proposition for our residents, we have scale. We are the largest operator in both retirement living and aged care in New Zealand and can offer residents a genuine continuum of care at all of our locations. In just 12 years since entering the Victorian market, we have built an established platform with scale.

In a market with significantly lower retirement living penetration than New Zealand, we are the only provider of scale in Victoria, offering fully integrated retirement, assisted living and all levels of aged care at each of our villages. It's well documented that there will be rapid growth in the oldest age groups with the 80-plus market expected to double by 2050.

And those in the older demographic group more likely to seek integrated living and care. You'll hear more about this shortly. So pulling it all together, the Ryman difference that sets us apart is our scale and the opportunity this creates for significant operating efficiency and to offer more choice and better service for our residents, our continuum of care model, driving lifetime value and stable occupancy, our premium locations, modern design, build quality and integrated care facilities, underpinning enduring demand and long-term asset value.

Our One Move proposition with flexibility for residents to move across the village as their needs change, and these differentiators will only strengthen as demographic tailwinds accelerate and demand for integrated living and care increases. So with that context, let's now step into the refreshed strategy. It's important that our refreshed strategy builds on the elements that have been key to Ryman's past success and addresses the drivers of poor financial performance in more recent years.

It builds on our high-quality integrated retirement living and care portfolio, which I just spoke to. We want to maintain the industry-leading resident experience and high-quality clinical care, which have been the foundation of our organization's purpose and values, driving resident satisfaction, brand and community trust. At the same time, we need to address what has got in the way of financial success.

Ryman held weekly and deferred management fees very low for a long time. Costs escalated, particularly through COVID, leading to significant operating deficits. The company chased larger and larger portfolio of development projects. At one point, having 16 projects on the go with a combined total development cost of over $4 billion, targeting a 15% year-on-year increase in underlying profit underpinned by development.

Non-village costs grew faster than resident numbers and the company had not scaled its systems and processes to match the size of the organization. The lack of financial performance transparency, alongside the strong growth in property prices meant the financial impact of this was not visible. You have heard and will be reminded today of the decisive action the new Board and management have taken to address these factors.

Learning from our past, our refresh strategy involves a shift in focus. From the past central focus on rapid growth through development that relied on capital gains to create value to one that focuses on sustainable value creation. This change involves growing high-quality recurring earnings from both retirement living and care, fully utilizing the capacity we have already invested in and optimizing the portfolio based on growing demand, evolving customer preferences and future potential capital growth.

We continue to see development as a key part of our future growth. But going forward, we're going to do things differently. A more disciplined selection of sites and markets with enduring demand, an outsourced variable cost developer model, a product mix to best meet the evolving needs of customers and a disciplined approach to returns. Our refreshed strategy combines doing the basics well with evolving our model for how the market has and is changing.

Our first strategic pillar is to be the provider of choice in care-centric living for the growing 80-plus market, especially in assisted living and care, which is the fastest-growing part of the market and where we already have a strong competitive advantage. The second pillar of growing recurring earnings focuses on unlocking value through the reset of pricing, operational excellence and growing occupancy.

This is about ensuring we have a business that can generate reliable growth in recurring earnings. The third pillar focuses on optimizing the portfolio for value, allocating capital to grow returns and reducing capital intensity. This is about ensuring our portfolio meets the evolving needs of customers and our shareholders realize the benefit of capital appreciation over time.

Lastly, we will get back to value-creating portfolio growth, which remains a key opportunity for long-term shareholder returns. This is a strategy to deliver industry-leading customer satisfaction and grow total shareholder returns through growth in high-quality recurring earnings alongside sustainable dividends and active portfolio management and investment, maximizing capital gains from our sizable property portfolio over time.

Over the last 18 months, there has necessarily been a tactical focus on resetting the business. We have reset revenue by changing contract terms, reset the balance sheet to have the lowest gearing in the sector and long-dated debt funding are now through reporting changes, which have created transparent financial performance and for the first time in over a decade, delivered positive free cash flow. We have turned the corner.

And now with our refreshed strategy, our focus expands to unlocking business potential and optimizing our portfolio for value. This will enable us to shift our focus over the next 3 years increasingly towards sustainable growth that delivers long-term value. We will get back to portfolio growth, but we'll do it at the right time, having addressed the operational performance of the business, which has not had enough attention, not just at Ryman, but across the industry.

While our near-term focus is on resetting the business we have today, we are also thinking and looking longer term. And this year, we are starting work to design and build our future operating model. Since 2010, which is when we have really solid data, we have provided homes and services to more than 50,000 Kiwis and Australians.

This history and scale gives us access to the deep insight needed to continually evolve our offering in line with changing customer expectations and to build a flexible and adaptable operating model that can anticipate and move with future changes in the workforce, regulatory and funding regimes and the range of emerging digital opportunities. We're already using data and insights extensively across the business.

And as we reset and optimize the portfolio, there's significant value and competitive advantage to unlock as highlighted on this slide, with early wins helping to fund the investment needed in systems and processes. Scale matters in this industry, and it's going to matter more in the future. We see that in the industry consolidation trends already underway in Australia.

As we move through the turnaround of the business we have today, our focus will increasingly turn to how we build competitive advantage into our operating model and leverage our scale, keeping our residents and their needs at the center of what we do. In summary, we have a high-quality portfolio of assets, industry-leading resident experience and quality of care that sets us apart.

We are reearning the right to grow with improved financial performance and operational performance. We are changing our focus from the speed of growth to the quality of growth and ensuring that we grow in a way that is value accretive. As Cam will talk to now, we are well positioned to leverage our scale and care-centric customer proposition in the fastest-growing parts of the market.

That's a good point to hand over to Cam, who is going to talk to the future of aged care and retirement living.

As we're starting to cover already today, the aged care and retirement living sectors are about to go into their biggest period of change, the most exciting time in the history for both our countries. We always knew that this massive increase in the number of older people were going to come through the system.

We didn't know what political and economic environment it might land on. I'm going to go through a series of the key elements influencing aged care and retirement living in Australia and New Zealand today. And it's going to allow us to arrive at a projection about what the world might look like as the baby boomer generation comes through.

Critical and most important when we consider the different elements influencing it is, of course, the customer. And we've focused very much on the sheer number of people coming through the system. We've known that we'd have a doubling of the number of the key target market of the 80-year-olds plus. But perhaps the most exciting component of what's changing for us is not the number of people, but the character of those people. They're not homogenous.

And so you can see there at the bottom there, the builder generation in orange being replaced by that big baby boomer generation. And then frighteningly my generation, Generation X after it, keeping us busy from 2040 onwards. The nature of those changing consumers are probably more influential than their pure numbers. The consumers themselves, those customers that we've worked with, those that we've largely built our models on have been the builder generation.

And the builder generation have been somewhat conservative. They've lived through world wars, depressions, and they're somewhat accepting of the services that we've made available to them. They have been somewhat grateful. They're replaced now by a new generation of consumers that are not grateful. It's the baby boomer generation. they are the architects of consumer choice.

Their expectations and the likelihood that we can just put them in the jam jars of services that we have historically made available to them is very limited. The builder generation in Australia received about 95% of their direct aged care costs free. About 2/3 of Kiwis get their direct residential aged care costs free as well. The combination of that very changing demographic and the reality that they're going to have to pay for more of their services themselves is going to be a massive influence on what we deliver going forward.

Their capacity to be able to make contributions and their ability to be able to buy what it is that they want is demonstrated the builder and remaining builder and baby boomer generations represents less than 1/3 of the populations of Australia and New Zealand. but they control most of both countries' wealth. And so their buying power, their ability to be able to match their very high expectations with their financial means will be a major influence on the services that we provide going forward.

And while we've always known that this huge gray tsunami was coming, the supply is hopelessly behind in order to meet it. In Australia, from about 2016 with the 2016 budget and around about 2010 for New Zealand, we slowed down in supply and the building of residential aged care beds, rest home beds in New Zealand, nursing home beds in Australia. And so that slowdown comes in the face of what's just started to emerge massively as an increase in demand.

So in Australia, for example, we required about 10,000 new beds to be built last year. We've got about 803. Kiwi has almost built as many, although they were predominantly Aura beds. And so the number of beds that we can build now can't possibly catch up with the number of older Australians and Kiwis that will come through the system. Home care supply could be an option. And so providing services to people out in the suburbs is often seen as the great solution.

The couple of challenges that we have there is the baby boomer generation and X behind them didn't really have enough children for us to be able to supply the labor for us to live long time in our homes in the suburbs. Also, the rational system for New Zealand and Australia means that we're falling hopelessly behind in terms of need already.

So in Australia, there's over 100,000 people that have been assessed as needing home care services still waiting for them. There's another 100,000 people waiting to get on that wait list. And so the challenge associated with people getting their home care services out in the suburbs will continue, particularly as that demographic change lands on us. has a major impact then on our health dynamics.

If you look at the rest of the world, the developed world and OECD countries that capture their long-term care data, you can see that a very large proportion of Australians, in particular, aged over 80 end up in residential aged care. And their length of stay tends to be relatively long. And that's partly because Australia has been a little bit immature in the development of its home care services.

We're about 10 years behind the Kiwis with their aging at home policy. And so we've tended to have too many people end up in residential aged care in Australia, and they stay there for too long. And so what will need to happen as we're seeing the hospitals in both sides of the ditch start to fill up with older people who need to be discharged into aged care.

We'll find that our residential aged care services will be reserved for people with very high levels of functional dependence, higher acuity and challenging behaviors. And we will find -- need to find other places for older people to age gracefully. We also need to be very careful about how we manage our scarce resources. I mentioned that we didn't have enough children to be able to provide services for us out in the suburbs.

A critical one for that is our clinicians, our GPs and in particularly in aged care, our nurses. We can do the very best that we can. That green line is a projection there on how many nurses do we expect to get year-on-year coming through the system. The orange line is the proportion of those nurses to older people, older Australians and Kiwis. And so no matter what happens because of the changing demographics, we're not going to have enough clinicians available to be able to deliver services moving forward.

In these circumstances, it's going to require more older people to be in areas of close proximity where we can allocate our scarce clinical resources to their care needs, enabling them to age safely. The economics also force another major change already in Australia, but coming shortly in New Zealand.

So for all of the things that have happened in Australia in recent times, we went through the ABC report. We had a Royal Commission through COVID and then the findings of the Royal Commission and now a new act introduced in November last year. Of everything that takes place in that massive act, the single greatest change in all of that was around needs testing.

The contribution now required for those people entering home care or residential aged care in Australia will have a major impact on people's decisions moving forward. No matter which way we look at it, the changing dynamics and the shortening of the number of people available to make tax contributions to our care means that increasingly, we're going to have to pay for more of this stuff ourselves.

And the combination of the baby boomer generation having very high expectations and the need for us to make greater contributions ourselves means that the quality of our care services and the flexibility of it need to improve all the time. The other element of the reform progress is that we tend to find an injection of new funds when we realize that a sector has been underresourced.

On your left, you'll see the relationship between financial performance in recent years. You can see that 2023, when the government introduced the reform agendas recommended by the Royal Commission, it came with an injection of funding. On your right, you can see that New Zealand also under-resourced in terms of aged residential care is about to be moving into the reform program.

So we can anticipate that there will be a short-term improvement. But no matter which way I spin this, it's very hard for me to come up with a solution that makes a stand-alone rest home work in New Zealand or an aged care facility to work in Australia. And so more and more, we'll be looking at alternatives to be able to provide services to this huge number of people coming through the system.

Those dependency ratios I mentioned before, back for the Australians, the release of the first intergenerational report by the Productivity Commission, we knew that at that stage, we had approximately 6 taxpayers for every older Australian, similar numbers you can see there when we analyze that for New Zealand. And when the baby boomers hit their straps, that drops to about half.

So half the number of people available to make contributions to our services. And so that tightening, that dependency ratio means that our contributions need to grow all the time. That reform program then becomes absolutely critical. I mentioned we started with the Royal Commission, a new Aged Care Act, means testing.

Also for Australia, terrific improvements in terms of accommodation revenues, the refundable accommodation deposits increased from 550 to 750 and the reintroduction of retentions where providers can take a recurring amount for 5 years of the RAD contributions.

Again, it's really good, and it's positive, and that's been really good for those existing operators. Naomi mentioned the level of consolidation and investment appetite in Australia at the moment for residential aged care services. It is primarily around investment in existing services. There's a lot of development going on. For New Zealand, I mentioned that we're at the earlier part of that transition.

We can expect that in that reform process, there'll be some replication of what's happening in Australia. We're hoping that we have an independent pricing authority to make sure that pricing is more sustainable moving forward. We hope that there are better subsidies for supported residents. And we do expect that there'll be an injection of government funding to help encourage new development, but also to help facilitate a reduction of pressure off the hospitals and into the aged care system.

So what does it all this mean? This combination of these different influences descending upon us all at the same time. I've spoken today about different components of aged care. I've spoken about retirement living, about aged residential care and about home care. And Naomi is introducing more and more of this continuum care model. In our view that the continuum of care is likely to be the most important future for village operators moving forward.

It is the assisted living piece that will become increasingly important from where we go in the future. If we project that into the future, then we expect to see that the demand that we've talked about today is going to be met in these 4 key areas. The first at the top there is residential aged care, nursing homes, rest home, a combination of the red line there that is government funded and the yellow line, which is privately funded high care services.

Projections around this that it will increase in line with the growing population. But for the reasons I've explained today, we can't get the supply to catch up with the aging population. The bottom line is retirement living, and this is retirement living that offers retirement living solutions.

Our view is not the same as most village operators would recommend is that will go up in line with the growing population. I think the changing market means that the baby boomer generation and then us, all busily pretending that we're not getting older, we'll find it harder and less interesting to go into villages where most of the people are older people, unless it provides some level of support.

And for that reason, it is that green area in the middle the assisted living service, which will become the greatest and most exciting and most dynamic area of services, which will enable us to be able to provide services for that massive number of older people coming through the system. And as the largest provider of those integrated services in New Zealand and soon in Australia. Ryman finds itself in an enviable position to be able to leverage that model and expand it moving forward into that demand. Thanks, Naomi.

Thank you, Cam. We now have around 10 minutes for a few questions.

If you can please wait for the roving mics before you ask your question, and I'll moderate the Q&A questions on each of the sessions. So if you direct your questions to me, and I'll make sure I hand it to the right person. As Hayden mentioned earlier, please start with your name and organization. Do we have any questions at this stage on the first part of the presentation?

Yes. Maybe just on the EBITDA per bed sort of metrics. I think it's sort of $15,000 to $25,000 to $30,000. Is there some benefit from aged care reform backed into those targets or is that sort of potentially upside?

Can we come back to that Stephen? Because we're going to talk to Ryman specific targets shortly in Marsha's session, and I will make sure we have another Q&A session at the end of that to make sure we're clear on how we've built that up. But certainly, as Cam's talked too, he's presenting the industry-wide position right now and what you see in New Zealand is that very low level of profitability today that isn't sustainable and that we expect will form the basis for a reset in the coming years. So happy to come back to how we see that playing out specifically in the next session.

Sorry, sorry to introduce myself, Stephen Ridgewell, Craigs Investment Partners. Maybe just on the industry changes and Naomi. And if we're sort of talking about -- there is a review on at the moment, what would be the top 3 things that you think the industry would like to see in terms of change to the funding model that specifically Ryan would like to see in the next sort of 12, 24 months?

Yes, we've had a lot of opportunity as an industry to engage with government. And so we think there's a good understanding of that. One of the first ones is evidence based pricing. That's been a shift in Australia, we have brought the experts from Australia over to build a sector-wide pricing model to provide to the government and help inform the basis for future pricing decisions.

Another is the evolution of how the funding works in terms of what is paid for by government, what is paid for by the consumer. In a way, the government is letting the industry front that at the moment in needing to supplement charges with the charges that come through daily premiums and DMF on ORAs. So it's a really important part of the reforms and part of the work that the Ministerial Advisory Group are doing to look at what that change in funding who pays how we make that an equitable model.

And that is a key part of the MAG's mandate over the next 6 months. There's some near-term things that we're encouraging the government to focus in on. We know that right now today in New Zealand as well as in Australia, there is bed blockage in the public hospital system that is something that the aged care sector can assist with. And what's needed for that is some different arrangements to how respite care and shorter stay care work and so we see that as a near-term priority even outside of the reforms that will need to be legislated.

And probably the final one I'd mention, I could probably go on for longer on this, but the final one I'd mention is just in the provision of home care. Today, the government has been -- it's mixed across the country, but has been taking a direction towards bulk funding and single contracts in regions. And it's really important that retirement village operators are able to provide care to their own residents. So that's a very active dialogue at the moment as well with Health NZ, Te Whatu Ora.

It's Oliver from New Zealand Shareholders Association. Just to extend the question slightly, and you talked about the potential for government reform here in New Zealand. Given that we had an election later this year, to what extent have you got cross-party political support for some of the physicians that you're advocating for?

Thanks, Oliver. Look, I think that there's great cross-party support to address aged care funding in New Zealand. I think we're through that stage. I think everyone understands the need for that. And we're now at the point of talking about the how. How do we make that reform effective? How do we make it sustainable long term? And then how do we work through that with the community and with the population?

So in Australia, when those reforms went through, we saw them go through with bipartisan support. That was an important part of those long-term reforms here in New Zealand, the Ministerial Advisory Group, the government has been set up. Has been established jointly by Minister Brown and Minister Costello. So that's 2 or 3 and is very much seeking active engagement with the labor party as well.

So I'm hopeful and positive that we will ultimately have a bipartisan solution. And that hopefully, this is one of the first reforms that whatever the outcome from the election we have in New Zealand later this year, it's one of the first reforms that comes to the new parliament.

Shane Solly from Harbour. You talk about value-creating portfolio growth. Can you just expand a little bit on that? What are the sort of the key indicators we should be looking at as investors that would show that?

Thanks, Shane. And we are definitely going to come back to this later in the day and in the development section to talk about and capital management sections to talk about specific metrics. But at the bottom line, we -- whether we're extending the existing portfolio for investment or through greenfield sites. We want to be able to see a clear line of sight to shareholder value, which ultimately means cash flow.

And so that's where we've obviously made the shift towards more cash-oriented metrics to really understand business performance and are making sure we're testing and looking at each part of our portfolio, both to be performing at the level of the assets we have today should be performing at as well as when we're adding to that being confident that the additional assets that we are investing and are going to add to the portfolio.

And ultimately, that's got to be on a shareholder returns per share basis. So -- but we'll come back to the metrics more specifically later in the presentation.

All right. I might wrap up this first round of Q&A. There will be plenty of time for more through the day.

But now I would like to invite Rick Davies, Chief Customer Officer, to talk to you about how we are improving our sales effectiveness.

Thanks, Naomi, and hello, everyone. I'm Rick Davies, Chief Customer Officer based at Ryman's head office in Christchurch. My role covers sales, marketing and pricing with a particular focus on our retirement living offering. I'm going to talk today about our focus on improving sales effectiveness, and we'll go through both our approach and the progress we are making.

Now I'm sure you'll all appreciate that the detail around our sales strategies are commercially sensitive. So there will be specifics I can't speak to today, but I will provide insight into our overall approach and progress.

As Naomi mentioned earlier, Ryman has some significant scale in New Zealand and Victoria for our continuum of care proposition. And the strength of our value proposition is best demonstrated in our mature villages with 94% of our independent units and 87% of our service apartments currently occupied. Our resales opportunity, matching resales with resident turnover rates sits across the stock.

Our developing villages sit at lower occupancy rates, reflecting the supply increase that occurs when a village opens and the time required to establish itself in a new catchment. As you see in this chart, accelerating the sell-down rates of our new serviced apartment stock currently at 57% occupancy presents a significant opportunity as we look ahead.

Aged care occupancy sits with our Chief Operating Officer, Marsha Cadman, and she will talk to this in her update. Before we get into sales strategy, I'll briefly touch on our recent third quarter sales update, which we announced to market in mid-January. We delivered a solid quarter, maintaining momentum through to the holiday period, mixed housing market conditions and with heightened competition in some regions. New sales of independent units softened after the strong uplift from our new Nellie Melba stage release the prior quarter.

New sales of service departments were strong, with Auckland delivering its best quarter in 3 years due to targeted efforts where village stock is concentrated. Resales were steady overall, albeit still mix at a regional level. While resales volumes are not yet where we need them to be, importantly, these sales are now at a much higher value DMF. Growing resale volumes is a key focus for us and something I'll talk to shortly.

Another key point I'd call out is that our FY '26 figures and particularly Q3, have the contribution from residents who have relocated from Margaret Stoddart and Woodcote to our other Christchurch villages. Ryman made the decision to close the care centers of these villages late last year. And since then, we have supported the transition of almost all independent residents to other Christchurch villages. These transfers are expected to number around 40 for the full year, which we have excluded from our full year sales guidance of 1,300 to 1,400 or sales on retirement village units. This guidance is unchanged.

Looking more broadly at our sales drivers, the external housing market remains a key influence on our sales with most new residents needing to sell their own home before moving into a Ryman village. Market conditions remain variable by region. Positively, we are seeing a recovery in Victoria gather momentum, along with some regions in New Zealand. However, the Auckland market remains subdued.

Despite these varied conditions, we do have sales momentum building in all regions. And as the Auckland market recovers, we are well placed to capitalize on this with 1/3 of our portfolio located in Auckland. Our focus remains firmly on driving sales effectiveness, and we are busy improving our sales strategy and insights, bolstering team capabilities and sharpening our tactics at a village level.

Our actions over the last 12 months have delivered measurable impact. Our contract book is now of high quality. Sales cycle times are reducing and lead to contract conversion rates are improving. Our marketing capabilities to target and engage prospective residents, leveraging technology are also improving. Marketing messages are becoming more relevant, often tailored toward a specific catchment, product type and audience profile. Investments and team capability have gathered pace, and we've built strength in our internal pricing expertise, along with customer nurture specialists, product research and design and sales training programs to improve our frontline sales performance.

Ensuring our product offer meets the expectations of today and tomorrow's retirees is critically important to us. Efforts are underway to broaden the market appeal of our service departments, which I will talk to shortly. It remains a heightened competitive environment, particularly in Auckland. We're active in ensuring our own competitiveness and we monitor and set our sales incentives and tactics at a village level to suit local requirements. Underpinning our sales effectiveness program are comprehensive data and insights that are helping us diagnose areas for improvement and target our investments where it's most effective. Every stage of our sales funnel is measured and monitored for performance.

The past 12 months have seen us focus on the mid-funnel stages in this chart as we have successfully embedded our new pricing terms. Booking and appointment with a sales adviser is a high-quality indicator of a customer's likelihood to progress. As once they experience our beautiful villages firsthand, their propensity to buy significantly increases.

Our sales advisers are now equipped with a broad range of tools that we have developed over the last 12 months to drive sales conversion. Tools vary by village depending on the specific needs of each local market, but can include pricing and sales incentives, broader marketing options and community engagement support.

Looking ahead, our focus is shifting to the top and bottom of this funnel as we seek to grow the quality of inquiries coming in, the volume of quality inquiries coming in and better support contracted customers once they have made a decision to purchase.

We expect to further reduce cancellation rates this year by better assisting customers and navigating this late stage of the journey, such as downsizing and selling their own home. The sales cycle can be long for many, often over a year given the significance of the decision for a retiree.

Over the last 12 months, we are seeing the time taken from inquiry to settlement reducing as a result of the focus on the sales funnel performance. We have developed a comprehensive pricing framework, which we use to set prices at a unit level. This framework considers the market demand of its surrounding communities and layers in a range of factors, including unit type, unit quality, competitiveness and sales velocity amongst others. Flexible pricing is now available for all new customers. While our standard prices are based on a 30% DMF, we offer flexible pricing by adjusting the sticker price with the associated DMF rate. This ensures our product offers are more adaptive to a customer's financial capacity and preferences without compromising value for Ryman.

Various experiments are underway across our portfolio, including price elasticity testing, which target occupancy improvements and lead price testing for generating inquiry. Looking ahead, pricing will remain an important lever as we seek to substantially reduce our available stock. Comprehensive governance reporting and oversight is in place at Ryman to ensure this is exercised in a way that maximizes value for Ryman over the long term. Every resident departure is a new sales opportunity for Ryman with each new vacancy a chance to reset weekly fee levels, commence DMF accrual and unlock capital gain. Our goal is to sustainably trade at resale levels that match vacancy rates, regardless of the external market conditions.

As you can see from the top chart, we have an opportunity to generate cash as we converge the blue and orange lines and as we do, reduce the volume of paid out vacant resale stock. Reducing the days for a new customer to settle helps avoid growth in paid out stock. And as the bottom chart shows, we are seeing improvement here with days from contract signing to settlement now under 100 days. As our village portfolio matures, vacancy volumes will slowly grow, increasing the opportunity in front of us. As we have seen throughout Ryman's history, as vacancy rates step up, our resale volumes follow soon after. There is often a lag between a vacancy emerging and settling a new customer. In challenging external housing markets, this lag can grow as we've seen over the last 3 years.

Through our sales effectiveness program, we expect to make good progress in closing the gap this year. It's worth noting that while an increase in contracting rates is required to sustainably close this gap, this gap can also close through lowering cancellation rates on the existing contract book. Through our efforts to improve the resident movement experience, we expect we can further reduce cancellation rates this year. To put context on the size of the resales turnover gap, we are seeking to close based on year-to-date training in FY '26, we would need just the equivalent of one more sale each quarter at each of our resales villages. We're confident we'll close this gap. It's worth noting that the New Zealand government recently announced their intention with the proposed reform of the Retirement Villages Act with the most significant change being a proposal to mandate operator buyback of vacated units within a maximum of 12 months. Ryman already meets this requirement and has done throughout its history.

In October 2024, we lifted our weekly fees and deferred management fees to better support the premium proposition we provide and to ensure Ryman's costs are covered into the future. While there is no doubt that this along with other organizational changes at that time slowed sales, these changes were critical for creating long-term value in the portfolio. With these changes now successfully embedded, the long-term benefit will significantly outweigh the short-term pain of this change. Weekly fees for incoming residents to our independent units are on average 67% higher than outgoing residents. Similarly, the average DMF for new residents has seen a 39% increase year-on-year. This slide demonstrates the significant value to be released when our back book and front book -- between our back book and front book as our portfolio rolls onto new contract terms. With a turnover rate of around 12% per annum, half the portfolio will be on new terms by FY '29.

Looking ahead, vacancy rates determine where our sales strategies are most active. And as you'll see in this chart, service departments at our developing villages present a significant opportunity in the near term. Ryman's service departments have long provided a convenient option for those needing additional services such as cleaning or meals, or perhaps wanting to be closer to the village amenities. We now have approximately 2,800 service apartments in our portfolio with over 400 units added in the last couple of years. The time taken to sell down this stock at a new village can take over 3 years due to the limited tenure of existing independent residents at that time and the service department products appealing to a more narrower needs-based market.

With 43% of service departments vacant in developing villages, we believe that diversifying the appeal of this product to a broader audience with more resident choice in their required services will accelerate this opportunity and improve sell-down rates from historical norms. We are exploring 3 opportunities to evolve our service department proposition and drive up demand and occupancy rates. Our first opportunity is in creating greater resident choice and the services a resident wishes to receive and in turn, lowering the barrier to entry with regards to price. This trial will test customer choice and allow those wanting a lighter touch experience to enjoy service department living at a lower cost while expanding their service selection as their needs and preferences change.

Secondly, we know there is a market for those wanting service department living with the assurance that they don't have to move again when their need for specialist aged care services increase. Adapting our service apartments for flexibility, allowing these residents to age in place will increase the appeal of the product to both existing residents and new customers. Our third opportunity is in converting a selection of our service apartments into modern, spacious premium care suites with those with the financial capacity and preference for premium experiences can enjoy full aged care services from the comfort of these high-quality apartments. These 3 opportunities will be tested in a targeted way that ensures the right product and value mix is achieved. Work is well underway, and we look forward to testing these changes out this year at selected villages.

This slide highlights the significant opportunity we have in new sales stock and paid out resale stock. That's why our focus on lifting occupancy and sharpening our sales performance really matters. Today, we have over 1,300 vacant units. Around 1,000 of these are either brand new or have already been paid out to their departing resident. Together, these units represent an opportunity to release around $800 million of cash back into the business. The level of paid out stock is influenced by several factors, including housing market conditions, resident transfers, sales performance and our historic 6-month buyback approach. Releasing cash from this stock will require the resales turnover gap to sustainably close and will also benefit from efforts to reduce our unit refurbishment time frames. As the housing market improves, particularly in Auckland, this opportunity naturally becomes easier to unlock. But we're not waiting for external conditions to improve. Our sales effectiveness program targets this opportunity and is underway in earnest.

So to conclude on a few key messages. We are accelerating performance improvement through our comprehensive sales effectiveness program supported by a recovering property market. While many sales effectiveness initiatives are already delivering improvement, we have a significant program still to come. Our pricing changes are successfully embedded and improving conversion rates demonstrate our ability to sell effectively on the new terms. Service departments are a significant near-term lever with diversification of the offer set to accelerate and unlock meaningful cash flow. The $800 million of new and paid out resale stock is a substantial opportunity for cash release, and I'm confident we can get after a significant portion of this by the end of FY '29, supported by our broader target of $500 million of capital release. Our sales and marketing improvements will build sustained resale momentum, reduced vacant stock, release cash and accelerate long-term value for shareholders.

Thank you, and I will now hand over to Marsha, who will talk to operational excellence.

Thanks, Rick. Good afternoon, everybody. I'm Marsha Cadman, the Chief Operating Officer. I first joined Ryman as Chief Sales and Marketing Officer in mid-2021, and I left the company in early 2023 and returned less than a year later. In doing so, it didn't take me long to be energized at the once-in-a-lifetime opportunity that we have to lead this company's transformation.

When I walk into our villages, I consistently hear our residents say, "Your village is the best village" or how they wish they had done this sooner or how their staff are the best staff. I was recently forwarded an e-mail from a daughter whose father has passed in special care. Here are some excerpts from that to give you a sense of what is happening in our villages every day. Throughout those final week, we came to see the joy, fun, laughter, care that occurs in special care unit. All of the staff are professional and positive and so caring of the residents. The residents themselves are just a wonderful mix of personalities, the same as in any community, and they take care of each other and of us at times. Thank you for this special unit. It was a difficult time of our life but it is one that we have precious memories of. What we didn't fully appreciate is how much laughter and caring occurs upstairs within that special community.

Moments like these are made possible through our unique investment in the continuum of care in all of our villages and our focus on well-being, not just care. With the impending doubling of the population -- 80-plus population and the shift from retirement living to assisted living, our continuum of care is becoming increasingly sought after. Dementia is now the #1 cause of death in Australia. Over the coming years, more and more of our residents will have higher acuity and increased care requirements.

Having highlighted what makes Ryman unique, I'd like to turn to operational excellence and how we will build on our differentiators to unlock our full potential. Many of you will have visited friends or family at various care facilities across Australia and New Zealand. What is immediately clear is that the quality of both the facility and the care very significantly. Our residents age in one place with the assurance that they have the care and the support they will need in familiar surroundings with familiar friends and familiar team members.

Our expert clinical teams on site are supported by a dedicated clinical and resident services team, ensuring on the ground insight, combined with expert oversight. This means they and their families have access to the assistance, information and advice to make the choice -- the right choices as care and clinical needs change. This investment in the quality of our care is just part of the reason we are industry-leading with the experience we offer our residents. A wider commitment to resident well-being is a more holistic approach to the concept of care, and our residents tell me that they have a bigger life since they moved into one of our villages. Whether it is the gardens, our award-winning AAA programs, the social activities, resident workshops, craft activities, carefully curated menus, happy hours, ballet classes, choirs, balls, croquet, aquarobics, walking clubs. I could go on, but there are opportunities for every resident to engage, ensuring the social connection that is essential for living.

Finally, the passion and enthusiasm of our skilled and energized teams and the amazing work that they do alongside our residents on a day-to-day basis is reflected in the resident feedback and the family feedback that is evidence that our team continues to deliver on the founder's philosophy of good enough for mum or dad. Our refreshed strategy will look to maintain and reinforce these critical attributes, which are the backbone to Ryman's competitive advantage.

With that context, I want to talk about the opportunities to leverage this foundation. First and foremost, our operational focus will be on building occupancy in our developing villages to mature village levels. Second, we'll optimize our assets through sustainable increases in room premiums and in resident capital through turnover and better use of our range of accommodation options for highest value. And finally, our targeted efficiency initiatives, which are already bearing fruit will continue to drive costs out of the business.

First, occupancy. Rick shared this slide earlier, focusing on retirement living occupancy. I now want to focus on care center occupancy. Occupancy across our mature beds is consistently above 95%, what is generally accepted as full occupancy across the industry. With the requirement for residential aged care driven by need, often an urgent health-related trigger and shorter tenures than retirement living, occupancy can fluctuate. With careful and active management, 36 of our villages have maintained 96% and above occupancy in the first 6 months of this financial year. In fact, just this morning, 26 of our mature villages have less than 5 beds available.

As you know, we have grown our portfolio significantly over the past 18 months, investing in 5 new care centers, which added another 440 beds. In these developing villages, we see a lower level of occupancy as they fill. By lifting these developing care centers, the levels in our mature villages, we can unlock an additional $26 million of revenue. Pleasingly, we are quickly building up the level of occupancy in these new care centers and attracting strong premiums in New Zealand and RADs, refundable accommodation deposits, in Australia, which will bring significant revenue growth. In our care facilities, wages remain the main variable cost. So as we fill this capacity and maintain consistent mature level occupancy, we will see strong care margin growth.

Premiums are another important opportunity for us. The daily accommodation premium or premium room fee that is paid above the New Zealand government funded care fee for the quality of the accommodation Ryman provides. We have seen this premium grow, reflecting continued demand for the accommodation our residents enjoy. A greater focus on regularly reviewing and increasing these premiums without impacting occupancy further maximizes this opportunity. It also reflects the traditional market preference in New Zealand, particularly evident in nonresident prospects and their families for paying a premium over a capital payment. We continue to see strong demand for premiums from these customers across all of our New Zealand villages.

All of this means that as our developing villages fill with residents on new premiums that are higher than the current average, we will see meaningful growth. We have seen some of our peers in New Zealand opt for an ORA model for care rather than accepting premiums. Ryman has chosen to continue to offer premiums across our mature and our developing villages as we believe it reduces tenure risk and supports high occupancy. We remain flexible to options that will increase capital into care, and I'll shortly touch on the resident fund that we have recently introduced in New Zealand.

In Australia, RADs are the market preference for paying for care, and as a capital product, involve a lump sum payment that a resident pays when entering residential aged care. Like premiums in New Zealand, we have similarly seen strong growth in Australia. This is being driven by new residents, representing higher RADs than existing residents and also a more structured approach to reviewing pricing as the regulatory framework allows in Australia and reflecting the premium nature of our rooms. We take a targeted and tiered approach to ensure we can price rooms within each village with different features that suit different resident preferences. For example, at our newest Australian village, Bert Newton, the most recent RAD sold vary from $795,000 to just a touch over $1 million. In addition, we are able to provide the families with a combination of a RADs premium combo.

As I mentioned, we have recently responded to interest from our existing residents seeking to leverage their ORA capital from their retirement living accommodation when they transition into care in our New Zealand villages. Our new resident fund allows residents to pay for their care with the equity from their retirement village unit. We piloted this product in H1 with really encouraging take-up. We moved quickly and launched it across all New Zealand villages just before Christmas. We think the resident fund is quite innovative in the market and better supports residents and their families as they consider a move into care at what can be an incredibly stressful and difficult time.

In the example on the screen, one of our residents, let's call her Mrs. Vance, moved into an independent living apartment worth $500,000. After a decade with us, her care needs have evolved, and she and her and her family have decided for her to move into aged care. As our independent apartment sales, Ryman receives $150,000 of DMF, and she chooses to have the remaining $350,000 of equity directly transferred into her resident fund. With this, she receives a discount on the daily accommodation premium, and the remainder of the cost is debited directly from the fund. This not only gives Mrs. Vance choice, but streamlines her move into care for her and her family. We are confident this offering will encourage increased movement into care due to the ease for residents like Mrs. Vance to pay for their care as their needs change.

For Ryman, in addition to encouraging more movement into care means we retain the capital and thereby reduce our interest costs. We see even more opportunity with this product offering and believe the resident fund will provide optionality for residents to pay for care and extra services by a deferred payment into the future.

Across the organization, there is a laser focus on driving cost efficiencies in our support functions, procurement and our operations. For FY '26, we are targeting between $50 million to $60 million of cost savings. Reducing our cost structure and support services has included moving away from a regional and executive senior management structure to a functional structure. This has removed duplication across senior roles and business units in areas such as human resources, marketing, sales, finance and in operations. We are centralizing purchasing and procurement. This investment has identified savings across key cost categories such as food, medical products and consumables.

Rethinking our approach to some asset classes has also released value. Shifting to a lease model for our vehicles will deliver savings, more efficient management of our fleet and also improvements in the quality of these vehicles. We are continuing to work through the entire supply chain and are enjoying working with our partners to achieve efficiencies across the board.

Finally, we are identifying operating savings within our villages by focusing our teams on identifying opportunities to drive down costs. For example, our contract with our waste provider in New Zealand will deliver savings but also has commitments to work together to reduce waste volumes across our village network. As mentioned, major aged care reforms have been implemented in Australia, while New Zealand is still in design mode. In Australia, the government covers clinical care costs while accommodation and nonclinical costs are means tested, shifting both funding certainty and consumer expectations. Key financial metrics are now locked in, including RAD retentions of 2% per annum on new agreements from November 2025 and twice yearly indexation of daily accommodation payments.

The Support at Home home care program is a major system shift designed to reduce wait list for aged care and keep people supported in the community longer. From an operational perspective, implementation of the reforms is complete across our Australian business, and we have progressed in meeting the new aged, the new care minutes requirements. Importantly, the Australian experience gives us positive evidence on pricing, workforce impacts and system behavior, not just policy intent.

In contrast, New Zealand has just entered a formal review phase, and while slower to start, the timing difference and a strong commitment from government creates an opportunity to move more quickly from this point into design and implementation, drawing directly from the Australian learnings and avoiding early implementation risks. The Independent Ministerial Advisory Group will recommend changes before the 2026 election for a more sustainable, long-term funding model, with government already indicating an ambitious implementation and reform program commencing in 2027. The policy direction signals alignment with Australia with intent to leverage learnings from the Australian reforms rather than start from scratch. Early indications suggest a case mix approach, supporting both higher acuity residential care alongside expanded home care in the home. There may also be interim funding changes as early as this calendar year, particularly to relieve pressure on hospital beds.

In summary, putting this all together, through the combination of filling vacant capacity, growth in premiums and RADs, our new resident fund, efficiency gains as well as funding reforms, we are targeting a meaningful lift in aged care EBITDA per bed from $15,000 to $25,000 to $35,000 per bed by FY '29. Matt will talk further to these key targets shortly.

Before I hand back to Naomi, I want to mention an example of what sets Ryman apart. The continued focus on creating holistic resident experience that is unparalleled in our sector. Up until recently, Ryman had a well-embedded annual tradition of giving every resident a Christmas present. But we have now shifted to involving residents in the art of giving at this special time of year. This image is one of our Australian residents who participated in this project called RizeUp, where residents shop for more than 760 different items and toys using gift cards provided by Ryman. These were then wrapped, gifted to the charity and 230 children and 20 moms who spent Christmas in refuges in Victoria received the gifts.

In New Zealand, a similar partnership with Catalytic Foundation's Christmas Shoebox Project meant more than 1,200 children received something special, selected and carefully wrapped by our residents last Christmas. These projects, which may appear small, do create opportunities for our residents to engage in largely meaningful ways, connected and creating contribution to their social well-being and connection while removing costs for resident gifts that did not fully enhance the lives of our residents. In the words of one resident, it makes our Christmas even more special. We want them to know they're not alone, and we think of them, and we want to share with them, share our Christmas joy.

As you've heard today, operational excellence will allow us to unlock significant value for the business. High-quality care, resident experience and engagement of our teams across villages will continue to be at the core of our strategy. There is a substantial opportunity to lift our care margin from increased occupancy and care premium accommodation pricing. Our laser focus on cost reduction is driving decreases in costs by FY '29. And as government policy evolves to meet rapidly growing demand, our flexible operating model would be a key competitive advantage. With all this, we are targeting a significant increase in aged care profitability.

Thank you. I'd now like to hand back to Naomi to facilitate our Q&A.

Thanks to Rick and Marsha, who've spoken on the existing portfolio and how we will grow recurring earnings and release cash. We've now got 10 minutes for questions on the first presentations we've had today. Do we have any questions? Arie?

Just a couple of questions. Firstly, just on the service department and the initiatives there to drive occupancy. Can you just sort of talk to your confidence in your ability to sustain efficiency and not give up margin by providing more flexibility to residents? And I guess on the care suites and then the premium care offering and serviced apartments, were there any meaningful investments sort of anticipated around that offering?

Thanks, Arie. I'll pass to Marsha. It's a key part of how we're looking to build flexibility into the model and really how we structure our workforce around that. A lot of our serviced apartment focus, though, is focused on speeding up the rate at which we fill that capacity, particularly in our developing villages where a number of those units are. And that still provides us with the shorter turnover time frame we have on serviced apartments, time to continue to optimize the use long term. So we don't get one go at it. We can do it continually. But I'll pass to Marsha just to talk specifically to your question around how do we adjust the cost to match the variable service and flexibility we're building in.

Yes. Thanks, Naomi. Thanks, Arie. I think a couple of key things here. One is we are already offering rest home and some hospital level care into our serviced apartments. This is more on a case-by-case basis and flexibly across our portfolio. What we can do is a more targeted increase in that approach on a proportionate basis in our villages. So there are more rooms that we can do that in. So we see a real opportunity to effectively use the cost base that's sitting in the care center to extend that care into the serviced apartment with a marginal impact, substantive marginal impact. So we're looking forward to doing more of that.

I think separately, there's also the opportunity to go in the other direction, as Rick talked to, be able to have people move in, live independently without having that requirement for a higher level of care and reduce some of the packaging that we do currently with serviced apartments where we offer a very set menu of selection and give them flexibility, whether that's hospitality services such as linen, cleaning, towels, or whether that's getting further support through higher level care needs and particularly as New Zealand follows Australia and moving into a more flexible model in terms of how care is provided and how acuity is assessed.

Yes. And then just one other question. The guidance on the EBITDAF per bed was useful. I mean, while accepted duration is longer in terms of ultimately turning around the performance, the weight of capital is in your RV offering. So just any comment on where the EBITDAF per unit, which was the equivalent there was just over $4,000 at first half '26, what your targets are for EBITDAF per unit and the RV part of the offering for FY '29?

So we're going to come back, Arie, to how we think about returns in retirement living because you're right, they are different in terms of the capital and the return profile. So if you can hold that over to Matt session, I am conscious that Stephen asked about what's in the '25 to '30? And we haven't built that apart, obviously, in today's presentation. We do see government acting in that time frame because we see the necessity for government to act. If you look what's already appearing in the public hospital system in New Zealand and the cost of a public hospital bed close to $2,000 a day compared to the cost of an aged care bed, which today at government-funded rates is around $300 a day.

So even with addressed sustainable funding, there is significant value in having people in aged care capacity where they can be properly cared for in aged care capacity and having our public health system and hospitals available to meet the most acute care needs. That's what will drive that shift in government funding. It is an FY '29 target. And part of what through the presentation today I think you'll see is while we have these 2 very integrated businesses in a single location, that contribute value to each other. We have to also pull apart and think about them financially differently from a valuation lens, from a financial performance lens. And so that's giving you the frame to do that, but we'll come back and talk to returns that we need to target through the RV side of the business in the capital management session.

Nick Mar from Macquarie. Just on the resident fund model, could you just talk through how you determine the pricing for the discount, whether it's on an imputed interest rate or something like that. And how it sort of differs from, I guess, the RAD model you're offering before where there's sort of a capital piece for a discounted or no daily premium charge?

Sure. I might pass that one, Nick, to Matt.

Thanks, Nick. So there is an imputed interest calculation you can see in the example we've provided on the slide. We gave you the interest rates down the very bottom of the slide in the footnote, and you can use that against the other factors in terms of the example of the residual equity that the residents using in the resident fund to calculate both the premium and the interest.

[indiscernible] from the RAD model.

It is, the accounting treatment is more akin to a RAD model, but I won't get into the accounting treatment today, and we're yet to report on a half which has the resident fund product in it, which we will do at full year.

And just to come back, the rationale is really to make that move seamless for a resident when they are needing to go into care and give them choice. So it should be -- our aim is to make it economically neutral for Ryman, but to open up the range of ways that residents can pay for care. And as people are asked to pay for more of their care over time, giving more options, particularly around how you use capital to pay for care is going to be important for that because a lot of our customer base, they might be asset-rich, but they might be cash flow liquidity poor. And so we're really trying to help give them solutions and make that seamless when that transition needs to occur.

Stephen Ridgewell, Craigs Investment Partners. Naomi, I just wanted to go back to the gap between resales turnover and unit resales, which is in the earlier part of this session. And it's been good to see that gap obviously has been narrowing, but there is still a reasonable gap there. Can you give us an indication of when, from the CEO chair, you'd like to see those 2 lines meet and essentially at some point, they should cross over and unit resale should be ahead of turnover. And then the second part of the question is, what other things in the toolkit could you use to accelerate that? Because it does seem like it was a little bit slow in the third quarter, perhaps where we might have been hoping that gap closing.

Thanks, Stephen. And I'll ask -- I'll pass to Rick to answer the second part of the question. But look, from my perspective, obviously, the answer is as soon as possible in terms of closing the gap. One of the things to be mindful of is just the journey that our residents typically come on from the point they're first thinking about moving into retirement living to coming in to signing a contract, on average, 6 months later, moving into a village. It's quite a long time frame often 1 to 2 years. And so all those things that we're doing across the village to improve the funnel, really take time to do that.

I'll just ask Rick to talk to specifically how we focused on chasing that down in FY '27. And then we might need to wrap up for time.

Thanks, Naomi Thanks, Stephen. Yes. The gap is clearly a very key focus for us this year, and it's not just from time to time, the gap will already close, but we're looking to sustainably close it, and that is that converting those lines. We've got measurable performance improvements that we can see in that sales funnel. And to Naomi's point, due to the natural sales cycle time, many of those benefits that we can see and measure today will take some time to flow through their full benefit as we see those inquiries playing that year-long cycle out before they sign up and then move in. So we can see the improvements. We know it's closing the gap. We're very confident we can close the gap, and that remains our key focus this year.

Okay. I think that's all the time we have just right now for Q&A. We will have another longer Q&A session. So for those who didn't get to, we'll make sure there's an opportunity then.

As part of our refreshed value-focused strategy, we are looking at the full range of options for portfolio growth. And in the next section, I'll take you through how we're assessing opportunities across our developing villages, mature villages and land bank before handing back to Matt to talk to capital management.

We have a mix of opportunities on both sides of the Tasman with a range of scale and complexity. From our developing villages where we have uncommitted stages, and the flexibility to align development with demand to our mature villages where we've already invested in village centers and care capacity that have high and proven market demand and potential to expand. To our greenfield sites where we have reassessed feasibility across our land bank to identify those sites most prospective for future development and those unlikely to be developed where divestment offers better value for shareholders. And while M&A is not a focus at present, there may be opportunities in the future as we see consolidation occurring across the industry. We will continue to monitor corporate activity across both retirement living and aged care on both sides of the Tasman.

In 6 of our developing villages, we have made the decision to pause later stages and to phase the timing of development of those stages in line with demand. In all but one of these villages, the main buildings are now complete or soon to be complete. We've shifted from programmatic development to phasing development based on market demand. This approach has reduced capital spend and supports our focus on reducing stock and improving capital efficiency. Before committing to later stages, we will ensure earlier stages are well sold and priced to deliver strong returns on subsequent stages. We expect the next stages of Patrick Hogan and Northwood to be progressed in FY '27 after strong sales at both villages in the last 6 months.

Construction of the main buildings and next stages at Hubert Opperman are also due to start in FY '27. And this will be the first project we deliver under the new outsourced model. In the past, the organization had a primary focus on greenfield development and the reported new build rate. This has meant we haven't had a focus on how we can grow within and around our existing footprint, where we already have proven demand, established pricing and existing care and village infrastructure. This makes the risk profile and capital intensity lower for brownfield developments compared to greenfield. We know that in our existing villages, around 30% of the care residents on average come from within the village. This means we have significant capacity to support more retirement living with priority access to care at these sites.

More than half our villages have very high occupancy or wait list for independent living, indicating that demand to support expansion exists. These opportunities are weighted to New Zealand where our portfolio is more mature. And almost 1/3 of the portfolio is in catchments with medium house prices above $1 million, which is where high-density vertical village economics can work. An example of one of these brownfield development options is our Grace Joel Village located in St. Heliers in Auckland, an affluent area, our village occupies a hilltop position with panoramic views of the beautiful Hauraki Gulf and Rangitoto. This opportunity is at an early stage and is one we are looking to prioritize.

Over the last 5 years, we've seen average occupancy of over 90% and strong property values in this catchment area with medium house prices of around $1.7 million. If you look at the picture on the right-hand side of the slide, you will see the 6,300 square meters of land we own adjacent to our existing village. Estimates suggest that for a project cost of between $120 million to $160 million, we could add an additional 96 units in a unique and irreplaceable location. We are mindful of surrounding competition and market conditions in Auckland as we further progress assessment of this opportunity and potential timing of it in the coming year.

Moving now to our greenfield land bank. We have completed our review to identify sites, which will be retained for future development. When assessing these sites, we have reevaluated feasibility on a site-by-site basis, considering the current outlook for demand, house prices, surrounding competition and future capital growth potential. In addition, we are reviewing our village designs, including product mix, unit layouts and finishes and the form of our main buildings. We expect to continue evolving these designs before these projects are committed. As an outcome, we have retained 6 high-quality sites for potential future greenfield development, 4 in metro locations, which can support vertical higher density development; and 2 lower density, more broad acre developments, 60% of the retained greenfield land bank unit count is in Australia, where retirement living has a lower level of penetration and better care profitability, making it more attractive at present.

Over the course of FY '27, we will be focused on prioritizing the best of these greenfield sites to move to a more advanced stage of planning, and have the potential option to upgrade the quality of our $194 million land bank as this progresses. At the time of the half year results in November, we confirmed that we had contracted land bank sales totaling $110 million. Following the completion of our land bank review, we have identified further sites for divestment and are now targeting at least $200 million in cash release in total from land divestments. This includes Kealba, Kohimarama, Rolleston, and Rolleston greenfield sites, as well as our Hornby and Riccarton sites, which following the closure of care and transfer of almost all residents to other villages, we expect to become available in the future.

Based on work to date, one of our most prospective sites, greenfield sites, is Essendon in Melbourne. This site offers 3 hectares of land in close proximity to Melbourne CBD and is permitted for aged care and retirement living. We know from our Raelene Boyle Village less than 10 minutes away that there is a strong level of demand and limited supply in this area, and see this as a prime location for future development. I won't spend long on this slide as it pulls together the range of development options, which we have just discussed. While we won't be putting a state on the ground tomorrow on new projects, Richard's mandate will be to prioritize the best options across the portfolio with significant flexibility to build in line with demand.

So putting it all together, we have over 2,500 units and beds in identified and uncommitted developments. Our review has found that we have market demand and key capacity to support higher return brownfield expansion in more than half of Ryman's existing villages. We are retaining 6 land bank sites and currently see Australia as more attractive for greenfield investments and New Zealand for brownfield expansion. We are targeting at least $200 million from land sales and have already contracted $110 million of this to date. And we see development as a key part of our future, and an important part of Richard's mandate coming into the business will be to advance our plans for the best opportunities for both greenfield and brownfield growth across the portfolio.

Now I'll hand to Matt to present on our new capital management framework and dividend policy that underpins the refreshed strategy.

Thanks, Naomi. I want to start my section with a value lens, recapping how the business makes a return, which I appreciate is not always easy in a sector with complex accounting. So I'm making the complex simple for Ryman, it starts with high-quality recurring revenues that are, by their nature, consistent through our economic cycles. The earnings from our daily and weekly fees across retirement living and aged care are net of our cost to provide these services. And at the half year result, we talked to the importance of the front book. And historically, our fees hadn't kept pace with costs, which is evident in our past results. We are now addressing both the pricing of our fees and also our cost base, which I'll talk to more in the coming slide.

Second is our DMF, which is paid out of resident capital on exit and retained by Ryman. The DMF is benefiting from the same front book profile with our 30% contracts now well accepted in the market. The uplift from the 30% contract base will generate significant cash flow in the years ahead. Care is similar but slightly different as it has a number of different resident funding options that are largely interchangeable. And as Cam has already spoken to, to some of the economics around demand. The combination of both the fee revenue and DMF or its care equivalent provides a recurring earnings stream and a defensive growth profile.

From a balance sheet perspective, resident capital is an important component of Ryman and the industry's efficient funding structure. This funding structure enables shareholders to benefit from the capital gain of this asset base over time. This can be cyclical in nature as we are seeing in the differing property price growth rates between New Zealand and Victoria, but represents significant leverage to shareholders over the long term. This slide provides a diagram representing a simplified version of our new capital management framework. The aim of the framework is to improve the sustainable allocation of Ryman's capital and its measurability through to shareholder returns.

You can see the main sources of funding, which provide our efficient and low cost of capital, benefiting from the nature of resident funding in the first sell-down of a new village. And with the restatement of our targeted gearing range of 20% to 30%, we are committed to a long-term resilient balance sheet for both our shareholders and our residents. The allocation of care between RV and care -- sorry, allocation of capital between RV and care can and should be measured differently -- sorry, separately, given the differing operating models of the 2 businesses. For retirement living, we have looked at a range of different reference points for what yield is achievable for this asset class. We believe well-run portfolios can deliver a yield of greater than 5%, which is what we're targeting.

Our measure of this is based on the RV segment CFEO preinterest over the RV NTA. The RV NTA should be thought of as an asset NTA, which includes resident debt but excludes corporate debt to provide the simplest form of the measure, which can be used down to a village level. But to be clear, today, across the portfolio, we are not meeting this 5% target and are under earning on our asset base. As I spoke to on the previous slide, the change to our fees and contracts reflected in our resident front book combined with the cost savings program and the progressive improvement in occupancy provide a clear path to deliver on RV yield over time.

For care, we see EBITDAF per bed as the appropriate measure, given this is the widely used benchmark across listed and unlisted operators. As we spoke to at the half year result, we were aiming for $25,000 to $30,000 in EBITDAF per bed, which is a material uplift compared with the average of $15,000 we are achieving today. Similar to RV, the combination of our cash improvement targets, combined with the progressive uplift in occupancy make this target achievable.

Within development, we are applying a more disciplined approach with a much greater focus on project hurdles as well as applying market-backed assumptions in feasibilities. Where there are projects that demonstrate an attractive opportunity, we will invest for the medium to long term. The combination of these targets generates a return, which is akin to free cash flow per share and importantly provides a full picture of cash flow across the business. The use of this return in capital management has several main choices, which, I'll speak to more in coming slides.

Our recent refinancing demonstrated the support of our banking partners and is a long-term platform from which to continue to strengthen the business and optimally position it for growth. The refinancing delivered both a lower cost of funding and an extension to tenor, meaning that we can focus on reinvesting our post-interest returns into either growth or our dividend profile.

You will note that our bond of $150 million is set to mature within this calendar year that our headroom provides the optionality to absorb the repayment of the bond or seek a new bond issuance. We look forward to coming back to the market this year as to our intentions as we consider the bond market a key component of our capital management in providing flexibility and diversification of our cost of funds.

One further element that I want to call out is the ICR covenant, which we have set at 1.5x. There was a lot of consideration behind this metric given Ryman's continuum of care and the proportionality of care in our portfolio. It was important for the covenant to have care development costs excluded for the first 24 months post first occupancy. This is due to not all residents entering under a capital product in New Zealand with many paying for their accommodation under a premium. The allowance for this is a key component highlighting the covenant's fit-for-purpose nature and matches the way we view care funding from our residents within our wider capital management framework.

This slide is a focal point for my section as it provides additional context and proportionality of how we are growing our recurring earnings. It underpins our strategy, the optimization of our portfolio and the new capital management framework.

Starting with the outcome. You can see that we are now targeting $150 million in CFEO improvement from FY '29 against the FY '25 baseline. This compares with the previously stated range of $100 million to $150 million cash improvement over 3 to 5 years. We have narrowed the measure from cash improvement to CFEO, so as to provide accountability given the nature of the contributing categories. We have also reset the measure to the top end of the range.

Talking to the categories. Firstly, occupancy improvement will drive operating leverage as development slows and we focus on filling our Villages and Care, where volume is critical. Rick and Marcia spoke to this and the size of the uplift potential, where the continuum helps to fill our Service Apartments and Care along with clear demographic demand. This category is just the occupancy uplift benefit through to FY '29.

Second, Care operating improvement -- sorry, Care operating performance will improve through a combination of higher room premiums being implemented by Ryman, along with the introduction of RAD retention in Australia and cost efficiencies.

Third, village operating margins will benefit from higher weekly fees as the front book rolls forward, combined with village level efficiency initiatives. Whilst this isn't as large a category as Care, it has the potential across the portfolio even as we benchmark within our own group. These first 3 categories are presented on a net basis with underlying cost inflation and resident growth already incorporated into the targets.

Procurement and overheads are the next 2 categories and are considered on a gross basis given their nature. They are presented consistent with our previous disclosure of annualized cost savings, although they don't include capitalized costs and unit refurbishment savings. There's already been substantial progress in both the restructuring of our head office and cost out in procurement, and we maintain the guidance of $50 million to $60 million of annualized savings for FY '26 as defined at our half year result.

Finally, front book DMF will be realized over time, reflecting the total value of the portfolio benefiting from the increase in DMF within our contract book. This category represents the difference between cash DMF recognized in FY '25 versus what will be recognized in FY '29. To be clear, these targets are across identified categories within CFEO, where we have line of sight to improve our operating performance in the near to medium term.

Collectively, they give us confidence in the $150 million target, which will underwrite a large amount of our return profile in the capital management framework. To achieve this uplift, we expect to incur $5 million to $10 million per annum in one-off costs from related investments to deliver the $150 million through to FY '29. Any such one-off costs will be made clear in the disclosure of our future results.

It is worth highlighting that reported CFEO includes other categories such as village refinancing, which is central to the economics around the retirement model. However, given this component is heavily influenced by macro factors outside of Ryman's control, we saw it as more appropriate to exclude this from the $150 million target.

Now Rick has already spoken to the opportunity to release cash from stock, which is based on what we had reported at the half year result. To make clear the measurability of the $500 million of cash release target, for CFDA, it excludes CapEx or cash receipts from new projects. And for CFEO, it is the cash release from paid out stock -- resale stock.

Another value driver for this cash release is, of course, capital from Care, specifically RADs and of course, our new resident fund product. We haven't quantified this given the level of customer choice in Care. However, this remains a key opportunity to drive CFDA and cash release going forward. There is lots to get after. And with a valuable high-quality Ryman inventory in combination with land bank divestments, there is clear potential to release $500 million by FY '29.

As we see progressive uplift in returns and cash generation and cash release from the business, gearing will deleverage in the near term. At the half year, with gearing at 28%, we are now in the initial band shown in this slide. The land bank divestments, along with better performance into FY '27 will progressively move us to the lower end of this range.

In the medium to long term, depending on the speed of the $500 million of cash released, Ryman will be in a position of having a lower level of gearing. However, the intention is to remain within a band of 20% to 30% in the medium to long term. Being within this range provides the capacity and prudence for Ryman to continually assess the optionality around growth opportunities that Naomi has spoken to.

For shareholders other than dividends, a core proposition of the returns in Ryman is sharing in the capital gains from this asset class over time. Whilst the NTA of Ryman often gets focused on with the $4 billion shown on this slide, there is over $12 billion of total gross assets across the group. I should also call out that Care within our NTA is only the land and buildings and arguably not its full value.

Whilst this is due to the accounting treatment for Care, it is something for investors to note given Ryman's proportionality of Care across the portfolio. Whilst there is cyclicality to real estate prices, which we manage through price governance, there is meaningful value to shareholders of consistent capital gain over the long term at a very efficient cost of funding.

Starting at the bottom of this slide, today, we are announcing our new dividend policy with a payout of 20% to 50% of CFEO, which we expect to recommence from FY '28. Given the cash flow improvement across the business, we are using CFEO as the basis for dividend distribution, given it represents sustainable cash returns. I should also add that using CFEO is aligned with the feedback that we have received from shareholders. The payout range of 20% to 50% is intentionally conservative to create capacity to invest in growth over the long term. It also holds management accountable for the generation of a cash-backed return.

Lastly, we expect to recommence the dividend from FY '28 when the profile of our earnings and related cash generation should be stronger than today. This slide shows the cascade of capital allocation in relation to the dividend policy and brings into context the approach to the payout range of 20% to 50%. The initial use of our CFEO generation above debt servicing is to distribute a minimum of 20% to shareholders, after which there are several options.

As Naomi has spoken to, there is optionality within and around the portfolio as well as on both sides of the Tasman. The choices around growth and distributions will have regard to the right level of gearing depending on Ryman's portfolio, our market and the opportunities ahead of us. Importantly, we will not pay dividends from debt in future allocations.

The position Ryman is now in post refinancing allows us to take the next step in more disciplined capital management to provide stronger returns to shareholders. We will do this by focusing on a targeted yield from RV and operating profitability from Care, benchmarked against the best performers in the industry. And by delivering on the operating cash improvement, it will underwrite the uplift in these measures as well as the return profile. This will enable Ryman to reduce gearing in the near term, pursue growth opportunities in a disciplined way and pay dividends.

I'll now hand back to Naomi.

Thanks, Matt. We now have time for around 20 or 30 minutes of Q&A before I wrap up. So a longer session on any of the presentations that we've done today. So we'll open up the floor to questions. Nick?

Just on the $150 million could you just talk through, which of those buckets have, I guess, in your mind, changed materially, since you last talked to the market because a lot of things like filling up your villages, some of the changes in DMF, the cost saving targets are unchanged. So what's given you that increased confidence in that $150 million? And has there been any new revenue or cost opportunities that have gone into that versus, say, 6 or 12 months ago, when you first announced it?

Thanks, Nick. So I think a couple of things have changed. First of all, when we announced it a year ago, it was $100 million to $150 million. Just from a personal perspective, I was 3 months into the role at that point. I'm now 14 months or so into the role. And we have, from what you can see on the slide, quite clear views on exactly, where we are going to go and target the top end of that range. And the purpose of giving you those buckets is to sort of communicate really that confidence and the identification of the specific savings.

I don't think the -- what we are going after has materially changed, but our understanding of the value in it has shifted as we got further into it. And probably the one thing that would stand out to me, and I'll check if Matt's got anything to add is the Care business has an ability to reset performance much more quickly.

So as you shift pricing and improve occupancy and things like that, that's coming through much more quickly in cash in Care compared to the Retirement Living business with its tenure, with its contract turnover that just takes a little bit more time to see the full value. So while we've given you the FY '29 numbers, that is not the full benefit of the steps we're taking. That's just what we see as being targeted within that initial time frame.

Matt, anything else that's changed from your perspective?

No, Naomi, all I'd add is that the work is always underway. I think the quantification of these savings requires time as it should. And I think the team has done a great job running to ground a number of the opportunities that we knew were present versus a factor of quantification and then target setting to the extended time line.

I know Will had a question before the break. Do you want to go to Will first and then Shane and then Jeremy.

Will Twiss from Forsyth Barr. You've kind of given us a time frame around the aged-care goal in terms of getting the 25,000 to 30,000 EBITDAF per bed by FY '29. How should we be thinking about the timing in terms of the goal around retirement living in terms of that 5% yield on NTA?

Thanks, Will. You're right, we haven't been specific on that. What we have been specific on is obviously the improvement we see coming through CFEO within that FY '29 time horizon. But I might pass to Matt in terms of talking to what's the range of things that can contribute to us building back up to that more than 5% level longer term.

Yes. Thanks, Naomi. Thanks, Will. In terms of the target, it's a long-term target. Let me start by saying that. I think it's important in terms of the calculation components that we have provided you to understand that in terms of the $150 million, that's the recurring sustainable improvements per the categories identified.

It doesn't include resale margin, which is, of course, in the RV yield component in the numerator. So there are long-term components, which are variable by nature in terms of that resale margin, which we didn't think was appropriate to include in the FY '29 time horizon, but on a long-term yield basis for RV is appropriate to include.

The other thing I'd add to Matt's comments is just where we're at in our reset, if you think about the levers we've pulled, they're really portfolio-wide levers. And so that's what a lot of the targets for that FY '29 time frame are focused around.

As we step into the next stage of the strategy, portfolio optimization comes more to the fore. Richard joining us with a deep background in asset management for value, we'd see more value coming through that. And that all helps us get that portfolio-wide yield up to the sort of level that good performing RV assets are at.

I think Shane was next.

Yes. Shane Solly from Harbour here again. Just you talked about earlier on, this is a scale industry. And I'm just interested in what scale means for Ryman and maybe you could give some illustrations as to where scale -- where you want to be?

Sure. So if I talk about, first of all, Shane, the value of scale, and I think about it in a couple of parts primarily. In aged-care, first of all, it's a high-cost business, a high fixed cost business. It really relies on high occupancy, efficient leveraging of systems and expertise. It's very hard to do that in small facilities. It's very hard to do that in small corporate groups.

So we think of optimal capacity or size in aged-care of probably in the order of 80 to 100 beds per site and then the added benefit you get from running a portfolio of assets of scale that adds to that. It's very difficult in Australia now, we see this post the reforms for small operators to compete with the regulatory requirements and just the nature of the business.

So we think scale has got a big advantage in aged-care. We think that's going to grow. We also think as services become a bigger part across the village, the same applies into RV. If you think about the value proposition we can offer to residents as we have this next generation of residents coming through the boomers, who are looking for more, wanting for more, but also able to pay for more, being able to offer more services, more options, more choice across the village. That's all a real opportunity. And to set up the systems and processes to deliver that, scale really helps you.

Similarly, in terms of a lot of the digital opportunities that we have, whether it's managing a $12 billion asset portfolio with an $80 million per annum capital spend through to the size of our workforce, almost 8,000 people. There is huge leverage in these capital and people-intensive businesses that AI-enabled systems and process can really unlock. Scale allows you to do it. It's very hard to just invest in the capability without that. So that's in a way still ahead of us because we're really resetting what we've got today. But I certainly see it as an important part of the future opportunity.

I think the other part of your question is how big do you want to be? And what does Ryman look like long term? We don't have a fixed view on size as an overall objective. We want to be in the markets that value the Ryman proposition that have the enduring demand that we can be confident that we're going to deliver a strong return to shareholders. You don't want to be in an oversupply position with assets like this. The scarcity factor adds to the value and helps you in a business that really relies on occupancy.

And so we're comfortable with where we are in New Zealand. We see great opportunity in Australia. We've had great success in the first 12 years. We've been entered the Victorian market. We've now got the scale. We've got the ability to work within the regulatory regime there, and that's a great platform from which to grow in the future.

I think Jeremy is next and then Bianca.

Jeremy from Milford. Just a quick one on the CFEO. You've got the $150 million improvement. To what extent did you consider an absolute target to put out there? And just sort of noting in 2025, you did negative $115 million CFEO, and I know you've excluded resales, but to what extent did you think about putting an absolute target or number out there?

Thanks, Jeremy. I'll pass to Matt to talk to that.

Thanks. Look, ideally, we would put a target out there that's absolute, but it's made up of components that to the extent of the $150 million recurring sustaining improvements that we are targeting and by the nature of the categories are well within our control. To the extent that the broader complete CFEO picture includes other elements like resale margin that over the long term will normalize, but within that FY '29 window being a shorter horizon are more due to factors outside of our control.

So whilst price and our price activity is, of course, a component, there is the real estate market and property prices, which is probably equal to, if not a greater component. So given there are different levels of composition of what's within our control within those other elements of CFEO like resale margin, we felt the target was more appropriate for things that we could focus on and execute on within that time period of FY '29.

Just to add to that and to your question, Jeremy, if you think about the 2 targets together. So in the -- as Matt said, that sustainable recurring CFEO improvement that we just want to see growing over time in the business. We want to see growing CFEO over time on a consistent portfolio base. And separate, we do see opportunity with the stock we have in terms of reducing that stock level. That's captured in the $500 million target. So that $500 million target does have a component of CFEO. It's got CFDA as a starting point and then added to that, the reduction that we are expecting to see in the bought back stock.

So we're trying to keep those separate intentionally, one sustaining, recurring, keep doing that, grow over time. And the other is more of a one-off working capital release. And so we are actually trying to give you through the 2 targets by FY '29, a full view of that.

We'll go to Bianca next, and then we'll come back.

Bianca Murphy from UBS. Just a question on the 6 retained greenfield opportunities. So the majority of those are high density. Could you just give us some color around how you're planning to stage those projects and make sure the balance sheet doesn't get too stretched again?

Thanks, Bianca. And good question. Good question for Richard, but probably need to give him more than 2 days that he's had so far. There's no doubt that with vertical villages, staging is more complex, but there are still things we can do.

You actually saw a really great example of that at William Sanders this morning, where that village was built over about 4 years in a staged way, where we could bring independent residents into the first stages with the cash flow that comes with that and then completing the continuum of Care with the main buildings, but it is more tricky.

The other thing that we're conscious of with the greenfield developments and it's part of why we want to have more of a diversified approach to development is that the greenfield sites tend to be quite capital intensive. We certainly don't want to get back to the situation we were in of having 16 projects, $4 billion of spend on the go at one time, that is too much and clearly stress the balance sheet.

But having a number that is manageable, staging them so that, again, we've had 6 Care Centers open, main buildings open in the last 2 years. We wouldn't do that again. That's a lot of Care and Service Department capacity to bring on at one time. It's a lot of main buildings to open with the cost and start-up and commissioning that comes with that.

But phasing is also between projects across projects within projects. And so part of what we'll be looking for is that clear view and ranking of the best opportunities we have, but also how do we phase them to really manage the balance sheet well. And as Matt has spoken to, we've got that ability within the new dividend policy and with the gearing policy that we've maintained to have some flex up and down to allocate more CFEO to fund our growth projects or to have that higher level of gearing.

But certainly, I would expect in the next couple of years, we're going to have a good amount of capacity for growth in the balance sheet and be well set up for those best opportunities that we want to progress.

Francois from ANZ. My question is as follows. You're working really hard to grow the recurring revenue from the business. And then you're planning in '28 and thereafter to keep half or more than half for growth initiatives and opportunities. Can you give us an idea of what returns you will be seeking for those growth opportunities?

Thanks, Francois. I'll pass to Matt to talk to that one.

Thanks, Francois. So the measure we use is the project IRR for returns on new projects. And that has regard to both the time and cost to build, the time and cost to sell down the project as well as the carry costs over that period of time. It also allows us to compare projects, which is, of course, important. We haven't given you the specific hurdle today. As we look forward as to new projects, we will look in terms of those new projects to provide a level of measure of return that we're pursuing.

So as and when we are bringing new projects forward with a specific view around capital commitment, we would, as Matt said, look to also give you an expected return and I'd be clear on that upfront before we're next deploying new capital.

Today, you've decided on the dividend policy. So you must have an idea of what kind of -- for fitting a chunk of the dividends to investor, you must have an idea of what kind of returns you will be seeking.

So I think if you look at what's in the capital management framework, we clearly talk about positive NPV. So at a minimum, we're investing in a way that's above our cost of capital. But we're also, as Matt talked about, wanting more discipline around project IRR. And the reason for that is because we think that often the time taken to build and sell down has been missed in some of the economics previously.

And so you'll form a view on cost of capital. There's lots of views out there as to what it might be. But it's contributing to the enterprise value, but it's also as a project confident to sell down within a time frame that the project is -- has a strong return and then ranking them across the full range because there are quite a range of different propositions based on size and time to build.

And so we want to look at that across greenfield, across brownfield, across the mix in the portfolio and think on that basis, that portfolio of growth opportunities we have. Where you're probably going and getting to is where does this all end up in terms of a return on capital employed or other metric. And that's certainly something we're going to keep looking at and thinking about. I wouldn't want you to think that this capital management framework is done and never to be touched again.

This is a big step for us to be very clear in how we are running the business today and to have clear metrics around that. We're going to make sure we listen to the feedback from the market. There is always good perspective on that. There's a range of views in this particular sector, and we'll look to continue to refine it as we move forward through the strategy we've put forward.

Arie Dekker, Jarden. Just 3 questions. Firstly, just thinking about our ability to, I guess, measure how you're tracking against us. Would it be fair to say that in terms of those buckets in CFEO that contribute to that $150 million that they're pretty equivalent to you sort of guiding to your expectations that you can improve operating EBITDAF by $150 million over that period?

I'll pass that one to Matt.

Yes. So Arie, the majority of the buckets are CFEO related. And to the extent that the target is CFEO, you will also get an EBITDAF uplift corresponding to that, although not all buckets are EBITDAF equivalent. So DMF and the sixth bucket, an example of that. But yes, to the extent that the 6 buckets collectively represent an improvement in sustaining CFEO, yes.

And on conscious of your earlier question, Arie, which might have been answered, we're obviously very focused around EBITDAF as a key measure in Care and understanding that at a village level and across the portfolio. In RV, we probably see CFEO and the cash yield as the more relevant all-in metric just because of the accounting treatment of DMF, as Matt's spoken to.

Yes. And then just on the gearing and the sizing of debt to that point that you made about your inability to control macro factors and I guess, in the valuation that underpins LVR, there are additional factors outside of your control, the independence of it.

Yes. So I'm just sort of interested in why you're using that measure to target the sizing of your debt given some of your concerns about control and that and particularly the issues the company has had in the past in using LVR as a guide to debt sizing.

Matt, do you want to talk about that?

Yes, sure. So I think the 20% to 30% is appropriate given there's already a degree of leverage in the business from resident funding, which can't be ignored. So that needs to be in the consideration to the 20% to 30%. We have given you the other measures in terms of the headroom to our facility, 1.5x covenant, obviously, consideration towards debt for development activities.

So I think there's a composite of measures. It also connects through our capital management framework to our dividend payout policy. So 20% to 50% at the low end, 20%, it allows us 80% of CFEO return to be redeployed back into debt servicing or reduced gearing.

Yes. And then just a couple of guides on the development front. So in terms of, if we go back to the Ansell presentation and what was sort of outlined there right at the end, I think, in terms of the expectations for demand for independent living in particular versus, say, assisted living, should we expect to start to see that influence both, I guess, the mix of the developments you start to undertake more skewed to assisted living than perhaps in the past?

And then also on development, just a question around land acquisition and sort of the time frames that we might expect to see you add to those 6 greenfield sites?

So on the question of mix, Arie, that's something that is absolutely under review. I think one of the things we're going to see change is the shift from thinking about the physical footprint as a fixed proposition in terms of the Care you provide within that physical footprint. And so that sort of separation of independent of serviced or assisted Living and Residential Care, almost by their terms, they're communicating how fixed we are in the service we're providing.

I think what we're going to be doing is looking at how do we build more flexibility into the physical footprint because we know that the customer expectations are going to change, the government funding is going to change, but we're building 50-plus year assets. And so we need to make sure we're doing that in a way, where we can flex the use of those assets over that life of asset aligned with how the market is going to shift.

We think we've got a really good starting point because already today, 20% of the portfolio is serviced apartments, 30% of the portfolio is aged-care, and we've got a lot of independent living that is apartments, which is easier to provide assisted living into generally. There's a lot that already in the physical footprint that exists today will easily flex to a greater level of service. We do, in saying that, and this is something we're quite mindful of, need to make sure we're attracting residents, who are really going to value that proposition.

And so helping that shift occur over time in terms of the offering, how we allow for residents to opt in and out of things is a key part of what we're thinking about over time because clearly, there's a risk in pure-play independent living around tenure, if we don't get that right. And we think our model is a key part of how you manage that risk.

Jesse, I think...

I've got 2 questions. The first one is just a follow-up on the development economics. So project IRR is a bit of a challenge for Ryman because the projects are meant to be 100-plus percent geared over time with resident financing. So the IRRs can tend to look very high initially. But if there's some kind of variation, cost overrun, things don't sell down as quickly as you want, then they can very quickly go negative or become very small.

So I just wonder, are there any other secondary -- how do you think about, first of all, the amount of leverage in the projects, when you look at your cost of capital that you use as a hurdle rate? And then also, are there any other secondary metrics that you would use to look at projects as a bit of a fail safe because IRR can be so volatile?

Great question. So in terms of the gearing, the gearing or the level of debt is in regard to the total business. So we don't think about gearing in terms of the individual project. We think about the project as to its effect on gearing for the whole business. And you're right, there are risks and variables involved in a project IRR given that time period and the speed to sell down on any new project. That's why I think it's important going forward, where we look to deploy new capital to Francois's question, that we provide those return targets that we're seeking from new projects going forward to make that clear.

One other thing I'd just add, Jesse, is just the difference that exists between New Zealand and Australia and in how Care capacity is funded. So in Australia, we have 60% RAD penetration. That provides significant capital to fund the building of Care capacity.

In New Zealand, we have about 10% RAD penetration. And so Care does not recycle capital. And the reason we think project IRRs are so important is that often, if you just focus on cash recycling, you're not seeing the time value of the money, the holding cost of the land, the holding cost of the stock, the time to build and ultimately measuring on that basis.

And we do need to think about Care separately because it's got different economics. As Cam said, tricky to get to stack up our stand-alone today just with where the funding is at. But we'll keep looking at that on a case-by-case basis to make sure each project has a strong return off a much a clear basis rather than relying on effectively the capital gain through the duration of the project, which was often driving that in the past.

Okay. Then the next question is, if you -- have you looked at -- if you meet the targets that you've set by segment for Ryman, so the 5% cash yield on retirement and the EBITDAF targets on aged-care and then layer in the other elements with the development using the cash retention you're planning within new dividend policy, interest expense, corporate costs and so on.

Can you say what that looks like on a consolidated basis for Ryman? So presumably, if you meet those targets, you'd be able to model out and say that means overall, after all the additional costs, et cetera, Ryman overall should have an X percent cash yield on net tangible assets, and it should have a Y percent return on equity. It should have a growth rate that looks like something. Can you give us a bit of a picture of the overall consolidated targets for the company that you're going for?

So in terms of FY '29, I think the thing to highlight is these are not our long-term targets. That improvement we're targeting is what we're looking to get to by then versus what we might look to get to from the portfolio long term. And what we've done with the capital management framework today is to say across the different components, retirement living, aged-care, development activity, what are we targeting in terms of financial performance.

That question of aggregate portfolio performance is definitely something we want to come back to as we get through this performance improvement journey. And clearly, the answer is much better than today, but we just don't have a specific view for you on that right now.

So we'll look at how we can continue as we go forward. We'll be reporting against looking at how we can report against the targets we're setting, so you've got that clear line of sight and then get to that clearer view on how we effectively grow overall returns over time.

Probably got time for one more final question. Stephen?

And thanks for the detail on the land bank review that's been really helpful. Just had some questions on some of the decisions in terms of what was kept in the land bank and then maybe what's up for sale. So first of all, on the Takapuna site, it's a obviously well-located site, but it's very small. If you build it, it will be quite a small village, maybe a boutique, we might call it a boutique village. So maybe you could just help us with the thinking around why you're still keeping in the land bank at this point, planning to progress it? And will the economics stack up for these return hurdles that you've talked to?

Thanks, Stephen. So yes, as you say, Takapuna is a smaller site compared to what we generally will look for. It is in the right target demographic. As you would have seen visiting Williams Sanders in Devonport today, that is our market. And so what we'll be doing is through this prioritization process, look at how that stacks up compared to the other greenfield opportunities we have, and we'll be progressing the best of them.

So for the reasons you've said, it's got some constraints in terms of what you can do on that site, but it's got the market. And that's what has led to the decision to make -- to keep that in the portfolio today. We'll look at how we prioritize the best opportunities across the land bank that we are retaining.

Can I just ask one quick one? So maybe one for Matt on the gearing target. So you've got the gearing ratio coming down in the next few years and then potentially with the upper level going to back to 30%. Within those targets, there will be -- I'm sure you've modeled in the background, some kind of build rate or there would be a range of build rate outcomes from very little to potentially something more than that.

Can you give us any kind of indication within that range? Because it's a big range, 20% to 30% gearing, especially in the longer term, right, what might be at the top end of that range and perhaps the low end in terms of the level of construction activity that you might be targeting longer term?

Thanks, Stephen. The 20% to 30% is a big range, and you can see that we're taking steps to deleverage in the near to medium term. I think we've given you several building blocks to help you model that. I'll leave it up to you to come up with a cost to build per unit or per bed as to an extrapolation depending on the sensitivity you want to apply between 20% and 30%. We think 20% to 30% is a prudent gearing range. It gives us resilience to the balance sheet versus above 30% against the point I made earlier that there's resident debt within our capital stack as well.

But I think the range you can apply an assumption based on a cost to build that will give you a number depending on where you want to forecast within the 20% to 30% and it will be subject to the opportunities ahead of us to the extent to what Naomi had said earlier, where we have projects that meet a return hurdle and exceed it and are attractive for us versus alternatives, we will pursue them and stay within that 20% to 30%.

I'll leave it up to you to work the sensitivities.

And I think one of the key things Stephen, is just that shift to flexibly developing. So not having the imperative to develop because we're carrying a big cost and a big program. We want to be able to develop, when it makes sense, but equally not develop when it doesn't make sense. Ultimately, if the better use of shareholder funds is to return it, we will return it. If we think we've got really good prospects for investing it, we will invest it. And we think we've got good capacity in the balance sheet with the capital management framework we've presented today to do that, as Matt's outlined. Right.

Let's do a quick wrap up before I hand over to Dean to close. Today, we have run through our refreshed strategy. You have, first of all, seen what's not changing, which is our focus on being industry-leading in meeting the needs of our residents and continuing to evolve our offering as their needs and expectations change.

In wrapping up, I want to give you an overview of where our focus will be in the next financial year as we execute on our refreshed strategy. As we look to continue to be the provider of choice, we will maintain our resolute focus on the quality of care that our residents receive, which comes from the culture and engagement of our team.

We will be looking at opportunities to improve customers' experience, including providing more flexibility in payment choices. And we will be working alongside the New Zealand government as they look to find solutions to ease hospital bed pressures and deliver sustainable aged-are funding.

In FY '27, we see opportunity to grow recurring earnings by increasing the occupancy levels at our developing villages, optimizing utilization of our Care capacity to drive better outcomes for our residents and improved financial performance, broadening the market for our service apartments and continuing our efforts to drive efficiency and cost out of the business.

We will be increasing our focus on optimizing our portfolio by growing resales to exceed turnover and reduce stock, more targeted allocation of capital for value across the current portfolio and continuing the divestment of land that doesn't meet our portfolio growth criteria to release $200 million in cash.

And on our last pillar of value-creating growth, our focus areas for FY '27 will be to sell down the new sales stock we have, progress the next stages of Patrick Hogan and Northwood, establish our outsourced delivery model, which will give us the flexibility to grow in where we grow and in how we grow. And Richard's team will prioritize the best opportunities for brownfield and greenfield growth across the portfolio.

Now I know we have gone through a lot today, and I hope we have provided you with the confidence that we have a clear plan for this business and to deliver value. I'll finish up by reiterating the key takeaways from today, which I shared with you upfront.

Ryman is focused on growing high-quality recurring earnings, optimizing our large property portfolio for value and returning to portfolio growth that creates value for shareholders. We are uniquely positioned with the portfolio of assets and capabilities we have today to meet the significant growth in demand that is coming and are positioning the business to have the flexibility to benefit from this.

We have set clear targets for improving financial performance in the next 3 years and have reiterated those targets and our confidence in them again today, $150 million in sustainable cash flow improvement and $500 million of cash release, and we will continue to update you as we move forward on how we are performing against those targets.

We have significant optionality for portfolio growth and a plan to return to disciplined growth in the coming years, progressing those opportunities with the best returns. And with a clear capital management framework now in place, a new dividend policy and improving financial performance, we expect to return to dividends in FY '28 and have a solid foundation on which to grow shareholder returns.

With that, I'll hand over to Dean Hamilton, our Chair.

Thanks, Naomi. I was just reflecting sitting there, actually, it's good to be at the end of the meeting, not at the start of the meeting, which is what I was 18 months ago before we're fortunate enough to hire Naomi. So nice to reflect on what has progress we've made in a relatively short period of time.

The clicker, Naomi, where is the clicker? I thought I'd just touch on 2 things. One, the Board. We've made a significant amount of change in this Board over the last 2 and a bit years. James and I started in 2023 and then progressively built up the Board since then.

In terms of that Board, we've got -- I'm really pleased with how it's come together in terms of the mix of capabilities and experience we've managed to attract to the company over a period that was actually a relatively challenging external environment. Kate has a background in construction and law and then moved into health care, where she ran all of Ramsay's 80 hospitals, which is a highly competitive game and then became CEO of IVF business, Virtus before it was taken private in Australia. So Kate brings a great set of experiences.

James will be well known to you. His experience in audit and risk and investor in capital markets is probably second to few in New Zealand. So great to have James leading the audit team there. Paula is our long-serving director at 6 and a bit years. Paula has had a career in people and performance across health care and finance.

David was a partner at BCG for many years, leading their strategy and M&A practice. He then moved to Stockland, where he led their business development and then ran the whole retirement living business before divesting it. And Scott will be well known to you as well, having led Precinct for a number of years now, really focused on premium property development across Auckland and Wellington. So bringing great depth so great for Scott to recently join the Board.

So we've trimmed that Board down a bit. We think we've got one more to add back. As we look at what our business strategy is how we're focusing in on operating ways of working, how we bring digital into the customer journey into -- also into our back office. We'll look to bring one director on with that direct experience to constructively support management in those endeavors. So I'm pleased with how the Board has gone.

Clearly, a lot has been achieved in the last couple of years from a reset perspective. And really, the key message I want to deliver today is the Board is very conscious that we may need to move away from that tactical reset and to sit back and focus on strategy and looking at long-term shareholder wealth creation.

But in terms of the tactical stuff, pretty much a brand-new Board, a large change to management, which we're really supportive of. We're delighted with how Naomi has got our hands around a relatively complex business pretty quickly. We talked about the timing in the Investor Day, and we felt that it was time to get back in front of people.

And I think one of Naomi's key messages is it's a dynamic strategy, but some clearly some key strengths that we wanted to focus on here today. So we've reset Board, we've reset management. We've reset the accounting. We've reset our financial transparency, the way in which we report what we report on.

We've reset the management incentives. So a significant amount of foundational change, but clearly pivoting now to much more strategic dialogue with management, which is great. In terms of the focus we talked about today, maintaining that industry-leading customer satisfaction, there is no Ryman without a resident. So that's critical to us and one of the Board's key responsibilities in my mind is organizational reputation. That generates sustainable returns on existing capital deployed.

The Board is right behind that as a key priority. We actually think that's an enabler for future development as well because the fit of your current portfolio is you put that in your forward cash flow model, IRRs, NPVs all look better. So we don't think that's actually inconsistent. We actually think it creates more optionality going forward, having a highly cash positive core business. Disciplined approach to future expansion in markets with enduring demand.

The Board is supportive of getting back out and at it, but the business needs to rebuild that capability. Richard has only just joined. So we need to let him get his feet under the table, we need to build that capability back. But I'm very confident that this business with Board and management support will get back out building. Prudent capital management. When I joined, debt was heading towards $3.5 billion. And when we were in diligence and they raised -- the initial equity raising was before James and I joined, that brought it down.

And then we obviously had very challenging business markets, which meant that the business was under a fair bit of pressure. So we had to raise equity again, which hadn't been anticipated. So we certainly appreciate everybody's support. But we're not going back there again.

Funding that at 2%, I think, hit a lot of ills. You can't survive when interest rates effectively went to 6%. So they traveled on the business at $3 billion worth of debt. That math was just in a business that wasn't creating positive cash. You didn't have to be a genius to see that was a place that you could not survive.

So everyone has done the hard work. Investors have kindly supported Board and management in that. We need to be prudent. We don't want to do that again. We think we've got the capability to both generate cash return and grow within that capital structure. And lastly, a real focus on total shareholder returns, which is a mixture of dividends and capital gains. And we've aligned management incentives.

When I first joined short-term incentive, medium-term incentive, long-term incentive, all driven on underlying profit. So we've had to dismantle that and the long-term incentive now is all around TSR. So a mandatory requirement to retain those by management, when -- as and when they vest and a mandatory requirement for Board to own shares. So hopefully, we've got some good alignment and skin in the game across Board and management.

So that was the key things I want to touch on, strong endorsement by Board of this strategy. But thank you for your time. Really appreciate the support of Ryman. We appreciate the support of the Board and the management, and we look forward to returning that with much improved returns. Thanks for today.

Thank you for standing by, and welcome to the Ryman Healthcare Half Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Ms. Naomi James, Chief Executive Officer. Please go ahead.

Good morning, everyone. I'm Naomi James, Chief Executive Officer of Ryman Healthcare. Thank you for joining us for our half year results for the 6 months to 30 September 2025. With me today is Matt Prior, who commenced as Chief Financial Officer on the 31st of July; and Hayden Strickett, our Head of Investor Relations. We're going to be working to get through the presentation in around 30 minutes to allow time for Q&A before we wrap up at midday. Looking at the agenda, I'll provide an overview of sales, stock, operations and development before handing to Matt, who will speak to the financials and capital management. And I'll then provide an update on outlook and strategic priorities before opening up for Q&A.

Starting on Slide 4. As you'll see from today's results, we are well on our way to delivering better returns and are doing the things we said we would do when we raised capital at the start of the year. This is the first positive free cash flow result that Ryman has announced in more than a decade. We have made substantial progress towards achieving our cost reduction target in the first half and increased our target for the full year. Our refreshed sales strategy is rebuilding momentum with 2 quarters of sequential growth at our new 30% deferred management fee. Our balance sheet reset is now complete with the full bank refinancing we announced at the start of the week. And we have today announced that we will hold an Investor Day in February, which will cover our strategy refresh and new capital management framework.

Let me start with the first half highlights on Slide 5. And starting with our sales performance. We've seen a rebuild in sales volume for the first half with total sales of 704. While down on the second half of last year, which was a record, this was up on the fourth quarter of last year and is at a significantly higher value with the new level of DMF. On the operating side, we've stepped up the level of cost out. To 30 September, this is now at $40 million annualized, and we've uplifted the full year target to $50 million to $60 million. This is reflected in our financial performance with a significant improvement in operating EBITDAF and positive free cash flow for the half of $56.2 million on total revenue up 13% on both pricing and occupancy growth, while total costs fell 2%.

We've completed the refinancing of all banking facilities, significantly extending the average facility tenor to 5 years. As part of this refinancing, we also improved our pricing and have more resilient financial covenants. Through the half, we completed an ASX foreign exempt listing, which we committed to do at the time of the capital raise. This is a pivotal step in broadening Ryman's investor base while reinforcing our commitment to the Australian market. Finally, we've made good progress with the strategy and portfolio review with additional land divestments bringing total contracted sales to $110 million. We will be coming back to the market at an Investor Day in February with an update on our refresh strategy and capital management framework going forward, including our dividend policy.

Now jumping into the detail, starting with sales on Slide 8. We've seen continued improvement in sales effectiveness and contract conversion driven by strong lead generation from village open days and targeted sales and marketing initiatives. Looking at the first quarter, we saw a 12% step-up and another 9% step-up in the second quarter in our occupied sales. As a reminder, these are RV unit sales only, and we do not include care RADs in our sales numbers. This year, we introduced quarterly reporting. So you already have the sales figures you see on this slide. The new news is the update to our full year guidance to 1,300 to 1,400 units, which I'll speak to at the end in the outlook section.

Moving now into pricing and the breakdown in sales mix. On Slide 9, you can see the changes we made to the pricing model are now fully in place. As a reminder for those new to the Ryman story, our sales, which are recognized at the point of occupancy typically lag contracting by 6 months on average. We made the shift to a standard 30% DMF on the 1st of October 2024. So contracts signed prior to that date have now been settled and the first half of this year reflects the pricing changes. You can see that 3/4 of new residents are moving in on our standard 30% DMF with the remaining quarter being a mix of DMF options, demonstrating the flexibility in our pricing framework across DMF and unit pricing to meet individual needs. Our contracts are long dated and the benefit of these changes will build over time with annual portfolio turnover currently at 12%. As well as the uplift in DMF, we're also seeing a significant step-up in weekly fees with an average 60% uplift in the level of weekly fees on rollover of units.

Moving now to sales contracts on Slide 10. You can see again the significant improvement half-on-half coming through in our forward contract book with both increased contracting levels and a reduction in cancellations. Market conditions are still mixed across the regions. We are seeing early signs of recovery in Victoria, while Auckland is yet to show meaningful improvement, which is significant for Ryman with around 30% of the portfolio in Auckland. Our contracted level of stock is lower, reflecting the recent completion and settlement of presold units at Kevin Hickman and Nellie Melba.

Stepping now into the breakdown between resales and new sales on Slide 11. Our average resales pricing has been broadly stable on first half 2025, while slightly down half-on-half due to mix impact. Independent units are down 2% year-on-year, while serviced units are up 1%. We've seen our gross resales margin, which reflects the cumulative capital gains on each unit continue to moderate from historical highs. This reflects the flat housing market we've experienced in recent years. We've seen resales volumes increase across both independent and service departments compared to the prior half. But you will see there is still a gap between sales and turnover, 81 units for the half, which means as we signaled at our full year results, there is a working capital drag through the half with an increase in resale stock and the payout balance.

Turnover is an important driver of cash generation in our model through both DMF and capital gains. With improving resales, we have a significant opportunity both to increase cash generation and to release cash from the $330 million of bought back resale stock we have today. Turning to new sales on Slide 12. New sales have reduced, reflecting the planned ramp down in development in response to elevated industry stock in some locations. As a result, our level of new sales stock has remained broadly flat over the past 6 months. We do have elevated levels of serviced apartments following the opening of 5 main buildings over the last 18 months. This is a key area of focus for us, and we are considering a number of options to improve utilization of this product.

Average pricing remains strong, supported by a favorable mix with 45% of new sales coming from Australia. And importantly, our total new sales stock value of around $470 million at the end of the half represents a significant cash release opportunity going forward. As we open the operations section on Slide 14, I'm pleased to share that Ryman has once again received significant external recognition. I know these award slides sound a bit repetitive given how many we've won over the years. But this is ongoing recognition across both the aged care and retirement living parts of our business, which truly reinforces the strength of Ryman's reputation.

Importantly, our internal customer survey results have also continued to improve year-on-year across all parts of the village. It's been especially pleasing to see this progress in a year where we've undertaken a significant reset across many parts of the business. And I want to acknowledge the dedication and commitment of our Ryman team members who work every day to deliver great service for our residents and are working to make our business performance even more sustainable.

Moving now to aged care performance on Slide 15. Starting with pricing, we have seen significant period-on-period improvement in both room premiums in New Zealand, up 10% on PCP and an average refundable accommodation deposits, or RAD balances in Australia, up 5%. These gains are in addition to the base care funding uplifts implemented in both New Zealand and Australia. In New Zealand, a base care funding uplift of 4% took effect from 1 July.

We have also successfully trialed a new product for residents transferring to care from within the village, which we're now rolling out across all of our New Zealand villages. This allows us to grow the level of resident capital in care in New Zealand and gives our residents more choice in how they fund the cost of their care. In August, we communicated the closure of our 2 oldest rest home level care centers in Christchurch. Time to align with the opening of the 80-bed new Kevin Hickman facility, every resident has been supported to find a new home that meets their needs.

Moving on to Slide 16 and the significant progress with aged care reforms across both Australia and New Zealand. In Australia, reforms have been enacted and are now moving into the implementation phase. Changes to allow a 2% annual retention of new RADs came into effect on 1 November. With our average incoming new RAD in Australia currently exceeding $800,000, this is expected to deliver a meaningful increase in revenue from new RADs moving forward. Ryman is already well progressed in meeting the new clinical care minute requirements, which become mandatory with the new funding changes.

We've also seen significant progress made in New Zealand with the government announcing the establishment of a ministerial advisory group. While it is lagging Australia in undertaking the necessary reforms, we expect New Zealand will benefit from being able to draw on lessons from the Australian reforms, taking the elements that have worked well and delivered meaningful benefits while supporting the delivery of high-quality care without creating undue compliance burden. And the New Zealand government has been specific on the timing it wants to achieve, advised by the middle of next year to enable it to enact changes to the funding model in 2027. This will provide time for all political parties to commit to funding reform ahead of the New Zealand election next year. And there's a big focus on the reforms gaining bipartisan support has occurred in Australia.

Moving now on to development. I'm pleased to announce today the appointment of Richard Stephenson as Chief Development and Property Officer. Richard brings deep sector experience with more than 20 years working across the retirement living and aged care sectors in New Zealand and Australia. The addition of Richard to our senior executive team positions Ryman for a return to disciplined growth and supports the continued delivery of high-quality communities for residents.

Moving now to Slide 18, which sets out the status of our program of works across our in-flight projects. We've made good progress in the last half with the completion of the final stage at Nellie Melba completing the village, the completion and opening of the Kevin Hickman main buildings, the commencement of the main building at Patrick Hogan and progress of Keith Park Stages 8 and 9 with these independent apartments forming the bulk of our second half build guidance. We expect updated plans for our Hubert Opperman village to be finalized and approved next calendar year, allowing for the commencement of construction, which will be the first project we deliver under the outsourced model. And we continue to have more than 300 RV units sitting in our land bank for future stages on these projects, which have planning approvals and are ready for development as and when market conditions support it.

Jumping forward to our land bank on Slide 20. In February, we announced that we were undertaking a comprehensive review of our land bank, which was independently valued at $376 million at 30 September. We have been exploring the best opportunities for growth in terms of both our existing villages and our greenfield sites and are also determining which sites would deliver better value for shareholders through divestment. A number of sites were identified for potential divestment during the early stages of this review, and we're pleased to report the successful sale of Park Terrace in Christchurch for $42 million and Mount Eliza in Victoria for $35 million. This is in addition to the existing contracted sales at Karori and surplus land at Nellie Melba totaling $33 million. We will provide a further update on our land bank review at our Investor Day in February and expect to have identified sites to be retained for future development as well as additional sites for divestment. Now I'll hand over to Matt to run through the financials.

Thanks, Naomi. As my first half at Ryman, it has been fantastic getting to see the opportunity to unlock value in the business on a number of fronts, which I will touch on today. For the result, I'll talk to the financial highlights in our P&L, cash flow and valuations as well as speak to the refinancing update, which we announced earlier in the week. Starting with Slide 22. As Naomi has spoken to, we have made meaningful progress in the first half, which is reflected in these financial results. I'll call out 4 highlights on this slide. Firstly, we have seen a significant improvement in financial performance with losses before tax and fair value movements reducing $57.6 million year-on-year, underpinned by revenue growth of 13% and disciplined cost control.

Next, free cash flow of $56.2 million was positive, underpinned by strong net development cash flows and lower finance costs. And thirdly, acknowledging the quality of our $1 billion of unrealized development assets, which represents a material cash opportunity. Lastly, the full refinancing of our bank debt, which has extended average tenor to 5 years, improved pricing and introduced a fit-for-purpose covenant structure. The refinancing completes our balance sheet reset and provides a robust foundation to grow earnings.

Moving to Slide 24. Strong revenue growth is a notable highlight for the half, driven by the benefit of both our growing resident base, up 4% year-on-year in volume terms and stronger pricing in both aged care fees and retirement village fees. Year-on-year growth in DMF revenue includes a one-off adjustment for the prior year period relating to a historical GST issue, which was disclosed at the full year result. Removing this impact, DMF was broadly flat year-on-year. There are a number of factors at play here, including the changes to our pricing model as well as the accounting changes made in the prior year. If we look at independent units, we have moved from a 20% to a 30% DMF, but with revenue recognition period changing from 7 years to 9 years.

Similarly, service apartments have moved from the 20% to 30% DMF with recognition changing from 3 years to 4.5 years. This means that whilst the change in DMF contract terms is building a higher-value contract book, it will take time to flow through to the P&L, and this is shown in revenue in advance. In simple terms, revenue in advance represents DMF, which has been contractually accrued but not yet recognized in the P&L. The balance will underpin future DMF revenue. I would stress that our front book revenue profile across both DMF and weekly fees is significantly greater than the revenue in place from our back book, which supports our growth in years to come.

Slide 25 shows the significant progress we have made in our cost-out programs over the past year. Non-village expenses reduced half-on-half by 27% to $54 million, with the majority of this improvement coming from last year's restructure to support services. Adding to this is also some reallocation of costs to villages following these operational changes. Village expenses increased 7%, reflecting additional capacity, which has come online, noting that we have opened 5 main buildings in the past 18 months. While cost savings remains a key focus for the business, this is being approached in a considered way given the importance of the Ryman brand and our strong resident proposition.

Moving to Slide 26. Combining the revenue and cost improvements I've talked to, we have seen a $26.4 million year-on-year lift in operating EBITDAF to $40.1 million, a key measure we focus on internally to track the core operating performance of our business. I would note that this does not include any realized capital gains on retirement village ORAs, which are reflected in other metrics such as cash flow from existing operations. The chart shown on this slide shows the improvement with non-Village cost reduction and positive leverage in developing village growth providing the most benefit.

Moving to Slide 27. A key strategic priority for FY '26 has been segmenting our financials between aged care and the retirement village parts of the business, which we will report on going forward. I'd like to highlight that this is a non-GAAP disclosure, which currently sits outside of our financial statements. Segmentation is based on property type with the aged care segment comprising our care centers and the Retirement Village segment comprising our independent living units, service apartments as well as common areas and amenities. I should also make clear that home care services provided to a resident in RV are included in the Retirement Village segment.

Central to this analysis is the allocation of support services to each of the segments. A substantial amount of the support is provided through our office functions such as operations, clinical, procurement and contracting. Allocating these costs to the segments provides a complete picture of our cost structure and business performance. The output of this work provides metrics such as EBITDAF per aged care bed of approximately $15,000 on an annualized basis. For a scale operator such as Ryman, this is significantly below the full potential of our portfolio, and there are transformation projects underway to improve performance. It is also important to note that the figures shown on a per bed or unit metric are averages with variations seen throughout the portfolio. Our transformation progress will be reflected in these segment measures going forward.

Slide 28 details our cash flow from existing operations, or CFEO, for short, which is down year-on-year when excluding interest. Robust cash flow from village operations aligned with the improvement in operating EBITDAF has been offset by lower net cash flow from resales. Resales cash flow continued to be impacted by growth in our bought back stock, which grew $53 million in the half. Excluding this, our cash performance would have been meaningfully higher. I'd also highlight that we have made some refinements to our cash flow methodology. The most significant change is the allocation of interest on unsold new stock and land bank to development activities. Whilst much of this interest does not meet the criteria for capitalization, functionally, it still relates to our development business.

Other changes include the allocation of sales and marketing costs between CFEO and CFDA and similarly, reallocating costs on land bank sites such as rates or site security to CFDA. The composition of CFEO shows the improvement in village operations, but this is held back by gross receipts from resales compared with the previous half, which had the benefit of stronger sales. Totaled against lower non-village expenses and attributed interest costs, there was a slight improvement in overall CFEO.

Turning to Slide 29. We have seen strong net cash release from the development side of the business with our project spend reducing significantly as we sell down existing stock. The opportunity to release cash from inventory is substantial with approximately $470 million of new sales stock at 30 September. Consistent with my previous comments, the figures on this slide reflect our updated methodology with cost allocation to CFDA, including marketing and selling costs as well as allocating notional interest on unsold new stock and our land bank.

Slide 30 shows the positive free cash flow for the half, which was the first time in many years for Ryman. Free cash flow of $56 million was partly offset by a headwind of $42 million in other movements, primarily FX with the 3% decline in the New Zealand dollar for the period. While this has had a negative impact on the Australian dollar debt, I'd note that our Australian dollar assets have also seen an FX uplift, which is an offsetting benefit to our balance sheet and our NTA. And as Naomi has already highlighted, there have been subsequent land bank sales that will benefit our second half cash position.

Turning to asset valuations on Slide 31. Independent valuations across our sites consider unit and pricing information, capital spend and site-specific factors with further details in our presentation appendices. The half saw a positive fair value movement of $3.2 million, reflecting a number of changes, including price, but the outcome was broadly flat, taking into account FX and the previous result adjustment. There has also been a small impairment for 3 care centers as detailed in the financial statements, noting that the broader care portfolio is valued annually. The overall investment property carrying value and net tangible asset value remained broadly flat against the previous result.

My final slide on financial performance provides a summary of our profit and loss with per share measures, which I won't speak to in detail given most line items have already been covered. Earnings per share of negative $0.044 was down for the half with the improvement in operating earnings offset by lower fair value movements as well as the higher number of shares on issue following the February equity raise.

Now on Slide 34. As announced earlier in the week, we have successfully completed a full refinancing of our syndicated loan facilities. This extends our weighted average maturity to nearly 5 years with no maturities until FY '31. To achieve this, we have received strong support from our lending group who has recognized the turnaround that is underway at Ryman by providing funding out to 7 years. Our new ICR covenant is 1.50x adjusted EBITDA to interest, excluding interest on development debt. This designated development debt includes our committed developments that are in flight as well as recently completed care centers in New Zealand.

Importantly, our existing covenant waiver remains in place with first testing of the new covenant to apply from September 2026. Overall, this refinancing retains significant funding headroom of over $500 million and provides a strong foundation to support our strategy and long-term value creation.

Finishing my sections, I'll talk to treasury management on Slide 35. Since the equity raise earlier this year, we have delivered annualized interest savings of around $67 million, driven by lower debt following the February equity raise, positive free cash flow and a reduced cost of funds. With nearly 70% of drawn debt now on fixed rates and an average hedge tenor of 3 years, we have strong interest cost certainty. Combined with a lower debt profile post equity raise, this positions us for substantially reduced interest going forward.

Before I hand back to Naomi, I'd like to thank all the operational teams across Ryman's Villages as well as the development and support teams in Christchurch, Auckland and Melbourne that helped deliver these results. I'll now hand back to Naomi to talk to our outlook.

Thanks, Matt. On Slide 37, we have our updated full year sales guidance to 1,300 to 1,400 RV units. This reflects expected broadly flat total sales half-on-half in a mixed market with new stock delivery weighted to the first half and a lower level of new sales. In these numbers, we haven't assumed a recovery in the Auckland market, which makes up approximately 30% of our portfolio by number. We have increased our cost saving target for the year to $50 million to $60 million annualized.

We have also confirmed the top end of our build rate guidance for the year at 330 units and beds. And we have moderated our CapEx guidance, reflecting the release of contingency on a number of in-flight projects, which have completed as well as some timing -- cash timing impacts. And we take a more disciplined approach to sustaining CapEx in the existing villages.

Slide 38 gives you an update on the strategic priorities we announced at the time of the equity raise and what we said would be our focus in FY '26. I won't step through the slide as we've already covered each of these points through the presentation. But I would say we have made meaningful progress in releasing cash from the business, improving our performance and resetting the business for a return to disciplined growth.

Let me wrap up on Slide 39. Our near-term focus continues to be on building our sales momentum, releasing cash from the balance sheet and driving operational efficiency across the business. Ryman is positioned for significant cash flow growth as the housing market recovers, aged care funding reforms are enacted, our aging population grows strongly on both sides of the Tasman and aged care scarcity increases. And I'm looking forward to sharing more with you at our Investor Day in February on our refreshed strategy, focused approach to growth and new capital management framework, including our new dividend policy. I will now open up for Q&A.

Your first question comes from Bianca Murphy with UBS.

First question is just on future development -- no, sorry. My first question was on your commentary that you are signaling that you will be returning to disciplined growth again. But at the same time, we continue to see vacant stock increase as well as bought back stock. And I know it, of course, takes a few years to develop a village. But can you just touch on the confidence, I guess, that Ryman is ready to return to growth again given where your stock levels are?

I think I caught all of that. But I guess just talking to, first of all, the stock levels, what we've seen half-on-half is obviously build rate and new [ stock ] sales rate much more closely match each other. And that's what we're wanting to achieve in terms of moderating the rate of growth in our in-flight projects, which has seen us defer some of those later stages. We are intending to bring those stages forward as and when the market conditions support those developments, and that will be done on a progressive basis. And in terms of our greenfield land bank and sort of future expansion around the existing villages, that's something that we're intending to come back and talk about further at the Investor Day in February.

Okay. That's helpful. And then I believe you previously mentioned that you expect stock levels to peak in FY '26. Do you still expect that to be the case? And if so, is your expectation that will be first half or second half?

So in terms of the stock levels, we've obviously seen those increase through the first half with resales being at a slightly lower level compared to turnover. We are very actively working to get those to match each other with the range of sales effectiveness initiatives that we've got underway. We are also a little bit dependent on market conditions, particularly when it comes to the portfolio in Auckland. And ultimately, that's going to determine the exact point in time that we reach that point and start to see that cash come back down and the buyback level come back down. So probably can't predict more precisely than that, Bianca, but we're certainly working very hard to get to that as soon as we can.

Okay. And then yes, following up on that, could you just talk about what you're seeing in terms of market conditions in the first weeks of the second half?

Sure. Do you want to talk to that, Matt?

Sure. Thanks, Naomi. So Bianca, in terms of what we're seeing so far in the second half, but before I do that, just rewinding slightly to the first half, in the first half, we did see higher volume of new sales and good movement on new stock deliveries with the rate of move-in probably a little bit faster than expected. In H2, I would say that we're optimistic given the recent cuts to the OCR, but it's really too early to say how those cuts will translate in terms of an uplift in current conditions.

For October and November specifically, we've seen consistency with our first half sales performance, although we're entering this kind of quietly -- sorry, quiet seasonal period of December and January with this mixed market conditions as a backdrop. And as I said, optimism around the OCR cut, but it's too early to say how that will play through in the second half.

Your next question comes from Arie Dekker with Jarden.

First question, just on new sales stock and the ILUs in particular. Just given the influence of Australia in the first half. Just keen to get a bit of an indication of how much of that nearly 300 ILUs in new stock sits in Australia versus New Zealand? And then just related to that also, what your expectations are for pricing in Australia given the mix of stock that you have remaining there?

That's a very detailed question. We might have to come back to you offline as to the composition.

In the first half, Arie, one thing we'd point to is with the Nellie Melba final stage completing, we have had a number of sales come through from that. We had 76 units added in Nellie Melba. We are seeing good trading and market conditions over there, and that's a relatively recent thing. But we haven't, I don't think, provided quite the level of split that you've just asked us for in terms of the split between New Zealand and Australia. So that's probably the further detail we can provide around that.

Okay. No, sure. Just in terms of cost-out expectations, which have increased through the first half, which is clearly pleasing as you're spending more time in the business. I mean, could you just sort of characterize how far you've gone, I guess, in sort of peeling back the layers of the onion and whether your expectations would be that based on what's still to go that we could see further upsizing of that envelope through the balance of this year and into next year?

Thanks, Arie. So in terms of what we've seen so far is, obviously, we had $23 million last year. We initially expected $23 million this year. At the half, we've achieved $40 million. The current year savings are really across both non-village and village. I would say in emphasis areas, it's around the support services, as you would know, procurement as well, refurbishment CapEx and really village efficiency initiatives. It's really giving us the early gains that we're being able to talk to and now update and increase our guidance to the $50 million to $60 million. As we do more work, we'll be able to give you more confidence around the timing of that. But at this stage, not looking to change the original numbers in terms of total target.

I know I wasn't expecting you to. But what you're suggesting there is there is more work to do in terms of looking across the business and certainly potential for that to be increased further?

Yes. You'll remember, if you go back to the cap raise, Arie, we talked about a cash improvement target of $100 million to $150 million made up of a mix of cost and revenue. So that is still our overall target that we're working to. We've given you the cost indications to date. And one of the things we're mindful of is being able to give a clearer view around timing of when the revenue improvements will flow through as well. So that's probably something we're going to come back on in the new year with some further detail around it.

Great. Yes, that makes sense. And then just on the RAD retention benefit that's coming in, in Australia. I mean, what's your -- obviously, too early to see on the evidence, but I guess, just some comments on your expectations with regards how it might change the mix and the SKU of residents you see coming in on a DAP versus a RAD. Do you have any comments there?

I don't think we'd expect to see it change the mix, Arie. We've certainly seen a little bit of benefit ahead of the 1 November commencement for residents looking to avoid that new regime. It applies to new RADs from the 1st of November. But typically, it's driven based on the capital that individuals have access to. And it's also strongly linked with the tax and means testing settings in Australia. So it's fairly resident circumstance specific as to how those choices work rather than tied with that DMF retention.

Okay. No, that's good. And then just, I guess, returning and just asking a specific question back to the answer you've already given with regards to that the resales and improving volumes there to bring it more in line with turnover and then clearly, clear inventory as well. I guess just on the tools you're using, I guess we can't sort of see it come through at an aggregate level. And then also, there's obviously the phasing of it all and that in terms of settlements. But can you just talk to the extent to which you are using price as a tool in resales to increase volumes, whether you are doing that or not? And what sort of levels where it is being applied?

Sure. So we're using a range of initiatives, Arie, and price is really only one of those. I think we signaled at the full year that we would use pricing in a targeted way where we have building resale stock or where we have older new sales stock. I won't talk to sort of anything specific around discounting. It's obviously a competitive market. But price is certainly not the only thing we are doing. We have a range of other incentives and measures in place targeted at a village level and also have invested quite a bit in the training of our sales staff to really make sure that they've got sort of the right toolkit, the right range of incentives and are able to do a really great job at selling the new DMF offering, which they are really hitting their strides with. So it's a range of things with targeted pricing really just being one part of it.

Okay. And then just the last question for me, it's a quick one. Congratulations on the divestments of Mount Eliza and Park Terrace. Could you -- I may have missed it, but could you just comment on where those -- the values achieved for those versus the FY '25 book value?

Yes, they're broadly in line with book.

The next question comes from Will Twiss with Forsyth Barr.

Thanks for the extra disclosure on the Village and the care earnings. If we think about that $15,000 per bed EBITDAF in aggregate, can you give us an idea of what that looks like if we think about mature versus non-mature care centers? And then a follow-up to that, what is the split between what that looks like in Australia versus New Zealand?

Hi, Will. It's Matt. I'll talk to the Australia and New Zealand piece. So care in Australia is more profitable. It reflects the funding reforms that have occurred in that market. And whilst we're not providing the $15,000 EBITDAF per bed split between the 2 markets, you can see from the country segment reporting in Note 2 that Australia has a higher margin at a country level and the bulk of the P&L is care. So hopefully, that's helpful in terms of giving you an indication. And look, with the lower margin in New Zealand, it really is particularly as a result of the funding environment. So a scale operator like Ryman, we should be looking to get efficiencies from that scale, and we will from our transformation programs to improve performance.

But that said, lower earnings in New Zealand aged care is reflected in our valuations also, and we do need to see meaningful improvement in funding to support investment in new capacity. And just on that, the same applies to obviously mature versing immature care centers. This is a high fixed cost business. They benefit from occupancy. So you should expect obviously a lower margin in a more immature care center.

Okay. Great. But maybe if you could just give us a ballpark of where you think that EBITDAF per bed would be in a mature center today?

Yes. I think, the complex thing there is, obviously, the premiums we're realizing do vary quite a bit across the portfolio. So it's not a consistent position. It is region-specific. And I think in terms of perhaps that portfolio target in Australia and New Zealand, that's something we might come back in the new year and give you a further view on what we think a fully optimized position might get to, including the benefit of the sorts of aged care reforms that are being looked at in New Zealand.

Okay. No, that all makes sense. And then just moving to the village side. There's quite a big delta, sort of $50 million, $60 million between the village fees and the village OpEx. When can we sort of expect that delta to start closing materially? And then I guess, following up from that, is it still your expectation that over time, you can get these 2 lines to closer to breakeven?

Yes. Good question, Will. So focusing on RV, not care. Looking at the costs I should point out the cost is a blend of independent and serviced and the cost of delivering service is higher within that blend. You can see in the appendices that we've given the [ IA ] kind of unit fees of approximately $156 based on the current back book, if you can think about it this way, with the costs being at a current point in time.

My observation coming in as a CFO is this is an industry issue. It's affecting a number of operators in this kind of high inflationary environment. A large part of the reason that Ryman has lifted its fees after many years of keeping them flat is to partly address this issue. So the front book will address this in combination with some of the cost-out programs that we have underway, and that will close that gap on the RV side progressively over time, but it will take time.

Great. And then just last one from me. If we think about the kind of step down in maintenance CapEx in the first half, how should we be thinking about this as a base going forward?

I think the step down, and it's not a significant step down, Will, in terms of FY '25, it really just reflects a different level of cost discipline across the business and financial discipline across the business. We want to invest in the existing villages, but do that in a way that really is value-oriented. And so there will be some movement period-to-period based on opportunities, particularly where we can create value through investing in the villages. But in every dollar we're allocating, we are really making sure it is well spent, and that's reflected in the numbers.

[Operator Instructions] The next question comes from Stephen Ridgewell with Craigs Investment Partners.

Congratulations on the improved free cash flow results and progress on improved operating results. Look, I just wanted to touch on the operating EBITDAF result, which you called out earlier, Naomi was up sort of 200% or so off a low base. And then maybe also look at the resale gains because if we include that to the operating EBITDAF, that number is down 3%. So given the cash resale gains, look to be down about 34%. I just want to follow up on Arie's question on the decline in resale margins. Directionally, it's as expected but the magnitude does perhaps look a little bit steeper. And I just wanted to see if there were any call outs with regards to mix or other considerations? Or does that kind of fairly reflect the level of discounting that Ryman has connected over the half to clear the resale stock?

I think in terms of just what's driving that reduction, which is obviously not new to this half, Stephen. We see the HPI inflation in recent years as a significant factor. And remembering that in resales, about half is service departments, which are turning over on average in 4.5 years and half is independent at about 9 on average. And so particularly with service departments, you see that more recent lower level of house price inflation having an impact. And so that's sort of as significant a factor in terms of the resale margins.

The pricing, I think, is more of a factor in terms of mix as well. And so as we see newer villages making up a larger proportion in the volumes and not necessarily having the same level of resale gains just purely as a percentage terms in terms of house price inflation, that's also flowing through to sort of what you print in terms of that overall percentage margin change.

Okay. So you're calling out maybe a slightly younger average tenure potentially for those resales because just to -- I guess we did see a 540 bps sequential decline in independent gross resale margins on Slide 11 and 350 bps sequential on service. So that would seem a bit steeper than what we're seeing across the rest of the sector and the housing market generally. So it reads more -- without that color, did more discounting, but you're suggesting it's more of a mix shift. Is that right?

Look, I think it's a combination of those things, Stephen. So rather than one of them. And just to call out the -- we've obviously got the city villages as well as the regional ones. We've got the newer villages as well as the older ones. And then we've got the service department and independents in the mix and all of that overlaid with broadly flat HPI over the last 5 years or so. So those factors are all playing into that resales trend. But obviously, pricing is a factor as well.

Okay. And I guess if we look into the second half, I mean, are we going to see -- should we be seeing a stabilization in those, if you like, like-for-like resale margin trends? Or is this a fair read is this the new normal just given where the housing market is in this part of the cycle and what you need to do to get clear stock?

Look, it's obviously fairly mix dependent, Stephen, but I'd expect there's potential to further downward, but with perhaps a slower moderation in that in terms of where it trends, but very mix dependent in terms of where the sales are coming from.

Okay. And then just maybe one on the CapEx. I think it's been mentioned earlier that the CapEx guide was lowered a bit. Naomi, you sort of called out cost discipline. I was just wondering as well, though, does that pull down and what we're seeing is that the build rate is at the top end of the range, prior range and the CapEx guidance is lowered. Does that reflect perhaps lower CapEx going into next year or lower build rate going into next year? I'm just trying to interpret the moving parts there because typically, if your build rate was at the top end, you'd expect CapEx to be a little bit higher from where I sit. Just trying to understand that.

So the way I'd think about the build rate, Stephen, is really just that we're expecting to deliver in full to schedule rather than any change in development activity. In terms of the CapEx, there's a couple of things in that. One is that we have released meaningful contingency from some of the projects that we've completed, which is really pleasing. And then there's some timing in that. There's always a -- we're obviously completing Keith Park final, the current stages 8 and 9 near the year-end. We're getting towards the end of Northwood around the year-end. That just means you do sometimes have some timing impacts as to when that can flow through those projects. No change to schedule or delivery in any of that -- impacting any of that.

Okay. And maybe just one last one for me. Just on the volume guidance upgrade, it's obviously good to see. Just maybe a question on the mix. And Matt, you sort of called out kind of earlier that perhaps you'd see some improvement in continued improvement in resales in the second half, but new sales perhaps sort of dipping a little bit just given obviously the front books coming back. I mean I was just wondering if you could give us some indication of maybe how sharp that mix shift you might expect to see in the second half on the settlements. And I appreciate it's early days, but is it likely to be quite a different mix in the second half or incrementally different, if you like?

Yes, you had 2 kind of large tranches of stock come through in the first half in terms of Nellie Melba and Kevin Hickman. So those 2 definitely play a role in first half new sale performance, and you can see the mix from what we have disclosed in our trading updates and the result. So it probably is more of an even spread in H2 than what it was in H1, which had the benefit of those 2 large tranches. So I'm not going to give you specifics, Stephen, in terms of the combination of those factors into H2, but hopefully, that's directionally helpful.

The next question comes from Nick Mar with Macquarie.

Just following on from that. Just within the contracting rates, can you give us any idea of how that's looking on retail, just how close you're getting to the sort of termination run rate on a go-forward basis?

So Nick, I think you were asking how close is the resale contracting rate to matching the turnover rate? Did I hear that correctly?

Yes. So within that sort of $674 million of new sales contracts in the first half, how close that is to the $619 million of termination?

So we haven't given a specific split in terms of the guidance, but we are certainly seeing that gap narrow. And while resales is sort of below where we want it to be, we're chasing that hard to get back up to that turnover level, and that's a near-term focus for us. So that's a near-term goal we are working to chase down. We have indicated, I think, in the guidance that new sales are probably a bit lighter in the second half. And so you'll factor that into sort of the resales rate through that period in how you read that.

And Nick, just to add to that, not just for the target of achieving turnover, but also to the extent there's $330 million of stock value attributed to that, which is something -- which is a large prize for us to get after in terms of cash release.

Yes, absolutely. And do you think that the current set of incentives, tools, pricing, everything like that is enough to get you to that, notwithstanding sort of a material change in market conditions? Or are you sort of needing to wait for the market to pick up in Auckland to be able to actually execute on that piece?

I don't think we're waiting for the market to pick up, Nick. I think property is cyclical. We all know that, and we're chasing that down in the current market. It's just a little harder, particularly probably at the Auckland end. But certainly, in lots of markets, we're well exceeding that. And so our focus is on closing the gap.

Yes. So my question was in order to do that sort of nearer term, do you need to run more discounting or bigger incentives to get the cadence up?

Not necessarily. I think it's a matter of continuing what's occurring, which is really using the full range of sales initiatives and options we've got to drive near-term sales performance.

And I think you've seen, Nick, in the half that there's been a trend in sales effectiveness towards better conversion and that conversion rate of leads through to contracts, through to settlements has been one of the highlights of the half. So to the extent we can continue to build and develop those tools, it goes beyond price in terms of sales performance.

That's helpful. And then could you just talk through that resident funding trial that you've done kind of transfers to care and any intentions of sort of going back and allowing ORAs across other care beds in your portfolio and trying to sell down that way?

Yes. So I guess just starting with the resident. When it comes to care, our residents are coming either from within the village or often coming from outside the village. And so that resident fund product that we have trialed and are now rolling out is really about helping our residents transfer within the village and use the capital they have, whatever level of capital that might be to fund their care. We do also provide care in certain cases into service departments, and that's an ORA structure in terms of where that's used. But we also see daily accommodation premiums as a really important option because -- very often, care residents are coming to us at a difficult time in life. There's a lot of uncertainty around how long they might require care for and what level of care they might need.

And so we want to have the terms and offerings right to sort of match the residents' needs. High occupancy in care is key to profitability. And so having a range of pricing options is what's going to support that. And we think this new resident fund adds to the range of options that our residents have in coming into care.

Sorry, what specifically is the resident fund and what's the mechanism?

So it's effectively a capital amount that applies as a deposit to fund through both effectively the value on the capital as well as through drawdown of that amount to fund the care. So whatever level of capital an individual might have, they can use both the capital base and the drawdown from that to fund their care without needing to have separate funding or capital available to pay their room premiums. It effectively allows us to discount the room premium in using that capital in that way.

And then the last part of the question, are you considering sort of having ORAs available over the [ balanced ] care portfolio in New Zealand?

We see that as one option, and it's an option that's used today in service departments and care suites. As to the extent of broader use of it, that's something we'll keep considering in really matching the range of pricing options to what residents are looking for. Occupancy is critical in care. So we want to be able to maximize occupancy and realize the premium for the accommodation in a way that's aligned with how the resident is best able to fund that. And not everyone has a capital sum and not everyone is wanting to sign an IRA at a point where they are moving them or a family member into care.

There are no further questions from the phone lines at this time. I will now hand it to Hayden for rest of Q&A.

Your first online question is from David Kingston. Well done on an overall -- on the overall progress and positive free cash flow. When are you expecting positive EPS?

Yes. Thanks for the question, David. So EPS, as you'll see it in the face of the accounts, is driven pretty heavily by the fair value movements period-to-period. These are independent, hard to pick. You'll see from our fair value change from last year to this year, it was a substantial difference. But going forward, to the extent of build rate moderating and as well as valuation being stable, we wouldn't expect that to have the same degree of change. But that's the main factor affecting EPS beneath our operating performance.

Your second online question comes from [ Francois ]. Sales application trends beyond the reporting period of September 2025 with a split of ILUs and care suites, please?

Thanks, [ Francois ]. We're not going to give the complete split, but I would say that it's continuing at a very similar level of contracting post 30 September. Again, we're coming into this quiet kind of December, January period. But what we're seeing to date across October and November is at a very similar level of contracting.

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

Thanks, Hayden. Thanks, everyone, for joining us today. Appreciate your time and look forward to giving you an update next year at Investor Day. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.