Yesterday's AGM was full of positivism for the future. It is going to be really wonderful.
But they did not say how much profit to expect this year.
My friend says it is a good buy.
Yes as usual all very positive. Although, I found it pretty telling they avoided using any per share metrics, if they did most of the metrics they allegedly did so well on would be flat year on year or worse.
Past is gone.
Maybe good future will happen now.
Plenty of positivism.
Their builds are going well. Windermere is coming on really well.
We should spend a moment considering our public health system.
One of the problems it has is a never ending stream of older people who are no longer coping in their own home. It might be due to falls (but the person still relatively independent) or the onset of dementia etc and becoming unwell.
Essentially these folk go to Public Hospital. They get treated (and quite well) and then they get parked in wards for days until a care home beds becomes available.
Think about how our population is aging.
SP is currently hammered (along with every other financial investment vehicle) so could be a good time to buy if you think the overall market has bottomed out.
Disc: Holder
Quote from: Plata on Jun 24, 2022, 03:53 PMYes as usual all very positive. Although, I found it pretty telling they avoided using any per share metrics, if they did most of the metrics they allegedly did so well on would be flat year on year or worse.
I am sure they were all there yesterday at the annual meeting patting themselves on the back thinking what a marvelous job they are doing, all the while very conveniently overlooking that fact.
If it was a golfing round how would it score...not under par then?
Good to see this is a "stock" forum. It can cover views on both traders and long term investors. I am the latter
I'm not surprised to hear enquiries are up. NZs public healthcare system is under great strain.
A lot of elderly are a lot safer and would be much better looked after at OCA.
Absolutely. Great demographic tailwind.
However - this tailwind causing a strain to our old age care system is a threat as well as a benefit. Good to have the huge demand. Not so good that politicians are able to modify the framework without the need to pay.
It just turns OCA (as well as any other retirement village providers) to political footballs.
Increase carers pay package, increase minimum wage without increasing as well governments pay per care patient and retirement villages are screwed.
Force retirement villages to take patients without the ability to ask for a (sufficiently sized)
surcharge ... and retirement villages are screwed.
Change the taxrules - and retirement villages might be screwed.
So - yes, this can be an amazing field to invest with huge demand and huge opportunities.
However - our politicans can easily screw this up. In a way this is as well a high risk investment.
Discl: Invested in OCA. But try as well to stick to my diversification rules.
Quote from: BlackPeter on Jun 25, 2022, 10:28 AMAbsolutely. Great demographic tailwind.
Increase carers pay package, increase minimum wage without increasing as well governments pay per care patient and retirement villages are screwed.
Force retirement villages to take patients without the ability to ask for a (sufficiently sized)
surcharge ... and retirement villages are screwed.
Change the taxrules - and retirement villages might be screwed.
The "boomer bulge" has had a disproportionate effect on politics and policy for the last fifty years. It will be another twenty before any government can safely ignore us. There is a reason that there are very few elderly living in extreme poverty and distressingly many children doing so. We vote in very large numbers.
Disc Ridiculously overweight and so far underwater that nitrogen narcosis is all that is keeping me smiling.
Quote from: winner (n) on Jun 25, 2022, 02:00 PMA very positive ASM the other day
Easy day for Brent Pattison (and Liz) addressing a group of contented followers - akin to preaching to the converted.
I note that 33% (77 million) of shares voted against increasing directors fees by $133,500 - suppose those shareholders are unhappy / disappointed / frustrated with the company performance over the last couple years
Very unusual to get a negative vote that high ! Does anyone believe that leads to any sort of Mea Cupla that what they have been doing isn't working for shareholders ?
A year down the track are they still simply accentuating the positive, something like "look we've sold XYZ more units and generated greater DMF fees" but overlooking the fact that earnings per share still haven't grown ?
As I've said previously on many occasions if sales and DMF's are growing but costs are growing faster then yes, they can say they are growing and management, directors and staff are happy to put their hand up for more pay rises based on that but shareholders and earnings per share....oh dear.
Does anyone seriously believe this has any hope with its extremely care heavy Govt underfunded business model (that's not been able to grow underlying earnings in the last half decade at all), of outperforming SUM over the medium to long term with its care light business model and proven CAGR of 33% per annum ?
If there's no hope whatsoever of outperforming SUM, (and to be crystal clear that is exactly my contention), then surely this is merely at best a trading stock and at worst a stock to avoid altogether.
Disc: No stake in this sector but when SUM breaks out its downtrend...
The business may (or may not) be well run but the aged care industry as a whole is seriously underfunded by the Government and facing staff shortages and cost increases across the board.Much like the Health sector in general. And although OCA and others are pivoting away from aged car into retirement units (particularly Premium units), this model is vulnerable to a declining property market and spiralling building costs. All up margins in both business models are getting squeezed from all angles.
I would say that OCA may have Benn oversold recently but I don't see it returning back to previous levels for quite some time. There's better defensive stocks offering better return out there.
Quote from: Beagle on Jun 25, 2022, 03:36 PM...
As I've said previously on many occasions if sales and DMF's are growing but costs are growing faster then yes, they can say they are growing and management, directors and staff are happy to put their hand up for more pay rises based on that but shareholders and earnings per share....oh dear.
Does anyone seriously believe this has any hope with its extremely care heavy Govt underfunded business model (that's not been able to grow underlying earnings in the last half decade at all), of outperforming SUM over the medium to long term with its care light business model and proven CAGR of 33% per annum ?
If there's no hope whatsoever of outperforming SUM, (and to be crystal clear that is exactly my contention), then surely this is merely at best a trading stock and at worst a stock to avoid altogether.
Disc: No stake in this sector but when SUM breaks out its downtrend...
Hmm ... I guess your comparative views on OCA vs. SUM are clearly older than this forum ;) ... and one could say somewhat entrenched;
And sure - SUM was 5 years or so back hopelessly undervalued (we used to agree on that) and clearly took off since then. OCA always looked promising, but it still needs to deliver on its promises.
If you compare the SP developemnt - SUM did much better than OCA on a 5, 3 or 2 year comparison, while on a one year comparison they are only marginally better. Remember: Past performance is no guarantee for future performance.
This could mean that SUM now just caught up with its value ... and from now it well might move together with OCA and the rest of the market.
If I look at OCA at todays price (and use marketscreeners forward earning consensus) , then it has a forward PE of 8, a backward PE (10 years) of 12 and a forward Earnings CAGR of nearly 8. Not bad for a lame duck, isn't it? ... but than - sure, analysts are in predicting future earnings as often right as they are wrong.
Comparing that with SUM: forward PE is 10 (still good, but a bit worse than OCA), backward PE is 11 (slightly better) but forward earnings CAGR is only 1.5. Looks like that SUM might have already reached its earnings potential and OCA has still lots of headroom to grow.
I realise that you feel at the moment much better about SUM than about OCA, but with all due respect ... feelings for companies are a dangerous thing and they do have a tendency to change.
Based on data would I expect both companies to do well, but OCA even a bit better. Obviously - the politcial risks you liked to raise so often in the other forum are real, but I think they are quite material for both of them.
If our politicians screw up the sector (and they might), then there will be no immunity pill - neither for SUM nor for OCA.
Looking at the markets - sure, SUM offers more of a cruise ship atmosphere for its residents as long as they are well and healthy. However - just let one spouse of a couple needing care, than they both would have wished to go the OCA way.
I suppose this effect will over time as well impact on OCA's (positive) as well as SUM's (negative) earnings potential.
Give it a decade and I see OCA clearly ahead of SUM (well, in relative terms).
Hello and welcome to everyone from the other place.
In response to Beagle's question and as BlackPeter has touched on, I fully expect OCA to outperform the NZX over the next 2-3 years. As to how that compares to SUM? I haven't done the numbers....but it would be great to see both outperform along with a few others in various property industries that have been over-sold lately.
You may be right, but for the next 12 months is OCA's SP going to go up, sideways or down? It's crystal ball stuff given all that's going on. Maybe the smart thing is to put your money in a 3.65% ASB term deposit and lie on a beach for 12 months?
Aha, I finally got the meaning of your username.....how is that leisure suit Larry? Brings back memories....
If I had the answer to the "next 12 months" question I doubt I would be sitting here, posting this....I reckon a bit of all 3: down, sideways and up..! In the meantime I'm happy to accumulate at current prices and I'm waiting for retail capitulation before committing a larger chunk of cash across the entire industry. The market has been soggy lately and I'm not sure if the recent reversal is a bull trap, part of the ebbs and flows or something else.
Quote from: BlackPeter on Jun 25, 2022, 04:27 PM...........
If I look at OCA at todays price (and use marketscreeners forward earning consensus) , then it has a forward PE of 8, a backward PE (10 years) of 12 and a forward Earnings CAGR of nearly 8. Not bad for a lame duck, isn't it? ... but than - sure, analysts are in predicting future earnings as often right as they are wrong.
Comparing that with SUM: forward PE is 10 (still good, but a bit worse than OCA), backward PE is 11 (slightly better) but forward earnings CAGR is only 1.5. Looks like that SUM might have already reached its earnings potential and OCA has still lots of headroom to grow.
.....
Give it a decade and I see OCA clearly ahead of SUM (well, in relative terms).
Did take a couple of unrelated paragraphs out of BP's post
Using marketscreener forecasts hows this for a comparison -
OCA Book Value (Equity) per share increased by 11% pa since 2017 ..... marketscreener says 3% pa for the next three years
SUM BV/share increased by 26% pa last 5 years ....marketscreener says 10% pa for the next three years
Seems the OCA rhetoric not being listened to by guru analysts
On those numbers I know which one I prefer as my first pick in the sector (still)
Quote from: winner (n) on Jun 26, 2022, 09:01 AMQuote from: BlackPeter on Jun 25, 2022, 04:27 PM...........
If I look at OCA at todays price (and use marketscreeners forward earning consensus) , then it has a forward PE of 8, a backward PE (10 years) of 12 and a forward Earnings CAGR of nearly 8. Not bad for a lame duck, isn't it? ... but than - sure, analysts are in predicting future earnings as often right as they are wrong.
Comparing that with SUM: forward PE is 10 (still good, but a bit worse than OCA), backward PE is 11 (slightly better) but forward earnings CAGR is only 1.5. Looks like that SUM might have already reached its earnings potential and OCA has still lots of headroom to grow.
.....
Give it a decade and I see OCA clearly ahead of SUM (well, in relative terms).
Did take a couple of unrelated paragraphs out of BP's post
Using marketscreener forecasts hows this for a comparison -
OCA Book Value (Equity) per share increased by 11% pa since 2017 ..... marketscreener says 3% pa for the next three years
SUM BV/share increased by 26% pa last 5 years ....marketscreener says 10% pa for the next three years
Seems the OCA rhetoric not being listened to by guru analysts
On those numbers I know which one I prefer as my first pick in the sector (still)
OCA will be $2 plus way before SUM is $20, what more do you need to know?
Still quite a nice downhill slope since Sep 2021
Has it bottomed yet - any thoughts ?
Quote from: nztx on Jun 27, 2022, 03:39 AMStill quite a nice downhill slope since Sep 2021
Has it bottomed yet - any thoughts ?
Should be all UP from here .....Brent said the other day ' This financial year, full year 2023, is off to a good start, and while only two months in, we can report an observed uptick in our enquiries with sales volumes, average capital gain and resale margins all ahead of the same point last year. '
Good stuff
Quote from: Minimoke on Jun 24, 2022, 04:06 PMTheir builds are going well. Windermere is coming on really well.
How are sales going in the first stage at Windermere?
I recall checking a few months ago and the apartment sales were veeeeeeeeery slow, this was before the property market stalled.
Quote from: Beagle on Jun 25, 2022, 03:36 PMDoes anyone seriously believe this has any hope with its extremely care heavy Govt underfunded business model (that's not been able to grow underlying earnings in the last half decade at all), of outperforming SUM over the medium to long term with its care light business model and proven CAGR of 33% per annum ?
I do.
SUM has been the beneficiary of an obscene property cycle. Easy to look like heroes when it's entirely beyond your control.
If ILUs are the answer then why was MET such an abject failure when its portfolio was 95%+ ILU??
I do think premium care is a great product despite challenges with operating costs.
The frequency of cash flow (that thing everyone seems to have forgotten about) is far, far higher. You're always racking up and, crucially, realising DMF given the tenure profile and constantly realising resale gains.
Disc: Long OCA but only because I think they are a crazy ripe takeover target. I don't believe they're particularly well managed currently.
Lol the CEO and all the directors take more shares in lieu of the dividend, Greg T gets another 529k shares to add to his collection, they all obviously have utmost confidence in the company's future prospects aye, as do I.
More good stuff from Oceania .... a sustainability linked banking facility
Good to see a focus on the environment and their customers happiness and well being
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394454/373625.pdf
Quote from: winner (n) on Jun 29, 2022, 08:43 AMMore good stuff from Oceania .... a sustainability linked banking facility
Good to see a focus on the environment and their customers happiness and well being
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394454/373625.pdf
Does this mean the rate is lower? If so good move...
Quote from: Rawz on Jun 29, 2022, 10:35 AMQuote from: winner (n) on Jun 29, 2022, 08:43 AMMore good stuff from Oceania .... a sustainability linked banking facility
Good to see a focus on the environment and their customers happiness and well being
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394454/373625.pdf
Does this mean the rate is lower? If so good move...
The rate is only lower if they manage to meet all the criteria otherwise their rate goes up so some risk of a worse outcome for the company and shareholders.
Quote from: kasper on Jun 29, 2022, 10:39 AMQuote from: Rawz on Jun 29, 2022, 10:35 AMQuote from: winner (n) on Jun 29, 2022, 08:43 AMMore good stuff from Oceania .... a sustainability linked banking facility
Good to see a focus on the environment and their customers happiness and well being
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394454/373625.pdf
Does this mean the rate is lower? If so good move...
The rate is only lower if they manage to meet all the criteria otherwise their rate goes up so some risk of a worse outcome for the company and shareholders.
Its nice of the banks to give Oceania a discount if they do some good sustainability stuff ..... money for nothing?
Shareholders should be happy as
Chris Lee - love him or hate him it seems - but he paints a pretty grim picture of the retirement sector from both an operational and investor point of view
https://www.chrislee.co.nz/taking-stock
Investors should form their judgements when they review their exposure to the sector.
Arvida's grim news in Timaru is unlikely to be caused by management or governance failure. The change being faced may thus be secular, not cyclical.
Quote from: winner (n) on Jun 30, 2022, 12:39 PMChris Lee - love him or hate him it seems - but he paints a pretty grim picture of the retirement sector from both an operational and investor point of view
https://www.chrislee.co.nz/taking-stock
Investors should form their judgements when they review their exposure to the sector.
Arvida's grim news in Timaru is unlikely to be caused by management or governance failure. The change being faced may thus be secular, not cyclical.
A shortage of 4000 nurses is Govt failure, shutting the door on overseas nurses for the last 2 yrs and not having the foresight to plan ahead , not to mention even though the door has now been reopened nurses have to work 2 yrs to obtain residency compared to many other professions on the short list who can walk straight into it when they arrive. Its definately cyclical not secular but the cycle could be a reasonably long one until the likes of Andrew Little opens his eyes and stops pretending all is under control.
Great excitment at ASM when Brent said sales so far this year were ahead of last year
So sales for H123 hopefully going to be more than the 230 they did H122 (last year)
Be good if they got over the reported 268 they did in H121 - that would be a better indicator of growth
Probably get a feel of how much 'ahead' is when Summerset report June quarter sales in a few days
Makes you wonder why Oceania can't do quarterly numbers as well .....maybe seen as commercially sensitive / keeping shareholders in the dark
The most sought-after company in the forum. How about their debt level, financial health and growth?
https://www.youtube.com/watch?v=O18vVvkak7Q
Quote from: Mr Cashflow on Jul 03, 2022, 07:00 PMThe most sought-after company in the forum. How about their debt level, financial health and growth?
Quote from: Basil on Jul 03, 2022, 07:28 PMhttps://www.youtube.com/watch?v=O18vVvkak7Q
OMG ...Josh underwhelmed
That was produced late May ...even more underwhelmed and concerned methinks
And had no opportunities to 'trim' his holding
Beware of the illusory truth effect on here, that is repetition can affect beliefs about truth, probably why the OCA senior management and board either don't read stuff on these forums or if they do they are aware of this phenomenon. Instead they all forfeited any divvy money in cash form and loaded up on more shares, follow the smart long term money not repetitive white noise.
Quote from: winner (n) on Jul 03, 2022, 08:01 PMQuote from: Mr Cashflow on Jul 03, 2022, 07:00 PMThe most sought-after company in the forum. How about their debt level, financial health and growth?
Quote from: Basil on Jul 03, 2022, 07:28 PMhttps://www.youtube.com/watch?v=O18vVvkak7Q
OMG ...Josh underwhelmed
That was produced late May ...even more underwhelmed and concerned methinks
And had no opportunities to 'trim' his holding
Today's update https://www.youtube.com/watch?v=JyXfE0ZaU_0
Quote from: Basil on Jul 03, 2022, 09:44 PMQuote from: winner (n) on Jul 03, 2022, 08:01 PMQuote from: Mr Cashflow on Jul 03, 2022, 07:00 PMThe most sought-after company in the forum. How about their debt level, financial health and growth?
Quote from: Basil on Jul 03, 2022, 07:28 PMhttps://www.youtube.com/watch?v=O18vVvkak7Q
OMG ...Josh underwhelmed
That was produced late May ...even more underwhelmed and concerned methinks
And had no opportunities to 'trim' his holding
Today's update https://www.youtube.com/watch?v=JyXfE0ZaU_0í
What's he say this time?
Beware of the illusory truth effect on here, that is repetition can affect beliefs about truth,
I'm trying so so hard not to believe Oceania is past its inflection point and the sector tailwinds will see the Oceania share price double over next 18 months
Sorry kasper - you made me say this
Liz needs to seek help - she's suffering from that illusory truth effect from listening to Brent, that is repetition can affect beliefs about truth,
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394774/374021.pdf
Quote from: winner (n) on Jul 04, 2022, 09:18 AMLiz needs to seek help - she's suffering from that illusory truth effect from listening to Brent, that is repetition can affect beliefs about truth,
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394774/374021.pdf
As F/Moose so aptly put it a while back on that other place, "Greg T is an actual hitter", might I add to that there are actual hitters and then there are those that just do a lot of barking, who would you rather take a lead from?
OCA is a good stock to buy.
OCA is a good stock to buy.
OCA is a good stock to buy
Your illusionary truth, my affirmation.
Its bewildering why does this company get so much air time ? Its under $1 so it must be cheap, right ?
Plenty of REIT's trading at much bigger discounts to NTA. (those same REIT's that do not suffer from headwinds of rapidly falling real estate prices, dramatically increasing costs of construction and loss making care operations).
Maybe if RYM and SUM did a 10:1 split so they traded at ~ 90 cents punters would see them as really cheap too ?
Quote from: Benji on Jul 04, 2022, 09:45 AMOCA is a good stock to buy.
OCA is a good stock to buy.
OCA is a good stock to buy
Your illusionary truth, my affirmation.
We will never see $1 again.
We will never see $1 again.
We will never see $1 again.
Actually - this used to be a really bullish post on the other forum. Sad how times and meanings can change.
But lets balance this with:
OCA - you can never have too many of them (and repeat 2 times).
Anyway - maybe we should refrain from using Trumpesk means to create and influence the GroupThink of the big unwashed and stick around with discussing facts.
Discl: hold OCA within the rules of my diversification policy.
Quote from: Basil on Jul 04, 2022, 10:20 AMIts bewildering why does this company get so much air time ? Its under $1 so it must be cheap, right ?
Plenty of REIT's trading at much bigger discounts to NTA. (those same REIT's that do not suffer from headwinds of rapidly falling real estate prices, dramatically increasing costs of construction and loss making care operations).
Maybe if RYM and SUM did a 10:1 split so they traded at ~ 90 cents punters would see them as really cheap too ?
Probably because people are either afraid of or don't know how to start other threads. Just give it a go and the herd might follow ... ;)
Quote from: Basil on Jul 04, 2022, 10:20 AMIts bewildering why does this company get so much air time ? Its under $1 so it must be cheap, right ?
Plenty of REIT's trading at much bigger discounts to NTA. (those same REIT's that do not suffer from headwinds of rapidly falling real estate prices, dramatically increasing costs of construction and loss making care operations).
Maybe if RYM and SUM did a 10:1 split so they traded at ~ 90 cents punters would see them as really cheap too ?
Less air time if you not post here, yes?
Quote from: winner (n) on Jul 04, 2022, 08:00 AMOMG ...Josh underwhelmed
What's he say this time?
Trying to trim his OCA holding. On Sunday he says has put Argosy on his watch list for acquisition and the price takes off the very next morning. Maybe with all his followers from his great video's he can move the market ?
Sometimes watch American Baseball...plenty of really wealthy big hitters strike out through mistimed hits. I am sure that wealthy guy people are talking about has done well with most of his investments but everyone makes mistakes. Not every Warren Buffet makes money off every share he buys. Not always a good idea following the big guys especially buying up large @ $1.40😢
Quote from: BlackPeter on Jul 04, 2022, 10:33 AMQuote from: Basil on Jul 04, 2022, 10:20 AMIts bewildering why does this company get so much air time ? Its under $1 so it must be cheap, right ?
Plenty of REIT's trading at much bigger discounts to NTA. (those same REIT's that do not suffer from headwinds of rapidly falling real estate prices, dramatically increasing costs of construction and loss making care operations).
Maybe if RYM and SUM did a 10:1 split so they traded at ~ 90 cents punters would see them as really cheap too ?
Probably because people are either afraid of or don't know how to start other threads. Just give it a go and the herd might follow ... ;)
I'm sure if he started a Coronavirus thread it would get plenty of attention but then on second thoughts do we really need another Beagle migrating over here with his daily paralysis by analysis on Covid numbers , please spare us the torture. Time to take the dog for a walk methinks.
Quote from: winner (n) on Jul 04, 2022, 09:18 AMLiz needs to seek help - she's suffering from that illusory truth effect from listening to Brent, that is repetition can affect beliefs about truth,
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394774/374021.pdf
I like it how you have just completely written off Liz lol
Quote from: Rawz on Jul 04, 2022, 11:50 AMQuote from: winner (n) on Jul 04, 2022, 09:18 AMLiz needs to seek help - she's suffering from that illusory truth effect from listening to Brent, that is repetition can affect beliefs about truth,
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/394774/374021.pdf
I like it how you have just completely written off Liz lol
Yep run with the hares and hunts with the hounds is the modus operadi of some, just like the changing wind.
The market sent a big message out in the days following Arvida's pretty good full year result .... pushing the ARV share price down 12% over a few days
The message was plain and simple - the retirement sector is stuffed - its had it years of good times and now its going to have years of not so good times
Always pays to listen to market messages - especially emphatic ones
Quote from: winner (n) on Jul 04, 2022, 02:20 PMThe market sent a big message out in the days following Arvida's pretty good full year result .... pushing the ARV share price down 12% over a few days
The message was plain and simple - the retirement sector is stuffed - its had it years of good times and now its going to have years of not so good times
Always pays to listen to market messages - especially emphatic ones
Depends if you want to listen to the reef fish market or the big fish market (Your looking at a classic reef fish market today, look at that pathetic volume in OCA)
Quote from: kasper on Jul 04, 2022, 04:18 PMQuote from: winner (n) on Jul 04, 2022, 02:20 PMThe market sent a big message out in the days following Arvida's pretty good full year result .... pushing the ARV share price down 12% over a few days
The message was plain and simple - the retirement sector is stuffed - its had it years of good times and now its going to have years of not so good times
Always pays to listen to market messages - especially emphatic ones
Depends if you want to listen to the reef fish market or the big fish market (Your looking at a classic reef fish market today, look at that pathetic volume in OCA)
Sure was .....Directors didn't have to buy too many to keep the price up .....they be glad
Sector still in the doldrums but the long term trend of the more highly rated SUM outperforming OCA remains intact ......even if outperform means not being down as much
One good thing about this is when OCA gets to $2 SUM will probably be $300000ocavsum.JPG
Quote from: winner (n) on Jul 06, 2022, 04:49 PMSector still in the doldrums but the long term trend of the more highly rated SUM outperforming OCA remains intact ......even if outperform means not being down as much
One good thing about this is when OCA gets to $2 SUM will probably be $300000ocavsum.JPG
Excellent post, thank you for your work on this. Trends exist for profoundly good reasons. I'd rather bet with the trend than against it.
Quote from: Basil on Jul 06, 2022, 05:26 PMQuote from: winner (n) on Jul 06, 2022, 04:49 PMSector still in the doldrums but the long term trend of the more highly rated SUM outperforming OCA remains intact ......even if outperform means not being down as much
One good thing about this is when OCA gets to $2 SUM will probably be $300000ocavsum.JPG
Excellent post, thank you for your work on this. Trends exist for profoundly good reasons. I'd rather bet with the trend than against it.
Trends exist simply because of the ever changing fickleness of human nature, nothing more, nothing less.
Ahhh I remember the days of "you can't have enough," and "back up the truck."
Seems nostalgia isn't what it used to be.
Quote from: kasper on Jul 06, 2022, 08:30 PM]Trends exist simply because of the ever changing fickleness of human nature, nothing more, nothing less.
Agree with you there kasper ..... but whatever the fickleness of human nature that has caused the trend it's pretty well entrenched ..... and trends generally don't change until they are 'shocked' into doing so .... wonder what that shock is that will change that fickleness ..... probably not Brent's stories or even inflection points.
Quote from: Left Field on Jul 07, 2022, 08:55 AMAhhh I remember the days of "you can't have enough," and "back up the truck."
Seems nostalgia isn't what it used to be.
Well obviously the CEO and board can't have too many cause they keep loading up the truck, they must still all firmly believe in nostalgia or maybe they actually believe in the company.
Summerset June quarter sales took a dive v last year
Brent said Oceania sales were up (same quarter)
Well done Oceania
For those who care about growing profits that's good news
I think Summerset better than expected by gloomy posters.
Oceania OK buy.
Quote from: winner (n) on Jul 11, 2022, 01:04 PMBrent said Oceania sales were up (same quarter)
Oceania hadn't completed the quarter when he made that statement.
Either way, looking forward to what the half-year shows.
OCA up 3% today .... that's pretty good
Maybe the start of a decent uptrend ..... first stop a return to 100 and then onwards and upwards
Bolly bonds tightening .... they say a good sign for a break out upwards
Quote from: winner (n) on Jul 11, 2022, 02:29 PMBolly bonds tightening .... they say a good sign for a break out upwards
Your going to talk yourself into buying soon before you miss the upcoming run up.
Shareclarity has a DCF valuation of $1.19
That can't be right .....Must have forgotten about the ever increasing DMFs or something
But then many would be happy if share price was actually $1.19
Quote from: winner (n) on Jul 14, 2022, 02:25 PMShareclarity has a DCF valuation of $1.19
That can't be right .....Must have forgotten about the ever increasing DMFs or something
But then many would be happy if share price was actually $1.19
Shareclarity are rubbish. Lol
Quote from: winner (n) on Jul 14, 2022, 02:25 PMShareclarity has a DCF valuation of $1.19
That can't be right .....Must have forgotten about the ever increasing DMFs or something
But then many would be happy if share price was actually $1.19
I'm not a huge fan of share clarity but I was quite surprised to review some of their valuations today and some of them make a heck of a lot of common sense.
For example GNE @ $3.12 and ARG @ $1.45 make a lot of common sense to me as does OCA at $1.19
Like all DCF valuation models it all depends upon the inputs and assumptions they enter into their system but in these three cases I actually think they've done a very good job.
Here are some other valuations from Brokers most recent research notes.
Forbar $1.55 Outperform
Craig's $1.21 Neutral
Jarden $1.25 Neutral
Quote from: Basil on Jul 14, 2022, 03:02 PMI'm not a huge fan of share clarity but I was quite surprised to review some of their valuations today and some of them make a heck of a lot of common sense.
For example GNE @ $3.12 and ARG @ $1.45 make a lot of common sense to me as does OCA at $1.19
Like all DCF valuation models it all depends upon the inputs and assumptions they enter into their system but in these three cases I actually think they've done a very good job.
Well yes I must also agree with their $8.72 value on SUM and $7.18 on A2.
Quote from: Shareguy on Jul 14, 2022, 03:13 PMHere are some other valuations from Brokers most recent research notes.
Forbar $1.55 Outperform
Craig's $1.21 Neutral
Jarden $1.25 Neutral
And 4 traders avg target price equals $1.49 so let's just say $1.40 to be conservative and be done with it.
this from a recent OCA preso
I assume this affordability ratio is the 'discount' of a Oceania unit to the overall property market ......yes?0000oca.JPG
I read it is ILU's are ~ 59% of the surrounding property price, (41% discount to prevailing property prices) and care suites are only 27% of surrounding property prices, (73% discount).
OCA score an "own goal" with their care suites by offering cheap premium rooms. https://images.oceaniahealthcare.co.nz/wp-content/uploads/2020/11/09181641/Oceania-Premium-Accommodation-Charges-Final.pdf
Quote from: Basil on Jul 25, 2022, 01:26 PMI read it is ILU's are ~ 59% of the surrounding property price, (41% discount to prevailing property prices) and care suites are only 27% of surrounding property prices, (73% discount).
OCA score an "own goal" with their care suites by offering cheap premium rooms. https://images.oceaniahealthcare.co.nz/wp-content/uploads/2020/11/09181641/Oceania-Premium-Accommodation-Charges-Final.pdf
Thanks.
the way analysts talk the gap (say your 41% mentioned above) provides a buffer when house prices fall so investors should not be too worried about a property down turn. Even Oceania management talk about this buffer
Seems the logic is that they can use this buffer to increase their prices
So if property prices decline by say 10% but Oceania put their prices up say 5% then the discount becomes 31% (not the 41%)
Overall impact is that Oceania will get 16% more for the sales than if they had followed the market down ....
.....this buffer is a cool thing, or don't I just get it
Quote from: Basil on Jul 25, 2022, 01:26 PMOCA score an "own goal" with their care suites by offering cheap premium rooms. https://images.oceaniahealthcare.co.nz/wp-content/uploads/2020/11/09181641/Oceania-Premium-Accommodation-Charges-Final.pdf
My understanding is that you can't just walk in and ask for a PAC over any suite, if they are willing to offer a PAC room at a facility (they may not be willing to offer any at a given facility) then it will likely be an undesirable room (usually a smaller room with no view) and only on a short term basis for respite or palliative care.
If you're coming in as a prospective resident expecting to stay for, say, a 3 year tenure then they won't agree to a PAC.
The buffer only works if there's demand to make it work and residents want into the villages concerned. I also think to a large extent the buffer is overstated in its effect. More people than many realise simply make the decision to buy a unit and use existing resources and get on with selling their house after they've moved into their new unit.
I think its common knowledge that OCA have not been increasing their care suite prices in recent years, (despite a booming real estate market) because the demand simply isn't there to support price increases. Demand appears to have been dramatically undermined by Ryman's far superior fully refundable deposit scheme. I don't think any OCA shareholder wants to acknowledge that. Head in the sand ?
On the other hand by way of contrast its been reported SUM increased their ILU prices 3 times last year against a backdrop of very strong demand.
Craigs in recent research believe despite the 3 price increases last year SUM's units are the cheapest relative to the market they have been in many years.
The other problem with the care suite model is the demand isn't there until by need it is. It might for example take 2 years or even more for them to fill up the 113 new care suites being completed this half at Lady Allum in Milford Auckland whereas by way of contrast RYM and SUM are preselling the bulk of their new villages before they're even completed. There are clear cash flow advantages between the two different business models which explains why OCA have a relatively high debt level and SUM's gearing is the lowest in the sector.
Basil, you say:
QuoteDemand appears to have been dramatically undermined by Ryman's far superior fully refundable deposit scheme.
Per here:
https://www.rymanhealthcare.co.nz/what-we-offer/peace-of-mind-guarantees
Ryman seems to offer a number of guarantees. The only thing I could find that differed to here:
https://www.oceaniahealthcare.co.nz/living-at-oceania/village-living
was the 90 day deposit refund.
Is that what you are referring to when you talk about the "fully refundable deposit scheme"? Is that enough of a difference to dramatically undermine OCA ILU sales?
Also, I'm not sure we should be comparing sales rates of OCA care suites to sales rates of RYM or SUM ILUs. They have different target markets, differing levels of service and different price brackets. Would it not be better to compare sales rates of OCA ILUs to sales rates of RYM/SUM ILUs? OCA apartments are often pre-sold, much like the other RV providers.
It is well known care suites take a relatively longer time to sell down given they are more needs based plus there is the issue of over-reporting unsold suites as previously discussed, which differs to unoccupied suites. Lastly, OCA do not help themselves by comparing the care suite price to houses in the surrounding suburb - that is similar to comparing an apple to an orange and carries little no weight IMO.
I'm not fully across how RYM operates these deposits.
- Are they genuinely available on any room in their care portfolio? Has anyone tested this?
- How are they accounting for them? Presumably if the next resident has the choice of a daily rate then they are always a current liability? Big unknown capital management risk for RYM - what if you had a whole bunch of deposit residents leave only to be replaced by daily rate payers? You'd need to pay all the deposits back with nothing coming in.
Seems like a strange, not particularly capital efficient decision to make when the market has tested and accepted DMF on care.
QuoteI think its common knowledge that OCA have not been increasing their care suite prices in recent years, (despite a booming real estate market) because the demand simply isn't there to support price increases. Demand appears to have been dramatically undermined by Ryman's far superior fully refundable deposit scheme. I don't think any OCA shareholder wants to acknowledge that. Head in the sand ?
More info here Ferg. To be clear what I am talking about is RYM's RAD scheme undermining demand for care suites in other villages.
https://www.rymanhealthcare.co.nz/accommodation-premium.
I shared in more detail in post #56 in the retirement village thread why I think care suites are unattractive and not selling well...for your convenience I've quoted that below. From the most recent call OCA had 450 unsold units as at balance date, a whole year's supply. 113 more care suites are scheduled to be finished this half at Lady Allum retirement village in Milford. 61% of OCA's units are care focused and my research shows based on consented pipelines of future developments they can only move the needle on average 1% per year from care to ILU's per annum, without further acquisitions. Even in 2028 they will have approx 55% of their units focused on care.
Just adding a bit more colour to this debate, I accept there may be differences between the size of OCA's care suites and RYM's premium rooms and that OCA's care suites may have a kitchenette that RYM's premium rooms don't but there's no argument that RYM's care and facilities has been regarded as the Gold standard and the nature of their RAD scheme is far more compelling in terms of its flexibility and no loss of capital.
One of the biggest issues with people going into care is what is their life expectancy ? I had a chat with OCA senior management about my Mum's situation and the first question I was asked was how long do you expect her to live. Based on experts opinions on that it was clear a care suite at the Sands would have been completely inappropriate as an alternative as well as being to far for her elderly friends to come and see her.
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The first question to ask Plata is has OCA's huge experiment with care suites worked as a strategy ?
I would argue NO as there seems to be a very large pool of unsold care suites and its probably a growing problem.
Why do I think care suites are not attractive as a care option ?
1. Firstly they're inflexible. You might pay say $350K and you will lose $35,000 if your parent dies the day after they move in, (minimum 1 year charge).
2. Your Estate won't get the residual value of the license to occupy back until they have resold that care suite, that could be a few months or a few years, who knows ?
3. There are plenty of other options, for example we knew our Mum was dying from terminal cancer and we found her a fabulous premium room in a brand new upmarket care facility in Whangaparoa that her specialist recommended and it cost her Estate $45 a day premium accommodation charge PAC...from memory all up it was about $7,000 for the 5 months she was in care before she went to be with God. She enjoyed a great sea view, great facilities, good care and was very close to her friends and family.
4. Lots of other villages allow you to have a premium care room for similar or often less money including many of OCA's villages themselves, that's right OCA undermine their own care suite business model !
5. There are other schemes that don't cost anything and your Estate get's all the money back within 30 days, see the RYM refundable deposit scheme here https://www.rymanhealthcare.co.nz/accommodation-premium
This is what OCA are up against with their care suites. With RYM's refundable deposit scheme, you lose nothing of the $350,000, you pay zero premium room charge and you enjoy RYM's well regarded standard of care. To top it all off there's no waiting months or years for your Estate to be paid out.
The question you need to ask with the excellent lower cost and more convenient alternatives is who in their right mind would put say $350,000 into an OCA care suite and see between 10-30% of that gobbled up in license fees and then force the Estate to wait maybe years to be paid out ? I put it to you and others that most people are not stupid, don't want to tear up money like that and don't want to put their kids through an endless wait for the Estate matters to be cleared up.
The whole care suite thing and its relative attractiveness has really come under serious attack with RYM's far more attractive fully refundable deposit scheme. That's how I see it and that's why I think OCA, (despite keeping their care suites very cheaply priced and not seeming to have any pricing power with them) are really struggling to sell them. That's one of the key reasons I sold out of OCA, the other is the huge rate of increase in their wages bill...lots of holes in that boat !
Thanks for that. That makes sense now. I had seen your earlier post but missed the significance of the RAD. What I take from that is the patient still pays the daily care fee, but if they want extras then there are 3 options of how that is paid; being weekly fees or RAD or a combination of the two. I noticed also that settlements beyond 6 months start to accrue interest so RYM are also reliant on resales to repay the deposit.
Good for RYM if they can do that at no charge, but better for OCA if they can get away with doing it with a DMF. The OCA care suite DMF is a scaled % each year charged monthly being 15/10/5% p.a., and the maximum amount payable is 30% which would require an occupation of 3 or more years. One might argue OCA is not getting away with it given the number unsold. However, unsold is not unoccupied which has been mentioned a couple of times now. We don't know how many are unoccupied but the occupied suites are still earning care fees for OCA, at the same care weekly rate as RYM (notwithstanding the minor regional variations).
From 2017 to 2022 OCA disestablished 855 care beds, and developed/converted/acquired 612 care suites and 571 ILUs. Care beds + care suites were 72.8% of total units in 2017 and are 61.3% in 2022 which was a reduction of 2.3% per year. It appears your 1% p.a. is based on moving the 61.3% to ~55% per the pipeline over 6 years. If care suites are not working, I would expect OCA to take corrective action by converting suites in the development pipeline to apartments, if that is possible. Or by acquiring more ILUs which will shift that % faster - and they have signalled they wish to undertake more acquisitions.
I take on board what Whacc says and his intimate knowledge of the industry - it takes years to build capacity and there is a wave of demand coming. Whilst filling suites with non-premium care patients may not be the most efficient use of capital, some could say the same of the RYM premium suites under a RAD arrangement. OCA selling suites will depend on matching demand by location with available inventory versus alternative providers. Not an enviable task for sure but I have faith the Board and Management know more about how this will play out than all of us combined.
From the call there was about 80 care suites being occupied as PAC which still leaves in the high 300's unoccupied.
15% DMF in the first year even if you only live 5 months so a premium $500K care suite at the Sands would have cost my Mum's estate $500K x 15% = $75,000 compared to the ~ $7,000 it did cost. Wow, that's more than ten times the price !
My position is that no other company has a whole years stock unsold or anything remotely like that so the sales rate is worst in sector and objectively must be a major concern especially in tandem with the fact that OCA have not been increasing care suite prices despite booming real estate prices in recent years.
The numbers of unsold units tell me the market is not accepting care suites as an acceptable concept, perhaps with the exception where people are not too poorly, want a kitchnette and expect to live a few years.
Ostensibly OCA's float was built around the premiumization of care with care suites and yet the ROI in the care sector of their operation has nearly halved since listing. A failed strategy or are dramatically escalating staff costs and Govt underfunding the reasons ? Maybe is a bit of all this ? The numbers don't give me any confidence their strategy is really working. Even Maverick concedes the real money is in ILU's and OCA have only 39% of them.
I think the first indication from OCA that the care suite concept is not really working well was their statement around the recent Bream Bay acquisition saying "we might add" some care suites or words to that effect. It wasn't a convincing statement, reading between the lines it was almost like they were saying something like, gosh we're really pleased they're all independent units and they've sold well so far so we'll only add care suites if we have to to help the ILU's sell.
Each to their own. Its clear I think that SUM's business model is more fit for purpose and Winner has posted a chart showing the relative trend of their share prices over time since OCA listed. Its possibly worth noting that SUM have grown underlying eps ~ 2.5 times since OCA listed and OCA have barely moved the needle in their time on the market. I'm sure holders would argue its all about the future for OCA. Other companies business models position them to continue growing faster is how I see it.
Finally, it might be worth noting that ARV are getting into care suites too. In their recent presentation I noted their care suites price relativity in the Auckland region was just 15% to the average real estate price. They're not priced very confidently are they ! That tells you what they think.
28% care for them and 61% care for OCA and fierce and enduring headwinds with care costs. Hmmm
All the concerns about care suites are just a myopic viewpoint IMO, over the longer term things will pan out just fine as the business continues to be driven by huge need. Lot of smart money is invested in this company just like it is in the others in the sector. SUM is a great company in some areas of its business just like OCA is but I don't see it doubling in price from here before OCA does.
Share prices follow earnings. Earnings matter, that's the key difference between my investment approach and your's kasper. SUM have a 10 year CAGR of 33%. Just 3 years growth at 33% compounded means earnings grow 135% and support a share price more than doubling.
For the life of me I cannot see OCA's eps growth beating SUM's growth in the foreseeable future. Its simply not a plausible expectation given the radical Government underfunding of care and OCA's huge exposure to care.
I sometimes wonder if SUM did a 10:1 split and their shares were $1.04 how much more attention they would get from retail investors ? Certainly the institutions like them...interesting comments from Sam Dickie of Kingfish in their quarterly report yesterday.
Anyway, good luck to shareholders, its time I did something more productive.
Quote from: Basil on Jul 26, 2022, 10:22 AMShare prices follow earnings. Earnings matter, that's the key difference between my investment approach and your's Kasper. SUM have a 10 year CAGR of 33%. Just 3 years growth at 33% compounded means earnings grow 135% and support a share price more than doubling.
For the life of me I cannot see OCA's eps growth beating SUM's growth in the foreseeable future. Its simply not a plausible expectation given the radical Government underfunding of care and OCA's huge exposure to care.
I sometimes wonder if SUM did a 10:1 split and their shares were $1.04 how much more attention they would get from retail investors ? Certainly the institutions like them...interesting comments from Sam Dickie of Kingfish in their quarterly report yesterday.
Anyway, good luck to shareholders, its time I did something more productive.
The market will decide based on its own drivers which are not clear cut nor based on pure number crunching at any given point, OCA has been the ugly duckling for a while but that doesn't mean it always will be ,anyway I reckon OCA will be $1.86 before SUM is $20.90.
When the TA looks better for SUM I'm more than happy to take that bet.
It will be interesting to see if the recent acquisitions start having some bearing on EPS, test out whether M&A crew at OCA really understand what the phrase EPS accretive means.
Quote from: Basil on Jul 26, 2022, 10:22 AMShare prices follow earnings. Earnings matter, that's the key difference between my investment approach and your's kasper. SUM have a 10 year CAGR of 33%. Just 3 years growth at 33% compounded means earnings grow 135% and support a share price more than doubling.
For the life of me I cannot see OCA's eps growth beating SUM's growth in the foreseeable future. Its simply not a plausible expectation given the radical Government underfunding of care and OCA's huge exposure to care.
I sometimes wonder if SUM did a 10:1 split and their shares were $1.04 how much more attention they would get from retail investors ? Certainly the institutions like them...interesting comments from Sam Dickie of Kingfish in their quarterly report yesterday.
Anyway, good luck to shareholders, its time I did something more productive.
If I had $10.40 to spend, would I be tempted by one SUM at $10.40. Or would I prefer 10 SUM's at $1.04. I don't think anyone pondering that question adds mush to the share registry.
I must do a closer inspection of OCA's Belview in christchurch. It is coming on at a rapid pace and by all accounts a very nice facility. Especially the Care Suites
"Choose from either a studio Care Suite with an open-plan bedroom and lounge, or a one-bedroom Care Suite with a separate bedroom and living area. Some Care Suites are large enough to accommodate couples, so you can be together – even if one of you requires Hospital level care." And
"A DHB assessment is not required for care that is paid for privately." that should help sort the wheat from the chaff.
Quote from: Plata on Jul 26, 2022, 11:03 AMIt will be interesting to see if the recent acquisitions start having some bearing on EPS, test out whether M&A crew at OCA really understand what the phrase EPS accretive means.
The promise is 'These acquisitions are expected to
deliver strong accretion to underlying earnings per share in FY2023'
Did they ever say how much in the way of earnings the recent acquisitions would bring in .....or keeping that close to their chest so nobody can say 'what happened'
EPS accretion talk
Didn't OCA said their Hobsonville and Pukekohe acquisition done in early 2021 was going to be underlying eps accretive?
Result - F22 eps looks pretty similar to F21 (maybe marginally up)
If Hobsonville/Pukekohe were eps accretive the rest of the business must have gone backwards
Hope better this time around with the new invigorated team
I think Investment bankers know eps accretive talk is what really gets the punters excited...like baiting a hook with a huge bit of bait and reeling them in. Very rare event you ever see a company back that "come on" talk up with genuine accountability with what really happened afterwards.
Arvida would be struggling to demonstrate that Arena acquisition was accretive as well.
They'd say too early to tell and just give us time
Quote from: winner (n) on Jul 26, 2022, 11:48 AMDid they ever say how much in the way of earnings the recent acquisitions would bring in .....or keeping that close to their chest so nobody can say 'what happened'
From memory (and don't hold me to this) it was high single digit EPS accretive. My interpretation of that is it will sit somewhere between 7 and 9 cents per share inclusive. Others might have a different interpretation, And "E" may refer to underlying earnings or EBITDA or plain old NPAT (which is actually the same as NPBT).
Quote from: Ferg on Jul 26, 2022, 10:02 PMFrom memory (and don't hold me to this) it was high single digit EPS accretive. My interpretation of that is it will sit somewhere between 7 and 9 cents per share inclusive. Others might have a different interpretation, And "E" may refer to underlying earnings or EBITDA or plain old NPAT (which is actually the same as NPBT).
Had a look and yes the promise is high single digit EPS and it's Underlying Earnings ...,and they mention the 'baseline' is consensus analyst earnings.
F22 Underlying earnings was 8.0 cents per share
So my expectations for is F23 is 8.0 plus minimum 10% for business as it was pre acquisition (remember they said 'positioned for growth') giving 8.8 cents PLUS say 7% (high single digit) accretion for acquisitions gives 9.4 cents EPS
Anything less they've failed in my eyes .......but on past performance (both yours at forecasting and Oceania on delivering growth) you'll probably be right with your 7 to 9 cents
Just shows why companies love talking 'accretion' when they buy something ....sounds impressive up front but at the end of day never needs to be shown to be true, even if it could be measured
Quote from: winner (n) on Jul 26, 2022, 01:09 PMArvida would be struggling to demonstrate that Arena acquisition was accretive as well.
They'd say too early to tell and just give us time
Arena was a terrible acqusition.
On the block for 3 years, picked over by everyone with no bites.
Reweighted their portfolio to ILU though, which is apparently all that matters.
They should be able to earn steady income in the years ahead so with reasonable gearing their bonds are probably quite good buying at about 5.75% yield to maturity with the 10 year Govt stock rate at about 3.5%, (2.25% premium to Govt stock seems about right to me).
Quote from: Basil on Jul 29, 2022, 03:15 PMThey should be able to earn steady income in the years ahead so with reasonable gearing their bonds are probably quite good buying at about 5.75% yield to maturity with the 10 year Govt stock rate at about 3.5%, (2.25% premium to Govt stock seems about right to me).
OCA020 5.75% is about 2.5% points higher than 5 year govt stock
Interestingly of the things listed on NZDX these are 2nd highest yields - Synlait 2024 ones are over 8% - these two seen as the 'riskiest' companies on the NZDX
Others in sector ARV quoted at 5,32% / Ryman at 4.91% / SUM 2027 at 5.23% and SUM 2025 at 4.85%
So Oceania seen as the 'riskiest' of the main players in the sector (spooky how that pecking order pops up again)
Many would say buying the OCA shares with a yield of 4.78% is a better 'bet' than those bonds at 5.75%
Interesting bonds
Quote from: winner (n) on Jul 29, 2022, 04:03 PMMany would say buying the OCA shares with a yield of 4.78% is a better 'bet' than those bonds at 5.75%
Interesting bonds
If I was only interested in yield then the bonds are definitely a better bet.
For the hard time that care gets, at least that regular cash flow is there to support the coupon.
Quote from: Whacc on Jul 29, 2022, 05:28 PMIf I was only interested in yield then the bonds are definitely a better bet.
For the hard time that care gets, at least that regular cash flow is there to support the coupon.
Finally something we can agree on.
As you know Winner, bonds and equities have very, very different risk profiles although for the first time in decades their values moved in the same direction in the first half of this year. I see that as an aberration and highly unlikely to continue. Today OCA bonds were trading at a 50 bps premium to SUM. I don't think there's any material risk of OCA defaulting so a 250 bps premium over Govt stock and 50 bps over SUM is probably reasonably good buying for the very modest risk involved. 5.75%. Disc: I bought a few OCA bonds today and a few SUM bonds yesterday.
Another month passes and again the market demonstrates its more 'attracted' to SUM than to OCA .... the trend since OCA listed continues.
I know many of you will say such a measure is useless and meaningless and a load of the proverbial .... but I think it's intriguing and if nothing else its a beautiful chart
Must mean something
Wish OCA would hurry up and get back to $1.60 as SUM will probably be $20 by then
00000ocavsum.JPG
Not at all meaningless ,It means to sum at near peak sp and oca etc at bargain prices
Interesting interview with the CEO of Arvida on breakfast T.V. this morning.
Nurses now being underfunded by $20,000 - $25,000 per annum (up from figures previously talked about by other sector participants of $15,000 - $20,000 per annum each).
1,000 beds out of 40,000 in this sector have been decommissioned due to chronic underfunding in just the last 6 months !
Govt funding round adjustment this year was directed at minimum wage earners, others in sector and other costs incurred only received just over 1% funding increase, how miserable is that ! (This is absurd when inflation is at 7.3%), he didn't say that but I was thinking it.
He did not look like a happy man at all. Huge pressure on the care sector. He stated we need a complete overhaul of the funding model for late stage care. Good luck with getting that from Labour or National if they get into power in due course.
Posted here because care makes up 61% of OCA's units and they are by far the most exposed.
OCA bonds should be fine, moderate gearing and stable cash flows and they will make profits in line with historical returns but I really don't see how earnings can grow meaningfully in the current chronically underfunded care sector environment.
The pattern of increasing DMF revenues ostensibly all being eaten up by rapidly escalating care costs looks set to continue for many years to come.
Others see it differently, that's fine and good luck to them, I reckon they'll need it !
Quote from: Basil on Aug 01, 2022, 09:26 AM1,000 beds out of 40,000 in this sector have been decommissioned due to chronic underfunding in just the last 6 months !
...
The pattern of increasing DMF revenues ostensibly all being eaten up by rapidly escalating care costs looks set to continue for many years to come.
That's assuming (big) that DMF & resale gains will remain stagnant as beds become scarce when demand is ever increasing.
Each one of these decommissions is increasing that scarcity.
Seems like deliberate ignorance to the law of supply & demand on your part to satisfy your entrenched position.
Quote from: Basil on Aug 01, 2022, 09:26 AMGood luck with getting that from Labour or National if they get into power in due course.
Also assumes that this won't become an increasingly big political issue as people cotton onto the fact that all standard beds are being decommissioned as uneconomically unviable.
Only very premium beds will be available and not nearly enough of them.
That narrative is a big issue for Labour's traditional constituency.
Also, as previously mentioned, the most engaged generational political bloc becoming aware that something they need (and moreover feel *entitled* to) isn't available to them. Look out.
The laws of supply and demand don't apply, (in terms of price movement), if the price of care is set by the Government at a fixed rate that gives a woefully inadequate return on equity. This Government is happy to see "fat cat" (I believe that's the prevailing line of thought in Wellington) retirement companies get badly squeezed. Its their way of taxing tax free gains on resales of ILU's. In terms of the listed sector OCA feels the full force of this with their 61% care v 39% ILU.
Quote from: Basil on Aug 01, 2022, 10:43 AMThe laws of supply and demand don't apply, (in terms of price movement), if the price of care is set by the Government at a fixed rate that gives a woefully inadequate return on equity. This Government is happy to see "fat cat" (I believe that's the prevailing line of thought in Wellington) retirement companies get badly squeezed. Its their way of taxing tax free gains on resales of ILU's. In terms of the listed sector OCA feels the full force of this with their 61% care v 39% ILU.
The laws of supply and demand absolutely apply to the ingoing price of a care suite (and therefore the resale gain and DMF revenue streams).
? ? ? ? ?
Also, I watched Jeremy Nicol's interview. If you don't think that a shortage / underfunding of dementia beds (in particular) will not become a huge political issue as it becomes increasingly evident then, yeah, we're not going to agree.
If families need to start caring for relatives with dementia then it will hit home pretty fast.
We should remember residents of Aged Care Facilities pay their own way 100% of the time.
Until they reach a certain "poverty" threshold. Which is currently about $256,554 for a couple in care. Or if one still lives in own home then its $140,495.
With places like OCA's bellview it appears they are trying to attract high net worth residents.
Fun fact. Stats NZ reckon that by 2028 there will be more than a million people aged 65+.
Pressure will continue for them to leave their leafy suburbs so younger folk and families have somewhere to live.
An aging population is something no government can afford to ignore. If for no other reason old folk vote.
Quote from: Minimoke on Aug 01, 2022, 12:30 PMFun fact. Stats NZ reckon that by 2028 there will be more than a million people aged 65+.
Pressure will continue for them to leave their leafy suburbs so younger folk and families have somewhere to live.
An aging population is something no government can afford to ignore. If for no other reason old folk vote.
Problem for OCA is they are targeting the 85+ crowd and that's really a late 2030's and 2040's tsunami.
Staffing problem solved. Andrew Littles brilliant move is to use Shortland Street as a vehicle for promoting nursing as a career option.
Nice little rally today. Could it be the cost of living payments making their way into this retail favourite?
Quote from: Plata on Aug 01, 2022, 08:16 PMNice little rally today. Could it be the cost of living payments making their way into this retail favourite?
$116. Hardly likely to move a market. TAB and lotto probably doing quite well though.
The rally continues! $1.01 close... someone wanted in ;D
101 - this is above the MA100 (@100)! If this holds, we could call it a trend change ...
Quote from: Basil on Aug 01, 2022, 05:25 PMProblem for OCA is they are targeting the 85+ crowd and that's really a late 2030's and 2040's tsunami.
Quote from: Basil on Aug 01, 2022, 05:25 PMProblem for OCA is they are targeting the 85+ crowd and that's really a late 2030's and 2040's tsunami.
Surely you realise that the the 85+ are also part of the 65+???
Share price over a buck now
Spent a lot of its life between 100 and 110 -- hopefully wont stay in that range this time around
Gets over 110 and the games on and we'll all be rich
Quote from: Dcm1 on Aug 02, 2022, 05:44 PMSurely you realise that the the 85+ are also part of the 65+???
Is that the sp DCM
https://www.nzherald.co.nz/nz/rest-home-failed-woman-who-died-less-than-24-hours-after-admission/65GDIHVTF64AC7XRUWW2MWPV3Y/
I thought Kasper said their care standards were the best ?
Obviously its not just earnings that have been deeply disappointing.
Yes pretty disappointing but the reality is any system that involves humans can and will fail at some point in time. Just a shame it cost someone their life, hopefully new procedures were put in place to avoid a repeat.
At least OCA admitted failures. Hopefully they have better procedures to stop this happening going forward.
Quote from: Basil on Aug 08, 2022, 06:28 PMI thought Kasper said their care standards were the best ?
Obviously its not just earnings that have been deeply disappointing.
Their care standards are right up there and you are conveniently overlooking the fact that it was staff members not following company policy in this case that caused the reported situation, the company does not have complete control over an individual staff members accountability at all times.
"At least three of the four nurses involved in her care failed to fulfill their clinical responsibilities and adhere to policies and procedures".
That's a damming indictment on the caliber of their staff and / or their systems.
One thing for one person to make a mistake but AT LEAST 3 out of 4 qualified nurses ? WOW !!!! "Oceania has implemented changes at the rest home". This proves that their original systems were NOT of an acceptable standard. This lady died because OCA's system's were second rate and their staff were third rate. Just accept it for what it is, a death caused by gross carelessness and inadequate systems. Its a big black mark on their reputation in my opinion.
If it happened in America they'd be sued for tens of millions for this.
Quote from: Basil on Aug 08, 2022, 09:42 PM"At least three of the four nurses involved in her care failed to fulfill their clinical responsibilities and adhere to policies and procedures".
That's a damming indictment on the caliber of their staff and / or their systems.
One thing for one person to make a mistake but AT LEAST 3 out of 4 qualified nurses ? WOW !!!! "Oceania has implemented changes at the rest home". This proves that their original systems were NOT of an acceptable standard. This lady died because OCA's system's were second rate and their staff were third rate. Just accept it for what it is, a death caused by gross carelessness and inadequate systems. Its a big black mark on their reputation in my opinion.
If it happened in America they'd be sued for tens of millions for this.
Can potentially happen at any facility but in this case the culture of this particular facility would need to be questioned although this happened 4 yrs ago so is historical, the company systems cannot be blamed for individual incompetence or a rogue manager for that matter.
Yes fair enough comment about potential for human factors but just drilling down a bit more into care systems and procedures what I find interesting is last time I looked into this I believe Arvida has a considerably higher proportion of its care facilities on the "Gold Standard" 4 year Ministry of health audit cycle than Oceania. You claim, or certainly imply Oceania is the best in class so given your knowledge of the sector how do you explain that the independent Ministry of Health auditors are more comfortable with the care standards and procedures of Arvida's facilities ?
Is this a systems issue for OCA or a staff and compliance issue ?
Disc: I should disclose I now have a moderate position in OCA's bonds. Govt funding ensures they should be able to service their debt okay.
REINZ report HPI down 1.4% in July from June - last 3 months down 4.9% and an an annual basis now negative at 2.9%
At this rate some banks saying 20% decline in property prices is on track
This ialk of Oceania having a 'buffer' against falling property prices is a load of the proverbial - but believe it if it makes you more relaxed
https://www.reinz.co.nz/Media/Default/Monthly%20Press%20Release%20Assets/Residential/07%20-%20July/REINZ%20Monthly%20HPI%20Report%20-%20July%202022.pdf
Quote from: winner (n) on Aug 11, 2022, 10:00 AMREINZ report HPI down 1.4% in July from June - last 3 months down 4.9% and an an annual basis now negative at 2.9%
At this rate some banks saying 20% decline in property prices is on track
This ialk of Oceania having a 'buffer' against falling property prices is a load of the proverbial - but believe it if it makes you more relaxed
https://www.reinz.co.nz/Media/Default/Monthly%20Press%20Release%20Assets/Residential/07%20-%20July/REINZ%20Monthly%20HPI%20Report%20-%20July%202022.pdf
OCA up 3% today so far to $1.02
Winner - is this the post to which you refer when you talk about the buffer being nonsense? A quick search of the word "buffer" in this thread turned up this post in particular.
Quote from: winner (n) on Jul 25, 2022, 01:43 PMthe way analysts talk the gap (say your 41% mentioned above) provides a buffer when house prices fall so investors should not be too worried about a property down turn. Even Oceania management talk about this buffer
Seems the logic is that they can use this buffer to increase their prices
So if property prices decline by say 10% but Oceania put their prices up say 5% then the discount becomes 31% (not the 41%)
Overall impact is that Oceania will get 16% more for the sales than if they had followed the market down ....
.....this buffer is a cool thing, or don't I just get it
Yep Basil that's a comment I made about this buffer
I still think it's too good to be true
Cant see Oceania selling units at 70% of prevailing house prices as per my example
Probably I just don't get it .... Lack of understanding and all that. Never mind
It's all good. I was searching for who was talking about buffers and decided to "poke the borax" so to speak.
If Management have not actually said "buffer", then it is likely implied. I think we should ignore the care suite comparison to local housing - that is nonsensical. As for the ILUs and apartments, I interpreted it as did Basil - the comparatives put up by OCA show average unit price relative to the average price for properties in the surrounding area. Plus I'm guessing it is likely weighted by region using some metric like population or ILU capacity etc. I'm not sure of the level of filtering used to come with up the local average, or if it is a genuinely raw number. Whacc might know.
In any case it is pretty blunt instrument, rather than an instrument of any great precision given the number of potential variables involved.
This says to me RV's are cheaper than the surrounding suburbs and they likely use that as a marketing tactic. Others, including Management & analysts, go one step further claiming it offers a buffer or cushion against weaker local prices - with the unstated assumption that any such HPI weakness is short term in nature. To claim it offers a buffer in the event of a long term correction would be delusional given RVs are essentially a property play.
If the "buffer" is indeed a "cushion" AND local property prices continue to fall AND RVs do not reduce their prices accordingly, then we would expect to see the comparative graphs increase. Then the discounts relative to local areas would reduce per Basil's explanation of how the graphs work given affordability and discounts sum to 100%. RVs with a larger pre-existing discount relative to their competitors may have some sort of pricing and margin advantage, assuming there are no other factors in play.
Interesting stuff either way.
To your last point Ferg its possibly worth noting that the average price of an ILU in RYM's Auckland villages is $1.4m and the average price of an Auckland house is hundreds of thousands south of there.
They are quick to point out that based on relative pricing of the respective suburbs their villages are in, their units are still at a discount but I think they are sailing very close to the wind and I couldn't help noticing a recent press article I probably linked earlier saying $2m house sales had stalled in Devonport and on the other hand they are wanting $1.9m for a south facing 2 bedroom unit in their new Devonport village.
Hmmm, not much buffer there after paying real estate agents commission and lawyers fees.
I can't help wondering with that village where their north facing units with better sea views are priced ?
I think OCA are probably better positioned than RYM in terms of the buffer thing but on the other hand I believe the full feature "land based cruise ship experience" villages that RYM, SUM and ARV provide are fundamentally more attractive from a lifestyle perspective to incoming residents than the "boutique" lower facility level villages OCA provides.
It's said that Oceania unit price growth not keeping up with overall property prices is a 'strategic' move by them
When you consider the large number of unsold units (a years worth?) I think 'strategic' is code for something is wrong and our units aren't selling that well so we better discount them
Interesting that in a recent presentation by ARV, they price their Auckland care suites at only 15% of the average Auckland house price. They seem to be selling theirs at that level ~ $150K.
Could be a good strategic move for OCA to halve their care suite prices. No point trying to sell them for $350K, the market has spoken and said thanks, but no thanks. Better selling them @ 50% off than keeping hundreds of units sitting their vacant and unsold.
I think all they are "delivering" this half is another 114 care suites to add to their huge stockpile of unsold units, more than a year's worth. Shame there's no ILU's "delivered" this half. (Almost universally acknowledged as being the type of unit where the real money is made).
I can't imagine how some people come to the conclusion we are going to see real growth this half when care costs keep skyrocketing, the Govt is even more egregiously underfunding care than ever before and the only "fresh" product they are bringing to the market is more care suites.
Another commentator on another site that a lot seem to follow openly admits he doesn't have a great handle on the other companies in this sector but puts all his eggs in this underperforming basket. Go figure...
We have been over this before. A unit or suite counts as "unsold" until it has it first ORA agreement. A number of patients were transferred out of facilities being demolished into care suites, like a free upgrade. OCA continues to earn care revenues from these patients but the suite counts as "unsold" despite being occupied. So to call them a "stockpile of unsold units" is misleading. Plus you know it is a needs based service, it's not something you can sell to just anybody.
In addition, Awatere in Hamilton was delivered very late FY22 which added to the unsold stocks; we will see the financial effect of sales starting this half year. You know stocks go up and down depending on when they are delivered relative to balance date. To expect all new ILUs in Awatere to sell in the final 1-2 weeks of the fiscal year is unrealistic - unless you have some advice for the Board and Management in that regard? I know I don't....! :D
Whilst you mentioned the 113 suites being delivered in H1 for Lady Allum, you overlooked the 79 units at St Heliers being delivered this year, 46 units for Bellevue and it appears you have already forgotten about the 58 apartments acquired in Remuera post balance date and the 75 units at Bream Bay (and for the sake of completeness an additional 18 suites in Motueka).
We have gone over care profitability a number of times. It is acknowledged there is under-funding but OCA continues to be profitable in this area if you look at the full picture with development margins for suites correctly classified under care rather than village. I get that original shareholders are miffed they were sold a pup on the profitability of care, but others are looking past that at the future profitability of the group.
By the way winner, I found this on page 17 of the last OCA presentation:
"Average sales prices for Oceania units and care suites are significantly below the median houses in their respective surrounding catchments - this provides some buffer from a cooling housing market".
So no need to talk of implied or otherwise, that is OCA's own words. At ~59% for villas and apartments, that looks to be a decent "cushion" if prices are forecast to fall 20%.
Quote from: Ferg on Aug 12, 2022, 01:20 PMBy the way winner, I found this on page 17 of the last OCA presentation:
"Average sales prices for Oceania units and care suites are significantly below the median houses in their respective surrounding catchments - this provides some buffer from a cooling housing market".
So no need to talk of implied or otherwise, that is OCA's own words. At ~59% for villas and apartments, that looks to be a decent "cushion" if prices are forecast to fall 20%.
......assuming that they don't follow the market down as they have done before in a low growth HPI environment ...... if they did that the buffer would still be about 59%
Will be interesting to see what happens over next few years or so
Quote from: Ferg on Aug 12, 2022, 12:23 PMA unit or suite counts as "unsold" until it has it first ORA agreement. A number of patients were transferred out of facilities being demolished into care suites, like a free upgrade. OCA continues to earn care revenues from these patients but the suite counts as "unsold" despite being occupied. So to call them a "stockpile of unsold units" is misleading.
Not misleading at all. You imply this isn't a problem with the clear implication that units unsold are occupied in another way so this is not a material issue. The reality is the numbers are very stark. From the last call there were only ~ 80 care suites of the unsold ~ 450 units that were temporarily occupied under a premium accommodation charge. That leaves a "substantial stockpile", yes I stand by that term, of ~ 370 units unsold and vacant. Add another 114, (I am going off memory here you may be right with your 113), to that being "delivered" this half. This huge stockpile of unsold units have not had price increases for years despite a roaring bull market in housing. Hmmm...I find that really interesting when all the other companies have been raising prices over the years.
I guess some companies don't have pricing power.
Hmm seems like Basil hates OCA as much as Beagle, no surprises there. PS-That story you jumped on the other day from the Herald is not the full story of that situation, no surprises there either.
Beagle got to 12 and died. Really sad but before he went to the big dog kennel in the sky he imparted all his 40 years of investment knowledge into his son Basil so lucky Basil has a huge head start :D
No room for emotion with investing Couta1. I let the numbers do the talking and try and pick which is likely to outperform and which is likely to underperform.
Beagle taught me that. 😜
Sorry to hear about beagle ... my condolences.
... and you are saying, it is already 12 years that Roger disappeared?
This is a pity, he was a good guy :) !
Time flies when you are having fun!
Yeah, hard to believe I joined that other horrible place in 2010 and it took me 12 years to escape that asylum, almost like Hotel California, "you can check out any time you like but you can never leave" LOL....now I'm free at last to enjoy new adventures...just need a new first mate to enjoy it with like some of these lucky owners https://www.rivieraaustralia.com/enews-articles/owners-photo-comp-pets/ Which one is the cutest ?
living the dream now basil, condolences for your beagle
Another month passes by and this long term trend continues ..... never before has the OCA share price as the %age of the SUM share price been so low.
Sorry but I have a morbid fascination with long term trends that seem to defy hype etc .... but as they say in trend theory to break such long term trends a real shock to the norm has to occur .... and I have difficulty in seeing any shocks (either with OCA or SUM) coming in the near to medium term.
One thing logic says it can't continue to zero ..... but if say if OCA got taken over soon we'll never find out what the bottom is
000000ocasum.JPG
Looks like in due course it will be down to 5%, 20 OCA = 1 SUM.
What's the bet that SUM does a share split at some stage in the next few years.
Quote from: Basil on Sep 09, 2022, 04:06 PMPaywalled https://www.nzherald.co.nz/business/why-would-kiwi-property-sell-northlands-at-papanui-for-87m-less-than-2019-valuation/E6OAYBDRJP3MH6OX6HVYITLT2A/ I think its crystal clear who got the better end of the deal.
My view on the discount to NTA is that its really an illusion and the discount is "apparent" in nature only and realistically not realizable in the current market.
If KPG was to try and liquidate other assets they'd probably get a similar outcome.
Anyone who thinks they can sell their office assets into a new J.V. fund at book value or very close to that in the current market is probably kidding themselves.
Same applies to OCA with many of their assets compromised by lack of adequate return on many of their older care focused facilities giving a woefully inadequate ROI.
At least with KPG you get a decent quarterly return.
Probably the wrong thread but since it come up here. Thoughts on when OCAs new deliveries come through later this year and next? Already priced in or could make the gap between price and NTA closer?
My thoughts on OCA have been very clearly and thoroughly articulated already in the OCA thread, in the retirement village thread and on the other forum but in summary there are deep systemic issues in that company and with its core care suite product delivering woefully inadequate returns. Human resource cost escalation is rampant, has been for years and is getting worse. Government underfunding is getting worse by the year.
113 care suite deliveries this half will do nothing to alleviate these issues.
Sell down of the Helier may give some temporary relief in the year in which the bulk of the selldown of the ILU occurs but its not a permanent fix per se.
Others seem to think the selldown of the Helier is the panacea to all their problems.
In the overall scheme of things I think it won't move the needle much.
The root of the issue as I see it is about 68% off all their units are care beds giving a pathetic return on capital employed no matter whether they're basic care beds of care suites. There's no obvious permanent cure to the issues confronting OCA so I see the deep discount to "theoretical" NTA as enduring. I say theoretical NTA because if they tried to sell some of their older basic care villages, I believe its highly unlikely a transaction could be effected other than at an extremely distressed price level. I think a lot of naive investors get tripped up by theoretical paper valuations and believe that if something is trading at a decent discount to NTA it must be a bargain.
=
REINZ August data out
HPI down 1.3% from July - last 3 months down 4.7% and 5.8% from a year ago
Sharon from ANZ commented The August data are consistent with our (very uncertain) forecast that house prices will fall 15% peak to trough – they are down 9.5% already.
Just as well Oceania has to this buffer - so no worries
Report https://www.reinz.co.nz/Media/Default/Monthly%20Press%20Release%20Assets/Residential/08%20-%20August/REINZ%20Monthly%20HPI%20Report%20-%20August%202022.pdf
I think there's no argument there is a substantial buffer between house prices and care suites and that people will move into care when they need to.
Whether the care suite product itself is the most attractive option per se, is quite another question.
I think its likely elderly folks are finding it harder and its taking longer to sell with 108% more properties on the market and I think that translates into more people choosing normal premium care accommodation or some other solution like Ryman's fully refundable deposit scheme.
At the end of the day OCA's care suite product is just one of many care options available and the available evidence to date suggests this type of retirement village license to occupy with its own unique terms, (15% first year or part year DMF fee whether you live one day or the whole 365) has found very limited market acceptance, in part perhaps because of the terms which appear egregiously unreasonable at first glance and perhaps in part because it's becoming known these care suites are slow sellers and it may take quite a considerable period of time, (perhaps years), for the Estate to get repaid what's left over after the expensive DMF fees.
On the other hand the Government funding of OCA's villages means you virtually get a quasi Government backed guarantee on OCA's corporate debt so buying a quasi Govt bond with OCA 010 or OCA 020 corporate debt at about 6% makes sense to me whereas clearly from previous posts I see the theoretical discount to NTA as an illusion and returns of capital employed as being woefully inadequate. In summary I see OCA's corporate debt as an ideal risk reward investment whereas the shares themselves...frankly you are highly likely to enjoy considerably better growth SUMwhere else.
Just as well the Helier is going to completely transform the entire company and be the panacea for everything for OCA...or so some would have you believe...
Disc; Significant stakes in OCA010 and OCA020 corporate bonds, SUM shares and SUM030 corporate bonds.
Down to 92 cents as we draw towards a close on their half year., down more than 6% since my post a week ago. Need "M" to do another big ramp in the other place to try and stave off a retest of the 12 month low of 88 cents.
I can't see any relief coming for shareholders with the half year reporting in late November. Only 113 care suites being "delivered" this half at Lady Allum in Milford that I can recall. Add them to the hundreds of care suites they already have in stock and can't sell. Hmmm Someone in OCA needs to make a very brave call that this whole care suite thing is giving unacceptably low returns and turn at least half the current unsold stock into small independent apartments which I reckon would sell okay to people who can't afford a proper sized independent living unit. Doubt they'll do a Mea Culpa any year soon so shareholders are likely to keep getting about what they've always got, about 8 cps underlying profit which is worth less each year that inflation runs hot. No doubt they will wax lyrical about all their fabulous ESG achievements, how staff and residents are doing super well and poor old earnings per share won't even be a figure referred to in the investor presentation, just like last time.
Another month passes and again the OCA share price under performs v SUM share price ... a new low as they say
OK historical and all it shows is that since listing OCA generally umder performs SUM - both performance wise and attracting market sentiment
But as BlackPeter keeps reminding nobody can predict the future .... in other words this long entrenched trend could turn before Christmas....one good thing is that its very very unlikely 9not impossible) for the line to keep going down to zero
0000ocasum.JPG
The trend continues...that's a "surprise" lol
Quote from: Basil on Oct 03, 2022, 12:33 PMThe trend continues...that's a "surprise" lol
Definitely a pecking order in this sector and it shows in this chart
Like SUM growth highest ... then RYM/ARV and at the bottom OCA
Like SUM ROA (Return on Assets) is 12% ... then ARV / RYM at the bottom OCA at 5%
Like how the market 'rates' SUM with a P/B value of 1.26 followed closely by RYM and a distance back to ARV and OCA at the bottom at 0.69
'Pecking orders' don't change overnight ..... and possibly it will be the same in a few years time
Pecking order is no surprise and mirrors the growth rate of each of the stocks in this sector in the last 5 years.
The trend exists for a significant number of profoundly good reasons, all of which I have alluded too at great length already and for those reasons I am very confident the trend will remain intact going forward.
Mark my words, just like I said one day SUM would exceed the share price of RYM, one day some years down the track 1 SUM will equal 20 OCA.
Its such a one sided contest which company will grow its earnings faster it's not even a contest. Might as well ask which will grow faster, Glassons Australia or the Warehouse lol
Quote from: winner (n) on Oct 03, 2022, 12:50 PMDefinitely a pecking order in this sector and it shows in this chart
Like SUM growth highest ... then RYM/ARV and at the bottom OCA
Like SUM ROA (Return on Assets) is 12% ... then ARV / RYM at the bottom OCA at 5%
Like how the market 'rates' SUM with a P/B value of 1.26 followed closely by RYM and a distance back to ARV and OCA at the bottom at 0.69
'Pecking orders' don't change overnight ..... and possibly it will be the same in a few years time
Pecking orders don't change over night? OK, maybe not over night, but over a couple of years - absolutely.
Just look what happened to all the amazing companies who couldn't make any wrong move: FPH, XRO, RYM, ATM (to name just a few): always too dear but always a good buy until the trend changed.
At some stage the market will realize that SUM is already fully priced and OCA is full of opportunities, and then will happen to OCA what happened to SUM some years ago (when somebody who changed his avatar used to claim that 1 RYM will always be worth 2 SUM (give or take some percent). It didn't took long for SUM to outgrow RYM, didn't it?
I recon this can happen to OCA as well ...
Quote from: BlackPeter on Oct 03, 2022, 04:34 PMPecking orders don't change over night? OK, maybe not over night, but over a couple of years - absolutely.
Just look what happened to all the amazing companies who couldn't make any wrong move: FPH, XRO, RYM, ATM (to name just a few): always too dear but always a good buy until the trend changed.
At some stage the market will realize that SUM is already fully priced and OCA is full of opportunities, and then will happen to OCA what happened to SUM some years ago (when somebody who changed his avatar used to claim that 1 RYM will always be worth 2 SUM (give or take some percent). It didn't took long for SUM to outgrow RYM, didn't it?
The change is underway ---- SUM down 4% today and did way worse than OCA
Likely that SUM was "window dressed" on 30 September and today unwound that.
Not the start of anything. SUM holding up better than most because cream always rises to the top.
QuoteWhile the provision of quality aged care is core to our
mission, we have pursued a strategy of reducing the
number of traditional care beds in our portfolio. Last year
we divested four of our smaller care centres reducing the
needs-based composition of our portfolio. This strategy
will continue, and the proportion of care suites in our
portfolio will increase. Care suites enable an acceptable
return on investment to be achieved within a quality care
setting.
OUTLOOK
The aged care sector is contending with unfunded
staff cost increases, acute labour shortages and
additional costs associated with tackling Covid, as
well as general cost inflation. While there are some
signs of conditions stabilising, no government funding
top-up is expected. Minister of Health Andrew Little
has indicated nurse pay parity is on the agenda, but
we believe this is unlikely to be resolved until mid
next year at the earliest. This means care margins will
continue to be under pressure.
Interesting comments from CEO of Arvida today as they apply to the care side of their operation.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/399910/380409.pdf
Quote from: Basil on Oct 04, 2022, 10:37 AMInteresting comments from CEO of Arvida today as they apply to the care side of their operation.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/399910/380409.pdf
You keep referring to this heap of unsold units and I am trying to find confirmation on this, was it mentioned in the H1 2022 earnings call? If so I found the transcript (but it seems you have to pay to view it ::) ). If anyone has a subscription surely fetch us the quote.
https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/news/Transcript-Oceania-Healthcare-Limited-H1-2022-Earnings-Call-Nov-29-2021-37754177/
I can no longer find the link that I listened to but I took detailed notes at the time from the conference call in May 2022. The CFO mentioned there were 450 unsold units and suites at year end (I recorded this as "450 units n suites"). This took the analysts by surprise as being higher than expected. "Units" refers to apartments and villas.
OCA had recently completed Awatere stage 2 which likely added 63 unsold units given it was completed right on or about year end. There is a cooldown period criteria that must be satisfied until something counts as sold. So finishing Awatere right on year end gives a misleading view at that point in time.
I can't recall if the actual numbers were disclosed or derived but I believe there were 150 PAC clients which means those care suites were occupied but counted as unsold given they had never had an ORA. Note a unit only ever counts as sold when it has its first ORA. It is also important to note that unsold does not mean unoccupied. Such occupied suites continue to earn money which also allows for activity/buzz on a new site, and staff are not completely under-utilised.
In addition, there were possibly some clients who were not paying a PAC but who had been placed into suites after their old facilities were demolished/decommissioned etc. Such placements count as occupied but unsold.
There was also $10m in buybacks which potentially muddied the waters - it certainly muddied the cashflow report but I am unclear as to the stock on hand impact, if any.
It was also not 100% clear if the 450 included 117* resales available for sale. I believe it did and this is a normal part of turning over units and suites. The CFO also mentioned there were unsold units from Bellevue & Green Gables.
*117 was made up of 38 villas, 25 apartments and 54 care suites.
All in all there is a lot of confusion given the 450 was higher than expected. Part of the confusion arose due to the definition of "unsold" which included suites that were occupied either under a PAC arrangement or clients being placed in suites after another site was decommissioned. As well as the inclusion of the normal stock in trade of resales. We were hoping all would be revealed with the next report but we will just have to wait and see. But one thing I can state with certainty is that there are NOT 450 empty care suites.
Oceania - the definition of "unsold" is confusing
Ryman - what really is a 'completed' unit - make up a number as you go along it seems
others - no doubt some of their numbers are 'unclear'/'confusing' as well
Underlying earnings is a made up number which to a large extent doesn't really show the 'value' of the company
NTA is essentially driven by property valuations - just a big guess in reality
Amongst the four main players in the sector maybe a dozen or so different profit measures are used to paint a bright picture. Financial reporting in this sector is very obtuse - maybe to confuse punters, maybe even themselves.
So I've come up with a new valuation method - it seems to give a realistic value, based on economic realities
For Oceania you take the NTA of $$945m and discount that by 15% because its just a big guess - that gives you $800m and then you deduct the NPV of the future 'losses' from caring and looking after people and running villages which I reckon is $100m - Gives a value of $700m - let's say $1.00 a share
My thinking is that it doesn't seem worthwhile for somebody whose not an insider to build big models to come up with indicative profits and valuations .... will always be wrong I reckon.
QuoteAll in all there is a lot of confusion given the 450 was higher than expected.
But one thing I can state with certainty is that there are NOT 450 empty care suites.
That's not saying much. The number I mentioned was 380 care suites.
Its the CEO and CFOs job on the call to make things crystal clear and they didn't. (The very poor job I was referring to recently)
One thing that was crystal from the call was the significant surprise and confusion amongst analysts with numbers mentioned being asked to be confirmed again...I have never heard that level of confusion and surprise on a call before. Why were they so surprised ? Lack of detail in the presentation ? Presentation focusing on all sorts of feel-good resident care and ESG stuff and lacking objectivity and anything that is a negative ?
You could fairly easily make the case that OCA's financials are deliberatly obtuse and they try and obscure things. Notice how underlying earnings per share are never mentioned in the entire presentation and that's by no means a one-off. Have you noted how we never hear about the point of inflection anymore ?
The downtrend continues as real estate prices and volumes continue their very severe decline.
https://www.nzherald.co.nz/business/auckland-median-house-sale-price-plunges-180000-in-10-months-barfoot-thompson/PG6O2U6G76AAZE2HOQ5YDZ7QVM/
ARV fired a very clear warning shot yesterday about the effects on its business from the care side of their operations, (28% of their business). If people want to ignore the implications of what was said in terms of the impact on a company with 68% of its units in care, good luck to you.
Quote from: winner (n) on Oct 05, 2022, 08:59 AMOceania - the definition of "unsold" is confusing
Ryman - what really is a 'completed' unit - make up a number as you go along it seems
others - no doubt some of their numbers are 'unclear'/'confusing' as well
Underlying earnings is a made up number which to a large extent doesn't really show the 'value' of the company
NTA is essentially driven by property valuations - just a big guess in reality
Amongst the four main players in the sector maybe a dozen or so different profit measures are used to paint a bright picture. Financial reporting in this sector is very obtuse - maybe to confuse punters, maybe even themselves.
Too right winner and I agree 100%. The more I look at RV companies the more I am convinced the industry is shrouded in obfuscation. That much is clear. ;D
In addition, any business won't include a KPI that shows under-performance or under-achievement etc. so that is not really a surprise.
Quote from: winner (n) on Oct 05, 2022, 08:59 AMMy thinking is that it doesn't seem worthwhile for somebody whose not an insider to build big models to come up with indicative profits and valuations .... will always be wrong I reckon.
I'm not sure about this fascination with critiquing models we have seen a lot of lately...would you care to explain? Any decent modeller knows their model is wrong, it's just a question of by how much. That is financial modelling 101 which I'm sure you know. In addition, given absolute values are easily critiqued, often ranges are presented which are based on various assumptions. To expect any sort of "perfection" is an unrealistic expectation. For balance: equally unrealistic expectations from modellers is looking for relationships between numbers with the unstated assumption that such a relationship should exist. That is a fool's errand.
Jeez, the OCA020 2028 bonds are at 6.66% ....were 3.3% a year ago when issued
Hope punters who bought them back then don't need to sell in a hurry ...you'll only get $84 for each $100
Quote from: winner (n) on Oct 11, 2022, 06:41 PMJeez, the OCA020 2028 bonds are at 6.66% ....were 3.3% a year ago when issued
Hope punters who bought them back then don't need to sell in a hurry ...you'll only get $84 for each $100
E hika mā! That's a biblical interest rate right there!
New minimum pay rate for bringing care workers into the country is $29.66 an hour
Quote from: NZInvestor on Oct 12, 2022, 07:11 AMNew minimum pay rate for bringing care workers into the country is $29.66 an hour
And the N T A dropping like an Anchor :'(
Quote from: Auto Rower on Oct 12, 2022, 02:16 PMAnd the N T A dropping like an Anchor :'(
Looking pretty gloomy share price wise for the whole sector
The secular bear market that started about 7 years still in play ..... multiples still to drop a bit more and earnings outlook must be a bit gloomy
Surely OCA won't go to 85 cents
Quote from: winner (n) on Oct 12, 2022, 02:27 PMLooking pretty gloomy share price wise for the whole sector
The secular bear market that started about 7 years still in play ..... multiples still to drop a bit more and earnings outlook must be a bit gloomy
Surely OCA won't go to 85 cents
I am afraid to say they will seeing as I just bought some at 88 !!!!
Its the old kiss of death I am good at that if nothing else
Pretty sure in a couple of years you will be pretty pleased with your purchase price :) ; I guess, really - who cares whether hype pulls the price short term down to 85 cents, 80 cents or even lower?
30 months ago it bottomed out around 40 cents ... Didn't matter an iota to the people who bought it 6 months earlier for $1 and sold it 12 months later for $1.50 ... and didn't matter either for anybody just holding them :) ;
Just noise for investors and opportunities for traders ...
I could be tempted again at 65 cents on the greater fool theory that sometime, somewhere down the track someone will probably pay more. Not convinced there's any value at all here at the current price. eps is 8 cents and they will be doing well if they can maintain that this year. With 10 year Govt stock at 4.50% now fair value on a no growth stock is a PE of 8. eps 8 cents x 8 = 64 cents. If it doesn't get down that low I don't care, plenty of other cheap stocks around. I am sure others will see it differently and that's fine.
Quote from: Basil on Oct 13, 2022, 12:02 PMI could be tempted again at 65 cents on the greater fool theory that sometime, somewhere down the track someone will probably pay more. Not convinced there's any value at all here at the current price. eps is 8 cents and they will be doing well if they can maintain that this year. With 10 year Govt stock at 4.50% now fair value on a no growth stock is a PE of 8. eps 8 cents x 8 = 64 cents. If it doesn't get down that low I don't care, plenty of other cheap stocks around.
You clearly expect real estate to go down to zero (or maybe even negative values?) and you don't expect any income from people buying their units?
Well, I do expect real estate to bottom out sometimes over the next 12 months and ... and I see that their income from selling their units will increase. Quite simple - standard unit has three to four years turnover and any new units built will increase this income stream as they come online (and they do).
But does not matter ... just close your eyes and go somewhere else. Please do! Do not waste your and our time unless you have something new to contribute.
Real estate falling 30%-40% would not surprise me at all, ~ 45-55% in real inflation adjusted terms over a period of 2-3 years. More problematic for many is the rapid build up of inventory and people simply not being able to sell their homes and unable to purchase RV units.
New to contribute is my revised price target of 64 cents but it could easily go lower if some leveraged punters get into a forced selling situation with margin calls like last time so 40 cents is not completely improbable again if despair sets in. I think OCA will be doing incredibly well if they can maintain underlying earnings per share in real terms in FY23 compared to FY22. (Another year of no growth) This would require headline underlying earnings of approx 8.56 cps (last year's underlying eps plus inflation at 7%). I am skeptical they can do this so another year of (in real inflation adjusted terms) declining profit seems quite plausible.
I think you know already from my previous posts OCA's care suites are not increasing in price and not keeping up with inflation so even those they can sell are not going to generate real growth in DMF earnings after rapidly rising care costs are factored in.
Likewise, as you already know their basic care operations are saddled with ever increasing costs not being matched by Govt funding increases. Their only apparent get out of jail free card out of this mess is ILU sales and they are going to need elderly folks in their St Heliers homes to be able to sell them before buying ILU units in the Helier. That might be easier said than done now and by and large probably won't happen until FY24.
Finally, the rise in the 10 year risk free rates globally is undermining all DCF equity valuations, hence a no growth company should now attract a PE of 8...this was as much as 11 this time last year and is a major factor undermining equity valuations generally including your beloved OCA.
Good luck BP. I see we closed at another fresh 12 month low today. Maybe Mr Market is a little bit smarter than you give it credit for.
The great thing for you though is with OCA measuring profit in such a vast number of ways I am sure when they report their half years results in late November, you'll find one of those ways suits your purposes to cling on to your version of growth. If there was an advanced accounting university paper titled "accounting obfuscation 301 create your own profit answers", I am sure they would devote most of the year to looking at the primary case study in this matter, OCA.
OCA bonds at 6.7%pa yesterday
Of the listed bonds on NZDX on Synlait ones have a higher yield
Oceania heading into the being seen as pretty risky territory
It's not surprising that Oceania (and others) don't come up publicly with a number as to the true extent care losses really are ...... like to what degree do property gains and other activities) subsidise care activities (the actual Cost of looking after those in need)
Not surprising because I reckon it would shock shareholders ....recasting their accounts and looking at money flows that cost / subsidy could be as high as $20 a year now ....a couple of years ago it was positive, prob made or at worst broke even on care.
Quote from: winner (n) on Oct 18, 2022, 08:07 AMOCA bonds at 6.7%pa yesterday
Of the listed bonds on NZDX on Synlait ones have a higher yield
Oceania heading into the being seen as pretty risky territory
You know when the oldest and biggest player in their field, (Ryman) radically reduces the scale of their care in new facilities being built the scope of the losses with care is very, very serious. The board would have thought long and very hard about this as it signals a major change for them. Hard off the back of ARV effectively saying care was costing them really serious money despite only being just over a quarter of their business model the signs for anyone specializing in care are very ominous indeed.
I see AIR are raising new corporate bonds at circa 6%, a significantly lower yield than OCA bonds. Interesting that the market sees AIR as less risky than OCA...very interesting.
I really regret buying Oceania bonds. Another loss making investment in 2022 to add to the list.
Doggie really should stay ensconced in his kennel and initiate a share and bond buyers strike as he has a lot of wounds, (more than enough already) to lick now including in his bond portfolio.
Govt been underfunding aged hospital care for a long time now.
A church based charity that I know ran a large rest home with hospital care for over 50 year. However, even this charity couldn't make the Govt funding work in recent times and closed its doors about 10 yrs ago.
One of the reasons why I shun this sector.
Capitalise expected future care losses and it's no wonder some in sector trade at discount to NTA
Share price valuation = NTA (maybe should be discounted a bit these days) LESS future value of care losses
Quote from: winner (n) on Oct 18, 2022, 08:15 AMIt's not surprising that Oceania (and others) don't come up publicly with a number as to the true extent care losses really are ...... like to what degree do property gains and other activities) subsidise care activities (the actual Cost of looking after those in need)
OCA are the only ones to disclose care as a separate segment, specifically excluding all of those gains?(??)
Quote from: Whacc on Oct 18, 2022, 01:10 PMOCA are the only ones to disclose care as a separate segment, specifically excluding all of those gains?(??)
They do indeed ..... but how meaningful is it really
Like if they really made $9,537 ebitda per care bed (excluding property related gains) why are moaning about not getting enough cash from the government
Maybe the government looks at this $9,537 profit per bed and says you must be joking if you want more.
Quote from: winner (n) on Oct 18, 2022, 02:45 PMLike if they really made $9,537 ebitda per care bed (excluding property related gains) why are moaning about not getting enough cash from the government
Because profit (specifically EBITDA) isn't the same thing as covering your cost of capital (or even just your maintenance spend), but dummy retail investors (and even listed company directors) love it as a metric.
There is obviously the D, the I and the all important (to retail investors at least) Divs to consider. Frankly, none of these businesses should be paying Divs at this point in their lifecycle and especially given the macro environment.
They're mistakenly conducting capital management as if their target customer demographic (past mature, into decline) is also their stage in the business lifecycle (growth).
Not sure what you want the answer to be here to be honest, above you want to know the "true extent of losses" and then when they show a positive segmented EBITDA margin it's also incorrect?
Government does (and should) realise that in a functioning market all viable businesses will make a margin and seek to cover their WACC, otherwise why would anyone get out of bed.
The nub of the issue is that this Government expect companies to care for residents for free.
Its actually totally repulsive to their core beliefs that anyone is entitled to make money from care.
Andrew Little in not quite so many words said as much the other day.
If you went into a Labour caucus meeting and said retirement villages are entitled to a fair rate of return on their cost of capital you'd probably get one of four responses
a) Blank stares wondering what the heck is cost of capital ?
b) A quick and smarmy retort along the lines of That's a cost we can do without !
c) Didn't you know this was our way of exacting revenge on these greedy capitalist companies because we can't tax their tax free gains on independent retirement units ?
d) Jovial laughter and be laughed out of the room
I suspect it would be A or D.
Quote from: Basil on Oct 18, 2022, 04:15 PMThe nub of the issue is that this Government expect companies to care for residents for free.
Its actually totally repulsive to their core beliefs that anyone is entitled to make money from care.
Andrew Little in not quite so many words said as much the other day.
If you went into a Labour caucus meeting and said retirement villages are entitled to a fair rate of return on their cost of capital you'd probably get one of four responses
a) Blank stares wondering what the heck is cost of capital ?
b) A quick and smarmy retort along the lines of That's a cost we can do without !
c) Didn't you know this was our way of exacting revenge on these greedy capitalist companies because we can't tax their tax free gains on independent retirement units ?
d) Jovial laughter and be laughed out of the room
I suspect it would be A or D.
Let the Commerce Commission loose and they'd work out these retirement companies are making 'excessive profits of $X a day'
Quote from: Basil on Oct 18, 2022, 04:15 PMThe nub of the issue is that this Government expect companies to care for residents for free.
Its actually totally repulsive to their core beliefs that anyone is entitled to make money from care.
Andrew Little in not quite so many words said as much the other day.
If you went into a Labour caucus meeting and said retirement villages are entitled to a fair rate of return on their cost of capital you'd probably get one of four responses
a) Blank stares wondering what the heck is cost of capital ?
b) A quick and smarmy retort along the lines of That's a cost we can do without !
c) Didn't you know this was our way of exacting revenge on these greedy capitalist companies because we can't tax their tax free gains on independent retirement units ?
d) Jovial laughter and be laughed out of the room
I suspect it would be A or D.
Definitely A
Did I miss something? Why is OCA down so much today? 3.5% on no news while ARV is UP doesn't add up to me?
It is important to distinguish between signal and noise ...
If you look at the chart - it looks like these two are nicely correlated. However ARV (orange line) went a bit too far down compared to OCA (the blue line) and therefore market probably just correcting a bit.
ARV-OCA.JPG
Hint - following share prices and getting excited about every jitter on a day by day basis can be a huge time waster and might both increase your medical bills (heart pills and similar) and reduce your life time and quality. Just relax and enjoy the ride unless you are a day trader ...
One interesting phenomena they noticed in European and US capital markets (but I am pretty sure it is globally applicable) ... dead peoples portfolios (i.e. estates) are typically outperforming the portfolios of living people. Dead people don't monitor the share prices on a day to day basis and they obviously don't sell or buy on any jitter. They just hold and are clearly free of any worries.
Maybe something to learn from.
Taleb in a great book 'Fooled by Randomness'wrote a bit about the anxiety of looking at portfolios too often
As humans have evolved they feel losses significantly more than gains and then Taleb goes on about noise and meaning
Briefly -
"A 15% return with a 10% volatility (or uncertainty) per annum translates into a 93% probability of success in any given year. But seen at a narrow time scale, this translates into a mere 50.02% probability of success over any given second as shown in the table. Over the very narrow time increment, the observation will reveal close to nothing. Yet the dentist's heart will not tell him that. Being emotional, he feels a pang with every loss, as it shows in red on his screen. He feels some pleasure when the performance is positive, but not in equivalent amount as the pain when the performance is negative"
Ie the more you look at your portfoliothe more pain one suffers .... even if over a year the portfolio makes a decent return
For more detail this is worth reading
http://mastersinvest.com/newblog/2017/5/11/check-daily
Good to look at the psychology of investing and to not be looking at one's portfolio too often.
Can't help myself wondering about the investment psychology of discounts to NTA giving the perception of value when no value really exists if you discount your valuation for all the assets involved in care which give such a pitiful return.
I also sometimes wonder about the investment psychology of simply holding on to one's dog's thinking they must come right eventually ?
Then there's another interesting psychology, that of following those who appear to know what they're doing...regardless of returns all because they for whatever reason attract a following, maybe not unlike the Pied Piper https://en.wikipedia.org/wiki/Pied_Piper_of_Hamelin
"The phrase "pied piper" has become a metaphor for a person who attracts a following through charisma or false promises"
A certain person in another place essentially says I have a model that promises growth if you just keep hanging on.
But after 5 and a half years we've had no earnings growth so how long does one keep hanging on hoping those promises come true ?
If you're not going to look objectively at the five and a half year mark and now say, we've got the whole care sector under ever worsening and unprecedented pressure (thank you ARV and RYM for the free heads-up) and housing in the steepest fall in decades, if the growth in eps doesn't happen do you keep waiting another year, another two years, another five and a half years ?
What about the opportunity cost of how much growth you could have got elsewhere ? I reckon the IPO price of 79 cents could get tested in the coming weeks.
IPO price $0.79 (raised $200m to reduce debt - none went to Oceania to grow etc)
Raised $100m recently at $1.30 and $1.28
All up market has put in $300m at an average of $0.91 - so current share price not that good relative to that
And that's not counting $20m odd from the DRP at prices $1.1750 / $0.9910 / $1.5331 / $1.4040 / $1.2837 and
$0.9875
Oh well, that's life
W() posting that here on a forum that sees few vistors is probably a good idea......
lucky its not performing like a china stock...
but wait it hit a high of 1.50 and above?
cripes... it is acting like a china stock....
dont post that on sharetrader... might ruin a lovely spring day..
Looking forward to Oceania's half year report in a few weeks. Could be exciting.
Below are the headlines for previous announcements since 2019. Notice since our Brent took over the headlines have all been good news and not just the staid announcement from Earl's days
Brent is telling a story
There was an investing 'rule' in the 1990's early 2000's that went along the lines of 'Just buy the story and it'll work out'. That 'went' out of fashion post the dot com collapse. Another long standing simple 'rule' has been the '60/40 portfolio and you'll do alright no matter what happens' - but the 60% stocks / 40% portfolios are down about 20% this year so that 'rule' seems destined to be dropped.
Good things often return so maybe the 'just buy the story and it'll work out' rule will work again.
Wonder what our Brent will come up with as a headline in a few weeks ... to keep that story alive
Recent headlines:
May 22 - Oceania positioned for growth
Nov 21 - Oceania delivers improved performance despite COVID-19
May 21 - Oceania records strong 10 month trading results
Jan 21 - Oceania Healthcare - Half Year Result and Interim Report
Jul 20 - Financial results for the year ended 31 May 2020
Jan 20 - Oceania Healthcare - Half Year Result and Interim Report
Jul 19 - Financial Results for the Year Ended 31 May 2019
I won't post the Underlying Earnings EPS numbers as that will ruin the story
https://www.oceaniahealthcare.co.nz/ "You've always believed in better"
(unless you're talking about the real key metric, underlying eps which the company goes to considerable lengths to avoid ever mentioning) .
"I won't post the Underlying Earnings EPS numbers as that will ruin the story"
A young legal beagle once said " Facts just the facts:"
Technically its a STRONG SELL
https://www.investing.com/equities/oceania-healthcare-ltd-technical?cid=1096380
Quote from: Basil on Oct 25, 2022, 11:45 AMTechnically its a STRONG SELL
https://www.investing.com/equities/oceania-healthcare-ltd-technical?cid=1096380
Well, quite similar to 2020 short before it bounced back from something like 40 cents to something like $1.60.
If anything - it might have been a "strong sell" for traders when it went through the MA100 or MA200 ... but recommending to sell now feels sort of stupid (to avoid stronger language).
Is this really what you would recommend to somebody you care about? Or are you just trying to increase the level of fear for people who didn't do their fundamental analysis in order to pick up some more really cheap shares?
Obviously - Fundamentally it is a strong BUY!
9.4 out of 10 from four analysts - quite impressive
https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/
Quote from: BlackPeter on Oct 25, 2022, 12:52 PMWell, quite similar to 2020 short before it bounced back from something like 40 cents to something like $1.60.
If anything - it might have been a "strong sell" for traders when it went through the MA100 or MA200 ... but recommending to sell now feels sort of stupid (to avoid stronger language).
Is this really what you would recommend to somebody you care about? Or are you just trying to increase the level of fear for people who didn't do their fundamental analysis in order to pick up some more really cheap shares?
Obviously - Fundamentally it is a strong BUY!
9.4 out of 10 from four analysts - quite impressive
https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/
Hey BP - have you changed your mind about analysts - you usually pretty disparaging about them
strange those 4 analysts haven't reduced their targets much - usually they track the share price (up as well as down)
Quote from: winner (n) on Oct 25, 2022, 01:20 PMHey BP - have you changed your mind about analysts - you usually pretty disparaging about them
strange those 4 analysts haven't reduced their targets much - usually they track the share price (up as well as down)
No matter what I think about analyst forecasts ... I am sure the forecasts and recommendations from market screener (which basically covers the majority of fundamental analysts) are per se not less credible than any computer generated recommendation from Investing.com which Basil referred to.
BTW - I used to register some years ago with Investing.com ... and had to give them my email as well as my cell phone number (they said for security reasons). Starting with that mistake I got initially a flood of cold calls on my cell phone from various UK investment advisors (telling me they got the data from Investment.com) selling all sorts of stuff. Took more than a year for the flood to turn into a trickle, and neither telling them to go away nor blocking the numbers does help, they often call from new numbers. AVOID them unless you like lots of cold calls during (NZ) night hours and if you travel to pay the roaming fees for their calls. Disgusting bunch of people, but clearly not trustworthy analysts.
Man oh man 83 cents... This downtrend seems rock solid! Getting pretty sick of scuba diving here, at least given the lack of trading updates nothing is going too amiss. Right? :o
Quote from: Plata on Oct 26, 2022, 05:30 PMMan oh man 83 cents... This downtrend seems rock solid! Getting pretty sick of scuba diving here, at least given the lack of trading updates nothing is going too amiss. Right? :o
Hasnt been that low for yonks
Brent needs to come out with an announcement tomorrow ......say a few positive things and a hint the financials to be announced in a few weeks arent that bad
The punters need some hugs and cuddles eh
Last year they didn't report until 29 November. I suspect the next month and a bit is going to be a very painful wait for shareholders and even when the wait is over the company will report numbers that will simply confirm what the smart money already knows and that's what ARV and RYM have been clearly warning about, that the returns from care and the pressure the care sector is under have never been worse.
I can't help feel that it these levels OCA is going to attract some sort of interest. How much lower can it go?
Quote from: Shareguy on Oct 27, 2022, 09:10 PMI can't help feel that it these levels OCA is going to attract some sort of interest. How much lower can it go?
Possibly many take a takeover offer at $1.10 and think how lucky they were they got that
Love Jarred at the 10th Man. Here's a few bits from todays newsletter
- Earnings don't matter?
- it is sentiment that matters
- It pains me to see this. It pains me to see people spend their entire lives manipulating numbers in a spreadsheet, thinking it's going to give them some insight into what the stock market will do
- Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock
- etc etc.
Market sentiment about OCA these days sucks eh ...... really bad ..... so until that sentiment changes little hope of a much improved OCA share price ---- and don't overlook that generally people don't behave rationally'
Same applies to other stocks in this sector but on a scale of 1-10 where 1 is 'really sucks' and 10 is 'sort of sucks' you's have to put OCA at 1 (2 if being nice) ... ARV at 2 and RYM and SUM at 5 to 6
Latest The 10th Man here
https://www.mauldineconomics.com/the...gs-dont-matter
Quote from: Shareguy on Oct 27, 2022, 09:10 PMI can't help feel that it these levels OCA is going to attract some sort of interest. How much lower can it go?
Quite easy ... downtrend will stop as soon as demand is higher than supply, caused by the fear to miss out growing larger than the greed to wait for still lower prices. In March 2020 it dropped down to 40 cents.
However - quite meaningless jitter for investors.
If you bought a house to live in some years ago for $500k, which used to be worth last year $1.2m and is now worth $1 m, you still have a house to live in and nothing has changed for you, right?
If you bought an OCA share for say $1 some years ago, it went down to 40 cents and up to $1.60 and currently down to 84 cents, you still have one OCA share - and both dividend (current yield juicy 6%) and earnings (earnings CAGR of 10) of this share just keeps growing. Sill the same great investment (obviously getting only better while the SP drops).
Sure - for buyers waiting to get in it is relevant whether they pay 80 cents, 60 cents or 40 cents for this amazing investment ... but as in all other things in life - the longer you wait the higher the risk to miss out.
Not many managed to get in for this amazing 40 cents deal on March 23, 2020. The day before it was 51 cents and the day after 52 cents. My lowest buy in around this time was in the early 60 cents ... and I am still pretty happy with this investment :) ;
Is this what you were talking about? ;)
BUY 24/03/2020 50,000 NZD 46.5 23,250.00 46.40 23,296.40
Quote from: 777 on Oct 28, 2022, 10:20 AMIs this what you were talking about? ;)
BUY 24/03/2020 50,000 NZD 46.5 23,250.00 46.40 23,296.40
Market opened that day at 51 cents, went down to 38 cents and closed at 40 cents.
I mentioned the closing price (given this is an auction), but sure - the trade you mention is in the band.
Your trade?
Quote from: winner (n) on Oct 28, 2022, 09:15 AMLove Jarred at the 10th Man. Here's a few bits from todays newsletter
https://www.mauldineconomics.com/the...gs-dont-matter
"He also goes on to say...
Economist Nouriel Roubini was tweeting unironically the other day about World War III. He thinks it is "likely." And a lot of people share that opinion.
Guys. It's not going to happen. Not only is it not going to happen, just the fact that you are saying that is a big sentiment indicator. I've been saying this for a while—sentiment today is worse than it was during the financial crisis. Much worse. This isn't just about the housing market imploding—people actually think that the world is going to come to an end.
Large groups of people acting irrationally, like I said. The opportunity here is to buy stocks. More precisely, the opportunity occurred on the last CPI release on Thursday, October 13—that was the moment—and we are already up 8% since then.
It's time to buy"
Thanks for posting Winner.
However....I won't be buying OCA anytime soon. Much better opportunities in the market IMO.
Quote from: Shareguy on Oct 27, 2022, 09:10 PMI can't help feel that it these levels OCA is going to attract some sort of interest. How much lower can it go?
Classic value trap. Its seems cheap because of the discount to NTA...BUT WAIT check out the discounts to NTA of some of the REIT's who have 100% of their assets working properly for them, not 68% of their assets caught in a vice like systemic Govt underfunding problem with care like OCA does.
Then consider how ARV signaled how badly they're being affected by care costs and that's with only 28% of their units care focused.
After that consider what a huge move it was for the market leader Ryman to radically scale back on their new villages in regard to care. For them to do that the board and CEO must have carefully weighed up the reputational damage that would do, (RYM have always been known for the caliber of their care and the decent size of their care facilities relative to independent living units suggesting to incoming residents that care would be there when it was needed), against what they obviously perceive as systemically and egregiously low returns on care that would appear to be a problem forever and a day going forward.
Remember that National has only promised to increase care rates in line with inflation going forward so all this does is lock in future Govt care contributions at late 2023 historically low level's and that's if a National led coalition win the election). We might as well sell everything and run for the hills if Cindy gets back in...
The Pied Piper can play his tune all he likes and if people want to follow him good luck to them. I value this on an
underlying earnings basis as a no growth company, (underlying eps has declined in real inflation adjusted terms by 17% since 2018) so they will be doing well to keep underlying eps constant in real inflation adjusted terms. 8 cps underlying realised profit and I apply a no growth PE of 8 (until such time if ever they can prove they can grow that figure and I am not convinced they can in the foreseeable future) and I get 8 x 8 = 64 cents. That's around half asset backing and that's where they deserve to be in my opinion. The bottom line is this is a company than cannot control its costs and appears to have very poor cost disciplines and far to much focus on impressing everyone with how well they're looking after everyone's else's interests including all things ESG.
I would only nibble there on the basis that some other company might have a crack at taking them over for about $1 and clean out a lot of dead wood, refocus the activities, add some desperately needed cost disciplines and grab some synergies for their trouble.
For me it's not worth punting on companies that are fundamentally systemically challenged with their business model unless they really are VERY cheap considering the extreme headwinds faced for the foreseeable future.
Your question certainly got tongues wagging this morning lol.
For existing shareholders sake I hope I am wrong with my 64 cent call but I'm not betting my own money on this until such time as I think the odds are in my favour.
Value of OCA -
1) NTA - Reported as $945m but discount by 20% for pending revaluations = $750m
2) future value of losses looking after people etc estimated at $150m. Assumed current shortfall /care cost / loss / subsidy from property profits (or waht ever you want to call it) is $15m and this growing at 5%pa and using a discount rate of 15%
Value is 1) LESS 2) = $600m
Spooky indeed - market cap today $600m
Market maybe is forward looking after all and got it right
Quote from: winner (n) on Oct 28, 2022, 09:15 AMLove Jarred at the 10th Man. Here's a few bits from todays newsletter
- Earnings don't matter?
- it is sentiment that matters
- It pains me to see this. It pains me to see people spend their entire lives manipulating numbers in a spreadsheet, thinking it's going to give them some insight into what the stock market will do
- Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock
- etc etc.
Go tell that to Amazon investors today...
Suppose when share price close is 81 cents one takes some comfort that the WVAP was 82.69 cents ...not so bad after all
I think I can safely say that nobody has issued more warning barks about this mutt than me.
I think I am also coming to an even deeper understanding that the market for retirement units is presently saturated and likely to remain that way for many years. Really pleased to be out of this whole sector, especially this one.
Lets face it where do they find staff from.
The whole country staff program was plain to see when the immigration minister from FIJI did not seem to understand high tech QUALIFIED drivers of agricultural equipment (HI TECH these days) can not be found at your local poly tech in the BOP or GISBORNE.....
wasnt it apparent then that there was a problem with immigration and maybe certain demographics just did not want more people coming here that were technically capable and had the wrong skin color? (European people not wanted). Remember the "Privilaged white farmers" comment.
White people dont apply please we have to decolonise the country and reindocinrate all immigrants.
The kiwi is 58 to the Dickie and your dollars are worthless. A young US guys with a Kiwi friend is taking her back the US becuase he can buy 10 acres one hour up north from NY for Yankee dollars and isnt staying here.
Why dont they just go and get 250 thousand uKE's well educated people and problem solved..
It would keep houses prices up and KIWI build coiuld house them quick smart no problem....
wasnt it obvious then chart start heading down and immigration was stalled that this was a sell... who still holds these?
dont worry Peters will solve all these problems when he is the New prime Minister and Luxon is allocated the tourism portfolio.....
Second chance for anyone that missed out on the IPO in May 2017 @ 79 cents is likely to be coming very shortly. Can't go wrong there surely ? Just remember it has been down to less than half that at 38 cents in early 2020. I think the outlook is substantially more challenging now than it was in May 2017 when it listed. NTA is basically irrelevant when 68% of your assets are earning truly pitiful returns and on basic care beds you're losing money.
To Attract internation staff you have to advertise in the language of european countries not in english or some local tongue...
classic example is this where the german translation was not very accurate.
Good example for teaching european languages and others in schools... do they still have schools?
https://www.stuff.co.nz/environment/130353050/the-dream-job-in-haast-that-hardly-anyone-wanted-is-now-hot-property
Another day, another multi year low, now 80 cents. Test of the IPO price of 79 cents coming up either tomorrow or next week I reckon.
Quote from: Basil on Nov 03, 2022, 05:19 PMAnother day, another multi year low, now 80 cents. Test of the IPO price of 79 cents coming up either tomorrow or next week I reckon.
If yahoo is right on first day trading it opened at 82 had a high of 83 and closed at 79
Day 2 opened at 80 closed at 79
Day 3 open 79 closed at 78 DAy 4 closed at 82 and until covid panic stayed above 80
Quote from: Basil on Nov 03, 2022, 05:19 PMAnother day, another multi year low, now 80 cents. Test of the IPO price of 79 cents coming up either tomorrow or next week I reckon.
Come on, this is pretty weak stuff. Don't disappoint us and tell us when they will break through the all -time low of 38 cents, we expect no less from you :P .
Could quite easily overshoot on the downside below my assessed fair value of 64 cents but I think another visit below 40 cents is very unlikely.
Sorry, I can't help my obsession with slow motion train wrecks...
Quote from: Ferg on Jun 25, 2022, 06:56 PMHello and welcome to everyone from the other place.
In response to Beagle's question and as BlackPeter has touched on, I fully expect OCA to outperform the NZX over the next 2-3 years. As to how that compares to SUM? I haven't done the numbers....but it would be great to see both outperform along with a few others in various property industries that have been over-sold lately.
Curious how you are feeling about it now Ferg ?
I believe that was posted late June 2022 so we still have between 21 and 33 months for this to play out.
I don't get fixated on daily price movements, other than to take advantage of price weaknesses given I try to be a contrarian investor. I'm not a trader. Plus given my work commitments, I can't put the time into tracking daily/hourly SP movements across multiple companies.
How do I feel about the SP? Honestly I feel great about it. As previously discussed, given I kept plenty of powder dry and divested a number of holdings some time ago, I can choose to accumulate at prices below what I deem to be fair value. I was discussing this exact point with a learned investor this evening. I'm actually more worried about other investments right now - OCA is neither my highest position nor the one that keeps me up at night.
However, the work I have put into understanding OCA allows me to assess the level of risk with which I am comfortable. Insofar as my ability to say if the latest SP movements relative to the NZX is a temporary aberration or a sign of something else - I'm not going to pretend I understand sentiment.
As the late Dr Isaac Asimov says in his book 'The Last Question (https://www.goodreads.com/quotes/403544-there-is-as-yet-insufficient-data-for-a-meaningful-answer)':
"There is as yet insufficient data for a meaningful answer."
I recommend reading it - it's a light hearted short story on entropy and how to solve the issue of stars running out of energy.
Yes as noted in the quote 25 June, just over 4 months ago. Each to their own approach I agree 100% but it's been an interesting 4 months with ARV and RYM effectively saying we're getting crushed with care costs.
The gazetted increase for Govt funding was 5.5% from memory and I would think OCA's care costs are continuing to rise at 10% plus, as they did last year.
Really disappointed in a poll the other day to see Labour still ahead of National.
Can you imagine for a second if they get back in for a third term and the radical underfunding of care gets far worse ? Another 3 years of socialist co governance extremism and I'd be happy to sell everything and invest the whole lot overseas.
For me, I'm glad I sold some of my OCA at $1.58, most of the rest at $1.40 just over a year ago and cleaned the rest our about 6 months ago at an average of $1.04.
Probably another 20-25% downside to the whole retirement village sector I reckon. My core thesis is the housing market is in a slow motion car crash and it rubs off in a major way on retirement village companies. https://www.newshub.co.nz/home/money/2022/11/economists-issue-warning-after-financial-stability-report-paints-grim-picture-of-nz-economy-as-interest-rates-skyrocket-house-prices-plummet.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+4+November+2022
I'll watch the technical's and see what happens. I might be tempted a bit if it gets down into the very low 60 cent range.
Quote from: Basil on Nov 03, 2022, 08:50 PMCurious how you are feeling about it now Ferg ? You've done a lot of work on this for what ? Since that post on 25 June OCA is down ~ 17.5% and the NZX50 is up approx 2% as is SUM itself, OCA almost a 20% under-performance by comparison. A short-term aberration or something more enduring, what say you ?
OCA not as bad as My Food Bag - they down 25% in same period
Some punters love Fibonacci numbers
So using closing prices the big low was 50 cents (the touted 38 cents was intraday) and the share price climbed to $1.60
Since then all down hill .... price has gone past the 23.6% retracement from that $1.60 high ..... and the 38.2% retracement ..... and the 50.0% retracement (which was at $1.06) .... and the 61.8% retracement
Next stop maybe the 78.6% retracement at 74 cents
Nature often a good indicator of what can happen
hey basil ---- you forgot to mention all the new capital that's been injected since the IPO
Inc the DRP about $130m
Average price of all shares issued in IPO and since is 91 cents
Quote from: Basil on Nov 04, 2022, 01:44 PMOuch...that paints it in even a worse light.
Even the insiders are hurting
Our Liz has heaps at average of $1.05
She's about $423,000 under water ..... but at last she's had those juicy Director fees to soften the blue
Probably can't even average down at the moment - might have to wait until after the results announcment
Just noticed that dividends haven't been keeping up with inflation over last 5 years
They've been - cents
2018 4.70
2019 4.70
2020 3.50
2021 3.40
2022 4.40
Suppose if Underlying Earnings haven't grown you can't increase dividends
Hope Brent conjures something up and says Interim Dividend is at least 2.5 cents (LY 2.1 cents)
But then with the huge cash burn they have they really shouldn't be paying a dividend in the first place
Hadn't really looked at their segment (care/village) reporting over the years
Just had a look at what they've reported as Care Underlying EBITDA over the years - Underlying EBITDA seems to be the preferred profit measure they use for segment reporting
Jeez, Care Underlying EBITDA has been trending down since they listed - reported $31.9m in FY17 - FY22 was only $20.3m - yep about 30% less now than 5 years ago.
Revenues up 6% pa (including the much touted increase in premium fees) but expenses have gone up 9% pa - that's no way to run a business
Not good but then I fully expect to be told I 'just don't get it'
Wonder what's happened in soon to be reported half year
While practising travel packing, staying in hotels close to airports,swimming in hotel pools and preparing for the bording of air liners we missed this gem....
"below fair value of 64"
has anyone crossed posted this to that other place where the thought police live?
where are the emoji's ....?
Interesting that OCA threads on both NZ Forums contain the most posts in recent years...
Many words, many hours of discussion, many hours of justifications.......
However, quantity does not equate quality.
A classic dividend trap IMO.
Ahhhh.... If only the company capitalization was related to forum emotion... boom times ;D
:'(
[/quote] =msg=3938 date=1667682841]
Ahhhh.... If only the company capitalization was related to forum emotion... boom times ;D
[/quote]
There is ....but a negative relationship :-\ :) ;D 8) :-*
PEB and Plexure/Task are other great examples
Hit a new 1 year low....78c.
Indeed. I sold out recently from all my RV stocks. Just don't see the light at the end of the tunnel with house prices falling and now the large pay increase to the already better paid Australian nurses/carers. From memory more than half of our carers/nurses are foreign migrants, I imagine their loyalty can be bought quite easily and therefore will put further pressure on NZ employers to raise wages.
Quote from: winner (n) on Nov 04, 2022, 11:32 AMOCA not as bad as My Food Bag - they down 25% in same period
Humor me mate. There could be something to be learned here comparing train wrecks, a free lesson. Which has the less ugly medium-term prospects going forward?
MFB down 60% since September 2021 and OCA now halved since I started selling in the same month. Absolutely massive destruction in value in less than 14 months on both counts. Interesting question though, which disaster is potentially the more salvageable situation in the medium term if one was to now have a speculative punt?
Quick look on direct broking shows a 12% yield for MFB but that's not all, its fully imputed !...so 16.7% gross. Okay, probably not sustainable while we're going through a cost-of-living crisis but on a look through the pending recession / cost of living crisis maybe it's almost worth a punt for yield? Maybe consumers won't always be in a cost-of-living crisis and will start ordering again in a big way at some stage? Could be a dark horse and get up for a place at long odds, you never know ?
On the other hand, I think it's clear there's no letup in the rapidly escalating costs of providing care and with real estate tanking this just looks like a hole that gets deeper and darker every year going forward. The way I see it care is like a horse mired in quicksand...there's no escaping it and if you have too much of it in the business model it drags everything down into the mire. No way that changes any year soon which makes OCA a horse punters should avoid as its almost certain to run donkey last in the retirement sector race which as I see it is really just a race to see who does the "least worst" of the sector in the next two years. Kind of like a backwards horse race. The horse that goes backward the least is the winner...but why punt at all in that race on any horse in it ?
Finally, comparing this to another train wreck Harmoney, (why not compare 3 wrecks just for fun) see my comments in the first 6 pages in the other place, but post 39 sums it up from February 2021 when the share price was ~ $A2.50 "
Lending money to people unsecured is a recipe for disaster regardless of the interest rate charged. I think their business model is fundamentally flawed so wouldn't be an investor at any price". That's another train headed even deeper into trouble burning up money like there's no tomorrow. Very soft and muddy track they're on there with rapidly rising consumer delinquency during the cost of living crisis.
They way they're burning through capital it could be off to the glue factory with that nag sometime in the next year or two. Best hope is a massive transfusion of new capital at some deeply discounted price and hope to nurse that nag through the next year or two.
I reckon there's always a lesson from watching each train wreck and another lesson again when you compare them. Nardia has the X factor, what have the others really got ? Pretty sure the next episode of Nardia's farm is on tonight. P.S. Looking at the chart of MFB it looks like its threatening to break up through the 30 day moving average line. Have we just stumbled upon a donkey worth punting on ?
Quote from: Basil on Nov 03, 2022, 06:10 PMCould quite easily overshoot on the downside below my assessed fair value of 64 cents but I think another visit below 40 cents is very unlikely.
Sorry, I can't help my obsession with slow motion train wrecks...
I thought at the time that 64c was unlikely. Looks feasible now though.
My 20% stop loss hit so I'm out at $0.80
Quote from: Shareguy on Nov 09, 2022, 08:25 PMI thought at the time that 64c was unlikely. Looks feasible now though.
Highly likely to overshoot on the downside. Go into any care facility anywhere and you'll see the majority of workers are immigrants. When my Dad was at Ryman with Dementia the entire facility was staffed with Filipino workers. Many care facilities are closing because they're losing a lot of money or simply cannot get the staff they need. Its hard to imagine that we're not headed for a real late stage care crisis of epic proportions in N.Z.
https://www.abc.net.au/news/2022-11-09/is-15-per-cent-pay-rise-for-aged-care-workers-enough/101631292
With significantly higher wages in Australia, a more open entry system, a 15% increase just announced and hopes of another 15% next year its beats me why any caregiver would choose to come here instead of Australia ? The only option seems to be for retirement villages to increase wages a lot more despite the Govt's pathetic funding rate adjustment at less even than the rate of inflation) and cross subsidise the cost of the care with profits from the independent living unit sales.
That's not going to be massively impactful for those companies in this sector that only have a small portion of their business as care, such as SUM and ARV but it will really hurt RYM in my opinion, and is shaping up to really undermine the viability of OCA going forward. The market is a forward looking beast and I think its really starting to wonder about whether the rising care costs might not just soak up ostensibly all future DMF gains like it has for years now, but whether the chronic seriousness of underfunding of care starts to send earnings into decline not just in inflation adjusted terms like they have already fallen 17% over recent years, but in absolute nominal eps terms as well. Its clear this Government are more than content to sheet the underfunding problem home to the shareholders of retirement village companies and let the hopelessly overrun health system deal with the overflow of old aged folks from smaller facilities that have had to close.
I think the hardest thing for some investors to get their head around is they keep thinking it must be cheap because of the theoretical discount to NTA last reported as $1.32. The thing is if the vast majority of those assets are earning pitiful returns then NTA becomes an entirely inappropriate yardstick.
Who would want to take over a company like this with deep systemic issues that appear baked in and unresolvable?
64 cents assumed a no growth eps of 8 cps and a commensurate no growth PE of 8. If earnings are going to go into decline (and I think there's a real chance they might), then quite aside from the common occurrence of shares in a steep decline falling below fair value its clear fair value needs to be questioned as well.
Others seem to think that the increasing DMF revenue will be the panacea for all ills the company. I remain deeply skeptical. (Occupational hazard of bean counters is they need to see the evidence before believing it) There's now a half decade track record of extra costs soaking up all the DMF gains and it appears costs are now growing at an even faster rate so the odds on this well-established pattern of no growth changing any year soon look increasingly remote. Indeed, one would be foolish not to consider the possibility of earnings per share going into decline this year. If costs are going up at a rate north of 10%, as I suspect they are, and Government funding is only covering half that increase quite clearly the situation is getting worse every year.
What does one look for as a sign that there is something here to pique one's interest ? Well apart from a further significant fall in the share price AND clear chart evidence the share price is likely to have bottomed out, (not expected that anytime soon), I think a Mea Cupla admission that returns on care are simply not acceptable and a major change of strategy aimed at reducing the considerable stockpile of unsold care suites would be a good start. For example, if on 23 November they said something like, look, all future village development plans and unsold stock units are under review with renewed focus on how we can shift more quickly towards more independent living units...that might be a start in a VERY long journey...
What's to stop them having for example, two thirds of their new apartments at the Milford village as ILU's rather than the whole 113 (from memory) new units supposedly delivered last half as care suites ? I reckon the directors need to start thinking outside the box and do something serious about improving future returns rather than endlessly waxing lyrical about their ESG initiatives. I doubt anything will change and I am of the opinion it is likely that underlying earnings per share in real inflation adjusted terms decline this year. The sell down of the Helier in FY24 should temporarily arrest the eps decline but where to from there in FY25 is quite frankly anyone's guess but its hard to imagine the real estate decline and ever increasing cost problem are issues that will be resolved in the near term. Maybe 2024 sees the bottom of the real estate market so that stops that problem for OCA in FY25 but I honestly have no idea how they are going to solve their ever-worsening problem with care costs.
Great post Basil.
What a disappointment this company's share price has been. We don't have long to wait to find out just how things are.
There has been no disclosures made, so is this just sentiment or are their cockroaches waiting to show themselves.
I am constantly hearing reports in the media of "doom and gloom" in the property market. In my opinion they are exaggerated, factless and without merit. Yes they are declining but after such a ridiculous gain last year are we surprised.
Figures from QV show the average house price in NZ went up 28.2 percent in 2021. Til the end of October 2022 QV says that the average is down 9.7 percent lower than at the start of this calander year.
https://www.qv.co.nz/news/qv-house-price-index-october-2022-double-digit-declines-growing-2022-ticks-away/#:~:text=for%20the%20quarter.-,The%20latest%20QV%20House%20Price%20Index%20shows%20the%20average%20home,average%20decline%20nationally%20of%209.7%25.
As Basil points out the care side of the business is a real concern. How bad things are will hopefully soon be revelled.
Half year is on the 23 of this month. Will wait till the results are announced before I decide next move. The truck is semi full. In the meantime I am strengthening the chassis's in readiness to back the truck up.
It is cheap though Shareguy ? I look at this is a property company as that's where the real coin is.
I think its relevant to compare to not only other retirement village companies but also to other classes of property, i.e. other property companies and I can't help myself compare it to KPG seeing as they have exactly the same last reported NTA of $1.32.
Few weeks ago I added some KPG at 86 cents, (both KPG and OCA were very close in price at the time) and made the case in that thread that for 33% taxpayers I'm getting ~ 10% gross yield AND a decent discount to NTA. (KPG is a P.I.E. so quarterly dividends are fully tax paid in investors hands).
By comparison at the time OCA offered a ~ 5% yield and the same level of discount to NTA. Sure OCA retain more of their earnings but where's that got them so far ? Interestingly I note OCA would need to get down to 44 cents to offer the same yield as KPG. Hmmm
Obviously these are two different asset classes within the property sector and two very different business models but the real standout key difference I see between the two is KPG is free to run their business as they see fit with minimal Govt interference such that ALL their assets are in a position to earn a proper commercial return. On the other hand OCA has more than half their assets employed within the care sector and the Government have basically thrown all those assets under the bus. https://www.newshub.co.nz/home/politics/2022/11/jacinda-ardern-grant-robertson-react-to-pictures-of-them-in-80s-as-aged-sector-calls-for-more-funding.html
REINZ figures for October will be out in the next few days and will be interesting.
Quote from: Plata on Nov 09, 2022, 02:43 PMIndeed. I sold out recently from all my RV stocks. Just don't see the light at the end of the tunnel with house prices falling and now the large pay increase to the already better paid Australian nurses/carers. From memory more than half of our carers/nurses are foreign migrants, I imagine their loyalty can be bought quite easily and therefore will put further pressure on NZ employers to raise wages.
While selling low is a safe recipe to turn a large fortune into a small one ... hey - its just money, isn't it? Do you expect the retirement sector to go bankrupt or do you want more powder to pick the bottom?
Anyway - good luck with your other investments.
Just wondering, where do you expect retirement stock to sit in 5 or 10 years from now when no doubt all the retired people are gone and nobody needs them anymore ;p ;
Quote from: BlackPeter on Nov 10, 2022, 12:06 PMWhile selling low is a safe recipe to turn a large fortune into a small one ... hey - its just money, isn't it? Do you expect the retirement sector to go bankrupt or do you want more powder to pick the bottom?
Anyway - good luck with your other investments.
Just wondering, where do you expect retirement stock to sit in 5 or 10 years from now when no doubt all the retired people are gone and nobody needs them anymore ;p ;
I don't think it will go bankrupt or anything like that, I just think the headwinds it faces in next few years (namely house price falls and care staff shortages) will mean there is not much opportunity to be had here at the moment. I also don't think the price I sold out at will be the bottom, not that I intend to buy back in. Staff shortages are already starting to close facilities, and I don't see that problem getting better in the next 2 years especially with the generous pay rises to be had in Australia. I was hopeful that the increased build rate and the commissioning of the Hellier would lead to a pretty decent result, but I am not willing to take the risk anymore that OCA can keep costs down especially in the current environment.
I'm sure the RV sector will be up in 5 or 10 years time, but I don't consider my understanding of the sector or its constituents to be greater than the average market participant, and on that basis don't feel it is worth the time effort or risk to hold them vs having the money in an ETF or something I better understand. I am also highly suspicious of RV stocks being labelled a bargain right now, given what appears to be quite low interest from institutions. Do retail investors outperform institutions?
I see Salt's Long Short Fund has Ryman as their largest SHORTS and SUM as one of their largest LONGs
Methinks they just having a bob each way
Quote from: winner (n) on Nov 11, 2022, 10:14 AMI see Salt's Long Short Fund has Ryman as their largest SHORTS and SUM as one of their largest LONGs
Methinks they just having a bob each way
Looking at their respective growth rates in recent years and comparative premiums to NTA I would say that's a superb execution of a sound long-short strategy. It beautifully hedges out the market risk, sector risk, shorts the higher care business model, (which is where the real pressure is and likely to remain so indefinitely), against the lower care one, shorts the high premium to NTA against the lower premium and shorts the lower growth against the higher growth company. This is long-short stuff at its best. The only better strategy I could think of is short OCA and long SUM.
Quote from: winner (n) on Nov 11, 2022, 10:14 AMI see Salt's Long Short Fund has Ryman as their largest SHORTS and SUM as one of their largest LONGs
Methinks they just having a bob each way
Haha, pretty sure that's been the case for the last 5 years if you look back.
Quote from: Plata on Nov 10, 2022, 12:37 PMI don't think it will go bankrupt or anything like that, I just think the headwinds it faces in next few years (namely house price falls and care staff shortages) will mean there is not much opportunity to be had here at the moment. I also don't think the price I sold out at will be the bottom, not that I intend to buy back in. Staff shortages are already starting to close facilities, and I don't see that problem getting better in the next 2 years especially with the generous pay rises to be had in Australia. I was hopeful that the increased build rate and the commissioning of the Hellier would lead to a pretty decent result, but I am not willing to take the risk anymore that OCA can keep costs down especially in the current environment.
I'm sure the RV sector will be up in 5 or 10 years time, but I don't consider my understanding of the sector or its constituents to be greater than the average market participant, and on that basis don't feel it is worth the time effort or risk to hold them vs having the money in an ETF or something I better understand. I am also highly suspicious of RV stocks being labelled a bargain right now, given what appears to be quite low interest from institutions. Do retail investors outperform institutions?
Fair enough - I am sure there will be plenty of other opportunities to make money over the coming years. Having said that, I am long in both OCA as well as RYM.
Admittedly - I am not interested whether my holdings correlate with any institutions. The thing is, institutions are not better in predicting the future than anybody else.
I remember when CBI Insurance went broke, it had a number of institutional investors (ACC and Jarden are just two of them).
I remember plenty of funds (incl Fisher Funds, but it was a mass hysteria) buying into XRO when the SP was much higher than now.
I remember the infallible Infratil investing millions into a number of European Airports, which they afterwards sold for one dollar (or was it one Euro or Pound)?
Institutions get it sometimes right and sometimes wrong. As anybody else, they are fallible and not able to predict the future.
Better DYOR.
Confession time one week away and apart from the brief big dipper of March-April 2020 when Covid first hit this trades at an all time low.
Some contrition that their current strategy isn't really working well for shareholders would be a good start, but I guess that's too much to ask...
Quote from: Basil on Nov 16, 2022, 03:01 PMConfession time one week away and apart from the brief big dipper of March-April 2020 when Covid first hit this trades at an all time low.
Some contrition that their current strategy isn't really working well for shareholders would be a good start, but I guess that's too much to ask...
Ryman results tomorrow could be a bit of an indicator to how OCA have gone. Hope Ryman upbeat with big increase in profits ...set the tone.
Quote from: winner (n) on Nov 17, 2022, 08:23 AMRyman results tomorrow could be a bit of an indicator to how OCA have gone. Hope Ryman upbeat with big increase in profits ...set the tone.
Very different companies with RYM having far lower exposure to loss making care services.
That said, I wouldn't give you a single cent above NTA for a RYM share. One takeaway we learn from RYM, the process whereby former market darlings revert to fair value is one that moves at glacial pace.
Quote from: Basil on Nov 17, 2022, 10:24 AMVery different companies with RYM having far lower exposure to loss making care services.
That said, I wouldn't give you a single cent above NTA for a RYM share. One takeaway we learn from RYM, the process whereby former market darlings revert to fair value is one that moves at glacial pace.
If Ryman full of gloom and despondency tomorrow and share price falls a fair bit no doubt OCA will follow .... unless the OCA story on Tuesday is bright and bubbly and all good things
Fbar expectations for tomorrow. Do we agree?
Figure 3. Key 1H23 earnings expectations
1H22 1H23
% change
Care fees 86.5 89.7 4%
Care DMF 7.0 10.1 44%
Village DMF 15.6 17.9 15%
Village fees 5.1 5.6 10%
Resale gains 10.6 14.4 35%
New sale gains 15.3 17.3 13%
Other 1.0 0.5 -48%
Total revenue 141.1 155.5 10%
Total costs 104.3 111.7 7%
EBITDA 36.8 43.8 19%
Depreciation & amortisation 9.9 10.3 4%
EBIT 26.9 33.5 24%
Underlying profit 27.6 32.1 16%
Annuity EBITDA 21.5 26.5 23%
EPS (cents) 3.9 4.5 15%
DPS (cents) 2.1 2.0 -5%
Source: Forsyth Barr analysis, Company reports
Looks like they have been talking to Maverick lol
Cost increases are likely to eat "almost all" or all of the revenue gains which is a well entrenched pattern going back years. I continue to believe its a no growth stock until they can prove otherwise.
Results out and apparently it is all about 'Premiumisation' (word of the day)
https://www.nzx.com/announcements/402826
Not good.
Interesting 'word of the day' though.
Result as I expected given the period we are in, don't see the sp changing much given it has been trashed to death already. At least we haven't got that trolling bull numpty posting on this site like that other place.
Red flag for me is "Oceania CFO, Kathryn Waugh, added "By starting to link its borrowings to its sustainability vision, Oceania is committed to driving its performance even further and with greater ambition." All this "sustainability" and "social goals" is a massive distraction to their key responsibility of making money for shareholders. Bad enough when they meddle with free cash. But totally irresponsible to be doing it on debt.
Some rather impressive figures on page 29 of the presentation.
Average development margin 32.2%
Average resale margin...........22.7%
Average resale gain per unit/care suite $99,613.
Quote from: lorraina on Nov 23, 2022, 09:27 AMSome rather impressive figures on page 29 of the presentation.
Average development margin 32.2%
Average resale margin...........22.7%
Average resale gain per unit/care suite $99,613.
Yep some good stuff in there but there are some that only want to see the bad, they need more hobbies I reckon.
I have correctly called this as a no growth company for a VERY long time now.
Numbers that stand out to me.
Operating cash flow down from $52.5m to $31.4m
New unit sales on 61 compared to 101 in PCP, (no inroads into their massive mountain of unsold care suites, actually got a lot worse during the period with 127 more built).
The Helier now running behind schedule, now talking first apartments in March 2023, the rest in FY24
DMF and PAC revenue up 18% but as usual the multi year track record of residents, staff, management and directors eating all the gains continues, (no surprises there !)
NAV down from $1.38 as at March 2022 to just $1.34 now so when its all said and done they lost 4 cps this half, less dividend paid of just over 2 cents in this period so net comprehensive loss of just under 2 cps
Recorded statutory eps down from 5.3 cps to just 1.6 cps
Debt climbed from $380m in March to an astonishing $498.5m as at September...oh my goodness !
Interest rates on debt now in the range of 3.81% - 6.08% compared to last year 2.48% - 2.64% so not only has debt climbed a lot interest rates on it have as well.
Occupancy down, dividend down...I could go on but I think you all know already I think this is a dog.
Going forward their modus-operendi appears to be borrow more and build more....this at a time when real estate is falling, sales volumes are falling and we appear to have a real glut of care suites on the market.
Growth company ?...where's my Tui ? Others will see what they want to see and good luck to them.
Got a real fancy new hobby Kasper...heading out on it again on Friday.
Debt to (Debt + Equity) up 34% from 29%
RYM had a ratio like that not that long ago
Quote from: Shareguy on Nov 22, 2022, 10:16 AMFbar expectations for tomorrow. Do we agree?
Figure 3. Key 1H23 earnings expectations
1H22 1H23
% change
Care fees 86.5 89.7 4%
Care DMF 7.0 10.1 44%
Village DMF 15.6 17.9 15%
Village fees 5.1 5.6 10%
Resale gains 10.6 14.4 35%
New sale gains 15.3 17.3 13%
Other 1.0 0.5 -48%
Total revenue 141.1 155.5 10%
Total costs 104.3 111.7 7%
EBITDA 36.8 43.8 19%
Depreciation & amortisation 9.9 10.3 4%
EBIT 26.9 33.5 24%
Underlying profit 27.6 32.1 16%
Annuity EBITDA 21.5 26.5 23%
EPS (cents) 3.9 4.5 15%
DPS (cents) 2.1 2.0 -5%
Source: Forsyth Barr analysis, Company reports
Underlying profit forecast 32.1 .......actual 27.8
Bit of a miss there Forbar
Mind you I missed by a lot more ...major underestimation of how many sales they made ...was buoyed by ASM comment things were going well after 2 months. Didn't expect sales to go backwards from then
N.
Quote from: winner (n) on Nov 23, 2022, 10:25 AMUnderlying profit forecast 32.1 .......actual 27.8
Bit of a miss there Forbar
Mind you I missed by a lot more ...major underestimation of how many sales they made ...was buoyed by ASM comment things were going well after 2 months. Didn't expect sales to go backwards from then
N.
$40m your forecast v $27.8m Hmmm...my goodness mate, I am sorry but that's a real shocker !
I think you and many others have been lulled into a trance by the "Pied Piper" on the other forum.
Market has spoken and is unimpressed. Lots more pain to come in this downturn for all retirement village companies, even the real blue chip one SUM. (RYM has lost its blue chip status in my opinion)
OCA will keep building more care suites and keep not being able to sell them and debt will keep going up...(limit increase this period)....and appear to be taking a build it and they will come approach that's simply not working.
Yes basil "$40m your forecast v $27.8m Hmmm...my goodness mate, I am sorry but that's a real shocker !"
Forecasts often enthusiastically optimistic
Look at it this way ......read the presentations etc and it's all so so positive and hunky dory like so I see it just as a timing difference ...I'm only six months out as full year numbers will be all OK
Quote from: Basil on Nov 23, 2022, 10:48 AM$40m your forecast v $27.8m Hmmm...my goodness mate, I am sorry but that's a real shocker !
I think you and many others have been lulled into a trance by the "Pied Piper" on the other forum.
Market has spoken and is unimpressed. Lots more pain to come in this downturn for all retirement village companies, even the real blue chip one SUM. (RYM has lost its blue chip status in my opinion)
OCA will keep building more care suites and keep not being able to sell them and debt will keep going up...(limit increase this period)....and appear to be taking a build it and they will come approach that's simply not working.
There was another barking "Pied Piper" that not that long ago proclaimed that this stock was the best thing since sliced bread and one of the best value plays on the NZX, nuff said.
With a few extra shares seems underlying earnings per share about same as last year
Wonder what target growth to get the incentive is?
Quote from: kasper on Nov 23, 2022, 11:03 AMThere was another barking "Pied Piper" that not that long ago proclaimed that this stock was the best thing since sliced bread and one of the best value plays on the NZX, nuff said.
Market conditions have changed dramatically since me being bullish which was a
long time ago.
Much easier to swim with the tide than against it.
QuoteLook at it this way ......read the presentations etc and it's all so so positive and hunky dory like so I see it just as a timing difference ...I'm only six months out as full year numbers will be all OK
Great story...growth is coming, just have patience. Problem is I have heard that story with OCA so many times now I have lost count. I ran out of patience last year and dumped most of my holding at around $1.40. Kept a few hoping those lulling others into a trance might be right but smelled the coffee and dumped them earlier this year at ~ $1.04 when I called time on this flea ridden mutt.
The ugly truth is they face enormous ongoing systemic issues with rapidly rising care costs that are vastly underfunded, and this situation gets worse every year. What's even worse is this situation is unresolvable in the foreseeable future. They keep trying to solve the problem with building more care suites but they're building a mountain of them and they're VERY slow selling. My prognosis in this sector is the lower the percentage of care in your business model the better. I see this underperforming the sector and this sector underperforming the market with strong headwinds readily apparent.
Still determined and brave enough to allocate fresh capital to this sector and do some bottom picking for value ? Good luck with that I reckon but you might like to have a look at ARV's significant discount to NTA, (very similar to OCA's discount to NTA) and consider that only a small part of their business (about 28%) is care.
Disappointing result. Well it was not going to be flash, but I think even the most positive have been surprised.
Spoke to my broker this morning who says
Still a great sector with not enough supply forecast to meet demand in years ahead. House prices on the turn next year. Large increasers in buildings costs across the board.
Thinks sediment with US markets has turned positive with inflation peaked. Wonders with our low dollar that a number of our companies will look attractive from and M and A perspective.
Thinks Ryman currently the most undervalued stock on the NZX.
Interesting that the valuer has hardly moved his growth rates, discount rates and cap rates at all despite bond yields increasing how much in the last 6 months?? (page 20 of the preso)
He must reside in some alternate reality.
Quote from: Basil on Nov 23, 2022, 11:10 AMThe ugly truth is they face enormous ongoing systemic issues with rapidly rising care costs that are vastly underfunded, and this situation gets worse every year. What's even worse is this situation is unresolvable in the foreseeable future. They keep trying to solve the problem with building more care suites but they're building a mountain of them and they're VERY slow selling. My prognosis in this sector is the lower the percentage of care in your business model the better. I see this underperforming the sector and this sector underperforming the market with strong headwinds readily apparent.
The ugly truth for you is that, despite this result being very underwhelming to say the least, the best news story is the care segment performance on page 21 so your favourite whipping boy isn't ringing true in this result.
Care suites are performing well - DMF is solid, EBITDA before dev margin and resale gains is up.
It's new sales activity that is ropey in this result (and across the sector, unsurprisingly).
According to you care suites are performing well but they had about 350 unsold at the previous report, added 127 more but only sold 61 new units (not all of which are care suites), so at the current new sales rate they have about 4 years of stock of unsold care suites. Notice the occupancy down as well ?
I sold some at $1.58, most of the rest at $1.40 and cleaned the remainder out at $1.04. Obviously I am new at this and need your help 😜
Bottom line is no matter how you slice and dice it most were calling for an increase in profits and I said it would be another flat result on an underlying basis which it is. Right again. NAV went backwards 4 cents from $1.38 to $1.34 so on an all inclusive basis NAV to comparative NAV they lost about 2 cents per share of value this half after paying the dividend. That's quite an "achievement". Interesting to compare that "achievement" with RYM that managed to nicely increase their NTA this half and grow underlying earnings 44%.
Debt ballooning up towards half a billion but let's increase the debt limit even with much higher prevailing interest rates and build more care suites we can't sell. What could possibly go wrong 🤦
Quote from: Basil on Nov 23, 2022, 02:26 PMAccording to you care suites are performing well but they had about 350 unsold at the previous report, added 127 more but only sold 61 new units (not all of which are care suites), so at the current new sales rate they have about 4 years of stock of unsold care suites. Notice the occupancy down as well ?
I sold some at $1.58, most of the rest at $1.40 and cleaned the remainder out at $1.04. Obviously I am new at this and need your help 😜
Bottom line is no matter how you slice and dice it most were calling for an increase in profits and I said it would be another flat result on an underlying basis which it is. Right again. NAV went backwards 4 cents from $1.38 to $1.34 so on an all inclusive basis NAV to comparative NAV they lost about 2 cents per share of value this half after paying the dividend. That's quite an "achievement"
Debt ballooning up towards half a billion but let's increase the debt limit even with much higher prevailing interest rates and build more care suites we can't sell. What could possibly go wrong 🤦
I don't think you do yourself any favours by continuously reminding everybody what price you sold at and why you spend so much of your time talking about a stock you hate and don't own is hard to fathom.
Well I guess if you had of listened to me you wouldn't be in the hole you're in.
Some people try and help others on here by sharing insights on shares they don't own.
If every thread was just full of people pumping each others tyres on shares they own what a boring place a forum would be.
Quote from: Basil on Nov 23, 2022, 02:38 PMWell I guess if you had of listened to me you wouldn't be in the hole you're in.
Some people try and help others on here by sharing insights on shares they don't own.
If every thread was just full of people pumping each others tyres on shares they own what a boring place a forum would be.
Time to ask yourself how many people have bought stocks on your recommendation and found themselves in various holes only to find you have sold out in the meantime?
"what could possibly go wrong"
when you step back and look at the last 12 years........
biggest increase in reserve bank balance sheets in history.... EVER?
look at the SP5.... see anything?
nothing to see right?
maybe the B Man is saying .....
stop, look, listen.... https://www.youtube.com/watch?v=GeAxvT62l6o
and what could go wrong ... well everything really and at any time....
https://www.youtube.com/watch?v=T2IaJwkqgPk
As for laying blame im afraid its "caveat emptor".
Dont blame someone else for your own investment decisions as they are always in the end your own.
Quote from: Waltzing on Nov 23, 2022, 02:54 PM"what could possibly go wrong"
when you step back and look at the last 12 years........
biggest increase in reserve bank balance sheets in history.... EVER?
look at the SP5.... see anything?
nothing to see right?
maybe the B Man is saying .....
stop, look, listen.... https://www.youtube.com/watch?v=GeAxvT62l6o
and what could go wrong ... well everything really and at any time....
https://www.youtube.com/watch?v=T2IaJwkqgPk
As for laying blame im afraid its "caveat emptor".
Dont blame someone else for your own investment decisions as they are always in the end your own.
Well hello Basils sidekick.
Investing off the information posted on forums is a very bad idea.
However interesting information can be gained to be placed against your own personal views.
But a broker once said always remove the emtion from your investment decisions and never play the players always the ball.
Skate to where the puk is going to be not where it is.
https://www.youtube.com/watch?v=zWtha_SVCjg
Quote from: Waltzing on Nov 23, 2022, 03:59 PMInvesting off the information posted on forums is a very bad idea.
However interesting information can be gained to be placed against your own personal views.
But a broker once said always remove the emtion from your investment decisions and never play the players always the ball.
Skate to where the puk is going to be not where it is.
https://www.youtube.com/watch?v=zWtha_SVCjg
Well if thats the case you should be loading up on this and the other retirement sector stocks and getting your ice skate blades sharpened in readiness.
Back to OCA (but I feel it is only right that I go on record and say that I always post very very quickly after I have exited any position over the years).
Note 3.3 from the accounts is very interesting
Quote3.3 Held for Sale
Assets are classified as held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable.
They are stated at the lower of carrying amount and fair value less costs to sell, except
for investment property assets held for sale which are carried at fair value.
As at 30 September 2022 ten sites are being actively marketed for sale and as such meet
the definition of held for sale. These sites and their respective land, building, investment
property, plant and equipment and liabilities have been reclassified for
reporting purposes.
Changes in fair value from the date of classification to held for sale are recognised in
comprehensive income.
See note 3.4 for resident liabilities associated with these held for sale assets.
$NZ000's Notes
Unaudited
Sept 2022
Audited
Mar 2022
Opening balance - -
Transfer from investment property 3.1 34,833 -
Transfer from property, plant and equipment 3.2 31,996 -
Additions 500 -
Change in fair value during the period (2,545) -
Closing balance 64,784 -
With thanks to Ronaldson from the other site for pointing out note 3.3 in the accounts.
10 sites are held for sale as at 30 Sept, (as at March 2022 none)
If my memory serves me correctly, they sold about 5 uneconomic sites a couple of years ago for peanuts.
So about 15 really poor villages were included with the IPO that never had a chance of giving a decent commercial return. Hmmm Investors sold a pup?
Its one thing to list 10 villages at book value and quite another thing to try and sell them on this market!
With RBNZ balance sheet over loaded and T1 capital ratios about to be the highest in the "WORLD" NZ is a high risk market in all sectors.
This is not to mention the macro prudential board in the hands of Dervan and others one wonders what brakes they apply next to lending on capital markets.
Sector may not recover for a long time if OCR rates remain high due to the RBNZ over cooking the market by a factor its never had to endure before in it's history.
CI.
Quote from: kasper on Nov 23, 2022, 02:48 PMTime to ask yourself how many people have bought stocks on your recommendation and found themselves in various holes only to find you have sold out in the meantime?
I hope kasper you have not fallen into the same trap as your A2 investment, failure to acknowledge the change in the wind cost you big time.
Certainly I would think once it became clear our monetary policy was changing and was going to damage the real estate market that the retirement sector was going to take a hit was blatantly obvious.
I suspect the sector is in for an extended patch of no so great numbers. Building and development costs have gone crazy but it is somewhat harder to sell a house and one could expect a lot less, completely different playing field.
Don't get me wrong I like the sector but not the time to be holding or buying.
The down turn in numbers were somewhat foreseeable and are just starting to appear now and IMO only going to get worse.
Well said Snapiti. Interestingly Balance, who correctly called the top in ATM and is involved with the property development sector, in the other place posted today he reckons this is just the first year of the property down cycle and it could last up to 5 years! :o
Worryingly, with the current state of the market and the clear direction downwards and with all players in the RV sector being impacted by slowing sales and real pressure on cash flows who is going to use up precious cash reserves or their diminishing lines of bank credit to buy 10 cast-off third-rate villages that OCA don't want anymore?
Quote from: Basil on Nov 23, 2022, 06:28 PMWell said Snapiti. Interestingly Balance, who correctly called the top in ATM and is involved with the property development sector, in the other place posted today he reckons this is just the first year of the property down cycle and it could last up to 5 years! :o
Worryingly, with the current state of the market and the clear direction downwards and with all players in the RV sector being impacted by slowing sales and real pressure on cash flows who is going to use up precious cash reserves or their diminishing lines of bank credit to buy 10 cast-off third-rate villages that OCA don't want anymore?
Orr's mandate right now is to push down inflation and increase the unemployment rate......every other show, including the property market, is just a casualty of that war.
I can see 30% coming off the peak in residential property, can see the NZX being banged up as well.....won't be long and you will be able to get 5% for cash in the bank.
Beagle you are well researched, do you know out of SUM,OCA,RYM who is the most leveraged
Quote from: snapiti on Nov 23, 2022, 06:57 PMOrr's mandate right now is to push down inflation and increase the unemployment rate......every other show, including the property market, is just a casualty of that war.
I can see 30% coming off the peak in residential property, can see the NZX being banged up as well.....won't be long and you will be able to get 5% for cash in the bank.
Beagle you are well researched, do you know out of SUM,OCA,RYM who is the most leveraged
RYM are the most heavily leveraged mate.
Paywalled but interesting to note RYM down a whopping 22% just in the last 4 trading days! (Called by guess who as looking quite vulnerable in the low $8 range very recently).
https://www.nzherald.co.nz/business/market-close-nz-shares-fall-on-reserve-banks-hawkish-mood/6EH5UJEJH5APZCI2F6R37MUZKY/
Noted in this article that their market cap is now basically the same as their debt, both around $3 Billion, so getting basically 50/50 debt equity or not far off it. ARV and SUM have the strongest balance sheets with gearing in the mid - late 20% range. OCA approx mid 30's.
Funding costs for floating rate debt which a lot of these companies have is absolutely going through the roof. We're not done yet, another 75 bps on the cards for February and more after that. OCA's debt jumped from $380m as at 31 March to a whopping $498.5m as at 30 September. That's real growth for ya but not the sort of growth you want :o
a developers worst nightmare, rising build and development costs, rising leveraging costs and a downturn in the market (longer to sell and for less)
Happy to sit on the sidelines and watch Orr do his thing
Agreed. Happy to sit on the sidelines too. "Blind Freddy" can see the tide is going out in this sector and in the property development game generally. From memory OCA's current fixed price construction contracts, (which is what's behind their good current development margins of ~ 32%) only run for about another year. When they start seeking construction tenders for new villages after that they're in for a HUGE shock.
After reviewing the result, I have downgraded my target price to 60 cents. Remaining with a SELL and if you can borrow the scrip, SHORT !
Quote from: Basil on Nov 23, 2022, 11:10 AMMarket conditions have changed dramatically since me being bullish which was a long time ago.
Much easier to swim with the tide than against it.Great story...growth is coming, just have patience. Problem is I have heard that story with OCA so many times now I have lost count. I ran out of patience last year and dumped most of my holding at around $1.40. Kept a few hoping those lulling others into a trance might be right but smelled the coffee and dumped them earlier this year at ~ $1.04 when I called time on this flea ridden mutt.
The ugly truth is they face enormous ongoing systemic issues with rapidly rising care costs that are vastly underfunded, and this situation gets worse every year. What's even worse is this situation is unresolvable in the foreseeable future. They keep trying to solve the problem with building more care suites but they're building a mountain of them and they're VERY slow selling. My prognosis in this sector is the lower the percentage of care in your business model the better. I see this underperforming the sector and this sector underperforming the market with strong headwinds readily apparent.
Still determined and brave enough to allocate fresh capital to this sector and do some bottom picking for value ? Good luck with that I reckon but you might like to have a look at ARV's significant discount to NTA, (very similar to OCA's discount to NTA) and consider that only a small part of their business (about 28%) is care.
9th of May 2022 not that long ago.
"where did I put the keys to the truck...got to be good buying at anything under $1.15
Rating upgrade announced. BBB Beagle busy buying."
Seems like a lifetime ago, its been a LONG year in the markets. I took a small number extra onboard hoping for a good result later in May 2022. The result disappointed and I posted this on 23 May 2022, (only 2 weeks later) and sold out completely, very shortly thereafter.
QuoteAnnual Review.
Positives
1. The new acquisitions at Remuera and Bream bay are the stand out positive feature of 2022 as the Remuera acquisition in particular is highly likely to be underlying eps accretive and there's plenty of room for future development at Bream Bay.
2. That together with negotiating more funding headroom for future acquisitions is a material and notable achievement for 2022.
3. The review of the development portfolio and planning to achieve an increased build rate going forward is also a good positive.
4. Enduring another year of Covid without any material slippage in underlying eps of just a fraction under 8.0 cps is a satisfactory result considering the extremely challenging environment both on an operating level as well as in a political environment that's clearly unhelpful to the sector.
Negatives
1. The longstanding issue with staff costs rising much faster than operating revenue continues and in fact has got worse this year than ever before.
Total employee costs compared to last years annualized figure are up a staggering 12.65% substantially worse increase that the systemic long run average of 7-8% increase per annum.
2. The repayment of the wage subsidy of $1.8m is completely illogical considering the Govt's systemic underfunding of basic care services and is a very poor decision in my opinion.
3. Even backing out the wage subsidy repayment staff costs increased 11.3% against Rest Home and hospital care fees only up 5.3%.
4. Importantly Government funding is unchanged on the year !
5. Staff costs in total amounted to ~ 67% of all revenue received and importantly the increase this year in human resource ate up 91% of all the increase in gains made from the increases in premium rooms and DMF fees so the long run trend of staff eating ostensibly all the gains from the business transformation process over the years continues unabated.
6.Underlying eps of just on 8.0 cps for 2022 by my calculations in real inflation adjusted terms, (inflation is a serious matter now), is now 17.5% lower than in 2018, the first full year.
7. From my review of the financial statements other costs in the business are also rising at a pace that's concerning.
8. Delivery of new units in 2022 was disappointing, the second year in a row.
Notes from the analysts call on Friday afternoon
1. Direct Covid costs of $2.5m in FY22 are unlikely to repeat in FY23. Comments were made that there was also indirect Covid costs but no explantion was offered as to whether they might repeat.
2. Remuera Rise average age of residents 83.6 years, sounds like 1 resident has vacated already and the apartment will be marketed at about $500K more so management are confident this will be eps accretive and that their assumptions around that are conservative
3. Good cover on fixed price construction contracts right through to December 2024 (which was a very pleasant surprise !)
4. Actively looking for greenfields development sites and some softening in land prices has been observed.
5. An analyst asked if they could detail the price increase that had been applied for care suites and the response was 1-2% (in a year real estate went up circa 20%) The analyst was so surprised he asked again if that figure was right and the CFO assured everyone it was. You could have cut the air with a knife, I think everyone was genuinely shocked, I know I was ! Its clear OCA have very little if any pricing power with care suites.
6. There may be many more care suites for sale than are officially on the books as vacant. Its would appear there are a large number presently being used as PAC rooms. I confess I was getting a bit sleepy towards the back end of the hour long analysts call after spending all morning deciphering the dog's breakfast accounts so please take the total number of units for sale expressed as 450 in the conference call as an indicative number at this stage. I am 99% sure that's the number I heard which is really concerning because that's a whole year's worth of stock. Mav is looking into this with the CFO, and will provide more detail in due course.
Outlook
1. Its one thing to state a new goal of 300 units and another to achieve it. Achieving it in FY23 should be a foregone conclusion with 113 care suites in Milford deferred from last year, (so its really only 187 units in FY23) but I will believe it when I see it in FY24 and beyond.
2. From my 5 year review its clear there is very very little money in care, nothing in basic care and very modest returns from premium care and care suites and notwithstanding the vitally needed pivot towards more building and acquiring more independent living units OCA will be saddled with an extremely high level of their business model being in care which accords a very low return on capital employed for the foreseeable future.
3. The Global shortage of care and nursing staff and fierce competition for them and demands for ever increasing pay rates for the risky work involved are not a situation I foresee changing any year soon. Expect a continuation of multi year trend of staff eating the vast majority of all gains from DMF and premium care revenue increases.
4. The political environment is extremely unhelpful, actually hostile to OCA both from a funding perspective and residency for care and nursing staff with this Govt in its "infinite wisdom" making it less attractive to come here than for staff to go to Australia. With care and nursing staff (nurses up to a whopping $30 an hour more) able to earn substantially more in Australia I expect the recent opening of the borders to exacerbate the staff shortages not help the situation.
5. Fixed price construction costs locked in on projects through to Dec 2024 confers a material advantage compared to others in the sector.
6. 300 units this year sounds impressive but a heck of a lot of them are care suites which appear to have very limited pricing power in a high inflation environment.
7. The Helier should provide a boost in earnings as its sold down in much the same way as the Sands did in 2018 and they might get back to underlying earnings in real inflation adjusted terms in FY24 of about 10.7 cps which while being a 27% increase from this year is still a no growth scenario in real terms since the underlying eps of 2018...so 6 years without any real growth in underlying earnings and that assumes they actually make 10.7 cps in FY24 which is not a certainty.
8. Its very important to note that this woke Govt's review of the retirement village sector remains as something pending and who knows what they might do ?
Its clear I am nowhere near as positive as Maverick and Ferg.
Will they be able to grow earnings from FY24 onwards...only time will tell.
In the meantime for those who want to make a much quicker pivot towards independent living units there are SUM clear alternatives with a long proven track record of strong earnings growth and much better cost control discipline.
9. OCA are cheap and they are cheap for many good reasons and not the least of them is a proven inability to grow earnings despite a booming real estate market for the last 5 years.
10. Its very clear the tide is going out very fast in the real estate sector and the approximate halving of sales volumes recently reported is going to make it much harder for all companies in this sector to execute sales as the vast majority of incoming residents need to sell their home first.
11. I expect extremely challenging real estate and political conditions for the balance of 2022 and for as long as this woke Government is in power the headwinds are most fierce in this sector for OCA.
12. The outlook globally with almost all central banks rapidly winding back stimulatory settings also provides a very challenging backdrop for the market and I remain of the view we are in "Bear" market conditions.
If a Labour Greens Maori coalition get a third term, which they might, run for the hills.
My rating Underweight / Underperform Disc: Will retain a modest stake for now and see if the shares somehow get a lift and go from there.
Others will have a different view and that's fine. DYOR.
Agility has been a very necessary attribute in the market this year. Its helps mitigate very painful losses. Be quick or be hurt !
Like I said Kasper, you have to be quick in this market or you end up getting hurt.
The repayment of the wage subsidy of $1.8m was completely illogical last year. If you normalize last year's underlying profit for this repayment, then underlying earnings have gone backwards in the result announced today compared to normalized underlying earnings last year. I don't see anyone else on this or the other forum has picked this up yet. You get these insights when you do your own thorough analysis rather than relying on your "gut feel"
Quote from: Basil on Nov 23, 2022, 11:13 PMLike I said Kasper, you have to be quick in this market or you end up getting hurt.
How's your Ryman trade going ?
but bazzer - during that (last) 2-3 week period where you were a shareholder and were lavishing praise on OCA - there were many posts about being a long term shareholder...
"
Provided one takes a long term view I think with this new acquisition the shares are a pretty good opportunity at below $1."
"This is Brent stamping his mark of leadership on the company and I like what I see so far.
They have another $290m for future acquisitions and this one only cost them $57m. Are you getting the picture now ?
Brent was formerly a director of investment banking at Jarden. Leadership matters and under Brent's leadership we are seeing acquisitions of new villages that are predominantly independent living, (Hobsonville last year was the first example and these two are examples two and three). You see a new pattern emerging here ? I do. I'm buying more...can't help myself...
under $1 is sound long term buying."
You are obviously a momentum trader and there is nothing wrong with that but when you make all these statements about long term this and that and then nek minute you are out, its weird.
There's also absolutely nothing wrong with being a momentum trader either. Things change. It's a dynamic environment. Hey, a divy is coming, this is what the macro runway is like, boom I'll take it. I think you have a very good read of it all. I think you are an excellent trader. but you will no doubt be aware you have a lot of older long term investor types who follow you and I reckon you should be more conscious of that
But when making your posts, play the ball not the man. You are far too clever, you have far too much to contribute, to get into the gutter and attack individuals who don't post here, or attack others whose unrealised investments are below cost, or troll, or whatever. You are so far above that, and this comment is beneath you.
I used to get excited to login and see some beagle comments and the insight they always had, and now when I see something its like oh who is he trolling next.
I miss the old beagle and I hope he comes back.
And FB say today
We remain of the view that OCA is one of the most attractive medium and long term investments under our coverage
Oceania Healthcare (OCA) delivered underlying earnings below our expectations due to higher costs and lower new sale gains. Annuity EBITDA fared better, up +21% versus 1H22 and +4% ahead of our forecasts. The strong annuity EBITDA performance was driven by resale gains, up +55%. None of that mattered. The aged care stocks continue to sell off across the board driven by concerns around increasing debt levels, led by Ryman Healthcare (RYM), down ~-20% in the four trading sessions since it reported earnings. OCA's debt also increased by ~NZ$60m more than we had anticipated but we are meaningfully less concerned with regards to OCA's debt levels than we are for RYM's. We remain of the view that OCA is one of the most attractive medium and long term investments under our coverage. We reiterate our OUTPERFORM rating and see ~70% upside to our reduced 12 month target price of NZ$1.30 (from NZ$1.45).
Three reasons to be comfortable with OCA's level of debt
OCA's increase in net debt was higher than we had anticipated, following a familiar pattern over the last few reporting seasons across the aged care sector. That said, we remain comfortable with OCA's ~NZ$500m of debt for three reasons; (1) the value of finished, unsold stock is over half of OCA's total net debt. In addition, OCA's flagship development, 'The Helier' should deliver a net >NZ$100m in cash; (2) OCA has termed out its debt sufficiently. It has ~NZ$220m of debt headroom and zero debt maturing until FY28, and (3) we estimate that OCA could be free cash flow neutral already next year, depending on how ambitious its greenfield program is.
I have tried to make a conscious effort to rise above some of the personal attacks on here but its challenging at times when some get annoyed with their losses and look to blame shift on to me.
By way of further clarification. Firstly, it's been an extraordinary year in the markets with extreme volatility unlike anything I have seen bar the initial onset of Covid in 2020 and the GFC. The OCA report in late May 2022 bitterly disappointed me, just like the current print really disappointed others. I never get emotional about stocks any more, it's a numbers game for me pure and simple and if I sense risk to my capital, I am very quick and proactive about taking action to mitigate or eliminate that risk. I've been refining my ability to sense reward, risk and corporate B.S. for over 40 years but I still get caught out now and again as does anyone else. Staring like a possum at the approaching headlights of a runaway train is not something I am into doing, it almost always ends very badly.
I always post very promptly after exiting a position and always make a very fulsome effort to explain why in very fulsome detail and am cognisant that some follow my lead so I go to great lengths, (often to the extreme dislike of remaining holders), of effort to very clearly articulate why I have entered or exited positions.
If people want to follow me in or not that's their decision. I don't ask for followers, so they are free to choose whoever they follow, me or anyone else or their own nose for a feed. All I expect is that for those that follow me, if you keep holding after I have clearly articulated why I have exited, you own that decision for yourself and don't blame me if the custard hits the fan. Once in a blue moon I very occasionally allow myself the luxury of wondering how many people I have helped over the years.
Back to OCA - Its good to see the ferocity of the care cost headwinds are not increasing further but they remain very strong for the foreseeable future and OCA is obviously far more exposed than other sector participants. I believe the brokers are not understanding that care suites are not finding good market acceptance. A clue to how much better the market appears to be receiving the fully refundable deposit scheme that RYM runs for care facilities can be seen in RYM's recent accounts for those that want to do the legwork and go looking for it.
Good story in NBR (if you can access)
Should allay some fares
https://www.nbr.co.nz/investment/wer...-oceania-boss/
And a cool photo of our brent at work
0000brent.JPG
Quote from: Basil on Nov 24, 2022, 11:29 AMI have tried to make a conscious effort to rise above some of the personal attacks on here but its challenging at times when some get annoyed with their losses and look to blame shift on to me.
By way of further clarification. Firstly, it's been an extraordinary year in the markets with extreme volatility unlike anything I have seen bar the initial onset of Covid in 2020 and the GFC. The OCA report in late May 2022 bitterly disappointed me, just like the current print really disappointed others. I never get emotional about stocks any more, it's a numbers game for me pure and simple and if I sense risk to my capital, I am very quick and proactive about taking action to mitigate or eliminate that risk. I've been refining my ability to sense reward, risk and corporate B.S. for over 40 years but I still get caught out now and again as does anyone else. Staring like a possum at the approaching headlights of a runaway train is not something I am into doing, it almost always ends very badly.
I always post very promptly after exiting a position and always make a very fulsome effort to explain why in very fulsome detail and am cognisant that some follow my lead so I go to great lengths, (often to the extreme dislike of remaining holders), of effort to very clearly articulate why I have entered or exited positions.
If people want to follow me in or not that's their decision. I don't ask for followers, so they are free to choose whoever they follow, me or anyone else or their own nose for a feed. All I expect is that for those that follow me, if you keep holding after I have clearly articulated why I have exited, you own that decision for yourself and don't blame me if the custard hits the fan. Once in a blue moon I very occasionally allow myself the luxury of wondering how many people I have helped over the years.
Back to OCA - Its good to see the ferocity of the care cost headwinds are not increasing further but they remain very strong for the foreseeable future and OCA is obviously far more exposed than other sector participants. I believe the brokers are not understanding that care suites are not finding good market acceptance. A clue to how much better the market appears to be receiving the fully refundable deposit scheme that RYM runs for care facilities can be seen in RYM's recent accounts for those that want to do the legwork and go looking for it.
Not sure its helpful, but I try ...
Every stock has at any time risks as well as opportunities attached to it.
Many of us tend to see just the opportunities when the stock goes up and to emphasize just the risks when the stock goes down, basically amplifying the trend. It's just part of being human (or canine?) to suffer from a mixture of confirmation bias plus group think.
Some of us have a investor perspective (focussing on long term trends) and others have a trader perspective (focussing more on the near future). Both views are absolutely valid, but it is useful to know which of these views the other side of the discussion occupies.
Some of us try to express a balanced view (and no, I don't mean like the so called poster in the other forum) and others give at any time their unfiltered views - expressed with authority. Sometimes it might be worthwhile to think about how a post might be interpreted by a public we don't really know.
We should all contribute our unique views ... this is what forums like this are about, but repeating even a valid issue in isolation again and again might not be as useful ... and some might consider it as rubbing salt into their wounds.
I think at times we all could try to be a bit more balanced and specific - and sometimes we all could be as well a bit more considerate of others.
Anyway - I agree that everybody needs to read the forum rules - and clearly, given that nobody is allowed to give advice here, it is everybody's own decision whether they buy, sell or hold. At any time.
quite often there is a disparity between how the company wants it's result and future outlook perceived when compared to a changing macro back drop.
Always pays to have ones BS radar working well
May as well put up the updated EPS trend chart. Just as well earnings don't matter - it's the story that counts.
EPS based on Underlying NPAT since listing. Middle part of chart may be a bit wonly because they changed Balance Dates and the Definiition of Underlaying NPAT (made it a bigger number so the numbers around 2017/2018 may actually be understated on a true comparative basis)
Underlying NPAT is just a guess anyway - the Oceania definition 'Underlying Profit is a non-GAAP measure of financial performance and considered in the determination of dividends. The calculation of Underlying Profit requires a number of estimates to be approved by the Directors in their preparation. Both the methodology and the estimates may differ among companies in the retirement village sector.'
For what its worth here's my chart. I dare not comment
0000ocaeps.JPG
Attached Images Attached Images
Quote from: snapiti on Nov 24, 2022, 06:13 PMquite often there is a disparity between how the company wants it's result and future outlook perceived when compared to a changing macro back drop.
Always pays to have ones BS radar working well
That is so right snapiti
A lot not said by them
Love Brent being quoted in NBR as saying 'We're starting to see the market copy us' .... seems a pretty egotistical character this Brent
off topic I know,
I got a mate who runs a medium sized business, always wants poeple to think the business is running well.
He has everyone on contract and was telling me that 30% of his staff were not renewing their contracts. Certainly gave me the impression he was keen for them to renew.
Interesting I know one of these staff members and they told me all the staff were interested in renewing their contracts but the boss did not have enough work for them.
Portrayed perception versus reality.
Quote from: winner (n) on Nov 25, 2022, 10:15 AMMay as well put up the updated EPS trend chart. Just as well earnings don't matter - it's the story that counts.
EPS based on Underlying NPAT since listing. Middle part of chart may be a bit wonly because they changed Balance Dates and the Definiition of Underlaying NPAT (made it a bigger number so the numbers around 2017/2018 may actually be understated on a true comparative basis)
Underlying NPAT is just a guess anyway - the Oceania definition 'Underlying Profit is a non-GAAP measure of financial performance and considered in the determination of dividends. The calculation of Underlying Profit requires a number of estimates to be approved by the Directors in their preparation. Both the methodology and the estimates may differ among companies in the retirement village sector.'
For what its worth here's my chart. I dare not comment
0000ocaeps.JPG
Attached Images Attached Images
A picture says a 1000 words, thanks for that.
Well that muddies the waters even more doesn't it. One of the many things they don't tell you is that if you took out the one-off $1.8m wage subsidy repayment from the previous corresponding period underlying earnings this period would be lower still. If as they are suggesting, there are material differences in the methodology between different retirement companies on the measurement of underlying earnings maybe we should be more focused on statutory earnings which were just 1.6 cps or maybe my time tested and successfully used shortform earnings calculation of just focusing on the change in NAV from one period to another is the best way of measuring total comprehensive earnings (which was down 4 cents a share this period). As you say, underlying earnings involve significant amounts of internal estimation are therefore little more than a "hopefully", educated and professional guess.
Think I will stick with my short form total comprehensive earnings methodology after all the change in NAV encapsulates the change in the total asset position of the company from one period to the next.
Seeing as they state that their methodology of underlying earnings is "considered in the determination of dividends" doesn't that suggest the reduction in dividend from 2.1 cps last year to 1.9 cps this year means underlying earnings per share may have actually declined ?...i.e. the directors are normalizing the $1.8m care subsidy repayment last year compared to this year but paint the situation differently in their presentation materials.
To me, ignore all their positive talk, (especially the almost endless ESG nonsense), and ask yourself why the dividend has been reduced? That's a very good place to start thinking about this most recent result.
.
Brent opining "bragging?" about other companies copying their care suite concept implies it's been successful. At any point in their presentation materials do they tell shareholders how many unsold care suites they have ? If not why not ? Other companies are quite transparent about how many unsold units they have.
Is there any detailed material on why they have put a whopping 10 retirement villages on the market to sell or do they just sweep this "minor" issue under the carpet like its nothing and wax lyrical about their 1 pending flagship village at the Helier ? I reckon these guys take the old cliche "accentuate the positive and eliminate the negative" to a whole new level.
To me, the reduction in dividend tells you all you really need to know about whether this company is growing earnings or not. The dividend is down ~10% and the company's earnings are going backwards mainly because they can't sell their mountain of hundreds of unsold care suites.
Don't shoot the messenger, I am just interpreting their complex financials' as I see it.
https://www.youtube.com/watch?v=f3jdbFOidds
I think the dividend reduction is less about whether or not earnings have grown and more about retaining capital as the LVR creeps up and interests rates rise. As for unsold care suites, occupancy on the care segment is something like 92% which doesn't indicate to me there are hundreds unoccupied as you suggest. If you add in the PAC beds/suites then sure there does look to be hundreds of beds/suites that are not occupied via an ORA. Is that a problem? Maybe. The other thing to keep in mind is they are demolishing stuff all the time and they have to stick the now homeless occupants in another unit. I am not sure how they classify that situation though, is the unit they move to classed as occupied? The more brownfield development there is the more this situation can influence occupancy %
QuoteIf you add in the PAC beds/suites then sure there does look to be hundreds of beds/suites that are not occupied via an ORA. Is that a problem?
Clearly, It depends on what daily rate you're getting as a PAC charge and what the occupancy rate is.
From the presentation their EBITDA margin on care including PAC charges is 12%, (same level as PCP) but down from 19% when they listed.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/402826/384013.pdf
The result was headlined Care Suite Premiumisation delivers results. Yes its delivered a result but its a flat result and occupancy is actually down from 92.5% to 91%. I believe most of the brownfield development has already been completed.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/402826/384010.pdf
How is their strategy successful for shareholders when everyone else, (better facilities for residents, more pay for staff, management and directors) is doing better (which makes their mantra "believe in better" seem appropriate), except for the inconvenient truth that shareholders get a 10% haircut with their dividend ? Does that seem fair ? Its not the first time their dividend has been cut either.
https://www.oceaniahealthcare.co.nz/aged-care-pricing
According to the website, all beds (premium+standard) are on PACs with the care suites on ORAs. So I'm not so sure the PAC revenue is useful to indicate problems with selling ORAs.
https://images.oceaniahealthcare.co.nz/wp-content/uploads/2020/11/09181641/Oceania-Premium-Accommodation-Charges-Final.pdf
PAC charges are quite inexpensive, (these rates are the latest available ones from their website). I guess it begs the question why anyone would bother with Care suites if you can get a premium room for a very modest daily charge ? Also letting out Care suites under a PAC at say $40 a day extra = $14,600 per annum whereas if they sell that care suite (average price about $315K), they get 15% of that in the first year = $47,250. That's a difference of over $30,000 in the first year. Multiply that by (my estimate) 440 unsold care suites and that's $20.68m revenue gone begging. If only they could sell their care suites at even half the rate they're building them...
I guess all the unsold care suites explains why their cash flow is down so much this half too. Cash flow is the lifeblood of business.
If there are 440 unsold care suites that would be a pretty significant part of their portfolio. How have you come to that estimate?
Thanks for asking because I had to look back on the last analysts call i had time to listen too ~ 6 months ago, notes posted in the other place on 23 May 2022.
QuoteNegatives
1. The longstanding issue with staff costs rising much faster than operating revenue continues and in fact has got worse this year than ever before.
Total employee costs compared to last years annualized figure are up a staggering 12.65% substantially worse increase that the systemic long run average of 7-8% increase per annum.
2. The repayment of the wage subsidy of $1.8m is completely illogical considering the Govt's systemic underfunding of basic care services and is a very poor decision in my opinion.
3. Even backing out the wage subsidy repayment staff costs increased 11.3% against Rest Home and hospital care fees only up 5.3%.
4. Importantly Government funding is unchanged on the year !
5. Staff costs in total amounted to ~ 67% of all revenue received and importantly the increase this year in human resource ate up 91% of all the increase in gains made from the increases in premium rooms and DMF fees so the long run trend of staff eating ostensibly all the gains from the business transformation process over the years continues unabated.
6.Underlying eps of just on 8.0 cps for 2022 by my calculations in real inflation adjusted terms, (inflation is a serious matter now), is now 17.5% lower than in 2018, the first full year.
7. From my review of the financial statements other costs in the business are also rising at a pace that's concerning.
8. Delivery of new units in 2022 was disappointing, the second year in a row.
Notes from the analysts call on Friday afternoon
1. Direct Covid costs of $2.5m in FY22 are unlikely to repeat in FY23. Comments were made that there was also indirect Covid costs but no explantion was offered as to whether they might repeat.
2. Remuera Rise average age of residents 83.6 years, sounds like 1 resident has vacated already and the apartment will be marketed at about $500K more so management are confident this will be eps accretive and that their assumptions around that are conservative
3. Good cover on fixed price construction contracts right through to December 2024 (which was a very pleasant surprise !)
4. Actively looking for greenfields development sites and some softening in land prices has been observed.
5. An analyst asked if they could detail the price increase that had been applied for care suites and the response was 1-2% (in a year real estate went up circa 20%) The analyst was so surprised he asked again if that figure was right and the CFO assured everyone it was. You could have cut the air with a knife, I think everyone was genuinely shocked, I know I was ! Its clear OCA have very little if any pricing power with care suites.
6. There may be many more care suites for sale than are officially on the books as vacant. Its would appear there are a large number presently being used as PAC rooms. I confess I was getting a bit sleepy towards the back end of the hour long analysts call after spending all morning deciphering the dog's breakfast accounts so please take the total number of units for sale expressed as 450 in the conference call as an indicative number at this stage. I am 99% sure that's the number I heard which is really concerning because that's a whole year's worth of stock. Mav is looking into this with the CFO, and will provide more detail in due course.
The number 450 was never rebutted by Maverick or anyone else. Analysts were shocked by the number as was I. Note this is not disclosed in their presentation that I can see but all other retirement companies are happy to disclose the numbers of unsold units. Maybe ask yourself why ?
Since then they have built another 127 care suites this half and sold 61 "units", not all of which will be care suites, I assume somewhere about 40 were.
So again, thanks for asking because my revised estimate is 450 unsold care suites at the start of the period+ 127 built, less ~ 40 sold = 537 estimated unsold care suites (some of them will be occupied under PAC) as at 30 September 2022. Their total care suite stock is 972 (page 5 of the presentation) but by my estimate well over half are unsold.
Notice how in point 1 of the notes from the May call they said there was about $2.5m of Covid costs that would be non-recurring in FY23, (estimate $1.25m per half year period), and the $1.8m Covid wage subsidy repayment in 1H FY22 was also non-recurring so that's about $3m in non-recurring costs incurred last period more than this one and yet reported underlying profit is up just $2.2m. In other words, strip out the non-recurring expenses from the previous corresponding period and underlying profit this half has gone backwards in normalised terms by $800K and also there's millions more shares on issue under the dividend reinvestment program so underlying earnings per share in nominal terms have gone backwards and in inflation adjusted terms (with inflation running at over 7%) real inflation adjusted earnings per share have gone backwards quite significantly.
No worries thought because in their presentation, (page 5), they have plans to build another 700 care suites in the pipeline and are going to gear up with more bank debt to expand their development pipeline in a falling real estate market. What could possibly go wrong ?
Three questions I think holders need to ask themselves.
1. Why is the share price right back at the IPO price it listed at 5.5 years ago ?
2. Is what they are trying to do really working for shareholders ?
3. Would I not be better off in any of the other retirement village companies that have a well proven track record of growing earnings ?
Giving it a try myself, info from recent half year and this https://images.oceaniahealthcare.co.nz/wp-content/uploads/2020/11/09181641/Oceania-Premium-Accommodation-Charges-Final.pdf
2.7 million of premium PAC revenue in the half
60% of care portfolio is "premium care beds or care suites" therefore 40% are non premium care beds. There are 1652 care beds and 972 care suites in total. To my understanding all care suites are considered premium. Therefore of the total care portfolio of 2624 bed/suites, there are 1050 regular beds (40%). This indicates OCA currently has 1574 premium beds and care suites, or 602 premium beds and 972 care suites.
602 premium care beds in portfolio, assume premium charge is very upper end of possible range at $40 per day (inc gst) so ~$35 per day to OCA. 602x35x182.5 = $3,845,275 Obviously this is too high. If we assume all PAC care revenue is derived from premium beds (none from suites), the average premium daily charge per bed is $24.6 per day. This is in the upper half of the range looking at the minimum and maximum daily charges on their website. To reach that PAC revenue, either my daily charge guestimate is roughly correct OR it is an overestimate and PAC revenue is being supplemented by care suites that have failed to sell via ORA. Time to figure that out...
Report page 53 indicates $32.5 million in care suite DMF is contracted at this stage. I'm not as sure of this part, but a further $4.2 million comes from care suites in villages that are "held for sale". Average sales price for a care suite over the last 5 years look like something around $240,000, starting closer to $200,000 in 2017 and shooting up to $300,000 region in recent times.
Total contracted ORA money from care suites (inc villages held for sale) is $216,617,000. At 100% care suite ORA uptake, that suggests an average sale price of $233,675. Taking Basil's estimate of 440 unsold care suites, leaves 487 care suites. If that were true, the average sale price for the suites that did sell would be $444,798. This is well in excess (>40%) of the average sale prices achieved historically, even in recent times. As such I find it hard to believe this number is even remotely close.
Lets compare the total contracted ORA money to the contracted DMF, the DMF is 16.9% of the total contracted ORA money. ORA DMF is 10% year 1, 20% year 2, 30% year 3 onwards. Getting 16.9% indicates there are likely more 1 year old ORA contracts than 3 year old ORA contracts, probably something like Year 1 > Year 2> Year 3+. The portfolio of contracted ORA suites is likely skewed to a more recent date of sale (younger ORAs = more recently sold). Between 2019 and now, average sale prices for ORA care suites started at $241,000 in 2019 and increased steadily to $311,000 in the most recent half. Based on my previous workings, I think a reasonable average sales price for the currently contracted ORAs is closer to $280,000. To achieve a total contracted ORA money from care suites (inc villages held for sale) of $216,617,000, 774 care suites must have been contracted at this price point leaving 153 without an ORA.
Of course, I'm not an expert on this stuff so I may have made some mistakes here. I'm using a lot of averages which are could be a source of error as not all suites are priced at the average. But based on the above, I do not see how there could be more than 200 care suites without an ORA at this time.
Good work Plata ... well thought out but I think you (and others) are wasting time and effort in even attempting such exercises
Why - I think even Oceania don't know the real answer ,,,and if they do they go out of their way to make the numbers as obtuse as they can
I still can't believe that they only had 61 new sales in first half year
Thats 40 less than same period last year and half the number they sold in pcp2021
They were even selling more new ORAs in 2018
The numbers don't seem to reconcile with the words and images in their reports.
Rather than working with averages if you are serious about wanting to be invested in OCA and are concerned about how the care suite sales process is going, (61 total new sales in the last half is pathetic Winner, I couldn't agree more), I'd recommend giving the CFO a call.
I know the number 450 I heard on the May call is correct, I heard it with my own ears and it was repeated twice. (The only reason I said I was 99% sure is I was being polite to Maverick as he didn't listen in and wanted to get his own confirmation, which he subsequently declined to share because he claimed his conversation with the CFO was "private").
My view is OCA will remain the runt of the litter in this sector and give bottom quartile performance for many years to come because there are systemic unfixable issues with their business model and legacy issues of poor quality villages that will dog them for a very long time. OCA's focus on modest margin care means investors in this company will always be "swimming against the tide" compared to the rest of the sector.
I going to conclude my commentary on OCA for now by observing one salient fact. There was only one poster on here or the other place that correctly called a flat result. Everyone else and every analyst was forecasting earnings growth.
Quote from: Basil on Nov 27, 2022, 11:22 AMI going to conclude my commentary on OCA for now by observing one salient fact. There was only one poster on here or the other place that correctly called a flat result. Everyone else and every analyst was forecasting earnings growth.
Sounds like a smart poster - do we know them?
Quote from: Crackity on Nov 27, 2022, 11:26 AMSounds like a smart poster - do we know them?
My mate Jarred says 'Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock.'
He added 'Much of the financial education of the last 10 years has focused on making investors more rational. That is the wrong approach. Human beings will never be rational. The goal is not to be rational; the goal is to profit off the irrationality of others. People are smart; large groups of people are stupid. This creates opportunities. Lots and lots of opportunities.'
Quote from: winner (n) on Nov 27, 2022, 11:34 AMMy mate Jarred says 'Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock.'
Interesting article by the Secret Broker today alluding to similar sentiment....
https://stockhead.com.au/the-secret-broker/the-secret-broker-eat-sleep-buy-cheap-repeat/
Quote from: Basil on Nov 27, 2022, 11:22 AMI know the number 450 I heard on the May call is correct, I heard it with my own ears and it was repeated twice. (The only reason I said I was 99% sure is I was being polite to Maverick as he didn't listen in and wanted to get his own confirmation, which he subsequently declined to share because he claimed his conversation with the CFO was "private").
How do you reconcile that with the 200+ million in ORA contracted value? Does that not imply the suites that have sold have done so at a very steep average price? Perhaps only the ones in Auckland and other city centres with much higher average prices are selling?
I don't hold these or intend to due to macro trends so not gonna call the execs. I just did the math as a learning experience to try read between the lines from a company that seems to enjoy hiding information.
Plata - You don't need to reconcile information you heard straight from the horse's mouth.
Crackity - You know who 😉
Next job is analysis of KPG and then ARV result. Might as well go fishing where you're more likely to land something rewarding.
"KPG and then ARV"
and we're off ......
https://www.youtube.com/watch?v=jUavm_JgTuc
Quote from: Basil on Nov 27, 2022, 12:18 PMPlata - You don't need to reconcile information you heard straight from the horse's mouth.
Crackity - You know who 😉
Next job is analysis of KPG and then ARV result. Might as well go fishing where you're more likely to land something rewarding.
Still holding KPG?..
Quote from: Ricky Bobby on Nov 27, 2022, 05:25 PMStill holding KPG?..
Yeap, holding a few for the yield.
Another commentator in the other place reckoned the pay funding round might add $1.5m in revenue in 2H. Was described as "Cream" Hmmm Cream usually a euphemism for returns over and above what one would expect, like money for nothing. So does that adjective stack up ?
If this extra money all flowed through to shareholders, (it never does with OCA), that's another 0.2 cps in earnings so it means they might be able to maintain their FY23 final dividend at the same level as last year instead of cutting it 0.2 cents per share like this time. That would be good because instead of shareholders dividends being down 17% in real terms for this divvy, (10% dividend cut plus 7% inflation) it might only be down 7%, (inflation) for the final divvy.
The fly in the ointment is once you run that extra income through the OCA head office administration "system" and the care services eat up their costs maybe almost none of it gets through to shareholders and they may still be 17% worse off with their income again at final divvy time. Gosh, with income to shareholders dropping so much just as well shareholders can count on capital gains going forward...opps, no, sorry, the NTA and NAV are also going backwards.
Interestingly they listed in 2017 with a total of 50 sites, (page 6) https://images.oceaniahealthcare.co.nz/wp-content/uploads/2020/10/26121409/oca-results-presentation-fy17.pdf Of those 50 sites 15 have now been identified as being third rate duds, with 5 previously sold and a further 10 villages now classified as held for sale.
Nearly a third of all sites when they listed have now been classified as having insufficient potential to be held for ongoing operation or development.
Begs the question of whether investors we sold a "Pup" ? Not a mention of all the dog's held for sale but so much positive rhetoric about 1 new site the Helier.
Quote from: winner (n) on Nov 27, 2022, 11:34 AMMy mate Jarred says 'Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock.'
He added 'Much of the financial education of the last 10 years has focused on making investors more rational. That is the wrong approach. Human beings will never be rational. The goal is not to be rational; the goal is to profit off the irrationality of others. People are smart; large groups of people are stupid. This creates opportunities. Lots and lots of opportunities.'
That's been the basis of Finance for at least the last 90 years since Benjamin Graham.
Sounds like your mate Jarred has a case of Dunning-Kruger.
Which at least is better than having a case of Freddy Krueger
Of the 3 in the sector who have reported last week or so who tells the best story
Probably Oceania - there Interim Report had 74 pages - Arvida and Ryman 32 and 34 respectively
Oceania wins hands down - the thickest Interim Report by far
I enjoyed reading ARV's report this morning and quite frankly it was a breath of fresh air compared to OCA.
Hey Ferg how are you getting on with untangling OCA's financials' and translating them into some more readable?
One thing that's weird about Oceania is that since the initial IPO the subsequent capital raised has been returned to shareholders as dividends
New capital about $130m dividends about $130m
Weird eh .... but of course I just don't get this form of 'capital management'
Only winner has been taxman whose taken his share of the $130m (say $42m)
There has been a lot of good questions regarding the level of unsold units and if demand is tapering off.
Contacted Oceania with this question
"Now that the results are released can you tell me how many care suites at the close of the period 30 September 2022 are not considered contracted under a ORA agreement?"
Answer as follows
Firstly thanks for your enquiry.
As a brownfield developer of care suites, we will typically construct a new care site and then transfer residents across from the previous care centre on site, without those residents entering an ORA. There will still be other care suites available which we will sell under ORA from opening, and as the transferred residents depart we will then sell the care suite they were occupying under an ORA for the first time.
This complexity means that to date we have not disclosed the number of care suites not under ORA as it does not accurately reflect availability of stock. As we work through our pipeline of brownfield developments this will become less prevalent, however.
Feel free to contact Oceania's Investor Email address (investor@oceaniahealthcare.co.nz) for future investment related enquiries and we'll be able to get back to you.
Regards
Heath
HEATH MILNE M&A, Strategic Projects Manager
MOB +64 27 406 1798 (tel:+64%2027%20406%201798)
Just watched Brent Pattison on NZX Virtual investor Event.
Loan term debt including bonds at very low interest rates. [5 to 7 years].
Current [next two years] build at fixed prices.
No need to adjust current unit prices.Compare well with others. [and still a lot lower than surrounding property prices].
Interesting their very upmarket care will attract people who can afford to pay without any Govt help.
Very excited about St Heliers build.
And did mention sale of sites which no longer suited OCA's requirements.
Most impressed with Brent and OCA's prospects.
Good job there shareguy ...... answer really was 'trust us we know what we are doing' or was it a Sargeant Schultz type of answer
Perhaps W69 you should have posted this here as well as ARV.?
A guy from Oceania said in an investor webinvar today that the 'market went to sleep' in the later bit of half one - hence the shortfall in new sales. But its all back to normal now so big catch up in second half
Went to sleep for all in the sector I reckon, so Arvida will be busy selling new ORAs as well this summer
Maybe the market went to sleep, (or that's their latest excuse), on what OCA had to offer but I definitely didn't get that sense listening in to the ARV call.
Of course, they will talk up their Helier success story, one village, compared to ten villages that are performing so poorly they want to try and quit them is this market. Good luck with that.
Quote from: Basil on Dec 06, 2022, 04:35 PMMaybe the market went to sleep, (or that's their latest excuse), on what OCA had to offer but I definitely didn't get that sense listening in to the ARV call.
Of course, they will talk up their Helier success story, one village, compared to ten villages that are performing so poorly they want to try and quit them is this market. Good luck with that.
You clearly must love to resemble a broken record ... and you like to tease, don't you?
But I think you are clever enough to realize that maybe these 10 sites don't fit into the new OCA story of luxury accommodation, but hey - just keep trashing them, cheaper shares for everybody else to buy.
Are you sure that stocks always go the way you are trying to push them? If yes, then you might have a somewhat selective memory. The beagle is sometimes right and sometimes wrong - as all of us.
From memory - both TRA as well as HLG have been on loftier heights when you started to support them, but who knows - it might get right eventually. But as anybody else, you might still need to work on your timing with them. Just would be nice you could do this a bit quieter ....
Talking about timing ... I think the time to support OCA is now ...
Arvida Group Limited ARV NZ NZ$1.25 NZ$904 10.7x
Ryman Healthcare RYM NZ NZ$6.90 NZ$3,450 11.2x
Summerset Group Limited SUM NZNZ$9.30 NZ$2,159 11.9x
Oceania Healthcare OCA NZ NZ$0.83 NZ$594 10.1x
Extract from a brokers recent analysis on the sector, forward PE is the last figure and as you can see you can throw a blanket over the range of forward PE's, they're all very similar. All companies will be subject to similar headwinds and challenges in the year ahead.
Three of these companies have proven business models with which they have proved they can grow earnings...and one just talks about growth.
today's presentation
https://www.youtube.com/watch?v=v50PygLI_kI
Quote from: Basil on Dec 06, 2022, 05:50 PMArvida Group Limited ARV NZ NZ$1.25 NZ$904 10.7x
Ryman Healthcare RYM NZ NZ$6.90 NZ$3,450 11.2x
Summerset Group Limited SUM NZNZ$9.30 NZ$2,159 11.9x
Oceania Healthcare OCA NZ NZ$0.83 NZ$594 10.1x
Extract from a brokers recent analysis on the sector, forward PE is the last figure and as you can see you can throw a blanket over the range of forward PE's, they're all very similar. All companies will be subject to similar headwinds and challenges in the year ahead.
Three of these companies have proven business models with which they have proved they can grow earnings...and one just talks about growth.
So currently with similar PEs the 'best play' in the sector from now is the one that can grow the fastest ...yes?
Quote from: winner (n) on Dec 07, 2022, 09:25 AMSo currently with similar PEs the 'best play' in the sector from now is the one that can grow the fastest ...yes?
Exactly. Look at the various business models across the sector and ask yourself, who has the most proven track record of growing earnings in the last decade, (SUM), and which company has the most obvious headwinds going forward with care costs, (OCA). I also think it's well worth focusing on the very latest data coming back from the market and its readily apparent that since the Reserve Bank's extremely hawkish statement in late November the real estate market has taken another significant leg down in terms of sales level's. Banks are stress testing new applicants at close to 10% now and hardly anyone is going to qualify.
I am forecasting that 2023 is going to be a very grim year for house prices and sales volumes. Consider who has the lowest gearing in the sector ARV (28%) and SUM at a similar level, compared to OCA at 38% and RYM even worse, and who's sales have proven so far in 2022 to be holding up the best (ARV), and who's reported sales have been the worst (OCA). Strap yourselves in for 2023 folks, it's going to be a very challenging year for this sector.
Quote from: Basil on Dec 06, 2022, 05:50 PMArvida Group Limited ARV NZ NZ$1.25 NZ$904 10.7x
Ryman Healthcare RYM NZ NZ$6.90 NZ$3,450 11.2x
Summerset Group Limited SUM NZNZ$9.30 NZ$2,159 11.9x
Oceania Healthcare OCA NZ NZ$0.83 NZ$594 10.1x
Extract from a brokers recent analysis on the sector, forward PE is the last figure and as you can see you can throw a blanket over the range of forward PE's, they're all very similar. All companies will be subject to similar headwinds and challenges in the year ahead.
Three of these companies have proven business models with which they have proved they can grow earnings...and one just talks about growth.
One of the criteria we applied when employing new designers and analysts was to check whether they are able to from their opinions based on a diverse variety of inputs - or whether they used to jump to conclusions based on preconceived views.
You are listing PE (and actually OCA looks best) and you hold this against them due to a preconceived view.
Why not telling us a bit more about the whole story?
Who is doing best in earnings CAGR? Which company has the best discount to assets? Did you compare the past growth rates and made a judgement, which of them are already past their best (growth rates peaked and declining) and which of them have still the best to come?
Are you comparing the stories and aligning them with the public health forecasts?
Just picking one parameter and trashing a company for actually doing best in this category is not good enough.
I have already posted extensively about the challenges OCA faces.
Underlying earnings, (realised earnings) is the benchmark for this sector that RYM set. I beleive you use other criteria so we are never going to align our views based on earninbgs metrics.
OCA's underlying earnings per share have gone backwards since they listed.
SUM have grown underlying earnings per share at a rate of 31% CAGR since they listed and are confident of growing earnings this year despite the headwinds for the sector. They do what they say they are going to do unlike your beloved OCA.
ARV grew underlying eps last half by 10% in a very tough market and have grown underlying earnings per share reasonably well since they listed whereas OCA have not. Blind Freddy can see RYM have too much debt for this market.
Care suites are vastly oversupplied in the market which is why they are not selling well.
I think a decade from now as the baby boomer population come of that age care suites will do okay-ish.
RYM with their fully refundable deposit scheme for premium rooms which is finding wide acceptance in the market, (100% of the deposit back within 30 days of passing), are in my opinion sucking the wind out of care suite sales. That's how I see it but I have such a small stake in this sector I find it easy to be completely objective. I invest on the numbers and numbers only and leave the relative feel good ESG merits of each company to others to consider.
If that makes me a bad dog then I'm guilty as changed but I can't help noting that all sector participants are trying to curate wonderful living environments for their residents, some with far more facilities than others though and in my experience it's those on-site facilities that get old folks out of their units mixing with and enjoying each other's company.
Quote from: lorraina on Dec 06, 2022, 07:22 PMtoday's presentation
https://www.youtube.com/watch?v=v50PygLI_kI
I reckon there's every chance he'd make a great Dad reading his kids fairy tales at bedtime. Fabulous storyteller with lots of really impressive feel good stuff. Shame about the numbers which do not line up with the story.
Funny as..lol.
No surprises there.!
Quote from: lorraina on Dec 06, 2022, 12:21 PMJust watched Brent Pattison on NZX Virtual investor Event.
Loan term debt including bonds at very low interest rates. [5 to 7 years].
Current [next two years] build at fixed prices.
No need to adjust current unit prices.Compare well with others. [and still a lot lower than surrounding property prices].
Interesting their very upmarket care will attract people who can afford to pay without any Govt help.
Very excited about St Heliers build.
And did mention sale of sites which no longer suited OCA's requirements.
Most impressed with Brent and OCA's prospects.
Found that upmarket care statement very interesting.
Every New Zealander is currently entitled to, at least in part, subsidised hospital-level care regardless of their means.
So at higher socio-economic sites they're not going to apply for funding that the resident (and by extension OCA) are entitled to?
I just don't understand the point of this and why it would be a value-add strategy?
Will they provide a different standard of care at these sites (it's always been care is care - it's high regardless)?
Is it something to do with strengthening the social license so you can demand Government increase funding for standard beds?
I presume it's so you have a counter argument to Government claims of "LOOK AT YOUR PROFIT THOUGH!"
Honestly a big shoulder shrug on why this is something shareholders should be excited about.
Quote from: Basil on Dec 07, 2022, 11:08 AMI have already posted extensively about the challenges OCA faces.
Underlying earnings, (realised earnings) is the benchmark for this sector that RYM set. I beleive you use other criteria so we are never going to align our views based on earninbgs metrics.
Fair enough.
I do use earnings according to the internationally agreed standard, while you use non standardized parameters every CFO can make up (and they do) as they see fit.
Clearly my fault - guilty as charged.
But look, it is good to have a variety of views in these discussions, and sure - sometimes the use of non standard measures helps to see some things better. Sometimes recasting can add value, but sometimes it just adds another level of smoke screen - and I suppose this is what some CFO intend to do.
Not wanting to start here a discussion about our different methods to value companies - it clearly is interesting to get various different views, and lets face it - markets don't follow any particular method to value stocks over time, so the more different views we hear and see, the more likely it is we understand what the market is going to do.
It is just sometimes a bit arduous to endure the same argument from the same poster several times per week - again and again and again. We get it that you don't like OCA (well, at current, its not unheard of you changing your views).
I don't like everything they do either, but I still see them at current on the balance of arguments as a deep value game.
There's an old saying 'Earnings don't repay loans, Cash flow does'
Probably these days applies more so to companies in the retirement sector
That 'hand brake' scenario on another thread was interesting
There's an old saying 'Earnings don't repay loans, Cash flow does'
Prompted me to update this - another measure I have a morbid fascination with
Its a chart of Oceania's cash burn since they floated (including dividends)
Suppose spending more and more is what happens in this sector so no worries ..... but whatever a fascinating chart showing half a billion of spend funded by the begging bowl to shareholders and borrowing more.
At least that forbar 'hand brake' scenario said that if they stopped developing (borrowing) they would be debt free in 2027 ... that's good
ocacash.JPG
Top chart below is from half year preso a few weeks ago
The EBITDA MARGIN line doesn't look too bad hanging around 12%
The bottom is from Full Year preso from six months ago and had things going back to 2017 ..like ebitda margin was 21% in F17, 18% in F18 and 15% in F19
And six months ago I think they said that ebitda margin would start improving because covid was over and more premium stuff etc etc ..just have to wait eh
Making things look better (less bad) pretty sneaky eh
They have changed a few other charts as well ...hmmm
Red flags to me
2B368482-79F8-4F28-B30F-7C8CC1FA00DB.jpeg
0D9E74D5-2FAF-452E-A19F-DF2EAE65DC35.jpeg
But
Excellent work Winner, thank you. Gosh the slope of that red line, cash burn looks like its steepening :o
"Care Suite premiumisation delivers results" the recent result headline read. Interesting how they changed the timeframe of the latest chart to try and show the margin in a better light. Hmmm
What are the odds 1 RV player has to do a cap raise before old mate Haast Eagle Orr finishes his hiking?
Hope not :o
Interesting 'cash burn' chart winner which had me scratching my head. It's not wrong per se - but I think it is only telling half the picture
'Cash outflows' per your graph of ~$504m is made up of:
- operating cash flows +$582m
- less capex -$985m
- less dividends -$102m
- gives circa -$504m
Meanwhile assets grew by $1.5b since FY16, and on the other side of the Balance Sheet ORA's grew by $600m, loans $240m, capital $330m and reserves + retained earnings grew $430m.
So very roughly it appears growth in the investment / income earning asset base of $1.5b was funded ~40% by residents, 16% by loans, 22% by equity and the balance from retained earnings etc. In other words this 'cash burn' of ~$500m represents around 33% of the build in asset base. Half of that was borrowings locked in at rates of 2.3% and 3.3% for 7 year terms. The remaining portion was mostly funded interest free by residents.
Looking at these numbers I would happily borrow $1 if I could get another $1-$2 free of charge to add to an asset base that makes money.....where do I sign up?
Quote from: Ferg on Dec 07, 2022, 11:36 PMInteresting 'cash burn' chart winner which had me scratching my head. It's not wrong per se - but I think it is only telling half the picture
'Cash outflows' per your graph of ~$504m is made up of:
- operating cash flows +$582m
- less capex -$985m
- less dividends -$102m
- gives circa -$504m
Meanwhile assets grew by $1.5b since FY16, and on the other side of the Balance Sheet ORA's grew by $600m, loans $240m, capital $330m and reserves + retained earnings grew $430m.
So very roughly it appears growth in the investment / income earning asset base of $1.5b was funded ~40% by residents, 16% by loans, 22% by equity and the balance from retained earnings etc. In other words this 'cash burn' of ~$500m represents around 33% of the build in asset base. Half of that was borrowings locked in at rates of 2.3% and 3.3% for 7 year terms. The remaining portion was mostly funded interest free by residents.
Looking at these numbers I would happily borrow $1 if I could get another $1-$2 free of charge to add to an asset base that makes money.....where do I sign up?
We do not have to sign up anywhere.
Just join the OCA share register,and let them continue doing what they know best.
And the Christmas Bonus is we can currently buy $1 of OCA [NTA] for 62.68 cents....!!!!!
Good people doing great things...
Quote from: Gerald on Dec 07, 2022, 10:36 PMWhat are the odds 1 RV player has to do a cap raise before old mate Haast Eagle Orr finishes his hiking?
Hope not :o
RYM should have done a cap raise in the good times (as an aside the exact same thing could be said for central bank hiking!!)
Cap raises are not a bad thing for growth companies, framing them as such has been RYM's biggest issue.
Dividends are the real stupidity for these businesses. They have no free cash flow.
Quote from: winner (n) on Dec 07, 2022, 04:32 PMThere's an old saying 'Earnings don't repay loans, Cash flow does'
Prompted me to update this - another measure I have a morbid fascination with
Its a chart of Oceania's cash burn since they floated (including dividends)
Suppose spending more and more is what happens in this sector so no worries ..... but whatever a fascinating chart showing half a billion of spend funded by the begging bowl to shareholders and borrowing more.
At least that forbar 'hand brake' scenario said that if they stopped developing (borrowing) they would be debt free in 2027 ... that's good
ocacash.JPG
Pretty picture. Accelerating trends towards the bottom right make most investor nervous. However - doesn't this chart just show that they invest money into new buildings - and their build rate has increased? Good on them, as long as they can repay their bonds / loans / occupier deposits, and so far I don't see any issues, their leverage ratio is in the mid 50'ies (which is quiet normal). Do you?
Makes sense that it takes a bit of time for an investment into a building you own to repay, doesn't it?
What exactly is the big deal?
Quote from: BlackPeter on Dec 08, 2022, 10:50 AMPretty picture. Accelerating trends towards the bottom right make most investor nervous. However - doesn't this chart just show that they invest money into new buildings - and their build rate has increased? Good on them, as long as they can repay their bonds / loans / occupier deposits, and so far I don't see any issues, their leverage ratio is in the mid 50'ies (which is quiet normal). Do you?
Makes sense that it takes a bit of time for an investment into a building you own to repay, doesn't it?
What exactly is the big deal?
Yes, no big deal
I did Suppose spending more and more is what happens in this sector so no worries .
Just see it as fascinating - suppose all in sector have similar charts - and was in context of 'Earnings don't repay loans, Cash flow does'
Quote from: BlackPeter on Dec 07, 2022, 01:40 PMFair enough.
I do use earnings according to the internationally agreed standard, while you use non standardized parameters every CFO can make up (and they do) as they see fit.
Clearly my fault - guilty as charged.
..............
Things like Underlying Earnings do use real numbers and even thought those distardly CFOs might manage what's reported they do represent a pretty good feel for how current activities (looking after and caring for people and selling properties) are doing
Insofar as your using these internationally agrred standards have you ever considered that as the resulting NPAT is essentially change in fair valuations how guesses, estimates, assumptions etc etc are behind those numbers - many guesses,estimates, assumptions I reckon
Interesting they cut their dividend and are still running their dividend reinvestment program issuing shares at a deep discount to NTA, (when most other companies stop their DRIP in similar circumstances).
Quote from: winner (n) on Dec 08, 2022, 12:15 PMThings like Underlying Earnings do use real numbers and even thought those distardly CFOs might manage what's reported they do represent a pretty good feel for how current activities (looking after and caring for people and selling properties) are doing
Insofar as your using these internationally agrred standards have you ever considered that as the resulting NPAT is essentially change in fair valuations how guesses, estimates, assumptions etc etc are behind those numbers - many guesses,estimates, assumptions I reckon
Absolutely - most books are based on guesses. However, adding another set of guesses (by using "underlying earnings") does not improve the guesswork.
I prefer books to at least try to represent a value close to what the company is worth ... and if I ignore e.g. the change of asset valuations, than I get only half the story.
Its like calculating the gains out of owning a house and ignoring at the same time the capital appreciation (or depreciati0n :o );
Announcement today that Dr Frances Hughes has resigned as Group General Manager Clinical and Care Services as she has been selected as a National Candidate for the Mana seta in next years elections.
I have no idea how winnabel this seat will be. Or how far up the List she will be.
But if she finds her self in Parliament this time next year hopefully the retirement sector has a strong advocate within the tent.
Quote from: NZInvestor on Dec 12, 2022, 10:10 AMAnnouncement today that Dr Frances Hughes has resigned as Group General Manager Clinical and Care Services as she has been selected as a National Candidate for the Mana seta in next years elections.
I have no idea how winnabel this seat will be. Or how far up the List she will be.
But if she finds her self in Parliament this time next year hopefully the retirement sector has a strong advocate within the tent.
This is my electorate. Good luck to her but I think anyone that isn't waving a red flag will struggle in this seat going on past history.
Property market still stuffed
Low number of sales a worry for OCA
https://reinz.co.nz/Media/Default/Monthly%20Press%20Release%20Assets/Residential/11%20-%20November/REINZ%20Residential%20Press%20Release%20-%20November%202022.pdf
Those REINZ numbers ..suppose we can say the property market has 'woken up' :)
winner you have a bot working right...
how do you manage this many posts a day...
sucessful retired investor, race winner and ex analyst....
Quote from: Mousehold on Dec 12, 2022, 03:47 PMThis is my electorate. Good luck to her but I think anyone that isn't waving a red flag will struggle in this seat going on past history.
If I look how Labour is dropping in popularity I'd suppose that National is quite likely to take next year as well a lot of list candidates into parliament ... and I would be surprised if anybody would give up their job if they haven't got at least a reasonably safe place on the list. Well, I wouldn't.
Quote from: NZInvestor on Dec 12, 2022, 10:10 AMAnnouncement today that Dr Frances Hughes has resigned as Group General Manager Clinical and Care Services as she has been selected as a National Candidate for the Mana seta in next years elections.
I have no idea how winnabel this seat will be. Or how far up the List she will be.
But if she finds her self in Parliament this time next year hopefully the retirement sector has a strong advocate within the tent.
Quite interesting given she also put her name forward as a National candidate for the recent Hamilton West byelection.
https://www.stuff.co.nz/national/300726857/underdog-national-party-unveils-diverse-candidate-shortlist-for-hamilton-west-byelection
So she is shopping around electorates.
I guess once you pin your colours to a political party then an executive role in a listed business like OCA becomes quite untenable. With OCA's material reliance on Government funding, and particularly as head of nursing lobbying for that funding, it would be difficult once you're seen as partisan.
Quote from: Whacc on Dec 13, 2022, 02:32 PMQuite interesting given she also put her name forward as a National candidate for the recent Hamilton West byelection.
https://www.stuff.co.nz/national/300726857/underdog-national-party-unveils-diverse-candidate-shortlist-for-hamilton-west-byelection
So she is shopping around electorates.
I guess once you pin your colours to a political party then an executive role in a listed business like OCA becomes quite untenable. With OCA's material reliance on Government funding, and particularly as head of nursing lobbying for that funding, it would be difficult once you're seen as partisan.
Mana is a safe Labour seat, currently held by Kris Faafoi. It has a history of National carpetbaggers - who routinely lost the electorate vote but then came in on the list (Parata, Finlayson etc.) Frances Hughes does not currently feature on the National Party List (2020.)
This thread has transformed the way I saw OCA re the debt leveraging and slowing down, and perfectly explains the PA that we have seen - SUM stronger, OCA and RYM weak.
However, Beagle, I think you said ARV was comparatively strong as well (debt wise). but the SP has been smashed?
Do you hold ANY retirement stocks?
Welcome to the cool people's forum Entrep, fabulous you found your way here.
Gosh what a grueling year its been in this sector. Breathtaking really. Worryingly the latest REINZ and other source date suggests the speed of the housing decline is accelerating and the volume of sales is drying up even more.
You know from the other place when I sold out of OCA.
I also sold out of ARV earlier in the year averaging about $1.70 but bought a very small "toe in the water" 2% portfolio position back again quite recently at ~ $1.20. I think on reflection I probably pulled the trigger a bit early.
Yes I think ARV is very cheap e.t.c. e.t.c., see ARV thread...but all boats go lower on an outgoing tide and that includes the good ones with no leaks in them like SUM and ARV.
I'm not keen to add to any of these stocks until we see the real estate market stabilize.
Interestingly Harbour Asset Management came out yesterday, more here see point 10 https://www.harbourasset.co.nz/research-and-commentary/top-10-risks-and-opportunities-for-2023/ and said "Extremely poor affordability, however, suggests downside risks to house prices. House price-to-income ratios and mortgage repayment costs, for example, require a further 30% decline in house prices to return to long-term averages (all else equal[/i])". ANZ N.Z's biggest lender are stress testing mortgage applicants at 8.6% and hardly anyone is qualifying because the numbers simply don't work for where interest rates and house prices currently sit. I think the severe lack of affordability is going to really undermine any prospect of any early recovery in house prices.
Maybe Balance is right and we're looking at several years of house price declines ? This real estate malaise could very easily extend into right through 2023 and well into 2024.
What's the catalyst to turn this sector around in 2023 ? I don't see one.
Quote from: Basil on Dec 16, 2022, 10:26 AM...
What's the catalyst to turn this sector around in 2023 ? I don't see one.
Increased immigration?
First home buyers needing a roof over their heads?
But I guess we shall see ....
I think that the slow decline in retirement stock prices we have seen in recent times will probably continue for a while. On that basis I sold out (oca included) a while ago for a heavy loss, and so far I am not unhappy with my choice. In saying that, I am concerned that the trend reversal may be quite rapid (say interest rates start coming down fast, and/or a few strong immigration or HPI stat prints) and I might be left high and dry. Say we get to the next investor update, and house price decline accelerates, and they say pricing has been strong, sales strong etc... that might be big on the upside. I guess the bigger question is how likely is that.
Quote from: Hectorplains on Dec 15, 2022, 09:10 PMMana is a safe Labour seat, currently held by Kris Faafoi. It has a history of National carpetbaggers - who routinely lost the electorate vote but then came in on the list (Parata, Finlayson etc.)
He's gone walkabout - the recently turned 18 member of the household is getting letters from a different numptie in red but I forget her name. Agree Mana will remain red.
All Directors etc took the DRP instead of cash ....probably Liz told them to set an example for all shareholders
Suppose many shareholders took cash ...they need to be reprimanded?
Some 68% of shares took the cash anyway ......lot higher %age if allow for the directors etc
Quote from: winner (n) on Dec 20, 2022, 10:40 AMAll Directors etc took the DRP instead of cash ....probably Liz told them to set an example for all shareholders
Suppose many shareholders took cash ...they need to be reprimanded?
Some 68% of shares took the cash anyway ......lot higher %age if allow for the directors etc
Greg Tomlinson would have been the main one.
Owned 3.2% as of the last annual report.....probably a marginally higher percentage now.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/404387/386008.pdf
And Gregg was joined by:
Elizabeth Coutts
- Alan Isaac
- Kerry Prendergast
- Sally Evans
- Peter Dufaur
- Brent Pattison
- Anna Thorburn
- Kathryn Waugh
The DRP shares our Liz got reduced her average buy price to $1.047
At current share price of 76 cents she is now $545,645 under water
At least she is sharing the pain with many eh - but she gets zillions in Directors fees to offset the pain.
But it all come right one day
Quote from: Shareguy on Dec 06, 2022, 12:19 PMThere has been a lot of good questions regarding the level of unsold units and if demand is tapering off.
Contacted Oceania with this question
"Now that the results are released can you tell me how many care suites at the close of the period 30 September 2022 are not considered contracted under a ORA agreement?"
Answer as follows
Firstly thanks for your enquiry.
As a brownfield developer of care suites, we will typically construct a new care site and then transfer residents across from the previous care centre on site, without those residents entering an ORA. There will still be other care suites available which we will sell under ORA from opening, and as the transferred residents depart we will then sell the care suite they were occupying under an ORA for the first time.
This complexity means that to date we have not disclosed the number of care suites not under ORA as it does not accurately reflect availability of stock. As we work through our pipeline of brownfield developments this will become less prevalent, however.
Feel free to contact Oceania's Investor Email address (investor@oceaniahealthcare.co.nz) for future investment related enquiries and we'll be able to get back to you.
Regards
Heath
HEATH MILNE M&A, Strategic Projects Manager
MOB +64 27 406 1798 (tel:+64%2027%20406%201798)
I do feel I must call out this so-called reply from Oceania as OCA have now built a reputation as absolute masters of obfuscation.
It is notable that every other company in this sector is completely transparent with unsold units and the type of units unsold but OCA are not. Why Not ?
Firstly, the answer is contemptuous in its nature in that it assumes investors are stupid and cannot understand the difference between a care suite being unsold under an ORA on one hand and unsold and temporarily occupied under a premium care room daily basis on the other. Investors are generally not stupid so this condescending reply amounts to "deliberate concealment of relevant financial information"
Secondly its factually incorrect as they
have disclosed this information before in the analysts call in late May 2022, (I have already posted the numbers) and additional care suites built since then and subsequent sales in the low 30's (from memory) suggests they have a very, very serious problem with unsold care suites.
Lastly, comments from management attempting to explain their poor sales in IH and especially Q2, (when I note the daily Omricon numbers had significantly abated compared to Q1) that the market simply "went to sleep" or words to that effect does not hold water as other companies in this sector such as ARV reported good sales.
I suggest the real reason you didn't get an answer is that management and directors now consider this information so commercially sensitive and care suite sales results are so poor with resulting stock level's so high they are becoming increasingly embarrassed by it.
We don't need to explain ourselves to shareholders is their prevailing attitude
The way they cut the dividend despite telling shareholders everything is going really well and despite paying everyone lots more including staff, management and directors is again, really just saying to shareholders, we'll just keep telling you stories and hope that keeps you pacified.
Not a single word in the presentation about the 10 villages they have put on the market or why ?
Again, we don't need to explain ourselves to shareholders.
Never mentioning underlying earnings per share in their presentations.
Reason, Lets hope shareholders keep believing our story that its going to get better in the future.
There is much to be admired with the clear, open, fully transparent and easily understood way others in this sector communicate with shareholders.
Basil, don't be too hard on Brent with his 'market went to sleep' comment
He was possibly saying that the market for Oceania units went to sleep .....not the overall market per se
Another, and better, way of saying not as many as we hoped bought our units (and maybe went elsewhere?)
Quote from: Basil on Dec 20, 2022, 12:45 PMLastly, comments from management attempting to explain their poor sales in IH and especially Q2, (when I note the daily Omricon numbers had significantly abated compared to Q1) that the market simply "went to sleep" or words to that effect does not hold water as other companies in this sector such as ARV reported good sales.
Quote from: winner (n) on Dec 20, 2022, 04:09 PMBasil, don't be too hard on Brent with his 'market went to sleep' comment
He was possibly saying that the market for Oceania units went to sleep .....not the overall market per se
Another, and better, way of saying not as many as we hoped bought our units (and maybe went elsewhere?)
Yes it was a contemptuous non-reply, but is the "market went to sleep" statement really a contentious issue?
Yes, Omicron numbers have abated but, in case you missed it and perhaps more significantly for RV businesses, we've also had rampant inflation and the fastest, biggest hikes in the OCR in 30 years.
I mean you need to be on another planet at the moment to not realise that interest rates and availability of credit have bought the macroeconomic environment, particularly anything related to property and asset values, to an absolute stand still. It's not news and nor is it scandalous to euphemise this situation with a statement like the "market has gone to sleep".
It has, that's not up for debate.
I'm all for hitting management over the head for things within their control, but to make a big deal about whether the market is a hard-sell or not at the moment ain't it. It objectively is a tough market.
Same people are quick to laud management teams when all they are doing is riding macroeconomic tail-winds (i.e. SUM getting lucky on fast-&-loose monetary policy to cash in on HPI from an overweight ILU portfolio - that's not managerial genius).
Basil lauds others in the sector for their disclosure, but his hot button issue is picking through the quality of OCA's care earnings when they are the only ones to provide segmented care earnings and the others refuse to?? Very strange.
so any thoughts as to a takeover, surely at almost 50% discount to NTA, it must be inviting?
Quote from: Whacc on Dec 20, 2022, 04:40 PMYes it was a contemptuous non-reply, but is the "market went to sleep" statement really a contentious issue?
As Winner has suggested, I suppose they had to come up with some story. As I said, others in the sector seem to be doing considerably better.
QuoteYes, Omicron numbers have abated but, in case you missed it and perhaps more significantly for RV businesses, we've also had rampant inflation and the fastest, biggest hikes in the OCR in 30 years.
I mean you need to be on another planet at the moment to not realise that interest rates and availability of credit have bought the macroeconomic environment, particularly anything related to property and asset values, to an absolute stand still. It's not news and nor is it scandalous to euphemise this situation with a statement like the "market has gone to sleep".
It has, that's not up for debate.
"Blind Freddy" understands all these headwinds but on any decent level of objective analysis its clear others in the sector are doing a considerably better job of selling in the last half year than OCA have done.
QuoteI'm all for hitting management over the head for things within their control, but to make a big deal about whether the market is a hard-sell or not at the moment ain't it. It objectively is a tough market.
Same people are quick to laud management teams when all they are doing is riding macroeconomic tail-winds (i.e. SUM getting lucky on fast-&-loose monetary policy to cash in on HPI from an overweight ILU portfolio - that's not managerial genius).
Basil lauds others in the sector for their disclosure, but his hot button issue is picking through the quality of OCA's care earnings when they are the only ones to provide segmented care earnings and the others refuse to?? Very strange.
Well, care is OCA's main business whereas it's just a modest part of the other companies' operations.
BTW - SUM have been making their own luck for more than 11 years now. No company is that lucky. They run a very tight ship and steer a very good course.
What should worry shareholders is the whole basis upon which OCA came to the market was a focus on premiumisation of their care units generating improved returns. Since listing we've seen EBITDA in the care sector ostensibly nearly halve and promises made in the May 2022 call that things will improve have not materialized, (EBITDA margin stuck at 12% down from 21% when they listed).
The deliberate concealment around how poorly care suites are selling flies directly in the face of the whole basis upon which this company listed. It makes me believe the whole thrust of their business endeavors is fundamentally compromised with a woeful lack of demand. (I note ARV's care suites did not sell well either) Further, with gearing now at very high level's the rate of sales is now extremely important going forward.
One thing, and frankly the only one I can think of in OCA's favour, is generally speaking their units seemed to be priced at the cheapest end of the market, (biggest percentage difference between average ILU unit prices and surrounding average real estate prices in the sector). With real estate falling rapidly prospective unit purchasers might be forced to choose a boutique smaller and cheaper village with fewer facilities instead of a unit in a full feature retirement village with one of OCA's competitors that they really want. More people may have to choose within their means whether they like it or not. That might help OCA a bit going forward.
850man - I would rate the chances of an attempted takeover of OCA as very slim in this market. ARV is probably a much better chance with its similar discount to NTA but predominantly ILU business model.
Only Brent really knows what he meant by the 'market going to sleep' in the latter half of H1. Good excuse for disappointing sales.
REINZ shows July/Sep sales volumes down 22% on same period in 2021 so maybe 'the market did go to sleep' in that quarter
Oct/Nov sales volumes are down 35% on last month ...jeez market having sweet dreams.
If this is any indicator of how many sales Oceania make the start to second half of year is going to be a SHOCKER
At least with Oceania it's all speculation because we only get numbers every 6 months from them but May seems a long way away.
Wonder the voting machine will have come up with by then Peter ....something in the 50's when the weighing machine is still showing 130/140
Quote from: winner (n) on Dec 22, 2022, 08:23 AMOnly Brent really knows what he meant by the 'market going to sleep' in the latter half of H1. Good excuse for disappointing sales.
REINZ shows July/Sep sales volumes down 22% on same period in 2021 so maybe 'the market did go to sleep' in that quarter
Oct/Nov sales volumes are down 35% on last month ...jeez market having sweet dreams.
If this is any indicator of how many sales Oceania make the start to second half of year is going to be a SHOCKER
At least with Oceania it's all speculation because we only get numbers every 6 months from them but May seems a long way away.
Wonder the voting machine will have come up with by then Peter ....something in the 50's when the weighing machine is still showing 130/140
I see well respected poster "peat" in the other forum predicting 50 cents next year for OCA.
peat has always struck me as a very smart guy.
"50 cents next year for OCA"
what to say... but stay away .....
maybe stay away from the other forum as they wont be happy holders....
Quote from: Basil on Dec 28, 2022, 01:05 PMI see well respected poster "peat" in the other forum predicting 50 cents next year for OCA.
peat has always struck me as a very smart guy.
No matter how smart he might be ... remember: Nobody can predict future stock prices (Ben Graham)! You realize that this is true for peat as well, don't you?
:) ;
https://athenarium.com/mr-market-benjamin-graham/
In The Intelligent Investor, Benjamin Graham argues that it is "absurd" for the average investor to believe that he or she can predict prices movements better and more consistently than the market can. Average investors, after all, are by definition average. They make the market so.
Most investors are average but some who study the market very closely, place great value on thorough fundamental analysis and also carefully consider technical analysis can probably beat the market more often than not. That's my theory and I will stick with it and might have quite a bit of evidence to support my theory 😉
Balance on the other forum just quoted one of Beagle's posts from late May 2022 when the share price was $1.04
As applicable today in terms of prospects for OCA as it was back then. Could be worth re-reading it. I found it useful to refresh my memory
QuoteQuote Originally Posted by Beagle View Post
I have finished my 5 years overview and a very brief synopsis is as follows.
The Float and Business Case
OCA floated on the premise that the new product called care suites would be transformational and generate far superior returns for investors.
As you can see from the presentation on page 19 http://nzx-prod-s7fsd7f98s.s3-websit...382/370976.pdf
the exact opposite of what was promised has occurred and returns on care have nearly halved from an EBITA margin of 21% to just 12%. Importantly returns were declining rapidly before Covid came along but its clear that Covid has exacerbated the issues.
Some of the reasons that explain this spectacular failure in execution of their business case as promoted at the time of the IPO appear to include:-
1. Rampant increases in the cost of human resources in the business with spectacular growth in employee costs from $103m when they listed to $156m last year an incredible 51.5% increase in staff costs.
2. A much slower increase in revenue growth from $171.8m to $231.1m over the 5 years period (34.5%).
3. Government underfunding has seriously undermined their business case and the premiumization of care hasn't worked.
4. Care suites have not met wide market acceptance and there are a total of ~ 450 unsold units inclusive of ILU units as at balance date 31 March 2022, a whole years stock. (Care suites are often initially let out as premium accommodation until they are sold, see footnote at bottom of page 31).
As a result of the spectacular failure of care suites and the systemic underfunding by the Govt of basic care (which and I am going off memory here was just on $100m in 2022 so is a huge part of their business model) underlying eps has declined from 8.60 cps in their first full year of listed operations in 2018 to 7.98 cps in 2022 and decline of 17.5% in real terms if you account for inflation.
As I have pointed out before the company has no pricing power with care suites which were only up 1-2% last year and have not kept pace with the real estate market.
Ultimately from personal experience with my Mum I believe customers are reluctant to commit to an ORA model when they don't know their longevity.
Looking forward to the next 5 years
I expect the cost of provision of care services to continue to experience rampant inflation pressures as a worldwide shortage of care and nursing staff causes huge issues with demands for more money and staff shortages. I also expect the Labour Government will play hardball with retirement village companies and continue to make them heavily subsidise care operations from other parts of their business.
This is going to cause an indefinite period during which OCA will generate very low and completely unsatisfactory returns from care.
So how long will it take OCA to execute their Pivot to independent living units so they represent more than 50% of the business model ?
Looking at page 31 and the PIE charts.
Its important to understand that currently the ratio of care to independent living units is 61:39
There are 1957 units in their development pipeline and 71% of them have already been designed and consented so it would be very difficult to change consented developments.
If they can execute at a sustained rate of 300 units per annum the pipeline will take 6.5 years to complete, a total of 11.5 years since they listed. (Please note that at the time of the listing we were told the business transformation would take 6 years)
As a result of a further 6.5 years of development they will end up with a care to independent living unit ratio of 55:45
In other words it takes a full year to move the needle one percent from care to ILU.
Conclusion
The business case upon which OCA floated has not worked. Its actually been a very poor failure in a period of strongly rising house prices, (DYOR on how much SUM grew underlying earnings in their first 5 years by way of comparison)
Care suites are not meeting wide market acceptance and OCA has no pricing power with them or basic care which combined is currently 61% of their business model.
Despite this they continue a heavy development pipeline of more care suites with most units in FY23 being care suites.
Its one thing to say you are going to pivot to independent living units but it would appear it will be 7-10 years before they have more ILU units than care, (barring major ILU village acquisitions which could somewhat speed up the process)
Seeing as this is an incredibly intense care focused business model and will be for the foreseeable future investors need to decide for themselves whether the intense cost pressures faced by those providing care services will abate anytime soon so that OCA will earn a materially better margin on its services. I think this is extremely unlikely as shortages of staff is a worldwide issue and Covid isn't going away anytime soon. Its very important to understand that even in 2028, (barring major acquisitions which might change the mix a little) OCA will still be predominantly a care based business operation.
People who believe that there is more money to be made in independent living focused business model's can execute their own pivot in less than a minute on the market, not the decade it will take OCA !
Going forward I think this will seriously underperform the others in the sector for the foreseeable future so I completed my exit from the company this week. I think the whole sector faces very serious headwinds for 2022 and potentially 2023 as well so I may remain on the sidelines for some time. In addition the Government review of this sector is very concerning and serious Government underfunding is highly likely to continue under Labour into late 2023 at least.
When the time is right I will invest the proceeds of my sell down in SUM with its well proven business model that has generated an average annual compound growth rate of 33% per annum since it listed.
I will leave you folks in peace on this thread now and conclude by wishing shareholders good luck.
I know some will hate my post and have counter points and that's fine. For the foreseeable future my time with OCA and debating it is over.
I certainly won't miss the headache's of interpreting their financial statements !
Posted by Beagle on 22 May 2022.
QuoteSp then was $1.04.
Worth reading again in the light of OCA's recent results. Balance
Some posts age poorly, and others age very well. I am as confident today as I was back then this post will stand the test of time. I really need to stop wasting time on this in 2023. I know full well without a shadow of any doubt their business case is systemically flawed compared to their competition. What others think is not of any real concern to me and I have done more than anyone could ever reasonably expect to explain my point of view. You either get what I have been trying to say since late May 2022 or you don't. Its not cheap relative to ARV by any means as their business model works and is not handicapped by the grossly excessive level's of woefully inadequately financially rewarding care services that OCA has and they trade at a very similar level of discount to NTA. More importantly ARV's underlying realised eps is growing and in real terms OCA's underlying eps is declining. You'd need rocks in your head to choose OCA over ARV at these levels in my opinion. I can't put it any more plainly and clearly than that!
Waikato (WAI WAKA) university business management department will allocated a research student to look into this modelling stated above once the student has completed their diversity and cultural sensitivity studies.
As this will take at least 2 months we wont have result till well into the doctorial year.
Did you come up with a similar set of statistics Winner() ?
Just tiring thinking of all the reading of OCA FA reports required....
Could they not convert many care suites to independant units as they become available?
A quick and dirty calculation done;
In 2017 Oca nta 77c/sh
2022 nta =$1.34.
House price inflation 2017 to 2022 (a proxy for revaluations) was up
46% so total non real estate return for Oca shareholders over 5 years is 20% or 4% PA plus net dividend yield say 4%
So 8% return pa (plus any long term increase in property prices ) all assuming shares were purchased in 2017 at nta 77c.
Not that attractive unless you want property exposure.
Just realized any debt exaggerates the return
So the business return was even lower.
Its like chasing your tail...
plan A , Plan B ... Plan C ...
who wants to even bother reading the reports when there are some real possible options going to turn up overseas next year...
heck even IBM is UP...
Should I buy this stock now or wait?
Quote from: Mr Cashflow on Jan 07, 2023, 09:13 PMShould I buy this stock now or wait?
Yikes, are those really the only two outcomes available to you? I come here to chew the fat... you know, Stock "Talk." I can only suggest you read the thread - there is some very good, detailed analysis from some knowledgeable punters - that might help you with your question. :)
Another month/year passes and again the SUM share price outperformed the OCA share price (or in an ugly month didn't fall as much as OCA)
Could look at the chart showing the relativity of the two stocks two ways.
One school of thought would be that currently OCA is the cheapest its ever been relative to SUM. In other words good buying in the hope that in the future the trend will reverse and one will be better rewarded holding OCA than SUM.
Another point of view is that they say 'the market is forward looking' and as such the market is currently saying nothing has changed and SUM will continue to do better / outperform OCA. Of course the market isn't always right and this forward looking stuff is all nonsense anyway
One never knows. January might be an inflection point and OCA outperforms SUM and continues to do so
Sorry to bore you all again but please bear with me and my morbid fascination with long standing trends
00000ocasum.JPG
Quote from: winner (n) on Jan 08, 2023, 09:00 AMAnother month/year passes and again the SUM share price outperformed the OCA share price (or in an ugly month didn't fall as much as OCA)
Could look at the chart showing the relativity of the two stocks two ways.
One school of thought would be that currently OCA is the cheapest its ever been relative to SUM. In other words good buying in the hope that in the future the trend will reverse and one will be better rewarded holding OCA than SUM.
Another point of view is that they say 'the market is forward looking' and as such the market is currently saying nothing has changed and SUM will continue to do better / outperform OCA. Of course the market isn't always right and this forward looking stuff is all nonsense anyway
One never knows. January might be an inflection point and OCA outperforms SUM and continues to do so
Sorry to bore you all again but please bear with me and my morbid fascination with long standing trends
00000ocasum.JPG
Yup, OCA is in a down trend. It may pay to recall the old Sioux adage, "that picking bottoms gets you sh*tty fingers."
Not boring at all winner. Keep sharing it. We like 'inflection points' but they are proving elusive (or illusive??).
Great image Winner. Tells you one business model is working and the other...
Quote from: Basil on Jan 08, 2023, 11:13 AMGreat image Winner. Tells you one business model is working and the other...
And that doesn't appear to be just your opinion either - its the opinion of the market per se and if market is forward looking (many keep on reminding me it is) than the market also saying it's not going to change soon
OCA care suite model arguably a decade or slightly more too early.
Average entry age into villages according to RYM and SUM is about 80.
Baby boomer tsunami started in 1946. 1946 + 80 = 2026. That suggests the boomer tsunami is about to hit retirement villages in a few years but Earl told an Auckland branch of the shareholders association meeting in his presentation a few years ago they are targeting an older demographic with their boutique villages,, ("we're different from the others and not building land based cruise ship's"), (about 85) and an even older demographic (late 80's), with their care suites 88 + 1946 = 2034.
I would argue the old adage that in the long run the market is a weighing machine not a voting machine is what's responsible for the long term trend we're seeing. If you go back to 2017 when OCA listed SUM's underlying profit was $81.7m and this year I expect they will announce close to $200m.
OCA on the other hand...oh dear...
Quote from: winner (n) on Jan 08, 2023, 09:00 AMAnother month/year passes and again the SUM share price outperformed the OCA share price (or in an ugly month didn't fall as much as OCA)
Could look at the chart showing the relativity of the two stocks two ways.
One school of thought would be that currently OCA is the cheapest its ever been relative to SUM. In other words good buying in the hope that in the future the trend will reverse and one will be better rewarded holding OCA than SUM.
Another point of view is that they say 'the market is forward looking' and as such the market is currently saying nothing has changed and SUM will continue to do better / outperform OCA. Of course the market isn't always right and this forward looking stuff is all nonsense anyway
One never knows. January might be an inflection point and OCA outperforms SUM and continues to do so
Sorry to bore you all again but please bear with me and my morbid fascination with long standing trends
00000ocasum.JPG
Maybe you should draw as well a five year chart comparing SUM and RYM (remember "1 RYM equals two SUM"?) and analyse the (spoiler alert) inflection point. This would help us to better understand the trendline OCA vs SUM and how it might change in the future ...
https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/financials/
Not sure whether analysts are using IFRS reported profits or underlying profit, but I see they're only expecting 6 cps in FY23 and contrary to one well known poster on the other site who is expecting substantial growth in FY24, analysts are again forecasting only 6 cps in FY24. If the analysts are correct, FY24 will mark 8 years since they listed, and earnings will have gone backwards in all that time.
I dare not comment on the former poster who was adamant that 1 RYM would always be worth 2 SUM or name those that supported said poster.
Quote from: Basil on Jan 08, 2023, 06:51 PMhttps://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/financials/
Not sure whether analysts are using IFRS reported profits or underlying profit, but I see they're only expecting 6 cps in FY23 and contrary to one well known poster on the other site who is expecting substantial growth in FY24, analysts are again forecasting only 6 cps in FY24. If the analysts are correct, FY24 will mark 8 years since they listed, and earnings will have gone backwards in all that time.
I dare not comment on the former poster who was adamant that 1 RYM would always be worth 2 SUM or name those that supported said poster.
Like you he's a very open poster,which is really appreciated.
Unfortunately it appears he did serious doe on A2M and then near the bottem moved quite a bit of what was left into OCA at around $1.25.
Feel for him.
This sector is mostly a hold... for an unknown quantum of time.....
Quote from: Basil on Jan 08, 2023, 06:51 PMhttps://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/financials/
Not sure whether analysts are using IFRS reported profits or underlying profit, but I see they're only expecting 6 cps in FY23 and contrary to one well known poster on the other site who is expecting substantial growth in FY24, analysts are again forecasting only 6 cps in FY24. If the analysts are correct, FY24 will mark 8 years since they listed, and earnings will have gone backwards in all that time.
I dare not comment on the former poster who was adamant that 1 RYM would always be worth 2 SUM or name those that supported said poster.
Analysts typically estimate IFRS earnings but with REITS they are often very bad in estimating the revaluation gains or losses (and yes, sometimes they tend to forget them). Not that their other forecasts are better, but hey.
Given that - they need to throw the tea leaves out of the cup to predict when the Real Estate Market will turn around. Some analysts say second half of 23, which would mean that FY24 might end real estate price wise best case as it started (remember, the OCA FY goes only to March) ... i.e. no revaluation gains (but no losses either) in FY24.
Apart from that - 6 cents EPS for a 80 cents share without any revaluation gains does not look that bad, doesn't it? Just make sure you switch off the pitch thrower before you miss the bend in the trend. It is hard to keep a sight on the opportunities if you paint everything black (and I don't mean black numbers) :P) ;
Hey BP ... that 'bend in the trend' you mention is going to start today
You'll be able to claim you called it first
What's analyst targets now ....will need to track progress towards them
Amazing what change in sentiment can do to a share price ....not bending based on awful fundamentals
Quote from: winner (n) on Jan 09, 2023, 09:30 AMHey BP ... that 'bend in the trend' you mention is going to start today
You'll be able to claim you called it first
What's analyst targets now ....will need to track progress towards them
Amazing what change in sentiment can do to a share price ....not bending based on awful fundamentals
Nothing wrong with the fundamentals ... it is just the hype factor which used to be awful. You recon it is turning now? I guess everything is possible ... If we assume that the real estate market turns mid of the year and shares are typically 6 months ahead of the economy ... you well might be right.
Are you backing up the truck?
BP - The REIT's like ARG and KPG trading at a similar discount to NTA as OCA but with 100% of their business working for them properly and effectively yielding 8.5 - 9.2% gross (for 33% taxpayers), look like a far more compelling investment case to me.
The way I see it is if you're going to park money in a no growth share you should choose one that gives you a proper yield.
Quote from: Basil on Jan 09, 2023, 10:20 AMBP - The REIT's like ARG and KPG trading at a similar discount to NTA as OCA but with 100% of their business working for them properly and effectively yielding 8.5 - 9.2% gross (for 33% taxpayers), look like a far more compelling investment case to me.
The way I see it is if you're going to park money in a no growth share you should choose one that gives you a proper yield.
Yes and no. While ARG and KPG have obviously no expenses to pay for running expensive care facilities, they can't resell the same unit every three years (or so) either.
I recon there are benefits and drawbacks on both sides.
Anyway - at this stage I believe that 2023 will turn to be a year with very good buying for REITS ... up to the individual which flavour one prefers ...
Quote from: BlackPeter on Jan 09, 2023, 09:58 AMNothing wrong with the fundamentals ...
Suppose when looking at OCA Book Value per Share since listing you could conclude nothing wrong with fundamentals. Book Value a good metric because it includes realised gains on sales as well as unrealised valuations, value of land etc held, and operating profit/loss. Basically NTA for those who prefer that measure
It's grown at 11% pa .... pretty good but last 18 months growth has been 8% pa
Pty the share price hasn't grown at 11% pa since listing eh
-00000ocabv.JPG
Really interesting,thanks for posting.
How do they compare with ARV,RYM and SUM.?
Quote from: lorraina on Jan 09, 2023, 03:35 PMReally interesting,thanks for posting.
How do they compare with ARV,RYM and SUM.?
Here's the others - indexed to 2017
Wonder what a similar chart will look like in 2027?
00000retirebv.JPG
Thanks for posting.
An incredible performance by SUM.
Quote from: lorraina on Jan 09, 2023, 04:23 PMThanks for posting.
An incredible performance by SUM.
Bodes well for Oceania 2nd half ........be good if their sales are up 18% (or more) as well
Yes I was thinking the same issues /conditions would be the same for all in the sector.
Hopefully OCA have concentrated on new unit sales.
Mr Scoullar said that the motivation to move into a retirement village is often driven by life events, not the property market.
"Our residents are driven by factors like community, security or health, which lead them to look at an offering like ours. These influences don't change significantly even in a difficult property market. As a result, we continue to see good levels of demand across our portfolio."
Quote from: winner (n) on Jan 10, 2023, 08:44 AMBodes well for Oceania 2nd half ........be good if their sales are up 18% (or more) as well
Comparing chalk with cheese there.
Ryman gave FY23 guidance today - FY23F underlying profit guidance in the range of $280 million - $290 million, about 10% higher than FY22
Bad sign is that means second half underlying profit is going to be less than last year - sales not going that well?
Jeez hope OCA are going to do better than that - going backwards in H223 would result in full year being less than last year
Suppose we need to wait until end May to find out
Lot of media/analyst commentary on RYM capital raise
Common threads have been -
- investing cash flows generally higher than operating cash flows. In plain terms cash burn
- more debt needed to fund the cash burn
- dividends have been paid despite negative cash flows
- essentially increased debt funded dividends
Much the same story with Oceania. Chart below tells a story of sorts and after Ryman finish their cap raise Oceania takes over the mantle of the most leverage in the sector
In summary since Nov 2016 -
OCA have 'burned' through over $500m of cash
OCA have paid about $13om in dividends
OCA have raised about $120m in new capital
OCA have increased debt by about $400m
Maybe OCA next cab off the rank to strengthen its balance sheet
0000ocacash.JPG
Great post Winner, agree 100%.
All in this sector have now announced a review of their build rate going forward except OCA.
After the RYM capital raise, assuming punters back current management to support RYM, OCA moves to the top spot in the sector in terms of having the highest gearing.
They will be extremely keen to liquidate their 10 lame duck villages with no development potential but who on earth is going to be the buyer for those lemons in this market?
Carrying value is approx $60m but the real value, if there is one at all, is likely to only be a fraction of that.
There are no buyers in tis market as only fools are buying at these levels...
I know a couple who are leaving in June and have bough in up state New York. Almost as bad as buying on the east cost of NZ... but its a lot cheap and they get 10 acres and a Barn...
hes US shes NZ....
She doesnt want to move but the house prices here are "eye water, nose bleed" were the comments....
what if over the next 10 years this was the high point...
there must be a lot of hurt out there in the mortgage market..
Quote from: Basil on Feb 17, 2023, 10:28 PMGreat post Winner, agree 100%.
All in this sector have now announced a review of their build rate going forward except OCA.
After the RYM capital raise, assuming punters back current management to support RYM, OCA moves to the top spot in the sector in terms of having the highest gearing.
They will be extremely keen to liquidate their 10 lame duck villages with no development potential but who on earth is going to be the buyer for those lemons in this market?
Carrying value is approx $60m but the real value, if there is one at all, is likely to only be a fraction of that.
In analyst/media commentary on RYM fiasco is a lot of chatter of how Ryman haven't been disclosing a few things ....like a lack of total transparency. Even the cap raise documents leave out detail that investors should know about.
To me Oceania always seem rather 'vague' on detail and how they keep changing how they report things is not a good sign. I sometimes wonder what is it they don't want the market/investors to know about.
That's my opinion but I reckon they can't go on burning cash without a decent capital raise soon. Results announcement in May will be interesting.
Must say winner() charting is very professional and i think he worked at solomen bros in the late 80's ear; 90 in the Mortgage bond department as they were into anything that raced on a track... they were the big gamblers on wall street...
who hasnt got the book https://en.wikipedia.org/wiki/Liar%27s_Poker.... of course have lost it and its not under a computer ... we have a lot fo computer with book under them....
if you want to see where the GFC started it started in NY in the 80's
someone explain how small boxs of wood on tiny sections can sell for 900g's in small town NZ,
Quote from: winner (n) on Feb 18, 2023, 08:34 AMIn analyst/media commentary on RYM fiasco is a lot of chatter of how Ryman haven't been disclosing a few things ....like a lack of total transparency. Even the cap raise documents leave out detail that investors should know about.
To me Oceania always seem rather 'vague' on detail and how they keep changing how they report things is not a good sign. I sometimes wonder what is it they don't want the market/investors to know about.
That's my opinion but I reckon they can't go on burning cash without a decent capital raise soon. Results announcement in May will be interesting.
Agree. OCA management are very skilled at obfuscation.
You've got to have a bit of a chuckle about companies who raise debt to ostensibly pay unimputed dividends. With a third of it going to the Goverment. Nice to see them paying some tax even if it's in a roundabout way with shareholders doing it for them.
Oh Dear Dear ...... something rotten in the state of ....
Couldn't kelp but notice that there's even a pecking order when it comes to listed bonds
Could say higher the rate higher perceived 'risk'
Rates as per NZDX
OCA 7.23% / 7.25%
ARV 6.79%
RYM 6.25%
SUM 6.23% / 6.30%
And Metlife 6.47%
Spooky
Those yields for OCA pretty much in line with Synlait. Seems about right, both have a lot to prove and a long track record of ostensibly no growth despite high debt
Jenny Ruth BusinessDesk did a piece on retirement sector cash flows and quoted Decker from Jardens a lot -main point being Underlying Profit is not a good measure of cash flow and companies should be using AFFO (– adjusted funds from operations).
Piece in the article quoting Decker - "Ryman has produced $33m of Jarden Affo over the past five years versus over $1b of underlying profit and $539m of cash dividends,"
Pretty damning
My workings seem to indicate that Oceania has produced negative AFFO the last few years .... and still pays dividends
I wonder how Oceania will be presenting cash flow in results announcement ... spotlight has been on Ryman and Summerset showed some initiative in presenting their steady state cash flow (positive)
New policy from the "Blue boys" , (who at the moment would be red , color of death).
This could help everyone from COMP props to This sector.
And from the incredible rich business information selection on STUFFED!
https://www.stuff.co.nz/national/politics/131454239/national-unveils-buildtorent-policy-it-says-will-help-solve--housing-crisis
https://en.wikipedia.org/wiki/The_Blue_Boy
Simplicity had this vision long before National did, and has rentals about to go to market in April.
"Our first rental homes are opening in April
We're putting the finishing touches on our very first Simplicity Living development - Kupenga Apartments in Point England, Auckland.
Bringing to market a range of one, two and three-bedroom apartments, these 59 modern, quality homes will be available to rent on a long-term basis (no fixed term contracts).
One-bedroom apartments start from $415 per week, and viewings will start in early April"/I]
https://simplicityliving.kiwi
Quote from: Waltzing on Mar 10, 2023, 10:45 AMNew policy from the "Blue boys" , (who at the moment would be red , color of death).
This could help everyone from COMP props to This sector.
https://www.stuff.co.nz/national/politics/131454239/national-unveils-buildtorent-policy-it-says-will-help-solve--housing-crisis
https://en.wikipedia.org/wiki/The_Blue_Boy
Brent will be happy with what's going on in property market
Sales numbers in February up nearly 40% on last year
Theres a lesser rate of decline in annual median prices and sales counts
And great news Auckland saw a 7.0% increase in median house price tipping back over the $1 million price point.
Looking forward to great OCA result in May
What REINZ said https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/reinz_february_data_2023.aspx?name=reinz_february_data_2023
Quote from: winner (n) on Mar 14, 2023, 09:15 AMBrent will be happy with what's going on in property market
Sales numbers in February up nearly 40% on last year
Theres a lesser rate of decline in annual median prices and sales counts
And great news Auckland saw a 7.0% increase in median house price tipping back over the $1 million price point.
Looking forward to great OCA result in May
What REINZ said https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/reinz_february_data_2023.aspx?name=reinz_february_data_2023
Not bashing the company today, thats refreshing.
Quote from: Breezy on Mar 14, 2023, 09:56 AMNot bashing the company today, thats refreshing.
And OCA near top of NZX leaderboard at the moment
That's good
Quote from: winner (n) on Mar 14, 2023, 09:15 AMBrent will be happy with what's going on in property market
Sales numbers in February up nearly 40% on last year
Theres a lesser rate of decline in annual median prices and sales counts
And great news Auckland saw a 7.0% increase in median house price tipping back over the $1 million price point.
Looking forward to great OCA result in May
What REINZ said https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/reinz_february_data_2023.aspx?name=reinz_february_data_2023
Objectively the ~ 40% increase in sales volumes for February year on year was very surprising considering the atrocious weather that month. Probably many of those contracts were signed in January when the weather was much better and went unconditional in February and we'll see the backwash effect of the incredibly bad weather flow through to the volume of March contracts going unconditional.
Plenty of anecdotal evidence the cost pressures with care are still hugely problematic. How I see it is when the market leader (Ryman) waves the white flag and says they have to seriously reduce the level of care in new developments going forward, after all this time with their stellar reputation in care and the risk to their reputation going forward in doing so, you know they honestly believe issues around costs run very deep indeed and are not going away in the future.
There's enough evidence with a very soft real estate market, extreme weather slowing down developments and deeply ingrained massive systemic issues with human resource cost to come to the conclusion that OCA (with the vast majority of their business model involved with care), will report another very disappointing result in May. How long before caregivers and nurses want the same 15-25% increases their Australian counterparts are after?
I think the outlook for FY24 is also very subdued and they have little or no chance of selling the ten care villages they want to exit anywhere near book value. Just keep building more and more care suites that are not selling well with more and more debt, what could possibly go wrong 😉
You could of course be right. Or maybe Ryman simply doesn't have the insight OCA does into the potential market for care. OCA has always appeared to me, to be much more in touch with the realities of the aged care situation in this country, than other providers have been. Their Care Suites are a prime example, with their provision of continuity of care in the same suite, with care support increasing as needed over the life of the occupant(s). There
is money to be made from care, even standard bed subsidised care, if one has the tenacity and patience to anticipate future needs and the inevitable changes to funding, plan ahead for future scenarios, and be ready to take advantage of them down the track.
My money is on OCA as the provide most likely to achieve that.
Quote from: Basil on Mar 14, 2023, 01:54 PMPlenty of anecdotal evidence the cost pressure with care are still hugely problematic. How I see it is when the market leader (Ryman) waves the white flag and says its too hard, after all this time with their stellar reputation in care and the risk to their reputation going forward in doing so, you know the issues around the cost of providing care run very deep indeed and are incapable of resolution.
Quote from: Basil on Mar 14, 2023, 01:54 PMObjectively the ~ 40% increase in sales volumes for February year on year was very surprising considering the atrocious weather that month. Probably many of those contracts were signed in January when the weather was much better and went unconditional in February and we'll see the backwash effect of the incredibly bad weather flow through to the volume of March contracts going unconditional.
Plenty of anecdotal evidence the cost pressures with care are still hugely problematic. How I see it is when the market leader (Ryman) waves the white flag and says they have to seriously reduce the level of care in new developments going forward, after all this time with their stellar reputation in care and the risk to their reputation going forward in doing so, you know they honestly believe issues around costs run very deep indeed and are not going away in the future.
There's enough evidence with a very soft real estate market, extreme weather slowing down developments and deeply ingrained massive systemic issues with human resource cost to come to the conclusion that OCA (with the vast majority of their business model involved with care), will report another very disappointing result in May. How long before caregivers and nurses want the same 15-25% increases their Australian counterparts are after?
I think the outlook for FY24 is also very subdued and they have little or no chance of selling the ten care villages they want to exit anywhere near book value. Just keep building more and more care suites that are not selling well with more and more debt, what could possibly go wrong 😉
Isn't this the same regurgitated rhetoric we have been hearing from you since you fell out of love with this stock? Actually i can't remember exactly how many broken relationships you have had with this bride?
Maybe its time to do a stocktake Untamed. Nearly six years on from the IPO and the share price is less than the IPO price. I think you are very "brave" with RYM's long term track record since their IPO to suggest OCA directors and management have better insight than them.
At least with ARV, (and its dirt cheap with an even bigger discount to theoretical NTA than OCA) they have actually achieved some reasonable earnings growth since their IPO. I'm probably one of the very few to have made six figures from OCA and lived to tell the tale. Sold most of my shares at roughly twice the current share price but what would I know...
Quote from: Basil on Mar 14, 2023, 02:12 PMMaybe its time to do a stocktake Untamed. Nearly six years on from the IPO and the share price is less than the IPO price. I think you are very "brave" with RYM's long term track record since their IPO to suggest OCA directors and management have better insight than them.
At least with ARV, (and its dirt cheap with an even bigger discount to theoretical NTA than OCA) they have actually achieved some reasonable earnings growth since their IPO. I'm probably one of the very few to have made six figures from OCA and lived to tell the tale. Sold most of my shares at roughly twice the current share price but what would I know...
Nothing like a good brag.
I'm not brave at all. Just someone who is able to maintain an open mind based on my observations of OCA with regards to the care branch of their business. Remember that "care" does not simply refer to standard, government subsidised care beds. Every aspect of most RVs includes some level of care, whether it be the provision of emergency call bells in villas, supported living apartments, care suites or standard care beds. OCA understands care at all of these levels and care has always been the foundation of their overall philosophy. Until that changes, I will continue to consider them the lead provider in terms of care related "insight."
RYM pulling back on care, is possibly something they needed to do right now, under the circumstances, but over the long term, unless they reverse that decision, I think they will lose out on a significant opportunity down the track.
These discussions are not a competition. If I am proven wrong that's fine. I have made a calculated, informed decision to invest in OCA, as you no doubt have, with ARV (if you still hold). Investing is a personal thing - I don't do it to compete with you or anybody else. We win some and we lose some.
Time will tell.
Quote from: Basil on Mar 14, 2023, 02:12 PMMaybe its time to do a stocktake Untamed. Nearly six years on from the IPO and the share price is less than the IPO price. I think you are very "brave" with RYM's long term track record since their IPO to suggest OCA directors and management have better insight than them.
At least with ARV, (and its dirt cheap with an even bigger discount to theoretical NTA than OCA) they have actually achieved some reasonable earnings growth since their IPO.
I'm probably one of the very few to have made six figures from OCA and lived to tell the tale. Sold most of my shares at roughly twice the current share price but what would I know...
Quote from: Untamed on Mar 14, 2023, 02:24 PMI'm not brave at all. Just someone who is able to maintain an open mind based on my observations of OCA with regards to the care branch of their business. Remember that "care" does not simply refer to standard, government subsidised care beds. Every aspect of most RVs includes some level of care, whether it be the provision of emergency call bells in villas, supported living apartments, care suites or standard care beds. OCA understands care at all of these levels and care has always been the foundation of their overall philosophy. Until that changes, I will continue to consider them the lead provider in terms of care related "insight."
RYM pulling back on care, is possibly something they needed to do right now, under the circumstances, but over the long term, unless they reverse that decision, I think they will lose out on a significant opportunity down the track.
These discussions are not a competition. If I am proven wrong that's fine. I have made a calculated, informed decision to invest in OCA, as you no doubt have, with ARV (if you still hold). Investing is a personal thing - I don't do it to compete with you or anybody else. We win some and we lose some.
Time will tell.
Yes well said and if your good and successful at anything in life its always best to be happy in yourself and let others praise you rather than yourself.
I'm out of ARV, was a mistake to get back late last year...headwinds are too strong for this sector, heck even the best (SUM) are in a confirmed downtrend. ARV bonds at 7% look alright to me though, debt level's well controlled and management are proactive about adapting their build rate to the changing economic situation unlike OCA.
One thing I agree on, RYM are not the same company they used to be. There was only ever going to be one legend, Simon Challis, when he left he was irreplaceable. A lot of people are attracted to the veneer of cheap DMF fees and don't realise there is no free lunch and they pay for it with RYM's most expensive of sector by miles, unit asking prices.
OCA a decade too early with their care suite model is how I see it. Visionaries or failures, I think the share price speaks for itself. They will come right at some stage a long way down the track if they don't get themselves into deep doggy doo with too much debt in the meantime.
Well I am happy to know that you do in fact believe OCA will come right "at some stage." That's good to know :)
I don't think their Care Suites are a decade too early. I think the demand is already there but it will probably take a year or three for them to reach peak demand. By the time your ten years is here, I think care suites will be well and truly cemented in, and more than profitable.
Never underestimate the value to the elderly, of continuity of care. It is a big enough change for someone to move out of their home into an RV (at whatever level of care) without having to move again down the track if they require a higher level of care. Moving out of what has now become your new "home" in your 80s or 90s, or older, is hugely traumatic. Especially if you need to leave a spouse behind. Care suites are a blessing in disguise. Believe me.
Quote from: Basil on Mar 14, 2023, 02:34 PMI'm out of ARV, was a mistake to get back late last year...headwinds are too strong for this sector, heck even the best (SUM) are in a confirmed downtrend. ARV bonds at 7% look alright to me though, debt level's well controlled and management are proactive about adapting their build rate to the changing economic situation unlike OCA.
One thing I agree on, RYM are not the same company they used to be. There was only ever going to be one legend, Simon Challis, when he left he was irreplaceable. A lot of people are attracted to the veneer of cheap DMF fees and don't realise there is no free lunch and they pay for it with RYM's most expensive of sector by miles, unit asking prices.
OCA a decade too early with their care suite model is how I see it. Visionaries or failures, I think the share price speaks for itself. They will come right at some stage a long way down the track if they don't get themselves into deep doggy doo with too much debt in the meantime.
Quote from: Untamed on Mar 14, 2023, 02:43 PMWell I am happy to know that you do in fact believe OCA will come right "at some stage." That's good to know :)
I don't think their Care Suites are a decade too early. I think the demand is already there but it will probably take a year or three for them to reach peak demand. By the time your ten years is here, I think care suites will be well and truly cemented in, and more than profitable.
Never underestimate the value to the elderly, of continuity of care. It is a big enough change for someone to move out of their home into an RV (at whatever level of care) without having to move again down the track if they require a higher level of care. Moving out of what has now become your new "home" in your 80s or 90s, or older, is hugely traumatic. Especially if you need to leave a spouse behind. Care suites are a blessing in disguise. Believe me.
I hear what you are saying but the demographics don't support a robust swelling of demand just yet.
I went to a presentation the previous CEO gave at the Auckland branch of the New Zealand shareholders association several years ago. Two things Earl Gasparich made very clear.
1. We're not building land-based cruise ship villages like the others. In other words OCA villages are generally not full feature villages with all the bells and whistles like RYM, SUM and ARV with things like bowling green, swimming pool,, spa complex, mini golf e.t.c..
2. We're targeting the 85+ aged group with our boutique villages.
Here's the demographic problem for OCA.
The huge baby boomer tsunami (google baby boomer generation and you'll see its generally considered this is a post-World War 2 phenomenon that started in 1946) are not 85 yet. OCA will not start to enjoy this tsunami of demand until 1946 + 85 = 2031. Like I said, about a decade too early.
On the other hand there's plenty of demand from baby boomers in their 70's looking to move into full feature villages for lifestyle reasons and this is why SUM, RYM and ARV villages that offer good continuum of care as well as full feature lifestyle facilities are selling well, as long as they're reasonably priced.
Baby boomers are lapping these villages up because they offer such a wide range of communal activities it gets people out of their units enjoying the facilities and mixing with other residents. The camaraderie in some of these upmarket villages as the community there come out to play at events held on the bowling green is a lovely thing to see. RYM have a real affordability problem with their average independent living units in Auckland being $1.4m v a median Auckland house price of $1.0m. I think that's what's contributed to their recent debt fiasco.
One thing OCA have in their favour in a falling market is their village units are generally quite cheap relative to others in the sector. That might be helpful in the next year or two as people wanting to move to a village choose a more affordable alternative than what they really want.
Don't have time to a full search but minimum age of entry for residents is 70 years at The Bellevue, Eden Village, Onehunga, Meadowbank, Whitianga and The Oaks. Maybe someone knows the minimum age for all Oceania properties?
Quote from: Buzz on Mar 14, 2023, 05:29 PMDon't have time to a full search but minimum age of entry for residents is 70 years at The Bellevue, Whitianga and The Oaks. Maybe someone knows the minimum age for all Oceania properties?
It is 70 and if a couple both have to be 70.
Oh damn. I qualify.
Quote from: Breezy on Mar 14, 2023, 05:35 PMIt is 70 and if a couple both have to be 70.
What that does that do to Basil's analysis, that (he says) it is 85's or older (which maybe it isn't?). Geez, 85, like how small is the potential client base at 85! They'll mostly all be in some retirement village or care before then anyway. Seems a bit silly for them to limit entry to 85 years old, maybe Earl was talking about something else, perhaps entry to hospital care or something, who knows. Anyway, 70 is looking like the entry number so far. That would change the aging population analysis quite a bit.
You can't restrict entry to hospital level care based on age. It is based purely on need and requires a Needs Assessment to even be considered. The assessment must show that a higher level of care is needed.
Quote from: Buzz on Mar 14, 2023, 08:39 PM... maybe Earl was talking about something else, perhaps entry to hospital care or something, who knows. Anyway, 70 is looking like the entry number so far. That would change the aging population analysis quite a bit.
Quote from: Buzz on Mar 14, 2023, 08:39 PMWhat that does that do to Basil's analysis, that (he says) it is 85's or older (which maybe it isn't?). Geez, 85, like how small is the potential client base at 85! They'll mostly all be in some retirement village or care before then anyway. Seems a bit silly for them to limit entry to 85 years old, maybe Earl was talking about something else, perhaps entry to hospital care or something, who knows. Anyway, 70 is looking like the entry number so far. That would change the aging population analysis quite a bit.
Read my post again.
What Earl said is our
target market is the older demographic, 85+. I did not say anywhere and nor does that mean that you have to be 85 to move in. Its 70+ and both partners have to be that age. Their point of difference is they generally don't offer full feature villages with all the amenities I outlined. They're smaller boutique villages, generally with a lot lower level of communal amenities which are targeted to appeal to the older demographic. Sure, some people in their 70's will choose a boutique village with a lot less amenities at a lower price point. From what I have observed, most people think they want a full feature village even if they don't end up using all the communal facilities very much.
RYM and Summerset and to some extent Arvida have been successful because they're offering what the baby boomer generation wants right now. In 10+ years people will be clambering for late stage care as that generation's needs change. The problem is a decade is a long time in this market especially when one company is carrying far too much debt.
Interesting points Basil. I see Ryman average are of entry (as at Mar 22) is 79.3 years for Independent and 85.7 years for serviced. Suspect Oceania would be in that ballpark or older. Those needs based care suites take a long time to sell down especially when many delivered in the same location at once.
I think the average entry age to ARV and SUM independent living units is very similar Mos.
It never ceases to surprise me why people leave it so late to move into a retirement village.
Without exception every resident I have ever discussed this with at various retirement villages tells me the same thing. I wish I had moved in earlier.
I guess one reason for couples is there needs to be agreement by both parties that its a good move. I suspect, just as is the case in our household, one party is often a lot more interested in retirement village living than the other.
Quote from: Basil on Mar 14, 2023, 02:12 PMMaybe its time to do a stocktake Untamed. Nearly six years on from the IPO and the share price is less than the IPO price. I think you are very "brave" with RYM's long term track record since their IPO to suggest OCA directors and management have better insight than them.
At least with ARV, (and its dirt cheap with an even bigger discount to theoretical NTA than OCA) they have actually achieved some reasonable earnings growth since their IPO. I'm probably one of the very few to have made six figures from OCA and lived to tell the tale. Sold most of my shares at roughly twice the current share price but what would I know...
As so often - you pick the data to suit your story. It is quite non sensical to compare the first 6 years of companies who started at different times. If you compare the last 5 years of OCA (yellow line) and RYM (blue line) under comparable conditions, you will see that OCA performed better than Ryman. How do you explain that?
RYM-OCA.JPG
Yep, we know that's what you think, but that doesn't automatically mean you are correct. You are primarily a trader so I accept that OCA may not be the best "pick" for your situation. But for those of who are in it for the long term, OCA will do just fine. I am not entirely convinced that you actually fully understand their "business model" - because you really don't understand Aged Care. You are not the only one. Many here do not appear to have even a basic understanding of how the system works in terms of entry to care, what that care entails, and how the government subsidies work. Add to that the fact that most here seem unwilling to accept that the current situation in this country is already at crisis point, with a pending tsunami of hospital level and dementia level cases, fast approaching. The potential market for the provision of care from here on out, is huge.
Was somebody desperate to finally getting rid of OCA having to accept 72 today
Hope it wasn't somebody we know.
We all have different investment strategies. You are a Momentum Trader so be it. Like many other's I am a long term Investor and have my timeline on OCA. I look forward to 2023/24 and onwards.
I guess with your "Myopic Vision" is that you calling it a great company with great management in 2/3 years when results finally give long term investors what we all new?
OCA is only a long term investment as they were transitioning a number of sites from old to new. You new this when you invested in OCA but have no patience so trash companies, management when it doesn't meet your expectations.
At the end of the day no one really knows how a company's going to do and more importantly what a share price will do. Even the so called experts get it wrong sometimes.
I made the mistake of buying more OCA last year and my average cost is now in the red. Still think long term it's going to do well but agree in short term it's most probably not going to do much. As soon as we see signs of house price stabilisation and interest rates going back down then the retirement sector should improve. All the so called experts agree though that there is going to be huge growth in the age care sector with massive demand coming through in the next 50 years.
So I'm holding and hope for the best. I also think when it does turn and it always has done in the past, then these beaten down companies are going to look attractive.
It won't take 50 years. Unless the government (whichever one is irrelevant) decides to take on Aged Care themselves, RV providers will be the only practical option for the provision of care. The NGOs and small private providers can't cope now. It is only a matter of time before they become non-viable.
OCA is sitting in a prime position to pick up a heck of a lot of this market. If they ever decide to take on dementia level care .... you have no idea how huge that would be. Whether that is something they would consider, I have no idea, but "someone" has to provide it. Those who believe there is no money in care, are lacking forward vision.
I'm happy to wait as long as it takes, because I strongly believe OCA is a far "smarter" company than some are willing to consider.
Quote from: Shareguy on Mar 15, 2023, 06:32 PMAt the end of the day no one really knows how a company's going to do and more importantly what a share price will do. Even the so called experts get it wrong sometimes.
I made the mistake of buying more OCA last year and my average cost is now in the red. Still think long term it's going to do well but agree in short term it's most probably not going to do much. As soon as we see signs of house price stabilisation and interest rates going back down then the retirement sector should improve. All the so cool experts to agree though that there is going to be huge growth in the age care sector with massive demand coming through in the next 50 years.
So I'm holding and hope for the best. I also think when it does turn and it always has done in the past, then these beaten down companies are going to look attractive.
Quote from: Shareguy on Mar 15, 2023, 06:32 PMAt the end of the day no one really knows how a company's going to do and more importantly what a share price will do. Even the so called experts get it wrong sometimes.
I made the mistake of buying more OCA last year and my average cost is now in the red. Still think long term it's going to do well but agree in short term it's most probably not going to do much. As soon as we see signs of house price stabilisation and interest rates going back down then the retirement sector should improve. All the so called experts agree though that there is going to be huge growth in the age care sector with massive demand coming through in the next 50 years.
So I'm holding and hope for the best. I also think when it does turn and it always has done in the past, then these beaten down companies are going to look attractive.
This forum started off well but some collective bad habits have crept back in
I think it would be a great and prudent thing for all of us posters to not make statements like something is a BUY or a SELL and provide a target price. Not only do I believe its an unwise thing to do in the first place, but its not good for the maintainability of the forum.
Post #278 on this thread a classic example: "After reviewing the result, I have downgraded my target price to 60 cents. Remaining with a SELL and if you can borrow the scrip, SHORT !"
I just don't think these sort of price targets and buy/sell recs have a place on this forum. It should be for discussing how a company is travelling, the tailwinds and headwinds present, a discussion around the pros and cons and merits of a share, people outlining their rational for buying, not buying, holding or selling a share. Invariably the discussion may lead to thoughts on if a price may increase or decrease over time or because of certain catalysts, and that is fine in my view, but up to a certain point.
The conversation becomes loaded, and while making a BUY/SELL rec and or target price may look clever if it pans out, invariably with the passage of time it's easy to be reminded of it when things move in the opposite direction. Overall all of that isn't healthy and I personally reckon should be avoided.
Hey everyone. Once again the OCA is the trouble maker on StockTalk. Is this a coincidence?
If you intend to make negative postings about OCA as an investment, please keep in mind some investors may have lost more than half of their investment in the last few years. Bragging, discussing how sad people must feel or how wrong they are/were is just straight up rude and begging for negative responses. Some of you need to learn how to read the room, and some of you need to learn to use the report and ignore functions. Blowing up a thread with a mess of emotionally charged replies makes it significantly harder to moderate. If you do not know how to use this you can message me or view/ask the help section. It is much easier for me to remove or clean offending posts when no one has replied to them. I am happy to elaborate further via pm as to why if anyone is interested.
It is frustrating to see these bonfire threads start in the same place and for similar reasons every time there is a request for moderation. As you might have noticed, I have taken the axe to many posts from today in an effort to keep content and remove bickering. My apologies if your post has been removed or "cleaned", please understand how difficult it is to define a clean line between useful information and wasteful arguments. Fiordland Moose also makes a valid point. Financial advice is not permitted on StockTalk and I recommend all posters consider their wording when discussing intentions/feelings to buy/sell or when sharing target prices of estimates of fair value. It is important to emphasise these judgements are for informing your own behaviour, not influencing that of others.
I am open to GENERAL suggestions on how to prevent this from happening again in the future.
I have a holding in Oceania. It is certainly a stock that tests patience nearly six years in from the IPO. The inflection and earnings growth is taking longer than anticipated. I think the FY24 year to 31 March 2024 will tell us a lot given Waimarie sales should come through that year. I am not sure we will learn much more in FY23 after the first half with soft new sales and a lot of the new deliveries being care suites which take a long time to sell down and don't contribute much dollar margin initially. I am willing to wait another year or so for the FY24 result to see if Oceania can deliver results.
Quote from: Administrator on Mar 15, 2023, 08:31 PMHey everyone. Once again the OCA is the trouble maker on StockTalk. Is this a coincidence?
If you intend to make negative postings about OCA as an investment, please keep in mind some investors may have lost more than half of their investment in the last few years. Bragging, discussing how sad people must feel or how wrong they are/were is just straight up rude and begging for negative responses. Some of you need to learn how to read the room, and some of you need to learn to use the report and ignore functions. Blowing up a thread with a mess of emotionally charged replies makes it significantly harder to moderate. If you do not know how to use this you can message me or view/ask the help section. It is much easier for me to remove or clean offending posts when no one has replied to them. I am happy to elaborate further via pm as to why if anyone is interested.
It is frustrating to see these bonfire threads start in the same place and for similar reasons every time there is a request for moderation. As you might have noticed, I have taken the axe to many posts from today in an effort to keep content and remove bickering. My apologies if your post has been removed or "cleaned", please understand how difficult it is to define a clean line between useful information and wasteful arguments. Fiordland Moose also makes a valid point. Financial advice is not permitted on StockTalk and I recommend all posters consider their wording when discussing intentions/feelings to buy/sell or when sharing target prices of estimates of fair value. It is important to emphasise these judgements are for informing your own behaviour, not influencing that of others.
I am open to GENERAL suggestions on how to prevent this from happening again in the future.
Thanks admin. Business is business and this forum should treat it so. I get a hell of lot of insight from these forums and truly value the discussions. Let's take the emotions out of the chat and just focus on the business. I actually like it when people put on their price targets as gives me an indication of where the room sees the stocks. As long as they do it in way that is respectful! I hold some OCA as a long term investment, they are a bit different to the other operators and that's why I have decided to go with them. The next few years will be a bumpy ride, but that's life also!
Hadn't looked at my OCA forecast for a while so with latest property and other relevant reports out had a go.
Reckon Underlying Earnings will be $57m - less than pcp and means H2 was down quite a bit.
Cash Flows seem top of mind these days and OCA wil burn through even more cash this year. Even my AFFO (proxy for operating cash flow and seen as a better measure than Underlying Earnings) is negative,
Never mind as they'll borrow to keep the dividend coming.
What the market thinks will be up to Brent and how shiny / positive his presentation is but unless he does a good job with that possibly see negative impacts on share price come May/June. Something in the 60's even
My view only so don't get grumpy if ypu think differently - you could even put up a case to convince me it could be a great result and much better than last year
Quote from: Waltzing on Mar 16, 2023, 09:46 AMquick buy the banks they look like a real Bargain today......
get a Bargain and forget buying old homes you have to do up...
Offering financial advice is a no no, read admin post above.
One of key things form property data reports is the sales volume number. Retire sector sales numbers seem to follow the overall property market - didn't Brent say the bottom has fallen out of the market or something similar
Sales volumes continue to trend down and are at multi year lows .... bould to have some impact on OCA sales volumes (esp new units) and Underlying Earnings
0000housesales.JPG
Dont buy any stocks today... its too riske...
this is not financial advise... stay home... dont move... dont even think,,,,, its too dangerous....
to help this sector please do your gardening today as it will help keep property prices up in the long run and this will keep the country looking attractive to foreign investment....
especially from space as google starts reimagining the world...
now this is not gardening advise ...
Quote from: Waltzing on Mar 16, 2023, 10:07 AMDont buy any stocks today... its too riske...
this is not financial advise... stay home... dont move... dont even think,,,,, its too dangerous....
to help this sector please do your gardening today as it will help keep property prices up in the long run and this will keep the country looking attractive to foreign investment....
especially from space as google starts reimagining the world...
now this is not gardening advise ...
Your gardening advice sounds fine.
I quite like the idea of members indicating their opinion of where the share price can go....in either direction. That is for the most part the bottom line that we care about when investing. This is not the same as providing financial advice. There are members here that are great analysts, or accountants, or medium term or short term traders. Then there are also members that seem to be passionately involved in this (or ay other) industry (industry specialists), others with long term share ownership views; the list goes on. All these types play a role in understanding the share movement better, amongst other things.
Obviously I think the concept of attacking the person on here is a no no, but good robust debate and discussion helps each other a lot more than simply everyone being yes men/ women/ people for the sake of being kind. It also shows a bit character and displays a personality rather than a bland forum.
These differences of opinion have made me question some of my own ideas and thoughts on certain stocks and I am hopeful this will continue, not only on OCA but everywhere on this forum.
Quote from: Onemootpoint on Mar 16, 2023, 11:09 AMI quite like the idea of members indicating their opinion of where the share price can go....in either direction. That is for the most part the bottom line that we care about when investing. This is not the same as providing financial advice. There are members here that are great analysts, or accountants, or medium term or short term traders. Then there are also members that seem to be passionately involved in this (or ay other) industry (industry specialists), others with long term share ownership views; the list goes on. All these types play a role in understanding the share movement better, amongst other things.
Obviously I think the concept of attacking the person on here is a no no, but good robust debate and discussion helps each other a lot more than simply everyone being yes men/ women/ people for the sake of being kind. It also shows a bit character and displays a real human presence (dare I say warmth) rather than a bland forum.
These differences of opinion have made me question some of my own ideas and thoughts on certain stocks and I am hopeful this will continue, not only on OCA but everywhere on this forum.
Obviously we all want and hope our shares will ultimately go up in price but constant downramping and trash talking a stock over a long period of time once you have made your point is very negative and not helpful except to that persons ego.
Quote from: Breezy on Mar 16, 2023, 11:17 AMObviously we all want and hope our shares will ultimately go up in price but constant downramping and trash talking a stock over a long period of time once you have made your point is very negative and not helpful except to that persons ego.
Well, that's the thing isn't it. Trash talking the stock and trash talking the person is not the same thing. The share market is dynamic, what was valid 2 years, 2 months, even 2 days ago may have changed, or not. Some do not like the financials of the stock and explain why, others like the stock regardless of current industry headwinds because it is an important business and explain why. (And this opinion is also repeated by the way) I am interested to hear both. That's how we learn.
OMP i agree with your statement... i have typed this clearly and in simple straight forward language with nothing that might not make my statements difficult to understand.
Thank you very much for well thought out ideas and it makes perfect sense to me...
Once again thank you OMP..... i really think you should put OMG on the front of your moniker.... it will make you seem ORDAINED...
or as they say in french ...
https://www.youtube.com/watch?v=R5lZPWNFizQ
Quote from: Waltzing on Mar 16, 2023, 09:44 PMOMP i agree with your statement... i have typed this clearly and in simple straight forward language with nothing that might not make my statements difficult to understand.
Thank you very much for well thought out ideas and it makes perfect sense to me...
Once again thank you OMP..... i really think you should put OMG on the front of your moniker.... it will make you seem ORDAINED...
or as they say in french ...
https://www.youtube.com/watch?v=R5lZPWNFizQ
....and of course; humour and wit is welcome every now and then ;D
Quote from: Onemootpoint on Mar 16, 2023, 11:09 AMI quite like the idea of members indicating their opinion of where the share price can go....in either direction. That is for the most part the bottom line that we care about when investing. This is not the same as providing financial advice. There are members here that are great analysts, or accountants, or medium term or short term traders. Then there are also members that seem to be passionately involved in this (or ay other) industry (industry specialists), others with long term share ownership views; the list goes on. All these types play a role in understanding the share movement better, amongst other things.
Obviously I think the concept of attacking the person on here is a no no, but good robust debate and discussion helps each other a lot more than simply everyone being yes men/ women/ people for the sake of being kind. It also shows a bit character and displays a personality rather than a bland forum.
These differences of opinion have made me question some of my own ideas and thoughts on certain stocks and I am hopeful this will continue, not only on OCA but everywhere on this forum.
Yes and no. I agree that it should be possible to talk about ones ideas about future price development ... and if people give good reasoned price targets (no matter, whether they are based on FA (like e.g. x times avg EPS) or TA (like e.g. upper boundary of current price range) - as long as the base for the forecast is disclosed, then I agree they add value.
What concerns me sometimes is posters just throwing around with random phantasy numbers without giving a reason for them (like - this number is absolutely pointless, I just made it up). This is often just teasing / ramping and well might result in novices who still believe these so called gurus making the wrong decisions.
If it makes any one feel better, Fisher Funds just burnt $80m on Signature Bank, claiming that they couldnt see it coming. But the chart said different.
So here's the lesson, a basic TA overlay to guide exits and entries, gets you out of the really shit stocks. Its that simple. The market teaches expensive lessons - both in FA and in TA. We've all been there, done that, lost money. However, the smart people don't pay twice 8)
See my Momentum Investing thread on the ASX for more info (shameless plug, as in shame I dont make any money from it lol, I'm just here to save yours!)
Quote from: KW on Mar 20, 2023, 05:20 PMIf it makes any one feel better, Fisher Funds just burnt $80m on Signature Bank, claiming that they couldnt see it coming. But the chart said different.
So here's the lesson, a basic TA overlay to guide exits and entries, gets you out of the really shit stocks. Its that simple. The market teaches expensive lessons - both in FA and in TA. We've all been there, done that, lost money. However, the smart people don't pay twice 8)
See my Momentum Investing thread on the ASX for more info (shameless plug, as in shame I dont make any money from it lol, I'm just here to save yours!)
Mr Buffett may welcome an email from you offering him some advice but then again I don't think so.
Guess you've never heard Mr Buffet's rules?
"Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."
Quote from: KW on Mar 20, 2023, 06:11 PMGuess you've never heard Mr Buffet's rules?
"Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."
I was referring to his following of TA or more to the point the lack of it.
Hope yet for a get out of jail card
In the media-
Merger and acquisition activity in Australia sparked the retirement village sector here. US investment firm Bain Capital has made a A$775m (NZ$829m) takeover offer for aged-care provider Estia Health at $3 a share, a 28% premium to its latest price of A$2.66.
A buck a share for OCA might be welcome
Quote from: winner (n) on Mar 24, 2023, 06:56 PMHope yet for a get out of jail card
In the media-
Merger and acquisition activity in Australia sparked the retirement village sector here. US investment firm Bain Capital has made a A$775m (NZ$829m) takeover offer for aged-care provider Estia Health at $3 a share, a 28% premium to its latest price of A$2.66.
A buck a share for OCA might be welcome
No way, OCA isn't in trouble and a buck a share wouldn't get me out of bed! It wouldn't excite the insiders who hold a large number of shares either.
Quote from: Buzz on Mar 24, 2023, 07:05 PMNo way, OCA isn't in trouble and a buck a share wouldn't get me out of bed! It wouldn't excite the insiders who hold a large number of shares either.
A buck a share wouldn't even get any attention, maybe 100% premium on current price would perk up a bit of interest.
Estia share price was about $2.00 last week ...rumours pushed it up a bit but news of takeover pushed share price to $2.67 today.
So offer at $3.00 essentially a 50% premium
Maybe $1.20 on same basis for OCA
estia market cap similar to OCA
Lowest volume i have ever seen so far today with this stock, perhaps end of month rebalancing is going to be big tomorrow.
At the current SP of $0.73 at 54% of NTA, surely OCA buying back shares will create more shareholder value than new developments and paying dividends that are subject to tax. Why can't the Board see this and act on it? Same story as Arvida.
I have been on a tangent surprised at the high prices and more importantly the demand for the new Ryman Takapuna village(refer Ryman thread).
Have always thought that the Helier was going to be a goldmine for Oceania due to the location.
Have done some investigation and have been told about 25 percent sold including some of the larger units. Average for a 2+ apartment is $2.5m. Seems good buying when you consider the average price in St Helliers. Would not tell me what the top price was, other than they are sold already. Some have 180 deg views and 90 to 140 2m.
The Helier is a boutique residence with just 79 independent living apartments and 31 Care Suites (for Rest Home and Hospital level care). Our first apartments will be completed in July this year, with the Care Centre to follow in November.
With a range of layouts and sizes to choose from, our 1, 2 and 2+ bedroom apartments are currently available off the plans. All apartments featuring open plan living, premium fixtures and fittings and many have beautiful views. For an indication of price, the 1 bedroom apartment is priced at $1.2M, the 2 bedroom units start from $1.725M and are on average around $2M, and the 2+ units are starting at $1.885 with an average price of $2.5M.
The Helier boasts luxurious and tasteful communal spaces – including a pool and spa, lounge area, library, gym, café, bar, pool table, dining area and cinema.
Thanks for making that enquiry, Shareguy. Very interesting pricing for that spectacular site that would have cost a small fortune and a long time to get consents to develop with its outstanding natural feature zoning overlay.
Lol I see those 2 B trolls hard at it again on the other site OCA thread, one constantly harping on about a CR and the other just continuously random trolling, heaven forbid that either of them ever end up on here or the place will become bullishly unbalanced. Whoops forgot to add the third troll of the trinity being that NZTX person, all over the place downramping but particularly on the retirement stocks, these guys are either very miserable or very bored, probably both.
This Helier project was touted as a $120m project a few years ago.
Wonder what the cost is now?
Maybe still $120m ...aren't most of their building contracts on a fixed price basis!
Huge margins coming up by looks of it
Quote from: winner (n) on Apr 14, 2023, 08:09 AMThis Helier project was touted as a $120m project a few years ago.
Wonder what the cost is now?
Maybe still $120m ...aren't most of their building contracts on a fixed price basis!
Huge margins coming up by looks of it
Well, they better complete that $130m development & sell the units real quick in the face of :
Financials as at 30 Sept 2022 :
http://nzx-prod-s7fsd7f98s.s3-websit...826/384012.pdf
Note 4.3 Bank development facility $265m
Drawn $165m
Undrawn & Available (subject to no breach of covenants 'a' to 'd') $100m
Note 5.3 Development commitment $160m
$100m is $60m short of $160m.
Quote from: Teitei on Apr 15, 2023, 11:09 AMWell, they better complete that $130m development & sell the units real quick in the face of :
Financials as at 30 Sept 2022 :
http://nzx-prod-s7fsd7f98s.s3-websit...826/384012.pdf
Note 4.3 Bank development facility $265m
Drawn $165m
Undrawn & Available (subject to no breach of covenants 'a' to 'd') $100m
Note 5.3 Development commitment $160m
$100m is $60m short of $160m.
Look - I realize that there is a lot of GroupThink and downbeating around ... and always easier to beat somebody whom others already started to take down, isn't it?
Otherwise - they sold last year 450 units (new and resell), this is 37.5 units per month. Take an average price of something like $300k - this is more than $10M coming in per month. Maybe the situation is not quite as dire as some people love to state, isn't it?
Quote from: BlackPeter on Apr 15, 2023, 05:58 PMLook - I realize that there is a lot of GroupThink and downbeating around ... and always easier to beat somebody whom others already started to take down, isn't it?
Otherwise - they sold last year 450 units (new and resell), this is 37.5 units per month. Take an average price of something like $300k - this is more than $10M coming in per month. Maybe the situation is not quite as dire as some people love to state, isn't it?
We will know next month whether OCA has been negotiating the terms of a CR being negotiated behind the scenes.
The sp falling with no clear floor and support from institutions strongly points to towards a CR.
Why would the instos put up their hands to buy on market when they can get them cheaper via a CR like Ryman?
Simple enough for OCA to state that they are not in such a process and kill off the CR scenario.
Quote from: Teitei on Apr 16, 2023, 11:28 AMWe will know next month whether OCA has been negotiating the terms of a CR being negotiated behind the scenes.
The sp falling with no clear floor and support from institutions strongly points to towards a CR.
Why would the instos put up their hands to buy on market when they can get them cheaper via a CR like Ryman?
Simple enough for OCA to state that they are not in such a process and kill off the CR scenario.
Simple enough for OCA to state things ...... but they only talk to the 'market' / shareholders when made to
Communication not one of their strong points ......almost seems they treat shareholdersxwith disdain ......like they are bloody nuisance ...but we need to go begging every now and again.
Quote from: winner (n) on Apr 16, 2023, 11:44 AMSimple enough for OCA to state things ...... but they only talk to the 'market' / shareholders when made to
Communication not one of their strong points ......almost seems they treat shareholdersxwith disdain ......like they are bloody nuisance ...but we need to go begging every now and again.
Sold to the market by Macquarie Bank & PE after they ripped huge profits out of their sell down. Maybe that's why?
Quote from: Teitei on Apr 16, 2023, 11:50 AMSold to the market by Macquarie Bank & PE after they ripped huge profits out of their sell down. Maybe that's why?
Macquaries thought it was worth 76c to $1.04 but punters only fronted up with 79c ....that in itself says something
And most of the $200m raised went into paying down debt ...not for company use.
Macquaries managed to quit the rest of their holdings at $1.10 and $1.20
Seems they were the big winners out of all this
You may be right.?
Yet going by Gregg Tomlinson's record, I would not be surprised if it turns out he is the biggest winner.
He appears to invest for the long term.
From memory he made a great deal of his wealth in the retirement village sector.
Perhaps he knows the sector and the sector's values better than Macquaries.?
Quote from: lorraina on Apr 16, 2023, 03:19 PMYou may be right.?
Yet going by Gregg Tomlinson's record, I would not be surprised if it turns out he is the biggest winner.
He appears to invest for the long term.
From memory he made a great deal of his wealth in the retirement village sector.
Perhaps he knows the sector and the sector's values better than Macquaries.?
Tomlinson buying in (as high as $1.30) could very well be the reason why OCA attracted so much retail buying and pushed the sp along in the first place?
In any case, it is indeed comforting to have him there as a shareholder given his track record in other investments.
Quote from: lorraina on Apr 16, 2023, 03:19 PMYou may be right.?
Yet going by Gregg Tomlinson's record, I would not be surprised if it turns out he is the biggest winner.
He appears to invest for the long term.
From memory he made a great deal of his wealth in the retirement village sector.
Perhaps he knows the sector and the sector's values better than Macquaries.?
Must have got zillions when he sold Qualcare into what became Oceania .... thinking long term kept a chunk in the acquiror
His throughbred stud is doing quite well ..... have fun with what you are interested in eh
Quote from: Teitei on Apr 16, 2023, 03:51 PMTomlinson buying in (as high as $1.30) could very well be the reason why OCA attracted so much retail buying and pushed the sp along in the first place?
In any case, it is indeed comforting to have him there as a shareholder given his track record in other investments.
Also comforting for shareholders having Elizabeth Coutts as Chair.
Quote from: lorraina on Apr 16, 2023, 03:57 PMAlso comforting for shareholders having Elizabeth Coutts as Chair.
Liz hoping that by the time shre retires as a director she's ahead on her shares
Nearly 3/4 million bucks under water ... average cost $1.05
Hasn't bought any for a while to average down again .... probably waiting for the capital raise that's apparently coming up
Think her and Tomlinson are closer to the company than the capital risers.
Only fiction at present,,or as we have become used to "fake news."
Quote from: winner (n) on Apr 16, 2023, 04:56 PMLiz hoping that by the time shre retires as a director she's ahead on her shares
Nearly 3/4 million bucks under water ... average cost $1.05
Hasn't bought any for a while to average down again .... probably waiting for the capital raise that's apparently coming up
Why does she have to average down? Seems this theory assumes that she doesn't already own as many shares as she wants, same goes for Mr T. Just fake CR scaremongering like the unbalanced one on the other site.
Quote from: Breezy on Apr 16, 2023, 05:11 PMWhy does she have to average down? Seems this theory assumes that she doesn't already own as many shares as she wants, same goes for Mr T. Just fake CR scaremongering like the unbalanced one on the other site.
She and the other directors have always taken the DRP, so maybe she's waiting for that which will in effect average down her holding value, assuming the SP DRP is less than her average when it happens (and that they do issue a dividend).
So will OCA sp hold the critical 70c level today?
Will management come out and categorically rule out a CR?
Meanwhile, the property market is feeling the onset of the autumn chill :
https://www.interest.co.nz/property/120779/fewer-properties-being-auctioned-less-third-selling-under-hammer
Talk to any real estate agent out there and they will tell you that vendors are still being unrealistic with asking prices. And that includes RVs.
Something has to give.
Quote from: Teitei on Apr 17, 2023, 08:57 AMSo will OCA sp hold the critical 70c level today?
Will management come out and categorically rule out a CR?
Meanwhile, the property market is feeling the onset of the autumn chill :
https://www.interest.co.nz/property/120779/fewer-properties-being-auctioned-less-third-selling-under-hammer
Talk to any real estate agent out there and they will tell you that vendors are still being unrealistic with asking prices. And that includes RVs.
Something has to give.
Why should management come out now and rule out a CR , they aren't there to satisfy your morbid fascination, Balance. Are you hoping it will drop below 70c so you can load up? Have you got some other hobbies to entertain you?
Seen it all before.
Novice or naive investors professing long term investing while fretting over falling share prices and only wanting to read positive and affirmative postings, ignoring market realities.
Have a read of this from a shareholder in ATM who kept doubling up while the sp fell and fell :
"Not really an issue for long term holders as the article itself points out, the SP could triple looking a few years down the track IMO.Citi may also have ulterior motives in their recommendations."
Ulterior motives? Well, Citi (& others) proved to be right.
Have we learnt from making losses?
We tried to share our experiences but received abuse as a consequence.
Back to OCA:
Start with why OCA's sp is falling relentlessly without attracting institutional support?
All any of us can do is guess the answer to that question, because none of us know the answer. Not even you.
But what I
do know, is that a great many people simply do not understand Aged Care. Nor do they fully understand the OCA "model of care."
Time will tell, as it does for everything. But as far as I am concerned, OCA is "well positioned" for the future of Aged Care in NZ.
Quote from: Teitei on Apr 17, 2023, 01:19 PMBack to OCA:
Start with why OCA's sp is falling relentlessly without attracting institutional support?
Quote from: Untamed on Apr 17, 2023, 01:30 PMAll any of us can do is guess the answer to that question, because none of us know the answer. Not even you.
But what I do know, is that a great many people simply do not understand Aged Care. Nor do they fully understand the OCA "model of care."
Time will tell, as it does for everything. But as far as I am concerned, OCA is "well positioned" for the future of Aged Care in NZ.
They even said so themselves last May
Headlined annual result announcement
Oceania positioned for growth
Hey TeiTei/Balance they are saying you have gone quiet over on the ST OCA thread, Mav has obviously caught you off guard with his latest detailed/very thoughtful post, cat got your tongue or is it just in knots?
Quote from: Breezy on Apr 17, 2023, 04:12 PMHey TeiTei/balance they are saying you have gone quiet over on the ST OCA thread, Mav has obviously caught you off guard with his latest detailed/very thoughtful post, cat got your tongue or is it just in knots?
I have posted and as far as I am concerned, Mav's post changes nothing. He has completely missed the underlying reason for the steep sp fall of OCA.
Howdy everybody. As some of you might have noticed, the wheels fell of here once again. I have taken action to retain OCA related content while trimming personal attacks, inappropriate references and low quality negative posting. As this seems to keep happening, I have designated this thread with the "Strict" label. This label may be applied from time to time going forward to troubled threads for securities that have declined significantly in recent times. Posters in "Strict" threads may be very underwater and more sensitive to negative sentiment, requiring tighter standards to prevent problems occurring.
Moderation in this thread and others marked "Strict" will be much less forgiving, and penalties applied for posts in these threads will apply site wide.
Now, some of you may wonder "can I post something negative in a Strict thread?". Yes. You absolutely can and it is encouraged to provide CONSTRUCTIVE difference of opinion. However, posts that contain very little information or useful thoughts will be more likely to be removed. Frequent repetitive posting of the same information or thoughts is also more likely to be removed. If your posts are frequently removed from a "Strict" thread, you may start to receive warnings that could eventually lead to temporary posting suspension. If you are a user of a "Strict" thread, please make use of the report button where you think it necessary to help focus moderation on specific posts.
If you have a problem with this, I strongly suggest you avoid posting in "Strict" threads. It is unfortunate to have to this as I don't enjoy the idea of stifling one side of a debate, but some of you have shown blatant disregard for keeping the peace. I am open to discussing this in the dedicated post pinned in both the NZX topic and Help Centre Topic.
On Stocktalk's forum, the posters gather,
To discuss stocks and share their thoughts with each other.
Some are bullish, some are bearish,
But all are passionate, that's for sure.
Yet there are some who cannot stand,
When others post views that are contrary,
They blame them for their poor stock performances,
As if they had some control over market circumstances.
They call them trolls, and they rant and rave,
As if negativity alone could cause a stock to cave.
But markets are fickle, they rise and fall,
And blaming others won't solve the problem at all.
Instead, they should listen and learn,
To the views that others have to discern.
For in the diversity of opinion lies the truth,
And only by considering it can they find their proof.
So let them post their negative views,
And let the bulls and bears debate what to choose.
For in the end, it's the market that decides!
Quote from: lorraina on Apr 16, 2023, 03:57 PMAlso comforting for shareholders having Elizabeth Coutts as Chair.
Why?
Perhaps the most over-boarded, over-rated director in NZ.
Just get management teams off the record and ask what they really think.
Quote from: Whacc on Apr 19, 2023, 02:20 PMWhy?
Perhaps the most over-boarded, over-rated director in NZ.
Just get management teams off the record and ask what they really think.
Got to love Liz
Her reason for being appropriate to Oceania —- "You have to have vision, someone up that mast looking out to the future. That's what's important."
That sounds like she's whaling (https://www.youtube.com/watch?v=7ckcwDL3XYI&ab_channel=KneesTease)out there on the wide ocean(ia.)
Jeez, week close at 68 cents
Seems instos / fundies been selling recently gradually pushing price down.
Wonder what they know?
https://edition.pagesuite.com/html5/reader/production/default.aspx?pubname=&pubid=18dca2a1-e3ba-465f-bdee-0d067d11827d
Some valuable insights into the truly appalling underfunding of care outlined in Brian Cree Executive director of Radius healthcare advertisement, see page 4.
(Seems entirely relevant, meets strict criteria for OCA thread, seeing as last time I looked OCA's business model is dominated by care (68%).
Some key extracts for anyone who can't get access for any reason:-
"We heard the promises of pay parity but they remain unfulfilled and devoid of meaningful detail. The recent 14% increase in pay for registered nurses in hospital has only exacerbated the issue once again leaving the elderly who need care out in the cold ".
"Chronic underfunding means certain parts of the aged care sector continue to face an uncertain and grim future"
"More than 1200 aged care beds have closed in the last year due to a shortage of registered nurses".
Some pretty damming claims made by that Gentleman as to how brutally tough the care sector is at present.
(Don't know how many of the claims he makes are self-serving considering it is actually an advertisement by Radius Healthcare)
Quote from: Basil on Apr 21, 2023, 06:51 PMhttps://edition.pagesuite.com/html5/reader/production/default.aspx?pubname=&pubid=18dca2a1-e3ba-465f-bdee-0d067d11827d
Some valuable insights into the truly appalling underfunding of care outlined in Brian Cree Executive director of Radius healthcare advertisement, see page 4.
(Seems entirely relevant, meets strict criteria for OCA thread, seeing as last time I looked OCA's business model is dominated by care (68%).
Some key extracts for anyone who can't get access for any reason:-
"We heard the promises of pay parity but they remain unfulfilled and devoid of meaningful detail. The recent 14% increase in pay for registered nurses in hospital has only exacerbated the issue once again leaving the elderly who need care out in the cold ".
"Chronic underfunding means certain parts of the aged care sector continue to face an uncertain and grim future"
"More than 1200 aged care beds have closed in the last year due to a shortage of registered nurses".
Some pretty damming claims made by that Gentleman as to how brutally tough the care sector is at present.
(Don't know how many of the claims he makes are self-serving considering it is actually an advertisement by Radius Healthcare)
But lets not forget that we use for some funny reason OCA in these discussions always as proxy for all REITS. Some of them have basically the same care problems and others (like listed property funds) have not, but are down as well.
I'd like to opine that while there is no doubt that care is expensive and the funding model broken - the real issue for all REITS currently being down are international events.
Negative correlation with interest rates is one thing effecting all REITS in the time of high interest rates - and the withdrawal of international funds from "exotic" currencies like the NZD in times of international trouble is one other. Given that many international funds pulled out of the NZX did clearly not help our stock prices.
Too much local navel gazing going on here without people looking at the big picture ... and too many people who just like to follow any trend and (depending on the trend) either ramp down or ramp up. Clearly - for REITS the flavour of the month is down ramping. Does not need any analysis, just compare this (and other threads) with the mood in the discussion forums.
Economy is more complicated than that, but sure - predicting that the weather tomorrow will be the same as it is today yields you as well a 61% success rate. No analysis required, not even necessary to bring out the old farmer wisdoms :0; Looking deeper requires effort and analysis.
Good news is - interest rates appear to be close to their peak (remember the negative correlation with REITS?) and the international tension won't stay forever either (though might need some more time to fade away).
REITS are currently at a discount. Might be a good time to buy into well managed REITS. I think OCA is one of them, even if there are still some cosmetic issues, but hey - which company has none?
If one thinks OCA is essentially a REIT/property developer one will likely overlook the cost of looking after people and running villages.
On a cash flow basis I'd opine that this is significant - fees, DFM etc do not totally cover the cost of looking after people and running villages.
In OCA's case I reckon the 'loss' / cash outflow for this is in the tens of million .....my estimate for F22 was $15m, that being the non-property cash outflow
Evaluating REITs etc one tends to use NTA as a base ......cash flows driven by rents etc are generally positive.
But for likes of OCA I still contend that a valuation using NTA as a baseline should be along the lines of NTA less the present value of future cash outflows for looking after people and running villages (over and above fees /DFM etc)
If indeed this outflow for OCA is about $15m one needs to discount the NTA by about $150m (about 20 cents per share)
That's how I see it anyway
Well said Winner. I would add that if thinking of OCA as a REIT the return on assets employed in basic care, (not care suites) is basically nothing and in this market, with all the serious cost and manpower issues pertaining to providing care, I think those assets have very little or no value. We will see if OCA have made any progress with their attempt to sell 10 basic care villages next month. You also need to consider the returns on care suites and whether they are lower than independent living units, my views on that are well known.
With ~ 69% of OCA's assets tied up in one form of care or another and only ~ 31% independent living, there's a lot to discount in my opinion.
A stark contrast to some REIT's that have 99%+ of their assets earning a proper commercial return.
Quote from: winner (n) on Apr 23, 2023, 08:31 AMIf one thinks OCA is essentially a REIT/property developer one will likely overlook the cost of looking after people and running villages.
On a cash flow basis I'd opine that this is significant - fees, DFM etc do not totally cover the cost of looking after people and running villages.
In OCA's case I reckon the 'loss' / cash outflow for this is in the tens of million .....my estimate for F22 was $15m, that being the non-property cash outflow
Evaluating REITs etc one tends to use NTA as a base ......cash flows driven by rents etc are generally positive.
But for likes of OCA I still contend that a valuation using NTA as a baseline should be along the lines of NTA less the present value of future cash outflows for looking after people and running villages (over and above fees /DFM etc)
If indeed this outflow for OCA is about $15m one needs to discount the NTA by about $150m (about 20 cents per share)
That's how I see it anyway
Sure - they provide an additional "service"(care) and charge for it. I agree that at current it appears they subsidize part of this service with their property income.
Question is - is this part of their long term plan, or do they just need that for the start up phase (while they are still juggling with turning old old peoples homes into flash new care units and often need to run two operations in parallel (more staff)?
I think it is the latter.
Quote from: BlackPeter on Apr 23, 2023, 11:26 AMSure - they provide an additional "service"(care) and charge for it. I agree that at current it appears they subsidize part of this service with their property income.
Me zinks you have not fully thought through ze application process for zees 'retirement villages'. If you vish to move to a retirement village, you do not vish to 'move again'. You are shopping for 'continuity of care'. This is not a zervice to be broken into parts. It is all one zervice.
There is no 'cross zubzidy' here. If a village does not provide care units on site, then no one will buy those highly profitable Independent Living Units also on site. Village income will eventually drop to zero.
RB
Quote from: Basil on Apr 23, 2023, 11:24 AMWell said Winner. I would add that if thinking of OCA as a REIT the return on assets employed in basic care, (not care suites) is basically nothing and in this market, with all the serious cost and manpower issues pertaining to providing care, I think those assets have very little or no value. We will see if OCA have made any progress with their attempt to sell 10 basic care villages next month. You also need to consider the returns on care suites and whether they are lower than independent living units, my views on that are well known.
With ~ 69% of OCA's assets tied up in one form of care or another and only ~ 31% independent living, there's a lot to discount in my opinion.
A stark contrast to some REIT's that have 99%+ of their assets earning a proper commercial return.
Hi Basil, how do you calculate 69% of OCA assets in care? Page 49 of Sep accounts shows $696 m of care assets out of total assets of $2,451 m. Even if you add care suite ORA of $198 m the care total will still only be $894 m or 36.5% of total assets. Agree they returns from care are low and unlikely to improve.
Fair point that independent living units are higher value than care. IIRC from the May 2022 call they had 69% of units as either basic care or care suites. Have a look at my lengthy analysis on the other site (Beagle) posted in April and May 2022. Posts #12336, #12339 and #12842
How I value OCA is nothing to do with NTA. With a bit of under and overs, over the years (overs when they sell down a major new village like the Sands or the forthcoming Helier and unders when there's extra headwinds from the pandemic or they haven't got an A Grade village to sell down), they seem to make around about 8 cps each year and I expect much the same in FY23 about to be reported next month, somewhere in the mid $50m underlying earnings.
They have demonstrated no ability to grow eps, indeed my observations are ostensibly all DMF gains from the business model transition over many years now are eaten up by staff, management and the residents with extra care costs. Until they can prove otherwise, (and I don't think a one off modest potential increase in eps for FY24 for the sell down of the Helier is going to be nearly sufficient proof for me), as far as I am concerned, they are a no growth company making eps of about 8 cps, give or take a bit each year. As I see it this is always going to be a very high care needs company and there's very little money in care so unless you're getting the shares dirt cheap...why bother.
Using Ben Graham's no growth PE of 8.5 which has served me incredibly well over the years as a brilliant yardstick that sifts the wheat from the chaff and sorts out a lot of the hot air B.S. that's in a lot of share prices from time to time, to me the value of OCA is 8 cps x 8.5 = what do you know, 68 cents, what it closed at on Friday. By my reckoning the shares are now down to somewhere around fair value. Good value (subject to no untoward surprises in the FY23 report would be 60 cps in my opinion).
Forbar have them on a FY24 PE of 6.9 and a gross yield of 6.9%, (when the share price was 72 cents).
This suggests eps of 10.4 cps for FY24. That's too optimistic in my opinion and highly likely to be just a temporary aberration to the upside as they sell down the Helier. At 68 cents we're probably somewhere near the bottom, but who knows...these things can overshoot by 20-30% at times so I remain happy to let the chart and TA tell me when the bottom really is in. Others think the projected uptick in eps in FY24 is just the beginning of the new growth path OCA will be commencing and many subscribe to that theory espoused by a prominent poster on the other site. From my jaundiced perspective after years of watching the very rapid escalation in the costs running this business, I'll believe growth in eps when I see it. This company has a well proven ability to disappoint and an inability to control costs within anything remotely like the rate at which the Govt increase care funding each year.
Basically, in a nutshell the ever-increasing extent of Govt underfunding of care keeps eating all the other gains. If they can shed those 10 care villages, they want to sell at even half their book value that might mitigate the problem to some meaningful extent going forward.
Yes OCA certainly tests the patience with the transformation that is taking years without much to show for it in terms of eps growth. I am also estimating modest underlying earnings growth in FY23 before the much prophesized Helier significant uplift in FY24.
The Oceania brand and offer lacks consistency ranging from luxury to budget. There does not seem to be any meaningful action to address this other than a slow shift in mix through new developments and the ongoing effort to sell the 10 small facilities that account for less than 3% of assets.
Despite the frustration with delivery, the care handbrake and the inconsistent brand/offer, I see good value at $0.68. It would be good to see the Board adopt a clearer focus on growing shareholder value by undertaking a buyback at these levels rather than additional acquisitions/greenfield developments and paying taxable dividends. If the Board don't see compelling value at half of NTA then it is hard to figure out why they think it is a good idea to allocate capital to building more care suites.
The Elephant in the room as I see it.
$696m of care assets (not including care suites). On 720m shares that's 96.7 cps of assets per share with a massive question mark about their real worth.
What are those assets really worth on today's market given we have numerous facilities owned by other operators offering basic care going broke or closing around the country ? (Some are claiming as many as 1200 basic care beds have been shut down just in the last year)
If the returns are very close to break even can they even sell the ten small care villages at any price ?
What are their other older villages that predominantly have care as their core business really worth ?
I think the apparent discount to NTA is an illusion and is simply the market recognising that these assets may have very little value on today's market either as NTA or in terms of earnings power.
Quote from: Basil on Apr 24, 2023, 10:43 AMThe Elephant in the room as I see it.
$696m of care assets (not including care suites). On 720m shares that's 96.7 cps of assets per share with a massive question mark about their real worth.
What are those assets really worth on today's market given we have numerous facilities owned by other operators offering basic care going broke or closing around the country ? (Some are claiming as many as 1200 basic care beds have been shut down just in the last year)
If the returns are very close to break even can they even sell the ten small care villages at any price ?
What are their other older villages that predominantly have care as their core business really worth ?
I think the apparent discount to NTA is an illusion and is simply the market recognising that these assets may have very little value on today's market either as NTA or in terms of earnings power.
Your point is well made and I agree goes to value of OCA shares. If Care assets were only worth half of carrying asset value it would result it would lower NTA by $0.48 to $0.86 per share. I think care assets while challenged are likely to be worth at least half of carrying value for the following reasons...
- a small amount of care (10-20% of assets) underpins the continuity of care proposition that underpins achieving good ILU sales prices and occupancy. Noting that OCA has up to 36% of assets in care including care suite ORA so is overweight and 100% care facilities don't contribute to the continuity of care proposition
- supply of care is falling and demand is increasing which will mean that premium care facilities will increasingly be able to earn cost of capital through premium charging via weekly fees and care suite ORA's. This clearly does not apply to non premium facilities where potential customers can not afford to pay despite need. This is a real problem for the healthcare system and is resulting in people having no where to go and staying in very expensive public hospital beds. Unfortunately, it is going to get really tough for people needing care but lacking funds to pay for a premium option in many places
- some of the non premium care facility properties will be able to be repurposed for new housing/commercial developments albeit the timing is not great now
Summerset seems the only operator that has optimised the care component of its portfolio justifying a better share price/NTA ratio. However the OCA share price in my view more than reflects the care handbrake and is good value at these levels.
-
What you say makes good common sense to me Mos. You're right, there is genuine potential for the conversion of older facilities into affordable housing, perhaps as rentals for older folks. You're probably right, there is value around these level's but is it a value trap? How long does it take to meaningfully mitigate the effects of the high care albatross around their neck ?
Forbar have SUM on a forward PE of only 11 and with their well proven track record of growing earnings over time and well refined business model, to me that seems a very small premium for the best of breed.
Agreed Basil. SUM seems to offer the best prospects of long term value creation for the reasons you mention and has a clearer brand position/consistency of offer. It also appears to be the best cash generator enabling growth without significant dilution aside from DRP. Therefore hold SUM as the proven and preferred value creator in the sector.
I am still anticipating a positive rerating of OCA when the Helier ORA sell down flows through the FY24 results. But I recognise for this to happen it will need to overcome the care handbrake and give the market confidence that OCA Board and Management have a recipe that can create value. I see medium term upside in OCA with limited long term downside.
Bit of chatter OCA v SUM
Interesting that since SUMs uninspiring sales update a couple of weeks ago its share price is down 6.7%
Spooky as - the OCA share price is down about the same in same period. (RYM down a bit / ARV up)
Says something about OCA I reckon.
The OCA share price as a %age of SUM share price still trending down ......I won't post the chart as it seems to upset a few ...but whatever it is a long entrenched trend.
OCA hasn't put out any news since November v SUM 2 sales updates and full year result ......when OCA comes out with a 'disappointing' result soon it wil get interesting
Quote from: Mos on Apr 24, 2023, 03:55 PMAgreed Basil. SUM seems to offer the best prospects of long term value creation for the reasons you mention and has a clearer brand position/consistency of offer. It also appears to be the best cash generator enabling growth without significant dilution aside from DRP. Therefore hold SUM as the proven and preferred value creator in the sector.
I am still anticipating a positive rerating of OCA when the Helier ORA sell down flows through the FY24 results. But I recognise for this to happen it will need to overcome the care handbrake and give the market confidence that OCA Board and Management have a recipe that can create value. I see medium term upside in OCA with limited long term downside.
Good discussion Mos, I enjoyed reading your point of view.
At this stage I'm happy keeping my powder dry and reviewing the results of all three in this sector reporting next month and go from there.
Quote from: Mos on Apr 24, 2023, 03:55 PMAgreed Basil. SUM seems to offer the best prospects of long term value creation for the reasons you mention and has a clearer brand position/consistency of offer. It also appears to be the best cash generator enabling growth without significant dilution aside from DRP. Therefore hold SUM as the proven and preferred value creator in the sector.
I am still anticipating a positive rerating of OCA when the Helier ORA sell down flows through the FY24 results. But I recognise for this to happen it will need to overcome the care handbrake and give the market confidence that OCA Board and Management have a recipe that can create value. I see medium term upside in OCA with limited long term downside.
I agree - SUM is today for the retirement sector what Ryman used to be two years ago. SUM is now the fully priced retirement village star .... and will keep shining at the share sky as long as nothing goes wrong.
Just look however, what happened to RYM since than - looking into SUM's future?
To be honest - while I agree that SUM is a well run company, I prefer to own shares where all risks are priced in, rather than shares priced to perfection. Sh*t happens ... and then it is better if its already priced in. But each to their own.
BP .... with OCA all risks are priced in, rather than SUM shares priced to perfection. Sh*t happens ... and then it is better if it's already priced in.
All risks associated with OCA priced in? Don't think so as I reckon more shit to hit the fan ..........but probably t you are hoping that it won't.
Bush then that's a prediction from both of us and as we all know nobody (not even me) can predict the future eh.
Quote from: winner (n) on Apr 25, 2023, 09:37 AMBP .... with OCA all risks are priced in, rather than SUM shares priced to perfection. Sh*t happens ... and then it is better if it's already priced in.
All risks associated with OCA priced in? Don't think so as I reckon more shit to hit the fan ..........but probably t you are hoping that it won't.
Bush then that's a prediction from both of us and as we all know nobody (not even me) can predict the future eh.
Well, yes.
However - with SUM I seemed to have a 100% hitrate when I mentioned their good odds to knock RYM of their place (4 or 5 years ago, when everybody else still propagated this funny you-know-who theorem). 1 out of 1 right! Admittedly, not statistically relevant, but maybe it works for OCA as well?
Just kidding - I agree nobody can predict the future, but seriously - OCA's odds to multibag over the coming 5 to 10 years clearly look better to me than SUM's.
Lets revisit this post in 10 years, shall we?
Hope this not impacting Oceania in Auckland .......wouldn't want our Brent to say (again) the market is stuffed etc etc
Barfoot & Thompson, which is the largest in the Auckland market by a substantial margin, sold 473 residential properties in April, down 23% compared to April last year, and the lowest number of sales in the month of April for 22 years.
https://www.interest.co.nz/property/121007/barfoot-thompsons-median-selling-price-slips-below-1-million-now-down-245k-november
Awesome presentation and rave from Oceania re full year update and future outlook.
Can't wait for the live show at 11am. It's going to be so good. I reckon Brent's rave will be as exciting as a Springsteen concert and he'll have his backup raver Kathryn supporting him.
Rock on Brent, you are the man ............and doing a great job as well.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/411935/395028.pdf
Quote from: winner (n) on May 24, 2023, 08:37 AMAwesome presentation and rave from Oceania re full year update and future outlook.
Can't wait for the live show at 11am. It's going to be so good. I reckon Brent's rave will be as exciting as a Springsteen concert and he'll have his backup raver Kathryn supporting him.
Rock on Brent, you are the man ............and doing a great job as well.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/411935/395028.pdf
Not too shabby at all, no CR (Balance so wrong) divvy ratio changed but still getting one, gearing ratio okay, its a tick from me.
If I had $2,500,000,000 in cash I reckon I'd put it in the bank at 5% and earn myself an easy $125,000,000
Income down. Expenses up. Net profit significantly down. Teeny increase in new assets. Cash on hand down. Receivables up. Net cash inflow down, net cash outflow up
I suppose there are some positives in there somewhere.
Sounds like the board and senior management team have committed vast amounts of time and made extensive efforts on their sustainability journey...that's a positive isn't it Minimoke ;)
QuoteOceania Chair, Liz Coutts said "Oceania has made tangible progress over the last year in progressing its sustainability ambitions. Oceania has committed to the Science Based Target initiative and is currently working towards its implementation of climate-related financial disclosures". We have also prepared our first Sustainability Framework, following an extensive process gaining insights from a wide range of stakeholders, including residents and our people.
Quote from: Basil on May 24, 2023, 10:03 AMSounds like the board and senior management team have committed vast amounts of time and made extensive efforts on their sustainability journey...that's a positive isn't it Minimoke ;)
I havent got to the diversity section in the annual report. I'll come back when I have.
Near 2 mill shares just went through at 80c off market so you would have to think that 80c could top it out for now.
Quote from: Basil on Apr 24, 2023, 05:11 PMGood discussion Mos, I enjoyed reading your point of view.
At this stage I'm happy keeping my powder dry and reviewing the results of all three in this sector reporting next month and go from there.
Two out of three now reported and both epic fails in my opinion. RYM's figures heavily fudged, see comments in that thread and looking at 20% reduction is eps in FY24. Both analysts reports I have read have eps all the way out to FY26 being lower than FY23, thanks to the directors and management 'fixing" the USPP fiasco by issuing so many new shares.
This year, after a protracted consenting and development program that has taken many many years OCA finally delivered the bulk of their apartments at the Helier, (62 of them) and booked their development margin on the bulk of this prestigious village.
Despite this, we see development profit largely unchanged from last year, underlying profit up only 3.4%.
Net profit after tax was FY22 $61.1m , now in FY23 a pathetic $15.4m
Total comprehensive income which captures absolutely everything, was $114.4m, now only $34.5m...oh my goodness, how is that not a disaster?
Cash flow from operating activities was $105.5m, now only $70.2m
NAV which is NTA plus all development work in progress was $1.38, now $1.36 so they're going backwards after paying a pathetic 3 cps in dividends
Final dividend cut to the bone, not unexpected given the huge increase in their debt and substantial reduction in operating cash flow
Six years in a row of no eps growth despite all sorts of assurances at the time of the IPO that the transformation of their business model would deliver much improved returns over its 6 year timeframe. Whatever happened to the long promised point of inflection with the business transformation process ? Was this just a marketing B.S. to float this dog on the market ?
Others will try and spin this year's result as some sort of success and that's their prerogative, above is how I see it and as I've said reputedly before, there in NO money in providing care, care suites or no care suites.
The real money is in independent living units and only on a rising real estate market.
Attempts to sell 10 second rate care facilities over many months has also been an epic fail with only 2 conditionally sold.
I am 100% sure this company over the short, medium AND long term will deliver bottom quartile performance in this sector.
Maybe ARV will deliver something worth thinking about...probably best I don't hold my breath.
Quote from: Basil on May 24, 2023, 11:36 AMOthers will try and spin this year's result as some sort of success and that's their prerogative, above is how I see it and as I've said reputedly before, there in NO money in providing care, care suites or no care suites.
So telling - nobody is trying harder to spin this years results as a failure - and you are taking about others?
Interesting to note as well that you love to use the underlying profit whenever you choose to ramp up one of your darlings, but given that you love to ramp down OCA, you obviously take IFRS profit.
You used to rave about the need for capital raises and other nonsensical stuff. No apology coming forward from you, just some more down ramping.
Another unbalanced post - not surprising, but disappointing.
I shall go and walk Tony the Pony. You clearly don't appreciate my analysis of this stock and others also seem to feel the same way so I will leave you guys to pump each other's tyres. To be quite frank about it, I couldn't care less about this company anymore. Only posted because I thought perhaps one or two might be interested in what I thought. If no one is, I am totally relaxed about that and quite content to stop bothering to cover it anymore.
Quote from: Basil on May 24, 2023, 12:08 PMI shall go and walk Tony the Pony. You clearly don't appreciate my analysis of this stock and others also seem to feel the same way so I will leave you guys to pump each other's tyres. To be quite frank about it, I couldn't care less about this company anymore. Only posted because I thought perhaps one or two might be interested in what I thought. If no one is, I am totally relaxed about that and quite content to stop bothering to cover it anymore.
I was unmoved by the results. Seems I'm in step with the market that is currently voting at $0.78 / $0.77
Had a quick look and think it's a terrible result.
Gearing increasing to 36.9% (from 30.8% in FY22e). Has entered into an agreement to sell two of its Auckland care sites to a smaller operator. On books at $10.2m so what price I wonder.
Declared final dividend of 1.3 cents per share (not imputed)
$12m insurance income.
$15.4 m profit against $61.1 YEM22
EPS 2.2 cents against 8.7 cents YEM22
In a nut shell care costs are the big issue.
Will continue to hold at this stage.
May 2022 acquired Remuera Rise and Bream Bay and proudly said strong accretion in Underlying Earnings per share in FY23
FY22 Underlying Profit $56.7m was EPS of 8.2 cents. FY 23 numbers $58.6m and EPS of 8.0 cents (weighted average number of shares used)
Wouldn't say 8.0 to 8.2 is 'strong accretion'
But essentially the issue is that in spite of two big acquisitions Underlying Earnings haven't really grown at all.
I see in the Notes Bream Bay contributed $1.7m NPBT and Remuera Rise contribution was 'immaterial' ...hmmmm
I see Assets for Sale are now $104m
What's the story here
Hmm, I thought it quite a good result.
But then again, I tend to look at the underlying profit ($80m) and the increase in embedded value ($90m) as being the most important metrics at this stage of the company's maturity.
I can't understand why people get hung up on the increase/decrease in property valuations without also acknowledging the significant discount of the SP compared to NAV. Ie the market has already baked in an asset value way below current CBRE valuations
Not a pretty picture
Especially considering the acquisitions made over the years (and the capital raises)
0000ocaeps.JPG
Quote from: Basil on May 24, 2023, 11:36 AMTwo out of three now reported and both epic fails in my opinion. RYM's figures heavily fudged, see comments in that thread and looking at 20% reduction is eps in FY24. Both analysts reports I have read have eps all the way out to FY26 being lower than FY23, thanks to the directors and management 'fixing" the USPP fiasco by issuing so many new shares.
This year, after a protracted consenting and development program that has taken many many years OCA finally delivered the bulk of their apartments at the Helier, (62 of them) and booked their development margin on the bulk of this prestigious village.
Despite this, we see development profit largely unchanged from last year, underlying profit up only 3.4%.
Net profit after tax was FY22 $61.1m , now in FY23 a pathetic $15.4m
Total comprehensive income which captures absolutely everything, was $114.4m, now only $34.5m...oh my goodness, how is that not a disaster?
Cash flow from operating activities was $105.5m, now only $70.2m
NAV which is NTA plus all development work in progress was $1.38, now $1.36 so they're going backwards after paying a pathetic 3 cps in dividends
Final dividend cut to the bone, not unexpected given the huge increase in their debt and substantial reduction in operating cash flow
Six years in a row of no eps growth despite all sorts of assurances at the time of the IPO that the transformation of their business model would deliver much improved returns over its 6 year timeframe. Whatever happened to the long promised point of inflection with the business transformation process ? Was this just a marketing B.S. to float this dog on the market ?
Others will try and spin this year's result as some sort of success and that's their prerogative, above is how I see it and as I've said reputedly before, there in NO money in providing care, care suites or no care suites.
The real money is in independent living units and only on a rising real estate market.
Attempts to sell 10 second rate care facilities over many months has also been an epic fail with only 2 conditionally sold.
I am 100% sure this company over the short, medium AND long term will deliver bottom quartile performance in this sector.
Maybe ARV will deliver something worth thinking about...probably best I don't hold my breath.
At first glance it looks like the average result we should have been expecting for FY23. I don't think any development margin for The Helier is included in FY23 unless some Helier ORA's were sold and settled. I expect this to be a major boost to FY24. So in a down real estate market this kind of average performance in FY23 seems the best that could have been hoped for. The declining cash inflows are a watch out and we know there is no meaningful profit in care, but unless the real estate market tanks significantly further I am expecting the Helier sale to deliver a very good year in FY24.
Quote from: Basil on May 24, 2023, 12:08 PMI shall go and walk Tony the Pony. You clearly don't appreciate my analysis of this stock and others also seem to feel the same way so I will leave you guys to pump each other's tyres. To be quite frank about it, I couldn't care less about this company anymore. Only posted because I thought perhaps one or two might be interested in what I thought. If no one is, I am totally relaxed about that and quite content to stop bothering to cover it anymore.
Don't mind too much the detractors, Beagle. They are still punch drunk from the battering they have taken from this stock and cannot handle any objective & meaningful assessments.
OCA's results make for very sobering reading - massive cashflow deficits plugged by massive borrowings. Any company paying dividends using debt waves a very big red flag and OCA is no exception.
I am surprised they did not do a CR but that may be because they have now put $104m of properties for sale. As W69 pointed out, their track record does not give confidence they add much value to their acquisitions and developments.
Quote from: winner (n) on May 24, 2023, 02:35 PMMay 2022 acquired Remuera Rise and Bream Bay and proudly said strong accretion in Underlying Earnings per share in FY23
FY22 Underlying Profit $56.7m was EPS of 8.2 cents. FY 23 numbers $58.6m and EPS of 8.0 cents (weighted average number of shares used)
Wouldn't say 8.0 to 8.2 is 'strong accretion'
But essentially the issue is that in spite of two big acquisitions Underlying Earnings haven't really grown at all.
I see in the Notes Bream Bay contributed $1.7m NPBT and Remuera Rise contribution was 'immaterial' ...hmmmm
OCA paid $57m in July 2022 for Bream Bay & Remuera Rise - so 3% return in 8 months or 4.5%. Just about covered the interest cost!
With all due respect Balance, these kinds of comments are condescending and do nothing to enhance your "reputation." You make many assumptions about OCA investors, which are unjustified and incorrect in most cases. I am well down on my OCA holding right now, but not even remotely "punch drunk from the battering." I don't need to justify my investing decisions to anyone but me, and right now I am very happy to hold OCA. The problem you, and some others have, is you are so focussed on the numbers that you have tunnel vision. Yes, the numbers are important, but it is very evident that you do not truly understand either Aged Care (as a societal/health related need) OR what OCA is working to achieve with their business. It is absolutely nonsensical that we have these circular "discussions" on this company, that
always end up in a slinging match. Why can't we all bring our own particular skills or knowledge, to the table, and just leave them there for others to "read" and come to their own conclusions about? Why does it have to be a freaking competition all the time? Aside from being incredibly tiring, it achieves nothing and distracts from mature, constructive discussion.
Why does it bother you so much that someone invests in a company you don't approve of? I couldn't care less what
you invest in. It's not my business. Offer your contributions in a polite and respectful way, then let it go. These constant personal attacks need to stop - and I mean everyone, not just you.
Most of us came here to avoid that. Don't make us regret it.
Quote from: Teitei on May 24, 2023, 09:07 PMDon't mind too much the detractors, Beagle. They are still punch drunk from the battering they have taken from this stock and cannot handle any objective & meaningful assessments.
Quote from: Untamed on May 25, 2023, 09:19 AMWith all due respect Balance, these kinds of comments are condescending and do nothing to enhance your "reputation." You make many assumptions about OCA investors, which are unjustified and incorrect in most cases. I am well down on my OCA holding right now, but not even remotely "punch drunk from the battering." I don't need to justify my investing decisions to anyone but me, and right now I am very happy to hold OCA. The problem you, and some others have, is you are so focussed on the numbers that you have tunnel vision. Yes, the numbers are important, but it is very evident that you do not truly understand either Aged Care (as a societal/health related need) OR what OCA is working to achieve with their business. It is absolutely nonsensical that we have these circular "discussions" on this company, that always end up in a slinging match. Why can't we all bring our own particular skills or knowledge, to the table, and just leave it there for others to "read" and come to their own conclusions about? Why does it have to be a freaking competition all the time? Aside from being incredibly tiring, it achieves nothing and distracts from mature, constructive discussion.
Why does it bother you so much that someone invests in a company you don't approve of? I couldn't care less what you invest in. It's not my business. Offer your contributions in a polite and respectful way, then let it go. These constant personal attacks need to stop - and I mean everyone, not just you.
Most of us came here to avoid that. Don't make us regret it.
I've been in and out of OCA a few times and been burnt each time. I reckon I have a pretty good handle on our aging popluaiton demographics, the state of our health care system and the aver arching political situation.
And given all that the only thing we should be relying on is the numbers. They tell the story now and in the immeditate future.
So taking those factors into account
- the aging demographics won't change. But what needs to be looked at is the young demographics and the earning ability of those people - because they are the ones that will fund Aged Care in the future. And I dont like what I am seeing there. I think the Brain Drain will be a real problem.
- I see no immediate or mid term change in our health systems. Its like the proverbial oil tanker. Extremely difficult to turn around. And Aged Care isn't a priority.
- Politically. I'm not sensing any appetite by either of the major parties to implement the real and significant change in tehis area
So, for those broad reasons, unless the numbers tell me something different OCA is currently not a goer for me.
Disc - I do hold SUM. And the only reason I invest is to make money (and often I'm not very good at it. But at least wins outweigh the losses)
Quote from: winner (n) on May 24, 2023, 04:41 PMNot a pretty picture
Especially considering the acquisitions made over the years (and the capital raises)
[url="https://stocktalk.co.nz/index.php?action=dlattach;attach=900;type=preview;file"]0000ocaeps.JPG[/url]
Hmm - I guess I get it ... we are all used to unlimited and exponential growth and if we don't get it, we complain like a bunch of naughty children not getting their sugar fix.
However, what I don't understand is - why should a capital raise result in a higher EPS? A capital raise results (hopefully) in higher earnings, but as well in a higher number of shares ... i.e., what's really wrong if EPS stays constant, assuming its high enough? They asked for some more money and they paying for this money the same return as for the initial amount. Fair enough.
I am quite happy with a rather constant (and good enough) underlying EPS, particularly considering that real estate is cyclical. Lets not forget, that a good part of OCA's real (IFRS) earnings is related to the value of their real estate ... and while last year was a terrible year for the property market, 7 to 8 years in every decade are typically good years for real estate.
Looking forward to the earnings flowing in come 2025 or so ...
Quote from: BlackPeter on May 25, 2023, 09:57 AMHmm - I guess I get it ... we are all used to unlimited and exponential growth and if we don't get it, we complain like a bunch of naughty children not getting their sugar fix.
However, what I don't understand is - why should a capital raise result in a higher EPS? A capital raise results (hopefully) in higher earnings, but as well in a higher number of shares ... i.e., what's really wrong if EPS stays constant, assuming its high enough? They asked for some more money and they paying for this money the same return as for the initial amount. Fair enough.
I am quite happy with a rather constant (and good enough) underlying EPS, particularly considering that real estate is cyclical. Lets not forget, that a good part of OCA's real (IFRS) earnings is related to the value of their real estate ... and while last year was a terrible year for the property market, 7 to 8 years in every decade are typically good years for real estate.
Looking forward to the earnings flowing in come 2025 or so ...
You forget each time acquire something and have a capital raise it is eps accretive ...almost a promise
Quote from: winner (n) on May 25, 2023, 10:00 AMYou forget each time acquire something and have a capital raise it is eps accretive ...almost a promise
.... almost a promise? So - did they, or didn't they?
Honestly - I can't remember a promise - and lets face it, wasn't the majority of their CR's a sell down of Maccas shares? Why would that increase EPS?
Quote from: BlackPeter on May 25, 2023, 10:24 AM.... almost a promise? So - did they, or didn't they?
Honestly - I can't remember a promise - and lets face it, wasn't the majority of their CR's a sell down of Maccas shares? Why would that increase EPS?
The capital raise in 2021 (not a sell down) to acquire Hobsonville they said 'immediatately earnings accretive'. The Remeura/Brean Bay were said to be 'strong accretion to underlying earnings per share'
The latter paid for by debt ...you'd think that a bit of debt help would increase EPS
OK not exactly a promise but pretty close to one ........and in my eyes they have failed to deliver this increased EPS
Quote from: winner (n) on May 25, 2023, 11:46 AMThe capital raise in 2021 (not a sell down) to acquire Hobsonville they said 'immediatately earnings accretive'. The Remeura/Brean Bay were said to be 'strong accretion to underlying earnings per share'
The latter paid for by debt ...you'd think that a bit of debt help would increase EPS
OK not exactly a promise but pretty close to one ........and in my eyes they have failed to deliver this increased EPS
Fair enough if that's what they said (EPS accretive) for Remuera. Take that at face value.
However -for Hobsonville you realise that earnings accretive is not the same as EPS accretive, do you? I am sure the earnings went up ... and so did the number of shares :) ;
Craigs latest "You can't eat NTA"
OCA delivered a flat FY23 result, with uEBITDA up 5% to $80m (or c.2% organic growth, after backing out acquisitions). OCA's earnings have been broadly flat for five years now as it upgrades its portfolio. Most key metrics deteriorated, with new sales well below our expectations, and the level of unsold inventory almost doubled to $374m over 2H23. Net debt increased to $551m, with gearing up 780bps YoY to 37%, above management's target.
Course correction
OCA's key problems are twofold: i) the existing assets generate negative FCF and ii) its new villages have been slow to sell. Indeed, based on the run rate of sales in 2H23, it is taking OCA around 2 years to sell units. To their credit management have acknowledged the problem and are undertaking correction actions including: i) lowering the build rate to 200-250 units pa ii) lowering the capex intensity of the build rate by pivoting towards broad acre sites iii) selling assets, with over $10m sold to date and c.$50m to go iv) lowering the dividend payout ratio from 50-60% to 30-50% (payout was 38% in FY23). These actions should see net debt start to trend down from 2H24.
You can't eat NTA
Trading at 0.6x NTA, OCA has gained some popularity amongst value investors, but as one seasoned fund manager once told this analyst "you can't eat NTA!". We are cautious on the notion OCA is a "value" stock and caution further that not all NTAs are created equal. We highlight OCA's free cashflow from its existing portfolio (that is, operating cashflows less new sales revenue and growth capex but ignoring interest) was -$11.8m in 2H23 alone. While a slight improvement on pcp, OCA's cash generation is not supportive of the reported book value of its assets in our view. Indeed, as we highlight in the note, OCA's cash generation from its existing assets is significantly worse than RYM and SUM relative to its asset backing. In short, the lower cash generation of OCA's existing assets supports the shares trading at a deeper discount to reported book value than its larger peers.
Upgrade to Neutral, $0.90 TP
OCA is now taking corrective action which should see net debt start to come down from 2H24, at around the same time housing market conditions start to improve post the RBNZ's pause yesterday, while margin from The Helier development should help OCA deliver earnings growth over FY24/FY25 (CIPe +14% FY24/FY25
Hardly a resounding vote of confidence in management by Craig's.
Net debt may come down around 2H24 - yeah maybe but the trend is not your friend currently
Definitely will come down somewhat when they announce another cap raise - I was expecting an underwritten cash issue announcement with the annual results
Maybe the beanies aren't very good or the Board aren't listening.
So far Maccas are doing best out of this company - they smart peeps
Quote from: Crackity on May 28, 2023, 12:37 AMHardly a resounding vote of confidence in management by Craig's.
Net debt may come down around 2H24 - yeah maybe but the trend is not your friend currently
Definitely will come down somewhat when they announce another cap raise - I was expecting an underwritten cash issue announcement with the annual results
Maybe the beanies aren't very good or the Board aren't listening.
So far Maccas are doing best out of this company - they smart peeps
OMG - I'm so out of date with this company - here is the current CEO bio
Brent Pattison
Chief Executive Officer
Brent has over a decade of experience in Investment Banking, is a qualified chartered accountant and has held senior finance roles in NZ corporations across the Telecommunications and Financial Services industries.
Brent has a keen focus and interest in the Aged Care & Retirement sector including providing Investment Banking advice to Oceania during the 2017 IPO and to the other listed and privately owned peers in the sector.
There ya go - nothing to see here - it's all good
Quote from: winner (n) on May 24, 2023, 04:41 PMNot a pretty picture
Especially considering the acquisitions made over the years (and the capital raises)
[url="https://stocktalk.co.nz/index.php?action=dlattach;attach=900;type=preview;file"]0000ocaeps.JPG[/url]
Craig's negative on this warranted in my opinion. I think this great graph from winner says it all. EPS going no where. Care is costing them and will continue unless the government comes to the party. Debt needs to come down and should with the divi and build rate cut, plus some asset sales ($60m). Unsold stock a worry but hopefully a timing issue. The Helier which I think is in a great location should save the day FY24. Trading at a large discount to NTA. Can't see that changing in a hurry.
It's a hold for me currently. Still like the sector as part of a balanced long term portfolio and have been adding Arv, Rym and Sum this year.
Quote from: Crackity on May 28, 2023, 01:19 AMOMG - I'm so out of date with this company - here is the current CEO bio
Brent Pattison
Chief Executive Officer
Brent has over a decade of experience in Investment Banking, is a qualified chartered accountant and has held senior finance roles in NZ corporations across the Telecommunications and Financial Services industries.
Brent has a keen focus and interest in the Aged Care & Retirement sector including providing Investment Banking advice to Oceania during the 2017 IPO and to the other listed and privately owned peers in the sector.
There ya go - nothing to see here - it's all good
Some would say having an accountant run a care business not the best. ...numbers centric v people/empathy focus rarely gel
I'm glad I'm not the only one who breaks cash flow into Property Related Cash Flow and what I call Cash Flow from Day to Day Operations (running villages and caring for people)
From that Craig's stuff ... We highlight OCA's free cashflow from its existing portfolio (that is, operating cashflows less new sales revenue and growth capex but ignoring interest) was -$11.8m in 2H23
That -$11.8m (negative) in six months is a big number and it seems to be getting worse. I see that as akin to an operating LOSS.
"You can't eat NTA", ie not all NTAs are created equal. Must add to my investing quotes
Interesting CIP don't really see OcA as a 'value' stock.
Further from Craigs
OCA's free cashflow from its existing portfolio (that is, operating cashflows less new sales revenue and growth capex) was -$11.8m in 2H23. This is prior to deducting interest (which we largely attribute to funding development WIP). While this is a slight improvement on pcp, OCA has again delivered a poor operating performance that in our view is not supportive of the carrying value of its assets. Indeed, as we highlight in the chart on the prior page (bottom right), OCA's cash generation from its existing assets is significantly worse than RYM and SUM relative to its asset backing (see chart above right).
This all means that OCA's existing assets are neither able to fund growth (nor the interest expense of funding growth) nor are they able to fund the cash.
We will give OCA some credit: management have started to recognise the unsustainability of the current strategy and some corrective action is now being taken, including:
Lowering the build rate. Like RYM last week, OCA has by stealth essentially lowered its build rate by missing its prior guidance for FY23 while only maintaining guidance for FY24. Projects currently under construction have been slowed. Management have also acknowledged that new project starts will require a high degree of confidence in the economics (which is unlikely in the current environment).
Lowering capex intensity: part of the reason OCA has a sector leading level of unsold new stock is that it has a capex intensive, apartment and Care Suite focused build model. These large blocks require a lot of up-front capex and take 2-3 years to sell down (such as Awatea and, likely, The Helier). A pivot to greenfield broad acre sites to develop will however take quite some time (Bream Bay being a good example).
Lowering the dividend payout ratio from 50-60% previously to 30-50%, with a cut in the total dividend to 3.2cps as a result
Asset sales: at the interim result OCA indicated it would sell $60m of underperforming aged care assets, with $10m sold at a premium to book value. The sale is clearly a good result. We note OCA's sales strategy appears to be canny, targeting local operators or buyers more prepared to pay premium rates for one or two assets, as opposed to portfolio buyers where prices for care assets are depressed. Notwithstanding the success of the initial sale, it is usually the case that the easiest to sell assets go out the door first, and OCA still has work to do to execute this portfolio sale.
Management have also, to their credit, done a commendable job in controlling certain risks including build cost risk and interest rate risk, with costs for both locked in as far ahead as was possible in the more benign cost and interest rate environment of 2020/21. Indeed, we note that OCA has locked in an effective interest rate of c.4% for several years to come. This lowers - though does not eliminate - the risk of OCA breaching its bank debt
Quote from: winner (n) on May 28, 2023, 08:57 AMI'm glad I'm not the only one who breaks cash flow into Property Related Cash Flow and what I call Cash Flow from Day to Day Operations (running villages and caring for people)
From that Craig's stuff ... We highlight OCA's free cashflow from its existing portfolio (that is, operating cashflows less new sales revenue and growth capex but ignoring interest) was -$11.8m in 2H23
That -$11.8m (negative) in six months is a big number and it seems to be getting worse. I see that as akin to an operating LOSS.
Using borrowings and debts to pay dividends - biggest red flag of an unsustainable operating strategy.
What is the logic behind deducting the new ORA receipt from cash inflows? This derives a significantly worse picture of cash flows. Capex is spent in anticipation of future earnings. You don't then deduct those future earnings irrespective of the application of those funds. IMO it is a weird way of looking at it.
In deducting the new ORA sales values, they forgot to adjust that value for development margins of 36%. Amateur analysis IMO. One can only ask why....and what is their agenda?
Ferg, what Craig's are (trying) to show is free cashflow from its existing portfolio....and one conclusion was that these cash flows are not supporting the valuations of the portfolio.
The -$11.4 is basically receipts from village and care fees less what's paid to suppliers and employees and GST recovered along with a few other minor things. If one included interest of $12m free cash flow is -$23m but Craig's are nice and sat interest is all development related. I see this as what it's costing them to run villages and care for people on a day to day basis.
That leaves new ORA cash in of $99m (net) and capex of $219m ... cash out $120m or $134m if you include that interest
New builds are part of the existing portfolio so that doesn't make sense. In addition, the staff and costs required to run those new facilities do not come free. Such new facilities do not run themselves and yet those costs were not removed. They removed all the revenue but none of the costs....ok.
I have never come across an analysis where we look at a business by removing all income derived from this and prior years capex but we leave in those parts that are part of the same development but were sold in the previous FY. That also does not make sense. IMO it is a flawed method with an agenda and not worth spending any time on.
Take this method to one of the extremes. OCA turn off capex which falls to zero. All remaining new units are sold which generates huge cash flows and the debts are more than repaid. So we take out the cash flows from such sales in future and conclude cash flows are terrible? That is nonsense.
Retirement sector on fire today.
$.86c on large turnover (8.6m).
Quote from: Shareguy on May 31, 2023, 05:23 PMRetirement sector on fire today.
$.86c on large turnover (8.6m).
Wonder if that 'adjust session' had an impact
Quote from: winner (n) on May 31, 2023, 06:15 PMWonder if that 'adjust session' had an impact
Massive impact, VWAP would have been under 80c otherwise, can go either way though eg SPK.
Disc:: Pleased to have finally cleared out the last of my OCA bonds today, bringing to a conclusion my time as an OCA bondholder, (sold the last of my shares quite some time back). Not interested in getting bottom quartile share performance in this sector and the bonds have far more risk than the current yield suggests in my opinion with OCA having the highest gearing in this sector and the poorest and slowest track record of being able to sell its units.
Share price responded +very to the 'solid result' a few weeks....even went to 84 cents
Now down 11% since that momentous day ....and lower from when result announced
Oceania remains unloved and unwanted ...solid maybe but unexciting
ARV RYM and OCA all reported results late May
Since reporting-
RYM share price up 15%
ARV share price up 8%
OCA share price down 5%
Has to be a reflection of what the market thought of the results and future outlook
The long entrenched ' pecking order' in the retirement sector remains in place .......market telling us something
Doubt whether it'll change soon
SUM didn't report but up 6% over the last month
OCA Annual Meeting a bit later than usual this year
Last 2 have been in June ...looks like this year it'll be in August
Mustn't be keen to front shareholders this year?
Quote from: winner (n) on Jun 20, 2023, 06:52 PMOCA Annual Meeting a bit later than usual this year
Last 2 have been in June ...looks like this year it'll be in August
Mustn't be keen to front shareholders this year?
Might give them time to patch up a few shareholder concerns as well. August is almost HY, they'll know how things are running by then, property market rebound etc.
Maybe you should just sell? You do seem quite concerned about your holdings, bought in on the hype and caught out?
No Tomlinson on the DRP? Interesting
Quote from: Plata on Jun 26, 2023, 05:50 PMNo Tomlinson on the DRP? Interesting
Not really he's already got 26 mill shares, does he need anymore?
Quote from: Breezy on Jun 26, 2023, 06:11 PMNot really he's already got 26 mill shares, does he need anymore?
Exactly, and has it been figured out what his dividend in cash is. :o nice payday!
Quote from: Breezy on Jun 26, 2023, 06:11 PMNot really he's already got 26 mill shares, does he need anymore?
I just mean it is interesting he has stopped averaging down, he bought heaps at $1.30 and used to do DRP etc. If you take their presentations at face value surely the business is worth more now than it was when he bought millions at 1.30. Maybe he is saving for a yatch or a nice new deck
Quote from: Plata on Jun 26, 2023, 06:47 PMI just mean it is interesting he has stopped averaging down, he bought heaps at $1.30 and used to do DRP etc. If you take their presentations at face value surely the business is worth more now than it was when he bought millions at 1.30. Maybe he is saving for a yatch or a nice new deck
No yacht or deck for Greg ....probably buying a few more race horses to add to his successes.
Greg one of a few foreigners who can race horses in Hong Kong on a regular basis ..an honour.
Quote from: Plata on Jun 26, 2023, 06:47 PMI just mean it is interesting he has stopped averaging down, he bought heaps at $1.30 and used to do DRP etc. If you take their presentations at face value surely the business is worth more now than it was when he bought millions at 1.30. Maybe he is saving for a yatch or a nice new deck
Maybe the business isn't worth more now despite all the noise by some, especially on the other site, they are a screaming bargain in the low 70's? A lot has changed since Covid hit us and the returns on care now, are truly appalling. EBITDA margins on care have basically steadily tracked down ever since they listed 6 years ago from 19% to now lie around 11%.
Basically, every year the care side of the business is worth a bit less due to the ever-increasing pressure the Govt are placing on OCA through underfunding of care. That's how I see it. You'd think if Greg thought this was the screaming bargain others seem to believe it is, he'd be backing the truck up more.
Not even taking shares in lieu of dividend any more speaks for itself.
Quote from: Basil on Jun 27, 2023, 04:04 PMMaybe the business isn't worth more now despite all the noise by some, especially on the other site, they are a screaming bargain in the low 70's? A lot has changed since Covid hit us and the returns on care now, are truly appalling. EBITDA margins on care have basically steadily tracked down ever since they listed 6 years ago from 19% to now lie around 11%.
Basically, every year the care side of the business is worth a bit less due to the ever-increasing pressure the Govt are placing on OCA through underfunding of care. That's how I see it. You'd think if Greg thought this was the screaming bargain others seem to believe it is, he'd be backing the truck up more.
Not even taking shares in lieu of dividend any more speaks for itself.
Just because something is a screaming bargin doesn't mean you want to buy more once you have a massive holding like he has, I think PAZ is a screaming bargin at current prices but I'm not buying more because I already have an XXOS sized holding and its enough, each individual has their own limits on what is enough for them regardless of the price.
Yeap, fair comment, your point is well made Breezy.
https://www.nzherald.co.nz/nz/aucklands-wesley-rest-home-shuts-doors-suddenly/75QAY4G7YJGWZCIVS7QCTQYJDQ/
Up to 50 elderly residents of an Auckland rest home fear they'll be left without someone to live after the facility's operator told them it would shut down in less than two months.
But the care home operator, Oceania Healthcare and the property owner, Airedale Property Trust, are at odds over who made the decision to close.
APT CEO Dean Shields denies that the company refused to re-sign the lease, and said it was ultimately Oceania who made the decision to close. "We offered Oceania the ability to extend the lease, but Oceania has made the decision to not take up a lease extension and close down the care centre.
Quote from: Basil on Jul 01, 2023, 05:33 PMOCEANIA "Believe in Better" says the sign. Hmmm...better what ?
Sad state of affairs ..... must be horrible saying you are out on the street in a few weeks.
I assume no ORA at the this place? If so seems really bad management getting into this position.
Put the poor souls up in The Helier until they die ....that's what 'Believing in Better' is all about
Will be interesting to know, given that we all know pure rest home care is unprofitable, and this Wesley Care Centre is an operating lease providing pure care services, i.e. Oceania will be making a loss on operations, whether they are just quiting the loss, or some other reason.
Heartless it may appear to be, but right there is the ethical conflict you have as a shareholder, whether you're happy to make a loss at the Wesley Care Centre or cut the losses by not continuing the operating lease. Dig deeper into how many other properties are pure care, operating lease arrangements.
I'm not sure how I feel about this yet, as a shareholder. I'd like to know a bit more about the circumstances for this decision. I'd also like to know what arrangements OCA have to relocate their residents.
Quote from: Buzz on Jul 01, 2023, 06:51 PMHeartless it may appear to be, but right there is the ethical conflict
Not really a conflict at all.
Companies burning their social license also burns value.
If you believe shareholders need to be 'heartless' to make gains then the 19th century called and wants you back.
It could be both parties are telling the truth. The article says APT offered OCA an additional 6 months on their existing lease to Feb 2024. What sort of offer is that? Lease terms are typically for years with multi-year rollover options. And what was the rent rate offered? Churches with leasehold property throughout Auckland are not known for their charity to tenants.
If the terms offered by APT were uneconomic for OCA, or APT wanted to squeeze another 6 months out of OCA before taking the property in a new direction, OCA may have pulled the plug given a 6 month rental term is an insult. No one sane would rent a site for 6 months for their business, especially if a) the staff could be deployed elsewhere and b) the site was barely profitable or making losses. It's not a hard decision. The hard decision is what to do with existing residents. Nothing personal - it's just business.
IMO OCA have been given "Hobson's choice" where it is understandable they said no. But that does not preclude APT from taking the property in another direction in 2024. So both parties could be correct in their statements to the media, but both have lied by omission (where OCA have not admitted to not agreeing with a 6 month lease term, and APT have not been forthcoming to the media with their alternative plans). OCA need to come clean on the 6 months aspect.....if that is the case, then such a decision is understandable. More so if there is an intractable / obstinate a-hole on the other side of the negotiating table....the power of walking away.
Quote from: winner (n) on Jul 01, 2023, 06:14 PMPut the poor souls up in The Helier until they die ....that's what 'Believing in Better' is all about
My understanding is the care suites are not yet built there. So apples and oranges. Plus there is a completely different level of staffing required versus the apartments that are on the market. In addition, there will be other facilities closer to Wesley which will be more convenient for affected families.
on wrong thread but ... the builidng never stops..
Out side Tamahere south of hamlton Ryman is creating a hole new town full of little boxes...
Quote from: Ferg on Jul 01, 2023, 09:14 PMIf the terms offered by APT were uneconomic for OCA, or APT wanted to squeeze another 6 months out of OCA before taking the property in a new direction, OCA may have pulled the plug given a 6 month rental term is an insult. No one sane would rent a site for 6 months for their business, especially if a) the staff could be deployed elsewhere and b) the site was barely profitable or making losses. It's not a hard decision. The hard decision is what to do with existing residents. Nothing personal - it's just business.
I would have thought that if you had a building set up as a hospital facility, the lease terms would be very very long. Or at least with many many tenant right of renewals. Its not like you can just turf one rest home provider out every 5 years and then re-lease it to another rest home provider, all the while evicting one set of elderly residents out and then replacing them with a new set of elderly people.
So I would say OCA chose to close the facility and not renew the lease for the next extended period, while APT agreed to give an extra 6 months to the existing lease in order to give the residents time to find somewhere to live. 8 weeks is not very long - what happens to the people who don't have family to manage this process for them? OCA should have made the decision 6 months ago, and then notified its residents instead of leaving it to the last minute.
(Cross posted elsewhere)
I was thinking about this last night. My thoughts are:
1.Oceania has said they can re-house 30 of those 50 residents, elsewhere
2.That leaves 20 beds to find somewhere - we do not know how many of those beds are standard rest home level, hospital level, or dementia level beds
3.Beds only become available when someone dies, moves to a higher level of care, moves to a different location OR, when brand new beds come on line (anywhere - with any provider servicing the area)
4. The word will have already gone out, to all local providers, seeking assistance to re-locate the remaining 20 residents - some will have respite beds available, which could possibly be used, at least temporarily
I was initially concerned about the two month time-line, but the more I think about it, the more I realise it makes bugger all difference. If there are beds available, residents can go now/soon. If there are no beds available right now, hopefully there will be at least some in a week or two, or a month. I have no idea how many providers or beds are available in this location, but I imagine there are many more than where I live, so the overall "pool" of beds is going to be much greater than it would be down here. I think they have a good shot at finding beds for all 20 residents, within the two months time-frame. Dementia beds could be an issue however, if they are D3 (secure unit) beds.
My thinking would be, families and OCA will work together to find solutions, starting right now. Residents will move into beds as they become available - and I imagine the 30 residents OCA can accommodate elsewhere right now, will move very quickly. Having said that, you have to also consider the logistics of reducing the numbers in dribs and drabs - staffing becomes an issue if that drags on too long (caregivers, cleaners, cooks, housekeepers etc).
Time will tell and hopefully we will hear more soon, but my gut feeling is there is zero point hanging out beyond the two months. It would make zero difference to the availability of existing beds in the area - it is always impossible to predict when beds might be free.
It is more complicated than it sounds - kind of.
Quote from: Untamed on Jul 02, 2023, 03:28 PM(Cross posted elsewhere)
Already responded elsewhere :)
Thanks
The Helier - Paywalled https://www.nzherald.co.nz/business/watch-first-look-inside-150m-st-heliers-the-helier-retirement-village/MPWYCFVRNBGOHLWQZUGNIX54IM/
Summary, you pay millions for an apartment, (there are no standalone units), with 2 bedroom apartments priced at $1.7 - $3.5m, the best ones have already sold for $5m+, and they scalp you 30% DMF after only 3 years with compulsory weekly fees of an incredible $550 per week for a couple. If you need to subsequently move to a care suite they charge you an incredible $3,500 per week. WOW, what an amazing deal, (for shareholders), no wonder they are very cagey about how many have sold.
OCA now cover the full spectrum of village types from the Helier right at the top for people for whom money is no object and who arguably have more money than sense right down to the approximately 15 or so basic old care villages they're trying to sell because they're probably losing money on most of them.
You could say they have the whole field covered !
Quote from: Untamed on Jul 02, 2023, 03:28 PMIt is more complicated than it sounds - kind of.
It's a cluster and the people saying "just put them in The Helier" will also be the first moaning about care earnings and the slow sell down of units.
No good options.
If you move these people into new care suites then you can't sell them and book development margin.
If you move them into existing care suites then you can't resell them and book resale margin.
For the entire time those people are in those units you're not booking any DMF.
These people may well be in other units for years rather than months as well.
This was the experience at The BayView in Tauranga and Awatere in Hamilton. All care suites occupied and you end up turning potential purchasers away, especially as their care needs are usually so immediate.
So putting them in The Helier would be a decision that would potentially cost the business 8 digits.
Deferring the sales means material dead loss on DMF, not receiving the cash on sales results in more financing costs and an inability to recycle that capital into starting other projects.
Quote from: Basil on Jul 07, 2023, 04:18 PMWOW, what an amazing deal, (for shareholders)
So you're buying back in again if it's so good for shareholders?
One swallow does not a summer make.
I'm not sure what your point is then.
If there is an addressable market for any product and people are free and willing to buy that without any form of duress at a particular price point then what's the issue?
No issue at all, merely posting a news article with my thoughts on it.
It will be fascinating to see if there is sufficient market demand at that sort of pricing.
Thought about this a bit more. $550 a week is not too bad considering everything it covers.
Brent says the units are incredibly good value and every unit has a view. 2 Bedroom units start from only $1,730,000.
Probably good they went with hybrid Jaguar's...wouldn't want the fire risk of electric ones. Cool they have chauffeurs to drive you around. Maybe I could train them up to skipper my boat as well. Wonder if you can bring a Beagle dog along and the Butler could walk it for you in Glover park on the wet days when I couldn't be bothered? That would seal the deal and be really cool.
https://oceaniahealthcare.co.nz/location/the-helier
The Helier is pitched at "old money" who won't bat an eye at the purchase price or the fees. This is all about exclusivity - it is nothing more and nothing less than that. The prices will be chump change for some, even the top floors with their eye watering prices.
Quote from: Ferg on Jul 08, 2023, 10:49 AMThe Helier is pitched at "old money" who won't bat an eye at the purchase price or the fees. This is all about exclusivity - it is nothing more and nothing less than that. The prices will be chump change for some, even the top floors with their eye watering prices.
With that kind of money, why stay at a retirement village?
Retire to one of the Asian countries like Thailand and live like a king in the true & full sense of the word.
Probably because most people have family and friends here and they say that's what really matters.
When you start drilling down into what the $550 per week covers, including rates, insurance, power, internet, weekly cleaning, running costs of all communal facilities, exterior maintenance, grounds maintenance, chauffer driven Jaguar, butler service etc etc, the opex seems not too unreasonable to me if those are the sort of services you want in that upmarket environment.
Not sure what tiny view of the sea you get for $1,730,000...probably better to aim for a decent view in a better unit at $2.5-$3.0m. As others have noted, that's chump change for some especially old money in that area. They'll probably sell over the due course of time (2-3 years?) and OCA will do well from this village over time. A while back I heard about a certain plastic surgeon who buys a new BMW 7 series every year and makes over $1m a year that lives out that way. Probably suit that sort of MINO, (money is no object), retiree, perfectly.
From the point of view of the shares however, it's the substantial number of their unprofitable basic care villages that looks set to dog the company for many years to come. Not much chance of selling them I reckon. Brent needs to start thinking outside the box. Now he's finished reimagining the lifestyle living at the Helier it's time to get his hands dirty and get down into the other end of the market and start reimagining the old unprofitable basic care villages they can't sell as perhaps best suited for emergency housing for WINZ clients. At least that way they would get a return on those assets.
I see The Hellier has a lifestyle co-ordinator for personalised event planning, and access to companions for outings and events.
Wonder what that actually covers?
Possibly things like arranging a birthday dinner/party/celebration. Or an afternoon tea for a resident's family or friends visiting from out of town. Or something similar for a club or group a resident belongs to. The kind of "event" they may have previously organised themselves and held at their home.
As for the companions - that's interesting. I imagine it could mean that OCA has a team of volunteers (people in the community, or perhaps even staff) who are available to accompany someone to a funeral, wedding, graduation etc, or out for a cuppa, to an art exhibition, for a drive in the country, shopping, local shows etc.
Quote from: winner (n) on Jul 08, 2023, 04:15 PMI see The Hellier has a lifestyle co-ordinator for personalised event planning, and access to companions for outings and events.
Wonder what that actually covers?
Quote from: winner (n) on Jul 08, 2023, 04:15 PMI see The Hellier has a lifestyle co-ordinator for personalised event planning, and access to companions for
outings and events.
Wonder what that actually covers?
A lot of people in retirement villages are very lonely when their spouse dies. Evenings are the worst, apparently.
https://www.mindfood.com/article/luxury-epitomised-the-helier-by-oceania-reimagines-later-life-living/
Excerpts
This is a time to relish the fruits of our labour and to
discover pleasures old and new. we will have a very personalised individual service for our residents," explains Lacoua.
"The executive chef can come to their apartment to cook for any private dinners that they host," says Lacoua.
This just keeps looking better and better. The general manager was top dog at one of Europe's finest hotels so I am sure he is very skilled in organizing the right companion for residents that want this....or is that the concierge's job?...I have no experience in such matters LOL
Quote from: Basil on Jul 09, 2023, 06:20 PMInteresting debate in the other place about whether Oceania are "Greedy"
Got me thinking about the 30% DMF fee on the Helier which accrues over just 3 years, i.e. at the rate of 10% per annum. To the best of my knowledge this is the fastest rate in the industry, and it does seem like a lot accruing very quickly.
Here's RYM for example with a maximum of 20% DMF that accrues over 4 years i.e. 5% a year only half the annual rate of OCA at the Helier.
https://www.rymanhealthcare.co.nz/what-we-offer/useful-articles/deferred-management-fee
One other thing well worth noting. At RYM when you change unit types with your needs changing you only pay one DMF fee. At Summerset you only pay one DMF fee + 2% admin for change of unit type. On OCA's website I cannot find any undertaking that the DMF fee is payable only once which begs the question if you move from an independent living unit to a care suite do they clobber you 30% DMF on both ? It would seem on the face of it they do.
Interesting - this the same beagle who complained previously over all forums that OCA was too slow in cranking up their fees when the real estate prices went through the roof? And now he complains they are too greedy without having changed anything?
But then, this must be the same beagle who used to praise Ryman for introducing a fees for life model, while only months later flaming them for doing exactly that?
Must be hard to please beagles, maybe a lesson for anybody looking for a four legged friend.
OK, so OCA used to be in his bad basket because he didn't see how successful their model will be, and now that their success is hard to oversee even for the viewing impaired, now they are just greedy.
Oh dear ...
With all due respect Basil, their care suite model
is working. Good things take time. Care suites will become the preferred care option over the next few years - for those who can afford it. Mark my words.
Quote from: Basil on Jul 10, 2023, 10:25 AMI think this is the reason their care suite model isn't working
You are making a pretty big assumption here. Do you know that this is happening for a fact? If so, can you please post a reliable source, as I am not at all sure that you are correct.
Quote from: Basil on Jul 10, 2023, 10:46 AMCurious how shareholders feel about their returns knowing some of them will come from people who have paid more than 1 lot of 30% DMF fees perhaps even 3 lots of 30% as they progressively move from an ILU unit to a serviced apartment then a care suite ! Doesn't feel right to me. Morally repugnant is how I would describe it.
Assurances are provided on Summerset's website around only paying the DMF once and RYM make it crystal clear and I note their much lower DMF fee and it is accruing at half the annual rate of OCA's DMF fee.
The OCA website is very vague, and no such assurances are provided about only paying the DMF once.
I had to ring their national call center and the lady I spoke with assured me you only pay the DMF once which I have accepted at face value and accordingly, I have withdrawn my comments made above.
Apologies that I leapt to that conclusion, but I think OCA have a lot of work to do to make their website clearer. My comments about the level of unsold stock are correct but have already been stated before so I have withdrawn them as well.
As you were Ladies and Gentlemen and have a lovely day. :D
Quote from: Basil on Jul 10, 2023, 11:47 AMThe OCA website is very vague, and no such assurances are provided about only paying the DMF once.
OCA have always been open about care suites incurring another round of DMF.
Residents don't go to Serviced Apartments with OCA. They don't have them in their portfolio.
It's ILU then care suites, the marketing & value proposition of a care suite is all built around a 'single move' (from ILU to a care suite that provides all levels of care from rest home to hospital. No need for a halfway-house serviced apartment. No need to move when you need hospital level care.).
For a guy who posts so relentlessly on this stock I would have expected you to have noticed that.
If a potential resident is in the market for a luxury retirement product doesn't want to pay 30% DMF at The Helier then they're welcome to look elsewhere for a similar product... e.g. that resident could:
- Wait for Summerset to finish at St Johns then turn their nose up that the apartments are not appointed to the same level and the service level isn't as high; or
- Wait for Ryman to finish at Kohimarama then spend the rest of their days lamenting being in a South-facing ditch with, "gasp", normal people.
As others have pointed out, I'm really not sure what your point is here.
You've bemoaned it as a bad business model and now, even with willing potential residents operating in a highly competitive market, you're framing them as greedy?
Interesting. Here's the thing, anyone can ask any price they like for something, but does it find market acceptance is another question altogether.
The biggest fan of this stock on the other channel admitted today he thinks OCA have 335 unsold care suites.
In the year ended 31 March 2023 they only sold 74 new care suites. (Source, 2023 results presentation)
Based on their most recent sales evidence OCA therefore have 4.5 years worth of unsold stock of care suites. You don't need to have a marketing degree to work out that's an epic fail. Maybe if they are double dipping on the DMF as you suggest, people think that is greedy and that's why they're turning their noses up at them ?
Smooth operators OCA... smooth .... no idea what happening here just read the head line...
https://www.nzherald.co.nz/nz/everil-orr-village-residents-thought-the-new-facility-next-door-was-for-them-they-were-evicted-instead/NSTI7KVAYZHA7GECXWZAUWM5XI/
Quote from: Waltzing on Jul 12, 2023, 05:42 PMSmooth operators OCA... smooth .... no idea what happening here just read the head line...
https://www.nzherald.co.nz/nz/everil-orr-village-residents-thought-the-new-facility-next-door-was-for-them-they-were-evicted-instead/NSTI7KVAYZHA7GECXWZAUWM5XI/
I've emailed the investor relations person at OCA to get Brent to provide the media with a new photo of himself to use .....I mentioned that the one in that article fits your description of OCA Waltz
And that photo of the old guy just gushes sadness
A smooth operator .. https://www.youtube.com/watch?v=4TYv2PhG89A
who owns these... forget it as we have seen Navidia was not priced 2 years ago and now the retail SHAZ are buying re gen AI chat bots that will send you operator 47 to operator on you ...
https://www.youtube.com/watch?v=E_eZVrmwaWU
perhaps this man is the face of New New Zealand business....
Bad day for OCA shares with a close of 76 cents
Just as things were looking good it turns tail
Tomorrows another day and it might close over 80 cents
Quote from: winner (n) on Jul 12, 2023, 05:59 PMI've emailed the investor relations person at OCA to get Brent to provide the media with a new photo of himself to use .....I mentioned that the one in that article fits your description of OCA Waltz
And that photo of the old guy just gushes sadness
How did you get on with that email?
BlackRock like OCA....... acquired 11.6%
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/416077/400064.pdf
They potentially took over management of some funds that hold OCA.
BlackRock announcement retracted....... weird.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/416144/400132.pdf
Yes, I just saw that. I wonder what that's about?
Quote from: Left Field on Aug 10, 2023, 12:48 PMBlackRock announcement retracted....... weird.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/416144/400132.pdf
I suspect that it's a mistake - that internal shuffling between various Blackrock funds somehow "leaked" into market announcements.
A bit strange. Either Blackrock are developing a substantial holding or they're not. If they are, they are required to divulge it aren't they?
Very strange.
You need to disclose SSH above 5%.
To get to 11% overnight without any large blocks available would be quite something.
Quote from: Whacc on Jul 24, 2023, 05:20 PMHow did you get on with that email?
They said the press had lifted the photo from the Annual Report
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/417099/401450.pdf
Lots of warm fuzzies here....but not a single mention about how underlying eps has declined since they listed more than 6 years ago, (in fact you'd be forgiven for thinking eps is entirely irrelevant lol)
Lots of patting themselves on the back for how well they've done with growing the asset base, navigating challenges, reimagining this and that...I am sure some people lap this stuff up and there will be lots of palm pressing and smiles all round at the meeting. A new 5 year plan mentioned, (whatever happened to the original 6 year plan and the point of inflection ?)
No update about how they are getting on with selling their old care villages. All their talk about growth in this and that and how's its going to be better going forward and how clever they were to manage their debt costs and all the while earnings per share are going nowhere.
Just as well its going to all be different going forward...well that's what some people keep telling us year after year....
Hugs all round can do wonders though Basil
Our Liz in your speech said ' Brent will provide further detail on our sales progress and comment on our portfolio shortly but it is vital that we continue to position ourselves for future growth. '
But Brent doesn't seem to say anything about sales progress
Might have missed something
Have to wait for somebody to tell us what Brent told them in post meeting chats
Jeez Liz greasing up to shareholders ....love this bit ... I don't need to tell a room full of experienced investors
Experience the key word eh
Last year Brent was very positive at the annual meeting how sales have gone year to date, (didn't turn out to be true at all)...this year, as you suggest, he's much more opaque. I liked the bit where Brent says their care to ILU ratio is currently 60% but within 2 years it's going to be 45%. I'll believe that when I see it and not before. Bit like their promises of previous acquisitions being eps accretive...
Don't you find it strange that they never mention earnings per share in any of their presentations or speeches? If you keep telling yourself you are doing well by certain other measures whether that's asset growth, patient care, staff engagement and satisfaction, lowering emissions or whatever other KPI's you choose and ignore eps the tendency is to end up believing your own B.S. that you really are doing well and then putting your hand up for more and more money and bonus's.
Remarkable how the only time they mention eps and eps accretive is when they are raising fresh capital and wanting more money out of you lol.
Liz might have described shareholders as 'experienced investors' but they were treated as idiots
The brother Brent is so polished he could probably sell wildlife documentaries to David Attenborough. Must have been to toastmasters or some such :o
Got to be careful being too polished though, can easily come off as slippery. Pity he didn't get a single decent question after the undoubted thorough preparation.
Posts above seem on the mark unfortunately. Radio silence on nearly 5 months sales since 31 March does not inspire confidence with OCA's history of waxing lyrical about any metric that could possibly be construed as positive. I was expecting some commentary on how The Helier sales are going and any headway on the selling through the very large inventory of care suites. But nothing.
Property prices ... pretty sure that is what this sector is really about although health care is part of it right? The gurus on this sector will be waiting good news on the property price front?
https://www.stuff.co.nz/business/property/300957138/property-guru-dont-expect-to-make-money-in-next-few-years
Quote from: Waltzing on Aug 28, 2023, 08:42 AMProperty prices ... pretty sure that is what this sector is really about although health care is part of it right? The gurus on this sector will be waiting good news on the property price front?
https://www.stuff.co.nz/business/property/300957138/property-guru-dont-expect-to-make-money-in-next-few-years
He's a good guy that Olly
Quote from: winner (n) on Aug 28, 2023, 09:04 AMHe's a good guy that Olly
Unless you remember Landmark Properties 🤭
Quote from: Gerald on Aug 25, 2023, 04:34 PMThe brother Brent is so polished he could probably sell wildlife documentaries to David Attenborough. Must have been to toastmasters or some such :o
Got to be careful being too polished though, can easily come off as slippery. Pity he didn't get a single decent question after the undoubted thorough preparation.
Need to grease things up more when the teflon wears off.
Then what once appeared slick turns slimey.
Other channel reports that 6 apartments have been sold at The Hellier
Not worthy of mention at ASM apparently so probably waiting for the big unveil at the half year announcement
And apparently 'technical issues' meant online questions were lost ..... oh dear
Forest a reliable sort of guy in my opinion.
How is it that RYM and SUM in particular seem to achieve vastly higher presales level's than this?
With all the marketing and lead up time to this development its quite extraordinary that less than 10% of the apartments are now sold. Worse, without question these would be the premier units with the best sea views sold to MINO's (money is no object) customers so wouldn't care less about the extraordinarily expensive weekly opex fees at the Helier. (Many others may find the weekly opex very off-putting).
I think those forecasting underlying eps of 11 cps are miles off the mark and yet another year of disappointment is ahead of them, this one differentiated only by lower dividends as OCA's debt level's continue to rise to, in my opinion, above 40% which must be concerning.
Some very pointed comments on OCA on the other channel today, most notably by Poet. Compulsory reading in my opinion and hits the nail directly on the head.
Is the real questions what percentage of the nations net work in housing and what percentage is in business and export producing assets?
Over 1,000,000 traded at 74 cents so far today, the bottom of the recent trading range.
Will it hold and bounce off that level or will we see a breakdown and it head in the 60's ?
My view is management were quite positive on sales in the 2022 meeting but both half year and full year sales turned out to be extremely disappointing. At their most recent annual meeting as we all know, there was no mention of sales so reading between the lines they are really struggling this year. It seems the market simply doesn't want their small boutique style village units and prefers the larger full facility village units provided by their competitors. Holding costs for their several years' worth of care suites are really now starting to bite and with 10 year Govt treasuries now at 16 year high's this is only going to get worse in the years ahead.
They must be very close to breeching their debt servicing covenants in terms of cash flow and with the highest gearing in the sector (and probably the weakest sales), I think the chances of a deeply discounted capital raise in the year ahead is looking ominous.
The silence in regard to any announcement on sales success with their 10+ old loss-making care villages that have been on the market for ages now is deafening. Never mind... they are really kicking goals with their carbon reduction so all is forgiven. (sarcasm).
Just as well they have been able to maintain their dividends at 4-5 cents per annum....oh hang on a minute....
I think the chances of there being no dividend at the half year announcement in late November is getting higher...not that anyone in their right mind is holding this for the yield.
Ducked lower again today... like it's looking for a 6 to go in the front.
A fair few traded though, 1.3m
Quote from: Hectorplains on Sep 29, 2023, 08:56 PMDucked lower again today... like it's looking for a 6 to go in the front.
A fair few traded though, 1.3m
Maybe EOM rebalancing going on, there's not enough depth on the buy side to accommodate the sell volume that has gone through. Speaking of which, the buy side has collapsed and there's a wall of asks, so the TA breakdown I suggested in another place has happened and there's little or no support between here and the recent low $0.66
Whether that's a gift or not I suppose is up to individual interpretations, but it's bascially half of NTA. Like if they could sell every asset now and realise NTA and payout that to shareholders, you'd get double what you would get selling on the sharemarket right now!
Strange times we live in, this is a very weird market right now, we haven't seen this across the market for at least a decade, its not just OCA, it takes time to recalibrate our thinking when we've been accustomed for a decade to sustained growth in everything.
I smell long term opportunity everywhere, even if my name is not Buffet. Remember that the posted gross yield is BS. Real yield is based on what actually you pay for it and what it actually returns, net, to you.
Quote from: Basil on Aug 25, 2023, 03:34 PMI liked the bit where Brent says their care to ILU ratio is currently 60% but within 2 years it's going to be 45%. I'll believe that when I see it and not before.
Everything required to make this statement true will already be well in train, so it's easily fact-checked by just looking at what they have under construction.
These businesses are like container-liners - you can't turn them on a dime.
I certainly have looked into the rate at which they can turn the ship with their current development pipeline. What Brent said is simply not plausible with their planned build rate. Its only achievable if they can sell at least a dozen basic care villages and their silence in regard to progress on that front so far, speaks for itself.
I finally get it ...the 45% care ratio comes about from the disposal of X care suites ....rather than building heaps more ILUs than care suites
Quote from: winner (n) on Oct 05, 2023, 04:40 PMI finally get it ...the 45% care ratio comes about from the disposal of X care suites ....rather than building heaps more ILUs than care suites
If they dispose of anything it will be sites with mainly/only standard government funded care beds rather than premium care suites.
Watching rugby ....amazing Oceania ad came up after the game ....BELIEVE IN BETTER in music
Reckon it is multi award marketing
Yep; same. In fact quite a few commercials/ ads lately in particular OCA, Ryman and Summerset with their well known jingle becoming familiar/ annoying to my ear. That marketing needs to be done I suppose.
Mute switches....
Quote from: winner (n) on Oct 16, 2023, 10:25 AMWatching rugby ....amazing Oceania ad came up after the game ....BELIEVE IN BETTER in music
Reckon it is multi award marketing
What marketing awards have they won mate ?
I don't really get the "Believe in Better" marketing slogan? Sure, it might pique some people's interest to wonder Believe in better what? but I think it's common knowledge in that age demographic that Ryman are the most trusted brand and Summerset and Arvida have bigger full feature villages.
A lifetime ago when I studied marketing at Auckland Uni I don't ever recall claiming your brand is better, (with or without being able to substantiate it), as a successful marketing strategy. Go figure?
Perhaps another example is useful to illustrate my point. The other day a google ad came up on my screen from Mercedes-Benz North shore branch who are having a demonstrator sale. Their marketing punchline was "Endless Value"... surely that's an oxymoron for Mercedes Benz vehicles ! I guess my point is where a company's advertising slogan obviously lacks apparent credibility it actually works against them.
Quote from: Shareguy on May 27, 2023, 07:27 PMCraigs latest "You can't eat NTA"
OCA delivered a flat FY23 result, with uEBITDA up 5% to $80m (or c.2% organic growth, after backing out acquisitions). OCA's earnings have been broadly flat for five years now as it upgrades its portfolio. Most key metrics deteriorated, with new sales well below our expectations, and the level of unsold inventory almost doubled to $374m over 2H23. Net debt increased to $551m, with gearing up 780bps YoY to 37%, above management's target.
Course correction
OCA's key problems are twofold: i) the existing assets generate negative FCF and ii) its new villages have been slow to sell. Indeed, based on the run rate of sales in 2H23, it is taking OCA around 2 years to sell units. To their credit management have acknowledged the problem and are undertaking correction actions including: i) lowering the build rate to 200-250 units pa ii) lowering the capex intensity of the build rate by pivoting towards broad acre sites iii) selling assets, with over $10m sold to date and c.$50m to go iv) lowering the dividend payout ratio from 50-60% to 30-50% (payout was 38% in FY23). These actions should see net debt start to trend down from 2H24.
You can't eat NTA
Trading at 0.6x NTA, OCA has gained some popularity amongst value investors, but as one seasoned fund manager once told this analyst "you can't eat NTA!". We are cautious on the notion OCA is a "value" stock and caution further that not all NTAs are created equal. We highlight OCA's free cashflow from its existing portfolio (that is, operating cashflows less new sales revenue and growth capex but ignoring interest) was -$11.8m in 2H23 alone. While a slight improvement on pcp, OCA's cash generation is not supportive of the reported book value of its assets in our view. Indeed, as we highlight in the note, OCA's cash generation from its existing assets is significantly worse than RYM and SUM relative to its asset backing. In short, the lower cash generation of OCA's existing assets supports the shares trading at a deeper discount to reported book value than its larger peers.
Upgrade to Neutral, $0.90 TP
OCA is now taking corrective action which should see net debt start to come down from 2H24, at around the same time housing market conditions start to improve post the RBNZ's pause yesterday, while margin from The Helier development should help OCA deliver earnings growth over FY24/FY25 (CIPe +14% FY24/FY25
With OCA reporting next month and now plumbing fresh multiyear post Covid lows, its worth reflecting on the key issues clearly enunciated by myself many times and highlighted by Craig's report in May, quoted above, (emphasis added by myself).
To me it was notable that there was no update on sales at the annual meeting this year whereas the year before they exuded confidence that sales were going well, (despite actual results subsequently making a mockery of that claim).
Really, with vast amounts of completed unsold stock across a really wide range of villages if they can't show an increase in the sales run rate its time shareholders demanded answers.
With about a dozen basic care villages on the market for over a year now it will be interesting to hear whether they have sold any ?
I hope for shareholders sake they finally get some traction northward in their underlying earnings per share but I remain of a view their business model, in terms of its ability to generate future returns to shareholders, is vastly inferior to Summerset in particular.
Maybe with hundreds of unsold care suites they should (to use their terminology), "reimagine" how these could otherwise be made more marketable to sell? Maybe take at least half that old slow selling stock and market them as cheap units under a standard ORA agreement with no obligation on residents to pay care suite fees, but give the resident the option to transfer into the care suite system as their needs change? Maybe that's a good way to clear some of the vast mountain of unsold stock? Surely there's quite a big untapped market for cheapish, small retirement units under a standard occupation right agreement model? If I can come up with an idea like this is less than 5 minutes what are the board doing and why aren't they trying new ways to clear old stock and get their debt down ? it will be interesting to see what their gearing ratio is when they report next month.
Week close 68 cents ....that's pretty bad
Wonder what next week will bring
Updated my favourite chart ...the one of OCA shareprice as a % of SUM share price since OCA listed
Sure is one entrenched trend ...will it ever end ...trend theory would say it is so entrenched it would need a "shock" to either OCA or SUM performance to change the trend.....but then it can't continue to zero can it lol
IMG_5535.jpeg
Deeply and irrevocably entrenched. She's going down to 5%, (1 SUM = 20 OCA) at some stage in the next few years mate, I'm certain of it.
Been a bean counter for too long now, more than 42 years and one thing that's indelibly printed on my mind is that some business models work really well and others are destined to be low performers forever and a day.
The Board of OCA have not shown any real interest in shareholder value creation. If they did, they would be undertaking a share buyback at $0.68 (close to half of NTA) rather than allocating capital to new builds (especially in new care centric assets). Hopefully one day we will get a shareholder value orientated Board.
Quote from: Mos on Oct 29, 2023, 06:31 PMThe Board of OCA have not shown any real interest in shareholder value creation. If they did, they would be undertaking a share buyback at $0.68 (close to half of NTA) rather than allocating capital to new builds (especially in new care centric assets). Hopefully one day we will get a shareholder value orientated Board.
Given that the Board hold quite a lot of shares, maybe we'll see that come into play shortly. Regardless, it's still all about new sales, and some might say reducing debt to equity.
Quote from: Buzz on Oct 29, 2023, 07:59 PMGiven that the Board hold quite a lot of shares, maybe we'll see that come into play shortly. Regardless, it's still all about new sales, and some might say reducing debt to equity.
Yes, if it's all about new sales, they need to demonstrate some capability and performance in this regard - recent historical track record underwhelming on new sales. Will see what half year result brings but lack of update on new sales at ASM not inspiring confidence at this point. Makes little sense to allocate massive capital to additional care suites when they have years of inventory on hand available for sale.
Quote from: Mos on Oct 29, 2023, 08:13 PMYes, if it's all about new sales, they need to demonstrate some capability and performance in this regard - recent historical track record underwhelming on new sales. Will see what half year result brings but lack of update on new sales at ASM not inspiring confidence at this point. Makes little sense to allocate massive capital to additional care suites when they have years of inventory on hand available for sale.
Very little capital has been allocated to additional care suites, more to luxury apartments which are on market now, we want to see them sold. This is not as complicated as some choose to make it.
Quote from: Buzz on Oct 29, 2023, 08:45 PMVery little capital has been allocated to additional care suites, more to luxury apartments which are on market now, we want to see them sold. This is not as complicated as some choose to make it.
Sorry, I have to spend the time to rebut that because it simply isn't true. People deserve to know the truth. See page 6 of this presentation from May 2023
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/411935/395028.pdf
Even the most die hard supporter Maverick has acknowledged they have (from memory) a whopping stockpile of ~ 350 unsold care suites. Last year they only sold 74 new care suites and 54 ILU units. The sales rate last year suggests if this can't be lifted they have 350/74 = a whopping 4.7 years of stock of unsold care suites.
But wait there's more. On page 6 of this presentation, we see for FY24 they are targeting completion of 271 new units, (more than double the whole number of new units they sold last year), and that 271 includes a whopping 193 new care suites. (32 at the Helier, 55 at the Redwood Blemium, and 106 at Elmwood Auckland. That's another 2.6 years care suite supply at last year's new sales run rate).
It beats me how on earth this is consistent with the CEO's stated goal of trying to bring the ratio of care units down to 45% within 2 years? To have even the slightest hope of achieving that target they would need to sell at least a dozen basic care villages, but we have complete radio silence on progress on that, front more than a year after all these went on the market.
I think it's highly likely the unsold care suites issue will get materially worse in FY24.
One of the reasons the shares are tanking because they have a major issue with stock the market doesn't find attractive. The board have their head in the sand like an Ostrich on this issue and seem to spend most of their time trying to obfuscate the facts from shareholders and hiding their lackluster performance, (notice how eps is never ever mentioned in their annual reports or investor presentations), behind a thick veneer of sanctimonious ESG nonsense.
They think if they focus entirely on care for the residents, everything else will work out okay. We will see, but radio silence on sales progress to date at the annual meeting doesn't inspire confidence. Debt massively ballooned up last year....just keep building units at about double the rate new units are selling, that very few people seem to want...what could possibly go wrong... One day in due course they will have to get the begging bowl out for another capital raise as their banks start to ask questions...mark my words.
In due course they will have to refinance their corporate bonds OCA 010 and OCA 020. If you were to mark to market that funding at today's interest rates based on the yields those bonds are trading at now, that adds more than $12m to their annual funding costs. How's that for a future headwind to deal with in due course. The market is right to see an elevated level of risk with OCA because it is very elevated.
Not down ramping, just a PSA so people know the extent of the problems here. Disc: No position in the shares or bonds and none sought.
Building luxury stuff
The Helier they originally said was to cost $120m odd ....reports a while said the $150m development ....and now some stories floating around it's $165m
Suppose we'll never know what the final cost was ...but as long as they make 40% development margin on sale it doesn't matter
Quote from: winner (n) on Oct 30, 2023, 08:29 AMBuilding luxury stuff
The Helier they originally said was to cost $120m odd ....reports a while said the $150m development ....and now some stories floating around it's $165m
Suppose we'll never know what the final cost was ...but as long as they make 40% development margin on sale it doesn't matter
Correct.
And hey, just compare it with some public projects ... just read the Christchurch pool complex was originally costed at $230m and now its already well above $700m - and counting - and I am sure we all can name tens of large projects where costs not only doubled, but trippled or quadrupled.
And you are saying OCA's Helier went only up by 37.5%? OCA's building team clearly must be amazing - this is less than standard inflation for building projects.
Maybe they should run Fletchers large projects unit (which so far typically sees a doubling or trippling of the planned building costs) instead of wasting their valuable talent with building retirement villages?
BP ..no doubt about it ...Oceania a truly AMAZING company
BELIEVE IN BETTER. Hoping it refers to sales performance but not that confident.
Really weird how Chair Liz Coutts referred to something along the lines of "Brent will update us on sales this year" (or words very close to that effect), in her annual meeting speech and then Brent was completely silent on the issue is his speech. You would think the Chair and CEO would have conferred after writing their draft speeches to check they were both singing off the same song sheet. Go figure ?
Quote from: Basil on Oct 30, 2023, 04:02 PMReally weird how Chair Liz Coutts referred to something along the lines of "Brent will update us on sales this year" (or words very close to that effect), in her annual meeting speech and then Brent was completely silent on the issue is his speech. You would think the Chair and CEO would have conferred after writing their draft speeches to check they were both singing off the same song sheet. Go figure ?
Brent wanted to keep a positive mood atbthe meeting going .......not so good news allowed.
Quote from: winner (n) on Oct 30, 2023, 04:11 PMBrent wanted to keep a positive mood atbthe meeting going .......not so good news allowed.
Agree that's the most logical explanation and consistent with their long-entrenched practice of deliberate obfuscation.
I think Lizz far to buzzy with her tennis club to worry about any details regarding OCA.
Comment by Bull on the other channel.
Quotefrom forbarr and greek
Oceania Healthcare (OCA)
Interest costs, debt, and cash flow
OCA's flagship ~NZ$150m development The Helier will likely be in focus. Large scale launch of the apartment sell down was not until late August. We are unlikely to see many if any sales in the 1H24 period, but OCA should have seen at least a handful after period end. The delay of The Helier will result in yet another period with increasing debt, we estimate ~+NZ$40m (to NZ$585m). For the full year we expect largely flat net debt and positive free cash flow. A first for many years for any of the listed aged care operators.
Earnings changes
We lower our forecasts on the back of lower resale gains (lower prices), lower new sale gains (prices and units in FY24), lower DMF and slightly higher interest costs (OCA has the lowest effective interest rate in the sector given its high portion of fixed debt, notably its retail bonds). Our net debt forecasts increase, and we no longer forecast a fall in FY24 due to higher capex and lower cash flow from new sales.
Doesn't look very good.
Quote from: Basil on Oct 31, 2023, 11:08 AMComment by Bull on the other channel.
Doesn't look very good.
Feels like you are suffering under the same myopia as bull. Funny that.
Bull obviously picked the 2 for OCA most negative paragraphs out of a long report written by ForBar about their view of the current status of the retiremnt sector. Of course - anybody who knows bull knows all about his droppings and his desire to paint everything in black sludge.
What he missed and you as well - the whole report was very positive about the sector (including OCA) ... here are (from the same report) some bits summing up their views:
QuoteThe three aged care companies reporting 1H24 earnings trade comfortably below book value. Hence, we expect focus to be squarely on the ability to control debt. The companies have three levers to control debt with: (1) cash generation from ongoing operations, primarily collecting cash from resales. We expect an improvement from RYM and Oceania Healthcare (OCA), and largely unchanged from Arvida (ARV); (2) capex, we expect meaningfully reduced capex spend from all three, controlling the controllable; and (3) new sales cash flow. This is the biggest unknown, but we expect RYM and OCA to show solid improvements from a (very) weak 1H23 and for ARV to show some deterioration, in-line with its comments at its 2Q24 update.
...
We value both (RYM and SUM) companies on the same multiple. We make minor downgrades to our estimates and reiterate our OUTPERFORM ratings on RYM, ARV and OCA.
Now - maybe you need to practise playing a different tune, but obviously first you could start trashing ForBar (as we all love to do :) )... just not sure, why you bothered to cite them in the first place. Confirmation bias?
Quote from: Basil on Oct 31, 2023, 11:08 AMComment by Bull on the other channel.
Doesn't look very good.
That guy is one of the most miserable Trolls I've ever experienced and misery loves company.
Firstly, I hope it works out for you guys but if SUM and ARV are being somewhat affected by the weak and slow real estate market I think Maverick is right to be very cautious about first half sales and note he is only expecting 36 new unit sales. I find that extraordinary when its known as at last balance date they had circa 400 completed units. Not long to wait until we finally get an update on OCA's sales.
You've got to wonder a bit why no update was forthcoming at the annual meeting and also its worth noting that SUM and ARV update the market quarterly on their sales whereas OCA don't. OCA gearing already quite high at 36% as at 31 March. Hope it doesn't go over 40% and that they don't breech their interest coverage ratio's (ICR) bank covenants, (noting ARV just had to rejig their facilities and banks waived their ICR covenant for 30 September which makes it pretty clear they would have breached if it weren't for the rejig and waiver).
Staying positive about brokers...Craigs made some very good comments about OCA's NTA.
Westpac says about REINZ data ' New Zealand's housing market continued to hold its breath in October with prices tracking sideways and sales still low."
So Brent will be able to say with a straight face next week that sales have been a bit sluggish and impact our first half result ....but no worries second half will be a ripper
1st half results out...... significant progress etc etc....." transformative" they say.... but no interim divvy (and also no cap raise!)
https://www.nzx.com/announcements/422074
Highlights
• Total assets increased to $2.7bn, a 6% increase since 31 March 2023 which includes the completion of 17 apartments at The Helier (Auckland), 46 apartments at The Bellevue Stage Two (Christchurch) and four villas at Stoke Village (Stoke) plus the acquisition of adjacent parcels of land at our Bream Bay and St Heliers sites.
• Net assets increased to $1.0bn from $962.3m as at 31 March 2023.
• Operating cashflow increased to $48.0m for the six months to 30 September 2023, 53% above pcp.
• Undrawn net debt headroom of $113.9m and gearing of 37.7%, as at 30 September 2023.
• Total sales volumes were up 13% ahead on pcp including a 38% uplift in new sale volumes of 84 independent living units (ILU) and care suites.
• Divested, closed and exited leasehold interests at six care centres and villages.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407732.pdf
I will have a look after I have fully digested the Turners result.
Initial impressions. Underlying profit down. Cancellation of the dividend.
Quote from: Basil on Nov 22, 2023, 08:50 AMhttp://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407732.pdf
I will have a look after I have fully digested the Turners result.
Initial impressions. Underlying profit down. Cancellation of the dividend.
Just don't wait too long - this might be your last opportunity to buy OCA on the cheap :), though it looks like early market is blindsided by their dividend decision (which I would fully support - well, the dividend desision, not the blindsiding of the early market);
Of course ... no cap rise.
I guess given all these Kassandra calls recently on OCA, I am wondering what these Kassandras were smoking?
They managed to dispose of 6 of their less desirable leaseholds ... though seven more to go (i.e. number grew from 10 to 13?)..
Revenue as well as profit (gross as well as net) significantly up.
Development margins up.
Unit sales (new) up to 84 in 1HY24 compared to 61 (in 1HY23). Looks like progress to me.
Unit resales up to 171 from 165 - no stellar rise, but given Kassandras saying they don't focus on resales, nice the resales not just kept but slightly improved.
Occupancy rate - slightly up,but still just 90.3%. Not amazing, but not terrible either - and yes, it takes some time to sell large chunks of new care suites.
NTA (still not a four letter word to me) up to $1.40 - and this in a time where property prices are bottoming - i.e. all up from here.
Not perfect, but I'd say they look reasonably well positioned ... now its just a question of relaxing and waiting for the coming bull run to push prices up :) ;
BP ...you said 'Development margins up.'
Seems they dropped from 40% in H223 to 23% in H124 .......that's a big drop eh
Quote from: winner (n) on Nov 22, 2023, 11:34 AMBP ...you said 'Development margins up.'
Seems they dropped from 40% in H223 to 23% in H124 .......that's a big drop eh
Fair enough - one can't be careful enough in reading these announcements. There would not even have been a need to cherry pick the comparable timeframes.
QuoteThe development margin for the period reflects this with a moderation from prior comparative periods of 31.7% to 21.0% in ILU product and 39.0% to 29.9% in our care suite product.
CEO Brent Pattison commented "We have achieved increased sales volumes in the period, particularly in regional locations outside of Auckland. We expect stronger development margins as we sell down our new apartment developments in urban precincts across New Zealand."
So, yes you are right and I was wrong re development margins improving in this period (even if the difference from 1HY to 1HY is not that big as the data point you choose). On the positive side ... they do expect these development margins to rise again (and I think they have a point).
Anyway - bottomline looks good enough for me, but I am sure some people will find something to criticise on it as well.
QuoteOf course there are always surprises but to put a number on it....
I'm Picking a Uprofit of +15% to +20%ish tomorrow.
A prominent poster on the other channel....proven to be too optimistic, yet again.
Yet again, for the 6th year in a row despite improvements in sales, albeit off an incredibly low base and with vast amounts of unsold stock, OCA cannot seem to get out of their own way and grow underlying profit. Its always been at or about 8 cps.
NTA can grow and all that but its earnings that drives the share price and frankly I can see why the share price continues to lag in the doldrums.
In my book a no growth company with 8 cps underlying earnings is only worth a PE of 8. I am sure we can all do the maths on 8 times 8 cents.
They can make all the noise they like about how they are transforming the business model to the point of inflection or whatever other term they like but I find myself in a position where I have heard that story so many times before, I am now so jaundiced that i will only believe it when I see it.
The faithful will of course believe, it's all going to be different going forward, just like they have for the last few years.
Result probably not as awful as this analyst expected but I share many of the concerns he has expressed about OCA and it is also my least favored stock in the sector. https://justthebusinessjennyruth.substack.com/p/expect-quite-awful-retirement-stock
This doesn't look good .......realised gains on new sales down a lot
There were heaps more new sales but less realised gains/development margin ($s)
Like H123 there were 61 sales and average gain was $207k
And.H223 there were 67 sales and average gain was $294k
Then H124 84 sales but average gain only $154k
That's a huge drop and less than what was being achieved pre-covid
No doubt the ol excuse of geographic / type mix eh ...not heavy discounting.
Quote from: winner (n) on Nov 22, 2023, 03:15 PMThis doesn't look good .......realised gains on new sales down a lot
There were heaps more new sales but less realised gains/development margin ($s)
Like H123 there were 61 sales and average gain was $207k
And.H223 there were 67 sales and average gain was $294k
Then H124 84 sales but average gain only $154k
That's a huge drop and less than what was being achieved pre-covid
No doubt the ol excuse of geographic / type mix eh ...not heavy discounting.
Nice you did the numbers, but isn't that exactly the reduced development margin you are showing? Makes sense that it was in times of dropping property prices and increasing building costs difficult to sell licenses to occupy (which are typically funded withth selling a house) with a huge margin.
Good news is - real estate market has bottomed out, and going up again, which should as well reduce the pressure on their sales margins.
Quote from: BlackPeter on Nov 22, 2023, 03:42 PMNice you did the numbers, but isn't that exactly the reduced development margin you are showing? Makes sense that it was in times of dropping property prices and increasing building costs difficult to sell licenses to occupy (which are typically funded withth selling a house) with a huge margin.
Good news is - real estate market has bottomed out, and going up again, which should as well reduce the pressure on their sales margins.
Exactly ....but then why were margins nearly 40% in six months to March when all those factors you talk about were in play .....and this period 23%
Quote from: winner (n) on Nov 22, 2023, 03:56 PMExactly ....but then why were margins nearly 40% in six months to March when all those factors you talk about were in play .....and this period 23%
Taking your numbers at facevalue - but the margins for H223 (if true) look really outstanding. Not sure though, how statistically relevant the 60 odd sales for that half year have been.
However - for this last HY (April to September), they clearly had the full impact of the high building cost inflation as well as buyers reluctant to flog off their house in the middle of a real estate downturn. Real estate bottom was something like July / August, wasn't it?
You've got love these dinky charts they put in the preso ....really coolIMG_5559.jpeg
Quote from: BlackPeter on Nov 22, 2023, 04:47 PMTaking your numbers at facevalue - but the margins for H223 (if true) look really outstanding. Not sure though, how statistically relevant the 60 odd sales for that half year have been.
However - for this last HY (April to September), they clearly had the full impact of the high building cost inflation as well as buyers reluctant to flog off their house in the middle of a real estate downturn. Real estate bottom was something like July / August, wasn't it?
Had a call from a client with more than 40 years' experience in the industry today and still one of Auckland leading Auctioneers. Don't believe all the hype around the market bottoming out he warned. It's still incredibly hard work selling property which has very rarely been less affordable because of interest rates where they are. Interesting feedback from the coalface of a very experienced operator. I still think it's going to be a real "grind" for the sector in the near future, so not a sector I want to apply fresh capital too at this point in time even to SUM which far and away have the most compelling and well proven earnings growth story over the last decade. At an operational level OCA's villages lose big money, another serious reservation I have about this one.
Another sideways result. Must be very few sales achieved at The Helier given low level of new sales margin. Certainly tests the patience. If they don't deliver stellar H2 new sales driven by The Helier it really calls into question their ability to execute. You would think Greg T may lose patience with Management if H2 does not deliver a significant step up.
For Bars Review.
Oceania Healthcare (OCA) delivered a weak, yet somewhat reassuring 1H24 result. The weakness was undramatic and primarily related to increased village opex, driven by two village openings and slightly higher corporate overheads versus our expectations. Our main takeaway is the reduced risk of a downside scenario for the sector in general, with three reasons in particular for OCA. (1) OCA delivered all time high ORA sales of ~NZ$129m, +NZ$10m above its previous record in 1H21. Up +90% sequentially from the very weak 2H23 and up +15% on 1H23. (2) OCA sold two care sites at or marginally ahead of book value, these are non-premium assets that are broadly breakeven. This suggest some support for OCA's (and the sector's) book value at NZ$1.40 per share. (3) While leverage crept up another +120bps to 37.4%, the pace of debt accumulation has slowed materially. Assuming current market conditions remain, management suggested that debt should not move materially from here to year end and start to track lower thereafter. We reiterate our OUTPERFORM rating with a NZ$1.00 target price.
What's changed?
Earnings: Annuity EBITDA -8%/-9%/-7% in FY24/FY25/FY26 primarily driven by higher costs
Target price: NZ$1.00 from NZ$1.05, due to lower annuity EBITDA and reduced dividends.
Peak debt take two
OCA suggested at its FY23 result in May that it was at or close to peak debt; that did not turn out to be the case. OCA added ~+NZ$60m of net debt in 1H24, primarily due to a combination of: (1) a delayed start to sales at the flagship development The Helier; (2) a few opportunistic land acquisitions; and (3) delayed settlements of sales, primarily a number of care suites. Management again suggested that debt would plateau at its current level before trending down thereafter, but cautioned that it was dependent on housing market conditions. We believe management is being prudent. A combination of: (1) a well advanced sales process at at least two sites, (2) lower capex, (3) higher sales, and (4) no dividend, creates a back drop where maintained or reduced net debt is likely. We see ability to reduce net debt as both a necessary and sufficient condition for a re-rating of OCA's shares.
OCA has a relatively straight forward path to debt free (or near to) if it so chooses
We estimate that OCA needs to spend a further ~+NZ$140m of capex to finish the current 382 units it has under construction. Most, if not all, could be completed by the end of FY25. We estimate the cash sale price of the 382 units to be in the vicinity of ~NZ$240m, which together with currently available-for-sale stock (NZ$365m), and assets sales (NZ$40m), should reduce debt to ~NZ$100m. Against this OCA would still have ~NZ$180m of development assets.
1H24 result summary & forecast changes
OCA's 1H24 result was below our expectations at the annuity EBITDA and underlying earnings lines, primarily driven by higher than expected opex. With costs higher than our estimates across both its village and care operations. Pleasingly, care DMF (deferred management fee) was in-line after disappointing at its 2H23 result, while village DMF was slightly weaker due to the sale/closure of sites within the period. 1H24 sales rebounded from a weak 1H23, new sales gains (due to margins) were below expectations while resales gains were ahead of expectations. OCA did not declare an interim dividend and will consider a final dividend depending on cash flow, market condition and growth opportunities at year end.
Thanks shareguy for sharing that from Forbar
A 'very reassuring' report indeed ....though cynically you sometimes wonder how results/performance is viewed by the colour of the glasses one us wearing.
Wonder if result is 'uglier' than what the guy from Jarden was expecting?
Macquarie have OCA as outperform with a target price of $1.31.
Quote from: lorraina on Nov 23, 2023, 09:41 AMMacquarie have OCA as outperform with a target price of $1.31.
They should buy back in 🤭
Their final 41% holding went at $1.20 ( a nice 301 mill for Maccas coffers )
Quote from: Crackity on Nov 23, 2023, 10:00 AMThey should buy back in 🤭
Their final 41% holding went at $1.20 ( a nice 301 mill for Maccas coffers )
That was their profit. Onwards and forwards to their next deal. In a way, they must know they did very well to get out of OCA.
Good article by Jenny Ruth on OCA's 'secret' deals and covenants with its bankers..... possibly at the expense of share holders.
https://justthebusinessjennyruth.substack.com/p/directors-shouldnt-allow-bankers
Quote from: Left Field on Nov 24, 2023, 08:15 AMGood article by Jenny Ruth on OCA's 'secret' deals and covenants with its bankers..... possibly at the expense of share holders.
https://justthebusinessjennyruth.substack.com/p/directors-shouldnt-allow-bankers
Agreed - Banks again guilty of "poor and too much lending." As to Oceania, she notes that it's taking 2.5 years to sell new apartments, "by far the slowest in the sector." That and the obvious madness of borrowing to pay dividends...
As an aside, please consider supporting Ruth's "Just the Business" - it's the sort of insightful and independent commentary that is sorely lacking... outside of this esteemed site!
"Scoullar has since told me that the company will be providing more details, including details of the covenants, when it announces its full-year results in February."
"But what on earth were these companies' directors thinking when they allowed bankers to have so much sway over what could be dislcosed to shareholders?"
- From the financials
"Effective 17 August 2023, the company executed a limit switch. This transferred $50m of
available commitments from the General Corporate Facility to the Development Facility."
This suggest debt repayment isn't met by cashflow, therefore a portion of the facility is switched to development facility which will allow interest cost to be capitalised. Typically when interest cost is capitalised assets will need to be sold which is expected in this case. I think they waiting for the outcome of sales during the summer months and perhaps concerned of the feedback loop to share price if asset sales did not meet expectation therefore effect potential cap raise if that eventuated. Hence the lack of disclosure regarding banking covenants.
Thats my guess.
Quote from: Cookie on Nov 24, 2023, 09:10 AM"Scoullar has since told me that the company will be providing more details, including details of the covenants, when it announces its full-year results in February."
"But what on earth were these companies' directors thinking when they allowed bankers to have so much sway over what could be dislcosed to shareholders?"
- From the financials
"Effective 17 August 2023, the company executed a limit switch. This transferred $50m of
available commitments from the General Corporate Facility to the Development Facility."
This suggest debt repayment isn't met by cashflow, therefore a portion of the facility is switched to development facility which will allow interest cost to be capitalised. Typically when interest cost is capitalised assets will need to be sold which is expected in this case. I think they waiting for the outcome of sales during the summer months and perhaps concerned of the feedback loop to share price if asset sales did not meet expectation therefore effect potential cap raise if that eventuated. Hence the lack of disclosure regarding banking covenants.
Thats my guess.
Agree Cookie
Doing all sorts of clever things that they can manage to avoid a capital raise .......which no doubt they see as an embarrassment and a sign of failure
Quote from: Cookie on Nov 24, 2023, 09:10 AM"Scoullar has since told me that the company will be providing more details, including details of the covenants, when it announces its full-year results in February."
"But what on earth were these companies' directors thinking when they allowed bankers to have so much sway over what could be dislcosed to shareholders?"
- From the financials
"Effective 17 August 2023, the company executed a limit switch. This transferred $50m of
available commitments from the General Corporate Facility to the Development Facility."
This suggest debt repayment isn't met by cashflow, therefore a portion of the facility is switched to development facility which will allow interest cost to be capitalised. Typically when interest cost is capitalised assets will need to be sold which is expected in this case. I think they waiting for the outcome of sales during the summer months and perhaps concerned of the feedback loop to share price if asset sales did not meet expectation therefore effect potential cap raise if that eventuated. Hence the lack of disclosure regarding banking covenants.
Thats my guess.
Nice post - welcome to the forum. That sounds highly probable. It has a bit of that NZX 80's lack of transparency vibe. (https://www.youtube.com/watch?v=nMuh33BMZYY&ab_channel=thecomputerdude24TV%26MovieClips)
Quote from: winner (n) on Nov 24, 2023, 09:17 AMAgree Cookie
Doing all sorts of clever things that they can manage to avoid a capital raise .......which no doubt they see as an embarrassment and a sign of failure
Thanks Winner, I admit I am speculating here. This summer will be a very important period for sales.
Quote from: Hectorplains on Nov 24, 2023, 09:26 AMNice post - welcome to the forum. That sounds highly probable. It has a bit of that NZX 80's lack of transparency vibe. (https://www.youtube.com/watch?v=nMuh33BMZYY&ab_channel=thecomputerdude24TV%26MovieClips)
Thanks Hectorplains. Yeah it's abit odd regarding lack of disclosure regarding the covenants.
Lucky or not, I was still too young to invest during the 80s. I have only managed to read bits about it. Must have been interesting times.
QuoteGearing at March 31 was 36.6%, up from 28.6% a year earlier, and it has kept rising mainly because, as Craigs Investment Partners analyst Stephen Ridgewell puts it, Oceania has "an ocean of unsold stock.[
/b]"
I have been warning about this for a very, very long time. Worth noting that OCA have actively tried to conceal this information from investors for quite some time. Incredibly those with myopic vision, primarily on the other channel continue to believe this is an advantage for OCA and it's only a matter of time before a huge tsunami of stock is sold.
My contention has always been that what's in demand now and in the medium term ahead with the average baby boomer age demographics is the full feature retirement villages with all the bells and whistles. There are good systemic reasons why SUM only take 6 months to sell down a village and OCA take years. My contention is that not only are we vastly over supplied with care suites, where people do want this product, they still also want a full feature village so they can have fun and low feature boutique villages are going to struggle forever and a day. I would use this analogy. Think about the demand for Citroen vehicles compared to Toyota and consider if its plausible the relative demand for these brands will change anytime soon.
SUM are the only ones who have left the gate open to weekly fees being adjusted every year which considerably ameliorates their operational losses at a village level, unlike the other operators. To me, they have conferred upon themselves a massive advantage going forward.
Quote from: Cookie on Nov 24, 2023, 09:35 AMLucky or not, I was still too young to invest during the 80s. I have only managed to read bits about it. Must have been interesting times.
The 80's:
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only. - Charles Dickens' The Tale of Two Cities (1859)
Is a CR still on the cards for OCA then?
It all depends how their sales go in the second half.
Quote from: Basil on Nov 24, 2023, 09:57 AM/b]"
I have been warning about this for a very, very long time. Worth noting that OCA have actively tried to conceal this information from investors for quite some time. Incredibly those with myopic vision, primarily on the other channel continue to believe this is an advantage for OCA and it's only a matter of time before a huge tsunami of stock is sold.
My contention has always been that what's in demand now and in the medium term ahead with the average baby boomer age demographics is the full feature retirement villages with all the bells and whistles. There are good systemic reasons why SUM only take 6 months to sell down a village and OCA take years. My contention is that not only are we vastly over supplied with care suites, where people do want this product, they still also want a full feature village so they can have fun and low feature boutique villages are going to struggle forever and a day. I would use this analogy. Think about the demand for Citroen vehicles compared to Toyota and consider if its plausible the relative demand for these brands will change anytime soon.
SUM are the only ones who have left the gate open to weekly fees being adjusted every year which considerably ameliorates their operational losses at a village level, unlike the other operators. To me, they have conferred upon themselves a massive advantage going forward.
Actually - the best car we ever had was a Citroën CX (late 1980'ies / early 1990'ies): Comfortable, reliable and economical. Basically 30 years ahead of the competition (and I still don't know any other car where you can adjust the height above ground with one simple lever while driving ...
But look - we hear what you say, and no doubt - your views on OCA represent one (of many different) valid views on the company and I see they are aligned with some other commentors and journalists. However - as always, there are many other valid views on any thing. From every perspective you see different good and bad things - and while all of these views might be right, it is impossible to predict how the future will evolve.
If I look at the analyst consensus (whatever its worth), it clearly looks like many of the analysts see something different to you. And yes, Mav has as well a different view, and while I don't think that a very detailled model based on the past guarantees a reliable prediction of the future, it is certainly one important input parameter. Mav puts a lot of work into his posts, and I think they add a lot of value to the discussion. No need for beating him up for sharing his views.
The world has so many colours and there are always good and bad things about any company and there are always shades of grey. I think its great to have a diversity of thought and viewpoints as long as everybody acts with good faith and based on facts.
If we run down people every time we think we've been right and they've been wrong, we will lose their views.
Back to OCA. Personally I clearly see issues with OCA (and one of the biggest is their pathetic shareholder communication), but I see as well a world of opportunities. It looks like an amazing deep value play, even if they would need another cash injection (which I don't see). It would not be the first share the market is re-rating. Remember the times when everybody thought its convenient to spit on SUM ... and then they rocketed upwards?
Interesting as well - if I compare OCA with the once gold standard Ryman since 2017 (ie.e. OCA's IPO, than OCA lost 12.7% of its SP since 2017 (but paid a lot of dividends), while the gold star Ryman lost in the same timeframe 37.4% of its share value (and paid less dividends than OCA).
Fact is - while its at current fashionable to bash OCA, they did do better than many other retirement villages ... and I guess with SUM - well, lets wait how their trend shows after they have been removed from the MSCI, shall we?
Quote from: Hectorplains on Nov 24, 2023, 10:17 AMThe 80's: It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only. - Charles Dickens' The Tale of Two Cities (1859)
Is a CR still on the cards for OCA then?
Nice quote to describe the 80s.
I haven't done a deep dive regarding the likelihood/ how much stock needs to be sold.
Beagle has alluded to debt level has gone up. Also interest rates have gone up(although we are potentially at peak rates). So that's why I think the next few months will be important.
Thinking about it again about lack of disclosure regarding the covenant. Perhaps there is the other potential impact of knowing.
If we knew and it was perceived not to be in a good light. That could influence potential buyers behaviour to negotiate abit more knowing that OCA had to move stock.
It would not put OCA in a strong position to negotiate on sales
BP - Its not his first time of being too optimistic, far from it...but moving on, people will follow who they want to but food for thought, where's that got them so far ? Just as well it's all going to be different going forward, or so the current group think on the other channel goes.
OCA appears to be a deep value play but my contention is NTA is a red herring as so much of that NTA is tied up in no and low return care and so much in "an ocean" of stock they struggle to sell. My view is its unlikely to close that gap in a meaningful way until they can show they can shift large amounts of slow-moving stock and grow earnings. One analyst thinks they won't pay dividends for years. I think there's a deep systemic issue of operational losses at a village level that's incapable of resolution. so looking further out their ability to pay decent dividends is always going to be handicapped so that makes it an easy decision to apply my capital elsewhere. (I am a dividend hound and value investor at heart and that's never going to change).
OCA should probably do okay in the 2H with sales as they have such a vast amount of stock so simple weight of numbers available for sale should, at least in theory, probably help them avoid the shockingly value destructive fiasco of a deeply discounted rights issue RYM got themselves embroiled in.
OCA is not the only company in this sector trading at a large discount to NTA, (ARV is also very close to half theoretical NTA) and the index exit event on 30 November could provide an opportunity for a deep value play on them or a good entry point for the best of breed, SUM. ARV have a track record of modest underlying earnings growth, well, up until recently but I am not hopeful of a good print next week. Maybe on the back of that print and index exit they will retest earlier lows of 91 cents. If so, that would certainly command my attention.
I called out former market darling RYM in 2014 as being egregiously overpriced and have had an avoid rating on it ever since. Their fall from grace has been quite spectacular, I agree.
I've also called out the weaknesses on OCA's model for quite some time now and its share price has halved.
My contention is there is not just a problem with OCA's shareholder communication there is a culture of concealment within that company that i've talked about before. You'd be forgiven for concluding that the board and management treat retail shareholders with contempt.
Going forward, my view is OCA's biggest problem continues to be their very high level of exposure to care. Sure, they have made some progress with reducing that in the last 6 months which is good, but there is a vast amount of work still to be done and wanting to change the ship's course and achieving that is analogous to trying to turn a huge ship (hopefully not the Titanic), with very small rudders...there's only so much progress you can make each year.
Sure, they will make progress each year, but capital is mobile and frankly, I'd rather be on board a better and higher performing ship, or to use another analogy I've used before, drive a car without the handbrake on. Speaking of vehicles, many now have height adjustable air suspension...but I digress.
Wonder if what I hear that there were 5 The Helier sales counted in the F23 numbers is true?
Craig's latest report is not good reading
A OCEAN OF UNSOLD STOCK
1H24 result: a serious case of deja vu
OCA's earnings have been broadly flat over the past five years as its portfolio
has been upgraded. OCA delivered yet another flat result in 1H24, with
uEBITDA down 3%, and uNPAT down 1%, while unsold inventory and debt
continued to climb. Aged care margins fell, despite prior management
guidance for recovery. The only real surprise was that OCA cancelled its
dividend, though we have repeatedly flagged that OCA's free cashflow from
existing assets has been negative for several years (so it has been borrowing
to pay the dividend), and worsened to -$13.7m (pre-interest) during 1H24.
Dividend suspension due to poor sales performance
Unsold new stock increased $48m HoH to $422m (409 units) at the end of
1H24, driving a $61m increase in OCA's net debt to $613m (gearing 38%). The
key issue is that new sales have been slow, particularly in regional locations
(Awatere, Bay View, and Care Suites at Green Gable), with average new units
taking c.2.5 years to sell from completion, by far the slowest in the sector (vs.
<6 months for SUM). OCA's Care Suite model has worked well in leafy
Auckland suburbs, but has struggled in the regions where there is less wealth,
and there is sufficient existing supply of fully Government-subsidized aged
care beds. Management expect net debt to steady over 2H24, and potentially
decline depending on the level of settlements at The Helier and asset sales
($42m held), though they provided similar guidance six months ago.
Development model broken: course correction indicated
Aged care segment
Despite guidance for improvement in aged care earnings at OCA's last result, care uEBITDA
declined yet again, down -12% YoY to $9.9m. Even after adjusting for several site closures
and divestments, EBITDA was still down -11%, with margins down 210bps to 9.6%. We note:
Revenue growth accelerated to 7% YoY, its highest level since 1H21, from (i) a full period
contribution from the 4% Sep-22 funding increase (ii) two month contribution from the
Jul-23 funding increase of 10% and (iii) a slight mix shift towards growing premium fees.
Costs also grew 9%, largely due to Health NZ lifting wages (including 4-6% in July).
That's a truly damning indictment of their business model that hits the nail directly on the head.
Its good to see professional analysts now starting to call the company out on their B.S.
More directors snapping some more shares. Averaging down perhaps, or a barging price?? Time will tell
https://www.nzx.com/announcements/422730
Quote from: Greekwatchdog on Nov 30, 2023, 02:40 PMMore directors snapping some more shares. Averaging down perhaps, or a barging price?? Time will tell
https://www.nzx.com/announcements/422730
Elizabeth Coutts now holding close to 2 million shares (1,984,403 to be precise). That's a meaningful amount in most peoples books.
The other two as well both about 200,000 shares. Not as impressive as Elisabeth, but I recon they didn't pay for that out of the pity cash either.
While the fresh comittments have been lower (something like 30 to 40k shares each), it still indicates they do believe in the company, and actually - so do I.
Quote from: BlackPeter on Nov 30, 2023, 05:52 PMElizabeth Coutts now holding close to 2 million shares (1,984,403 to be precise). That's a meaningful amount in most peoples books.
The other two as well both about 200,000 shares. Not as impressive as Elisabeth, but I recon they didn't pay for that out of the pity cash either.
While the fresh comittments have been lower (something like 30 to 40k shares each), it still indicates they do believe in the company, and actually - so do I.
Liz 1,984,403 shares have cost her $2,052,832 ...average now $1.034
So she still underwater to tune of $584,000
At least keeping the faith and hoping like anything it'll turn out OK
Thought hoping wasn't a good strategy
I have never thought of Liz Coutts or Greg Tomlinson as being hopers...lol
I do wonder what it would cost today to replace OCA's villages.?
Above or below NTA.?
I would take a guess at above.
Would like to know others' thoughts.
Quote from: lorraina on Dec 01, 2023, 09:20 AMI have never thought of Liz Coutts or Greg Tomlinson as being hopers...lol
I do wonder what it would cost today to replace OCA's villages.?
Above or below NTA.?
I would take a guess at above.
Would like to know others' thoughts.
Excellent point!
... and yes, given above average inflation for building costs its not hard to see that replacement costs would be well above NTA.
It's a shame you can't eat NTA
Have you gone back to shopping at New World.?....lol
Quote from: Basil on Dec 01, 2023, 02:17 PMIt's a shame you can't eat NTA
Not really - I rarely try to or wish to eat assets (unless they are edible and I am hungry :) ;
I guess the thing is - if anybody needs to use the assets (for example to house elderlies), they will need to either build their own solution, buy the existing assets or rent the existing assets.
We established already that building their own solution (i.e.building another retirement village in comparable quality) is more expensive, so this either leaves using the existing solution (e.g. use OCA's services) or launch a takeover of the company (which might well be a risk given the undervalued price).
Obviously- you could as well reduce the quality of housing or care to save money (start with double bunking in a backpackers hostel down to offeeing a mattress and a blanket under the bridge), doubt however that people who are able to pay are too interested in latter solution.
None of these options involve eating NTA, so - not quite sure where you are coming from.
It was a one liner one of the analysts used when talking about OCA's NTA. What he's alluding too is that its realized earnings and more specifically operating cash flow that matter's. That's what you pay dividends out of and that's why you're not getting any from OCA at this point in time. All in this sector have the same problem except, perhaps, SUM.
Quote from: Basil on Dec 02, 2023, 02:29 PMIt was a one liner one of the analysts used when talking about OCA's NTA. What he's alluding too is that its realized earnings and more specifically operating cash flow that matter's. That's what you pay dividends out of and that's why you're not getting any from OCA at this point in time.
Makes sense that Basil ......operating cash flow buys the Sunday roast .....NTA just a made up number eh ...and replacement cost won't be feeding you either
But OCA not got a positive operating cash flow ...not even enough for a few crumbs
This sector wide problem is not going to change much anytime soon either eh.
This announcement scored 11 out of 10 on buzzword scorer
But at least Brent is excited
Officer, Brent Pattison, said that "Tracey is a proven leader, builds great teams, implements successful change in large complex business environments and champions a winning culture. We are thrilled to welcome Tracey to the Oceania family and look forward to her contribution as we grow, nurture, and develop our people capability."
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/423035/409019.pdf
Quote from: Basil on Dec 02, 2023, 02:29 PMIt was a one liner one of the analysts used when talking about OCA's NTA. What he's alluding too is that its realized earnings and more specifically operating cash flow that matter's. That's what you pay dividends out of and that's why you're not getting any from OCA at this point in time. All in this sector have the same problem except, perhaps, SUM.
I guess that's the thing with investments. You have to put money in (investing), wait some time, and - if you made the right choice than the money starts flowing. While you pay for your investments, your cash flow will be negative. Not rocket science.
At this stage most of the retirement villages are putting lots of money into new developments, meaning that's where the cash goes, not (yet) back to the investors.
If OCA would stop building any new villages now, they would be cash positive as soon as they wrapped up the reminder of the existing activities. If they continue to build, it will take longer, but they will get a larger cash flow afterwards, its that easy.
I understand though that patience (to wait) is neither a particular strength of traders nor of beagles so - maybe retirement villages might not be everybodys best investment proposition. Each to their own.
Quote from: winner (n) on Dec 06, 2023, 11:11 AMThis announcement scored 11 out of 10 on buzzword scorer
But at least Brent is excited
Officer, Brent Pattison, said that "Tracey is a proven leader, builds great teams, implements successful change in large complex business environments and champions a winning culture. We are thrilled to welcome Tracey to the Oceania family and look forward to her contribution as we grow, nurture, and develop our people capability."
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/423035/409019.pdf
"implements successful change in large complex business environments" - corporate speak code for reorganisation cost out coming
Quote from: BlackPeter on Dec 06, 2023, 11:23 AMI guess that's the thing with investments. You have to put money in (investing), wait some time, and - if you made the right choice than the money starts flowing. While you pay for your investments, your cash flow will be negative. Not rocket science.
At this stage most of the retirement villages are putting lots of money into new developments, meaning that's where the cash goes, not (yet) back to the investors.
If OCA would stop building any new villages now, they would be cash positive as soon as they wrapped up the reminder of the existing activities. If they continue to build, it will take longer, but they will get a larger cash flow afterwards, its that easy.
I understand though that patience (to wait) is neither a particular strength of traders nor of beagles so - maybe retirement villages might not be everybodys best investment proposition. Each to their own.
Not sure if you were an investor in the IPO but we were promised a 6 year business transformation program and that there would be a point of inflection well before that when earnings grew. From vague memory it was at the 3 or 4 year mark where shareholders were supposed to start seeing the benefits of their transformation program. Look mate, it's just one story after another, after another from OCA management about how the future is so much brighter but for more than 6 years now they have delivered no growth in eps which is why the market is so disappointed with them and the share price is under the IPO price.
I hear they about to pivot ...untold riches ahead
Quote from: Basil on Dec 06, 2023, 11:58 AMNot sure if you were an investor in the IPO but we were promised a 6 year business transformation program and that there would be a point of inflection well before that when earnings grew. From vague memory it was at the 3 or 4 year mark where shareholders were supposed to start seeing the benefits of their transformation program. Look mate, it's just one story after another, after another from OCA management about how the future is so much brighter but for more than 6 years now they have delivered no growth in eps which is why the market is so disappointed with them and the share price is under the IPO price.
Fair enough - and no, I bought in later.
Having said that - I can't really remember a lot of large projects which took less than at least twice the originally planned time and cost. Do you? And it is often not even ineptness or bad faith of whoever is managing these projects, its just - humans tend to be optimistic and make assumptions (you can't plan without them), but none of them is able to predict the future. Bad combination. And then - sh*t (e.g. like pendemics, increased inflation, building booms and busts, governments inflating salaries and restricting the acess to critical overseas workers) happens.
If mankind would call all projects coming in above the original budget and timeframe a loss, than there wouldn't be a lot of successful projects around.
While I agree that inflection point seems to be a bit tardy to arrive (though maybe we should have checked the definition of inflection point earlier instead of just assuming it means an inflection in earnings) - I do see a lot of good quality retirement and care units in the bank with an overall not too bad occupation rate of above 90%. I do see as well a grey tsunami building up to increase demand.
What we need to see is whether their supply matches demand - I guess if you are doing new things (like trying to satisfy the super luxury market) there is always a risk of a mismatch.
So far I am not too worried. What annoys me more with this company is the way they communicate and ignore valid shareholder questions and concerns. But, if we both think ways back into our past - I remember we've been in a similar situation with SUM and its then CEO (Norah Barlow) playing games. Maybe time we both need to combine again at some stage our energies to sort out the board and its policies. What about that?
That was fun eh. Beagle in maximum attack mode. Must admit, really ripping into the OCA board at the next annual meeting has a LOT of appeal. Not sure it would do much good though....water off ducks back and all that.
It's really good to see some analysts, (Arie Dekker of Jarden's and Stephen Ridgewell of Craigs) calling out companies in this sector. https://justthebusinessjennyruth.substack.com/p/directors-shouldnt-allow-bankers. and https://justthebusinessjennyruth.substack.com/p/expect-quite-awful-retirement-stock
Jarden's were extremely critical of OCA's result. Not sure I have a link for that.
Maybe there's no need for an old semi-retired dog to start barking when there's two younger ones doing the work now...
Have you ever seen two young Huntaway dogs round up a big flock of sheep ? I used to work on my uncle's southland sheep farm when I was a teenager. It's a joy to watch. Gosh they are so fast...faster, louder and more effective than an old beagle that's for sure lol.
"I hear they about to pivot ...untold riches ahead"
? ...
pass the ... https://www.youtube.com/watch?v=YppmWzDXMZs
Liz buys some more ........another vote of confidence in the future
Maybe she asked herself 'what the heck do I do with this lot of Director's fees'
I have been having a look at OCA and in particular the reconciliation of underlying NPAT. What struck me that most of the underlying NPAT is made up of either realised resale gains or development margin.
If i strip those out - am I right that OCA is struggling to make a profit on existing operation?
Be nice, this is my first forum post :)
Quote from: Dolcile on Dec 09, 2023, 08:00 AMI have been having a look at OCA and in particular the reconciliation of underlying NPAT. What struck me that most of the underlying NPAT is made up of either realised resale gains or development margin.
If i strip those out - am I right that OCA is struggling to make a profit on existing operation?
Be nice, this is my first forum post :)
Welcome
You're onto it Dolcile
Look at Cash Flow Statement in same light
That's today but I'm told that it's all about the property and annuity earnings that matter and that will result in untold riches coming their way
I struggle to understand it as well.
One thing that baffles me is that employee cost has gone up considerably over the years.
As of right now OCA has 3000 staff for 4000 residents. Isn't that a high labour cost for each resident.
Regarding the ORA/deferred management fee, am I right in saying they retain between 20 to 30% of the original value paid by the residents. Sure it is interest free but ultimately the balance needs to be paid back.
I looked at Ryman back in the early days, from what I can gather the operation was cashflow neutral. dividend was essentially paid out from the deferred management fees and parts of the property value revision. Is it coincidence interest bearing loan balances have gone up?. Now the operation is cashflow negative even taking into account the deferred management fees. So it's coming out of the property value revision(if they lucky and haven't ceased divie payments). I do admit I may need to step back and acknowledge it was a time of declining rates and alot of companies (not just RV operators) focused on growth at the expense of margin. I am starting to see a reverse of this across different industries now.
TBH I try to avoid spending too much looking at it. I consider the return on study, otherwise I am more likely to be susceptible to commitment bias. If anyone can shed some light on the increase in employee cost and even point out the flaws in my comments. That would be great.
3000 staff for 4000 residents will include
all categories of staff. RN's, caregivers, kitchen staff, laundry and housekeeping staff, administration, management, financial/legal, grounds/gardens, marketing/sales, and whatever other staff there will be across
all their villages. There may be opportunities to reduce back office numbers, but zero option to reduce "on the floor" staffing numbers.
From a care perspective, hospital level care has a requirement for 24/7 RN cover - standard care does not, but I would be surprised if RYM doesn't provide that as standard anyway. Caregivers will make up a large chunk of overall staffing figures, for very obvious reasons. Standard level care, hospital level care, and dementia level care, are all labour intensive areas, and there is no way round that. Not if you aim to be an ethical and responsible employer.
If anyone is interested you can go to the NZNO (Nurses Organisation) website and search for any collective contract for these providers. From those contracts, you can see pay and allowance rates for nurses, caregivers, diversional therapists/activities staff, housekeeping and kitchen staff. Keep in mind that the contracts listed there currently will be last years contracts, so there may be changes pending for this bargaining round. It is actually quite interesting to compare some of these contracts between providers - as they are not all exactly the same.
A lot will depend on whether this new government has the balls to step up and address the situation, especially the residential care funding subsidy. While a minority of residents will be eligible for this subsidy, it still makes a significant difference to care related income.
Quote from: Cookie on Dec 09, 2023, 11:11 AMI struggle to understand it as well.
One thing that baffles me is that employee cost has gone up considerably over the years.
As of right now OCA has 3000 staff for 4000 residents. Isn't that a high labour cost for each resident.
Regarding the ORA/deferred management fee, am I right in saying they retain between 20 to 30% of the original value paid by the residents. Sure it is interest free but ultimately the balance needs to be paid back.
I looked at Ryman back in the early days, from what I can gather the operation was cashflow neutral. dividend was essentially paid out from the deferred management fees and parts of the property value revision. Is it coincidence interest bearing loan balances have gone up?. Now the operation is cashflow negative even taking into account the deferred management fees. So it's coming out of the property value revision(if they lucky and haven't ceased divie payments). I do admit I may need to step back and acknowledge it was a time of declining rates and alot of companies (not just RV operators) focused on growth at the expense of margin. I am starting to see a reverse of this across different industries now.
TBH I try to avoid spending too much looking at it. I consider the return on study, otherwise I am more likely to be susceptible to commitment bias. If anyone can shed some light on the increase in employee cost and even point out the flaws in my comments. That would be great.
Quote from: Untamed on Dec 09, 2023, 12:33 PM3000 staff for 4000 residents will include all categories of staff. RN's, caregivers, kitchen staff, laundry and housekeeping staff, administration, management, financial/legal, grounds/gardens, marketing/sales, and whatever other staff there will be across all their villages. There may be opportunities to reduce back office numbers, but zero option to reduce "on the floor" staffing numbers.
From a care perspective, hospital level care has a requirement for 24/7 RN cover - standard care does not, but I would be surprised if RYM doesn't provide that as standard anyway. Caregivers will make up a large chunk of overall staffing figures, for very obvious reasons. Standard level care, hospital level care, and dementia level care, are all labour intensive areas, and there is no way round that. Not if you aim to be an ethical and responsible employer.
If anyone is interested you can go to the NZNO (Nurses Organisation) website and search for any collective contract for these providers. From those contracts, you can see pay and allowance rates for nurses, caregivers, diversional therapists/activities staff, housekeeping and kitchen staff. Keep in mind that the contracts listed there currently will be last years contracts, so there may be changes pending for this bargaining round. It is actually quite interesting to compare some of these contracts between providers - as they are not all exactly the same.
A lot will depend on whether this new government has the balls to step up and address the situation, especially the residential care funding subsidy. While a minority of residents will be eligible for this subsidy, it still makes a significant difference to care related income.
Thanks for the info Untamed. I assume that was the case as well. I thought about it afterwards and not to be misinterpreted. I am not saying the workers are undeserving of it, on the contrary I think there is a decent argument that they should be paid more for what they do. I looked at Arvida, Ryman and Oca- generally speaking and if I recall right the employee cost was around 50%+ of the care fees but that has increased to about 80%+. I agree there will be difference between the RV providers. But I am curious why there has been overall increase across RV providers.
On a different point.
I think it is generally agreed that most RV providers have decent NTA. I want to make a comparison with the landlord situation. Most landlords will own either one or two investment properties . Although some will have excellent equity (similar to NTA), most cannot afford to buy a further investment property. The main reason is they don't have the ability to borrow further even in light of their excellent equity position.
I think the same principle applies to RV providers. They have excellent NTA but I think alot of them are at the limit in terms of borrowing capacity i.e cashflow.
Not necessarily OCA, but I do wonder if increasing dividends were paid out by borrowing more against ever increasing NTA. Relatively speaking sooner or later an borrowing ceiling will be reached, quicker when the rates goes the opposite direct and start rising again. So I go back to my previous point that landlords have ceiling as to how many investment properties they can purchase. The principle is no different to RV providers.
Even if they took out the interest bearing debt. The cashflow is still negative. So back to my curiosity regarding the employee cost. Percentage wise, why has it jumped from 50% odd to 80%odd?
Edit: Bare in the mind the interest rate environment in the background. Gradually reducing interest rates over the last 10+ years meant all else being equal borrowing became easier over the period. We had a sugar hit over covid, but we are now facing on average higher rates. So developments they planned a few/couple years ago are not commercially feasible in the current environment.
As far as I can tell, OCA is no different to a negatively geared investment property. And i find it remarkable that they can't generate FCF from operations (excl. resale and development margin) when they receive the rent up front (dmf) and an interest free loan for the balance of the properties value. How can that be.
Quote from: Dolcile on Dec 09, 2023, 10:38 PMAs far as I can tell, OCA is no different to a negatively geared investment property. And i find it remarkable that they can't generate FCF from operations (excl. resale and development margin) when they receive the rent up front (dmf) and an interest free loan for the balance of the properties value. How can that be.
[/quote
True. At least the landlord soon be able to offset the full interest cost against the personal income.
It is a good question. I think a simplistic comparison would be that landlords will borrowing at a higher loan to value ratio i.e relative higher interest cost. However landlords don't need to fund the wage bill that is applicable with RVs(which is significant imo).
The expense ratio has changed over the years. My assumption(no proof), borrowing against the NTA help fund the dividends. Perhaps they were prioritising developments to increase the NTA. Things may have become unstuck due to the change in interest rate environment amongst other things.
They were definitely building units at rapid rate. Compound of 7.2% over the last 10 years. It also raises another question whether supply is ahead of demand. The 75 to 84 age bracket will increase at a lower rate of 4% from 2018 to 2034.
https://www.retirementvillages.org.nz/Site/About_RVA/RVA_Annual_Report.aspx
Hi Cookie, IMO the low gearing (relative to a normal property investment) makes it even more concerning. They can't seem to make money with a huge interest free loan and a modest LVR.
I've tried to see the value in OCA that others do, but can't seem to do it.
There was a poster on Sharetrader.co.nz that was suggesting in 8 years underlying earnings would be $71m. I can't post there to question where that figure comes from.
Newer posters would do well to go back right to the start of this thread and the thread on the other channel, (I used to post as Beagle on the other channel) and glean as much info as they can and see who has been right over time. I have made a huge effort, (nobody has tried harder) over recent years to warn about the weaknesses of their business model. Now we have two leading analysts bold enough to call OCA out I am happy to leave them to do the work, and certainly won't report what I've already shared before but I will share a couple of big picture insights I have with you newer posters.
Right back at the IPO when private equity were running the business they had a very, very tight focus on costs, (what you would expect from a private equity owner). Their EBITDA margin on care was 19% and care has always been a huge part of their business and always will be. At the IPO we were promised a 6 year transformation process whereby older basic care facilities would be disestablished and these fancy new care suites, (which was an unproven concept at the time and I maintain is still that way) would be built and this was to transform returns on care. It would take a few years but Earl Gasparich, the CEO at the time assured us the "inflection point" was only a few years away and we would start to see improving returns thereafter.
Time and time again thereafter we have been assured returns will be improved from care and even as recent as the FY23 annual meeting call senior management said returns from care have bottomed and will improve now but their EBITDA margin on care went down to less than 10% in the current half, in fact just on half the return on care when this floated nearly 7 years ago! So much for their much-hyped transformation program!
So why has this care suite concept failed and why are there hundreds of unsold care suites, more than 4 years sales worth at their most recent result? (Think about how ridiculous) it is if a car yard had 4 years worth of stock! How is it that SUM can sell down a village in 6 months or ARV within a year but OCA take several years?
I maintain the care suite concept is broken and doesn't work other than for a very small percentage of the population. An anecdotal story might help you understand why. First up the DMF fees are extremely expensive. My Mum was diagnosed with a terminal condition a few years ago and told she had about 6 months to live. I wanted the best for her and was keen to see her in a care suite in the Sands with a sea view but the cost would be circa $75,000 ($500,000 x 15% and you pay the 15% whether its 1 day or 364 days).
We found her very good care in a almost brand new local facility, (so her friends could easily come and see her) that her doctor recommended for $45 a day for a premium room with a nice sea view. It cost us a tiny fraction of the $75,000, less than $10K from memory and was better for my Mum as her old friends who lived locally could see her regularly. If you know you have a terminal condition, why would you choose a care suite? The answer is most who care about what their kids and don't want to waste money and put their kids through, potentially years of anguish waiting for the care suite to eventually resell) wouldn't.
This is why OCA have hundreds of unsold care suites and that part of their business model is broken.
RYM have a fully refundable care suite package where the money is fully refunded within 30 days on a resident passing so why would you choose an OCA care suite where you lose 15% per annum?
Yes they are at their limit of borrowing capacity. Yes the operational losses at a village level are confronting and a major weakness in their business model. Just keep building more villages that lose money, what could possibly go wrong lol
As an asset play, not that I think NTA is especially relevant, its earnings that really matter, I note ARV trade at less than half NTA and have a much lower exposure to loss making care.
Be careful who you follow on the other channel. A lot of people have followed another poster on there for years and where's that got them? Right down the toilet is where. He foretells untold riches ahead. I have been warning for years about the major weaknesses in OCA's business model ever since it was $1.40.
I don't like OCA even at the current price. Because they have cried "wolf" so many times before on future growth I will only believe it when I see it. 8 cents underlying earnings is about all they have ever delivered despite all the huge volumes of talk about transformation over the years
I think the culture of OCA is very wrong. All their focus is on ESG and patient care regardless of cost. Shareholders are treated with scant regard and I think there is very poor cost control within the business. I'm calling out the CFO as very weak and ineffective in that regard.
More recently, I think its a major fresh concern that despite no explicit Covid costs in the latest half year result, the EBITDA margin on care plunged badly to an all-time low, despite the company claiming earlier in the year it would recover. It shows the company has very few, if any effective cost control disciplines and no forward insight into profit. they never mention underlying eps in their presentations and over the years have had a culture of concealment of the level of unsold stock.
I can't see anything to like about their business model or the way the business is being managed. Sure, it would be remiss if I didn't acknowledge they are trying to reduce their exposure to care and have made some progress in the current half, but I think the best analogy to use is to think about a big ship with small rudders. It takes a very long time to change direction. Many, many years. It's been nearly 7 years now so maybe reflect on what little progress have been made this far. There's a lot better places to invest your capital. If you must invest in the retirement sector, pick the dog with the least fleas I reckon. That's SUM in my opinion.
Jeez ...care ebitda halved margin since listing .......and that's even with the huge success of the much touted premiumisation strategy.
Very helpful thanks Basil, confirms what I was thinking too.
In terms of Summerset, what stands out to you as the reason they are the pick of the RV bunch? P.s. I'm not looking to buy any RV stocks.
Quote from: Basil on Dec 10, 2023, 10:57 AMIf you must invest in the retirement sector, pick the dog with the least fleas I reckon. That's SUM in my opinion.
"I can't say enough about the fact that earnings are the key to success in investing in stocks. No matter what happens to the market, the earnings will determine the results." Peter Lynch.
SUMS ability to grow underlying earnings is better than the other 3 NZX RV stocks
Sometimes you really disappoint me Basil. You don't need to agree with Mav, but you also don't need to disrespect him.
Quote from: Basil on Dec 10, 2023, 10:57 AMBe careful who you follow on the other channel. A lot of people have followed another poster on there for years and where's that got them? Right down the toilet is where. He foretells untold riches ahead.
That sums (pun intended) it up nicely Hectorplains.
What concerns me about the sector a fair bit going forward is that most of the gains in the sector have been built upon growth in the value of housing in real terms but what if it's very different going forward and is it likely to be?
Let me unpack that a bit. This whole sector started with Ryman listing in 1999 and frankly, with first mover advantage they enjoyed an absolute bonanza until more competition started coming to the market when SUM listed in 2011. SUM have well and truly spanked RYM's performance since they listed.
Lets have a look at how house prices have grown since RYM listed to illustrate my point. Using the Reserve bank inflation calculator $100,000 in 1999 is now worth $184,986 using general CPI as the measurement yardstick but the housing index also on that website shows that $100,000 has grown to $477,064 by Q3 2023 so housing has outstripped general inflation by a factor of nearly 2.6 times.
Where's that got us ? Some of the most expensive real estate in the world on a per capita basis...from memory Auckland is the 3rd or was it fourth? most expensive city in the world relative to average income.
What if over the next 20 years we get a reversion to norm and house prices increase at a much lower rate than inflation, like what's happened since the market peak a few years ago? Well, all sorts of weaknesses in the business model of these companies will come to light that were otherwise camouflaged by the excess capital gains these companies used to make. You're seeing this now with huge operational losses at OCA becoming really concerning and RYM getting hit hard as well, also ARV.
RYM's model was predicated upon being the best in the sector and charging like a wounded bull for their units but using the lowest of sector DMF as the sweetener, a kind of sweet and sour strategy if you like with the sauce, they used being very low weekly fees fixed for life. Selling a premium product at a premium price with low weekly fees if you signed up off the plans was a very effective marketing strategy used at various Bowling club village launches all around the country in booming times with real estate, much less so now that real estate is flat and people can't get what they really want of their houses.
So all that a very long way round to coming around to answering your question of why I think SUM is the dog with the least flea's.
More succinctly answering your question in my view
1. There is very little - no money in care, never has been and never will be, it's such a people intensive business so the less care in the business model the better, SUM is best positioned here.
2. Fixed weekly fees for life has really come back to haunt companies in this sector with inflation where it is now. Those who signed up years ago with some of RYM's $99 weekly fees covering a huge number of things fixed for life are frankly laughing all the way to the bank every week. SUM is the only board in this sector that had the courage to stay firm in their belief, (despite strong encouragement from this old dog to fall into line with the sector) that weekly fees being adjusted for the rate of National Superannuation increase each year is perfectly reasonable. From a village operational point of view they have conferred upon themselves a massive advantage going forward in that they have a chance of villages breaking even at an operational level whereas the others are seriously disadvantaged.
3. SUM have always tried to consistently build "full feature" villages...the true land based cruise ship experience at a reasonably mid price point with mid price point weekly fees. This is what the market really wants which is why they sell down their villages very quickly.
4. Over the years we have seen average ILU prices move closer and closer to the national average real estate price with little margin left in some center's. SUM's mid price point is therefore a more marketable commodity than RYM's and in some cases ARV's more expansive units.
5. SUM and RYM have a competitive advantage in that Melbourn's average unit pricing is a lot lower percentage of prevailing real estate prices, about 60% from memory which is about what it was historically when this concept originally came about but in N.Z is now often in the 85-90% region.
6. Scott Scoullar, current CEO was understudy and CFO to the company whilst Julian Cook was CEO, (Julian came from an investment banking background and had a really sharp commercial edge to him that I really liked and frankly I miss catching up with him at annual meetings) and is vastly experienced in running the company and was making great pricing decisions on units and operational matters years before Julian Cook retired.
Just rounding this off, and to Hectorplains point, there is little difference between the forward PE's of the sector now basxed on forecast underlying earnings, you could almost throw a blanket over them and call them almost the same. So which horse are you going to back ? The one that's consistently given the best underlying earnings growth over the years or one that never delivered any.
Allow me this latitude. If you went to see a horse race and there were 4 participants and the TAB had them all at $4 to win, (yes I know this isn't possible and the TAB take a huge margin but please indulge me), who would you bet on. The horse with form that just keeps on winning race after race after race (SUM), a horse that has never won and delivered real results (OCA) or one of the other two with chequered results in recent races (ARV and RYM), the latter with a jockey with questionable skills?
What if it was the Grand National hurdles event and the track was extremely muddy and the fences really high and all might get tripped up or fall at one of the hurdles and there's no refunds on bets? Would you bother placing a bet at all ? That's why I don't have any exposure to this sector at this point. Gains have all been predicated upon massive expansion in the cost of housing in real terms and it's so unaffordable now its highly likely that even the best horses progress will be slow. They yield either nothing or nearly nothing so what's the point if you think housing will increase at below the inflation rate for quite some time ?
Quote from: winner (n) on Dec 10, 2023, 01:22 PMJeez ...care ebitda halved margin since listing .......and that's even with the huge success of the much touted premiumisation strategy.
But it's all okay because the CFO is really kicking goals with her laser focus on all thing ESG and the environment and all that carbon saved is sure to generate untold riches for shareholders in the near future ;) ...just, please don't ask me how :)
Quote from: Basil on Dec 10, 2023, 03:39 PMThat sums (pun intended) it up nicely Hectorplains.
What concerns me about the sector a fair bit going forward is that most of the gains in the sector have been built upon growth in the value of housing in real terms but what if it's very different going forward and is it likely to be?
Let me unpack that a bit. This whole sector started with Ryman listing in 1999 and frankly, with first mover advantage they enjoyed an absolute bonanza until more competition started coming to the market when SUM listed in 2011. SUM have well and truly spanked RYM's performance since they listed.
Lets have a look at how house prices have grown since RYM listed to illustrate my point. Using the Reserve bank inflation calculator $100,000 in 1999 is now worth $184,986 using general CPI as the measurement yardstick but the housing index also on that website shows that $100,000 has grown to $477,064 by Q3 2023 so housing has outstripped general inflation by a factor of nearly 2.6 times.
Where's that got us ? Some of the most expensive real estate in the world on a per capita basis...from memory Auckland is the 3rd or was it fourth? most expensive city in the world relative to average income.
What if over the next 20 years we get a reversion to norm and house prices increase at a much lower rate than inflation, like what's happened since the market peak a few years ago? Well, all sorts of weaknesses in the business model of these companies will come to light that were otherwise camouflaged by the excess capital gains these companies used to make. You're seeing this now with huge operational losses at OCA becoming really concerning and RYM getting hit hard as well, also ARV.
RYM's model was predicated upon being the best in the sector and charging like a wounded bull for their units but using the lowest of sector DMF as the sweetener, a kind of sweet and sour strategy if you like with the sauce, they used being very low weekly fees fixed for life. Selling a premium product at a premium price with low weekly fees if you signed up off the plans was a very effective marketing strategy used at various Bowling club village launches all around the country in booming times with real estate, much less so now that real estate is flat and people can't get what they really want of their houses.
So all that a very long way round to coming around to answering your question of why I think SUM is the dog with the least flea's.
More succinctly answering your question in my view
1. There is very little - no money in care, never has been and never will be, it's such a people intensive business so the less care in the business model the better, SUM is best positioned here.
2. Fixed weekly fees for life has really come back to haunt companies in this sector with inflation where it is now. Those who signed up years ago with some of RYM's $99 weekly fees covering a huge number of things fixed for life are frankly laughing all the way to the bank every week. SUM is the only board in this sector that had the courage to stay firm in their belief, (despite strong encouragement from this old dog to fall into line with the sector) that weekly fees being adjusted for the rate of National Superannuation increase each year is perfectly reasonable. From a village operational point of view they have conferred upon themselves a massive advantage going forward in that they have a chance of villages breaking even at an operational level whereas the others are seriously disadvantaged.
3. SUM have always tried to consistently build "full feature" villages...the true land based cruise ship experience at a reasonably mid price point with mid price point weekly fees. This is what the market really wants which is why they sell down their villages very quickly.
4. Over the years we have seen average ILU prices move closer and closer to the national average real estate price with little margin left in some center's. SUM's mid price point is therefore a more marketable commodity than RYM's and in some cases ARV's more expansive units.
5. SUM and RYM have a competitive advantage in that Melbourn's average unit pricing is a lot lower percentage of prevailing real estate prices, about 60% from memory which is about what it was historically when this concept originally came about but in N.Z is now often in the 85-90% region.
6. Scott Scoullar, current CEO was understudy and CFO to the company whilst Julian Cook was CEO, (Julian came from an investment banking background and had a really sharp commercial edge to him that I really liked and frankly I miss catching up with him at annual meetings) and is vastly experienced in running the company and was making great pricing decisions on units and operational matters years before Julian Cook retired.
Just rounding this off, and to Hectorplains point, there is little difference between the forward PE's of the sector now basxed on forecast underlying earnings, you could almost throw a blanket over them and call them almost the same. So which horse are you going to back ? The one that's consistently given the best underlying earnings growth over the years or one that never delivered any.
Allow me this latitude. If you went to see a horse race and there were 4 participants and the TAB had them all at $4 to win, (yes I know this isn't possible and the TAB take a huge margin but please indulge me), who would you bet on. The horse with form that just keeps on winning race after race after race (SUM), a horse that has never won and delivered real results (OCA) or one of the other two with chequered results in recent races (ARV and RYM), the latter with a jockey with questionable skills?
What if it was the Grand National hurdles event and the track was extremely muddy and the fences really high and all might get tripped up or fall at one of the hurdles and there's no refunds on bets? Would you bother placing a bet at all ? That's why I don't have any exposure to this sector at this point. Gains have all been predicated upon massive expansion in the cost of housing in real terms and it's so unaffordable now its highly likely that even the best horses progress will be slow. They yield either nothing or nearly nothing so what's the point if you think housing will increase at below the inflation rate for quite some time ?
Sigh ... it appears you spend currently a lot of bandwidth on trashing and bashing OCA. Hard to believe that this "flea-ridden" dog managed to do since inception better (dividend plus SP) than the once gold standard Ryman ... and similar like Arvida.
Sure - SUM has currently its time in the sunshine (well, all is relative in the RV industry) ... but lets face it, none of us can predict how long this mood holds (it was not always that way, remember?) , and currently it is clearly priced for perfection :); Not necessarily a good time to buy in.
But back to your post and OCA. You make it sound OCA is losing money by the millions by the day. Could you just remind us about these huge operational losses you are talking about? In my books they had since 2014 only 2 years with a (smal) loss ... and overall an average EPS of 8 cents. Not too bad for a 74 cents share, isn't it?
Look, it is fair enough if you keep barking again and again about your quite one-sided view of the world. Actually, it does help everybody to take as well your perspective into account and integrate that into the bigger picture. All things have pros and cons, and depending on your latest views you have an outstanding ability to either just deliver picture of a stocks pros or just deliver a view of a stocks cons.
However - trashing other posters and analysts just because they look from a different angle at the stock you just happen to either hate or love is not really on, particularly if these posters post not even in this forum but somewhere else. If you don't like what they say, than - why don't you tell them so and give them a chance to respond?
Funny as well, that I remember a poster beagle who barked over months (probably years) in a forum far far away how clever Ryman was to offer fixed weekly fees for life and bashing SUM for not doing the same thing. And now I read that this (fixing the weekly fees for life) is one of the big mistake some of the RV's made. Interesting, what difference a handful of years can make, isn't it?
Maybe it is even an indicator for a really good and long term successful RV if they are bashed by beagle? Who knows ... time will tell.
I was just giving an overview of the sector as I see it BP mainly for the benefit of a couple of new forum members.
Over the years I've heard quite a few people opine that Jarden have the best analysts. If that's so and I wouldn't argue against that proposition, now that Arie Decker who is head of research there is taking Oceania to task for their weaknesses and so is Craigs analyst, I don't need to ensure someone is trying to provide a contrary view to the endless positive fervor on the other channel.
8 cents earnings in 2023 is not the same as 8 cents in 2017, inflation has undermined more than 20% of their earnings in real terms, something nobody talks about. I think what's ground my gears with this one over the years is all the promises of growth and nothing has ever eventuated. The other pet dislike is concealment and how they have deliberately obfuscated their financials over the years and never mention underlying eps unless they're handing around the begging bowl in which case more promises (subsequently broken), are made about how this acquisition is going to be eps accretive.
8 cps with no earnings growth with a risk free rate of 5% is worth a 7.5 multiple to me. Each to their own. Good luck with it and I hope for investoirs sake one day in the not to distant future you do start to see earnings growth.
Basil, I remember when you trashed Julian and SUM for building too many and not selling enough so you sold. Share Price was around $7.30 give or take a percent or 3. Look what happened after you sold. SUM becomes gold standard.
OCA was always a slow burner, you said so yourself many times on ST. In fact I recall you defending OCA on many occasions to many Posters on ST.
Maybe you need to go find that bone and chew it down and let things be on OCA. You get wrong as well, you don't walk on water.
Quote from: Untamed on Dec 10, 2023, 03:26 PMSometimes you really disappoint me Basil. You don't need to agree with Mav, but you also don't need to disrespect him.
QuoteBe careful who you follow on the other channel. A lot of people have followed another poster on there for years and where's that got them? Rig
Something blaringly obvious about throwing stones and glass houses comes to mind.
While I don't have much interest in OCA Mav is a bloody good guy and takes a lot of time to share his work and analysis, and stays above the fray and doesn't sink into the slum when attacked. He's a genuine sort and I can't recall anyone ever doubting his integrity - or questioned his motivations - when posting, even when he's been excited or on the optimistic side (a trait not reflected in all). Discussion forums are a richer place with his contribution, not only in the analytical way in which he goes about it (whether you agree with it or not), but in the style and gentlemanly he approaches things.
Quote from: Greekwatchdog on Dec 10, 2023, 08:21 PMBasil, I remember when you trashed Julian and SUM for building too many and not selling enough so you sold. Share Price was around $7.30 give or take a percent or 3. Look what happened after you sold. SUM becomes gold standard.
OCA was always a slow burner, you said so yourself many times on ST. In fact I recall you defending OCA on many occasions to many Posters on ST.
Maybe you need to go find that bone and chew it down and let things be on OCA. You get wrong as well, you don't walk on water.
I think you are grossly exaggerating the concerns I held on SUM quite considerably. Nevertheless, you are right to some extent that I did sell down, but at an average price of $9 several years ago, prior to Covid on concerns regarding capital value losses over Covid and given its poor yield and lack of share price growth since then it's not a decision I regret.
Sure, like almost everyone I believed the very charming and affable Earl Gasparich and their business transformational story for about the first 4 years of OCA's existence and yes, I (previously for some time) thought there was a very good long term investment case. When the promised point of inflection passed without delivering results I started to question why and sold most of my holding at nearly double the current prevailing price and gave up on the rest at just over $1 at the 5 year mark of OCA's existence in early 2022.
I'm happy to let things be, I've done more than anyone could ever reasonably expect to warn about the weaknesses in their business case and was sounding the alarm a long time before Arie Decker of Jarden's and Stephen Ridgewell of Carigs did, although arguably his quip of an "Ocean of unsold stock" I admit does sum the situation up extremely well. I also called RYM a sell in 2014 at $8.50, 9 years ago, go back and have a look in the other place in early 2014, so I've made some very brave (against the prevailing group think), calls over the years but you are right that I don't walk on water, nobody does. All you can do is call it as you see it at the time but I can tell you I am very happy indeed with my track record in this sector.
To my call earlier today that the fabulous gains in the past that RYM and SUM have made have been all built on a radical expansion in the real cost of housing in the last 24 years, and its highly likely that can't continue, I foresee the real risk that this sector as a whole could badly underperform the market for the foreseeable future, perhaps the next decade.
Its pretty sad and sobering stuff that now the real estate market has cooled a little, neither RYM or OCA can afford to pay even a small crumb in the way of a dividend to investors, ARV's divvy has been halved and who knows with SUM will do but they might follow ARV's lead next February when they report although I suspect if anyone can hold their dividend, its them, but the yield does not appeal. I think the industry as a whole faces very challenging times ahead and is probably very heavily over supplied with stock. Best not to forget there's the Govt review of the sector still in play too.
I think Mav's a good guy to, but the fact is, he's been very wrong on OCA. so far.
Anyway....I'm more than happy to let the analysts Ridgewell and Dekker take it from here and do the good job they are well paid for. There's no reward for me in following OCA any more. All today's posts were intended to do was give an overview of how I see the sector...really just a waste of my time. Lesson learned.
For what it's worth, I've appreciated the insights you've given! Thanks
I've been reading the Sharetrader thread on OCA, but I'm not able to register an account on that site to contribute to the discussion. So I thought I'd post some thoughts here and to see if someone can help me understand why some forum users have a positive view on OCA or the RV sector as a whole. I'm genuinely interested in having a conversation about this to understand what I might be missing.
To start with, it seems to me that the general gist of the optimism is (1) if OCA were to stop developing there would be a wall of cash / returns coming; and (2) there is huge value to the so called "float".
I'm going to try and test this with a 1 property example...
1) Rest home developer constructs one unit at a cost $500k, funded either by equity or debt or a mix of both
Dr Development Asset / Investment property $500k
Cr Cash (funded by Equity or debt) $500k
[Negative cash outflow $500k]
2) Sale of first occupancy right agreement for $600k
Dr Cash $600k
Cr Resident loan liability $600k
[The sale generates a "realised development gain" of $100k which doesn't appear in the IFRS PnL but is included in the underlying earnings. Net cash position $100k]
3) Year 1-7 (average occupancy period), the DMF accrues to the operator
Dr DMF receivable $180k
Cr DMF Revenue $180k
[No cash change.]
4) Resale of ORA to 2nd resident for $690k (based on 2% annual inflation)
Dr Cash $690k
Cr Resident loan liability $690k
[Generates a "realised resale gain of" of $90k which again doesn't feature in the IFRS PnL. Going forward, this could be a gain or loss depending on the market but in theory should just track inflation - which I view as neutral from an investing point of view].
5) repay 1st residents estate and realise the DMF receivable
Dr Resident liability loan $600k
Cr DMF receivable $180k
Cr Cash $420k
[Net cash inflow of $180k, representing the realisation of the DMF]
Summary of the financial result
Cash $370k (-$500k development +$600k 1st ORA sale +$690k 2nd ORA sale -$420k repay 1st ORA)
Made up of:
Realised DMF $180k
Realised development margin $100k
Realised resale margin $90k
Total $370k
Under the assumption they stop developing and the resale margin is just inflation, then the real profit is $180k, representing the DMF over a 7 year period. This is equivalent to rental/lease income that is received up front and equates to 6% per annum gross yield on the initial $500k.
If that was where it ended, I might be interested. However, the $180k has to pay for shared assets (PPE), sales and marketing, other overheads and subsidise the care facilities. In my mind eroding the profit to almost nothing.
This correlates very closely to the sectors reporting of underlying earnings – except the underlying earnings include Realised Development Margin and Realised Resale Gains. If you remove these from the reported Underlying NPAT of SUM or OCA, you get close to breakeven.
So in summary, I don't see how the RV is making money other than from Development and Property Price growth above inflation? And if that is true, then I don't see how OCA stopping development generates some wall of cash / profitability.
Secondly the question of float, where does it feature? The resident loan is simply used to fund either the initial development or payout the previous resident / realise the DMF or Resale gain.
Please don't take this the wrong way – I'm curious to understand why our views differ and what I might be missing.
Quote from: Dolcile on Dec 12, 2023, 09:21 AMI've been reading the Sharetrader thread on OCA, but I'm not able to register an account on that site to contribute to the discussion. So I thought I'd post some thoughts here and to see if someone can help me understand why some forum users have a positive view on OCA or the RV sector as a whole. I'm genuinely interested in having a conversation about this to understand what I might be missing.
To start with, it seems to me that the general gist of the optimism is (1) if OCA were to stop developing there would be a wall of cash / returns coming; and (2) there is huge value to the so called "float".
I'm going to try and test this with a 1 property example...
1) Rest home developer constructs one unit at a cost $500k, funded either by equity or debt or a mix of both
Dr Development Asset / Investment property $500k
Cr Cash (funded by Equity or debt) $500k
[Negative cash outflow $500k]
2) Sale of first occupancy right agreement for $600k
Dr Cash $600k
Cr Resident loan liability $600k
[The sale generates a "realised development gain" of $100k which doesn't appear in the IFRS PnL but is included in the underlying earnings. Net cash position $100k]
3) Year 1-7 (average occupancy period), the DMF accrues to the operator
Dr DMF receivable $180k
Cr DMF Revenue $180k
[No cash change.]
4) Resale of ORA to 2nd resident for $690k (based on 2% annual inflation)
Dr Cash $690k
Cr Resident loan liability $690k
[Generates a "realised resale gain of" of $90k which again doesn't feature in the IFRS PnL. Going forward, this could be a gain or loss depending on the market but in theory should just track inflation - which I view as neutral from an investing point of view].
5) repay 1st residents estate and realise the DMF receivable
Dr Resident liability loan $600k
Cr DMF receivable $180k
Cr Cash $420k
[Net cash inflow of $180k, representing the realisation of the DMF]
Summary of the financial result
Cash $370k (-$500k development +$600k 1st ORA sale +$690k 2nd ORA sale -$420k repay 1st ORA)
Made up of:
Realised DMF $180k
Realised development margin $100k
Realised resale margin $90k
Total $370k
Under the assumption they stop developing and the resale margin is just inflation, then the real profit is $180k, representing the DMF over a 7 year period. This is equivalent to rental/lease income that is received up front and equates to 6% per annum gross yield on the initial $500k.
If that was where it ended, I might be interested. However, the $180k has to pay for shared assets (PPE), sales and marketing, other overheads and subsidise the care facilities. In my mind eroding the profit to almost nothing.
This correlates very closely to the sectors reporting of underlying earnings – except the underlying earnings include Realised Development Margin and Realised Resale Gains. If you remove these from the reported Underlying NPAT of SUM or OCA, you get close to breakeven.
So in summary, I don't see how the RV is making money other than from Development and Property Price growth above inflation? And if that is true, then I don't see how OCA stopping development generates some wall of cash / profitability.
Secondly the question of float, where does it feature? The resident loan is simply used to fund either the initial development or payout the previous resident / realise the DMF or Resale gain.
Please don't take this the wrong way – I'm curious to understand why our views differ and what I might be missing.
Just note that the initial investment of 500k is returned to the investor as soon as the first Ora settles. So the investment is 500k for one year, what then do you calculate roi to be?
Quote from: Poet on Dec 12, 2023, 09:37 AMJust note that the initial investment of 500k is returned to the investor as soon as the first Ora settles. So the investment is 500k for one year, what then do you calculate roi to be?
That's a good point. So is that what is being referred to as the "float"? Let me think about that some more, and what value that generates.
Quote from: Dolcile on Dec 12, 2023, 09:54 AMThat's a good point. So is that what is being referred to as the "float"? Let me think about that some more, and what value that generates.
Yes, I think that is what is referred to as the 'float'. That same $500 k can now be reinvested in another unit and rinse and repeat again and again.
Great work there Dolcile. With the float, this is referred to as "recycled capital" by the RV's which they use to build, per your example, a second unit. That ORA sale also gets recycled to build a 3rd unit and so on.
A few factors to consider with your modelling:
1. DMF retained after deducting unfunded* village opex has averaged circa 65% for the past 5 years. This has declined from FY15-FY18 figures of around 90% but it is pretty stable.
2. *Keep in mind that a number of village opex expenses are charged to residents. So some of these are funded, hence the high % of DMF retained noted above.
3. Development margin has averaged 30% over the past 5 years and resale gains 24%.
4. I believe resale gains are after deducting refurb costs.
5. Development loans must be repaid by incoming ORAs from the first sale and any interest costs incurred are capitalised to that loan.
I did a quick model using your figures where $250k equity is raised and $250k borrowed in Year 0, unit #1 is built in year 1 for $500k, sold in year 2 assuming 20% development margin (historical is actually higher), unit #2 was built in year 2 at $500k + 2 years inflation of 2.5% (borrow $250k again), sold for 20% margin in year 3 and so on up to 4 units. Year 9 has the first vacancy and ORA repayment and refurbishment of #1, which is resold at a margin of 15% (historical is actually higher) in year 10, and so on for the other units. Keep rolling this forward and you will see the snowball effect on cash and retained profits, even after deducting opex as noted above. Plenty of FCF & retained earnings to pay dividends once development ceases.
Thanks Ferg. That is really helpful and has given me more to think about and model. These business are hard to value!
Interesting I was comparing the SUM and OCA annual reports and noticed that OCA has a much high proportion in the balance sheet ascribed to PPE (care) than SUM.
SUM:
PPE - $326m (5.6%)
Investment property - $5.4b
OCA:
PPE - $712m (roughly 30% of physically assets)
Investment property - $1.6b
Quote from: Dolcile on Dec 13, 2023, 09:00 AMThanks Ferg. That is really helpful and has given me more to think about and model. These business are hard to value!
Interesting I was comparing the SUM and OCA annual reports and noticed that OCA has a much high proportion in the balance sheet ascribed to PPE (care) than SUM.
SUM:
PPE - $326m (5.6%)
Investment property - $5.4b
OCA:
PPE - $712m (roughly 30% of physically assets)
Investment property - $1.6b
Many Oceania care suites are classed as PPE ...rather than just Property
Okay here it is, the most surprising post from me all year. No its not April fools day and no, your eyes are not deceiving you, I recently took a substantial position in OCA. Almost beggars' belief doesn't it after what I've said about the company in recent years. All the proof you ever need that a Beagle will sniff under every single rock, even the most unlikely ones if he thinks there's a feed under there. Unpack my thinking a bit more after Christmas. Merry Christmas all.
Quote from: Basil on Dec 23, 2023, 03:09 PMOkay here it is, the most surprising post from me all year. No its not April fools day and no, your eyes are not deceiving you, I recently took a substantial position in OCA. Almost beggars' belief doesn't it after what I've said about the company in recent years. All the proof you ever need that a Beagle will sniff under every single rock, even the most unlikely ones if he thinks there's a feed under there. Unpack my thinking a bit more after Christmas. Merry Christmas all.
God please help us, really give Basil some positive news at Full Year in May otherwise fang face will strike for the xxx time
Quote from: Greekwatchdog on Dec 23, 2023, 03:20 PMGod please help us, really give Basil some positive news at Full Year in May otherwise fang face will strike for the xxx time
No worries ....Basil just realised the potential of the huge float Oceania has ......which will lead to unlimited riches in the future
Good that punters aren't so blinkered one can't see the light of day ...change their views
Not many recognise that float
Quote from: Greekwatchdog on Dec 23, 2023, 03:20 PMGod please help us, really give Basil some positive news at Full Year in May otherwise fang face will strike for the xxx time
Has the dog gone completely loopy with excess Turners profits or is there more to this story you might wonder.
Quote from: Basil on Dec 23, 2023, 03:32 PMHas the dog gone completely loopy with excess Turners profits or is there more to this story you might wonder.
Maybe the Dog has realised that many of us viewed long term hold (once upon time he did as well), hence different Investing Philosophies..Sooner or later they collide.
I guess you reserve the judgement to be the usual Judge, Jury Executioner if this doesn't meet your goals/timeline whatever they are...
Now be good fang face and go feed on those Flintstone Steaks..
Stay tuned, the dog's relentless search for new food sources and strategy to eat well will be revealed next week.
Quote from: Basil on Dec 23, 2023, 03:09 PMOkay here it is, the most surprising post from me all year. No its not April fools day and no, your eyes are not deceiving you, I recently took a substantial position in OCA.
OMG, I just spat out my beer! Welcome back, I also got a bit carried away and have added to my already oversized (% of portfolio) position, couldn't resist it under 70c. Look forward to hearing your reasoning in due course.
Quote from: Basil on Dec 23, 2023, 03:49 PMStay tuned, the dog's relentless search for new food sources and strategy to eat well will be revealed next week.
Welcome back to holders club Basil - solid prospects of long term value creation at current share price. I have purchased quite a few around this level as long term investment.
I guess you're ready for the next question, can you have too many? 😆
Stocks and Bonds
Thanks guys but I'd better let the cat out of the bag and stop the suspense otherwise some might be cross with me given my history with these lol. I did indeed very recently take a decent sized position in OCA...bonds not the shares ;) OCA 010 bought at 7.7% yield to maturity recently, last traded 7.12%.
Here's my thinking: These bonds rank equally under a deed of security with bank debt, (not all bonds do and Synlait bonds for example are subordinated to bank debt) and the debt ratio was 37% at the half year which is not too bad and certainly wasn't the 40%+ it might have been. There's very little risk here and a decent return with the prospect for capital gains as bond rates world-wide come down in addition to the gains already made.
The way I see it is the bonds have very low risk as for one thing, the company has suspended dividends so is clearly focused on getting the debt ratio down and another, OCA has an ocean of unsold new stock so all they have to do is dial back their new build rate, (whether by choice or by pressure from the bank) and more than sufficient cash flow should eventuate so the repayment of these bonds is assured in late Oct 2027 at face value, (I bought at just over 80 cents on the dollar). In the unlikely event I am wrong and insufficient sales of unsold stock occur and an interest cover ratio is breeched, and the banks make OCA do another cash issue to solve the problem, that's not my problem as a bondholder is it!
The running yield of 7.7% and the good prospect of further capital gains in the bonds is part of my strategy with my portfolio to invest some funds in lower risk area's than shares while still getting a decent return. There's not going to be huge gains here but a good pretty low risk bond play with a satisfactory running yield. There's more than one way to skin a cat for a feed :) Anyway...I'm now on a similar page to you guys hoping that sales go okay and OCA does well in the long run so that's good. Maybe there's more money to be made from the shares, history would suggest not but its possible in the future I acknowledge that, but as a matter of principle I won't own shares not capable of paying me a decent dividend, so OCA shares are not on my radar and unlikely to be in the foreseeable future. I'd like to think the company finally does better in the years ahead but an equity stake in OCA is not for me at this stage. Maybe if they can prove to me they can control costs, grow underlying earnings and start paying something of a half reasonable dividend again, but until then...
Hard to argue with 7.7% YTM. I prefer the shares but can see your rationale.
Quote from: Mos on Dec 23, 2023, 06:03 PMHard to argue with 7.7% YTM. I prefer the shares but can see your rationale.
Agree Bonds for a sustainable income, whereas the equity has suspended dividends and they were miserable anyway. Equity though is already up 9% from its lows, so that's more than a whole year of Bond returns in a few months from the equities, albeit probably not realised, yet.
Quote from: Basil on Dec 23, 2023, 03:32 PMHas the dog gone completely loopy with excess Turners profits or is there more to this story you might wonder.
Crikey .???????????????
The dog's gone NUTS.
OCA and then having a good word for 2CC..??
Next you will be buying back into PAZ .[Well their AiOra products really worked for you.]
LOL its not called the silly season without good reason.
The red Barron gave the dog a pass at Christmas so I figure if he can do it so can I 😊
https://www.youtube.com/watch?v=Jlf---13Q0g
the hound should be careful with this one, hope you have not sniffed out a hedgehog
Quote from: lorraina on Dec 23, 2023, 08:27 PMCrikey .???????????????
The dog's gone NUTS.
OCA and then having a good word for 2CC..??
Next you will be buying back into PAZ .[Well their AiOra products really worked for you.]
Must be Groundhog day once again.
Quote from: Basil on Dec 10, 2023, 10:57 AMNewer posters would do well to go back right to the start of this thread and the thread on the other channel, (I used to post as Beagle on the other channel) and glean as much info as they can and see who has been right over time. I have made a huge effort, (nobody has tried harder) over recent years to warn about the weaknesses of their business model. Now we have two leading analysts bold enough to call OCA out I am happy to leave them to do the work, and certainly won't report what I've already shared before but I will share a couple of big picture insights I have with you newer posters.
Right back at the IPO when private equity were running the business they had a very, very tight focus on costs, (what you would expect from a private equity owner). Their EBITDA margin on care was 19% and care has always been a huge part of their business and always will be. At the IPO we were promised a 6 year transformation process whereby older basic care facilities would be disestablished and these fancy new care suites, (which was an unproven concept at the time and I maintain is still that way) would be built and this was to transform returns on care. It would take a few years but Earl Gasparich, the CEO at the time assured us the "inflection point" was only a few years away and we would start to see improving returns thereafter.
Time and time again thereafter we have been assured returns will be improved from care and even as recent as the FY23 annual meeting call senior management said returns from care have bottomed and will improve now but their EBITDA margin on care went down to less than 10% in the current half, in fact just on half the return on care when this floated nearly 7 years ago! So much for their much-hyped transformation program!
So why has this care suite concept failed and why are there hundreds of unsold care suites, more than 4 years sales worth at their most recent result? (Think about how ridiculous) it is if a car yard had 4 years worth of stock! How is it that SUM can sell down a village in 6 months or ARV within a year but OCA take several years?
I maintain the care suite concept is broken and doesn't work other than for a very small percentage of the population. An anecdotal story might help you understand why. First up the DMF fees are extremely expensive. My Mum was diagnosed with a terminal condition a few years ago and told she had about 6 months to live. I wanted the best for her and was keen to see her in a care suite in the Sands with a sea view but the cost would be circa $75,000 ($500,000 x 15% and you pay the 15% whether its 1 day or 364 days).
We found her very good care in a almost brand new local facility, (so her friends could easily come and see her) that her doctor recommended for $45 a day for a premium room with a nice sea view. It cost us a tiny fraction of the $75,000, less than $10K from memory and was better for my Mum as her old friends who lived locally could see her regularly. If you know you have a terminal condition, why would you choose a care suite? The answer is most who care about what their kids and don't want to waste money and put their kids through, potentially years of anguish waiting for the care suite to eventually resell) wouldn't.
This is why OCA have hundreds of unsold care suites and that part of their business model is broken.
RYM have a fully refundable care suite package where the money is fully refunded within 30 days on a resident passing so why would you choose an OCA care suite where you lose 15% per annum?
Yes they are at their limit of borrowing capacity. Yes the operational losses at a village level are confronting and a major weakness in their business model. Just keep building more villages that lose money, what could possibly go wrong lol
As an asset play, not that I think NTA is especially relevant, its earnings that really matter, I note ARV trade at less than half NTA and have a much lower exposure to loss making care.
Be careful who you follow on the other channel. A lot of people have followed another poster on there for years and where's that got them? Right down the toilet is where. He foretells untold riches ahead. I have been warning for years about the major weaknesses in OCA's business model ever since it was $1.40.
I don't like OCA even at the current price. Because they have cried "wolf" so many times before on future growth I will only believe it when I see it. 8 cents underlying earnings is about all they have ever delivered despite all the huge volumes of talk about transformation over the years
I think the culture of OCA is very wrong. All their focus is on ESG and patient care regardless of cost. Shareholders are treated with scant regard and I think there is very poor cost control within the business. I'm calling out the CFO as very weak and ineffective in that regard.
More recently, I think its a major fresh concern that despite no explicit Covid costs in the latest half year result, the EBITDA margin on care plunged badly to an all-time low, despite the company claiming earlier in the year it would recover. It shows the company has very few, if any effective cost control disciplines and no forward insight into profit. they never mention underlying eps in their presentations and over the years have had a culture of concealment of the level of unsold stock.
I can't see anything to like about their business model or the way the business is being managed. Sure, it would be remiss if I didn't acknowledge they are trying to reduce their exposure to care and have made some progress in the current half, but I think the best analogy to use is to think about a big ship with small rudders. It takes a very long time to change direction. Many, many years. It's been nearly 7 years now so maybe reflect on what little progress have been made this far. There's a lot better places to invest your capital. If you must invest in the retirement sector, pick the dog with the least fleas I reckon. That's SUM in my opinion.
I am still in shock you have bought in, including bonds.
This is one of your posts from 10th Dec. Nothing has come out of OCA management for you to have changed your opinion and you still have doubts on the Property Market + you have mentioned on another post recently that there are too many units being built (despite a tsunami coming).
You have been scathing of Posters from ST for having there positive views, rightly/wrongly.
I suppose its easy for you being a momentum trader to pick a time when to buy in and then soak up the glory if it all turns out well for you and take the kudos from your followers.
May will be an interesting month of May especially if the result is not too your liking. Whats next you will buy back into ARV?
Quote from: Greekwatchdog on Dec 24, 2023, 08:19 AMI am still in shock you have bought in, including bonds.
This is one of your posts from 10th Dec. Nothing has come out of OCA management for you to have changed your opinion and you still have doubts on the Property Market + you have mentioned on another post recently that there are too many units being built (despite a tsunami coming).
You have been scathing of Posters from ST for having there positive views, rightly/wrongly.
I suppose its easy for you being a momentum trader to pick a time when to buy in and then soak up the glory if it all turns out well for you and take the kudos from your followers.
May will be an interesting month especially if the result is not too your liking. Whats next you will buy back into ARV?
Highlights once again why you should take most of the stuff posted on these forums as amusement rather than anything you should take seriously.
Quote from: Breezy on Dec 24, 2023, 09:04 AMHighlights once again why you should take most of the stuff posted on these forums as amusement rather than anything you should take seriously.
True, however there are far to many personal barbs going on to make it so especially towards people on ST, then some on here think they are the Pied Piper.
People on these sites need to remember DYOR as its your money stop using others on here as advice as they certainly won't be paying back your losses.
Back to OCA. Its long terms, its always been that way. Management and the board suck given there contempt towards investor's information and murky reports.
Quote from: Basil on Dec 23, 2023, 03:09 PMOkay here it is, the most surprising post from me all year. No its not April fools day and no, your eyes are not deceiving you, I recently took a substantial position in OCA. Almost beggars' belief doesn't it after what I've said about the company in recent years. All the proof you ever need that a Beagle will sniff under every single rock, even the most unlikely ones if he thinks there's a feed under there. Unpack my thinking a bit more after Christmas. Merry Christmas all.
Well, when I did the same with TRA (buying in after earlier pointing to some risks) I got caned. Not by the SP - which did rise nicely, as expected, but by some of the posters ...).
Wishing you (well, all of us) for the coming year the pleasant feeling of a SP with tail wind ... and no heckling posters.
Good you saw the light. Welcome on board ... and yes, I think now is a great time to get into OCA.
Merry Christmas to all.
Perhaps in the New Year, we should collectively communicate that to management? After all, we own a part of this company. That gives us the legitimate right to ask questions and express our concerns, and have them addressed.
QuoteManagement and the board suck given there contempt towards investor's information and murky reports.
Bonds are a very different asset class than shares. I am not sure from the posts above all realize that.
Buying a high yield bond, (I don't own any OCA shares), with 37% debt ratio protected by a master trust security deed that puts bondholders on the same footing as the banks seems like a reasonable security position to me, all the more so with management determined to get that debt down by suspending dividends (which may remain suspended for some time), and with an ocean of new stock to sell.
I'm also cognizant of a new mantra within the entire sector that's emerged this year which is forcing all to look very closely at their cash flow. All other companies in this sector have made moves or noises about moderating their build rate going forward to match demand and I expect OCA to follow suit. As their huge stock levels slowly come down, I expect their debt ratio to reduce in the years ahead.
I'm also very cognizant as a bondholder there's a fallback position if things go wrong which protects my security level. In the extremely unlikely event things go badly wrong and shareholders have to put their hands in their pockets for a capital raise, that's not my problem.
GWD - All I will say in response to your post is no, nothing has changed, but my security position as a bondholder is good - very good especially after the dividend suspension which clearly signals the company is determined to get that debt ratio down. SUM bonds trade at 6.2% so I am being paid quite well for the very slight extra risk here. I'm comfortable that the banks won't let OCA get too far over its ski's. I think they've already had a word to OCA management and that's why the dividends are suspended.
Been pointed out that OCA share price up 9% from its lows ...that's pretty good ...and was pointing out outperforming the bonds
Interesting how the big 4 have performed v 52 week lows -
SUM +26%
RYM +17%
ARV +15%
OCA +9%
Hmmm.........the ' pecking order' remains in intact and unsurprisingly OCA is still the sector laggard. OCA share price might have done OK of late but is still a relatively significant underperformer ....possibly one reason Basil ain't buying OCA shares.
No worries ....2024 is a new year .....and a year of hope
Welcome aboard the OCA Bond Express, Basil. Just make sure that you understand the potential tax fishooks of discounted secondary market bonds at maturity. Snoopy has some good stuff about it over on the other channel.
Happy New Year - I hope you get something you want.
Retail punters getting a chance to move the price up while the big players are laying on beaches in various places, lets see what happens in a couple of weeks or so once they are back.
For what its worth the Mrs and I were out for a drive the other day and drove past the Helier and were very impressed with the quality of the village's appearance from a street view but noted it appeared as quiet as a morgue and very few apartments had curtains, so it would seem the vast majority of the village is still empty. I told my wife the weekly opex to stay there is $550 and she said, that explains it! I am sure many of us recall the days where a premium site like that would have sold out off the plans long before it was finished. Gosh, how times have changed.
Could be that they don't have/need curtains. I expect the windows will all be tinted so nobody can see in, so they may simply have blinds - whatever the latest trend in blinds might be. Also, quite likely that current occupants are away for their annual overseas holiday.
Quote from: Basil on Dec 29, 2023, 04:57 PMFor what its worth the Mrs and I were out for a drive the other day and drove past the Helier and were very impressed with the quality of the village's appearance from a street view but noted it appeared as quiet as a morgue and very few apartments had curtains, so it would seem the vast majority of the village is still empty. I told my wife the weekly opex to stay there is $550 and she said, that explains it! I am sure many of us recall the days where a premium site like that would have sold out off the plans long before it was finished. Gosh, how times have changed.
Could be the case, it certainly looks to have been built to an exceptionally high standard and it's a brilliant location. From memory Naylor Love were the main contractor so quality control of the build should be top class.
Quote from: Basil on Dec 29, 2023, 04:57 PMFor what its worth the Mrs and I were out for a drive the other day and drove past the Helier and were very impressed with the quality of the village's appearance from a street view but noted it appeared as quiet as a morgue and very few apartments had curtains, so it would seem the vast majority of the village is still empty. I told my wife the weekly opex to stay there is $550 and she said, that explains it! I am sure many of us recall the days where a premium site like that would have sold out off the plans long before it was finished. Gosh, how times have changed.
,$550 a week opex compares very favorably to what a reasonably high end freehold house costs to run in nz. Rates, insurance,water, electricity etc so I wouldn't think it will be a deterrent to the expected demographic of the Helier.
Quote from: Basil on Dec 29, 2023, 04:57 PMFor what its worth the Mrs and I were out for a drive the other day and drove past the Helier and were very impressed with the quality of the village's appearance from a street view but noted it appeared as quiet as a morgue and very few apartments had curtains, so it would seem the vast majority of the village is still empty. I told my wife the weekly opex to stay there is $550 and she said, that explains it! I am sure many of us recall the days where a premium site like that would have sold out off the plans long before it was finished. Gosh, how times have changed.
Like Poet, I wouldn't have thought that $550 a week is much of a barrier for the target market.
A relative recently visited a new resident at The Helier for lunch at the restaurant - the resident confirmed there are "very few" residents at this point and that the new village is "very quiet". Information is a bit third hand but I guess we should not be surprised by this given how long it took Oceania to sell down The Sands in Browns Bay which is in a brilliant location at more affordable price points. It also is consistent with Oceania taking a long time to sell any of their new villages. I think we can now assume that there was not really much of a wait list for The Helier and that it will take some time to sell down this high quality village. Initially I was expecting the lion's share of the village apartments to sell this financial year resulting in a new sales margin bonanza, but now I think it will be spread over two years with more sold next financial year.
Happy to hold and wait for the value to be realised given average buy in cost under 70 cents, but it would be great if OCA could up their sales game and improve cashflow recycling.
Brent Pattison video from NBR October. Village looks great. Not convinced by the comments on very strong demand given post above. But will sell down eventually.
https://www.nbr.co.nz/in-case-you-missed-it/rewind-2023-oceania-ceo-brent-pattison/ (https://www.nbr.co.nz/in-case-you-missed-it/rewind-2023-oceania-ceo-brent-pattison/)
Thanks for sharing the video. He's certainly an impressive speaker but as you suggest, sales results to date don't support his claims of very strong demand. It's clear he's a relative newcomer to the industry because as I posted earlier today, back in the day in RYM's heyday, villages would often sell out completely off the plans long before they were even built. That's strong demand.
Fair comment about the opex guys. I hadn't really thought it through, but I guess rates on a typical, say $3m house in St Heliers would be circa $8-10K per annum and then there's insurance costing many thousands, power, water and repairs. No argument that it's an impressive village, very impressive but one swallow does not a summer make, and they have a lot of old basic care villages and a very long road ahead of them to gradually transition toward more ILU apartments. I would think it will take them well into FY26 to sell the Helier down completely, possibly even FY27. Pretty small market for high end apartments and new entrants have to be 70 years old or more and most will have to sell their existing high-end property in order to settle on their Helier unit.
Quote from: Basil on Dec 10, 2023, 03:39 PM6. Scott Scoullar, current CEO was understudy and CFO to the company whilst Julian Cook was CEO, (Julian came from an investment banking background and had a really sharp commercial edge to him that I really liked and frankly I miss catching up with him at annual meetings) and is vastly experienced in running the company and was making great pricing decisions on units and operational matters years before Julian Cook retired.
I don't know how you can hagiofy Julian Cook because he came from an investment banking background when Brent Pattison has the same background (which is likely the genesis for his obnoxious over-egging fast-talking salesman persona).
You also, correctly, have observed that much of the fortunes of the sector have been due to correlation with the housing market but don't make the consequential connection that SUM's historic performance has largely been due to this correlation; so they are the beneficiaries of systemic/macro luck rather than good management.
Their overweight ILU portfolio could have sold itself in the last decade as the country has lost its mind overleveraging into residential real estate.
You still expect SUM to be the pick while believing the housing market will moderate and no one will be able to sell their homes for what they expect.
As if this wave of boomers are never going to die and sit healthy in their 5 bedroom homes for another 50 years.
I'd suggest if/when the housing market moderates this will, longer term, benefit the sector as older generations lose the braindead expectation of huge capital gains on their primary residence, year-on-year-on-year.
That's one of the hardest sells for the sector, getting people to sell up when they think that purchasing an ORA is foregoing the future capital gains on a sure bet - so they loiter in their massive family homes.
Quote from: Whacc on Jan 01, 2024, 08:22 PMI don't know how you can hagiofy Julian Cook because he came from an investment banking background when Brent Pattison has the same background (which is likely the genesis for his obnoxious over-egging fast-talking salesman persona).
Don't hold back, tell us what you really think of Brent lol. I think he's fallen into ESG traps from a board and other senior management that are myopically focused on all things care with scant regard to financial discipline. The company made very good money under private equity ownership and had vastly better returns on care probably because private equity management had been instructed to have a laser focus on costs.
Quote from: Whacc on Jan 01, 2024, 08:22 PMYou also, correctly, have observed that much of the fortunes of the sector have been due to correlation with the housing market but don't make the consequential connection that SUM's historic performance has largely been due to this correlation; so they are the beneficiaries of systemic/macro luck rather than good management.
I agree OCA have had no luck but they also had a lot of old doggy villages focused on care which is something SUM was never handicapped with. When the pandemic struck OCA were sitting ducks to be most affected.
Quote from: Whacc on Jan 01, 2024, 08:22 PMTheir overweight ILU portfolio could have sold itself in the last decade as the country has lost its mind overleveraging into residential real estate.
I think you are overlooking that most people actually want a full feature, full facility retirement village not a boutique one with limited facilities. That's why SUM's formula works and they sell their villages quickly, they're selling what people really want. OCA have an ocean of unsold stock. Maybe reflect on why that is ? No doubt they will sell enough of it to service their debt so I'm comfortable as a bondholder, but I'll believe eps growth when I see it and not before.
Disc: At this stage I'm not an equity investor in any stock in this sector.
2024 - This is our Year
Up the Wahs - and go OCA
Destiny
The year of great things for both long suffering Warriors fans and Oceania loyalists
QuoteWould say that OCA promise a lot but rarely deliver, many punters don't like that
This quote a few pages back seems to be a good explanation as any -
In the absence of a track record of accomplishment, you should take a CEO's plans as hopeful intent. That doesn't mean they are lying, just that we really don't necessarily know what they can or cannot do. There is a particular danger if they use language that resonates with you. More than once in my investment career did I fall for someone who said all the right things, except that they hadn't done them — in the past, or as it turned out, in the future." Winner
I think this post of yours on the other channel hits the nail directly on the head.
Quote from: Basil on Jan 14, 2024, 12:01 PMI think this post of yours on the other channel hits the nail directly on the head.
I said this - 'OCA promise a lot but rarely deliver, many punters don't like that'
Possibly explains the trend in this chart ....never before has the OCA share price been this low relative to SUMs
No worries ....this is our year .....go OCA and Up the Wahs
IMG_5611.jpeg
Picture says a thousand words
Going down to 5% next year by the look of that entrenched trend.
Quote from: Basil on Jan 15, 2024, 09:08 AMPicture says a thousand words
Going down to 5% next year by the look of that entrenched trend.
Your predictions are far too timid - do a proper linear extrapolation and you clearly see that in three years time one OCA share is negative 1% of a SUM share! Oops.
Anybody can offer still more outrageous forecasts?
What about negative 5 % in 5 years, which means of a SUM share is $10, punters pay 50 cents to anybody taking an OCA share off them?
Obviously - non sensical ... but so much fun ... and nearly as intelligent than the once well known theorem that one RYM share is worth two SUM shares and ten OCA shares, which was meant to be true for eternity as well.
The power of linear extrapolation in a chaotic system composed out of cyclical movements ... but as they say - everything it is good for something - at least as a bad example.
The trend is your friend. Stated on the other channel years ago, anyone who thought OCA could outperform SUM had rocks in their head and I've been right so far. Of course, it's perfectly obvious the slope of the line has to reduce at some stage in the years ahead, thanks "Captain Obvious" for being the math's police, but there's no saying it will be this year.
Linearity, cyclicality and chaotic states are generally misunderstood phrases, especially in the investing world
They are phrases often used by punters to make themselves sound clever and sophisticated and to rubbish / discredit things they don't like/agree with
Two other phrases that are loosely used to explain/support views are 'supply shocks' and 'demand driven'
Adding some more to long term holding when it drifts down to 70 cents or less. Slow burn this one.
Man that SailorRob dude on the other channel stooping to low levels by discriminating against idea service clients on the OCA thread. As someone who has provided services to these clients for 33 yrs now I find his ramblings very distasteful. Thank goodness he isn't on here.
Quote from: Basil on Dec 10, 2023, 03:39 PMAllow me this latitude. If you went to see a horse race and there were 4 participants and the TAB had them all at $4 to win, (yes I know this isn't possible and the TAB take a huge margin but please indulge me), who would you bet on. The horse with form that just keeps on winning race after race after race (SUM), a horse that has never won and delivered real results (OCA) or one of the other two with chequered results in recent races (ARV and RYM), the latter with a jockey with questionable skills?
Do professional horse gamblers make their money by finding the "best horse" that keeps on winning race after race? Or do they attempt to find the mispriced bets within the market?
Similar to betting, the real pros in investing attempt to find the mispriced bets within securities. By choosing the company with the best prior performance in terms of what's happening on the graph, you end up with picks like Microsoft in 1999.
Now, the question changes from what's the best horse to which horse has the most mispriced odds. I believe that OCA is the most mispriced bet in the sector.
The point to my previous post is the whole sector, based on earnings which is all that really matters, is trading on not dissimilar forward metrics. There is very little mispricing. Arguably all OCA is worth as company that has now long proven it cannot grow earnings is (Ben Graham no growth 8.5 times) eps of 8 cents = 68 cents. I think the market is wide awake to that fact now as you can see from the share price. They might temporarily grow earnings a little as they sell down the Helier but I believe after that it will fall back into its rut of about 8 cps give or take a little. I would argue OCA is now fairly priced. The problem for OCA is it is handicapped with so much care in its business model, its analogous to having a 125 kg jockey on its back and it simply cannot grow as quickly as the others going forward. NTA is completely irrelevant if you have an ocean of stock that you can't sell and get earrings from.
For OCA to make any progress it has to prove it can start selling heaps of stock and start growing earnings. All the punters on the other channel, where you obviously come from think selling down the Helier is the start of that process. I believe it will give a slight temporary lift in eps in the same way as selling down the Sands in Browns Bay did and then it's back to the same old, same old 8 cents per share give or take a bit. I think they can service their bonds okay and plod along okay but they are always going to be the runt of the litter plodding along at the back of the field. My 2 cents worth. How long do you think dividends will remain suspended for ?
Quote from: Basil on Feb 08, 2024, 10:34 AMThe point to my previous post is the whole sector, based on earnings which is all that really matters, is trading on not dissimilar forward metrics. There is very little mispricing. Arguably all OCA is worth as company that has now long proven it cannot grow earnings is (Ben Graham no growth 8.5 times) eps of 8 cents = 68 cents. I think the market is wide awake to that fact now as you can see from the share price. They might temporarily grow earnings a little as they sell down the Helier but I believe after that it will fall back into its rut of about 8 cps give or take a little. I would argue OCA is now fairly priced. The problem for OCA is it is handicapped with so much care in its business model, its analogous to having a 125 kg jockey on its back and it simply cannot grow as quickly as the others going forward. NTA is completely irrelevant if you have an ocean of stock that you can't sell and get earrings from.
For OCA to make any progress it has to prove it can start selling heaps of stock and start growing earnings. All the punters on the other channel, where you obviously come from think selling down the Helier is the start of that process. I believe it will give a slight temporary lift in eps in the same way as selling down the Sands in Browns Bay did and then it's back to the same old, same old 8 cents per share give or take a bit. I think they can service their bonds okay and plod along okay but they are always going to be the runt of the litter plodding along at the back of the field. My 2 cents worth. How long do you think dividends will remain suspended for ?
How long do I think dividends will remain suspended? Probably a year. However, my preference would be to have zero dividends paid out so long as they can continue growing occupational rights agreements at the rate they have done in the past.
I think you'll probably get your preference of zero dividends for quite some time.
Selling down the vast ocean of stock they have is going to take several years. I don't think the market is fooled any more by their ESG greenwashing and talk of asset growth.
Excerpt from N.Z. market close report, paywalled in the N.Z. Herald
The Warehouse and Oceania Healthcare are falling out of the MSCI Small Caps Index at the end of the month and they were down 9c or 6.21 per cent to $1.36 and 2c or 2.94 per cent to 66c respectively. Oceania last traded at that level on March 30, 2020.
REINZ data January
The total number of properties sold across New Zealand in January 2024 4.9% higher than pcp ......so volumes growing although remain at very low levels
But Auckland however lowest sales count month ever recorded (except covid months)
Maybe Brent will have to say sluggish property market holding back sales ...esp in Auckland
Median price down a tad
https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/REINZ_January_data_Golden_weather_sees_confidence_lift.aspx?name=REINZ_January_data_Golden_weather_sees_confidence_lift
WOW Auckland medium house price down a whopping 6.7% for the month and lowest sales since records began. Ouch !
Another multi year low on huge volume, closing at 61 cents.
Balance on the other channel reckons according to his broker with the exit from the MSCI small cap index on 29 February, index tracking funds have to sell ~ 30 million shares. Hopefully this doesn't trigger margin calls or stop loss selling from trading positions.
Where's the bottom ? Is it possible 1 SUM = 20 OCA by the 29th of February and OCA end the closing MSCI exit match process in the mid 50 cent range ?
Quote from: Basil on Feb 20, 2024, 09:08 PMAnother multi year low on huge volume, closing at 61 cents.
Balance on the other channel reckons according to his broker with the exit from the MSCI small cap index on 29 February, index tracking funds have to sell ~ 30 million shares. Hopefully this doesn't trigger margin calls or stop loss selling from trading positions.
Where's the bottom ? Is it possible 1 SUM = 20 OCA by the 29th of February and OCA end the closing MSCI exit match process in the mid 50 cent range ?
Well in order to sell 30 million shares you have to have a willing buyer/s, the other side of the equation seldom mentioned.
Quote from: Breezy on Feb 20, 2024, 09:41 PMWell in order to sell 30 million shares you have to have a willing buyer/s, the other side of the equation seldom mentioned.
But at what price Breezy ? It would now seem likely its somewhere in the 50's, not 60's to try and clear most of that stock. The other thing that's quite plausible is that sellers can't find buyers for ~ 30 million shares between now and 29 February so there could remain a stock for sale overhang for possibly quite some time after the index exit.
Fascinating how low this will go. Surely won't test the Covid 38 cent low?
Disc. Hold a few.
You'd think not eh Mos. That Covid low was fueled by extreme fear...this is just a large index sale event of a very ordinary company that's probably experiencing the same very strong headwinds as RYM with sales as well as having no joy trying to sell any of its loss making basic care villages. Logic suggests somewhere in the 50's but I wouldn't rule out the possibility of the share price having a 4 handle which would be pretty shocking :o
Bought some more at 62c. I hope it gets even cheaper.
Quote from: Breezy on Feb 20, 2024, 09:41 PMWell in order to sell 30 million shares you have to have a willing buyer/s, the other side of the equation seldom mentioned.
Buy side book build in progress already I suspect.
Gosh, hit an intraday low of 56 cents today. Almost in freefall.
I see the bond yield is creeping up again
Lot of gnashing of teeth on the other channel and assertions its screaming cheap.
Almost got to thinking it might be but then a little reality check this morning. 10 year Govt stock rates have been making gains in recent weeks and we're almost back to 5% 10 year risk free rate with N.Z. Govt stock.
As most know, my contention is since this listed, by and large plus or minus a little bit OCA has made 8 cps in underlying earnings in the last 6 years and i expect much the same going forward so how would the legendary Ben Graham value this stock which despite many posts by some with almost religious fervor that it has stunning growth ahead of it, has never shown any ability to grow.
Well, some will recall Ben Graham said a no growth stock is worth a PE of only 8.5 (11.76% earnings yield) but that's when the risk free 10-year rate is 4.0% a 7.76% premium to the risk free rate. At 5% the earnings yield needs to be repriced to 12.76% so the appropriate PE becomes 7.84.
7.84 PE on 8 cps no growth stock = 62.72 cps fair value. Of course, many will scoff and say there's huge growth coming but there's no evidence they can grow their earnings so far and I remain deeply skeptical based on their extraordinarily high exposure to care and the incredibly soft and slow housing market (REINZ said January was the slowest market since records began). Talking to a couple of people at the coal face, anecdotally, February is also going to be a very slow month. I think companies in this sector with lower exposure to ultra low return care, only make serious money in boom times in the housing market. Those boom days and the tremendous gains enjoyed by RYM and SUM shareholders appear long gone to me.
Would you consider buying under 60c then Basil? Seems like a very conservative metric and valuation at 62.72 cps. I don't hold but have long watched the stock.
Quote from: Basil on Feb 21, 2024, 09:01 PMGosh, hit an intraday low of 56 cents today. Almost in freefall.
HA HA just a bit of jousting ahead of big turnover on the 28th between big account holders needing to off load and others that are looking to price match buy at the right price come the 28th Feb due to the index changes
Quote from: entrep on Feb 22, 2024, 05:19 PMWould you consider buying under 60c then Basil? Seems like a very conservative metric and valuation at 62.72 cps. I don't hold but have long watched the stock.
We will see in due course. Not interested at the current slight discount to where I see fair value. As the former directors of Waste Management once said "there's money in rubbish" but you have to get it dirt cheap. A lot of people on the other channel think they know better how to value OCA and think they are wiser than Ben Graham and his method's and have paid very dearly indeed for their hubris.
Snapper it's a leap year so those index changes occur on 29th February.
Quote from: snapiti on Feb 22, 2024, 05:58 PMHA HA just a bit of jousting ahead of big turnover on the 28th between big account holders needing to off load and others that are looking to price match buy at the right price come the 28th Feb due to the index changes
Is it the 28th, or Thursday 29th? Leap year.
Basil pointed out that 10 year Govt stock rates have been making gains in recent weeks and we're almost back to 5%
This chart is causing some commentators a bit of concern
Be funny uf history repeated itself and OCR went back to 8% plus
IMG_5654.jpeg
Speaking of cash rate Winner kindly posted. Housing remains extremely unaffordable in N.Z. From memory we're in the top three most expensive countries in the world to live. The only way housing goes up from here is if we get a dramatic reduction in interest rates.
The only way that happens is if inflation is well and truly dead and buried and the RBNZ is very, very confident the inflation Genie is well and truly back in the bottle to stay. All the talk on CNBC in recent weeks is its going to be incredibly difficult to wring the last couple of percent out of inflation to get it down from ~ 4% to 2% per annum. I think it might take another year or even two before we see meaningful reductions in mortgage rates. Even then, housing based on the N.Z. medium price just goes from extremely unaffordable to really unaffordable.
The mid 1990's through to 2021 saw a massive expansion in the real cost of housing far and above inflation over that period. From memory and I will check this when I have more time, housing went up at approx 3 times the rate of inflation over a 25 year period. That's what drove the super normal profit gains RYM and SUM enjoyed over that period. I don't see that sort of super normal growth in house prices happening again in my lifetime. More likely, housing will return to some sort of normal pricing relative to N.Z. incomes over a long period of time. That could mean a decade or even considerably more of house prices performing poorly.
As I see it, the house price boom party and all the massive capital gains that have flowed through to RYM and SUM and drove their rampant past growth in share prices is over and the long hangover has begun. Gains for this whole sector will be very difficult to come by in the years ahead and only the very best operators will do well, (SUM), the others will struggle on forever and a day, that's how I foresee it.
Unfortunately, OCA is stuck with an extremely high-cost care based business model and while they are trying to transition, I predict that will be extremely slow and that burden like a superheavy weight jockey on its back means the OCA horse will continue to lumber along at the tail of the field. Much of that reality is now in the share price but what's the attraction with no obvious ability to pay even a very modest dividend anytime soon. They can service their bonds okay and its ironic that every other stakeholder in OCA including staff, residents, management, the directors and bondholders are doing just fine, shareholders get the short straw. I think management needs a shake-up and to be refocused on driving shareholder returns through cost control and discipline, not chasing delusional ESG goals as though that really makes a difference to climate change. Their ESG fixation comes across as a deliberate attempt to mask poor financial performance. They never mention underlying eps in their presentations, ever. Doesn't anyone find that really strange given the CEO was a former investment banking director at Jarden's. Deliberate obfuscation? you be the judge.
Metlife posted a $22m first half loss ...included $10m fair value gains so operating loss about $22m
High expenses they said
Apologies I was wrong, just checked on RBNZ inflation calculator. (Google Reserve bank inflation calculator and have a play around on it yourself) Housing went up at a staggering 7.3 times the rate of inflation from 1995 to 2021. Lets put some numbers on this to illustrate how this went.
$100,000 in Q1 1995 increased to $166,000 in Q1 2021 - 66% General inflation.
$100,000 in housing in Q1 1995 went up to $583,000 in Q1 2021 - 483% Housing inflation!
Those extraordinary gains are what fueled the gold rush RYM and SUM enjoyed in the past. Someone buys an independent living unit for ~ $300K and 10 years later RYM or SUM resell if for $900K, that's where the super normal profits were made. Problem is if someone buys a unit now for $900K and in ten years they resell it for less than $900K (in real terms after accounting for inflation over the next ten years), the profits are going to be much, much smaller.
The past super normal gains are never going to happen again in the foreseeable future because house prices are extremely unaffordable now.
Far more likely is over the next 25 years we'll see house prices gradually return to some sort of normalcy which means this entire sector could underperform for as long as the next 25 years.
Problem for OCA is in these far more sober times in the real estate industry, they remain saddled with a super high cost large care based model so logic suggests they cannot outperform the others. That said, if it gets far below fair value on index exclusion it could be worth a deep value trade, note I suggested trade, not long term hold.
The next big boom is A.I. and the smart money has already moved out of this sector into that one.
https://www.thepost.co.nz/business/350187075/luxury-retirement-villages-are-rise-there-demand?cx_testId=3&cx_testVariant=cx_1&cx_artPos=2&utm_source=localised_module#cxrecs_s
Brent exiting - voluntary or involuntary?
https://www.nzx.com/announcements/426848 (https://www.nzx.com/announcements/426848)
The board must have been pretty annoyed that he let information out to shareholders last week via that Press release. Not the done thing for this company is it?
Quote from: Poet on Feb 26, 2024, 10:16 AMThe board must have been pretty annoyed that he let information out to shareholders last week via that Press release. Not the done thing for this company is it?
I would say it was a mutual parting. Given the share performance are we surprised.
Great news imo
Mixed feelings about this. With Brent's background as director of investment banking at Jarden, you would think if anyone could understand the need to drive eps growth it would be him. This company a bit of a meat grinder, chewed through two CEO's in less than 7 years.
With him going some of the promises he made (which always looked unattainable to me) are annulled. One of them was transitioning the business from 60% care units to 45% within 2 years. I called that a load of the proverbial at the time and stand by that view.
I guess he misses his days of cut and thrust with investment banking at Jarden's ? Maybe the ocean of unsold stock and the very poor rate at which its selling means he can see there's no real growth in the business in the foreseeable future and he just wants to shift somewhere which will be more rewarding. If they promote the CFO to CEO that's really a run for the hill's moment if you haven't already.
This announcement means I'm really losing interest in buying some on the index exit. Too many fleas on this dog...why's he really going, terrible news ahead ?
QuoteLiz Coutts, Chair says, "It has been an absolute pleasure having Brent at the helm and he has demonstrated resilience and tenacity in the execution of the strategy, including leading the sector to deliver new forms of innovation. Brent has always had the residents at the heart of everything he does".
"Brent has set the business up well to benefit from the positive momentum in the market and for his successor to build upon this success and Oceania's continued growth".
She needs to go too. Obviously, she does not understand the very simple fact that earnings per share have not grown at all in her time with the company.
Shareholders deserve honest talk from their CEO and Chair. What the heck is the point of building new units with cost blowouts when you could buy your own shares back for well under half NTA ? Are the whole board so thick they can't do some soul searching and work this out ? Well...I guess its just easier to keep talking B.S.
To those friends I had out on my boat recently and suggested this could be a profitable trade to buy on index exit on Thursday and resell before late May when results announced...my updated position is this. OCA now has FAR more risk. Could be very poor sales to be announced for the year to March 31 2024 and a capital raise now looks FAR more likely to me.
CEO not leaving without being for a VERY good reason. Probably bad news coming.
Why does Brent need a good reason to leave. Looks to me is that we will continue to do the job until the Board announce a successor. Maybe he is just taking a break, who knows but your making a lot of assumptions there.
I have learned to read between the lines with OCA. It's what they don't say you need to be concerned about.
Or you could say no news is good news? I mean lets face it they are by the the worse of the RV's at giving shareholders and updates outside HY and FY. Even in Earls time we got nothing. Certainly they get no points on charming is shareholders with news.
I would like to see some board changes as well as a new the CEO coming on.
Until then can't wait till May for FY. Not holding my breath for an update from them
Quote from: Basil on Feb 26, 2024, 01:56 PMI have learned to read between the lines with OCA. It's what they don't say you need to be concerned about.
Maybe Liz playing out the 'Believe in Better' bit ......looking for somebody better
Quote from: Greekwatchdog on Feb 26, 2024, 02:01 PMOr you could say no news is good news? I mean lets face it they are by the the worse of the RV's at giving shareholders and updates outside HY and FY. Even in Earls time we got nothing. Certainly they get no points on charming is shareholders with news.
I would like to see some board changes as well as a new the CEO coming on.
Until then can't wait till May for FY. Not holding my breath for an update from them
Time for Dame Kerry ans Alan Isaac to move on....done their bit occupying a seat for too long. Suppose Greg decides when to leave but I reckon he's pretty grumpy at the moment.
Quote from: winner (n) on Feb 26, 2024, 02:31 PMTime for Dame Kerry ans Alan Isaac to move on....done their bit occupying a seat for too long. Suppose Greg decides when to leave but I reckon he's pretty grumpy at the moment.
The rot starts at the top.
Chair should go asap and shareholders should appoint someone who gives a flying fig about shareholder interests.
Jeez, lost 30% value in under a month plus ceo resigns and not a single word from the board about what the he'll is going on. Unbelievable!!
Quote from: Poet on Feb 26, 2024, 02:37 PMThe rot starts at the top.
Chair should go asap and shareholders should appoint someone who gives a flying fig about shareholder interests.
Jeez, lost 30% value in under a month plus ceo resigns and not a single word from the board about what the he'll is going on. Unbelievable!!
I didn't want to offend anybody by suggesting Liz goes ......Our Liz is so admired by so many
And...
Suspended dividends and then spaff $40m on land that the market instantly discounts by more than 50% because the market doesn't believe the company can
Use it profitably
Next we will have a cap raise when the shareprice is under 50% of nav.
What brilliant leadership!
Hey Winner, I think Greg backed up the truck @$1.40 when I was selling most of mine down. Almost as much fun as selling WHS shares to Nick at $4.11. I bet he is very grumpy. Needs to start throwing his weight around a bit more eh. Maybe he told Brent to buck up his game or shift on ?
GWD - Shareholder communication from OCA is truly appalling, we absolutely agree on that. Even when they do say something the amount of deliberate obfuscation they engage in is mind boggling. (For example, for years they would never disclose to analysts what their unsold stock was despite every other company in this sector being completely transparent about it).
Buying heaps more land in front of the Helier at top prices, spending many, many millions like a drunken sailor when they have the highest gearing in the sector, shareholder dividends are suspended for who knows how long, the share price is less than half theoretical NTA, and they have an absolute ocean of unsold stock makes no sense to me whatsoever. WTF ?
Greg will be grumpy all right... not having a good trot with OCA or HGH
I think his personal market cap is still more than oca lol
Greg didn't participate in recent DRP ....prob saving cash for capital raise
His horses doing OK
Horses and wine seem much more interesting than banking and housing for the oldies eh
What odds you put on this cap raise...you been calling it for a while?
Quote from: winner (n) on Feb 26, 2024, 02:40 PMI didn't want to offend anybody by suggesting Liz goes ......Our Liz is so admired by so many
And a bit disingenuous some people suggest she doesn't care about shareholders, when she hold million or more of shares. The other guy even way more. Maybe they do care, enough to get rid of the CEO who only got a few shares by comparison and most (all) of them as incentives and DRP's.
Quote from: Basil on Feb 26, 2024, 11:21 AM"why's he really going"
He's weak & poorly regarded by the investment community.
Quote from: Basil on Feb 26, 2024, 11:21 AM"She needs to go too"
Yes, this also.
Quote from: Buzz on Feb 26, 2024, 05:59 PMAnd a bit disingenuous some people suggest she doesn't care about shareholders, when she hold million or more of shares. The other guy even way more. Maybe they do care, enough to get rid of the CEO who only got a few shares by comparison and most (all) of them as incentives and DRP's.
Well she isn't in an information vacuum, she knows all that is going on - it's all the other shareholders she doesn't care about. What excuse does she have for failing to update shareholders in the current situation - just total arrogance as far as I am concerned and she shouldn't be in the position - she should go and asap.
It was interesting he resigned on same day SUM reported..
I reckon the Board had seen RYM shocker report and said to Brett ..if SUM come out with a result that is greater than or equals X....you will be gone by morning tea!!
SUM released results at 8.30am
OCA released resignation at 9.59am....1 minute before morning tea
Therefore my story must be true ;D
Quote from: Perky on Feb 26, 2024, 03:04 PMGreg will be grumpy all right... not having a good trot with OCA or HGH
I think his personal market cap is still more than oca lol
And seeka... no divie there either...
Maybe the Board should seek out Norah Barlow to takeover as CEO for a few years
She's still involved in the sector and let's not forget that Norah did wonders for Summerset .......got it started to where it is today
She was pretty good eh Basil
And would help out diversity
Quote from: Poet on Feb 26, 2024, 07:06 PMWell she isn't in an information vacuum, she knows all that is going on - it's all the other shareholders she doesn't care about. What excuse does she have for failing to update shareholders in the current situation - just total arrogance as far as I am concerned and she shouldn't be in the position - she should go and asap.
All shareholders are equal, we all own the shares. There's no reason I can see why she who holds million+ shares would sacrifice her own shareholding on being arrogant of any other shareholders. Pretty short sighted imo. Let alone considering all the insto's who have massively more shares than she does.
My view is that this signals an important refocus on what is good for shareholders, we've all endured the turnaround strategy and as some have correctly pointed out that has come at a price on EPS. Now is the time to cash in, and show some returns for shareholders patience, of which she herself is a significant shareholder in her own right.
Imo people are far to quick to want to shaft the board or the management, just because the market decided your shares are worth less now than when you bought them. That's not a shareholder who bought into the long game, that's a shareholder who is wanting short term capital gains and has no intention of seeing out the business strategy/plan, and hence, made a poor decision getting involved.
Quote from: Buzz on Feb 26, 2024, 07:23 PMAll shareholders are equal...
Imo people are far to quick to want to shaft the board or the management
I don't buy that sorry.
Just because you have accumulated shares over decades doesn't mean you, by right, should continue on as an independent Board member.
The independents on OCA are almost entirely unchanged since the IPO.
That is not good governance.
We should have at least had a change in independent Chair as a matter of course already.
People forget Liz Coutts' failings at the Ports of Auckland where she also was quick to throw a CEO under the bus and quietly slipped out the exit while others took the flack.
These independent directors are part of a small generational cabal in this country that sit across almost every Board.
They were given an opportunity at a young age that has not been extended to the next wave of high energy business leaders, it's about time they all moved on and stopped clinging on to dreams of King's Honours for service to themselves.
Quote from: Whacc on Feb 26, 2024, 07:48 PMI don't buy that sorry.
Just because you have accumulated shares over decades doesn't mean you, by right, should continue on as an independent Board member.
The independents on OCA are almost entirely unchanged since the IPO.
That is not good governance.
We should have at least had a change in independent Chair as a matter of course already.
People forget Liz Coutts' failings at the Ports of Auckland where she also was quick to throw a CEO under the bus and quietly slipped out the exit while others took the flack.
These independent directors are part of a small generational cabal in this country that sit across almost every Board.
They were given an opportunity at a young age that has not been extended to the next wave of high energy business leaders, it's about time they all moved on and stopped clinging on to dreams of King's Honours for service to themselves.
Bravo, I completely agree, we shareholders should not pillory the Board or management just because the market has decided our shares are less than 50% of the intrinsic value of the company. Especially a Board that has millions of their own rewards at stake.
Nor can we question the wisdom of the market right now as we cannot change or influence that.
What we can do as shareholders is question our own ambitions for our shareholdings and whether we accepted the risks of upside or downside when
we bought into a multi year business transformation strategy, and our timing for doing that, that is just now beginning to show that it is working and has long term promise. Commentators from the outside have little or no influence on my decisions, they have nothing at stake. If they do, and are still confused, they should imo just quit and move on. No point in flogging a dead horse, in their opinion.
Sometimes the conversation becomes confused imo with the ambitions of those who buy the long term future and have patience to ignore the up's and downs of the market, versus those who just want some capital upside ASAP and if they don't see it or get it, then it's all a crock of sh1te.
Nevertheless, all these differing motivations are informative and make for interesting discussion.
Quote from: Buzz on Feb 26, 2024, 09:00 PMWhat we can do as shareholders is question our own ambitions for our shareholdings and whether we accepted the risks of upside or downside when we bought into a multi year business transformation strategy, and our timing for doing that, that is just now beginning to show that it is working and has long term promise.
Can you please direct me to the metrics you are referring too showing what you are suggesting ?
Quote from: Buzz on Feb 26, 2024, 09:00 PMNevertheless, all these differing motivations are informative and make for interesting discussion.
That I agree with.
The directors and Earl Gasparich told us at the time of listing nearly 7 years ago we were on a 6-year business transformation journey and about halfway through that we would see the "point of inflection"...that was supposed to be about 3 years ago. Whatever happened to that magic point of inflection? The last full year reported earnings are little different to the first full years after they listed. There has been no growth in earnings per share, in fact they have gone backwards over 20% in real inflation adjusted terms.
Brent told shareholders they were on another 6 year business transformation journey.
I am sure the incoming CEO will have another story about how this has so much long term promise.
The only hope I see for OCA is hiring someone with a very tight cost control focus like Julian Cook who would steadfastly endeavor to change the culture of this company from one that's all about care regardless of cost, to one that's about good care at a cost that gives shareholders a decent return on invested funds. That's never going to happen with regard to Julian Cook because he's gainfully engaged elsewhere now and the woke board would never allow someone with a very tight cost control focus to come on board because at their heart the board believe if you look after the residents well, regardless of cost, you will do well. How's that working out so far after nearly 7 years ?
Just as well its going to all be different and so much better for shareholders going forward eh ;)
This is from a poster on ST who wrote to Liz Coutts.
I wrote to Liz Coutts and asked her to make an announcement on the financial situation of the company, and whether a CR is being considered, based on the SP being halved over the past year and a half or so, plus the CEO being pushed or moving on. Also confirming no change to expected profitability. No surprises are needed at this time of panic by some silly retail investors.
Make of it as you will
Quote from: Greekwatchdog on Feb 28, 2024, 04:57 AM... whether a CR is being considered, based on the SP being halved over the past year and a half or so
No business should consider a capital raise purely on the basis of their share price halving. I can't think of a worse catalyst for considering of a capital raise.
I don't know why a falling share price has people talking about raises - if anything a high share price should be a reason for making that call.
Frankly there is zero chance Coutts will answer these questions.
If she believes that she is operating within the continuous disclosure requirements then she would have already said what needs to be said and nothing more.
I don't think panicing retail investors will overly concern her either.
The company will be allaying any concerns from broker analysts and institutional investors. If they manage to do that they won't make any more statements.
Quote from: Greekwatchdog on Feb 28, 2024, 04:57 AMwhether a CR is being considered, based on the SP being halved over the past year and a half or so, plus the CEO being pushed or moving on. Also confirming no change to expected profitability. No surprises are needed at this time of panic by some silly retail investors.
Refers to a CR based on a lower SP and then refers to silly retail investors? lol
Time to give this thread a bump I reckon.
Economics 101 the laws of supply and demand. 30m plus shares had to be sold on index exit recently so maybe that was the bottom and those investors who understand index exit and entry pricing impacts were canny enough to adopt this abandoned baby right at the bottom in the late 50's ?
Surely nobody would adopt 2 abandoned babies in the same week on some wacky theory that deep value investing often works and even if one of the babies turned out to be horrible the other one might be worth holding and cuddling...nah, nobody in their right mind would go off leash with a crazy theory like that...and if they did they have gone "feral"
So now shareholders have had the proverbial "dead cat bounce", although only a small one, where too from here ? In their most recent presentation OCA claimed an all up NAV of $1.47 so 63 cents represents a really hefty ~ 57% discount to that.
Have we seen the bottom ? Will a new CEO make a difference ? Is it time for a board shake-up ?
Where will the shares go this year ? https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/
3 BUY's and one hold. Average analyst price target is 99.25 cps.
Are all the analysts right or is this donkey incapable of performing even with a new jockey and trainer ?
Maybe we have hit the bottom and those that bought in the high 50's lately were as cunning as a hungry Beagle ?
What do you think ?
With respect, there is a lot of innuendo in this post Basil. Either you have already bought back in, or you are simply stirring the pot. Which is it?
Hey Basil ...good to get your thoughts on OCA
In a lot of ways OCA has a lot going for it and as a 'deep value' play possibly a better bet than HGH
Hmmmm
Surely not Winner. OCA having more upside potential than HGH ? Surely both won't turn out to be winners and anyone brave enough to adopt two abandoned babies at the same time might come out from their bottom picking exercise smelling like roses. Can't be anyone brave enough to do that eh ;)
At the risk of being chastised by mods.... *Untamed you are hereby chastised - Mod*
Quote from: Basil on Mar 12, 2024, 10:51 AMSurely not Winner. OCA having more upside potential than HGH ? Surely both won't turn out to be winners and anyone brave enough to adopt two abandoned babies at the same time might come out from their bottom picking exercise smelling like roses. Can't be anyone brave enough to do that eh ;)
Quote from: Untamed on Mar 12, 2024, 10:55 AMAt the risk of being chastised by mods, you are such a hypocrite Basil.
How many times has this been the best thing since sliced bread until its not? Take all comments on forums like this with a mountain sized lump of rock salt.
Looking for a "dead cat bounce" on a major index exit with enormous selling pressure, (simple laws of vast amounts of supply drilling out remaining demand at a very low price point), seems like a pretty feasible investment strategy, one that was certainly talked about quite a lot on the other channel. Basic economics 101 the laws of supply and demand. The only person I can see that's still saying it's the best thing since sliced bread is on the other channel. $1 by reporting time in late May is the call, I believe. Ironically, that's where the weighted average of analysts' sees it in 12 months' time (99.25 cents).
I'm not making any call on where this is going other than up, down or sideways, just asked a few questions that nobody so far has been brave enough to answer lol
You might not be "making any call" but your posts have most definitely
implied that you have bought back in, or are considering doing so. So, I will ask again, is that the case, or are you just stirring the pot?
What you often don't seem to realise Basil, is that
some people here, trust your input. Your comments and contributions may influence those people's investing perceptions and decisions (no, not mine). Yes, I know nothing we see here should be taken as investment advice, but newbies in particular do learn by example to some extent, so it is important to ensure your posts are clear and not open to misinterpretation.
This applies to everyone, not just you by the way.
Quote from: Basil on Mar 12, 2024, 11:38 AMI'm not making any call on where this is going other than up, down or sideways, just asked a few questions that nobody so far has been brave enough to answer lol
Quote from: Untamed on Mar 12, 2024, 12:30 PMYou might not be "making any call" but your posts have most definitely implied that you have bought back in, or are considering doing so. So, I will ask again, is that the case, or are you just stirring the pot?
What you often don't seem to realise Basil, is that some people here, trust your input. Your comments and contributions may influence those people's investing perceptions and decisions (no, not mine). Yes, I know nothing we see here should be taken as investment advice, but newbies in particular do learn by example to some extent, so it is important to ensure your posts are clear and not open to misinterpretation.
This applies to everyone, not just you by the way.
Sage comments.
See post #842. I think I've made it quite clear I am playing this as a dead cat bounce but who knows maybe late 50's cents was the bottom for this cycle ? Certainly, if you look back at the share price history it was only under 50 cents for a couple of days of extreme panic during the depths of fear surrounding the worldwide Covid pandemic in late March 2020. Anyone who bought at roughly 50 cents back then has certainly had ample opportunity to sell at a profit. 50 cents in late March 2020 adjusted for inflation is 59 cents now, (source, my workings on the RBNZ inflation calculator), so it's easy enough to make the case 59 cents on the index exit match price was very cheap and quite possibly a low point for the shares...I think it hit a low of 56 cents on very light volume one day that week but 59 cents was where the serious volume was done.
Also easy to make the case there would likely never be greater selling pressure with more than 30m shares being sold on index exit.
Dead cat bounce has worked to a small degree but maybe there's more than one way to skin a cat and Winner is right, it's such deep value here, there's more juice to come ? I guess a new CEO could make a difference ? Who knows, certainly not me. Time will tell. For what its worth, seeing as you say some people follow me, I think anyone hoping for $1 by reporting time in late May 2024 is highly likely to be disappointed. That said, some further recovery from here back into the recent trading range of 68-74 cents seems quite plausible. The other thing is that maybe at well under half NAV, this is a possible takeover target ? Could be a bit of fun to hold for a while and see what happens. I'm certainly not the adjective you so rudely used Untamed, an opportunist looking for a feed...yes...that's the thing with Beagle's, they will look under any rock if they think there's a feed to be had. I guess I had better not hold my breath waiting for you to apologize for your comment lol
What is a dead cat bounce?
https://www.investopedia.com/terms/d/deadcatbounce.asp#:~:text=A%20dead%20cat%20bounce%20is%20a%20temporary%2C%20short-lived,of%20recovery%E2%80%94or%20small%20rallies%E2%80%94during%20which%20prices%20temporarily%20rise.
Quote from: Crackity on Mar 12, 2024, 02:01 PMBad dog - no schmakos for you today - lol
He doesn't need a schmako today as he's already had a smack in the chops by an untamed feline.
It wasn't a "smack in the chops" - it was a respectful and polite reminder that we all have a responsibility to ensure our posts are clear and not open to misinterpretation. While I stand by the sentiment and meaning of what I said, I
do apologise Basil, for post #840. That one was harsh, and could have been worded much better.
Quote from: Breezy on Mar 12, 2024, 02:45 PMHe doesn't need a schmako today as he's already had a smack in the chops by an untamed feline.
Quote from: Untamed on Mar 12, 2024, 12:30 PMYou might not be "making any call" but your posts have most definitely implied that you have bought back in, or are considering doing so. So, I will ask again, is that the case, or are you just stirring the pot?
What you often don't seem to realise Basil, is that some people here, trust your input. Your comments and contributions may influence those people's investing perceptions and decisions (no, not mine). Yes, I know nothing we see here should be taken as investment advice, but newbies in particular do learn by example to some extent, so it is important to ensure your posts are clear and not open to misinterpretation.
This applies to everyone, not just you by the way.
Very well put. Old habits die hard, and Basil should try letting people think for themselves, particularly newbies.
Quote from: Untamed on Mar 12, 2024, 02:54 PMIt wasn't a "smack in the chops" - it was a respectful and polite reminder that we all have a responsibility to ensure our posts are clear and not open to misinterpretation. While I stand by the sentiment and meaning of what I said, I do apologise Basil, for post #840. That one was harsh, and could have been worded much better.
Sorry but just too much good humour to be had from that Crackity post to waste.
Yeah I know, but I don't want this to turn into a dog fight. I think I have made my point, so lets just leave it be now.
Quote from: Breezy on Mar 12, 2024, 03:10 PMSorry but just too much good humour to be had from that Crackity post to waste.
It's not about letting newbies think for themselves. Newbies learn from watching and listening to other investors, amongst other things. But it is important that the more experienced investors recognise that newbies are, by definition, vulnerable to misunderstanding and/or misinterpreting the many comments they read here. Newbies (to either investing OR to this forum) may not yet have a handle on the style or nuances of specific posters, which means they may not be able to "read between the lines."
It is just good practice, for everyone to be specific and absolutely clear in what they post, so their meaning is crystal clear. Basil has much to offer, but he likes to keep a veil of mystery about himself, and keep people guessing. Which really doesn't help people who are trying to learn.
Anyway, I think I have made my point, so time to move on now.
Quote from: Kaycee on Mar 12, 2024, 03:01 PMVery well put. Old habits die hard, and Basil should try letting people think for themselves, particularly newbies.
Quote from: Crackity on Mar 12, 2024, 02:01 PMBad dog - no schmakos for you today - lol
LOL Tony the Pony was a bad dog at the dog park this afternoon, but he got a schmakos .as a bribe to try and make him behave better lol I suspect his habits, not unlike some hungry Beagle, are deeply ingrained. Where he thinks there's a feed or fun to be had, he'll be in boots (paws?) and all.
Quote from: Untamed on Mar 12, 2024, 03:16 PMYeah I know, but I don't want this to turn into a dog fight. I think I have made my point, so lets just leave it be now.
The sp doesn't like all this fighting talk, back to 61c.
Quote from: Breezy on Mar 12, 2024, 03:35 PMThe sp doesn't like all this fighting talk, back to 61c.
Quick, let's all have a big group hug lol
This is just one of those stocks where management/company fortunes always seem to be bad. Started off making the wrong play into care instead of independent units, the latter turned out more profitable. Then tried correcting by building heaps of premium care suites and independent units, which now appear to have been hard to sell for the last 2 years or more. Would not surprise me at all if it just plods along doing nothing until it gets taken over at the sub $1 mark. I think the recent takeover proposal for ARV is probably a reasonable example for OCA too, a board so certain of intrinsic value they will turn down pretty reasonable offers. I have not looked at this sector for a while but my gut feeling is ARV is a better buy, at least then you have some confidence the share is actually undervalued given they got offered $1.70 a share mere months ago.
There has to be some sort of lesson with this one, how things can go so wrong for so long despite extremely obvious and forecastable growth in the total addressable market for its products.
Nobody is going to offer more than $1.70 so the problems I have with ARV is the boards intransigence in believing fair value on today's market is close to the intrinsic value they see meaning there is almost zero chance of a takeover going forward. This is what the board said the day after the shares were trading at a "whopping" 92 cents. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/423543/409608.pdf
I note a takeover at $1.70 would have provided an 85% uplift on the share price at the time. It seems to me the board are completely unrealistic as they say it "meaningfully" undervalues the companies intrinsic value. Interestingly, if you bring up a 10 year chart of ARV, only for two fairly brief periods of time has it ever traded over $1.70. With a board with a belligerent attitude like that, who needs enemies lol
At least with OCA there's a chance that any possible future takeover offer might be put to shareholders to vote on. Yes, there are many lessons with this one. It would be good if the incoming CEO could for a start be more open, forthcoming and transparent with shareholder communications. Maybe a new broom can make some inroads into OCA's problem areas with slow selling stock and older villages making ostensibly nothing? Maybe the new CEO comes up with a radical strategy to clear the decks of some of the problems. Like closing down marginal care villages they can't sell and turn them into profitable emergency housing centers. Maybe convert some of their ocean of unsold care suites into cheap ILU apartments and sell them that way? Some fresh ideas are needed I reckon and maybe a new CEO has some? I hope so.
Touché ;)
Quote from: Untamed on Mar 12, 2024, 10:55 AMAt the risk of being chastised by mods.... *Untamed you are hereby chastised - Mod*
Great that's out of the way and we can all have that big group hug now. Onward and upward towards $1+ again, what could possibly go wrong lol
Quote from: Basil on Mar 12, 2024, 07:23 PMGreat that's out of the way and we can all have that big group hug now. Onward and upward towards $1+ again, what could possibly go wrong lol
Can we be clear about this, we know you have OCA bonds, do you have some shares as well now?
Yes
Basil, did u make a brief appearance on the other channel yesterday?... or was I seeing things?!
Imagining things
Good news ...REINZ report huge increase in number of property sales in February v February last year. Auckland was standout.
More momentum in sales activity and getting back to historical levels
Good for OCA as sales, sales and even more sales are needed
And prices pretty good as well
https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/REINZ_February_data_More%20sales_prices_rise_activity_builds_in_property%20market.aspx?name=REINZ_February_data_More%20sales_prices_rise_activity_builds_in_property%20market
Quote from: Ricky Bobby on Mar 13, 2024, 07:46 PMBasil, did u make a brief appearance on the other channel yesterday?... or was I seeing things?!
Funny that. ...I thought the same when a guy called Jagger popped up ...hey that's our Basil
Wasn't him after all
Thanks for sharing the REINZ data Winner. Looks somewhat encouraging.
This from the other channel from Balance concerns me. My opinion: The new CEO absolutely must take action to address their ballooning debt burden.
Honestly, even if I was paid to do so, I wouldn't post on the other channel.
QuoteAuckland is where it really needs to happen to drag the property market up further. Still too many NZers leaving for Oz and selling out according to our local B&T real estate agent. Says it is making her wonder if she should do the same herself!
Meanwhile, anyone notice that there is a big step change in interest rates for OCA even while debt levels grow ever bigger?
2022/2023 : Interest is charged using the BKBM Bill rate plus a margin and line fee. Interest rates applicable in the
year to 31 March 2023 ranged from 4.05% to 7.52%(March 2022: 2.48% to 3.7%).
Debt 2022 - $383m
Debt 2023 - $558m
2024 : Interest is charged using the BKBM Bill rate plus a margin and line fee. Interest rates
applicable in the six month period to 30 September 2023 ranged from 7.05% to 7.13%.
Debt Sept 2024 - $621m (going higher as capital commitment of $88m)
So expect interest cost to increase to around $23m for the next half year.
And he was later corrected Basil. So his data was off. Brent has already said debt is at peak, so lets see what FY gives us all in May.
Welcome aboard again. Must be a steam train running slow for an old dog to catch up and jump on again
Quote from: Greekwatchdog on Mar 14, 2024, 01:36 PMAnd he was later corrected Basil. So his data was off. Brent has already said debt is at peak, so lets see what FY gives us all in May.
Welcome aboard again. Must be a steam train running slow for an old dog to catch up and jump on again
My data was indeed off.
I have recalculated (after your clarification) :
I make it now $25.8m for full year.
$17.2m for next half year + $8.6m for first half year :
$395m bank debt X 7.1% = $28m/2 = $14m
$225m bonds at 2.5% & 3.30% = $6.4m/2 = $3.2m
OCA has done very very well locking in those wonderful low interest rates on the bonds!
OCA has to be mindful of using debt to develop the newer developments like St Helier - that's $160m of debt funded project which will cost $11m a year in interest to service until the units are sold. Then, there's the operating costs in the short term which has to be funded as well.
Dis. Bought during index selldown at 59c.
Teitei - always good buying at 59 eh
Quote from: winner (n) on Mar 14, 2024, 11:53 PMTeitei - always good buying at 59 eh
Upside looks better than downside at 59c?
Must admit that the lack of conviction follow through buying is surprising. 30m+ index selldown is huge!
Hence, my musings on the step change upwards in interest rates on their increasing debts and why Brent is leaving if things are all heading in the right direction.
We are but little minnows in the overall scheme of things when it comes to having any impact on the sp of a liquid stock like OCA - so good to surface issues for all to comment on.
One of those extended trading days today ......OCA went to 84 cents on high volumes on one of those days a while ago for no apparent reason
Quote from: Plata on Mar 12, 2024, 05:51 PMThis is just one of those stocks where management/company fortunes always seem to be bad. Started off making the wrong play into care instead of independent units, the latter turned out more profitable. Then tried correcting by building heaps of premium care suites and independent units, which now appear to have been hard to sell for the last 2 years or more. Would not surprise me at all if it just plods along doing nothing until it gets taken over at the sub $1 mark. I think the recent takeover proposal for ARV is probably a reasonable example for OCA too, a board so certain of intrinsic value they will turn down pretty reasonable offers. I have not looked at this sector for a while but my gut feeling is ARV is a better buy, at least then you have some confidence the share is actually undervalued given they got offered $1.70 a share mere months ago.
There has to be some sort of lesson with this one, how things can go so wrong for so long despite extremely obvious and forecastable growth in the total addressable market for its products.
There is so much hindsight bias in this post it's hard to know where to start.
Independent units only went gangbusters because the property market went absolutely bananas between c.2016-2021 fueled by loose monetary policy.
No one could have forecast that, anyone who says that was in any way predictable is a fool.
In the words of Paul Conway (Reserve Bank of NZ Chief Economist) yesterday "forecasting asset prices is a mug's game".
Patting Summerset for getting lucky with an overweight ILU portfolio during a house price boom ain't it.
Especially because they were actively trying to reweight to a more balanced portfolio with care at the same time.
You say:
Quote from: Plata on Mar 12, 2024, 05:51 PM... how things can go so wrong for so long despite extremely obvious and forecastable growth in the total addressable market for its products...
If anything it's 100% more obvious and forecastable that there is going to be an overwhelming demand for care in the next 5-10 years as the largest generation this country has ever seen (Baby Boomers) age and have increased acuity requirements.
Care, unlike independent units, is a non-discretionary service that most people
will need at some point in their lives.
It's patently obvious this need will be required and where - we can see it in Statistics NZ data how many people of a certain age there are in NZ and precisely where they live.
That's obvious and forecastable - are you going to turn around in 5-10 years and berate anyone who missed that wave?
At last! Someone else who gets it.
Quote from: WhaccIf anything it's 100% more obvious and forecastable that there is going to be an overwhelming demand for care in the next 5-10 years as the largest generation this country has ever seen (Baby Boomers) age and have increased acuity requirements.
Care, unlike independent units, is a non-discretionary service that most people will need at some point in their lives.
It's patently obvious this need will be required and where - we can see it in Statistics NZ data how many people of a certain age there are in NZ and precisely where they live.
That's obvious and forecastable - are you going to turn around in 5-10 years and berate anyone who missed that wave?
My interpretation of the results by segment suggests that without development gains and valuation uplift gains the village segment only makes a small profit. Do you think this is just reflective of operational inefficiencies from the unsold stock? Is it the case that most unsold stock are independent units?
The beginning of the boomer generation is widely regarded as 1946 which makes them 78 now and some already need care. Keep in mind though the peak wasn't until 1961 when more babies were born in N.Z. than any other year before, or indeed, since then. Those people are only turning 63 this year and may not need care for another 20 years. On the other hand OCA has an ocean of unsold care suites it can't sell now that's blowing out their debt levels and debt funding costs now.
Oceania are ahead of the demand curve, yes agreed. Uncomfortably too far ahead of it and that is what's hurting their financial performance now. Hopefully the new CEO can realize this and steer a different course to avoid any icebergs.
It is not just about boomers. It is also to do with life expectancy in general. Our elderly folk are living longer than ever before. Some of them are able to stay in their homes, with support, until they reach their nineties. But many are not, so require residential care of some kind. Some folk find it incredibly isolating and lonely, continuing to live at home, even with good family support. Once they can no longer drive, they lose so much independence and their lives change dramatically. Many of those people choose residential care, for social reasons above everything else.
The need for quality care options will continue, and the level of care required will increase. If elderly people are staying in their home longer, they may not come into care until they are in their 90s. At which point their physical needs are likely to be higher than they would be if they entered care in their 80s. Care suites are literally the ideal option for care, for those who can pay for it. It provides continuity of care, peace of mind, and a guarantee of quality/flexible care, until the person dies (excluding severe dementia which can usually not be provided under this model). As someone who works in the field, and has experience with care, if I had the financial means, a care suite is what I would choose for myself. It is a far superior option than standard rest home care (private or NGO), and in my humble opinion, is as close to "perfect" as one could get.
In addition, there is always going to be a need for standard, government subsidised care, for people who cannot pay for care. OCA has said in the past that they will always maintain some level of these beds, so I hope that promise stands. As a shareholder, I will be extremely disappointed if that changes. Sometimes as a business, you do something for the right reasons, not just for money. There has to be a human side to these businesses, alongside the profit making side. I am not interested in investing in any RV that turns away from that.
Quote from: Plata on Mar 15, 2024, 09:18 PMMy interpretation of the results by segment suggests that without development gains and valuation uplift gains the village segment only makes a small profit. Do you think this is just reflective of operational inefficiencies from the unsold stock? Is it the case that most unsold stock are independent units?
No, I have written extensively about this issue before. The root issue the new CEO needs to address is the huge number of unsold care suites, more than 4 years of unsold stock at their most recent care suite sales run rate. The other key issue is the older care villages they can't sell that are either loss making or so close to breakeven they're not giving shareholders any return on capital invested. If they can't be sold maybe the villages should be closed, tarted up a bit and sold as cheap independent living units or emergency accommodation units for WINZ.
When you are in a hole, stop digging. The first thing they need to do is stop building more care suites or dramatically dial down the number of them attached to each of their new villages. They also need to dial back their build rate in line with demand like every other company in this sector is doing. The only way to start meaningfully closing the gap between the share price and their theoretical NAV is to convert unsold stock into cash.
Basil said about Oceania ...When you are in a hole, stop digging.
Good advice
But do they realise they are in way?
Quote from: Basil on Mar 14, 2024, 11:39 AMThanks for sharing the REINZ data Winner. Looks somewhat encouraging.
This from the other channel from Balance concerns me. My opinion: The new CEO absolutely must take action to address their ballooning debt burden.
Honestly, even if I was paid to do so, I wouldn't post on the other channel.
Love your cool looking rep bar on the other channel however you could do better as it lacks the ultimate 'banned' finishing touch like mine. Still I've got a bit more to achieve to match the famous winner (n) who managed a permanent ban from hotcopper, next level achievement right there.
Quote from: Breezy on Mar 18, 2024, 01:18 AMLove your cool looking rep bar on the other channel however you could do better as it lacks the ultimate 'banned' finishing touch like mine. Still I've got a bit more to achieve to match the famous winner (n) who managed a permanent ban from hotcopper, next level achievement right there.
Jeez that's a bit of the nose Couta - you haven't lived till you've been banned from at least one site
Quote from: Crackity on Mar 18, 2024, 10:19 AMJeez that's a bit of the nose Couta - you haven't lived till you've been banned from at least one site
Haha exactly my point, Basil hasn't had a permanent ban from any site yet, getting a permanent ban from hotcopper is still the ultimate prize because its extremely rare and hard to achieve. Lol
LOL you guys. Enjoyed the good banter reflecting on days gone bye, good way to start the week. :)
Quote from: Basil on Mar 16, 2024, 03:46 PMNo, I have written extensively about this issue before. The root issue the new CEO needs to address is the huge number of unsold care suites, more than 4 years of unsold stock at their most recent care suite sales run rate. The other key issue is the older care villages they can't sell that are either loss making or so close to breakeven they're not giving shareholders any return on capital invested. If they can't be sold maybe the villages should be closed, tarted up a bit and sold as cheap independent living units or emergency accommodation units for WINZ.
When you are in a hole, stop digging. The first thing they need to do is stop building more care suites or dramatically dial down the number of them attached to each of their new villages. They also need to dial back their build rate in line with demand like every other company in this sector is doing. The only way to start meaningfully closing the gap between the share price and their theoretical NAV is to convert unsold stock into cash.
Yeah for sure. I imagine the trope of the silver tide makes it hard for them to take the loss, I know it was when I sold out although time has shown just how much worse it could have been :o. I keep eyeing this one and ARV up time to time but struggle to get past the non-development business being so marginally profitable. I'm sure part of it is DMF maturity of the villages but it is hard to overlook the rapid growth in OPEX as well. As these businesses have grown their operations I would have expected OPEX growth to taper to be more in line with inflation, since adding a few hundred units when you only have a few hundred is a huge change vs adding a few hundred more units when you have thousands is a small change. IE % growth in units a year is not as high as it once was to my knowledge yet OPEX is still roaring away. Can DMF and other village revenue outpace OPEX going forward or will they always rely on rising house prices and development margin. These are the things I ponder.
Quote from: Plata on Mar 20, 2024, 08:40 PMYeah for sure. I imagine the trope of the silver tide makes it hard for them to take the loss, I know it was when I sold out although time has shown just how much worse it could have been :o. I keep eyeing this one and ARV up time to time but struggle to get past the non-development business being so marginally profitable. I'm sure part of it is DMF maturity of the villages but it is hard to overlook the rapid growth in OPEX as well. As these businesses have grown their operations I would have expected OPEX growth to taper to be more in line with inflation, since adding a few hundred units when you only have a few hundred is a huge change vs adding a few hundred more units when you have thousands is a small change. IE % growth in units a year is not as high as it once was to my knowledge yet OPEX is still roaring away. Can DMF and other village revenue outpace OPEX going forward or will they always rely on rising house prices and development margin. These are the things I ponder.
Current state of property market - not a lot of gains to be made, especially by developers!
Buyers' market continues :
https://www.interest.co.nz/property/126861/housing-market-looks-set-end-summer-season-big-overhang-unsold-stock
The housing market is facing a mountain of uncertainty in the form of unsold stock as it heads towards the end of its peak selling season.
Unless there is an enormous surge in sales in March, and there doesn't appear to be any sign of that happening at this stage, the housing market looks set to be heading towards winter with a large overhang of unsold stock that's likely to weigh heavily on buying decisions and prices.
Latest developer/property company to suspend payments to investors :
https://www.nzherald.co.nz/business/oyster-fund-194m-profit-turns-to-225m-loss-pastoral-house-payments-stopped/GHH5NL44FFEMFFQN34J7D44CBQ/
paywalled
Property devaluations pushed a major property syndicate into negative territory, from a $19.4 million profit into a $22.5m loss, when $13.9m of gains on real estate turned into $28.7m paper or unrealised losses.
And investors in the Pastoral House fund, which owns a Wellington office block, got no payments from October.
Nor can they withdraw their original investment, which for one couple was initially $1 million.
Quote from: Plata on Mar 20, 2024, 08:40 PMYeah for sure. I imagine the trope of the silver tide makes it hard for them to take the loss, I know it was when I sold out although time has shown just how much worse it could have been :o. I keep eyeing this one and ARV up time to time but struggle to get past the non-development business being so marginally profitable. I'm sure part of it is DMF maturity of the villages but it is hard to overlook the rapid growth in OPEX as well. As these businesses have grown their operations I would have expected OPEX growth to taper to be more in line with inflation, since adding a few hundred units when you only have a few hundred is a huge change vs adding a few hundred more units when you have thousands is a small change. IE % growth in units a year is not as high as it once was to my knowledge yet OPEX is still roaring away. Can DMF and other village revenue outpace OPEX going forward or will they always rely on rising house prices and development margin. These are the things I ponder.
All perfectly valid things to ponder in my opinion. Maybe that's all been factored into in the price now ?
No clue why this particular stock on the NZX has such a following. Can anyone explain it? Because it's a dog stock for price. The share price journey is shocking. I'm not trying to upset longs, in fact I'm trying to help: if I had been holding myself, I would have sold up ages ago. It's a total waste of time and capital. And the CEO departs to spend more time with his family, and the market moves the stock an almighty 5c higher. What's that all about? It's good he's going but it really doesn't matter? Or maybe it was just natural price drift and some punters didn't even know who he was?
I actually want to make two points here. (Disclosure: I looked into this outfit ages ago, along with all the other suspects in the NZ retirement home industry, because "the one who shall not be named" mentioned it to me in an unrelated thread in a galaxy far away; I came back from my research absolutely shocked at this industry, and obviously I never bought shares in any of them and I never will.)
Point 1: "The Elephant in the Room"... I won't dwell on this as I've read the "Strict" guidelines and my intention is not to upset those who hold the stock, and too many details would certainly be upsetting. But these sales of "property" to people are a total rip-off. There must be many and significant estate fights over aged people destroying their wealth when they already owned a house. Would anyone here on this site, today, sell a fully paid-up house and go and live in an OCA establishment (which not only destroys the family property but essentially charges rent as well)? That's it from me on this. Pick it apart as you like, but I can tell you now I would never do anything as financially illiterate as signing up for one of these, no matter my age.
Point 2: "Liquidity"... The NZX is never going to be the same again. A.I. changes everything. And all that money is on the Nasdaq. Why would anyone buy the stock the longs hold, when they wish to cash out for huge riches in x amount of years? It's not going to happen. That money is going overseas. This affects all stocks held on the exchange but it affects some more than others. The most likely buyer of OCA stock is an offer with a low-ball bid maybe 30c higher than it is now.
If you are the same Azz from ST, I should probably just scroll on by, but I have zero willpower, so ..... you are still young, so I understand why you might feel this way now, but there is a
lot of water to flow under the bridge between now and your retirement. You may very well feel very differently when you get there. There is more to life than accumulation of wealth. I would lay a bet that if you took a wander through an OCA,SUM or RYM facility, you would be hard pressed to fine even
one resident who regrets their decision.
Quote from: Azz on Mar 22, 2024, 09:10 PM but I can tell you now I would never do anything as financially illiterate as signing up for one of these, no matter my age.
Quote from: Untamed on Mar 22, 2024, 09:32 PMIf you are the same Azz from ST, I should probably just scroll on by, but I have zero willpower, so ..... you are still young, so I understand why you might feel this way now, but there is a lot of water to flow under the bridge between now and your retirement. You may very well feel very differently when you get there. There is more to life than accumulation of wealth. I would lay a bet that if you took a wander through an OCA,SUM or RYM facility, you would be hard pressed to fine even one resident who regrets their decision.
"If you are the same Azz from ST, I should probably just scroll on by"
That's not a very nice thing to say. I thought this was the friendly chat site.
Re the OCA/etc retirement home ripoff: the amount of money lost on the deal, plus all the rent having to be paid, could be used for paid care with a nurse or family member in the owned home, if that's the issue (health). But if these people are healthy and active well that makes the ripoff even worse. And if someone doesn't truly care about wealth transfer upon death, an annuity could be done.
Quote from: Untamed on Mar 22, 2024, 09:32 PMIf you are the same Azz from ST, I should probably just scroll on by, but I have zero willpower, so ..... you are still young, so I understand why you might feel this way now, but there is a lot of water to flow under the bridge between now and your retirement. You may very well feel very differently when you get there. There is more to life than accumulation of wealth. I would lay a bet that if you took a wander through an OCA,SUM or RYM facility, you would be hard pressed to fine even one resident who regrets their decision.
When my Mum was in the Peninsula Club retirement village, (now owned by Arvida), she told me everyone she knew there felt the same way. They all wished they had moved it sooner. Apart from the early years of her marriage she told me just before she died that the 11 years she enjoyed at the village I helped choose for her and Dad, were the happiest years of her life. We all knew when she moved in Dad wasn't long of this world with his advanced dementia, but she was never lonely despite living 9 years there without him. I think close camaraderie, minimizing loneliness through companionship and a genuine sense of community are huge factors. All the common area's and activities are just facilities to help achieve what I've just mentioned which is what's really important.
Quote from: Azz on Mar 22, 2024, 09:43 PM"If you are the same Azz from ST, I should probably just scroll on by"
That's not a very nice thing to say. I thought this was the friendly chat site.
Re the OCA/etc retirement home ripoff: the amount of money lost on the deal, plus all the rent having to be paid, could be used for paid care with a nurse or family member in the owned home, if that's the issue (health). But if these people are healthy and active well that makes the ripoff even worse. And if someone doesn't truly care about wealth transfer upon death, an annuity could be done.
Quote from: Azz on Mar 22, 2024, 09:10 PMNo clue why this particular stock on the NZX has such a following. Can anyone explain it? Because it's a dog stock for price. The share price journey is shocking. I'm not trying to upset longs, in fact I'm trying to help: if I had been holding myself, I would have sold up ages ago. It's a total waste of time and capital. And the CEO departs to spend more time with his family, and the market moves the stock an almighty 5c higher. What's that all about? It's good he's going but it really doesn't matter? Or maybe it was just natural price drift and some punters didn't even know who he was?
I actually want to make two points here. (Disclosure: I looked into this outfit ages ago, along with all the other suspects in the NZ retirement home industry, because "the one who shall not be named" mentioned it to me in an unrelated thread in a galaxy far away; I came back from my research absolutely shocked at this industry, and obviously I never bought shares in any of them and I never will.)
Point 1: "The Elephant in the Room"... I won't dwell on this as I've read the "Strict" guidelines and my intention is not to upset those who hold the stock, and too many details would certainly be upsetting. But these sales of "property" to people are a total rip-off. There must be many and significant estate fights over aged people destroying their wealth when they already owned a house. Would anyone here on this site, today, sell a fully paid-up house and go and live in an OCA establishment (which not only destroys the family property but essentially charges rent as well)? That's it from me on this. Pick it apart as you like, but I can tell you now I would never do anything as financially illiterate as signing up for one of these, no matter my age.
Point 2: "Liquidity"... The NZX is never going to be the same again. A.I. changes everything. And all that money is on the Nasdaq. Why would anyone buy the stock the longs hold, when they wish to cash out for huge riches in x amount of years? It's not going to happen. That money is going overseas. This affects all stocks held on the exchange but it affects some more than others. The most likely buyer of OCA stock is an offer with a low-ball bid maybe 30c higher than it is now.
You have much to learn about the ins and outs of this sector young grasshopper and I'm getting too old and weary to write a book for you.
Clearly, you do not understand the reasons for people choosing to move into a retirement village. Those who move into a villa or apartment, generally do so for three reasons. One, they no longer want the stress or expense of having to maintain a home and garden/section. Two, they want extra support such as security, on call RN in the event of an emergency, gardener service (for villas), on site options for meals, entertainment, sports/activities etc. And finally, companionship and community connections. They are able, and happy, to pay for all of that.
Those needing a higher level of care, are usually even more isolated than the above group of people, if they are living at home. Your assumption that they could save their money and pay for a full time RN or caregiver, is misguided. For one thing, if they are still living in their home, they don't have that "bucket of money" you are talking about, at their disposal. It is tied up in the equity in their house. How do you propose they can pay for full time, in home care? 24 hour care would require a minimum of three caregivers working 8 hour shifts. Even at $27/hour, that is going to cost them over $4000 a week. Drop it back to 12 hours a day and you're still looking at over $2000 a week. Now add on equipment such as shower chairs, hoists, toilet raisers, incontinence products, food, and other basic items needed for someone needing higher level care. Plus, if your rostered caregivers are required to transport the person to appointments or activities etc - they need reimbursing for fuel and wear and tear on their car. They are also entitled to holiday pay and sick leave. There is NO away you could pay them under the table for this kind of role, so you are most probably going to have to employ them via an agency, at an extra cost OR do all the pay roll stuff yourself.
It is absolutely not as easy or "cheap" as you assume.
People make huge assumptions about elderly folk. The vast majority are absolutely still capable of making their own decisions and understanding exactly what they are signing up to when they choose an RV. We have to get away from this idea that they must leave an inheritance and be frugal to protect that inheritance. As far as I am concerned, as someone who is passionate about aged care, they should use
their money for themselves. They worked for it, and they are absolutely entitled to choose to spend it on the last years of their life, if that is what they wish to do. At the end of the day it is money. A man made construct which can bring us some pleasure but also create a level of stress while we are alive, but it is of zero consequence once we are dead.
Quote from: Azz on Mar 22, 2024, 09:43 PMRe the OCA/etc retirement home ripoff: the amount of money lost on the deal, plus all the rent having to be paid, could be used for paid care with a nurse or family member in the owned home, if that's the issue (health). But if these people are healthy and active well that makes the ripoff even worse. And if someone doesn't truly care about wealth transfer upon death, an annuity could be done.
Catching up with my weekend reading I liked this recent post by Maverick on the other channel.
"OCA have always said they would produce 250 to 330 units over the years. ( oooh, remember those days.... when any RV just had to buy a paddock, say they are increasing build rate and the share price would jump.)
OCA have never said they are throttling build rates but IMO they most certainly are...
They usually had a little over 500 units on the go at any time. Now they still have that number but in a VERY short time when some deliveries complete over the next few months they will have half that on the go. There is no mention of what will replace those completions, which they normally would have. Even Frankton`s earthworks seem to have fallen off the "under construction " schedule.
They are cutting back and seem to have significantly reduced their current build ambitions, although have not said so. They have some excellent sites ready to pull the trigger on when ready such as Milford, Frankton and numerous others but looking 6 months out they have not committed to bugger all of that new development.
This is all good news for the immediate and medium term stakeholders as this will do wonders to their balance sheet. They are a unique position of having 2 years of stock using appropriate sales rates for this market , currently ready for sale.
OCA historically spent capex of c. $80m HY ( and a higher number lately as they finished the Helier and CHCH) so it would seem fair this would reduce to say c. $50m . The net effect on the cash flow henceforth should be very healthy. (IMO There should be plenty of cash floating around to resume the dividend.)
Yes, I have some healthy numbers but given OCA are in the middle of this change and will be temporary, they are pretty meaningless to state here. These can only be rough figures as they are entirely dependent on what the directors set as build targets. At any moment they could easily resume construction at pace should they choose but until they ramp up again the money will be rolling in nicely.
I would hope some corporate expenses reduce too as they back off the build rate. Perhaps they will want to retain their staffing as they will want to resume building at some point. We will have to wait and see about that.
We know that should they stop spending on new stuff and just finish their work in progress, sell what they have over the next 2 years, then they could all but pay off all debt. It does seem for this moment in time that is their direction.
As a long term shareholder but also who wants the dividend to resume. To me and Daytr, this is an obvious path they have chosen for now.
Naturally , development will resume at some point, they are poised ready to go. In the interim for up to the next 2 years OCA are in a sweet position of turning their surfboard around and ride the wave (cash in) that they have created underneath them."
I've never held OCA ( despite previous exhortations by some noted posters to "back up the truck" and "you can't have enough (OCA)". I'm v glad I ignored these posters. However, I like a beaten down stock with a turn around story...... the question is whether "turn around" yet applies to OCA.
From a TA perspective OCA is still very much in downtrend mode..... but well worth watching from the sidelines (particularly if Maverick is proven right.)
One or two of those posters were subsequently, quite clearly bearish for years after selling near the top.
Makes good common sense for them to dramatically dial back their build rate with the truly astonishing amount of completed stock they already have on hand.
Oceania's stock turn would make Kathmandu's stock turn of 1.32 times look tremendous
And KMD didn't seem too perturbed with such a low number
Then again a huge stock pile of unsold units is akin to Comvita's mountain of honey ....doesn't do them any harm
Comvita has had a lot of problems with debt levels resulting from unsold stock. They keep saying it improves with age. Suppose you could try and make the same case with OCA as the cost of construction never goes down then theoretically their unsold stock is worth more over time....but you have to sell it at some point and I worry some of the stock maybe isn't really wanted by the market.
Wonder what Todd Hunter does with really old vehicle stock that doesn't sell for years ? You reckon he puts the price up or down ? Is there a lesson there for Comvita and OCA ?
Cashflow is so important, especially in these economic times. They like so many others will have to crack at some point, sell their high cost product for less/loss to get some cash in... then things balance out and we will be off again! This could take a while tho...
Quote from: Basil on Mar 25, 2024, 02:22 AMWonder what Todd Hunter does with really old vehicle stock that doesn't sell for years ? You reckon he puts the price up or down ? Is there a lesson there for Comvita and OCA ?
I'd imagine they wholesale lots of unwanted stock to wreckers or potentially throw them in containers themselves and send them to markets that aren't too worried about modern safety standards.
Yes, repurposing stock for other uses is always a good strategy for stock you can't sell. I do genuinely wonder with more than 4 years of unsold care suites whether some of those should be repurposed as cheap independent living units ? I also wonder if the old care villages that are ostensibly breaking even and giving no return on capital, or even making a small loss, if they can't sell them maybe they could be repurposed as emergency housing or tarted up and sold as really cheap ILU units ? Plenty of strategic thinking for the new CEO to focus on and really hope he does rather than encouraging furtherance of the ESG focus that seems to be becoming quite pervasive at OCA.
Quote from: Basil on Mar 25, 2024, 11:50 AMYes, repurposing stock for other uses is always a good strategy for stock you can't sell. I do genuinely wonder with more than 4 years of unsold care suites whether some of those should be repurposed as cheap independent living units ? I also wonder if the old care villages that are ostensibly breaking even and giving no return on capital, or even making a small loss, if they can't sell them maybe they could be repurposed as emergency housing or tarted up and sold as really cheap ILU units ? Plenty of strategic thinking for the new CEO to focus on and really hope he does rather than encouraging furtherance of the ESG focus that seems to be becoming quite pervasive at OCA.
Emergency housing would fit well with their BELIEVE IN BETTER culture
Why don't those of you who have zero belief in this company, just start a new "OCA bagging thread" and leave this one for those of us who do.
Quote from: Basil on Mar 25, 2024, 11:50 AMYes, repurposing stock for other uses is always a good strategy for stock you can't sell. I do genuinely wonder with more than 4 years of unsold care suites whether some of those should be repurposed as cheap independent living units ? I also wonder if the old care villages that are ostensibly breaking even and giving no return on capital, or even making a small loss, if they can't sell them maybe they could be repurposed as emergency housing or tarted up and sold as really cheap ILU units ? Plenty of strategic thinking for the new CEO to focus on and really hope he does rather than encouraging furtherance of the ESG focus that seems to be becoming quite pervasive at OCA.
Quote from: winner (n) on Mar 25, 2024, 12:18 PMEmergency housing would fit well with their BELIEVE IN BETTER culture
[/quote]
Quote from: Untamed on Mar 25, 2024, 01:06 PMWhy don't those of you who have zero belief in this company, just start a new "OCA bagging thread" and leave this one for those of us who do.
They obviously thought today would be good fishing, I know its hard not to bite when the bait looks so enticing, trouble is it leaves a bitter taste.
Sour pusses...was just shooting the breeze because I'm bored with waiting for the share price to gain traction.
Basil, that's not likely to happen until after they announce the Full Year Result in May, unless of course they stun us all with a Investor Update which is not likely based on history
Quote from: Basil on Mar 25, 2024, 06:30 PMSour pusses...was just shooting the breeze because I'm bored with waiting for the share price to gain traction.
C'mon mate, you've been slagging OCA for years and now that you've recently got some bonds and some shares (but not rescinded any of your other thoroughly and extensively disparaging comments), you post that you're bored with the SP not gaining traction. Gee, let's focus on what's really important, it should be obvious soon and will be reported. Sales, sales, sales imo. After that we will better understand what the SP should be.
Deleted
Quote from: Untamed on Mar 25, 2024, 09:23 PMDeleted
I read it before you deleted it and you called it straight, nothing wrong with that.
Gee - can see why this thread has to be strictly monitored! So much angst!
I picked up some shares during the index sell down at 59c and thought that the sp would be tracking back towards 65c comfortably by now before the profit takers (from the index sell down) lock in their 10% gain. But they appear to be selling out at around current levels. Meanwhile, longer term holders have taken a hammering having bought all the way down and seem unable or willing to load up on much more.
I was looking for the directors and management to load up with more shares during the index sell down - would have been very encouraging but there have been no SPH from any one of them post the index sell down.
So looks like sp is going to range trade around current levels until results in late May.
Traders' stock in the meantime?
My angst was totally justified Balance, but for my own well-being I deleted my previous post.
This post of yours, is the kind of post I come here for. A constructive contribution around what is going on with OCA currently. Not simply a nauseating, boring, repetitive "this company is crap" post.
I don't expect to agree with everything people post here. I just want posts to read that are of some value.
Quote from: Teitei on Mar 26, 2024, 09:46 AMGee - can see why this thread has to be strictly monitored! So much angst!
I picked up some shares during the index sell down at 59c and thought that the sp would be tracking back towards 65c comfortably by now before the profit takers (from the index sell down) lock in their 10% gain. But they appear to be selling out at around current levels. Meanwhile, longer term holders have taken a hammering having bought all the way down and seem unable or willing to load up on much more.
I was looking for the directors and management to load up with more shares during the index sell down - would have been very encouraging but there have been no SPH from any one of them post the index sell down.
So looks like sp is going to range trade around current levels until results in late May.
Traders' stock in the meantime?
Quote from: Untamed on Mar 26, 2024, 10:03 AMMy angst was totally justified Balance, but for my own well-being I deleted my previous post.
This post of yours, is the kind of post I come here for. A constructive contribution around what is going on with OCA currently. Not simply a nauseating, boring, repetitive "this company is crap" post.
I don't expect to agree with everything people post here. I just want posts to read that are of some value.
Fair enough, Untamed but do bear in mind that there are traders as well as fundamental investors in most stocks.
As I have assessed and posted before on the other site, there are two big assumptions being made with all the listed RVs:
1. That the 'free' refundable ORAs are automatically invested profitably on the asset side. St Helier shows that is not the case. And as has been pointed out by other posters, OCA's care units are a severe drag on operating profits.
2. That the RVs property portfolios are somewhat not subjected to the property cycle. Where other property companies have been taking hits on their property valuations in the last 2 years, the RVs have increased and continuously booked steady increases in property revaluations.
The market (the institutional one being critical in terms of driving the sp) obviously does not agree with the assumptions above - hence, the discount to NAB of 56% in the case of OCA :
Simplistically, OCA's property assets were valued at $2.54 billion as at 30 Sep 2023 vs Equity of $1.02 billion - leverage to upside and downside property valuations of 2.5X. So if the institutional market takes the view that OCA's property assets should be revalued down by 15%*, it can be seen that $381m would reduce Equity down to $639m (NAB down to 88c). 20% would reduce Equity by $508m so NAB would be 71c.
Quote from: Teitei on Mar 26, 2024, 11:45 AM...as has been pointed out by other posters, OCA's care units are a severe drag on operating profits.
I am not entirely convinced that is the case, but if it is, it will not be forever.
What a lot of investors fail to understand is that care suites are necessary. If someone is looking to move into a villa or apartment, which provider do you think they will pick, all other things being equal? Provider A, who provides continuity of care via care suites OR Provider B, who doesn't? As someone who works in the aged care sector, I can safely tell you that the vast majority of people will choose Provider A because once they are settled and feeling "at home" in the RV of their choosing, they absolutely do
not want to have to move. Especially if they are now in their late 80s-90s with health issues. That village is "home", they feel safe and supported, and they have friends (both residents and staff). The absolute best thing for those people, for both their physical and emotional well-being, is to be able to get that higher level of care, within that community.
The rest home I work at is rest home level only, so we have no choice but to sometimes move someone elsewhere to hospital or dementia level care. It breaks our hearts to have to do that, because we, as caregivers, know that the chance they will die within a few weeks or months, once moved, is really high. Most of those people are not dying when they leave us. They just need a level of care we are not equipped to provide. Not once, in the time I have worked in this role, has anyone
wanted to move. Not once.
Care suites will be the care preference of the future - for those who can afford it. I have absolutely no doubt about that. It is what I would choose if I had the finances to do it. It is the best care option possible, and it
will be profitable eventually.
Quote from: Teitei on Mar 26, 2024, 09:46 AMGee - can see why this thread has to be strictly monitored! So much angst!
Some people nursing very deep wounds from huge unrealized losses with this one makes them hypersensitive or habitually sullen to anything that through their own unique "filter", appears to be negative. Was only discussing repurposing units that hasn't sold that's been on the market for years, (which is what any intelligent new CEO might consider doing), but that appears to have triggered some people's sensitivities.
Quote from: Basil on Mar 26, 2024, 12:29 PMSome people nursing very deep wounds from huge unrealized losses with this one makes them hypersensitive or habitually sullen to anything that through their own unique "filter", appears to be negative. Was only discussing repurposing units that hasn't sold that's been on the market for years, (which is what any intelligent new CEO might consider doing), but that appears to have triggered some people's sensitivities.
Are you seriously going to pull out that tired and disrespectful argument? I thought you had learned your lesson, but apparently not.
I am a very small investor in OCA, and yes, my holding is well in the red. But I am not even remotely "sensitive" or "worried" or "panicking" or any other adjective you wish to use. I made a calculated decision to invest in this company, for reasons that still apply, and I have no regrets whatsoever. While of course I would like to see a speed up of progress, and a higher share price, I am invested for the long term. As are most OCA investors. Don't treat us like idiots, and stop with the condescending implication that anything we post is because we are "butt hurt" losers.
QuoteIf Winner, I and a few others didn't shoot the breeze on a regular basis this forum would be like a morgue but, sadly, and I see this so much in the real world too, those that contribute the least, complain the most.
No it wouldn't. This thread used to be a good place for general, civilised discussion of OCA. But you and winner, and a few others, have turned it into a place of constant frustration and drama. Yes, I do appreciate the irony of that statement because here I am, yet again, contributing to that drama. But "someone" has to be the adult here and call out this nonsense from time to time. Otherwise, this thread is an absolute waste of time. You all did exactly the same with the OCA thread at ST. Ruined it for everyone. And now, you have basically done the same thing here. Some of us migrated over here in the hope of it being a breath of fresh air, without the never ending BS and dramas, but some of you are well on the way to turning Stocktalk into a clone of ST.
Quote... those that contribute the least, complain the most
Really? So unless one is an accountant, or has a million dollar investment portfolio, they have nothing of value to contribute? I contribute plenty, as I did at ST. Whether you consider my contributions of value, is up to you, but the feedback I receive via rep votes, likes, and personal messages, would appear to indicate otherwise.
It isn't a freaking competition.
Time to have a cup of tea then take Tony the Pony to the dog park for a walk and chill out. Maybe you should do something similar lol
Actually, on the subject of calming pet therapy one of the things that really disappointed me when I looked at Oceania's Lady Allum village in Milford for care for my mum was that they had stopped their weekly pet therapy sessions for the old folks. The oldies really look forward to those weekly visits from dog's and for no good reason they had stopped them. Maybe the new CEO will ensure all care villages have this incredibly valuable pet therapy session for residents?
I'd volunteer Tony the Pony but he's such a big dog he would scare some of the residents. Need a smaller and more agreeable dog like a Beagle. 8)
Chill, one and all.
There is much to learn from one another and I have always appreciated all contributions, albeit with exasperation at times!
Quote from: Untamed on Mar 26, 2024, 12:51 PMAre you seriously going to pull out that tired and disrespectful argument? I thought you had learned your lesson, but apparently not.
I am a very small investor in OCA, and yes, my holding is well in the red. But I am not even remotely "sensitive" or "worried" or "panicking" or any other adjective you wish to use. I made a calculated decision to invest in this company, for reasons that still apply, and I have no regrets whatsoever. While of course I would like to see a speed up of progress, and a higher share price, I am invested for the long term. As are most OCA investors. Don't treat us like idiots, and stop with the condescending implication that anything we post is because we are "butt hurt" losers.
No it wouldn't. This thread used to be a good place for general, civilised discussion of OCA. But you and winner, and a few others, have turned it into a place of constant frustration and drama. Yes, I do appreciate the irony of that statement because here I am, yet again, contributing to that drama. But "someone" has to be the adult here and call out this nonsense from time to time. Otherwise, this thread is an absolute waste of time. You all did exactly the same with the OCA thread at ST. Ruined it for everyone. And now, you have basically done the same thing here. Some of us migrated over here in the hope of it being a breath of fresh air, without the never ending BS and dramas, but some of you are well on the way to turning Stocktalk into a clone of ST.
Really? So unless one is an accountant, or has a million dollar investment portfolio, they have nothing of value to contribute? I contribute plenty, as I did at ST. Whether you consider my contributions of value, is up to you, but the feedback I receive via rep votes, likes, and personal messages, would appear to indicate otherwise.
It isn't a freaking competition.
You actually bring up some very good points in this post, I like your straight to the point/unpretentious style, keep being yourself.
One of the biggest issues is that OCA is used as the general forum for all RV issues. I mean when its property related its always on this thread, never the Retirement Village thread. All property issues should be on the Retirement Village thread not OCA as its covers all of the RV's. OCA has become the Poster child for dribble on both Forums.
And Basil I will say it again who cares what the unrealized losses, gains are? The only time it matters is when you sell end of story. How many times did you buy into ARV and sell at a lost? Do you get reminded of it constantly?? No.
Quote from: Greekwatchdog on Mar 26, 2024, 03:22 PMAnd Basil I will say it again who cares what the unrealized losses, gains are? The only time it matters is when you sell end of story. How many times did you buy into ARV and sell at a lost?
Companies with no eps growth are by their very nature best suited to be trading stocks. Buy and hold simply has not worked, ask the directors, they will confirm that. How much is Liz Coutts down ?. ARV has been my only modest loser that I can recall since the GFC 17 years ago. I only lost chump change in the wider scheme of things.
Quote from: Basil on Mar 26, 2024, 03:50 PMCompanies with no eps growth are by their very nature best suited to be trading stocks. Buy and hold simply has not worked, ask the directors, they will confirm that. How much is Liz Coutts down ?. ARV has been my only modest loser that I can recall since the GFC 17 years ago. I only lost chump change in the wider scheme of things.
Who cares what she or anyone else is down. You would be your grouchy best if the CEO and Board started trading there shares regularly given they no whats going on within their business without sharing that info to us.
This is OCA thread not a poster child for how much someone loses/makes, nor is this the generic thread for the RV's.
Go have a long cup of tea or bone until FY result in May then you can whinge all you like then.
Irony, you keep saying OCA was a bottom drawer stock on the other site and reminding others they didn't know what they were talking about when the challenged you on this. You told countless posters to go away they don't know what they are talking about.
Maybe they knew more than you?
Quote from: Basil on Mar 26, 2024, 03:50 PMCompanies with no eps growth are by their very nature best suited to be trading stocks. Buy and hold simply has not worked, ask the directors, they will confirm that. How much is Liz Coutts down ?. ARV has been my only modest loser that I can recall since the GFC 17 years ago. I only lost chump change in the wider scheme of things.
Well yes but if you don't risk much in proportion to what you have then its impossible to lose much either, like all things in life the more risk you take the bigger the potential reward.
Give OCA a dose of Nexgard and it'll lose one description that it's tagged with ...and the share price will take off
I don't allow uncontrolled bleeding of losses Breezy and take action to cauterize the wound, the extremely rare times I need too. Big positions, (not recklessly big), are taken on highly promising shares with an extremely high probability of success.
GWD. Yeah, right at the start, we all thought that but I called OCA a sell at $1.40 years ago, actioned that for most of them and cleared out the remainder at over $1 and have warned a lot regarding the issues since then. I think I can say with complete confidence, I don't think anyone else has warned more than me lol
It was always going to be fair value at some point...but I held off a long, long time before buying back in at 59 cents. Whether it's worth much more than that who knows for sure, only time will tell but the dead cat bounce since the index removal has been really insipid to say the very least and the share price for all intents and purposes is still behaving like an abandoned baby.
Quote from: Untamed on Mar 26, 2024, 12:51 PMWhile of course I would like to see a speed up of progress, and a higher share price, I am invested for the long term. As are most OCA investors.
OCA has a track record of great growth. Despite that, the share price drifts lower and lower.
That is a combination primed for building wealth. The lower the SP goes the better I say!
Quote from: Basil on Mar 26, 2024, 06:22 PMI don't allow uncontrolled bleeding of losses Breezy and take action to cauterize the wound, the extremely rare times I need too.
Beagle, to clarify your position do you mean you'll sell
purely because a market is pricing an equity lower?
Quote from: ValueNZ on Mar 26, 2024, 09:08 PMThat is a combination primed for building wealth. The lower the SP goes the better I say!
That's a weird way of trying to make money, good luck with that lol
Quote from: ValueNZ on Mar 26, 2024, 09:08 PMOCA has a track record of great growth. Despite that, the share price drifts lower and lower.
Unfortunately, nothing could be further from the truth. Underlying earnings per share have fallen in real inflation adjusted terms by more than 20% since the first full year's report after they listed nearly 7 years ago and plain and simple, that's why the share price is in the toilet. They need to show they can grow earnings otherwise this is probably destined to stay under the IPO price.
Quote from: ValueNZ on Mar 26, 2024, 09:11 PMBeagle, to clarify your position do you mean you'll sell purely because a market is pricing an equity lower?
I do thorough fundamental analysis with the aim of making money, not losing it. I will simply say this. I hate losses so if I think there's material amounts of more pain coming, I bail out and reevaluate at a later date.
Quote from: Teitei on Mar 26, 2024, 09:46 AMGee - can see why this thread has to be strictly monitored! So much angst!
I picked up some shares during the index sell down at 59c and thought that the sp would be tracking back towards 65c comfortably by now before the profit takers (from the index sell down) lock in their 10% gain. But they appear to be selling out at around current levels. Meanwhile, longer term holders have taken a hammering having bought all the way down and seem unable or willing to load up on much more.
I was looking for the directors and management to load up with more shares during the index sell down - would have been very encouraging but there have been no SPH from any one of them post the index sell down.
So looks like sp is going to range trade around current levels until results in late May.
Traders' stock in the meantime?
Punters at 64c getting sick of waiting so dropped their ask to 63c today but then firing them out the door at 62c once the bid builds up.
Quote from: Breezy on Mar 27, 2024, 04:31 PMPunters at 64c getting sick of waiting so dropped their ask to 63c today but then firing them out the door at 62c once the bid builds up.
...and a close at 61 cents
Quote from: winner (n) on Mar 27, 2024, 06:15 PM...and a close at 61 cents
Rats and mice sellers at that price, VWAP for near 1 mill shares at .6226 tells the real story.
Quote from: Breezy on Mar 27, 2024, 06:48 PMRats and mice sellers at that price, VWAP for near 1 mill shares at .6226 tells the real story.
It definitely was rats and mice dropping into .62 and .61 in the last 40 minutes today, with an average $1000 trade (30 of them) into the close at .61
OCA SP at the mercy of the minnows, there are no significant volume trades throughout the day.
Quote from: Basil on Mar 27, 2024, 11:37 AMThat's a weird way of trying to make money, good luck with that lol
The math behind my statement (really it's Buffett's statement) is very simple. I can lay it out for you if you'd like.
Quote from: Basil on Mar 27, 2024, 11:37 AMUnfortunately, nothing could be further from the truth. Underlying earnings per share have fallen in real inflation adjusted terms by more than 20% since the first full year's report after they listed nearly 7 years ago and plain and simple, that's why the share price is in the toilet. They need to show they can grow earnings otherwise this is probably destined to stay under the IPO price.
OCA could very easily grow its EPS from here very rapidly. All they would need to do is wrap up developments and invest all ORA's into bonds. But of course, this would be at the expense of being able to grow their asset base as rapidly as they have done in the past... IMO as long as they can grow the ORA account at a 15% CAGR they should do that as long as possible.
Quote from: Basil on Mar 27, 2024, 11:37 AMI do thorough fundamental analysis with the aim of making money, not losing it. I will simply say this. I hate losses so if I think there's material amounts of more pain coming, I bail out and reevaluate at a later date.
If a company is doing well fundamentally but has a falling share price there should be no cause for concern, right? Unless you need to liquidate in a short timeframe that is.
Quote from: ValueNZ on Mar 27, 2024, 07:29 PMIf a company is doing well fundamentally but has a falling share price there should be no cause for concern, right? Unless you need to liquidate in a short timeframe that is.
I am wondering whether we have on this thread a problem with some wires being crossed - and that's not just in the latest posts between these two posters (so, I apologise for jumping in quite here)?
One of the camps I hear saying that it is good (for a buyer and long term investor) if the price for an by the market undervalued company keeps dropping. And yes, as I see it - as long as the market is wrong (i.e. the markets rational or irrational fears are unjustified) this camp is right. Nothing better than buying a great product on special sales prices!
The other camp I hear saying that maybe the company is not that undervalued as the other camp thinks it is. Sure, it is great if they heap up lots of a desirable product - and no doubt, if they manage to sell it, they will make a fortune. What however, if they have all this desirable product on their balance sheet, but can't sell it due to market constraints? For sure - it is not clever to have lots of unsold product in your stores - this just costs money to maintain and lost opportunity costs. I think this camp has a point as well, if this is what happens.
So - no need to bother good old Warren, and in my view neither to bother all the stats about the grey tsunami coming in. I think we all see the real estate OCA accumulated, we all see the grey tsunami (and with it the need for more safe living and care places). The only real question I see is - has OCA invested into too much up market product which, while certainly desirable to have, the market can't afford?
If that's the case, than all the talk about NTA is pointless.
So - the real test is - are they able to fill luxury accommodation like the Helier (https://oceaniahealthcare.co.nz/location/the-helier) in real time?
Now - what does that mean? Care suites have an average occupancy of three years and living suites something like 7 years. Lets take the average - i.e. if the Helier is fully booked out after 5 to 6 years ramp up time, they didn't build too many units.
If it s booked out significantly earlier, they need to build another Helier, and if its after seven years still semi vacant, they clearly made a mistake.
So far the numbers we heard: A total of 111 units (not all complete yet) and of them after less than a year already 26 sold (yes, this number is already some months old) indicate that the Helier might fill up within something like 2 to 3 years. That's not bad, isn't it?
From memory - it took something like 3 years to fully sell the Sands, and I hear that the presales for Bellevue in Christchurch (https://oceaniahealthcare.co.nz/location/the-bellevue) are going quite well (something like 1/3rd presold).
So, may be we need more local intelligence counting the curtains and occupied balconies at the Heliers - and we certainly would need better reporting from OCA itself (yes, OCA, your reporting sucks), but at this stage I think its much more likely that OCA's new luxury living counts as a success rather than a failure. They say patience is a virtue, don't they?
And, if this is the case, than certainly camp 1 will have the last laugh ...
Quote from: ValueNZ on Mar 27, 2024, 07:29 PMOCA could very easily grow its EPS from here very rapidly. All they would need to do is wrap up developments and invest all ORA's into bonds. But of course, this would be at the expense of being able to grow their asset base as rapidly as they have done in the past... IMO as long as they can grow the ORA account at a 15% CAGR they should do that as long as possible.
I've seen your view repeatedly espoused on the other channel and there are a number of deep systemic flaws inherent in your thesis. My view remains as expressed in paragraph #2 of post #923 above, they have to grow earnings to break out of the malaise they're in. I've written extensively about the challenges OCA face before, and I know the P.C. hyena pack will jump down my throat if I summarize them again. Suggest you read my earlier posts on this channel and Beagle on the other channel, it's all been covered before.
Where we agree is that OCA needs to sell down its existing units rather than continually building an ever-growing ocean of unsold stock. How well or poorly they can do that in the years ahead will play a major part in dictating the future direction of the share price. The other thing that will shape the future share price is whether in gradually selling down 4 years' worth of unsold care suites it actually increases earnings per share. I think the jury is out on that. Will more than 90% of the increase in DMF revenue be eaten by a commensurate increase in operating expenses as it has before, or can they convert a slightly better percentage of increased DMF revenue into bottom line profit? Time will tell.
I am surprised the dead cat bounce after index exclusion hasn't added a bit more to the share price. It seems the market is deeply skeptical of claims of a rosy full year report coming in late May. I think those hoping for $1 are going to be deeply disappointed. Hopefully it can get back up into its recent trading range of 68-74 cents.
Another month passes by so just had to update this chart of OCA share price as %age of SUMs
Both had up months and OCA was up a fraction more than SUMs
The long term trend is still in place but maybe, just maybe, we are at a turning point and the OCA share price might do better than SUMs in future
SUM due to release quarterly sales numbers in next week or two. That might boost both ...pity we need to wait until May until we hear anything from Oceania about their progress.
IMG_5721.png
Quote from: Waltzing on Mar 28, 2024, 07:51 PMWont this sector be ok in the long run as house prices are surely fairly valued in NZ... right?
This comment really belongs in the general retirement village thread but the problem is we're amongst the top few most expensive countries in the world on a per capita basis for housing.
Winner, that's a very well entrenched trendline.
Quote from: Basil on Mar 28, 2024, 08:30 PMThis comment really belongs in the general retirement village thread but the problem is we're amongst the top few most expensive countries in the world on a per capita basis for housing.
Winner, that's a very well entrenched trendline.
Australia is worse but it has the benefit of an economy with real depth and wealth supplemented by flows of rich migrants.
Something has to give in NZ and I for one do not see property prices continuing to increase like in the past, especially with tens of thousands of our bright and skilled youngsters leaving for Australia - to be replaced by low grade & relatively poor migrants.
https://www.canstar.com.au/home-loans/expensive-cities-buy-property/
Did you
really to add the "low grade" comment? You were doing OK up to that point.
Quote from: Teitei on Mar 29, 2024, 09:01 AMto be replaced by low grade & relatively poor migrants.
Quote from: Untamed on Mar 29, 2024, 09:59 AMDid you really to add the "low grade" comment? You were doing OK up to that point.
Relative to who we are losing (the young, skilled, professionals and wealthy), how else would you describe the tens of thousands of semi-skilled workers NZ is importing from India, Philippines, South America and Fiji? Bus drivers, tire changers, painters, laborers, beauticians, and scammed workers.
https://www.rnz.co.nz/news/national/509925/vietnamese-migrants-sold-everything-to-pay-for-work-visas-claim-promised-jobs-non-existent
"A group of 16 Vietnamese allegedly paid $203,000 after being promised work and new lives, but arrived to find no jobs and were left with a mountain of debt that they say will be impossible for them to pay off. A spokeswoman for the group, Sky Duong, said the group were recruited through Facebook to work for New Zealand company Do Painters Limited and had been promised a wage of $50 an hour. She said they each paid $35,000 and an additional $15,000 for those with spouses and children for the job offer and an agent referred to them by the company to support their application for the work visas."
Quote from: Teitei on Mar 29, 2024, 10:12 AMRelative to who we are losing (the young, skilled, professionals and wealthy), how else would you describe the tens of thousands of semi-skilled workers NZ is importing from India, Philippines, South America and Fiji? Bus drivers, tire changers, painters, laborers, beauticians, and scammed workers.
https://www.rnz.co.nz/news/national/509925/vietnamese-migrants-sold-everything-to-pay-for-work-visas-claim-promised-jobs-non-existent
"A group of 16 Vietnamese allegedly paid $203,000 after being promised work and new lives, but arrived to find no jobs and were left with a mountain of debt that they say will be impossible for them to pay off. A spokeswoman for the group, Sky Duong, said the group were recruited through Facebook to work for New Zealand company Do Painters Limited and had been promised a wage of $50 an hour. She said they each paid $35,000 and an additional $15,000 for those with spouses and children for the job offer and an agent referred to them by the company to support their application for the work visas."
Look, whatever ones view on our current governments immigration policies (I admit, that I have as well problems to understand the current selection criteria), this is clearly not a discussion for the OCA thread.
Any chance, you put that under general discussion, if you have a desire to follow up on that?
I know what you meant but I think you could have chosen a much less disrespectful and judgmental phrase.
"Low grade" implies an assessment of poor quality and value, in whatever job they do. Which is unfair.
Never forget that we have immigrants who come here, with a Degree in Medicine or Nursing, who are working as Uber drivers because they can't get registration here (for whatever reason).
Besides which, the vast majority of the immigrants you are referring to, are hard working people, who are good at what they do.
Just saying. Be careful with your words.
Quote from: Teitei on Mar 29, 2024, 10:12 AMRelative to who we are losing (the young, skilled, professionals and wealthy), how else would you describe the tens of thousands of semi-skilled workers NZ is importing from India, Philippines, South America and Fiji? Bus drivers, tire changers, painters, laborers and unqualified scammed workers.
Quote from: BlackPeter on Mar 29, 2024, 10:19 AMLook, whatever ones view on our current governments immigration policies (I admit, that I have as well problems to understand the current selection criteria), this is clearly not a discussion for the OCA thread.
Any chance, you put that under general discussion, if you have a desire to follow up on that?
It is pertinent, BP because those who are leaving are by and large also leaving properties for sale while those who are coming here have zero capacity to buy the highly priced properties here.
What will that do to property prices and the RVs' prices?
What will that do to property prices and the RVs' prices?
[/quote]
Drop them, hopefully.
Quote from: Untamed on Mar 23, 2024, 08:50 AMClearly, you do not understand the reasons for people choosing to move into a retirement village. Those who move into a villa or apartment, generally do so for three reasons. One, they no longer want the stress or expense of having to maintain a home and garden/section. Two, they want extra support such as security, on call RN in the event of an emergency, gardener service (for villas), on site options for meals, entertainment, sports/activities etc. And finally, companionship and community connections. They are able, and happy, to pay for all of that.
Those needing a higher level of care, are usually even more isolated than the above group of people, if they are living at home. Your assumption that they could save their money and pay for a full time RN or caregiver, is misguided. For one thing, if they are still living in their home, they don't have that "bucket of money" you are talking about, at their disposal. It is tied up in the equity in their house. How do you propose they can pay for full time, in home care? 24 hour care would require a minimum of three caregivers working 8 hour shifts. Even at $27/hour, that is going to cost them over $4000 a week. Drop it back to 12 hours a day and you're still looking at over $2000 a week. Now add on equipment such as shower chairs, hoists, toilet raisers, incontinence products, food, and other basic items needed for someone needing higher level care. Plus, if your rostered caregivers are required to transport the person to appointments or activities etc - they need reimbursing for fuel and wear and tear on their car. They are also entitled to holiday pay and sick leave. There is NO away you could pay them under the table for this kind of role, so you are most probably going to have to employ them via an agency, at an extra cost OR do all the pay roll stuff yourself.
It is absolutely not as easy or "cheap" as you assume.
People make huge assumptions about elderly folk. The vast majority are absolutely still capable of making their own decisions and understanding exactly what they are signing up to when they choose an RV. We have to get away from this idea that they must leave an inheritance and be frugal to protect that inheritance. As far as I am concerned, as someone who is passionate about aged care, they should use their money for themselves. They worked for it, and they are absolutely entitled to choose to spend it on the last years of their life, if that is what they wish to do. At the end of the day it is money. A man made construct which can bring us some pleasure but also create a level of stress while we are alive, but it is of zero consequence once we are dead.
Untamed, if you wish, reply back with your thoughts; there's no "enemy" here, there's nothing personal going on, this is a discussion between people with different viewpoints, and opinions can always change given enough legitimate evidence.
I understand now that you are more interested in the company (OCA) and the retirement home industry and the wellbeing of the retired/elderly, than the shares you hold in OCA (I'm pretty sure that's what you meant). I apologize for misunderstanding you; I just thought as it was the OCA stock thread... oh doesn't matter, my bad! :-)
"For one thing, if they are still living in their home, they don't have that 'bucket of money' you are talking about, at their disposal. It is tied up in the equity in their house."-- Untamed
That's not correct. There are various ways to utilize home equity upon retirement. Reverse Mortgage being one of them. Any financial advisor not going through these options with the retiree would be negligent. (And I sincerely hope retirees are seeking independent financial advice before making big decisions.)
Re your passion for the retirement village concept - I get what you're saying. And I respect it. I just don't happen to agree with current practices regarding the way it's charged for. Why not just long-term lease? Make it a purely rental situation where the unit can be rented until the occupant passes away. Why force the sale of the retiree's [most likely] largest asset, and the proceeds of that to be used for another home that they then live in (and they also pay a weekly fee that could be considered rent anyway). In other words, tying up capital when all the retiree really wants is to live in a unit within a village, and subsequently enjoy its security and social aspects (see: I agree with you on these two aspects). To me, this is not the retirement home industry, it is instead a part of the real estate industry (with special character). To me, the primary focus of companies like OCA is selling (and re-selling) high-priced real estate.
The medical side that you describe, I think falls into "private hospital" territory, but is strange because the government seems to be setting prices for aged care as well as handing out subsidies. This situation is worrying. Maybe I don't have full information. But how does OCA do out of this? Price controls never end well. This care bit really interests me; I'm annoyed I can't figure it out; any information appreciated, especially on the viability of this what appears to be forced partnership with government, and especially in regards to 1) good service to the customer, and 2) profit to OCA.
Re the stock, I think you misunderstood what I was saying. Even though I was saying it in reply to [me misunderstanding] you, it's pretty important, and I'll try and explain it better... :-)
Your backing of the retirement home industry and this company OCA, is great: you believe in both. I operate in the same manner: when I back something, after research, I back it fully as well. But as part of that research, what I do is look at the stock that represents the company on a specific exchange, keeping in mind that the stock, while related to, is actually separate from, the company itself.
You, and others, might be quite correct about OCA being a good company with a good product. But this may not translate into a good stock investment. This is a very important investment concept. When it comes to the stock market, I don't invest in companies as such, I first and foremost invest in stocks. An amazing company, even a reasonably profitable one, might have a terrible share price journey. These bad journeys can last several years, even decades.
So we have:
* The industry/sector
* The company
* The exchange
* The stock
There are economic factors too, especially for a real estate company, and we're in a terrible recession in NZ right now, but let's keep it simple. Let me drop the first item off as well, and go from there.
We have:
* The company
* The exchange
* The stock
For OCA, the following:
* The company -- There are different viewpoints on its greatness; I'm not a fan; others very much are. Of interest is the CEO currently working through his notice. (I'm not going to publish my list of negatives found; I don't see the point - read on to understand why.)
* The exchange -- The NZX is dog tucker; liquidity is only going to get worse; it is my view that we need to merge our companies over to the ASX (we just need agreement on seamless imputation), and put the NZX out of its misery; a big factor negative to the NZX is that the overwhelming desire for A.I. riches means a lot of money moving offshore. For OCA, even with some successes of their business, there is not going to be a big scramble for the shares.
* The stock -- I arrived at five probabilities, one of which will dominate for the next two years or so (and possibly much longer): 90% chance share price will continue to drift sideways; 5% chance of a low-ball offer; 2% chance share price falls substantially; 2% chance share price increases in value by between 67% and 99%; 1% chance share price increases in value by 100% or more.
I love dividends, when a company is in safe waters; I don't think this company should be paying a dividend under current economic conditions (and it's not going to pay one, so that's a good defensive move by the company). I'm basically ignoring possible future dividends as a consideration for valuing the stock. (Please note I'm not a trader; I'm long-term, and I either eventually dump a stock for hopefully only a small loss, or I continue to hold winners.)
I haven't properly talked about time, as to how long is too long for a stock to have terrible share price performance. It depends on the stock. I could own a stock that is down 50% for a couple of years, and I'll still back it (continue to hold), and eventually it becomes a winner. What I'm saying for OCA is that enough time has already passed; if I had been a holder, even sitting on a loss, I would have sold a while back (and the capital used elsewhere).
To sum up: I do not think it's actually relevant as to whether OCA is a great company or not, in regards to [positive] share price performance; my view is there is no share price win here, I don't see much gain from current levels.
I want to add my view on what I'm witnessing some OCA longs doing (maybe it's just one person doing it). And that is averaging down, to hold. Look, people can do what they want; this is merely my opinion, after decades of fruitful investment across a multitude of markets and assets. Averaging down on a problematic stock, a stock at or near an all-time low with no obvious oversold condition, so as to increase a long position, is what I'm talking about. I'm not talking about dollar cost averaging to regular tranche buy a solid stock that is generally on the up and up, which is a completely different and wholly worthwhile approach. Averaging down, we all know what that means. DO NOT DO IT. I have literally never seen this end well. Think about the overall concept: buying a stock on a downward trajectory, and people will do it not just once but over and over, each time the stock is at a lower price - and way more often than not there is very good reason for the low price. Just keep cool if the stock held is lowly priced and research doesn't disallow it entirely; when it starts consistently rising on company news of actual turnaround, that might be the signal to buy more shares. (There are exceptions I guess, such as a stock obviously oversold after a single-session major selloff. But I can't think of any exceptions that would apply to OCA at this time.)
Everyone, do your own research. I may, of course, be completely wrong about the OCA share price. (Disclosure: I currently hold no NZ stocks, except in an allegedly aggressive fund where I disagree with their purchase but I have no choice except to exit the fund entirely.)
Just one last thing: longs on this thread, please stop being so defensive. It's not a good look. You don't need to attack people who have a differing view. Just reply back to negative-sentiment posts with reasoned argument. Be confident. I truly do not understand why people get angry when someone doesn't like the stock they like. I have the opposite approach: for a stock I'm in, and that includes any that are down big, I want all knowledge, I want all opinions, I especially want negative opinions, I do not want to restrict any of it because it's all of benefit (with the exception of defamatory assault of a named officer of the company, and no this exception does not include evidence-backed statements of opinion on, for example, CEO performance). What's actually detrimental is hiding away negative opinion, and living in an echo chamber - that's the quickest way to ruin. (Here's a prime example of a disastrous echo chamber: those delusional folk who say Bitcoin has zero value - patting each other on the back and missing out on millions of dollars of pure-profit derived from some of the best percentage gains ever seen in the history of investment.)
I will give credit where credit is due, and say, this is one of your more mature posts, so that is nice to see. Having said that, I honestly just don't have the energy to respond right now. Maybe another day.
Quote from: Azz on Mar 30, 2024, 04:29 PMUntamed, if you wish, reply back with your thoughts ...
Quote from: Untamed on Mar 30, 2024, 09:06 PMI will give credit where credit is due, and say, this is one of your more mature posts, so that is nice to see. Having said that, I honestly just don't have the energy to respond right now. Maybe another day.
Tell ya what, I'll be mature 86% of the time. Is that ok? It'll be a struggle but I reckon I can do it. Reply to my post at your leisure. Re energy replenishment, there's a health drink called Mountain Dew I can recommend. Happy Easter/chocolate day two and a half hours early!
Quote from: Azz on Mar 30, 2024, 04:29 PMRe your passion for the retirement village concept - I get what you're saying. And I respect it. I just don't happen to agree with current practices regarding the way it's charged for. Why not just long-term lease? Make it a purely rental situation where the unit can be rented until the occupant passes away. Why force the sale of the retiree's [most likely] largest asset, and the proceeds of that to be used for another home that they then live in (and they also pay a weekly fee that could be considered rent anyway). In other words, tying up capital when all the retiree really wants is to live in a unit within a village, and subsequently enjoy its security and social aspects (see: I agree with you on these two aspects). To me, this is not the retirement home industry, it is instead a part of the real estate industry (with special character). To me, the primary focus of companies like OCA is selling (and re-selling) high-priced real estate.
Remind me again how coercion is involved... There is no "force" being used. Whether it's something you would consider yourself to have utility is not the question, there is clearly a market for this sort of product.
Quote from: Azz on Mar 30, 2024, 04:29 PMThe medical side that you describe, I think falls into "private hospital" territory, but is strange because the government seems to be setting prices for aged care as well as handing out subsidies. This situation is worrying. Maybe I don't have full information. But how does OCA do out of this? Price controls never end well. This care bit really interests me; I'm annoyed I can't figure it out; any information appreciated, especially on the viability of this what appears to be forced partnership with government, and especially in regards to 1) good service to the customer, and 2) profit to OCA.
There is definitely merit in your argument (although being forced to deal with the government can be seen as a good thing too), but you're totally missing the forest for the trees. What's important over the short term is getting their "ocean" (ha) of stock sold down. The long term is all about continuing their epic growth of their asset base via development or focusing on allocating capital elsewhere from the inflow of ORA's.
Quote from: Azz on Mar 30, 2024, 04:29 PMRe the stock, I think you misunderstood what I was saying. Even though I was saying it in reply to [me misunderstanding] you, it's pretty important, and I'll try and explain it better... :-)
Your backing of the retirement home industry and this company OCA, is great: you believe in both. I operate in the same manner: when I back something, after research, I back it fully as well. But as part of that research, what I do is look at the stock that represents the company on a specific exchange, keeping in mind that the stock, while related to, is actually separate from, the company itself.
You, and others, might be quite correct about OCA being a good company with a good product. But this may not translate into a good stock investment. This is a very important investment concept. When it comes to the stock market, I don't invest in companies as such, I first and foremost invest in stocks. An amazing company, even a reasonably profitable one, might have a terrible share price journey. These bad journeys can last several years, even decades.
Ever heard the quote "In the short run, the market is a voting machine but in the long run, it is a weighing machine"? An amazing company with a 'terrible' short/medium-term share-price performance will in the long run eventually become fairly valued for very obvious reasons.
Quote from: Azz on Mar 30, 2024, 04:29 PM* The exchange -- The NZX is dog tucker; liquidity is only going to get worse; it is my view that we need to merge our companies over to the ASX (we just need agreement on seamless imputation), and put the NZX out of its misery; a big factor negative to the NZX is that the overwhelming desire for A.I. riches means a lot of money moving offshore. For OCA, even with some successes of their business, there is not going to be a big scramble for the shares.
I agree that companies listed on the NZX are mostly overvalued. But having low liquidity is a good thing, not a bad thing for a long-term investor. Higher volatility is something to take advantage of.
Quote from: Azz on Mar 30, 2024, 04:29 PM* The stock -- I arrived at five probabilities, one of which will dominate for the next two years or so (and possibly much longer): 90% chance share price will continue to drift sideways; 5% chance of a low-ball offer; 2% chance share price falls substantially; 2% chance share price increases in value by between 67% and 99%; 1% chance share price increases in value by 100% or more.
This is unreal. WTAF? How are these probabilities calculated?
Quote from: Azz on Mar 30, 2024, 04:29 PMTo sum up: I do not think it's actually relevant as to whether OCA is a great company or not, in regards to [positive] share price performance; my view is there is no share price win here, I don't see much gain from current levels.
Screw the underlying fundamentals eh? Pathetic. You should be happy for a stocks intrinsic value to compound away from the stock price, who doesn't like a good discount?
Quote from: Azz on Mar 30, 2024, 04:29 PMI want to add my view on what I'm witnessing some OCA longs doing (maybe it's just one person doing it). And that is averaging down, to hold. Look, people can do what they want; this is merely my opinion, after decades of fruitful investment across a multitude of markets and assets. Averaging down on a problematic stock, a stock at or near an all-time low with no obvious oversold condition, so as to increase a long position, is what I'm talking about. I'm not talking about dollar cost averaging to regular tranche buy a solid stock that is generally on the up and up, which is a completely different and wholly worthwhile approach. Averaging down, we all know what that means. DO NOT DO IT. I have literally never seen this end well.
The world's greatest investors all average down, because the forward return becomes greater as a share price falls. Basic math will tell you that.
Quote from: Azz on Mar 30, 2024, 04:29 PMHere's a prime example of a disastrous echo chamber: those delusional folk who say Bitcoin has zero value - patting each other on the back and missing out on millions of dollars of pure-profit derived from some of the best percentage gains ever seen in the history of investment.
Process vs outcome. You ask those crypto millionaires to repeat a fraction of their returns in the past and none would be able to do it. The statistics are very clear, those who take a Graham-Newman approach to investing are the only ones who can consistently beat the market over decades.
OK. Here goes. I am not going to respond to
every comment you made in your post, just the aged care related bits that I have some knowledge of.
Quote from: Azz on Mar 30, 2024, 04:29 PMI understand now that you are more interested in the company (OCA) and the retirement home industry and the wellbeing of the retired/elderly, than the shares you hold in OCA (I'm pretty sure that's what you meant).
Incorrect. I would say I am
equally as interested in, the business itself and the shares I hold in that business. Like every other investor, I too need a return from my investment. But it is a long term investment, so as long as the business itself remains solid, which I believe it is, I am reasonably happy to wait for the share price to eventually improve. If something changes with the business, that no longer fits with my initial reasons for investing, of course I would re-visit it.
Quote"For one thing, if they are still living in their home, they don't have that 'bucket of money' you are talking about, at their disposal. It is tied up in the equity in their house."-- Untamed
That's not correct. There are various ways to utilize home equity upon retirement. Reverse Mortgage being one of them. Any financial advisor not going through these options with the retiree would be negligent. (And I sincerely hope retirees are seeking independent financial advice before making big decisions.)
Yes, they could go down the reverse mortgage road, but as I said before, one of the
primary reasons people choose an RV, is to entirely remove the stress of continuing home and garden maintenance. A reverse mortgage might free up some cash to meet those costs, but it won't provide the same peace of mind that not owning a house will.
All RVs
require prospective customers to seek independent advice before they sign a contract. That requirement is set in concrete and cannot be bypassed. It is there to protect
both parties, and RVs are demonstrating responsibility by enforcing it.
QuoteWhy not just long-term lease? Make it a purely rental situation where the unit can be rented until the occupant passes away. Why force the sale of the retiree's [most likely] largest asset, and the proceeds of that to be used for another home that they then live in (and they also pay a weekly fee that could be considered rent anyway). In other words, tying up capital when all the retiree really wants is to live in a unit within a village, and subsequently enjoy its security and social aspects (see: I agree with you on these two aspects). To me, this is not the retirement home industry, it is instead a part of the real estate industry (with special character). To me, the primary focus of companies like OCA is selling (and re-selling) high-priced real estate.
While your suggestion for lease/rental options might have some merit, how exactly would this work in an RV scenario? As we have discussed often, RVs use the funds from selling villas, apartments and care suites, to develop new villas, apartments and care suites. If the model changed to lease/rent, that upfront money would not be available to use for further development.
By the way,
nobody is being forced to sell their house and move into an RV. It is merely
one option available to those who wish to take it up. If they prefer a standard rest home level facility run by an NGO, they can choose that option instead. If they wish to downsize from a house to a unit, and pay someone to do the gardens, they can choose to do that. If they wish to move in with family in their old age, they can do that. All of these things are choices. As I have said many times before, do not underestimate our elderly folk! They might be getting old, but they are not dead, and they are not stupid. The vast majority of them still have their faculties and are perfectly capable of making their own decisions. Yes, they might need some assistance from family or friends, to explore their options and do their homework. But at the end of the day it is their decision, their money, and we need to stop implying that they are not capable of making it!
QuoteThe medical side that you describe, I think falls into "private hospital" territory, but is strange because the government seems to be setting prices for aged care as well as handing out subsidies. This situation is worrying. Maybe I don't have full information. But how does OCA do out of this? Price controls never end well. This care bit really interests me; I'm annoyed I can't figure it out; any information appreciated, especially on the viability of this what appears to be forced partnership with government, and especially in regards to 1) good service to the customer, and 2) profit to OCA.
What a lot of people don't fully understand is that "hospital level care" does not mean someone needs to be in a hospital. It does not even mean that they are seriously unwell. More often than not, someone is assessed as needing hospital level care for one or more of the following reasons:
- They have health issues that would be better served in a facility that has 24/7 Registered Nurse cover. This could be for things like diabetes or circulatory issues that mean they have wounds that are difficult to heal, it could be someone who has regular seizures, someone with COPD, lung disease or heart disease - that needs to be on supplemental oxygen. It could be someone with cancer, a neuropathy, or a degenerative condition that causes extreme pain/discomfort. There are many health issues that must be managed by an RN. Remember, at rest home only level we do not have 24/7 RN cover. After 3.30pm our 32 bed rest home is managed by two staff - both of whom are caregivers, not nurses. We do manage a lot of health/medical issues including administering charted, PRN and controlled medications, but there are some things that are out of our scope of practice.
- Mobility issues. When someone has major mobility issues (for whatever reason) they are often a two person (sometimes even three) transfer, using hoists in and out of bed/chairs/shower chairs/toilet etc. Rest home level facilities simply don't have the equipment and manpower, to manage cases like this long term.
- When someone is unwell or frail, and now needs assistance with all aspects of daily living (ADL), such as using the toilet, showering, moving, and eating/drinking, they need to be somewhere with higher staffing levels. At rest home level, we can manage this if it is short term - say after someone returns from hospital - but once again, we just don't have the manpower to sit with someone and assist them to eat at every meal.
So, your belief that this level of care should be provided by private hospitals, is misguided.
With regards to government subsidies - I don't have all the details of that - someone else might. But the government subsidies apply
only to those who have been assessed as needing a certain level of care, and they must be under the cash assets threshold to qualify. If they qualify, the government pays the standard subsidy to the provider. Hospital level subsidy is higher than rest home level, and I believe dementia level subsidy is higher again. If a provider is receiving the subsidy for a resident, yes, the government dictates the maximum they can charge for that bed. I could be wrong, but my understand is that this
only applies to residents receiving the subsidy. Not to private paying residents. Breezy might be able to clarify that for us. I can't lay my hands on it right now, but OCA talked about this with regard to The Hellier I think. No government subsidies for anyone there, for obvious reasons, and no provision of standard care beds. So no government subsidies and no government limits on what they can charge for care.
QuoteYou, and others, might be quite correct about OCA being a good company with a good product. But this may not translate into a good stock investment. This is a very important investment concept. When it comes to the stock market, I don't invest in companies as such, I first and foremost invest in stocks. An amazing company, even a reasonably profitable one, might have a terrible share price journey. These bad journeys can last several years, even decades.
Yep, we could all be proven wrong. Or we could all be right. Which is why we all need to make our own personal investing decisions, based on our own situations/circumstances. Having said that, I don't subscribe to your "I don't invest in companies as such, I first and foremost invest in stocks." If that works for you that is great, but it is the exact opposite of how I invest. I only invest in companies whose business I understand. If I don't understand what a business does to make its money, how can I fully understand what they are doing/thinking, what their goals are, and how they are progressing towards achieving those goals? Clearly, there are still more than a few people in these forums, who still don't fully understand aged care. If you look only at the share price to judge a company, you are missing a heck of a lot of other very relevant information. Just my humble opinion for what it's worth.
QuoteJust one last thing: longs on this thread, please stop being so defensive. It's not a good look. You don't need to attack people who have a differing view. Just reply back to negative-sentiment posts with reasoned argument. Be confident. I truly do not understand why people get angry when someone doesn't like the stock they like. I have the opposite approach: for a stock I'm in, and that includes any that are down big, I want all knowledge, I want all opinions, I especially want negative opinions, I do not want to restrict any of it because it's all of benefit (with the exception of defamatory assault of a named officer of the company, and no this exception does not include evidence-backed statements of opinion on, for example, CEO performance). What's actually detrimental is hiding away negative opinion, and living in an echo chamber - that's the quickest way to ruin. (Here's a prime example of a disastrous echo chamber: those delusional folk who say Bitcoin has zero value - patting each other on the back and missing out on millions of dollars of pure-profit derived from some of the best percentage gains ever seen in the history of investment.)
Nobody here has ever complained about people sharing
information - negative or positive. What we object to from time to time, are posts that bring up the exact same stuff, day after day after day, without adding anything new to the conversation. This thread absolutely gets more than its fair share of that, and yes, I personally get tired of it as it detracts from any meaningful discussion. I can take the negative comments about OCA, as long as they are based on fact, and not continually rammed down my throat over and over again.
As for bitcoin - best we never go there ;)
Quote from: Untamed on Mar 31, 2024, 01:06 PMOK. Here goes. ...
Great! I'll read in a bit - I have chocolate to eat.
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMThis is unreal. WTAF? How are these probabilities calculated?
I used my noggin. How do you calculate probabilities?
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMScrew the underlying fundamentals eh? Pathetic. You should be happy for a stocks intrinsic value to compound away from the stock price, who doesn't like a good discount?
You misunderstand. The market may not price the stock according to your subjective view of the company. You can test this, in a backward manner, by looking at historical "great fundamentals" within companies and then see what happened to the stocks.
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMThe world's greatest investors all average down, because the forward return becomes greater as a share price falls.
Averaging down, to zero - is an actual thing unfortunately.
Sobering looking at the auctions in Auckland last week - property after property passed in and quite a number of those sold went for well under rating valuations.
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMI agree that companies listed on the NZX are mostly overvalued.
I never said that - so how can you agree with it?
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMhaving low liquidity is a good thing, not a bad thing for a long-term investor.
Low liquidity is a very bad thing. It's one of the worst things. My replies to your posts are becoming more "public service announcement" than "discussion".
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMHigher volatility is something to take advantage of.
Is OCA a high volatility stock?
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMProcess vs outcome. You ask those crypto millionaires to repeat a fraction of their returns in the past and none would be able to do it. The statistics are very clear, those who take a Graham-Newman approach to investing are the only ones who can consistently beat the market over decades.
Ok, I'll ask myself... Answer: to take your question literally ("...repeat a fraction of their returns..."), then all in that illustrious category would be able to do it unless unable to do another investment ever again due to, say, dying immediately. I'm guessing you used "fraction of" in error. If you ever hit a jackpot return, you might understand that, thereafter, diversification and safer-investment waters become priorities, and also that there is more capital available so returns by amount can certainly better previous higher-percentage returns. Let's use every investor's desire: the ten-bagger. Ever had one? Some investors never have one. Others have many. Being specific to the thread's stock, do you think OCA is going to become a ten-bagger? I'll use a probability: in my opinion, there is a 99.999% chance that OCA stock will never ten-bag or more (I'm not saying OCA stock won't be successful in some manner).
Quote from: Teitei on Apr 01, 2024, 10:08 AMSobering looking at the auctions in Auckland last week - property after property passed in and quite a number of those sold went for well under rating valuations.
We're in a very bad recession. Last thing people will be doing is selling-up to relocate to a retirement village.
Quote from: Azz on Apr 01, 2024, 01:15 PMWe're in a very bad recession. Last thing people will be doing is selling-up to relocate to a retirement village.
This is just one of the many RV's, Summerset ... "Over 2023 we saw a record 1,103 sales of Occupation Rights, our highest year to date, and an excellent result in a very difficult macroeconomic environment."
There will be keen interest in the OCA sales results, published in May.
Quote from: Azz on Apr 01, 2024, 01:15 PMWe're in a very bad recession. Last thing people will be doing is selling-up to relocate to a retirement village.
Its not a choice for many, when its your time its sell no matter the market.
Quote from: Buzz on Apr 01, 2024, 01:25 PMThere will be keen interest in the OCA sales results, published in May.
That's a good point, actually. Behaviors for this particular recession might be unexpected.
Quote from: Azz on Apr 01, 2024, 12:55 PMOk, I'll ask myself... Answer: to take your question literally ("...repeat a fraction of their returns..."), then all in that illustrious category would be able to do it unless unable to do another investment ever again due to, say, dying immediately. I'm guessing you used "fraction of" in error. If you ever hit a jackpot return, you might understand that, thereafter, diversification and safer-investment waters become priorities, and also that there is more capital available so returns by amount can certainly better previous higher-percentage returns. Let's use every investor's desire: the ten-bagger. Ever had one? Some investors never have one. Others have many. Being specific to the thread's stock, do you think OCA is going to become a ten-bagger? I'll use a probability: in my opinion, there is a 99.999% chance that OCA stock will never ten-bag or more (I'm not saying OCA stock won't be successful in some manner).
A fraction of is an expression meaning much lower.
Even 1% interest checking account will eventually be a ten-bagger. Whether an investor is successful is dependent on both return and time taken. Oceania is almost certain to 10x in price given enough time. If I had to guess how long that'd take, I'd say 10 years.
Quote from: ValueNZ on Apr 01, 2024, 01:51 PMA fraction of is an expression meaning much lower.
It's not very specific, though. And therefore very much open to speculation as to what the actual fraction is.
Quote from: ValueNZ on Apr 01, 2024, 01:51 PMEven 1% interest checking account will eventually be a ten-bagger.
Oh Lord, give me strength.
Quote from: ValueNZ on Apr 01, 2024, 01:51 PMWhether an investor is successful is dependent on both return and time taken. Oceania is almost certain to 10x in price given enough time. If I had to guess how long that'd take, I'd say 10 years.
A prediction. I respect that. See how we go.
Ok here we go. Bit delayed because I nearly had a chocolate overdose.
Quote from: Untamed on Mar 31, 2024, 01:06 PMIncorrect. I would say I am equally as interested in, the business itself and the shares I hold in that business. Like every other investor, I too need a return from my investment. But it is a long term investment, so as long as the business itself remains solid, which I believe it is, I am reasonably happy to wait for the share price to eventually improve. If something changes with the business, that no longer fits with my initial reasons for investing, of course I would re-visit it.
All good; and I understand the nuance.
Quote from: Untamed on Mar 31, 2024, 01:06 PMAll RVs require prospective customers to seek independent advice before they sign a contract. That requirement is set in concrete and cannot be bypassed. It is there to protect both parties, and RVs are demonstrating responsibility by enforcing it.
This is good, and yes it does protect both parties.
Quote from: Untamed on Mar 31, 2024, 01:06 PMWhile your suggestion for lease/rental options might have some merit, how exactly would this work in an RV scenario? As we have discussed often, RVs use the funds from selling villas, apartments and care suites, to develop new villas, apartments and care suites. If the model changed to lease/rent, that upfront money would not be available to use for further development.
Good point. But it doesn't remove a rental format because of unviability, not yet anyway. More opinions on this would be great!
Quote from: Untamed on Mar 31, 2024, 01:06 PMBy the way, nobody is being forced to sell their house and move into an RV. It is merely one option available to those who wish to take it up. If they prefer a standard rest home level facility run by an NGO, they can choose that option instead. If they wish to downsize from a house to a unit, and pay someone to do the gardens, they can choose to do that. If they wish to move in with family in their old age, they can do that. All of these things are choices.
I'm not using the word "forced" as in there's a gun to their head, I mean that for a certain category (retiree with only one major asset - ie, their home), then for those people to join the RV they need to sell their home because they require the payment to buy another home within the RV.
This part of it really comes down to the "management fee" structure. I think it's a weakness in the business model. If RVs are relying on it, then if competition were to attack that fee in some manner (reduction, removal, ...) then current RVs living and breathing on these very high, what I would call commission fees, will run into problems.
Quote from: Untamed on Mar 31, 2024, 01:06 PMAs I have said many times before, do not underestimate our elderly folk! They might be getting old, but they are not dead, and they are not stupid. The vast majority of them still have their faculties and are perfectly capable of making their own decisions. Yes, they might need some assistance from family or friends, to explore their options and do their homework. But at the end of the day it is their decision, their money, and we need to stop implying that they are not capable of making it!
I agree.
Quote from: Untamed on Mar 31, 2024, 01:06 PMWhat a lot of people don't fully understand is that "hospital level care" does not mean someone needs to be in a hospital. It does not even mean that they are seriously unwell. More often than not, someone is assessed as needing hospital level care for one or more of the following reasons ...
Thanks for writing those up.
Quote from: Untamed on Mar 31, 2024, 01:06 PMSo, your belief that this level of care should be provided by private hospitals, is misguided.
I'm not saying that. I'm saying it's a private company selling health care akin to a hospital, I'm categorizing it. But it has the government all over it, which complicates it.
Quote from: Untamed on Mar 31, 2024, 01:06 PMWith regards to government subsidies - I don't have all the details of that - someone else might. But the government subsidies apply only to those who have been assessed as needing a certain level of care, and they must be under the cash assets threshold to qualify. If they qualify, the government pays the standard subsidy to the provider. Hospital level subsidy is higher than rest home level, and I believe dementia level subsidy is higher again. If a provider is receiving the subsidy for a resident, yes, the government dictates the maximum they can charge for that bed. I could be wrong, but my understand is that this only applies to residents receiving the subsidy. Not to private paying residents. Breezy might be able to clarify that for us. I can't lay my hands on it right now, but OCA talked about this with regard to The Hellier I think. No government subsidies for anyone there, for obvious reasons, and no provision of standard care beds. So no government subsidies and no government limits on what they can charge for care.
Thanks Untamed. Breezy, any input?
Quote from: Untamed on Mar 31, 2024, 01:06 PMYep, we could all be proven wrong. Or we could all be right. Which is why we all need to make our own personal investing decisions, based on our own situations/circumstances. Having said that, I don't subscribe to your "I don't invest in companies as such, I first and foremost invest in stocks." If that works for you that is great, but it is the exact opposite of how I invest. I only invest in companies whose business I understand. If I don't understand what a business does to make its money, how can I fully understand what they are doing/thinking, what their goals are, and how they are progressing towards achieving those goals? Clearly, there are still more than a few people in these forums, who still don't fully understand aged care.
All good.
Quote from: Untamed on Mar 31, 2024, 01:06 PMIf you look only at the share price to judge a company, you are missing a heck of a lot of other very relevant information.
I use the share price to judge the share price.
Quote from: Untamed on Mar 31, 2024, 01:06 PMJust my humble opinion for what it's worth.
Your opinion is appreciated.
Quote from: Untamed on Mar 31, 2024, 01:06 PMNobody here has ever complained about people sharing information - negative or positive. What we object to from time to time, are posts that bring up the exact same stuff, day after day after day, without adding anything new to the conversation. This thread absolutely gets more than its fair share of that, and yes, I personally get tired of it as it detracts from any meaningful discussion. I can take the negative comments about OCA, as long as they are based on fact, and not continually rammed down my throat over and over again.
I get what you're saying. But I reckon with repeated negative comments just reply as if you had heard the comment for the very first time.
Ok, but this doesn't only apply to people moving into an RV. If someone wants to move into a standard Not for Profit rest home (like the one I work in), they would, in most cases, also have to sell their house. To qualify for the government subsidy, one must be under the cash assets threshold.
Here are the figures:
If you're 65 or older, your and your partner's (if you have one) total assets must be $273,628 or less. If you have a partner who's not in long-term residential care, you can choose whether the total value of your combined assets is either:
$149,845 or less, if you don't want to include the value of your house and car (your house isn't counted as an asset if it's the main place where your partner or dependent child lives), or
$273,628 or less, if you do want to include the value of your house and car.So, a single person would generally sell their house, then pay full price until their cash assets dropped below the $273,628 threshold. Once they reach that point, they can then apply for the government subsidy, which would then meet the cost of their care. Note, that anyone receiving the subsidy, loses the bulk of their government superannuation - they get to keep maybe $40/week for incidentals (don't quote me on that figure as it might be more now).
If that person doesn't want to sell their house - maybe wants to rent it out or gift to family or whatever - they would not qualify for the government subsidy and would therefore have to pay for their care themself.
This applies to
any residential aged care service, whether the provider is OCA, SUM, Presbyterian Support or a private rest home run by Mrs Brown. The government subsidy paid, is the same for each level of care, irrespective of who is providing the care. Any provider can choose to provide "add on" features such as rooms with a view, private ensuite etc - which the person or their family pays for. Government subsidies do not cover "extras."
So, when you refer to the RV model "forcing" people to sell their home, it is
not specific to RVs. It simply means, that any person who chooses an alternative lifestyle arrangement, other than continuing to live in their own home, pretty much has no option but to sell their home to achieve that. It doesn't matter whether they are selling it to buy an ORA or to pay privately for a care bed (non ORA) - most people will not be in the position to keep their house
and move into any kind of aged care/lifestyle facility. Yes, there may be a few very wealthy people who could keep their house (rent it out maybe) and have sufficient other cash assets/investments, to pay privately for "care" (as opposed to a villa or apartment) until they die, but the cost of that care would chew through that money, very quickly.
I feel that your thinking is a little skewed in this respect.
Quote from: Azz on Apr 01, 2024, 02:35 PMI'm not using the word "forced" as in there's a gun to their head, I mean that for a certain category (retiree with only one major asset - ie, their home), then for those people to join the RV they need to sell their home because they require the payment to buy another home within the RV.
Oh yes just a bit of imput re the room rates Untamed mentioned. Standard room rates are capped for both subsidized and private payers as per individual area DHB contracts. Non standard rooms are not subject to the cap as you have alluded to and so both subsidized and private payers must pay the extra charges if they wish to stay in these rooms. The same applies to respite care where the standard room rate is capped for either category.
On the odd occasion some families are happy to pay the difference for their subsidized family member to stay in a non standard room.
The current age related personal allowance is $55.35 per week as of today.
Quote from: Untamed on Apr 01, 2024, 03:13 PMOk, but this doesn't only apply to people moving into an RV. If someone wants to move into a standard Not for Profit rest home (like the one I work in), they would, in most cases, also have to sell their house. To qualify for the government subsidy, one must be under the cash assets threshold.
Here are the figures:
If you're 65 or older, your and your partner's (if you have one) total assets must be $273,628 or less. If you have a partner who's not in long-term residential care, you can choose whether the total value of your combined assets is either:
$149,845 or less, if you don't want to include the value of your house and car (your house isn't counted as an asset if it's the main place where your partner or dependent child lives), or
$273,628 or less, if you do want to include the value of your house and car.
So, a single person would generally sell their house, then pay full price until their cash assets dropped below the $273,628 threshold. Once they reach that point, they can then apply for the government subsidy, which would then meet the cost of their care. Note, that anyone receiving the subsidy, loses the bulk of their government superannuation - they get to keep maybe $40/week for incidentals (don't quote me on that figure as it might be more now).
If that person doesn't want to sell their house - maybe wants to rent it out or gift to family or whatever - they would not qualify for the government subsidy and would therefore have to pay for their care themself.
This applies to any residential aged care service, whether the provider is OCA, SUM, Presbyterian Support or a private rest home run by Mrs Brown. The government subsidy paid, is the same for each level of care, irrespective of who is providing the care. Any provider can choose to provide "add on" features such as rooms with a view, private ensuite etc - which the person or their family pays for. Government subsidies do not cover "extras."
So, when you refer to the RV model "forcing" people to sell their home, it is not specific to RVs. It simply means, that any person who chooses an alternative lifestyle arrangement, other than continuing to live in their own home, pretty much has no option but to sell their home to achieve that. It doesn't matter whether they are selling it to buy an ORA or to pay privately for a care bed (non ORA) - most people will not be in the position to keep their house and move into any kind of aged care/lifestyle facility. Yes, there may be a few very wealthy people who could keep their house (rent it out maybe) and have sufficient other cash assets/investments, to pay privately for "care" (as opposed to a villa or apartment) until they die, but the cost of that care would chew through that money, very quickly.
I feel that your thinking is a little skewed in this respect.
This is getting complicated.
The home purchased at an OCA RV, is that not seen the same for these calculations as the home they just sold?
Quote from: Breezy on Apr 01, 2024, 03:24 PMOh yes just a bit of imput re the room rates Untamed mentioned. Standard room rates are capped for both subsidized and private payers as per individual area DHB contracts. Non standard rooms are not subject to the cap as you have alluded to and so both subsidized and private payers must pay the extra charges if they wish to stay in these rooms. The same applies to respite care where the standard room rate is capped for either category.
On the odd occasion some families are happy to pay the difference for their subsidized family member to stay in a non standard room.
The current age related personal allowance is $55.35 per week as of today.
Thanks Breezy.
This sounds like a game of cat and mouse between the government subsidy level and the provider profit level.
If someone chose to sell their RV villa or apartment - to move to a "standard" care bed - I guess so. But it is highly unlikely anyone in that financial position would choose that care option. They would choose a Care Suite, which is another ORA contract. I don't believe any ORA option for care, qualifies for the government subsidy. But I could be wrong.
Quote from: Azz on Apr 01, 2024, 03:47 PMThis is getting complicated.
The home purchased at an OCA RV, is that not seen the same for these calculations as the home they just sold?
Quote from: Untamed on Apr 01, 2024, 04:02 PMI don't understand what you are asking sorry.
How is it (the RV home) calculated as an asset for the subsidy?
Quote from: Untamed on Apr 01, 2024, 04:02 PMThey would choose a Care Suite, which is another ORA contract. I don't believe any ORA option for care, qualifies for the government subsidy. But I could be wrong.
This might answer my question. Maybe... :-)
Untamed and co, I have a pretty good understanding of Artificial Intelligence and Quantum Computing, but the financial side of a Retirement Village company is nearly unfathomable.
Quote from: Azz on Apr 01, 2024, 04:17 PMUntamed and co, I have a pretty good understanding of Artificial Intelligence and Quantum Computing, but the financial side of a Retirement Village company is nearly unfathomable.
Quote from: Azz on Apr 01, 2024, 12:55 PMI'll use a probability: in my opinion, there is a 99.999% chance that OCA stock will never ten-bag or more (I'm not saying OCA stock won't be successful in some manner).
Quote from: Azz on Mar 30, 2024, 04:29 PM* The stock -- I arrived at five probabilities, one of which will dominate for the next two years or so (and possibly much longer): 90% chance share price will continue to drift sideways; 5% chance of a low-ball offer; 2% chance share price falls substantially; 2% chance share price increases in value by between 67% and 99%; 1% chance share price increases in value by 100% or more.
No comment
Quote from: Untamed on Apr 01, 2024, 04:02 PMIf someone chose to sell their RV villa or apartment - to move to a "standard" care bed - I guess so. But it is highly unlikely anyone in that financial position would choose that care option. They would choose a Care Suite, which is another ORA contract. I don't believe any ORA option for care, qualifies for the government subsidy. But I could be wrong.
Actually if the price of the care suite is under the Govt subsidy threshold then you can get the subsidy and this has occurred at OCA and other RV operators.
Thanks Breezy. I didn't know that. I am actually really surprised that this is the case.
Quote from: Breezy on Apr 01, 2024, 05:03 PMActually if the price of the care suite is under the Govt subsidy threshold then you can get the subsidy and this has occurred at OCA and other RV operators.
Quote from: ValueNZ on Mar 31, 2024, 09:48 AMThe statistics are very clear, those who take a Graham-Newman approach to investing are the only ones who can consistently beat the market over decades.
I'm intrigued in your obviously very rigorous investment style, for example your "the lower the share price the better" idea combined with your "OCA will be a ten-bagger" idea - and I'll be the first to congratulate you when those two things marry up. (Interestingly, if a stock that listed at, say, 79 cents, dropped to 7 cents, and then went back up to 79 cents, it would be a ten-bagger for those who went all-in at the bottom.)
The P/E fanatics that you follow make all sorts of claims, yet have no explanation as to why they miss massive gainers such as Nvidia. I can explain why: because the P/E stat is backward looking and stock investments are, due to the way time works, forward looking. The other issue for their predictions is in regards to what I'll call, for want of a better term, "real world events". You haven't really touched on the OCA CEO working under a very short-term contract, for example - what's your take on this (sincere apologies if I've missed your assessment)?
Quote from: Azz on Apr 01, 2024, 09:47 PMI'm intrigued in your obviously very rigorous investment style, for example your "the lower the share price the better" idea combined with your "OCA will be a ten-bagger" idea - and I'll be the first to congratulate you when those two things marry up. (Interestingly, if a stock that listed at, say, 79 cents, dropped to 7 cents, and then went back up to 79 cents, it would be a ten-bagger for those who went all-in at the bottom.)
Because the greater the discount to intrinsic value, the better my buying becomes (It's better to be able to buy a dollar for 50c than not). I would hope for a lower share price in ten years whilst the business increases its value, but realistically at some point between now and then the share price will appreciate to fair value.
Quote from: Azz on Apr 01, 2024, 09:47 PMThe P/E fanatics that you follow make all sorts of claims, yet have no explanation as to why they miss massive gainers such as Nvidia. I can explain why: because the P/E stat is backward looking and stock investments are, due to the way time works, forward looking. The other issue for their predictions is in regards to what I'll call, for want of a better term, "real world events". You haven't really touched on the OCA CEO working under a very short-term contract, for example - what's your take on this (sincere apologies if I've missed your assessment)?
What P/E fanatics do I follow? P/E is certainly an important metric, but it's just a quick and dirty approach, what's important is the discounted cash flows in the future. You try and calculate that for Nvidia and you'll find that without
extremely optimistic assumptions there's just no way you can justify its current valuation. There's nothing to discuss about the CEO of OCA, I have no take.
Quote from: ValueNZ on Apr 02, 2024, 09:22 AMBecause the greater the discount to intrinsic value, the better my buying becomes (It's better to be able to buy a dollar for 50c than not). I would hope for a lower share price in ten years whilst the business increases its value, but realistically at some point between now and then the share price will appreciate to fair value.
"the share price WILL appreciate"
So it's an absolute certainty. You can see the future.
Quote from: ValueNZ on Apr 02, 2024, 09:22 AMWhat P/E fanatics do I follow?
"Graham-Newman"
Quote from: ValueNZ on Apr 02, 2024, 09:22 AMP/E is certainly an important metric, but it's just a quick and dirty approach, what's important is the discounted cash flows in the future. You try and calculate that for Nvidia and you'll find that without extremely optimistic assumptions there's just no way you can justify its current valuation.
On another channel, on 29 September 2023, you made the following statement about Nvidia.
"if I can stop just one person buying into this company it will have been worth it"
Since then, Nvidia stock has gone up by 108% (from $434.99 to $903.63). How many people did you stop buying it? The reason this is important, is that everything you say and obviously believe - when it's tested it fails. At what point do you admit to yourself that you're wrong?
Quote from: ValueNZ on Apr 02, 2024, 09:22 AMThere's nothing to discuss about the CEO of OCA, I have no take.
The leadership of the company, their abilities, and their comings and goings, is irrelevant to you. My view is that the CEO departing is a significant event.
I guess it depends what you consider to be a "significant event." At this point none of really have any idea why Brent has resigned, so all we have is supposition. Which is never particularly helpful.
It may be that he was head hunted. It may be that he saw an opportunity elsewhere that he couldn't resist. It may be that his decision is based on family or personal reasons. There is even a
slim chance that he has perhaps realised he is not the man for the job, so is stepping aside for the good of the company? Yep, that one is extremely unlikely, but who knows?
One thing I
do know right now, is that two emails I have sent to Brent (via the generic company email link) have gone unanswered. Whoever clears that mailbox has not even had the decency to acknowledge my emails. Which, is unacceptable to me as an investor. That doesn't mean I am about to "get out" but it does mean I am watching very closely, and will be conveying my dissatisfaction via other channels, until
somebody has the decency to respond. I am kind of glad Brent is going to be honest. I want a CEO who values shareholders and has the balls to communicate with them, either publicly or privately. Let us hope the new CEO is someone who will do that.
Good company. Great prospects. Shit communication.
QuoteMy view is that the CEO departing is a significant event.
Quote from: Untamed on Apr 02, 2024, 02:04 PMI guess it depends what you consider to be a "significant event." At this point none of really have any idea why Brent has resigned, so all we have is supposition. Which is never particularly helpful.
It may be that he was head hunted. It may be that he saw an opportunity elsewhere that he couldn't resist. It may be that his decision is based on family or personal reasons. There is even a slim chance that he has perhaps realised he is not the man for the job, so is stepping aside for the good of the company? Yep, that one is extremely unlikely, but who knows?
One thing I do know right now, is that two emails I have sent to Brent (via the generic company email link) have gone unanswered. Whoever clears that mailbox has not even had the decency to acknowledge my emails. Which, is unacceptable to me as an investor. That doesn't mean I am about to "get out" but it does mean I am watching very closely, and will be conveying my dissatisfaction via other channels, until somebody has the decency to respond. I am kind of glad Brent is going to be honest. I want a CEO who values shareholders and has the balls to communicate with them, either publicly or privately. Let us hope the new CEO is someone who will do that.
Good company. Great prospects. Shit communication.
Great post, great assessment of the situation.
Quote from: Untamed on Apr 02, 2024, 02:04 PMI guess it depends what you consider to be a "significant event." At this point none of really have any idea why Brent has resigned, so all we have is supposition. Which is never particularly helpful.
It may be that he was head hunted. It may be that he saw an opportunity elsewhere that he couldn't resist. It may be that his decision is based on family or personal reasons. There is even a slim chance that he has perhaps realised he is not the man for the job, so is stepping aside for the good of the company? Yep, that one is extremely unlikely, but who knows?
One thing I do know right now, is that two emails I have sent to Brent (via the generic company email link) have gone unanswered. Whoever clears that mailbox has not even had the decency to acknowledge my emails. Which, is unacceptable to me as an investor. That doesn't mean I am about to "get out" but it does mean I am watching very closely, and will be conveying my dissatisfaction via other channels, until somebody has the decency to respond. I am kind of glad Brent is going to be honest. I want a CEO who values shareholders and has the balls to communicate with them, either publicly or privately. Let us hope the new CEO is someone who will do that.
Good company. Great prospects. Shit communication.
Good points. If it helps - you are not alone (re not getting email confirmations from OCA staff). I don't think I ever got any acknowledgement of my emails from any OCA staff I tried to contact with questions.
And yes, while they might not be the only company happy to ignore shareholder questions, they are clearly one of the worst.
Earl Gasparich was a good bloke. Enjoyed a few chats with him over the years and he answered my emails. He doubled his salary when he left for Metlifecare. Had high hopes with Brent coming on board, (given his background as former director of investment banking at Jarden), there would be a sharp focus on driving earnings per share growth but alas, the only time eps was ever mentioned was when the begging bowl was handed around for a capital raise at which point the magic words of eps accretive were used liberally. I think rather than Brent changing the culture at OCA, the culture there changed him.
1 queried some numbers that didn't make sense on WHS report last week by email
Got a detailed response from Finance Manager within a few hours
Over several years sent several emails to Oceania. Not all acknowledged but must say Anna Thorburn did respond to a few queries albeit in the 'can't say' way. Anna seen light if dayband no longer there ...maybe git told off for communicating with stakeholders
It just isn't good enough. I bet if we emailed them to enquire about a villa, apartment or care suite, we would have an answer the same day. Very possibly, even a personal phone call from their sales team.
I am at the point now where I will more than likely write an old fashioned letter, and send it "signature required" by courier. Just to make a point. I might even point out that they should keep in mind that shareholders may well also be prospective customers at some point. I am happy to let them believe I could be looking for care for a parent in the future. They wouldn't know it is BS, but it might wake them up to the fact that they can't simply ignore us.
Quote from: BlackPeter on Apr 02, 2024, 02:17 PMGood points. If it helps - you are not alone (re not getting email confirmations from OCA staff). I don't think I ever got any acknowledgement of my emails from any OCA staff I tried to contact with questions.
And yes, while they might not be the only company happy to ignore shareholder questions, they are clearly one of the worst.
Did you have the email address for the Finance Manager? Or did you send it via the general "contact us" address?
Quote from: winner (n) on Apr 02, 2024, 02:36 PM1 queried some numbers that didn't make sense on WHS report last week by email
Got a detailed response from Finance Manager within a few hours
Over several years sent several emails to Oceania. Not all acknowledged but must say Anna Thorburn did respond to a few queries albeit in the 'can't say' way. Anna seen light if dayband no longer there ...maybe git told off for communicating with stakeholders
Quote from: Azz on Apr 02, 2024, 01:47 PMOn another channel, on 29 September 2023, you made the following statement about Nvidia.
"if I can stop just one person buying into this company it will have been worth it"
Since then, Nvidia stock has gone up by 108% (from $434.99 to $903.63). How many people did you stop buying it? The reason this is important, is that everything you say and obviously believe - when it's tested it fails. At what point do you admit to yourself that you're wrong?
Am I wrong because I think that the price you pay is important? No. The fact that it appreciated in price enormously is not relevant. I believe it's important to follow the right process in investing and ignore short-term outcomes and you'll come out ahead of everyone else.
Quote from: Untamed on Apr 02, 2024, 02:45 PMDid you have the email address for the Finance Manager? Or did you send it via the general "contact us" address?
Contact Was on NZX announcement and it must have been forwarded to Finance Manager
Oceania hide behind a PR company but Claire.fisher@oceaniahealthcare.co.nz often listed as a contact. She's General Counsel
That could be helpful. Companies usually use the same email address format for all staff so Brent's is likely to be Brent.Pattison@oceaniahealthcare.co.nz
Might try that and see what happens.
Quote from: winner (n) on Apr 02, 2024, 03:15 PMContact Was on NZX announcement and it must have been forwarded to Finance Manager
Oceania hide behind a PR company but Claire.fisher@oceaniahealthcare.co.nz often listed as a contact. She's General Counsel
Quote from: Untamed on Apr 02, 2024, 03:21 PMThat could be helpful. Companies usually use the same email address format for all staff so Brent's is likely to be Brent.Pattison@oceaniahealthcare.co.nz
Might try that and see what happens.
Good luck
Maverick on other channel seems to have a few contacts who communicate with him
Quote from: Azz on Apr 01, 2024, 01:15 PMWe're in a very bad recession. Last thing people will be doing is selling-up to relocate to a retirement village.
Not really. People aged 75+ usually dont have mortgages so are unaffected by high interest rates. They dont have jobs so are unaffected by rising unemployment. They usually do have savings so benefit from higher term deposit interest rates, and CPI adjustments to their superannuation. Plus they tend to not be big spenders, so not affected as much by inflation in discretionary goods and services.
Their biggest problem is selling their house to someone who is affected by high interest rates, inflation and perilous employment. Which may be one reason why the stock of unsold houses currently on the market is at its highest since 2015.
Quote from: KW on Apr 02, 2024, 04:11 PMTheir biggest problem is selling their house to someone who is affected by high interest rates, inflation and perilous employment. Which may be one reason why the stock of unsold houses currently on the market is at its highest since 2015.
That's the problem though. Because the industry relies on the following.
* Retiree sells home, then
* Retiree buys home at [provider such as OCA].
However, we just have to wait I guess:
Quote from: Buzz on Apr 01, 2024, 01:25 PMThere will be keen interest in the OCA sales results, published in May.
Retirees won't want to sell into this market is what I'm saying.
Quote from: Azz on Apr 02, 2024, 04:58 PMRetirees won't want to sell into this market is what I'm saying.
Its not like they have all the time in the world to wait for a better housing market. They are getting older and more infirm every day, they will sell while they are still able to move. And gloomy times might actually prompt them to move - if they want to be settled and secure before everything goes to shit lol
If you are a potential ORA customer, you also have to ask yourself whether it is better to move early or late.
You are going to pay the same amount for the ORA (30% of capital) so wouldn't it make more sense to move earlier and get the benefit for longer.
Quote from: KW on Apr 02, 2024, 05:08 PMIts not like they have all the time in the world to wait for a better housing market. They are getting older and more infirm every day, they will sell while they are still able to move. And gloomy times might actually prompt them to move - if they want to be settled and secure before everything goes to shit lol
My view is that those houses will sell - if asking prices are lowered; but in NZ, sellers (and that includes retirees) are more likely to either remove the listing, or keep the listing but with an unrealistic price. But your view could be correct.
Quote from: Azz on Apr 02, 2024, 05:16 PMMy view is that those houses will sell - if asking prices are lowered; but in NZ, sellers (and that includes retirees) are more likely to either remove the listing, or keep the listing but with an unrealistic price. But your view could be correct.
They probably have a family member like me, who simply told my father to not be an idiot, take whatever offer was made and stop wasting time trying to get a better price. Eventually he listened, lowered his price, sold his house, and is now happily esconced in his RV wishing like all the others that he had done it sooner lol.
I suspect this is the reality for many folk contemplating a move to an RV (or any other aged care option in fact). I also suspect that the vast majority of complaints about RV costs etc, have been initiated by families, not the person considering the move. I have seen more than a few posts on various platforms by family members, making the usual "ripping Mum/Dad off" rants. When you read their posts closely, nine times out of ten you very quickly get the feeling that their concerns are
not actually about their parent, but about their inheritance, or should I say, lack of one.
I wish all families supported their loved one's desire to make this change, as you did with your Dad. At the end of the day, all that matters is that he is safe, cared for, and happy, and has peace of mind. Worth every dollar.
Quote from: KW on Apr 02, 2024, 05:24 PMThey probably have a family member like me, who simply told my father to not be an idiot, take whatever offer was made and stop wasting time trying to get a better price. Eventually he listened, lowered his price, sold his house, and is now happily esconced in his RV wishing like all the others that he had done it sooner lol.
Quote from: KW on Apr 02, 2024, 05:24 PMThey probably have a family member like me, who simply told my father to not be an idiot, take whatever offer was made and stop wasting time trying to get a better price. Eventually he listened, lowered his price, sold his house, and is now happily esconced in his RV wishing like all the others that he had done it sooner lol.
Yip, I am seeing this a lot. We are out looking at the moment and the fastest sales by far are those moving into an RV. It is happening.
For Bar been buying. https://www.nzx.com/announcements/428992
Next big announcement for me for the sector will be ARV's Investor update. Normally out early/mid April
Quote from: Untamed on Apr 02, 2024, 09:16 PMI suspect this is the reality for many folk contemplating a move to an RV (or any other aged care option in fact). I also suspect that the vast majority of complaints about RV costs etc, have been initiated by families, not the person considering the move. I have seen more than a few posts on various platforms by family members, making the usual "ripping Mum/Dad off" rants. When you read their posts closely, nine times out of ten you very quickly get the feeling that their concerns are not actually about their parent, but about their inheritance, or should I say, lack of one.
I wish all families supported their loved one's desire to make this change, as you did with your Dad. At the end of the day, all that matters is that he is safe, cared for, and happy, and has peace of mind. Worth every dollar.
If you take "retiree" out of the equation (and instead use, say, "people in their 50s who want to live in a village community"), who would sign up for one of these deals? That's how a lot of people see it - and they can't get past it.
I've wondered about this scenario: Say there's a married couple (a man 75 years old, and a woman 65 years old), they both move into one of these RVs. He dies, a few years later. Is she still locked into the ORA? If so, she might find another partner, who doesn't want to live there - but she'll lose a stack of money exiting.
Quote from: Azz on Apr 03, 2024, 05:40 PMIf you take "retiree" out of the equation (and instead use, say, "people in their 50s who want to live in a village community"), who would sign up for one of these deals? That's how a lot of people see it - and they can't get past it.
Ryman and Summerset both have a minimum age restriction of 70 years. I can't find anything re this on the OCA website, but I expect it will be the same. So there will be no 50 year olds in any of those villages. I imagine there might be some leeway for couples, as long as one of them is 70+ - but that is just a guess on my part. Besides which, these are
Retirement Villages, so clearly the expectation is that occupants
will be retirees.
Quote from: Azz on Apr 03, 2024, 05:55 PMI've wondered about this scenario: Say there's a married couple (a man 75 years old, and a woman 65 years old), they both move into one of these RVs. He dies, a few years later. Is she still locked into the ORA? If so, she might find another partner who doesn't want to live there - but she'll lose a stack of money exiting.
As far as this scenario goes, chances are high, that if the widow, does find another partner in the future, it will be someone she meets in the village. If not, she will now be (depending on how old her husband was when he died) closer to 70, and I seriously doubt she would want to leave her "home." The new partner would more than likely move in with her, or they would go with a companionship type relationship, and not live together.
I don't see it being a common situation to be honest.
Can I ask you - why are you so focussed and concerned about occupants spending their capital? Are you looking at this from the perspective of you, as a family member of someone who might choose to move to an RV? Or are you "imagining" not wanting to lose your own capital down the track, if you are the one considering RV living?
Quote from: Untamed on Apr 03, 2024, 06:22 PMRyman and Summerset both have a minimum age restriction of 70 years. I can't find anything re this on the OCA website, but I expect it will be the same. So there will be no 50 year olds in any of those villages. I imagine there might be some leeway for couples, as long as one of them is 70+ - but that is just a guess on my part. Besides which, these are Retirement Villages, so clearly the expectation is that occupants will be retirees.
Thanks for writing that up. But it is a concept I'm providing. People really think like that. They don't literally want to move into a village in their 50s. They're weighing an RV up (say for a family member who has asked about it) and cannot get past the management fee situation. They relate it to their own experience.
Quote from: Untamed on Apr 03, 2024, 06:22 PMAs far as this scenario goes, chances are high, that if the widow, does find another partner in the future, it will be someone she meets in the village. If not, she will now be (depending on how old her husband was when he died) closer to 70, and I seriously doubt she would want to leave her "home." The new partner would more than likely move in with her, or they would go with a companionship type relationship, and not live together.
I don't see it being a common situation to be honest.
I think it might be more common than you think. A remaining partner locked into an ORA agreement but with "newfound freedom".
Quote from: Untamed on Apr 03, 2024, 06:22 PMCan I ask you - why are you so focussed and concerned about occupants spending their capital? Are you looking at this from the perspective of you, as a family member of someone who might choose to move to an RV? Or are you "imagining" not wanting to lose your own capital down the track, if you are the one considering RV living?
I won't quote the exact views of family members, both young and old, but I'll give you the general gist: not very positive. I see the management fee, and also not handing out capital gains, as huge weaknesses: for perception of the industry, potential competition, and possible regulation.
Well they need to stop doing that.
It is
not their experience and it is
not their decision. Family members need to put their own feelings about RVs aside, and support their loved one(s) to make the best decision, based on what
they want, not what the family members want.
We need to throw this outdated "we must leave our kids an inheritance" BS, out the door! Our parents owe us nothing, and we, as their adult children, need to encourage them to spend their money however they wish. You really need to go visit some of these villages and have a chat to some residents. I know the rest home I work in, is not an RV, but I can tell you this. In the six years I have worked there, the only resident that ever wished she had not moved in, was a lady in her mid 60s with terminal cancer. She was an outdoorsy, farmer type and fiercely independent. But she literally had no choice but to move to a rest home, as she could no longer live on her own. So no, she didn't want to be there, or anywhere else. It wouldn't have mattered which rest home or which care suite or whatever, she went to - she didn't want to leave her home. Which is completely understandable, and we all had a huge amount of empathy for her. Fortunately for her, she wasn't with us for long before she died, and she died peacefully, knowing we cared and she accepted that it was the only viable option for her.
Apart from this lady (who by the way, for those who know me well, told me many times I was fucked in the head ;) ), not one other resident regrets selling their house, and paying for their care until their cash assets were low enough to receive the government subsidy. It is their home and they will tell you they are very happy, and love being part of our rest home "family."
Anyway, the point I am trying to make, but getting sidetracked as usual, is ... family need to put their loved one
first. Forget about their damned inheritance. Like KW said, just help them make the decision because once they have made it, the money doesn't matter anymore. What matters is they are happy in their new home, with their new friends, and feel safe and cared for.
Quote from: Azz on Apr 03, 2024, 06:27 PMThanks for writing that up. But it is a concept I'm providing. People really think like that. They don't literally want to move into a village in their 50s. They're weighing an RV up (say for a family member who has asked about it) and cannot get past the management fee situation. They relate it to their own experience.
OCA is 70 entry age like the other 2.
Quote from: Azz on Apr 03, 2024, 06:35 PMI won't quote the exact views of family members, both young and old, but I'll give you the general gist: not very positive. I see the management fee, and also not handing out capital gains, as huge weaknesses: for perception of the industry, potential competition, and possible regulation.
There are options of RV's that do share the capital gains, and have lower fees, albeit lower 'quality' amenities etc, perhaps you/your family should consider them?
I was wondering given you other investing interests, why you're attracted to conversing on OCA specifically? Most of what you have brought up would be well placed on the generic RV thread, as it applies to all listed RV's.
Quote from: Azz on Apr 03, 2024, 06:35 PMpotential competition
Already at least one company is paying some or all of a capital gain (I don't recall which company, nor how much). Surely OCA needs to respond to this?
Quote from: Buzz on Apr 03, 2024, 06:41 PMMost of what you have brought up would be well placed on the generic RV thread, as it applies to all listed RV's.
That's true; OCA seems to get it from everyone when it's more the industry. But this competition bit is specific to OCA, I'm wondering what's going to happen for them in regards to matching the competition.
Quote from: Azz on Apr 03, 2024, 06:35 PMI think it might be more common than you think. A remaining partner locked into an ORA agreement but with "newfound freedom".
I won't quote the exact views of family members, both young and old, but I'll give you the general gist: not very positive. I see the management fee, and also not handing out capital gains, as huge weaknesses: for perception of the industry, potential competition, and possible regulation.
How old are you, and do you have a partner?
Most people who have had a partner/spouse die, rarely see that situation as "newfound freedom." Just saying.
Quote from: Buzz on Apr 03, 2024, 06:41 PMperhaps you/your family should consider them?
My family will not consider any of them. I'm here because of the stock and how, out of all the RV companies, it has this massive following. It intrigues me, maybe I'm missing something for the stock? I just can't see it, but you can I think - good on ya!
Quote from: Untamed on Apr 03, 2024, 06:45 PMHow old are you, and do you have a partner?
Most people who have had a partner/spouse die, rarely see that situation as "newfound freedom." Just saying.
Well maybe we move in different circles. :-)
Let me try and explain my thinking another way. If the industry could understand better how they are perceived, and, via competition, change the charging structure (ie, make it a little less "obvious" lol, I don't really mean obvious, but that's the situation right now: "you wanna leave?, you lose 30%") then sales would be much easier.
Quote from: Azz on Apr 03, 2024, 06:42 PMAlready at least one company is paying some or all of a capital gain (I don't recall which company, nor how much). Surely OCA needs to respond to this?
No they don't need to respond to this, none of the listed companies pay any capital gain, if fact only a few smaller fringe players do.
Another way to explain: I'm torn because what great possibilities, what a wonderful industry - but nah, "management fee, it is!"...
Quote from: Breezy on Apr 03, 2024, 06:55 PMNo they don't need to respond to this, none of the listed companies pay any capital gain, if fact only a few smaller fringe players do.
Thanks Breezy. I can't remember who it was.
But what do you mean by "My family will not consider any of them?"
Are you talking about your elderly grandparents/parents, not wanting to ever move to an RV? If that's the case, that is absolutely fine! It is their decision, and if RV life is not for them, nobody is going to force them. It is simply
one option, for some people.
I have no idea if OCA has "a massive following" or not. I certainly wouldn't say that is the case in this thread. This thread is full of anti-OCA posters in case you haven't noticed. But yes, there are still some of us who believe in the company. But if you don't like OCA that's your prerogative. You make your own investing decisions as to all of us. It isn't my job to convince you of OCA's worth. All I have to offer is a little insight into aged care (because that is actually what it is), and offer my experience as someone who has worked really hard to built trusted, respected, and caring relationships with the residents I care for. If it is of some value to some people, that's great. If not, they can scroll on by.
What I struggle to understand is why so many anti-OCA people, keep posting in this thread. Wouldn't your time be better spent contributing to discussions on companies you
do invest in?
Quote from: Azz on Apr 03, 2024, 06:48 PMMy family will not consider any of them. I'm here because of the stock and how, out of all the RV companies, it has this massive following. It intrigues me, maybe I'm missing something for the stock? I just can't see it, but you can I think - good on ya!
Quote from: Azz on Apr 03, 2024, 06:27 PMThanks for writing that up. But it is a concept I'm providing. People really think like that. They don't literally want to move into a village in their 50s. They're weighing an RV up (say for a family member who has asked about it) and cannot get past the management fee situation. They relate it to their own experience.
There are plenty of people in their 50s who want to move into a village. If you went to Australia, that's exactly what you will find. Its just NZ that limits it to over 70's. I'd consider buying into an over 50's village in the future if I decide to move to Queensland, the only problem is that you cant currently get into one they are so popular.
One of Australia's largest property companies (Stockland) has heaps of them.
https://www.stockland.com.au/halcyon-communities/halcyon-waters
This one comes with two community boats you can use :-)
https://www.stockland.com.au/halcyon-communities/vision-by-halcyon/lifestyle
I am actually surprised that no one has copied the Australian model in NZ - the difference is that you own your house (so you keep capital gains) but pay ground rent for the land in addition to your weekly service fees to the village operator. And because its rent, you qualify for the Govt accommodation subsidy. And because you dont own the land you dont pay stamp duty.
Sigh ... you don't get it. When (the vast majority of) people make a decision to move to an RV, or any other kind of Aged Care/Retirement living situation, they
they fully expect to be there for the rest of their life. That is precisely why, once they have made that decision, the money no longer matters. They have found their "home" and they have
no intention of ever moving again.
Which is why the continuity of care aspect of RV living, is so attractive. The introduction of Care Suites makes it even more attractive.
Quote from: Azz on Apr 03, 2024, 06:54 PMLet me try and explain my thinking another way. If the industry could understand better how they are perceived, and, via competition, change the charging structure (ie, make it a little less "obvious" lol, I don't really mean obvious, but that's the situation right now: "you wanna leave?, you lose 30%") then sales would be much easier.
Quote from: Untamed on Apr 03, 2024, 06:58 PMI have no idea if OCA has "a massive following" or not. I certainly wouldn't say that is the case in this thread. This thread is full of anti-OCA posters in case you haven't noticed. But yes, there are still some of us who believe in the company. But if you don't like OCA that's your prerogative. You make your own investing decisions as to all of us. It isn't my job to convince you of OCA's worth. All I have to offer is a little insight into aged care (because that is actually what it is), and offer my experience as someone who has worked really hard to built trusted, respected, and caring relationships with the residents I care for. If it is of some value to some people, that's great. If not, they can scroll on by.
What I struggle to understand is why so many anti-OCA people, keep posting in this thread. Wouldn't your time be better spent contributing to discussions on companies you do invest in?
Fair points.
But: Sometimes people change their mind on a stock. If people only post to threads where they are positive they won't ever be convinced otherwise for those they are negative on! And I think lately OCA longs have done a great job in responding.
Quote from: Untamed on Apr 03, 2024, 06:58 PMBut what do you mean by "My family will not consider any of them?"
Are you talking about your elderly grandparents/parents, not wanting to ever move to an RV? If that's the case, that is absolutely fine! It is their decision, and if RV life is not for them, nobody is going to force them. It is simply one option, for some people.
It's (an RV) just not going to happen, across quite a large family. "Care" is being looked at in a different manner from an RV too. And I've generally kept my mouth shut on the issue lol [within my family I mean].
Quote from: KW on Apr 03, 2024, 07:02 PMThere are plenty of people in their 50s who want to move into a village. If you went to Australia, that's exactly what you will find. Its just NZ that limits it to over 70's. I'd consider buying into an over 50's village in the future if I decide to move to Queensland, the only problem is that you cant currently get into one they are so popular.
One of Australia's largest property companies (Stockland) has heaps of them.
https://www.stockland.com.au/halcyon-communities/halcyon-waters
This one comes with two community boats you can use :-)
https://www.stockland.com.au/halcyon-communities/vision-by-halcyon/lifestyle
I am actually surprised that no one has copied the Australian model in NZ - the difference is that you own your house (so you keep capital gains) but pay ground rent for the land in addition to your weekly service fees to the village operator. And because its rent, you qualify for the Govt accommodation subsidy. And because you dont own the land you dont pay stamp duty.
Thanks for posting that!
Quote from: Azz on Apr 03, 2024, 06:48 PMMy family will not consider any of them. I'm here because of the stock and how, out of all the RV companies, it has this massive following. It intrigues me, maybe I'm missing something for the stock? I just can't see it, but you can I think - good on ya!
As an investment, as far as I can see, OCA or any other listed RV won't interest you. There's nothing in the RV sector in TOTO that you will find attractive as an investment, at this stage in your life.
Maybe it's just that it provides a platform for you, to express your views and frankly - ignorance of the sector, the companies, their business models or the long term investment opportunity, and yet some people politely reply, but are probably thinking, why are you/they wasting their time?
Yes, I get that "care" is seen very differently from RV living. But in actual fact, it is a significant part of the whole model. Even villas and unserviced apartments, have an emergency "call bell" system, so occupants can call an RN in the event of an emergency. That is low level "care." Serviced apartments offer housekeeping services and laundry services - also "care." Most people only think of care as being personal cares provided at standard rest home, hospital or dementia level beds. But care encompasses so much more than that.
Yes, in my job I help people shower or use the toilet. I assist people with mobilising. I help them dress/undress. I serve their meals, clear their dishes, brush their teeth, do their laundry and ironing. But the most important aspect of the care I provide is, none of those things. It is the personal interaction I have with them every day. It is the sharing of aspects of my life, so they can get to know me as a person. It is listening to their amazing stories. It is the laughter we share, the respect I have for them as individuals and the time I put into building relationships so that they feel safe with me. THAT is care.
Most people ... and I do mean most ... do not get it.
Quote from: Azz on Apr 03, 2024, 07:09 PMIt's (an RV) just not going to happen, across quite a large family. "Care" is being looked at in a different manner from an RV too. And I've generally kept my mouth shut on the issue lol.
Quote from: Azz on Apr 03, 2024, 06:45 PMThat's true; OCA seems to get it from everyone when it's more the industry. But this competition bit is specific to OCA, I'm wondering what's going to happen for them in regards to matching the competition.
"This competition bit" is not specific to OCA at all. None of the listed RV's do what you think is more equitable. None of them, they all pitch to a different market, generically those who can afford a 'comfortable' retirement living experience, and specifically through to end of life.
Quote from: Buzz on Apr 03, 2024, 07:21 PMAs an investment, as far as I can see, OCA or any other listed RV won't interest you. There's nothing in the RV sector in TOTO that you will find attractive as an investment, at this stage in your life.
Maybe it's just that it provides a platform for you, to express your views and frankly - ignorance of the sector, the companies, their business models or the long term investment opportunity, and yet some people politely reply, but are probably thinking, why are you/they wasting their time?
It's not about a views platform at all. And I'm agnostic to what I invest in. I wouldn't invest in a retirement home operator because I'm close to retirement lol, that doesn't make sense to me. I would certainly be interested in an RV company as an investment that when I searched online didn't result in lots of people and actual websites complaining about the management fee. It's just this one thing basically (that and capital gains). Don't shoot the messenger!
Quote from: Buzz on Apr 03, 2024, 07:23 PM"This competition bit" is not specific to OCA at all. None of the listed RV's do what you think is more equitable. None of them, they all pitch to a different market, generically those who can afford a 'comfortable' retirement living experience, and specifically through to end of life.
Point taken; I thought one did. If it's just a small player then agree that's not really much competition.
Quote from: Untamed on Apr 03, 2024, 07:21 PM... It is the personal interaction I have with them every day. It is the sharing of aspects of my life, so they can get to know me as a person. It is listening to their amazing stories. It is the laughter we share, the respect I have for them as individuals and the time I put into building relationships so that they feel safe with me. THAT is care.
Most people ... and I do mean most ... do not get it.
This, and precisely this, is my enduring memory of the years of visiting my parents at the 'rest home', at least weekly, often twice weekly. So many fond memories, laughs and happy times we all had, they were so happy, safe, contended and surrounded by like minded folks. They're all dead now though, parents and the folks that were there at the time. I think that the inheritance money we beneficiaries forfeited, which was substantial, is nothing in the scheme of things compared to the everlasting feeling of having done the right and best things for our loved ones, and ourselves, when they no longer had the wherewithal to make the decisions for themselves.
Quote from: Azz on Apr 03, 2024, 07:38 PMPoint taken; I thought one did. If it's just a small player then agree that's not really much competition.
Not sure if this would be considered a small player or not, but certainly competition of some sort:
-----------------------
Vivid Living communities are purpose-built by Fletcher Living (a wholly owned subsidiary of Fletcher Building Limited)
* 50% share in capital gains
* Low Deferred Management Fee of 15%
https://vividliving.co.nz/our-benefits
-----------------------
Quote from: Azz on Apr 03, 2024, 07:35 PMIt's not about a views platform at all. And I'm agnostic to what I invest in. I wouldn't invest in a retirement home operator because I'm close to retirement lol, that doesn't make sense to me. I would certainly be interested in an RV company as an investment that when I searched online didn't result in lots of people and actual websites complaining about the management fee. It's just this one thing basically (that and capital gains). Don't shoot the messenger!
What makes the retirement villager sector's ability to have such rapid growth of their assets is the occupational right agreement model...
Take that away and I'm no longer interested in holding Oceania shares.
Quote from: Azz on Apr 03, 2024, 07:51 PMNot sure if this would be considered a small player or not, but certainly competition of some sort:
-----------------------
Vivid Living communities are purpose-built by Fletcher Living (a wholly owned subsidiary of Fletcher Building Limited)
* 50% share in capital gains
* Low Deferred Management Fee of 15%
https://vividliving.co.nz/our-benefits
-----------------------
They are seriously tiny.
Quote from: ValueNZ on Apr 03, 2024, 08:03 PMThey are seriously tiny.
Fletcher Building? Um...
Quote from: Azz on Apr 03, 2024, 07:51 PMNot sure if this would be considered a small player or not, but certainly competition of some sort:
-----------------------
Vivid Living communities are purpose-built by Fletcher Living (a wholly owned subsidiary of Fletcher Building Limited)
* 50% share in capital gains
* Low Deferred Management Fee of 15%
https://vividliving.co.nz/our-benefits
-----------------------
They don't provide a continuum of care so different market.
Quote from: Azz on Apr 03, 2024, 08:04 PMFletcher Building? Um...
No, just the retirement village branch of FBU. I didn't realise it even existed until now.
Quote from: ValueNZ on Apr 03, 2024, 08:00 PMWhat makes the retirement villager sector's ability to have such rapid growth of their assets is the occupational right agreement model...
Take that away and I'm no longer interested in holding Oceania shares.
To truely understand the business model, is to recognise the importance of
leveraging the 'float' (a concept harangued elsewhere, but absolutely true). Debt free money that never has to be repaid, incorrectly (imo) held as a liability when in fact it is free money that is leveraged for growth.
These are property development companies (the listed RV's) that have a unique business model, that sustains development and growth in income accordingly. I'd expect a company like this to fly close to the wind on cashflows and profits, let alone sharing profits with shareholders.
It takes time to get our heads around this because we have to factor in, where in the lifecycle of our investment, are these RV's? Until recently, all of them were full-on development, but now they're tempering expectations because apparently immediate ROI is important! It isn't.
OCA imo is still early stage, albeit making great progress, it was until recently just focused on growth, and doing a good job of it, again imo. No one would buy OCA if they didn't buy into their longer term development strategy, but few lately seem to acknowledge that. All the other stuff around that is 'feel good', but it's not what makes the company grow, or generates the money.
It's like a high growth software development company, even loss making (as so many are), all they have to do is fire all the software developers (builders in this case), stop development, and the cash flows flood in from the customer base they already have. But that would be madness, wouldn't it. Kill growth to satisfy a bunch of short term shareholders eager for income.
Again imo, it takes time to get ones head around investing in the RV sector, and/or the individual RV's which are at different points in their maturity. But that said, I'm more than happy with OCA (I own a bit of all of them, but overweight OCA), the sector already has, and will continue do very well in the long term, for investors. The tailwinds cannot be ignorned
It might not be instant capital gains money like some NAZ high fliers, but I reserve another portion of my portfolio for speculation. This, OCA and the other RV's are not speculation, it is bona fide long hold.
All imo.
Quote from: ValueNZ on Apr 03, 2024, 08:23 PMNo, just the retirement village branch of FBU. I didn't realise it even existed until now.
They're NOT "retirement villages", they are standalone rentals for retirees with no continuum of care. Big difference, not even comparable to any of the listed RV's.
This doesn't even come close to competing with traditional RVs.
Vivid Living at Red Beach offers a range of 1, 2, & 3-bedroom independent villas, with a central residents' lounge and onsite Community Manager. The residents' lounge includes a kitchen, tea & coffee facilities, a large screen TV, gas fireplace, a reading space, indoor and outdoor seating, and a BBQ patio area looking out onto landscaped shared central green spaces. The residents' lounge provides a friendly connection space for residents and can also be booked for private functions.It is simply a collection of independent living villas, with a pretty basic "residents lounge" and garden space. Zero care element.
Quote from: Azz on Apr 03, 2024, 07:51 PMNot sure if this would be considered a small player or not, but certainly competition of some sort:
-----------------------
Vivid Living communities are purpose-built by Fletcher Living (a wholly owned subsidiary of Fletcher Building Limited)
* 50% share in capital gains
* Low Deferred Management Fee of 15%
https://vividliving.co.nz/our-benefits
-----------------------
Actually, they are
not rentals. They are for purchase. But I see nothing even remotely attractive about this type of "village." It has literally
none of the benefits traditional RVs provide.
Quote from: Buzz on Apr 03, 2024, 08:33 PMThey're NOT "retirement villages", they are standalone rentals for retirees with no continuum of care. Big difference, not even comparable to any of the listed RV's.
Quote from: Buzz on Apr 03, 2024, 08:30 PMTo truely understand the business model, is to recognise the importance of leveraging the 'float' (a concept harangued elsewhere, but absolutely true). Debt free money that never has to be repaid, incorrectly (imo) held as a liability when in fact it is free money that is leveraged for growth.
These are property development companies (the listed RV's) that have a unique business model, that sustains development and growth in income accordingly. I'd expect a company like this to fly close to the wind on cashflows and profits, let alone sharing profits with shareholders.
It takes time to get our heads around this because we have to factor in, where in the lifecycle of our investment, are these RV's? Until recently, all of them were full-on development, but now they're tempering expectations because apparently immediate ROI is important! It isn't.
OCA imo is still early stage, albeit making great progress, it was until recently just focused on growth, and doing a good job of it, again imo. No one would buy OCA if they didn't buy into their longer term development strategy, but few lately seem to acknowledge that. All the other stuff around that is 'feel good', but it's not what makes the company grow, or generates the money.
It's like a high growth software development company, even loss making (as so many are), all they have to do is fire all the software developers (builders in this case), stop development, and the cash flows flood in from the customer base they already have. But that would be madness, wouldn't it. Kill growth to satisfy a bunch of short term shareholders eager for income.
Again imo, it takes time to get ones head around investing in the RV sector, and/or the individual RV's which are at different points in their maturity. But that said, I'm more than happy with OCA (I own a bit of all of them, but overweight OCA), the sector already has, and will continue do very well in the long term, for investors. The tailwinds cannot be ignorned
It might not be instant capital gains money like some NAZ high fliers, but I reserve another portion of my portfolio for speculation. This, OCA and the other RV's are not speculation, it is bona fide long hold.
All imo.
Yeah, I agree with all of that. I wonder how many shareholders actually understand the float... Likely very few. Of course, that's to our benefit with the share price being so low.
Quote from: ValueNZ on Apr 04, 2024, 07:56 AMthat's to our benefit with the share price being so low.
Are there any other "features" such as the "float" that will help get the share price even lower?
Quote from: Breezy on Apr 12, 2024, 06:19 PMunsubstantiated rubbish
This is an impossible situation for me.
If I substantiate my views on OCA - you call me a troll.
If I don't substantiate my views on OCA - you say I'm talking unsubstantiated rubbish.
I'm going to do this, I'm making this statement, and I'll leave this thread to its echo chamber:
I think OCA is in all sorts of bother, but why should I help thin-skinned longs who seem to have a personal attachment to a stock. The stock market is a tough game, it's not advisable to shut down opinion and get upset with people who suggest something you don't agree with.
And: Never fall in love with a stock.
Quote from: Azz on Apr 12, 2024, 06:38 PMI think OCA is in all sorts of bother
Why exactly do you think this, what is your thesis? Spell it out for us 'longs' who are apparently blind to something important that makes our investment so vulnerable. Perhaps add into this as well, why you said OCA is prone imminent financial meltdown, or words to that effect.
Thank you.
YUP still a going concern as far as the last financial report and will bump along for a while yet... Going to be a difficult few years for a lot of sectors not just this one...
Land ... no much more being made and some spots in NZ are likely never going to reduce much in value.
Its a hard lesson to learn but NZ land is very valuable.
AS society gets more risky a safe place to be housed in later years will stay in demand.
HealthCarePro (AKA UTD) puts a good case for care units as well.. You have to be in the industry perhaps to understand its complicated Accounting model.. IE Treatment of the DMF.
Quote from: Buzz on Apr 12, 2024, 08:24 PMQuoteI think OCA is in all sorts of bother
Why exactly do you think this, what is your thesis? Spell it out for us 'longs' who are apparently blind to something important that makes our investment so vulnerable. Perhaps add into this as well, why you said OCA is prone imminent financial meltdown, or words to that effect.
Thank you.
Crickets.
Yeah, the worst that could happen here is a HGH style deeply discounted capital raise to get on top of their debt. Talk of OCA's demise is a load of rubbish. There is however a very real risk that earnings could stay flat for several more years. That's exactly what the market is saying will happen with the share price where it is . (See ARV thread for Forbar's forward eps for that stock which is very sobering stuff)
Quote from: Basil on Apr 14, 2024, 11:10 AMThere is however a very real risk that earnings could stay flat for several more years.
True, that's why as investors we should be looking 10 years in advance. OCA is doing the right thing, they could easily boost earnings if they wanted but instead are choosing to grow the float, which is IMO currently more value accretive.
The questions we should be asking ourselves are:
What is Oceania's asset base likely to be in 10 years? And what implication does this have for earnings at a low ROA? What would an individual be willing to pay for this large asset base in a private transaction?
Even without this "pot of gold" at the end of the rainbow, even today's earnings are a pretty decent return. Maverick posted this a couple months ago.
"If OCA make the usual 8c /share of the last 5 years and you can now buy that share for 60c ....that`s a 13% P/A.
If OCA manage to sell that $363m of available new stock and over the next 2 years which should make a progressive profit up to $14c/share 2026...thats 23% P/A"
I see Oceania as having a low downside (usual 8c /share), while having an incredibly high upside, with the latter being more likely.
Quote from: ValueNZ on Apr 14, 2024, 12:11 PMTrue, that's why as investors we should be looking 10 years in advance
Each investor is different. You can't interpose your timeline onto others as their appropriate timelineSomeone in their 70's who needs dividend income for retirement would probably be well served considering a different investment. The prognosis for the entire sector in terms of dividend payments in the next few years is grim.
Quote from: ValueNZ on Apr 14, 2024, 12:11 PMWhat would an individual be willing to pay for this large asset base in a private transaction?
I think that's largely irrelevant as we've seen time and again, good solid takeovers offers rejected out of hand because it doesn't serve the directors best interests. ARV @ $1.70 and STU @ $1.90 are good examples.
Famous investors like Ben Graham have set the benchmark that no growth companies should trade on a PE of 8.5 when the risk free rate is 4%, (currently the 10 year N.Z. Govt stock rate is 4.9% which implies a no growth PE of just under 8. This takes into account market risk, stock specific risk and provides a fair risk adjusted premium for equity risk. A PE of gives an earnings yield of 12.5%. Multiply 8 x 8 cps = 64 cents so the market is saying and I agree with the market, the shares are currently fairly priced and are likely to remain around about where they are until such time as OCA can prove they can grow earnings.
An earnings contraction cannot be ruled out either as they dial back their build rate. As noted above ARV's outlook eps outlook makes for very sober reading.
Quote from: ValueNZ on Apr 14, 2024, 12:11 PMIf OCA manage to sell that $363m of available new stock and over the next 2 years
Such a scenario does not seem even remotely plausible to me. They have an ocean of unsold stock and their most recent run rate of care suites, of which they have several hundred, suggests more that 4 years to sell down existing stock and that assumes they completely stop building new units, which of course won't happen, its likely they will progress future developments at a reduced run-rate.
I know it's not a popular view but I hold it nonetheless and I see the shares as fairly valued at the current level of 63-64 cents. The future direction of the share price will likely be very heavily influenced by the rate at which they can reduce their unsold stock. I only bought a very modest (<2% portfolio position) on the recent index exclusion sell down. It's bounced a bit, (dead cat bounce which was the predominant reason I bought) and the very modest level of my share investment here is nothing more meaningful than a distraction so I sold it down recently but remain with a moderate position in the bonds.
Underpinning that decision was the fact that forecasts I have seen for even the market darling SUM who are executing with absolute perfection are for only very minor eps growth in the years ahead. Both ARV and RYM face serious earnings per share challenges too. OCA is very unlikely to be any different to the others.
I actually don't think the entire sector provides decent returns in any environment other than a booming housing market.
Quote from: Basil on Apr 14, 2024, 02:06 PMEach investor is different. You can interpose your timeline onto others as their appropriate timelineSomeone in their 70's who needs dividend income for retirement would probably be well served considering a different investment.
No way anyone should be in equities that has a timeline of less than 10 years.
Quote from: Basil on Apr 14, 2024, 02:06 PMThe prognosis for the entire sector in terms of dividend payments in the next few years is grim.
I think that's largely irrelevant as we've seen time and again, good solid takeovers offers rejected out of hand because it doesn't serve the directors best interests. ARV @ $1.70 and STU @ $1.90 are good examples.
I wasn't suggesting that OCA will get taken over (although it's possible), just to view the purchase of the stock in the same way you would for the entire company. I think ARV rejecting the $1.70 takeover bid was actually in the shareholder's best interests. I wouldn't want OCA taken over at $1. Maybe a $1.50.
Quote from: Basil on Apr 14, 2024, 02:06 PMFamous investors like Ben Graham have set the benchmark that no growth companies should trade on a PE of 8.5 when the risk free rate is 4%, (currently the 10 year N.Z. Govt stock rate is 4.9% which implies a no growth PE of just under 8. This takes into account market risk, stock specific risk and provides a fair risk adjusted premium for equity risk. A PE of gives an earnings yield of 12.5%. Multiply 8 x 8 cps = 64 cents so the market is saying and I agree with the market, the shares are currently fairly priced and are likely to remain around about where they are until such time as OCA can prove they can grow earnings.
An earnings contraction cannot be ruled out either as they dial back their build rate. As noted above ARV's outlook eps outlook makes for very sober reading.
Except OCA is growing its asset base very quickly... AKA not a no-growth company as this will eventually translate to EPS growth.
Quote from: Basil on Apr 14, 2024, 02:06 PMSuch a scenario does not seem even remotely plausible to me. They have an ocean of unsold stock and their most recent run rate of care suites, of which they have several hundred, suggests more that 4 years to sell down existing stock and that assumes they completely stop building new units, which of course won't happen, its likely they will progress future developments at a reduced run-rate.
Only time will tell who was right I guess.
Quote from: ValueNZ on Apr 14, 2024, 02:26 PMExcept OCA is growing its asset base very quickly... AKA not a no-growth company as this will eventually translate to EPS growth.
They have a 7 year history of no growth in eps and ARV has 10 years under its belt with the same result. Even RYM which is a huge company has been in existence since 1996, 28 years, is suffering from eps contraction is this market which renders your assumption that growth in earnings will eventually come as baseless. They have to prove to the market they can grow eps. OCA and ARV have both failed in that regard and that's the reason both their share prices are depressed. RYM also struggling and reflected in their share price. Even SUM who are widely regarded as executing with true excellence which were ~ $9 four years ago when the pandemic struck have only recovered a couple of bucks, which is not much for investors who get a low dividend yield from them. Size is no guarantee of earnings growth. Even executing with absolute precision as SUM are doing is only generating very tepid eps growth which brings me in a nice circle back to my thesis that equity investment in this sector is best avoided in all conditions other than a booming housing market. Even then in those conditions, which we may not have again for a very long time due to the lack of affordability of houses, maybe you are better off owning your own rental properties? With vast amounts of unit supply coming to the market from listed and unlisted operators, my contention is for the foreseeable future, the boom times this sector once enjoyed, which neither OCA nor ARV have been able to capitalize on, are over. Bond returns from this sector, purchased on the secondary market at circa 7% yield to maturity provide a satisfactory return in my opinion and I hold a moderate position of corporate bonds in ARV and OCA.
Solid update. Sales green shoots.
https://www.nzx.com/announcements/429532 (https://www.nzx.com/announcements/429532)
Well this is very interesting. I have still not received a response to the
three emails sent - the last one, directly to Brent himself. I know of at least two others who have had zero response to their communications.
The timing of this announcement feels like an attempt at appeasement/damage control. Doesn't excuse their complete lack of respect for shareholders, but the positive news is very welcome.
Quote from: Mos on Apr 15, 2024, 08:39 AMSolid update. Sales green shoots.
https://www.nzx.com/announcements/429532 (https://www.nzx.com/announcements/429532)
WOW I am going to go have a drink. An update from this lot is worth celebrating.
Seems Oceania only sold about 69 new units in second half of year H224 .....new sales about the same as H223
No wonder a bit light on real detail ...hopefully thinking the market will go into raptures with some big numbers
Continued growth in resales is good .....but the new sales not good.in the context of more sales and even more sales
Getting the OCA guru on other channel to check this ...but I think I'm right
All very vague that announcement
Unlike Arvida no mention of sale prices or margins .....in other words an indication of underlying profit
Maybe Brent too embarrassed to come out say the FY result not that good.
The no growth in H2 sales could be put down to them apparently putting some H124 sales into H223 (just heresay I read on other channel)
My reading ......unless much higher development margins than in the past there will be only a modest increase on last years $58.6m underlying npat .....but they'll rave on about cash flow and balance sheet instead
Quote from: winner (n) on Apr 15, 2024, 09:33 AMAll very vague that announcement
Unlike Arvida no mention of sale prices or margins .....in other words an indication of underlying profit
Maybe Brent too embarrassed to come out say the FY result not that good.
The no growth in H2 sales could be put down to them apparently putting some H124 sales into H223 (just heresay I read on other channel)
My reading ......unless much higher development margins than in the past there will be only a modest increase on last years $58.6m underlying npat .....but they'll rave on about cash flow and balance sheet instead
I make new sales to be 154 units vs 128 units in F2023 - still way down on the 184 units & 222 units in F22 and F21 respectively.
No mention of average sale price and margins - could be bad news lurking there indeed.
St Helier must be a real drag on OCA given how little OCA is talking about this super premium hyped-up development.
Quotestill way down on the 184 units & 222 units in F22 and F21 respectively
Yeah but those were years when money was almost free and the whole housing market was going nuts. Hopefully we don't see that ridiculous level of stimulation again
Quote from: Teitei on Apr 15, 2024, 10:24 AMI make new sales to be 154 units vs 128 units in F2023 - still way down on the 184 units & 222 units in F22 and F21 respectively.
No mention of average sale price and margins - could be bad news lurking there indeed.
St Helier must be a real drag on OCA given how little OCA is talking about this super premium hyped-up development.
Why compare F21 & F22? Market is totally different beast then too today. It was free money back then and property sector was on steroids'. Its not today
Quote from: Mos on Apr 15, 2024, 08:39 AMSolid update. Sales green shoots.
https://www.nzx.com/announcements/429532 (https://www.nzx.com/announcements/429532)
Agree - quite positive, and they deserve praise for providing an update. Lets hope this is the start of a new reporting pattern :)
Quote from: Teitei on Apr 15, 2024, 10:24 AMI make new sales to be 154 units vs 128 units in F2023 - still way down on the 184 units & 222 units in F22 and F21 respectively.
No mention of average sale price and margins - could be bad news lurking there indeed.
St Helier must be a real drag on OCA given how little OCA is talking about this super premium hyped-up development.
Good to see sales (both new as well as re-sales) improving - we well might have passed the bottom! And sure - if we are currently on the early incline after rock bottom, nobody in their right mind will expect for FY24 stellar returns.
Good to see as well an update on the divestment front, and hey - they talk about $40m in line with book valuation. Maybe NTA does mean something after all when trying to value companies?
Anyway, but lets not allow some good news to spoil the bashing party ... I am sure some people around this thread will just keep doing whatever they think they are best at, whether it makes sense or not.
Looks like its another year of no earnings growth as I expected. No sales increase in 2H despite ARV seeing an uptick and those 2H sales are based on a record level of unsold stock. Unsold stock level up yet again in FY24. I expect much the same in FY25 Not surprised the market is underwhelmed .
Property market not too bad last quarter. Number of sales in March 24 Qtr v Dec 23 Qtr were UP (REINZ data)
So comparing March 24 Qtr v Dec 23 for RV outfits
Number of New Sales -
ARV UP
OCA DOWN
SUM UP
Number of Resales -
ARV UP
OCA DOWN
SUM UP
Property showed a bit more life in March quarter. ARV and SUM saw more sales than December but OCA have reported less sales.
Supply not an issue as all say they have plenty of stock on hand
Something not quite right with OCA selling less while others are selling more. I'm trying to make sense of it but struggling.
Wonder why that's why Brent was a bit vague in the announcement ...almost a non announcement ...but it keep me occupied for a while ...and Speedy Az still got his walk.
No RYM numbers yet
They said - Oceania has completed a total of 182 development units in the 12 months to 31 March 2024.
Sold 153 units this year
Does this mean number of unsold new units has gone up
With 224 units expected to be completed in F25 let's hope sales boom in next year or so.
Quote from: Basil on Apr 15, 2024, 12:45 PMLooks like its another year of no earnings growth as I expected. No sales increase in 2H despite ARV seeing an uptick and those 2H sales are based on a record level of unsold stock. Unsold stock level up yet again in FY24. I expect much the same in FY25 Not surprised the market is underwhelmed .
The whole NZX is suffering from long Covid so can't really be anything but underwhelmed.
Quote from: BlackPeter on Apr 15, 2024, 11:04 AMAgree - quite positive ......
Anyway, but lets not allow some good news to spoil the bashing party ... I am sure some people around this thread will just keep doing whatever they think they are best at, whether it makes sense or not.
Why the aggro? Some of us are simply and imo, rightly posting our views as we see the 'update'.
As you know, it's all about market perspective about whether the update is better, worse or line with expectations.
The sp reaction (down) says the market is disappointed. So am I as I expected OCA to update on sales and margins.
Increasing sales is good but if it is at the expense of margins?
Dis. I read between the lines, did not like what I read and decided to let go of the shares I bought during the index selldown.
Given that almost everything was "down" today, I don't think you can legitimately make that assumption. Wait and see what the next few days bring.
Quote from: Teitei on Apr 15, 2024, 06:03 PMThe sp reaction (down) says the market is disappointed.
Quote from: Untamed on Apr 15, 2024, 06:21 PMGiven that almost everything was "down" today, I don't think you can legitimately make that assumption. Wait and see what the next few days bring.
Market recovered towards the close - down only 0.1%. OCA led the decliners while the other RV stocks held steady.
But fair enough - let's see what the next few days bring.
Guess 30m shares from the index selldown are still sloshing around.
Looking at the numbers released today, here are the volumes per half year (HY) and the Year on Year % change (Yoy%):
Capture - Copy.JPG
H1 was +13% versus last year, H2 was +19% versus last year, overall is +16%.
For Bars brief review
Oceania Healthcare's (OCA) FY24 sales update was below our expectations. 2H24 sales softened from a solid 1H24 and is illustrative of the current subdued housing market. While recent commentary on its 'The Helier' development has been constructive, it appears the remainder of its new sales inventory is proving a tougher sell in the current housing market. But OCA continues to hold prices steady, and any uptick in sales activity is likely the positive catalyst the stock needs to sell its inventory and reduce debt. We still remain of the view that net debt should fall in FY25 and see this update more as a delay in its turnaround rather than a cancellation. Encouragingly, further non-core site sales at book value provide further support to its book valuation. OCA trades at ~0.45x book value and we retain our OUTPERFORM rating.
What's changed?
Earnings: FY24/FY25/FY26 underlying earnings down -24%/-9%/-4% on slower new sales
Target price: Decreased to NZ$0.95 (from NZ$1.02) due to lower annuity EBITDA and higher net debt.
New sales — solid sales at The Helier, softer elsewhere
OCA reported 2H24 new sales comfortably below our expectations, this is despite solid sales at its flagship The Helier development. In February OCA stated in news articles it had applications for/had sold 20 apartments and four care suites at The Helier, up from six in November (only one was settled in 1H24). These sales achieved in the six months since opening constitute ~25% of the apartments at The Helier. We believe this is a solid result, however, this implies OCA sold ~50 units from its other new sales inventory of ~330 units in 2H24. We view this as soft despite volatility in new sales period to period and the current subdued housing market backdrop.
Sales of non-core sites at book value encouraging
OCA's sale of three further non-core sites and a land parcel at book value is encouraging. This provides another data point to support the book valuations; with OCA trading at less than half its total book value we see valuation as attractive. It had seven sites held for sale at its 1H24 result and has sold four of these over the period (only one land parcel settled in 2H24). Of the NZ$40m in proceeds achieved, NZ$13m was received in 1H24, we estimate ~NZ$2m will be received in 2H24 and the remainder in 1H25.
Build rate guidance in-line, net debt higher on lower sales proceeds
OCA's FY24 deliveries and FY25 build rate guidance were in-line with our expectations and company commentary at its 1H24 result. As a result of the soft sales our net debt estimate increases and we move our expectation of peak net debt forward six months from 1H24 to FY24. Unsold new stock remains elevated for OCA and any pick up in housing market turnover will likely be the catalyst needed to sell through this and drive: (1) a reduction in net debt, (2) an uplift in earnings, and (3) a likely re-rating of the stock.
Thanks GWD
Under what's changed they say FY24/FY25/FY26 underlying earnings down -24%/-9%/-4% on slower new sales
As a matter of interest did they say what the forecasted underlying earnings for F24 in $ terms is?
Hopefully this helps W69?
Oceania Healthcare Limited (OCA)
link
Priced as at 15 Apr 2024 (NZ$) 0.61
12-month target price (NZ$)* 0.95
Expected share price return 55.7%
Net dividend yield 5.0%
Estimated 12-month return 60.7%
Carbon and ESG (C&ESG)**
C&ESG rating B+
C&ESG score 65.4%
Sector average C&ESG score 61.6%
NZ average C&ESG score 59.7%
Profit and Loss Account (NZ$m) 2022A 2023A 2024E 2025E 2026E
Revenue 288.6 306.8 319.3 346.4 370.6
Normalised EBITDA 76.2 76.0 70.9 91.0 102.6
Depreciation and amortisation (10.2) (8.9) (9.3) (9.8) (11.5)
Normalised EBIT 66.0 71.2 61.6 81.2 91.1
Net interest (9.3) (12.6) (16.0) (16.8) (16.3)
Associate income 0 0 0 0 0
Tax 0 0 0 0 0
Minority interests 0 0 0 0 0
Normalised NPAT 56.7 58.7 45.6 64.4 74.8
Abnormals/other 4.4 (43.1) 6.1 (8.6) (10.1)
Reported NPAT 61.1 15.6 51.7 55.9 64.7
Normalised EPS (cps) 8.1 8.2 6.3 8.9 10.3
DPS (cps) 4.4 3.2 2.0 3.0 3.5
Growth Rates 2022A 2023A 2024E 2025E 2026E
Revenue (%) 12.0 6.3 4.1 8.5 7.0
EBITDA (%) 16.4 -0.4 -6.7 28.4 12.7
EBIT (%) 14.0 7.9 -13.5 31.8 12.1
Normalised NPAT (%) 11.0 3.4 -22.2 41.2 16.0
Normalised EPS (%) 3.7 1.1 -23.0 40.9 16.0
Ordinary DPS (%) 29.4 -27.3 -37.5 50.0 16.7
Cash Flow (NZ$m) 2022A 2023A 2024E 2025E 2026E
EBITDA 76.2 76.0 70.9 91.0 102.6
Working capital change (28.5) 0.1 8.4 0.6 18.9
Interest & tax paid (9.3) (12.6) (16.0) (16.8) (16.3)
Other (47.7) (61.8) (85.6) (66.9) (85.3)
Operating cash flow (9.3) 1.8 (22.3) 8.0 19.8
Capital expenditure (172.8) (173.4) (215.6) (171.6) (177.6)
(Acquisitions)/divestments 114.8 68.4 105.0 185.8 199.8
Other (50.5) (51.2) 30.0 40.6 16.6
Funding available/(required) (117.8) (154.4) (103.0) 62.8 58.6
Dividends paid (19.4) (21.8) (6.8) (29.0) (25.3)
Equity raised/(returned) 20.0 0 0 0 0
(Increase)/decrease in net debt (117.2) (176.2) (109.7) 33.8 33.3
Balance Sheet (NZ$m) 2022A 2023A 2024E 2025E 2026E
Working capital 28.2 56.6 56.5 48.1 47.4
Fixed assets 2,065.1 2,309.9 2,589.3 2,772.7 2,985.1
Intangibles 8.6 6.7 6.7 6.7 6.7
Right of use asset 0 0 0 0 0
Other assets 3.9 107.7 64.8 64.8 64.8
Total funds employed 2,105.8 2,480.9 2,717.3 2,892.3 3,104.0
Net debt/(cash) 370.4 546.2 655.9 622.1 588.8
Lease liability 9.9 4.8 4.3 3.3 2.3
Other liabilities 817.8 972.0 1,054.2 1,237.1 1,443.7
Shareholder's funds 907.7 958.0 1,002.9 1,029.9 1,069.2
Minority interests 0 0 0 0 0
Total funding sources 2,105.8 2,480.9 2,717.3 2,892.3 3,104.0
* Forsyth Barr target prices reflect valuation rolled forward at cost of equity less the next 12-months dividend** Information on Forsyth Barr's Carbon and ESG (C&ESG) ratings can be found at www.forsythbarr.co.nz/corporate-news-events/c-and-esg-ratings-report
link
Spot valuations (NZ$)
EV/Annuity EBITDA 1.00
DDM 0.92
n/a n/a
Key WACC assumptions
Risk free rate 5.00%
Equity beta 0.88
WACC 8.7%
Terminal growth 1.5%
Valuation Ratios 2022A 2023A 2024E 2025E 2026E
EV/Sales (x) 2.6 2.9 3.3 3.2 3.0
EV/EBITDA (x) 9.9 11.8 14.7 12.0 10.7
EV/EBIT (x) 11.4 12.6 16.9 13.5 12.0
PE (x) 7.5 7.4 9.7 6.9 5.9
Price/NTA (x) 0.5 0.5 0.4 0.4 0.4
Free cash flow yield (%) -16.2 -24.5 -30.8 4.9 9.5
Adj. free cash flow yield (%) -5.1 -3.6 -8.9 -2.2 0.3
Net dividend yield (%) 7.2 5.2 3.3 4.9 5.7
Gross dividend yield (%) 7.2 5.2 3.3 4.9 5.7
Capital Structure 2022A 2023A 2024E 2025E 2026E
Interest cover EBIT (x) 7.1 5.7 3.9 4.8 5.6
Interest cover EBITDA (x) 8.2 6.0 4.4 5.4 6.3
Net debt/ND+E (%) 29.0 36.3 39.5 37.7 35.5
Net debt/EBITDA (x) 4.9 7.2 9.3 6.8 5.7
Key Ratios 2022A 2023A 2024E 2025E 2026E
Return on assets (%) 3.1 2.8 2.2 2.7 2.8
Return on equity (%) 6.2 6.1 4.5 6.3 7.0
Return on funds employed (%) 4.4 3.9 2.7 3.9 4.4
EBITDA margin (%) 26.4 24.8 22.2 26.3 27.7
EBIT margin (%) 22.9 23.2 19.3 23.4 24.6
Capex to sales (%) 59.9 56.5 67.5 49.5 47.9
Capex to depreciation (%) 1,691 1,943 2,329 1,755 1,539
Imputation (%) 0 0 0 0 0
Pay-out ratio (%) 54 39 32 34 34
Operating Performance 2022A 2023A 2024E 2025E 2026E
Care fees 174.6 180.2 186.3 189.5 200.8
Management fees 47.2 53.9 55.8 63.6 73.7
Other 12.5 17.5 22.6 21.5 22.2
Gain on resales 23.5 27.0 29.4 32.8 36.0
Gain on new sales 32.9 32.4 25.2 39.0 38.0
Total revenue 290.7 311.0 319.3 346.4 370.6
Key Drivers
Sales - new units 184 128 154 250 275
Sales - resold units 266 280 321 411 465
Gross development margin 28% 37% 24% 21% 19%
Gross resales margin 21% 22% 20% 18% 17%
Average new sales price (NZ$000) 637 680 682 743 726
Average resales price (NZ$000) 417 449 449 449 460
Portfolio Overview
ILU's 1,625 1,820 1,917 2,038 2,200
Care Suites (ORA) 613 687 772 867 972
Care Suites (PAC) 241 301 303 294 282
Care Beds 1,725 1,651 1,351 1,321 1,312
Total 4,204 4,459 4,343 4,520 4,766
Thanks again GWD
The line I was keen on seeing was -
Normalised NPAT ...F22 56.7 F23 58.7 F24 45.6 F25 64.4
That $45.6m for F24 is pretty shocking ......way less than F23
Unlike Arvida who sell heaps more things and make about the same Oceania seems to be going down the path of selling heaps more thing and making heaps less.
No worries ...F25 looks good and Forbar still have OUTPERFORM rating ...even though they have 10 million less/looking after shares than a few months ago.
As one who can extrapolate from incomplete information my forecast F24 Underlying Profit is $60.1m ...slightly more than F23 ...even though they sold heaps more
Difference between me and Forbars $45.6m extrapolation is my development gains number is a lot higher
Come end of May all will be revealed
Sales - new units 184 128 154 250 275
Normalised EPS (cps) 8.1 8.2 6.3 8.9 10.3
The lines that I think are most interesting. Shocking eps number for FY24, lowest ever.
Growth in underlying eps in their estimated figures for FY25 and FY26 are predicated on a massive uplift in sales of new units from 154 in FY24 to 250 and 275 in future years.
Those targets look "highly aspirational" to me and are not supported in any way whatsoever by sales performance in the last 2 years. I guess we will see in due course but even if somehow they do manage to get to 250 in FY25 that only lifts underlying eps to an estimate of 8.9 cents, not far north of the 8 cps they have been averaging since they listed 7 years ago.
Yeah. NAH... a far more plausible forecast is for a slight recovery in sales numbers this year, maybe another 10-15% increase of FY24's number of 154, perhaps 180 if they do well and that maybe gets eps back to 8 cps for FY25. Still believe there's simply no growth here and goal one is to get this company back to the average it has been earnings. 8 cps x a PE of 8 = 64 cents.
They keep building many more units than they can sell. This happens year in, year out and has done for many, many years now. Gearing must be pushing towards a very uncomfortable level, notwithstanding sales and contracts on some basic care villages and some land, which has to a fair extent already been eaten up with land purchases adjacent to the Helier at top market prices. I suspect, given their truly woeful communication in the past, there's a real chance the directors made this surprise one-off update to soften shareholders up for a forthcoming capital raise when the result is announced. Time will tell but a 1:4 at about 50 cents wouldn't surprise me.
Quote from: Basil on Apr 16, 2024, 09:22 AMSales - new units 184 128 154 250 275
Normalised EPS (cps) 8.1 8.2 6.3 8.9 10.3
The lines that I think are most interesting. Shocking eps number for FY24, lowest ever.
Growth in underlying eps in their estimated figures for FY25 and FY26 are predicated on a massive uplift in sales of new units from 154 in FY24 to 250 and 275 in future years.
Those targets look "highly aspirational" to me and are not supported in any way whatsoever by sales performance in the last 2 years. I guess we will see in due course but even if somehow they do manage to get to 250 in FY25 that only lifts underlying eps to an estimate of 8.9 cents, not far north of the 8 cps they have been averaging since they listed 7 years ago.
Yeah. NAH... a far more plausible forecast is for a slight recovery in sales numbers this year, maybe another 10-15% increase of FY24's number of 154, perhaps 180 if they do well and that maybe gets eps back to 8 cps for FY25. Still believe there's simply no growth here and goal one is to get this company back to the average it has been earnings. 8 cps x a PE of 8 = 64 cents.
They keep building many more units than they can sell. This happens year in, year out and has done for many, many years now. Gearing must be pushing towards a very uncomfortable level, notwithstanding sales and contracts on some basic care villages and some land, which has to a fair extent already been eaten up with land purchases adjacent to the Helier at top market prices. I suspect, given their truly woeful communication in the past, there's a real chance the directors made this surprise one-off update to soften shareholders up for a forthcoming capital raise when the result is announced. Time will tell but a 1:4 at about 50 cents wouldn't surprise me.
Balance kept predicting a CR for ages and he has been wrong to date just as I suspect you will be, perhaps just tossing a coin would give a better indication.
Quote from: Greekwatchdog on Apr 16, 2024, 07:43 AMFor Bars brief review
Oceania Healthcare's (OCA) FY24 sales update was below our expectations. 2H24 sales softened from a solid 1H24 and is illustrative of the current subdued housing market. While recent commentary on its 'The Helier' development has been constructive, it appears the remainder of its new sales inventory is proving a tougher sell in the current housing market. But OCA continues to hold prices steady, and any uptick in sales activity is likely the positive catalyst the stock needs to sell its inventory and reduce debt. We still remain of the view that net debt should fall in FY25 and see this update more as a delay in its turnaround rather than a cancellation. Encouragingly, further non-core site sales at book value provide further support to its book valuation. OCA trades at ~0.45x book value and we retain our OUTPERFORM rating.
What's changed?
Earnings: FY24/FY25/FY26 underlying earnings down -24%/-9%/-4% on slower new sales
Target price: Decreased to NZ$0.95 (from NZ$1.02) due to lower annuity EBITDA and higher net debt.
New sales — solid sales at The Helier, softer elsewhere
OCA reported 2H24 new sales comfortably below our expectations, this is despite solid sales at its flagship The Helier development. In February OCA stated in news articles it had applications for/had sold 20 apartments and four care suites at The Helier, up from six in November (only one was settled in 1H24). These sales achieved in the six months since opening constitute ~25% of the apartments at The Helier. We believe this is a solid result, however, this implies OCA sold ~50 units from its other new sales inventory of ~330 units in 2H24. We view this as soft despite volatility in new sales period to period and the current subdued housing market backdrop.
In other words, another profit downgrade. Which downgrade is this - #2?
And the 'solid sales' at THe Helier - I recall that it was more 'negotiations for the sale of 20 apartments' or words to that effect?
Quote from: Teitei on Apr 16, 2024, 09:45 AMIn other words, another profit downgrade. Which downgrade is this - #2?
And the 'solid sales' at THe Helier - I recall that it was more 'negotiations for the sale of 20 apartments' or words to that effect?
There are no target prices near the current market price so the worst and more is already priced in.
Quote from: Breezy on Apr 16, 2024, 09:49 AMThere are no target prices near the current market price so the worst and more is already priced in.
But that's what some posters here and on the other site were writing when the sp was 80c!
Quote from: Teitei on Apr 16, 2024, 10:08 AMBut that's what some posters here and on the other site were writing when the sp was 80c!
Dont know and my long term tp is more than double the current price (3 yrs) depends on what time frame your tp covers doesn't it.
Quote from: Basil on Apr 16, 2024, 09:22 AMSales - new units 184 128 154 250 275
Normalised EPS (cps) 8.1 8.2 6.3 8.9 10.3
The lines that I think are most interesting. Shocking eps number for FY24, lowest ever.
Growth in underlying eps in their estimated figures for FY25 and FY26 are predicated on a massive uplift in sales of new units from 154 in FY24 to 250 and 275 in future years.
Those targets look "highly aspirational" to me and are not supported in any way whatsoever by sales performance in the last 2 years. I guess we will see in due course but even if somehow they do manage to get to 250 in FY25 that only lifts underlying eps to an estimate of 8.9 cents, not far north of the 8 cps they have been averaging since they listed 7 years ago.
Yeah. NAH... a far more plausible forecast is for a slight recovery in sales numbers this year, maybe another 10-15% increase of FY24's number of 154, perhaps 180 if they do well and that maybe gets eps back to 8 cps for FY25. Still believe there's simply no growth here and goal one is to get this company back to the average it has been earnings. 8 cps x a PE of 8 = 64 cents.
They keep building many more units than they can sell. This happens year in, year out and has done for many, many years now. Gearing must be pushing towards a very uncomfortable level, notwithstanding sales and contracts on some basic care villages and some land, which has to a fair extent already been eaten up with land purchases adjacent to the Helier at top market prices. I suspect, given their truly woeful communication in the past, there's a real chance the directors made this surprise one-off update to soften shareholders up for a forthcoming capital raise when the result is announced. Time will tell but a 1:4 at about 50 cents wouldn't surprise me.
Have you sold your shares Basil?
Quote from: Breezy on Apr 16, 2024, 10:50 AMHas he? I cant keep up.
Quote from: Breezy on Apr 16, 2024, 10:50 AMHas he? I cant keep up.
Momentum traders huh? Makes me wonder if they win or lose with all this whining.
Good grief OCA got clobbered by Covid (most in sector) this delayed their transformation, created a false economy with inflated Assets.
Its frustrating for sure, but seriously some of these so called traders need to have a good look at all the data not just the crap on a spreadsheet that shows EPS etc...
Quote from: Teitei on Apr 16, 2024, 09:45 AMIn other words, another profit downgrade. Which downgrade is this - #2?
And the 'solid sales' at THe Helier - I recall that it was more 'negotiations for the sale of 20 apartments' or words to that effect?
I lose count.
Quote from: Breezy on Apr 16, 2024, 10:50 AMHas he? I cant keep up.
It helps if you actually read the posts lol. Just in it for the dead cat reverse index exclusion bounce as I stated clearly when buying back into this in a very modest way. Unfortunately, the dead cat didn't bounce or "meow" very much. See post #1038 Yes, I think you can flip a coin on a capital raise, it's probably close to a 50% possibility with their ever-increasing debt ratio.
Quote from: Greekwatchdog on Apr 16, 2024, 10:59 AMIts frustrating for sure, but seriously some of these so called traders need to have a good look at all the data not just the crap on a spreadsheet that shows EPS etc...
Analyzed this to absolute death over the years. As much as I and many others wanted this to be a growth company, it isn't. There's no earnings growth here. The growth is all in costs and assets but several years supply of unsold units does not grow earnings, it grows debt and the costs to fund that. Their debt level will haunt them going forward unless they do something about it, but a cash issue will be eps dilutive so it's a no-win situation either way. The only way to try and grow earnings is to dramatically lift the sales rate but that's simply not happening in a truly meaningful way, and I think Forsyth Barr are very seriously overly optimistic about sales estimates going forward. The problem with DCF "valuation" models is wildly optimistic assumptions go in and wildly optimistic valuation answers come out. Most likely the share price will go sideways for quite some time and dividends will remain suspended, also for quite some time is how I see it.
Classic "Value Trap" is how I see OCA and the low or no dividends paid does not get you out of that trap. Could languish around these levels for years.
Did that market update mean they are on track to meet expected profit.
Quote from: Basil on Apr 16, 2024, 11:13 AMAnalyzed this to absolute death over the years. As much as I and many others wanted this to be a growth company, it isn't. There's no earnings growth here. The growth is all in costs and assets but several years supply of unsold units does not grow earnings, it grows debt and the costs to fund that. Their debt level will haunt them going forward unless they do something about it, but a cash issue will be eps dilutive so it's a no-win situation either way. The only way to try and grow earnings is to dramatically lift the sales rate but that's simply not happening in a truly meaningful way, and I think Forsyth Barr are very seriously overly optimistic about sales estimates going forward. The problem with DCF "valuation" models is wildly optimistic assumptions go in and wildly optimistic valuation answers come out. Most likely the share price will go sideways for quite some time and dividends will remain suspended, also for quite some time is how I see it.
Classic "Value Trap" is how I see OCA and the low or no dividends paid does not get you out of that trap. Could languish around these levels for years.
Good summary of your analysis, Beagle.
And let's remember that OCA had been funding its dividends and operating cashflow deficits with debt - hence the requirement to stop dividends last year. An absolute no no imo.
Must admit though that I thought that OCA sp would trend back to 70c due to the sheer number of shares (30m+) dumped during the index exit. Such is life.
Quote from: Waltzing on Apr 16, 2024, 11:39 AMDid that market update mean they are on track to meet expected profit.
Impossible to assess without an update on sales values and margins.
I seriously wonder why OCA left those critical information out when they decided to do an update. It is like they did the update grudgingly and with reservations?
Haha the OCA bashers who were only 2 minutes ago holders and pumpers and will be holders and pumpers again at a future date, so predictable.
Quote from: Breezy on Apr 16, 2024, 11:52 AMHaha the OCA bashers who were only 2 minutes ago holders and pumpers and will be holders and pumpers again at a future date, so predictable.
I gave you my reasons for getting rid of the shares (as disclosed at the time) I bought during the index sell down. You are most welcome to challenge me on any of the reasons.
Refer to one post of mine where I attempted to pump the sp. No wonder this thread has to be placed under STRICT - rightly so!
FYI, I was initially very heartened and pleased to see OCA finally providing the update until I read the contents.
Quote from: Ferg on Apr 15, 2024, 10:17 PMLooking at the numbers released today, here are the volumes per half year (HY) and the Year on Year % change (Yoy%):
Capture - Copy.JPG
H1 was +13% versus last year, H2 was +19% versus last year, overall is +16%.
Claims depressed property market etc etc holding back sales is a red herring to me
If REINZ reported property volumes is a proxy for market activity the last six months has been pretty strong.
Table shows growth in sales for ARV, OCA and SUM compared to general activity in NZ property market
What's happened to OCA new sales over last 6 months ...the 3% stands out as a really outlier eh ...something not right
IMG_5756.png
want all companies and sectors on the NZX to do well as the country needs it..
HealthCarePro (aka UTD) put a good educational case for care suites and with careful management in a difficult sector.
Quote from: winner (n) on Apr 16, 2024, 12:01 PMClaims depressed property market etc etc holding back sales is a red herring to me
If REINZ reported property volumes is a proxy for market activity the last six months has been pretty strong.
Table shows growth in sales for ARV, OCA and SUM compared to general activity in NZ property market
What's happened to OCA new sales over last 6 months ...the 3% stands out as a really outlier eh ...something not right
IMG_5756.png
A case of resales being at more realistic market values vs new sales being offered at unrealistic high values due to the high prices paid by OCA for land and development costs?
T
Quote from: Teitei on Apr 16, 2024, 11:43 AMMust admit though that I thought that OCA sp would trend back to 70c due to the sheer number of shares (30m+) dumped during the index exit. Such is life.
I thought the same and thought a reversion to the recent trading range of 68-74 cents was likely so while it was a little disappointing, that's OCA for you isn't it ! I like to use a fishing analogy in such situations, helps me to be philosophical about it. When you go fishing, even if you only catch one small fish, as long as you can get a couple of reasonable fillets off it, it's worth eating and better than nothing.
Quote from: Basil on Apr 16, 2024, 12:46 PMI thought the same and thought a reversion to the recent trading range of 68-74 cents was likely so while it was a little disappointing, that's OCA for you isn't it ! I like to use a fishing analogy in such situations, helps me to be philosophical about it. When you go fishing, even if you only catch one small fish, as long as you can get a couple of reasonable fillets off it, it's worth eating and better than nothing.
The market does what it wants, its seldom right and most of the time is either overbought or oversold as it has been for OCA for quite some time now. To believe the market always correctly prices a stock is delusional.
Quote from: Breezy on Apr 16, 2024, 01:26 PMThe market does what it wants, its seldom right and most of the time is either overbought or oversold as it has been for OCA for quite some time now. To believe the market always correctly prices a stock is delusional.
Agreed when it comes to short term sp movements.
Market is uncannily accurate though in the long term most of the time.
And what's the long term trend of OCA? Pretty much one way since 2021.
Quote from: Teitei on Apr 16, 2024, 01:43 PMMarket is uncannily accurate though in the long term most of the time.
Market seems to have worked out OCA is a no growth company and priced it accordingly.
Not cool Basil. There is
no "silence" whatsoever. I happen to know that the person you are referring to is currently off grid. So just stop with the accusatory innuendos. You always do this and it is
not ok! >:(
Quote from: Basil on Apr 16, 2024, 05:55 PMBetter not name names, too many sensitive ears but someone mentioned to me by PM today, the silence from one prominent poster on the other channel who was sure 2H sales would be up absolutely heaps and along with it, FY24 profit, is deafening. Must admit, that observation had crossed my mind too.
I have amended that post already at 5.58 p.m., a full five minutes before your post. Maybe if you weren't so quick to be the P.C. police you would have noticed that. :P
The phone rang, while I was busy typing hence the delay in hitting "post."
I
was going to say "Good Beagle!" but now that I see you edited your post and called me the "PC Police" I won't be doing that. I told you some time ago, during one of our behind the scenes "conversations" that I will
always call you out if I see you disrespecting anyone. So you know full well that's what I will do. I make zero apologies for that.
And maybe, if you thought before you posted, I wouldn't have to.
Quote from: Basil on Apr 16, 2024, 06:10 PMI have amended that post already at 5.58, a full five minutes before your post. :P
Just calling it as I see it, which isn't going to change anytime soon either :P
Took Tony the Pony for his walk today and we met a very cute Beagle. Got talking with her owner and swapping Beagle ownership stories. They really are naughty dog's, always looking to steal food that's not there's. Probably chose my user handle on the other channel pretty well lol Probably should change my user handle on here back to Beagle too lol
Quote from: winner (n) on Apr 16, 2024, 12:01 PM...
What's happened to OCA new sales over last 6 months ...the 3% stands out as a really outlier eh ...something not right
Without deeper analysis - did you consider that OCA's 2HY23 number (+38%) was as well a real "outlayer", but on the positive side?
So - is it really surprising, that they had the HY to follow less growth on top of that outstanding growth?
Quote from: BlackPeter on Apr 17, 2024, 08:40 AMWithout deeper analysis - did you consider that OCA's 2HY23 number (+38%) was as well a real "outlayer", but on the positive side?
So - is it really surprising, that they had the HY to follow less growth on top of that outstanding growth?
I did and came to conclusion it was off a lo wish number the year prior .....
.....and dismissed the idea that they may have changed the way as to when they book sales (other words describe this behaviour) ......and for that reason H223 number might be 'inflated' to get a respectable profit result innF23
BP ...forgot to say that even though H1 might have been really good it's surprising the momentum didn't continue through H2, esp when the over all property market was more active.
Quote from: winner (n) on Apr 17, 2024, 09:33 AMBP ...forgot to say that even though H1 might have been really good it's surprising the momentum didn't continue through H2, esp when the over all property market was more active.
I think that's the key takeaway from this update. All the more surprising because new stock is at an all time high. Its crystal clear to me that people are voting with their feet and most prefer what ARV and SUM are bringing to the market.
Quote from: Basil on Apr 17, 2024, 10:22 AMI think that's the key takeaway from this update. All the more surprising because new stock is at an all time high. Its crystal clear to me that people are voting with their feet and most prefer what ARV and SUM are bringing to the market.
Look, people tend to see see what they want to see.
If somebody sells 200 items a year, than this is just a number.
If they sell 80 items in HY 1 and 120 items in HY2, than this must be an amazing company with outstanding growth, even if the HY2 gain is just due to delayed sales in HY1.
If they however sell due to some unlucky timing 98 items in HY1 and only 102 in HY 2 (plus 3 percent) and are already on the the bashing list, than clearly, they must be a terrible looser.
I assume as accountant you happened to come across distortions due to timing before? Obviously, could happen to everyone, but if we are in the mood to bash a company, then not to them ...
And its not too hard to see that a big percentage increase on top of a big increase before is more difficult to achieve (has something to do with the laws of physics - LOL) then a big increase on top of a small increase (as the others had).
I just found it funny people seem to put that much weight on one "out-lyer" in a generally very lumpy business (building units is more lumpy than baking rolls) which clearly has been at least partially created by a very high high increase before. Is this what they call confirmation bias?
Quote from: Basil on Apr 17, 2024, 10:22 AMI think that's the key takeaway from this update. All the more surprising because new stock is at an all time high. Its crystal clear to me that people are voting with their feet and most prefer what ARV and SUM are bringing to the market.
Umm no, people prefer all kinds of options, when it comes to care SUM are at the back of the pack and don't be fooled by selective customer satisfaction surveys. SUM are a great real estate company but thats where their advantage ends.
Quote from: BlackPeter on Apr 17, 2024, 10:56 AMI assume as accountant you happened to come across distortions due to timing before?
Look, this is not a timing distortion. I have written extensively about how OCA are so slow to sell the 'literally" hundreds of care suites they have had in stock for years. OCA has a systemic multiyear stock problem and has built substantially more care suites than the market wants, year in, year out, for many, many years. It's not just a care suite problem, they keep building more units than they sell.
Now they have a massive stockpile and despite this they're underperforming the current sales numbers of others who have far less stock. Worse, their gearing level keeps going up and have plans for building even more units in FY25 at a rate significantly higher than the current sales rate.
You don't have to be an accountant to wonder why despite them having the highest gearing and biggest stock problem in the sector they are the only ones not tailoring their future build rate to market demand. They're "in denial" about their stock problems and just keep on building more stock than they can sell and burning through cash... one wonders what could possibly go wrong ? You simply can't keep doing that in the years ahead, its unsustainable.
No worries though BP...just expect them to hand around the begging bowl at some stage and sheet the problem back to shareholders. I rate the chances of that happening sometime between now and when they report the FY25 year in May 2025 as probably a bit higher than 50/50.
Quote from: Breezy on Apr 17, 2024, 10:59 AMUmm no, people prefer all kinds of options, when it comes to care SUM are at the back of the pack and don't be fooled by selective customer satisfaction surveys. SUM are a great real estate company but thats where their advantage ends.
That's all the advantage they need and what has made them such a great investment since they listed.
Quote from: Basil on Apr 17, 2024, 11:28 AMThat's all the advantage they need and what has made them such a great investment since they listed.
It depends on your values and morals, we have been on the inside of the sector for for over 30 yrs now. My wife resigned from her job with another formerly listed company because of its change of direction as it prepares for its sale in 2-3 yrs, their new cost cutting and removing services from residents didn't align with her value system so she couldn't keep working there even though she had the village operating like a well oiled Swiss watch, the residents and staff were gutted.
I think you're drawing a very long bow to imply investing in SUM is immoral. That's simply where the best money has been made in the sector in the last 13 years since they listed. Lots of happy customers can't be wrong and that's why they have no problems selling their units.
If OCA was such a "Nirvana" as you suggest, why the heck can't they sell their units ? No matter what moral high ground you might like to try and take, the fact is the market is telling you loud and clear that what OCA's competitors offer is more compelling.
Put it in motoring terms, there's some very good reasons Toyota outsell Citroen.
Quote from: Basil on Apr 17, 2024, 11:52 AMI think you're drawing a very long bow to imply investing in SUM is immoral. That's simply where the best money has been made in the sector in the last 13 years since they listed. Lots of happy customers can't be wrong and that's why they have no problems selling their units.
If OCA was such a "Nirvana" as you suggest, why the heck can't they sell their units ?
Where did I say that investing in SUM is immoral? I'm talking about individual values and morals and how that affects what is acceptable to you as an individual in a workplace setting.
I agree. I never ever thought I would invest in the RV sector as I (like many uninformed members of the public) believed, at the time, that RVs were greedy, money hungry, exploitative providers, out to rip off old people. Looking back now, I am ashamed that I ever thought that. It is
untrue and is an unfair assessment of the sector. I could have gone with any one of the RV companies, but chose OCA because they aligned with my personal values and my passion for care. Yes, the "care" component is changing from what it was when I first invested, which in some respects disappoints me, BUT I understand why, and I accept that the model had to change. As I have said often, the Care Suite model is the closest care option to "perfect" in my humble opinion. Sadly, I am not part of the Care Suite demographic so will never get to experience it, but as a caregiver (and friend to many elderly folk) this model really impresses me.
I
am disappointed with OCA's progress to date, including the share price. I will admit that. I still believe this is a successful business with good prospects for the future, so I am hanging in there for now. Time will tell what the next 12 months bring. Hopefully Brent's replacement will be someone who can drive growth, and someone who values and respects shareholders, more than Brent clearly does. We will see.
Quote from: Breezy on Apr 17, 2024, 11:46 AMIt depends on your values and morals, we have been on the inside of the sector for for over 30 yrs now. My wife resigned from her job with another formerly listed company because of its change of direction as it prepares for its sale in 2-3 yrs, their new cost cutting and removing services from residents didn't align with her value system so she couldn't keep working there even though she had the village operating like a well oiled Swiss watch, the residents and staff were gutted.
Quote from: Breezy on Apr 17, 2024, 11:56 AMWhere did I say that investing in SUM is immoral?
QuoteThat's all the advantage they need and what has made them such a great investment since they listed. Basil on Summerset.
QuoteIt depends on your values and morals, Breezy response
You did infer or imply that investing outside of SUM was more moral and by extension investing in SUM was somehow less moral....at least that's how I interpreted it...maybe I got the wrong end of the stick.
I'll try and make this my final comment on OCA for a while. Looking back on my journey with OCA what I find the most ironic is that before it listed the previous owner was able to get a 19% EBITDA margin on care. We were all "sold" on the dream that the care suite model would lift that return substantially. Earl was a nice guy, a good speaker but also a convincing salesman in terms of selling the transformation model. We all believed the dream and some thought you can't have too many. Thankfully the most I ever had was 300K and I was one of the first to work out the dream we were sold was turning into a nightmare in terms of return on investment as the EBITDA return nearly halved and the point of so-called inflection never arrived. I am sure in due course the next CEO will have his theories on how to turn this around and generate decent returns for shareholders, just as the last two CEO's have tried.
I think from a care perspective the care suite model is fabulous and has all the feel good stuff that Untamed, Breezy and others have talked about but from a getting a decent return on capital invested perspective, which is why I invest, the model simply doesn't work. That's not to say i think the business will fail, it's just that I think forever and a day the returns from their ILU units will heavily subsidize the large care part of their business they operate. The best analogy I can give you guys is that it's like driving around in a car with the handbrake on. I think it's always going to be that way with OCA, albeit to a slightly reducing extent in the years ahead as they try and extricate themselves from no return basic care villages.
I am sure OCA will track along for many years to come generating a similar level of earnings as it does now and to some people who like investing for the "feel good" factor that's okay for them and I understand that and if that's what floats their boat all good for them. For me, I'm not investing in something that I think has serious systemic "handicapping" issues that are incapable of being resolved in terms of generating decent shareholder returns. I believe in a nutshell the care suite model is deeply flawed from an investors point of view and the so-called transformation program OCA embarked upon when they listed, simply hasn't worked and isn't going too in the future. For those that look properly under the hood, the evidence is plain to see, an ever-increasing stockpile of care suites they can't sell that grows bigger every year.
Yes you got the wrong end of the stick and as you can see the village i was talking about above is not a SUM one but yes there are some things about SUM we don't like but won't be discussing it on here in any depth.
Quote from: Basil on Apr 17, 2024, 11:28 AMThat's all the advantage they need and what has made them such a great investment since they listed.
So if they are so great why did you see again and rubbish Julian like you have done to so many CEOs? Thats right 600 units to sell.
I refute rubbishing Julian. I challenged him on a number of issues from time to time at the annual meetings but overall, I think he did a superb job as the CEO while he was there and Scott has been performing exceptionally well as his replacement. They're trading at about 8 times the level they did when they listed 13 years ago which speaks for itself in terms of the caliber of their leadership and the commercial success of their business model. By comparison, OCA has been an absolute disaster for shareholders with the shares languishing well under the float price despite 7 years of trying to "transform" their business model. 79 cents at float down to 60 cents now might not seem that bad but its horrific in contrast to what could have been earned elsewhere in this sector like in SUM.
Remembering this is an investment in property-based assets and adjusted for inflation since it listed OCA shares should be $1.01 just to have maintained their real inflation adjusted value, (no return on that), just maintaining it so they have lost 40% of their value in 7 years in inflation adjusted terms.
Maybe in another 7 years things will be different...I guess that's the hope for shareholders.
SUM head office was very ivory tower like under Julian, hopefully its better under Scott.
Quote from: Basil on Apr 17, 2024, 11:20 AMLook, this is not a timing distortion. I have written extensively about how OCA are so slow to sell the 'literally" hundreds of care suites they have had in stock for years. OCA has a systemic multiyear stock problem and has built substantially more care suites than the market wants, year in, year out, for many, many years. It's not just a care suite problem, they keep building more units than they sell.
Now they have a massive stockpile and despite this they're underperforming the current sales numbers of others who have far less stock. Worse, their gearing level keeps going up and have plans for building even more units in FY25 at a rate significantly higher than the current sales rate.
You don't have to be an accountant to wonder why despite them having the highest gearing and biggest stock problem in the sector they are the only ones not tailoring their future build rate to market demand. They're "in denial" about their stock problems and just keep on building more stock than they can sell and burning through cash... one wonders what could possibly go wrong ? You simply can't keep doing that in the years ahead, its unsustainable.
No worries though BP...just expect them to hand around the begging bowl at some stage and sheet the problem back to shareholders. I rate the chances of that happening sometime between now and when they report the FY25 year in May 2025 as probably a bit higher than 50/50.
OK - Lets try to understand your language.
SUM told us in their FY23 presentation, that up to 31. Dec 2023 their unsold new stock did increase. Terrible, I thought these shocking things happen only to losers like OCA?
Anyway, they say that the amount of uncontracted units (I suppose this means not sold) is now up to 6% of total stock, and the number of unsold resales did grow to 2.3% of portfolio (I assume this means as well total stock). This allows the conclusion that their occupancy rate is 91.7% (100 minus (6 + 2.3) ...). I am sure that there are millions other ways to calculate the occupancy rate, but hey, lets take that, shall we?
So - yes, SUM is doing an amazing job, and they have currently only 8.3% vacant units. Pretty flash, isn't it? This must be the Gold standard!
Now, lets look at OCA. Actually, I found it much easier to find their occupancy rate in their recent HY presentation then it took me to find SUM's, but anyway ... maybe SUM's reputation as great reporter is somewhat overstated. But anyway - OCA reported in their recent HY report an occupancy rate of 90.3% (of total stock).
And yes, 90.3% is below 91.7%. But still - somehow wondering how SUM's occupancy rate of 91.7% can be top notch, while OCA's 90.3% (i.e. only 1.4% less) seem to mean endless unoccupied corridors where only the dust is piling up.
Don't misunderstand me - SUM (which actually went up to roughly 8 years ago through a similar phase of market perception like OCA now) is a well run company, but priced to perfection.
OCA is not (yet).
Your pick which of the companies to buy.
Thanks, a very helpful perspective comparing the 'gold standard' SUM with the 'laggard dog' OCA.
Oh wait, there isn't much difference! In total numbers of unsold/vacant units based on those percentages, given SUM have a lot more property in total, means SUM have a lot more units unsold!
They're all doomed! The RV sector is doomed!
And, if anyone wants a part of the doomed RV sector, then clearly getting some OCA at about 55% discount to NTA, is a lot better than SUM which is fully priced and flatlining.
All of them will be very good long term investments imo, but as they say good investments are about when you buy and at what price, not chasing the money.
Quote from: BlackPeter on Apr 17, 2024, 06:35 PMOK - Lets try to understand your language.
SUM told us in their FY23 presentation, that up to 31. Dec 2023 their unsold new stock did increase. Terrible, I thought these shocking things happen only to losers like OCA?
Anyway, they say that the amount of uncontracted units (I suppose this means not sold) is now up to 6% of total stock, and the number of unsold resales did grow to 2.3% of portfolio (I assume this means as well total stock). This allows the conclusion that their occupancy rate is 91.7% (100 minus (6 + 2.3) ...). I am sure that there are millions other ways to calculate the occupancy rate, but hey, lets take that, shall we?
So - yes, SUM is doing an amazing job, and they have currently only 8.3% vacant units. Pretty flash, isn't it? This must be the Gold standard!
Now, lets look at OCA. Actually, I found it much easier to find their occupancy rate in their recent HY presentation then it took me to find SUM's, but anyway ... maybe SUM's reputation as great reporter is somewhat overstated. But anyway - OCA reported in their recent HY report an occupancy rate of 90.3% (of total stock).
And yes, 90.3% is below 91.7%. But still - somehow wondering how SUM's occupancy rate of 91.7% can be top notch, while OCA's 90.3% (i.e. only 1.4% less) seem to mean endless unoccupied corridors where only the dust is piling up.
Don't misunderstand me - SUM (which actually went up to roughly 8 years ago through a similar phase of market perception like OCA now) is a well run company, but priced to perfection.
OCA is not (yet).
Your pick which of the companies to buy.
"Your pick which of the companies to buy."
neither at the moment as OCA has a bit of work to do and SUM is according to the maths people here fully priced.
Interesting article from HCP (HealthCarePro) that according to a NZ health department (lets hope they are good at maths) 12000 units requried soon for care suites...
Could the sector just stay as it is... a sector facing issues.
The vagueness of OCA's recent announcement and Forbars revised financials suggests that a capital raise is likely in near future. The timing of the announcement and it's contents was pretty weird ...like saying look we are still here so don't forget about us,
Forbars numbers (and mine) imply cash inflows not as much as most were expecting and they continuing to spend on developments ...so expect increased levels of debt (in spite of disposing a few things) to be reported next month.
What better time to announce a capital raise than at results time.
Quote from: winner (n) on Apr 18, 2024, 08:34 AMThe vagueness of OCA's recent announcement and Forbars revised financials suggests that a capital raise is likely in near future. The timing of the announcement and it's contents was pretty weird ...like saying look we are still here so don't forget about us,
Forbars numbers (and mine) imply cash inflows not as much as most were expecting and they continuing to spend on developments ...so expect increased levels of debt (in spite of disposing a few things) to be reported next month.
What better time to announce a capital raise than at results time.
Cutting the dividend, slowing and stopping new developments and selling 'surplus' assets are all indicative of a company carrying too much debt and facing operating cash flow deficits - which is what OCA has been doing.
Best to do a CR and be done with it so OCA can get on with its 'transformative' stratgy sooner than later?
Quote from: Teitei on Apr 18, 2024, 09:14 AMCutting the dividend, slowing and stopping new developments and selling 'surplus' assets are all indicative of a company carrying too much debt and facing operating cash flow deficits - which is what OCA has been doing.
Best to do a CR and be done with it so OCA can get on with its 'transformative' stratgy sooner than later?
Well, I guess they just can't win.
Do they pay a dividend then they get blamed for funding the dividend out of debts. However, if they do the right thing and cut the dividend they are blamed for doing exactly that.
If they keep unproductive assets, then they are blamed for doing nothing, and if they sell them - how terrible, how can they?
Ah yes, and the ominous CR some posters keep predicting again and again and again - sort of feels like the so called experts who called twenty of the the last two economic crashes.
By all means - lets look at all risks and opportunities for any investment, but just repeating endlessly the same story ad nauseam - that's not tei tei (high), that's just daft.
Quote from: BlackPeter on Apr 18, 2024, 09:48 AMWell, I guess they just can't win.
Do they pay a dividend than they get blamed for funding the dividend out of debts. However, if they do the right thing and cut the dividend they are blamed for doing exactly that.
If they keep unproductive assets, than they are blamed for doing nothing, and if they sell them - how terrible, how can they?
Ah yes, and the ominous CR some posters keep predicting again and again and again - sort of feels like the so called experts who called twenty of the the last two economic crashes.
By all means - lets look at all risks and opportunities for any investment, but just repeating endlessly the same story ad nauseam - that's not tei tei (high), that's just daft.
Not a case of blaming them - but reviewing where they were and where they are now.
You are actually confirming what OCA did wrong - paying dividend using debt until they have to stop. Buying unproductive & retaining unproductive assets until they have to stop. Paying up for ever more expensive land and costly developments (the sun will never set) until they have to stop.
Making the point that they should do a CR and just be done with it is simply reflecting market sentiment.
So out of curiosity, and excuse me if it is a stupid question, but hypothetically - if they were to do a CR what would you see them using it for? Just to pay off debt?
Quote from: Teitei on Apr 18, 2024, 10:11 AMNot a case of blaming them - but reviewing where they were and where they are now.
You are actually confirming what OCA did wrong - paying dividend using debt until they have to stop. Buying unproductive & retaining unproductive assets until they have to stop. Paying up for ever more expensive land and costly developments (the sun will never set) until they have to stop.
Making the point that they should do a CR and just be done with it is simply reflecting market sentiment.
Quote from: Untamed on Apr 18, 2024, 11:15 AMSo out of curiosity, and excuse me if it is a stupid question, but hypothetically - if they were to do a CR what would you see them using it for? Just to pay off debt?
Pay off debt and present a strong balance sheet to ride out the property and economic downturn over the next few years.
OK, so would you expect them to also halt development at the same time, and focus on selling stock on hand?
And isn't this precisely what people were bitching about when Ryman did it?
Quote from: Teitei on Apr 18, 2024, 11:51 AMPay off debt and present a strong balance sheet to ride out the property and economic downturn over the next few years.
The Helier Private Care Residences now open.
Quote from: Buzz on Apr 19, 2024, 08:29 PMThe Helier Private Care Residences now open.
Wonder how many private care residents have moved in.
"CEO Brent Pattison call the "private care model", costing around $3500/week or $182,000/year. The exact weekly fee will depend on the level of care required but the concept is to provide hospital-standard rest home and palliative care for residents at the luxurious end of the market."
Gulp!
Given that the standard basic rest home level weekly rate is around $1300 on average, this doesn't actually seem too bad.
Quote from: Teitei on Apr 20, 2024, 10:18 AMWonder how many private care residents have moved in.
"CEO Brent Pattison call the "private care model", costing around $3500/week or $182,000/year. The exact weekly fee will depend on the level of care required but the concept is to provide hospital-standard rest home and palliative care for residents at the luxurious end of the market."
Gulp!
Quote from: Untamed on Apr 20, 2024, 11:15 AMGiven that the standard basic rest home level weekly rate is around $1300 on average, this doesn't actually seem too bad.
And the people that will be attracted to this are most likely to be easily able to afford it.
Quote from: BlackPeter on Apr 17, 2024, 06:35 PMSUM told us in their FY23 presentation, that up to 31. Dec 2023 their unsold new stock did increase. Terrible, I thought these shocking things happen only to losers like OCA?
The slow real estate market has affected all companies in the sector
Quote from: BlackPeter on Apr 17, 2024, 06:35 PMAnyway, they say that the amount of uncontracted units (I suppose this means not sold) is now up to 6% of total stock, and the number of unsold resales did grow to 2.3% of portfolio (I assume this means as well total stock).
With OCA you are referring to their occupancy rate of their care units, (ARV are 94% by comparison).
As at 31 December 2023 SUM had 380 uncontracted new sales stock (page 51 of their preso) and they sold 560 new units last year so that represents 8.1 months of new stock. Page 55 they had 3.2 months' worth of uncontracted resale stock.
By comparison as at last report date OCA had unsold new stock in the late 300's from memory and again this year they have built more new units than they've sold so somewhere in the low 400's as at 31 March 2024, although they will be reluctant to disclose that number in their presentation material, you will need to tune into the FY24 call to hear that. That's about 2.7 years worth of new stock at their most recent sales rate. Some of that, mainly care suites, will be temporarily occupied at a premium care room, again they are very opaque about the extent to which this happens. Over the years OCA have done their very best to conceal their unsold stock situation...to the best of my recollection it has only come out last year in analysts Q&A time in the call.
Quote from: BlackPeter on Apr 17, 2024, 06:35 PMDon't misunderstand me - SUM (which actually went up to roughly 8 years ago through a similar phase of market perception like OCA now) is a well run company, but priced to perfection.
SUM has at times traded on a forward multiple in the high 20's and presently as at close of trade on Friday trades at 13.6 times last years underlying earnings which in my opinion is fully justified based on their average rate of growth over the years. For example, SUM have grown underlying earnings from $56.6m in FY16 to $190.3m in FY23, more than tripled. If you use the measurement basis you prefer NPAT, they increased Net profit after tax from $145.5m in FY16 to $436.3m in FY23, (tripled) . SUM is a growth company, OCA is not, it really is that simple.
At the end of the day share prices follow earnings not NTA and you can't eat NTA.
Quote from: BlackPeter on Apr 17, 2024, 06:35 PMOCA is not (yet).
"priced for perfection" I think the market is well aware of the challenges OCA face to grow earnings and is pricing the shares at about their fair value.
Long term I think SUM have a tremendous advantage with their business model with far less care and huge growth potential in Australia.
At this stage I think the whole sector is most likely going to track sideways for quite a while until the housing market gains genuine forward momentum. That could take quite some time. With the very poor dividend yield I don't have any equity exposure in this sector at this point and am not looking to add any in the foreseeable future. I think the market in Auckland in particular is absolutely saturated with supply which perhaps partly explains OCA's very lackluster recent sales announcement. I think in eps terms you will be very lucky if OCA can post similar earnings in late May to what it has in recent years, flat result is best case scenario. 7 whole years without any eps growth and I think that trend is likely to continue for the foreseeable future. Until they can prove to the market they can grow eps the shares are highly likely to stay anchored in the doldrums. That's how I see it and if others see it differently, that's fine and good luck to you.
If they start making progress on selling that unsold stock this will probably rise quite strongly. A few motivated individuals collaborating could probably prod and probe a few of the key villages to find out if that is occurring. If only you could get satellite data at night to see what % of rooms have lights on and such...
just fly some drones over them ....
OCA care facilities found to be not up to scratch..... " a litany of failures..."
https://www.newshub.co.nz/home/new-zealand/2024/04/oceania-slammed-as-report-exposes-litany-of-failures-in-care-of-man-who-died-after-complaining-of-terrible-pain.html
Holy hell, that poor old fella.
Absolutely shocking and by no means a completely isolated incident.
Happened in 2019, not sure why its making headlines 5 years later ?
Anyway, since then old folks can rest easy because in 2021 Oceania launched their "Believe in better "marketing" campaign where they strive to be better.
So... everyone can rest easy because they can believe in better but then in 2022 there's this, another death through gross negligence and lack of proper care https://www.rnz.co.nz/news/national/472492/oceania-care-apologises-for-shocking-treatment-of-woman-in-one-of-its-rest-homes
Surely another isolated incident and I remember from my time as a shareholder we were all told about
Oceania's infection control procedures and how good they were but oh dear...just very recently another 6 died
https://www.nzherald.co.nz/waikato-news/news/whitianga-rest-home-influenza-outbreak-six-dead/HJUC2B4US5DNTJEOHGJTLUWH6I/
Believe in better just creative marketing with no real substance behind it ? You be the judge.
To the best of my knowledge, and Breezy, feel free to correct me if I am wrong, but last time I looked, Arvida had a much higher percentage of their care facilities on the gold standard 4 year MOH review. If you really want better for your elderly relative, maybe you are better to go to Arvida.
Quote from: Basil on Apr 22, 2024, 04:08 PMAbsolutely shocking and by no means a completely isolated incident.
Happened in 2019, not sure why its making headlines 5 years later ?
Anyway, since then old folks can rest easy because in 2021 Oceania launched their "Believe in better "marketing" campaign where they strive to be better.
So... everyone can rest easy because they can believe in better but then in 2022 there's this, another death through gross negligence and lack of proper care https://www.rnz.co.nz/news/national/472492/oceania-care-apologises-for-shocking-treatment-of-woman-in-one-of-its-rest-homes
Surely another isolated incident and I remember from my time as a shareholder we were all told about
Oceania's infection control procedures and how good they were but oh dear...just very recently another 6 died
https://www.nzherald.co.nz/waikato-news/news/whitianga-rest-home-influenza-outbreak-six-dead/HJUC2B4US5DNTJEOHGJTLUWH6I/
Believe in better just creative marketing with no real substance behind it ? You be the judge.
To the best of my knowledge, and Breezy, feel free to correct me if I am wrong, but last time I looked, Arvida had a much higher percentage of their care facilities on the gold standard 4 year MOH review. If you really want better for your elderly relative, maybe you are better to go to Arvida.
Goes back to how and why Oceania was set up in the first place?
Oceania was put together by Macquarie in line with their strategy of aggregating businesses and assets, to flick onto the market for a profit. There's no real vision or underlying philosophy behind the company - a lot of corporate speak & jargon with one single aim - exit for a profit.
To be fair, the "believe in better" marketing slogan was created in 2021, long after Macquarie exited.
There has to be compelling reasons why the market is shunning OCA care suites despite them having record numbers, "several hundred" for sale. The extremely sluggish sales suggest the market thinks "believe in better" is exactly what you said, nothing but corporate marketing speak with little or perhaps even no substance whatsoever behind it.
OK, I'm trying to be the better person so I'm not going to address this to anyone in particular but I need to say this.
Firstly, dragging an incident that happened in 2019, into this OCA discussion, is pretty damned unfair in my opinion. That is six years ago, and a shitload of water has flowed under the bridge since then. Anyone bringing that up now is simply doing so as "ammunition" for their own agenda.
Secondly, guess what? Our little rest home has currently got a "flu outbreak" too. We have had around six residents in isolation for a week. DO NOT jump to the conclusion that an outbreak of flu, or anything else for that matter, is because of staff negligence or lack of infection control. In the vast majority of cases it is not. Residents come in and out of their rest "home" just as you and I do. They have visitors, they go to church or shopping or out for coffee. They are human beings, living their lives and picking up bugs is part of life. NOBODY can prevent that from happening. As for deaths, fortunately we have not experienced that but facilities who provide hospital level care are always going to be susceptible to deaths, as the residents they are caring for generally have significant health issues/conditions already. Infection control is vitally important, but people who are unwell, stand a high chance of dying, even when infection control procedures are followed to the letter.
SO please ... think about what you are posting, and think about how judgmental you are being about some of this. Unless you have worked in aged care, you literally do not know. Do you really think we want our residents to be unwell and/or die? They are part of our family! So just quit using stories like these two, to support your negative impressions of OCA.
I really wish I could bring some of you to work with me for a week. I guarantee by the end of the week you would be at least partway to "getting it."
Like you, I am curious why a 2019 incident was all over the news yesterday? The fact is this is not a completely isolated incident and there have been others including 6 deaths as recently as February 2024.
I am also suggesting there is no evidence that OCA's care is any better than anyone else's and suggesting their woeful care suite sales is ample evidence the general public thinks likewise and that their marketing slogan of "believe in better" has no substance behind it.
Creative B.S. marketing slogans with no substance behind them is one of my pet dislikes but OCA is certainly not alone in this. Fact is a lot of marketing slogans are nothing but a load of nonsense.
Nothing out of the ordinary to see here and a few years ago a local SUM village had 20 residents die during a winter due to a flu outbreak, didn't make the news.
Quote from: Basil on Apr 23, 2024, 12:02 PMLike you, I am curious why a 2019 incident was all over the news yesterday?
...because Aged Care Commissioner Carolyn Cooper's report into this was released on Monday.
Quote from: Basil on Apr 23, 2024, 12:02 PMLike you, I am curious why a 2019 incident was all over the news yesterday?
It's because the report on the incident was released on Monday. Five years to do a report! LOL.
"Aged Care Commissioner Carolyn Cooper found Oceania Care Company Limited in breach in a report released on Monday."Anyway, all just fodder for negative nancy's to dine out on.
Quote from: Buzz on Apr 23, 2024, 12:27 PMFive years to do a report!
Must have been commissioned by the Labour Govt lol
Quote from: Breezy on Apr 23, 2024, 01:21 PMNot sure about that, grinding axes seems to be an addictive past time for the bored. I could give countless stories like those quoted above from many different retirement villages and companies but I wouldn't waste my time, if someone can't figure out that stuff like this happens sector wide then they need a brain transplant.
It's not the countless stories, that count. OCA's bad press is unlikely to be good for their sales. For the public, as Lee Atwater famously said, "perception is reality." If you Google News search "Oceania Health Care." The first hit is the "litany of failures" report. Of the 9 others on the first page, 4 are negative (all variations of the flu deaths story.)
The "litany of failures" is a particularly problematic phrase, as it echoes Mahon's 1981 "litany of lies." Rightly or wrongly, that strongly evokes an association to dishonesty and coverups.
Quote from: Hectorplains on Apr 23, 2024, 02:10 PMIt's not the countless stories, that count. OCA's bad press is unlikely to be good for their sales. For the public, as Lee Atwater famously said, "perception is reality." If you Google News search "Oceania Health Care." The first hit is the "litany of failures" report. Of the 9 others on the first page, 4 are negative (all variations of the flu deaths story.)
The "litany of failures" is a particularly problematic phrase, as it echoes Mahon's 1981 "litany of lies." Rightly or wrongly, that strongly evokes an association to dishonesty and coverups.
OK - I googled it, and it was on number 26 (on the third screen).
But hey, who knows which information rabbit hole others subscribe to - if people only look for disaster stories, maybe it comes up earlier for them.
Looking at the story itself - members of my family had previously comparable and worse (well, not the outcome, but the lack of care) experiences both in NZ hospitals - in private care as well as in the public hospital.
It is a sad reflection on our health system that resources are overstretched and for some reasons are nurses from some countries with very patchy training standards (like South Africa) allowed to work here while nurses from countries with good training standards are not.
One of my relatives didn't got after surgery support for hours in a private hospital in Christchurch, and given that nobody reacted to the bell, she had to remove her infusion herself and than crawl to the toilet. That's gold standard private Care in New Zealand for you.
On another occasion she was with her immune system down (day 7 of Chemotherapie) and an life threatening infection in the public hospital in isolation. Sign at the door: Only enter with protective clothing and mask.
In came the cleaning staff without any protective clothing (and wearing their normal road shoes) and just waved the dust in the room from one side to the other.
So - yes, our healthcare standards in NZ are third world, and while most of our nurses are well meaning, not all staff is competent. However - picking just one of these shocking stories and smearing them on one particular care provider is just sensationalist. I have not seen any evidence that the care standard at Oceania is any worse than in any of the other care providers.
Pretty low to sensationalise this.
Quote from: BlackPeter on Apr 23, 2024, 03:28 PMOK - I googled it, and it was on number 26 (on the third screen).
Did you News search? It came up first for me.
Try Google News as my post clearly states. I'm not sure what the sensationalism is? Should the media not have reported on this outcome? Sounds like your relative got a poor deal. Is that indicative of NZs 3rd medical status, or is that sensationalism to extrapolate such a long bow?
Quote from: Hectorplains on Apr 23, 2024, 03:38 PMTry Google News as my post clearly states. I'm not sure what the sensationalism is? Should the media not have reported on this outcome? Sounds like your relative got a poor deal. Is that indicative of NZs 3rd medical status, or is that sensationalism to extrapolate such a long bow?
I could tell you some more of these stories from family and friends, but just follow the media - you hear every other month or so about somebody who died either because they have been mistreated or ignored in the NZ health system. Outcome is typically at best a "Sorry" to the relatives and then we just continue as normal. Having observed the white wash mechanism of the system myself - I can guarantee you that what you hear is only the tip of the iceberg. That's not sensationalism, this is just the way it is.
The cited Oceania story is neither unusual nor remarkable for the NZ Health system. Maybe bad luck for the patient, but this is all it is.
Quote from: BlackPeter on Apr 23, 2024, 04:39 PMI could tell you some more of these stories from family and friends, but just follow the media - you hear every other month or so about somebody who died either because they have been mistreated or ignored in the NZ health system. Outcome is typically at best a "Sorry" to the relatives and then we just continue as normal. Having observed the white wash mechanism of the system myself - I can guarantee you that what you hear is only the tip of the iceberg. That's not sensationalism, this is just the way it is.
The cited Oceania story is neither unusual nor remarkable for the NZ Health system. Maybe bad luck for the patient, but this is all it is.
Well yes exactly and that particular flu was introduced by a visitor in this instance but the axes will no doubt keep grinding on here.
Quote from: Breezy on Apr 23, 2024, 12:11 PMNothing out of the ordinary to see here and a few years ago a local SUM village had 20 residents die during a winter due to a flu outbreak, didn't make the news.
Yip, I know someone with a private care home lost a third of her residents in a fortnight during covid.
My Grandmother spent 8 years in a care home, had a couple of falls, usually in the middle of the night, we didnt blame staff she was 100 years old by then and still tying to do things herself.
The trolls are out in force on the other channel on the OCA thread, one in particular who is completely full of bull****. Kinda glad i can't participate or I'd be giving them stick.
Another month passes and SUM shareprice performs better than OCA ...both were down but OCA down greater %age
Updated chart ....you'd think the trend would end one day .....yes? .....note I didn't change the y-axis scale assuming it can't go below 5%
IMG_5780.png
I am very glad to hear that you didn't blame the staff. Increased falls risk is a reality of ageing. As we age, we not only become less steady on our feet, our ability to balance ourselves, is significantly impaired. That is the number one reason that most elderly folk in rest homes, have walkers. It isn't because they are necessarily frail or have mobility issues due to health conditions. It is usually because a walker helps them maintain better balance as they are walking, which reduces the chance of a fall.
Nobody can stop elderly folk having falls entirely. All we can do is reduce the risk by taking precautions such as keeping walkways, bedroom areas open and clear of trip hazards. Ensuring people wear sensible and supportive footwear is also important. The only way to prevent
any falls is to have someone accompany the person 24/7, which is obviously impractical and not even remotely doable. Having said that, sometimes a person can fall even while a staff member is with them. One minute they are upright, and the next minute they are on the ground, and you have absolutely no idea how it happened. That happened to me some years ago. I was helping a gentleman to use the toilet. I did everything to the letter in terms of supporting him to walk, with his walker, to the ensuite, ensured his brakes were on when we parked up for him to use the toilet. I even had my hands on him, as an extra precaution, as he was notoriously unstable on his feet. Right before my eyes, he went from standing, to lying on the floor. In a fraction of a second. To this day, I still have no idea how it happened. I have never felt so bad, and I blamed myself for a long time, but I now understand and accept, that sometimes falls happen, in the blink of an eye, and there is literally
nothing more I could have done, to prevent it.
QuoteMy Grandmother spent 8 years in a care home, had a couple of falls, usually in the middle of the night, we didnt blame staff she was 100 years old by then and still tying to do things herself.
It's an interesting paradox being an investor in aged care property development and the realities of actual care for our aged. I know that a few of us here have first hand experience, in caring for others and caring for our loved ones while they are in gods waiting room.
An amusing story that I used to tease my dad mercilessly about (because he was a real joker and teaser all his life, so to get some back on him). He was a very clever civil engineer, and until his death I'd take my daughter to visit him at the RV hospital care, and despite his moderate dementia they'd work on her calculus maths. He was so astute and onto it, showing her how to derive the formulae before applying it, and she learnt a great deal from him. It was quite the paradox.
When that was done, about 5:30 was dinner time and I'd help him up out of his laZyboy recliner and onto his stroller and walk from the lounge to the door. At the door he would always ask "which way?", left or right?
Now let's join up the civil engineer with a very sharp mind for building design and maths and calculus, even at his age, and wonder why he would ask "which way?" (to the dining room). The hospital care facility was a square box, you go left it took 30 paces, you go right it took 90 paces, either way you arrived at the dining room.
I'd say to dad, "would you like to go the short way or the long way, you have to walk this by yourself with the stroller". He'd always say, let's go the short way. 10-15 steps into that, he'd say, "can I sit down now, and you wheel me in?"
"Ok Dad" I'd say, thanks for helping your grand daughter with her maths today.
This went on for a few years, I got to know all the staff and the residents, I'd visit my dad twice a week, religiously, help out with dinner time, resident 'events', driving the outings van and other things. They were good times albeit desperately the end-of-times, for him.
If I was an investor in that home, I would put care and compassion above any monetary return. It changed me, for the better I feel.
To OCA and the other listed RV's, I'm with Justakiwi. Although I have significant proportion of portfolio invested, it is invested in the ultimate realisation of the property development however long that takes, while in the meantime I can rest assured that our residents are very well cared for, happy, contented and living the best rest of their life that they can, and deserve.
I really needed this post today.
Thank you for cheering me up!
Quote from: Buzz on Apr 30, 2024, 08:59 PMIt's an interesting paradox being an investor in aged care property development and the realities of actual care for our aged. I know that a few of us here have first hand experience, in caring for others and caring for our loved ones while they are in gods waiting room.
An amusing story that I used to tease my dad mercilessly about (because he was a real joker and teaser all his life, so to get some back on him). He was a very clever civil engineer, and until his death I'd take my daughter to visit him at the RV hospital care, and despite his moderate dementia they'd work on her calculus maths. He was so astute and onto it, showing her how to derive the formulae before applying it, and she learnt a great deal from him. It was quite the paradox.
When that was done, about 5:30 was dinner time and I'd help him up out of his laZyboy recliner and onto his stroller and walk from the lounge to the door. At the door he would always ask "which way?", left or right?
Now let's join up the civil engineer with a very sharp mind for building design and maths and calculus, even at his age, and wonder why he would ask "which way?" (to the dining room). The hospital care facility was a square box, you go left it took 30 paces, you go right it took 90 paces, either way you arrived at the dining room.
I'd say to dad, "would you like to go the short way or the long way, you have to walk this by yourself with the stroller". He'd always say, let's go the short way. 10-15 steps into that, he'd say, "can I sit down now, and you wheel me in?"
"Ok Dad" I'd say, thanks for helping your grand daughter with her maths today.
This went on for a few years, I got to know all the staff and the residents, I'd visit my dad twice a week, religiously, help out with dinner time, resident 'events', driving the outings van and other things. They were good times albeit desperately the end-of-times, for him.
If I was an investor in that home, I would put care and compassion above any monetary return. It changed me, for the better I feel.
To OCA and the other listed RV's, I'm with Justakiwi. Although I have significant proportion of portfolio invested, it is invested in the ultimate realisation of the property development however long that takes, while in the meantime I can rest assured that our residents are very well cared for, happy, contented and living the best rest of their life that they can, and deserve.
I know from experience its really tough to watch your Dad gradually lose his mind to dementia over the years, my Dad had a 7 year journey and it was difficult for the whole family, especially my Mum. It didn't escape my attention however there is something of an irony Buzz in you sharing your journey in the OCA thread, a company that does not to the best of my knowledge provide dementia care. Just a thought, maybe the fact they don't is a factor in their slow sales ?...i.e. they're not truly providing a full continuum of care.
How is it that ARV, RYM and SUM all provide dementia care but OCA don't ?
Quote from: Basil on May 01, 2024, 08:16 PMI know from experience its really tough to watch your Dad gradually lose his mind to dementia over the years, my Dad had a 7 year journey and it was difficult for the whole family, especially my Mum. It didn't escape my attention however there is something of an irony Buzz in you sharing your journey in the OCA thread, a company that does not to the best of my knowledge provide dementia care. Just a thought, maybe the fact they don't is a factor in their slow sales ?...i.e. they're not truly providing a full continuum of care.
How is it that ARV, RYM and SUM all provide dementia care but OCA don't ?
They do in many of their facilities just like the other 3 and I should know because I've worked in two of them. Sometimes it pays to do more research before down ramping.
I looked at their three most premier villages, The Helier, The Sands and Meadowbank. On the website tab for these villages which are their foremost product offering, it's clear dementia care is not available. The Sands doesn't even offer palliative end of life care, I know, I asked for my Mum.
It's a pretty messed up and confused product offer when their three most premier villages don't offer basic dementia care let alone lock-up advanced dementia care. I guess it's their older villages that they're trying to sell, wherein some might offer dementia care. "Believe in better"...hmmm
I'm just here to enjoy the investment community and the banter. I wouldn't imagine for one moment any opinion I share on here about any company would have any effect on its share price.
You are an odd fellow Basil. I would have thought you'd be happy for RVs not to provide dementia care, given your view that there is no money in care. You have repeatedly implied that RVs should be getting "out" of care altogether. Dementia care costs significantly more to provide, and is probably even less profitable than rest home level care. Yet here you are, having a dig at OCA for not providing it in all its facilities.
Having said that, many folk with dementia can be catered for at rest home level. I imagine OCA would support folk who were in that category. Providing secure dementia care is a whole different ball game, requiring additional investment in development of a secure unit, and much higher levels of staffing, especially at D6 level. Without adequate government funding, I can see why RVs would be reluctant to go down that road.
Quote from: Basil on May 01, 2024, 10:40 PMI looked at their three most premier villages, The Helier, The Sands and Meadowbank. On the website tab for these villages which are their foremost product offering, it's clear dementia care is not available. The Sands doesn't even offer palliative end of life care, I know, I asked for my Mum.
It's a pretty messed up and confused product offer when their three most premier villages don't offer basic dementia care let alone lock-up advanced dementia care. I guess it's their older villages that they're trying to sell, wherein some might offer dementia care. "Believe in better"...hmmm
I'm just here to enjoy the investment community and the banter. I wouldn't imagine for one moment any opinion I share on here about any company would have any effect on its share price.
Quote from: Basil on May 01, 2024, 10:40 PMI looked at their three most premier villages, The Helier, The Sands and Meadowbank. On the website tab for these villages which are their foremost product offering, it's clear dementia care is not available. The Sands doesn't even offer palliative end of life care, I know, I asked for my Mum.
It's a pretty messed up and confused product offer when their three most premier villages don't offer basic dementia care let alone lock-up advanced dementia care. I guess it's their older villages that they're trying to sell, wherein some might offer dementia care. "Believe in better"...hmmm
I'm just here to enjoy the investment community and the banter. I wouldn't imagine for one moment any opinion I share on here about any company would have any effect on its share price.
Your post seemed desperate to find some mud that would stick by making out that none of the OCA villages provide dementia care compared to its competitors which is simply untrue. You do realise that not all of the competitors villages provide dementia care including your beloved SUM, a fact you conveniently bypassed.
Quote from: Untamed on May 01, 2024, 11:38 PMYou are an odd fellow Basil. I would have thought you'd be happy for RVs not to provide dementia care, given your view that there is no money in care. You have repeatedly implied that RVs should be getting "out" of care altogether. Dementia care costs significantly more to provide, and is probably even less profitable than rest home level care. Yet here you are, having a dig at OCA for not providing it in all its facilities.
Having said that, many folk with dementia can be catered for at rest home level. I imagine OCA would support folk who were in that category. Providing secure dementia care is a whole different ball game, requiring additional investment in development of a secure unit, and much higher levels of staffing, especially at D6 level. Without adequate government funding, I can see why RVs would be reluctant to go down that road.
D6 is not common to each home or company and people with that level of need tend to get shifted, I have family working in care and I spend a bit of time around a few rest homes. But many dementia residents are easily cared for at a hospital level if they have no serious behavioral issues. Nana had dementia but nothing changed, she stayed where she was, happy, till 103.
Quote from: Untamed on May 01, 2024, 11:38 PMDementia care costs significantly more to provide, and is probably even less profitable than rest home level care. Yet here you are, having a dig at OCA for not providing it in all its facilities.
Quite surprised that OCA doesn't provide dementia care at their three premier villages. I thought if you pay the big bucks, (and we're talking $3.5K per week at the Helier) they would have an all-encompassing care service. Obviously not. This is a risk factor for me with my family history so i need to be very careful what village I select in the future to ensure my future possible needs are being met. That seems to rule out the Helier which is a bit disappointing. Good location there looking out over the Hauraki gulf where I go boating a lot. Would have been nice to sit there and look at the view and reflect on earlier days...oh well, never mind...probably a bit "high brow" for me anyway...know the Mrs. feels that way too..
Quote from: Breezy on May 02, 2024, 06:02 AMYour post seemed desperate to find some mud that would stick by making out that none of the OCA villages provide dementia care
I'm still quite a significant bondholder in OCA so I am a meaningful stakeholder here and as a bondholder I am keen to see their debt doesn't blow out to uncomfortable level's. OCA010 hit 8.12% on the debt market yesterday. That yield suggests to me the market is starting to get uncomfortable with their debt level and debt servicing capabilities. Like many shareholders I am trying to figure out why their sales in the last half were fairly weak compared to others in the sector. Thought maybe the lack of dementia care could be part of the answer but perhaps not.
How do you explain the weak sales considering they have record levels of completed stock ?
Quote from: Basil on May 02, 2024, 09:39 AMI'm still quite a significant bondholder in OCA so I am a meaningful stakeholder here and as a bondholder I am keen to see their debt doesn't blow out to uncomfortable level's. Like many shareholders I am trying to figure out why their sales in the last half were fairly weak compared to others in the sector. Thought maybe the lack of dementia care could be part of the answer but perhaps not.
How do you explain the weak sales considering they have record levels of completed stock ?
Suggestion on the other site that OCA could have forward booked 'sales' in H1 (eg.The Helier), presumably to make numbers look good when they reported their H1 results in Nov 23.
If true, would account for drop in H2 sales so then, it is critical to look at the yoy sales trend.
Share price looks like OCA is considering a CR? Word tends to leak out (re RYM) when the lead brokers are in discussions with sub-underwriters. Pure speculation on my part.
Quote from: Teitei on May 02, 2024, 10:09 AMSuggestion on the other site that OCA could have forward booked 'sales' in H1 (eg.The Helier), presumably to make numbers look good when they reported their H1 results in Nov 23.
If true, would account for drop in H2 sales so then, it is critical to look at the yoy sales trend.
Share price looks like OCA is considering a CR? Word tends to leak out (re RYM) when the lead brokers are in discussions with sub-underwriters. Pure speculation on my part.
Yes, this lot behaves like the worst of used car salesmen. Constantly trying to spin the truth to their advantage and constantly trying to pull the wool over their shareholder's eyes.
Wouldn't trust them further than I could throw them.
Oh, and as for a cap raise - who in their right mind would support this. Give them a dollar in cash and they will quickly turn it into 50c of share price. I wonder why - maybe due to their lack of credibility.
Quote from: Teitei on May 02, 2024, 10:09 AMShare price looks like OCA is considering a CR? Word tends to leak out (re RYM) when the lead brokers are in discussions with sub-underwriters.
Putting my bondholder hat on. Last time I looked gearing was the highest in this sector at 37%, nothing too serious and not a material concern. Since then however, in FY24 they've built a lot more units than they've sold and other capital works like main community building(s) will probably have also contributed to gearing headed materially higher. Will be interesting to see the gearing level when they report later this month.
More concerning is looking forward, their stated FY25 build rate is quite a bit further north of their current sales run-rate and that suggests to me their gearing level is highly likely to head materially higher in FY25, unless they can dramatically lift their sales rate this year, (very unlikely in this market based on recent sales level's). The debt metrics and cost of finance are certainly suggesting a capital raise is a real chance sometime between when they report later this month and in May 2025. Any possible new equity issuance, if it happens in due course would need to be a substantial quantum with the share price where it is to make a material difference to their gearing and would be highly dilutive to eps going forward.
Quote from: Teitei on May 02, 2024, 10:09 AMSuggestion on the other site that OCA could have forward booked 'sales' in H1 (eg.The Helier), presumably to make numbers look good when they reported their H1 results in Nov 23.
If true, would account for drop in H2 sales so then, it is critical to look at the yoy sales trend.
Share price looks like OCA is considering a CR? Word tends to leak out (re RYM) when the lead brokers are in discussions with sub-underwriters. Pure speculation on my part.
Lol I'm glad you put pure speculation at the end of your post, last time you were going on about a CR for quite some time which never eventuated but I guess you might get lucky eventually as even a stuck clock is correct twice a day.
Quote from: Breezy on May 02, 2024, 11:16 AMLol I'm glad you put pure speculation at the end of your post, last time you were going on about a CR for quite some time which never eventuated but I guess you might get lucky eventually as even a stuck clock is correct twice a day.
OCA was considering a capital raising last time round - fact.
They opted instead to stop paying dividends and to sell assets.
So don't get too high and mighty about stuck clock - you should have listened and hit out then.
Be buying back cheaper now but maybe you should be selling now to buy during the CR?
Quote from: Teitei on May 02, 2024, 03:08 PMOCA was considering a capital raising last time round - fact.
They opted instead to stop paying dividends and to sell assets.
Where is your evidence that they were considering a capital raise? I have zero memory of OCA making that announcement/statement. Could be faulty memory however, so can you please provide a source?
QuoteBe buying back cheaper now but maybe you should be selling now to buy during the CR?
Anyone dumb enough to take your advice without
any confirmation from OCA of a CR, would need their head read.
Quote from: Untamed on May 02, 2024, 03:17 PMWhere is your evidence that they were considering a capital raise? I have zero memory of OCA making that announcement/statement. Could be faulty memory however, so can you please provide a source?
Anyone dumb enough to take your advice without any confirmation from OCA of a CR, would need their head read.
Sp performance, cancellation of dividends and requirement for asset sales speak for themselves.
You could be buying back the shares cheaper now. But don't worry - you can still do so and buy back cheaper Foon?
Quote from: Teitei on May 02, 2024, 03:54 PMSp performance, cancellation of dividends and requirement for asset sales speak for themselves.
So
not a
fact at all.
QuoteYou could be buying back the shares cheaper now. But don't worry - you can still do so and buy back cheaper Foon?
So, once again, not based on fact. Just you, making throwaway wild suggestions that have the potential to negatively influence inexperienced investors decisions.
Quote from: Untamed on May 02, 2024, 04:11 PMSo not a fact at all.
So, once again, not based on fact. Just you, making throwaway wild suggestions that have the potential to negatively influence inexperienced investors decisions.
Don't you get it? Share price goes down there must be a CR? LOL great investor research there.
To think he gave us all crap and called us names. Lacks any humility or empathy, hence why I say when your spending your money you do your own research.
Too many EGO's in play by these traders. Gloat when they call it, but don't have the courage to say, oops sorry I was wrong or my personal favourite, is they have a high conviction on a stock and tell the same negative people they don't know what they are talking about when it clashes with their opinion
57 cents offered.
Most disappointing considering that the index overhang of $30m was done by 59c and that should have been the floor.
Quote from: Teitei on May 02, 2024, 04:46 PM57 cents offered.
Most disappointing considering that the index overhang of $30m was done by 59c and that should have been the floor.
Market is generally weak, have a look at the whole sector including property. Then the interest battle, economy, employment blah blah blah.
And if thats not enough for you there was that very strange comms ex OCA as well which in my opinion they should not have released at all as it lacked info.
All will be revealed on 24th May.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407732.pdf
Thought with the annual result coming up might be good to refresh what the half year looked like.
Gosh, forgotten they had a whopping 409 units for sale as at 30 Sept, see page 13.
63 apartments in the first half and total new build for the year recently announced was 182 so 119 new units built in second half, mainly care suites, 32 at the Helier and 55 in Blenheim.
So total available stock 409 + 119 new build in 2H = 528, less what they sold in 2H...others have done some analysis on this disappointing number.
No matter how you slice and dice it unsold stock will have gone up a heck of a lot as at 31 March 2024 from the already seriously overstocked level as at 30 September.
Worse is the nature of the unsold stock problem. Last year I commented after the annual result they had a chronic oversupply of unsold care suites, but they just keep building them at a substantially higher rate than they can sell them, approx 87 added in the 2H.
Basic good governance suggests when you are in a very deep hole with a very serious overstock problem the first thing to do is to stop digging the hole deeper. Gearing was already high at 37.7% as at 30 September, highest in the sector and must be pushing very close to or even slightly above 40% as at 31 March 2024. Despite this they have plans to accelerate the build rate in FY25. WTF ?? That simply doesn't make commercial sense to me, I'd almost go so far as to suggest its commercially "reckless" as its highly likely their unsold stock problem will just keep getting worse in FY25 like it has every other year recently.
Announced development plans for FY25 far in excess of FY24 sales rate, an ever-increasing ocean of unsold stock and the current high funding costs are all suggestive that there are plans afoot to ask for more capital. Not saying it will happen, just all the above material indicators are pointing in that direction.
Suspension of dividend is another sign of cash flow and gearing stress. I think it's highly likely dividends will remain suspended for the foreseeable future.
Quote from: Basil on May 02, 2024, 05:33 PMhttp://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407732.pdf
Thought with the annual result coming up might be good to refresh what the half year looked like.
Gosh, forgotten they had a whopping 409 units for sale as at 30 Sept, see page 13.
63 apartments in the first half and total new build for the year recently announced was 182 so 119 new units built in second half, mainly care suites, 32 at the Helier and 55 in Blenheim.
Yes we know, I recall you highlighting the same with SUM when they had over 600 to sell. Look what happened. Go figure.
Quote from: Teitei on May 02, 2024, 04:46 PM57 cents offered.
Most disappointing considering that the index overhang of $30m was done by 59c and that should have been the floor.
Really, you should know better than most that the only true floor in the market is zero.
Quote from: Greekwatchdog on May 02, 2024, 05:38 PMYes we know, I recall you highlighting the same with SUM when they had over 600 to sell you jumping up and down like a spoiled child. Look what happened. Go figure.
Same shite with you. Rinse and repeat.
SUM solved the problem because people seem to want SUM units, Oceania just keep making it worse year after year after year, that's the difference....but you know that already. They now appear to have approx. 3 years worth of unsold stock sitting on their balance sheet and headed even higher. No worries, either the bank will fund that at current high interest rates or shareholders will have to put their hand in their pocket for a cash issue...either way, eps will be affected.
Quote from: Teitei on May 02, 2024, 04:46 PM57 cents offered.
Most disappointing considering that the index overhang of $30m was done by 59c and that should have been the floor.
Any profit is a good one in this market. Well done on making a realized profit from the dead cat index exit bounce.
From Investopedia
What Is a Dead Cat Bounce?
A dead cat bounce is a temporary, short-lived recovery of asset prices from a prolonged decline or a bear market that is followed by the continuation of the downtrend. Frequently, downtrends are interrupted by brief periods of recovery—or small rallies—during which prices temporarily rise.
The name "dead cat bounce" is based on the notion that even a dead cat will bounce if it falls far enough and fast enough. It is an example of a sucker's rally.
KEY TAKEAWAYS
A dead cat bounce is a short-lived and often sharp rally that occurs within a secular downtrend.
It is a rally that is unsupported by fundamentals that is reversed by price movement to the downside.
In technical analysis, a dead cat bounce is considered to be a continuation pattern.
At first, the bounce may appear to be a reversal of the prevailing trend, but it is quickly followed by a continuation of the downward price move.
Dead cat bounce patterns are usually only realized after the fact and are difficult to identify in real-time.
Dead Cat Bounce
Investopedia / Laura Porter
I see a few key points here from what you guys are discussing.
Gearing at the last reporting date was high, bond yields indicate market is not very comfortable with it.
In the recent past build rate has exceeded sales rate.
While sales rate has picked up recently, build rate target has also been increased.
Plummeting share price must indicate word has leaked a capital raise is incoming.
To me, it seems kind of unlikely that a raise is going to occur imminently. Does an executive staring down the barrel of a *highly dilutive to EPS and especially NTA* debt bailout capital raise, go and guide the market they are going to increase capex/build rate? Doesn't seem logical. OCA still gets sales, you would expect they would delay projects, slow the build rate etc if they were concerned, and start to pay down the debt.
I reckon unless someone/s very high up are very thick in the head, the only explanation for increased build rate guidance is that sales that have not been reported yet were positive. What other explanation could there be that doesn't involve gross stupidity, worse than that seen with the Ryman CR because someone failed to read the fine print on the USPP notes.
EDIT: Also don't forget the $40 million in divestments "in line with book value" with some of the $58 million more at 'various stages of completion'
well if over time they manage the stock and the companies comes out in the green... or the industry has a study case for trying to find a model that works...
some saying it already has and it SUM..
Does that mean a socialist model required for some in the industry where the likes of OCA get Nationalised?
Quote from: Basil on May 02, 2024, 06:20 PMAny profit is a good one in this market. Well done on making a realized profit from the dead cat index exit bounce.
From Investopedia
What Is a Dead Cat Bounce?
A dead cat bounce is a temporary, short-lived recovery of asset prices from a prolonged decline or a bear market that is followed by the continuation of the downtrend. Frequently, downtrends are interrupted by brief periods of recovery—or small rallies—during which prices temporarily rise.
The name "dead cat bounce" is based on the notion that even a dead cat will bounce if it falls far enough and fast enough. It is an example of a sucker's rally.
KEY TAKEAWAYS
A dead cat bounce is a short-lived and often sharp rally that occurs within a secular downtrend.
It is a rally that is unsupported by fundamentals that is reversed by price movement to the downside.
In technical analysis, a dead cat bounce is considered to be a continuation pattern.
At first, the bounce may appear to be a reversal of the prevailing trend, but it is quickly followed by a continuation of the downward price move.
Dead cat bounce patterns are usually only realized after the fact and are difficult to identify in real-time.
Dead Cat Bounce
Investopedia / Laura Porter
I thought the sp would retrace back to over 70c after the index selldown at 59c and was happy to be a holder.
The sales update was bad however (thanks, W69, for the quick update on the day) and it just looked like the company cannot get its act together. Reinforced why Brent quit in February - that things were not going well imo.
Was Brent's background in investment banking one of the reasons why OCA kept gearing up?
Quote from: Waltzing on May 02, 2024, 06:30 PMDoes that mean a socialist model required for some in the industry where the likes of OCA get Nationalised?
Not in a million years. The Government washed their hands of Aged Care (regardless of which party/parties) years ago. They have zero interest in taking that responsibility back and zero ability to run it. They absolutely do not want it back. They will eventually, begrudgingly, have no choice but to fund it appropriately, but God knows when that will happen. And if they don't - well, they will reap what they sow. In more ways than one.
Quote from: Untamed on May 02, 2024, 07:52 PMNot in a million years. The Government washed their hands of Aged Care (regardless of which party/parties) years ago. They have zero interest in taking that responsibility back and zero ability to run it. They absolutely do not want it back. They will eventually, begrudgingly, have no choice but to fund it appropriately, but God knows when that will happen. And if they don't - well, they will reap what they sow. In more ways than one.
Not true that the government has washed their hands of Aged Care at all!
The 82 year old father of a contact went into the Bruce McLaren Retirement Village in Auckland - having lived a great life and had no assets left when he checked in. The Village arranged for everything (applying for the residential care subsidy) and he was staying there free until he passed away 2 years ago. His children initially paid for him to stay there ($1,500 per week) but after the first month, he stayed there courtesy of the taxpayer.
You all now know what to do if you choose to do so.
You knew
exactly what I meant. The government no longer owns or operates any aged care facilities. Everything, including all dementia care at both D3 and D6 levels, is provided by third parties. Sure, the government funds those who are eligible for the Residential Care Subsidy, but that is literally the extent of their involvement now. And they can't even do
that properly, as we all well know. The Aged Care Review has 100% confirmed that.
Quote from: Teitei on May 02, 2024, 08:07 PMNot true that the government has washed their hands of Aged Care at all!
The 82 year old father of a contact went into the Bruce McLaren Retirement Village in Auckland - having lived a great life and had no assets left when he checked in. The Village arranged for everything (applying for the residential care subsidy) and he was staying there free until he passed away 2 years ago. His children initially paid for him to stay there ($1,500 per week) but after the first month, he stayed there courtesy of the taxpayer.
You all now know what to do if you choose to do so.
Quote from: Untamed on May 02, 2024, 08:19 PMYou knew exactly what I meant. The government no longer owns or operates any aged care facilities. Everything, including all dementia care at both D3 and D6 levels, is provided by third parties. Sure, the government funds those who are eligible for the Residential Care Subsidy, but that is literally the extent of their involvement now. And they can't even do that properly, as we all well know. The Aged Care Review has 100% confirmed that.
No, I did not and do not know what you mean. I accept that the system sucks because those who live responsibly and save for their retirement end up having to pay for their own aged care while those who choose to squander all and live the high life get their aged care paid for by the taxpayers! No different from solo mums having 8 kids from 8 fathers livcing off the taxpayers - that's how NZ is now set up.
Do the US, Australia, Canada or UK run aged care homes?
Quote from: Teitei on May 02, 2024, 08:28 PMNo, I did not and do not know what you mean. I accept that the system sucks because those who live responsibly and save for their retirement end up having to pay for their own aged care while those who choose to squander all and live the high life get their aged care paid for by the taxpayers! No different from solo mums having 8 kids from 8 fathers livcing off the taxpayers - that's how NZ is now set up.
Do the US, Australia, Canada or UK run aged care homes?
Although it cuts both ways, i have witnessed many incredibly wealthy residents get a full subsidy over the years due to family trust setups.
Quote from: Breezy on May 02, 2024, 08:36 PMAlthough it cuts both ways, i have witnessed many incredibly wealthy residents get a full subsidy over the years due to family trust setups.
Exactly. That's why I wrote 'You all know what to do if you choose to do so."
Ah, here we go. Back to your usual bashing of those less fortunate than yourself. You have no idea how the other half live Balance. Those of us who will one day need that subsidy, did not "squander" our money. Nor were we lazy bludgers. We worked our butts off at low paid jobs, and experienced circumstances in our lives, that made it impossible for us to ever be wealthy. But as far as you're concerned, we should just go live under a bridge when we are old.
Quote from: Teitei on May 02, 2024, 08:28 PMNo, I did not and do not know what you mean. I accept that the system sucks because those who live responsibly and save for their retirement end up having to pay for their own aged care while those who choose to squander all and live the high life get their aged care paid for by the taxpayers! No different from solo mums having 8 kids from 8 fathers livcing off the taxpayers - that's how NZ is now set up.
Do the US, Australia, Canada or UK run aged care homes?
Quote from: Basil on May 02, 2024, 06:04 PMSUM solved the problem because people seem to want SUM units, Oceania just keep making it worse year after year after year, that's the difference....but you know that already. They now appear to have approx. 3 years worth of unsold stock sitting on their balance sheet and headed even higher. No worries, either the bank will fund that at current high interest rates or shareholders will have to put their hand in their pocket for a cash issue...either way, eps will be affected.
3 years worth of unsold stock? Really?
Just wondering based on which data you came to this conclusion for a company with an occupancy rate above 90%?
If what you say would be true, i.e. less than 10% of their stock are worth 3 years of selling, than this would mean that their average occupation time per unit would be 30 years. Quite unusual for a retirement home, isn't it?
Not sure, on which data (if any) your claim is based on, but you seem as well not to understand what difference the different average occupation times have on the occupancy rates.
A cruise ship experience provider for rich and healthy people like SUM has an average occupation time of 8 years.
A needs based care suite provider like OCA has an average occupation time of three years.
Given that the time to refurbish and market an apartment after the departure of the previous resident is the same, whether the resident occupied it for 3 years or 8 years, this obviously means that care providers with a higher change frequency have a lower occupancy rate - this is simple maths. More constant delay events over a given time reduce the occupancy rate
So - where are your three years of unsold stock coming from, and how does the unsold stock compare to e.g. SUM if you take the different occupation periods into account?
Quote from: BlackPeter on May 03, 2024, 10:00 AM3 years worth of unsold stock? Really?
I am time poor today so you'll need to do some legwork yourself. I suggest you read the most recent half year presentation, its all in there. I posted a link to it a while back.
You are getting totally confused between the care unit's occupancy and the overall stock situation. Try harder, it's all in there, 409 unsold units as at half year and then extrapolate by adding new builds in the 2H, less sales. Page 12 and 13 will get you started. Then look at their overall annual new build sales annual run rate and compare that to the number of estimated unsold new build stock units as at 31 March 2024. Its worrying me as a bondholder. I get approx 3 years of stock.
8 months uncontracted stock for SUM at their most recent sales run-rate.
Quote from: Basil on May 03, 2024, 10:35 AMI am time poor today so you'll need to do some legwork yourself. I suggest you read the most recent half year presentation, its all in there. I posted a link to it a while back.
You are getting totally confused between the care unit's occupancy and the overall stock situation. Try harder, it's all in there, 409 unsold units as at half year and then extrapolate by adding new builds in the 2H, less sales. Page 12 and 13 will get you started. Then look at their overall annual new build sales and compare than to the number of estimated unsold new build stock units as at 31 March 2024. Its worrying me as a bondholder. I get approx 3 years of stock.
See, this is the problem - you only look at the trees and you are so overwhelmed that you don't see the forest.
Maybe they did build in the past couple of years some larger apartment buildings (Oops, yes they did), which take longer to sell down? Quite normal for any RV provider.
So yes, lifestyle villages sell down faster, but they have as well higher maintenance and operational costs - SUM just will pay the bill a bit later.
Maybe you are taking the sales numbers of a (for all providers) weak sales period and assume that this will be the average sales number for the future? How sensible is this approach? It happens that companies sell more if they have more on offer ... and they certainly sell more when the real estate sector recovers (which it does).
Maybe you ignore the resales numbers that you forget that they are part of the mix? Money is not only coming from selling units the first time.
Look, I don't know what drives your confirmation bias this time, but normally it pays to take a step back and look at the bigger picture. OCA's occupation rate (~91%) is hardly worse than SUM's (~94% from memory). Not really a case to push doomsday rhetoric, isn't it?
Quote from: BlackPeter on May 03, 2024, 11:09 AMSee, this is the problem - you only look at the trees and you are so overwhelmed that you don't see the forest.
Maybe they did build in the past couple of years some larger apartment buildings (Oops, yes they did), which take longer to sell down? Quite normal for any RV provider.
I'm seeing the trees, the wood and the forest as well as the pine needles on the forest floor. I didn't invest a significant sum in the bonds without both my eyes wide open and keeping them open. Look, it's perfectly clear you haven't done the legwork I suggested. Analysts have said before they have an ocean of unsold stock, (they are not saying that about other R.V. companies), and the stock situation has got worse in FY24 and likely to get even worse in FY25. I've been warning about this for a long time now and with the share price where it has tracked over that time, it should be crystal clear the market has concerns too.
I think the bonds are fine from a risk reward perspective, possibly even good buying at an 8% yield to maturity. If the company has to do a cash issue or slow their FY25 build rate as I suspect, that's not going to materially affect their debt repayment capabilities either way. I think OCA are going to be very close to the upper limit of their bank loan facilities as at 31 March 2024. Maybe with incoming cash from basic care village sales they can achieve their FY25 indicated build rate or maybe that gets throttled back or perhaps there's a cash issue...either way the banks' lending cap will probably play a major role in dictating the future build rate. Others are throttling back their future build rate (apart from SUM) so its no big deal to stakeholders in the bonds is how I see it.
I run into a colleague today at a care facility and we got talking, she only provides services to residential care facilities including SUM, she said she enjoys the OCA homes the most due to the atmosphere/interactions with staff and level of care provided to the residents.
Quote from: Basil on May 03, 2024, 10:35 AMI am time poor today so you'll need to do some legwork yourself. I suggest you read the most recent half year presentation, its all in there. I posted a link to it a while back.
You are getting totally confused between the care unit's occupancy and the overall stock situation. Try harder, it's all in there, 409 unsold units as at half year and then extrapolate by adding new builds in the 2H, less sales. Page 12 and 13 will get you started. Then look at their overall annual new build sales annual run rate and compare that to the number of estimated unsold new build stock units as at 31 March 2024. Its worrying me as a bondholder. I get approx 3 years of stock.
8 months uncontracted stock for SUM at their most recent sales run-rate.
Beagle, beagle - you confuse me.
You made a lot of dooming allegations re the OCA sales pipeline, and when I ask some questions for clarification you tell me that I need to do the legwork myself, because you haven't got the time.
Does this mean that all your damning allegations are based on - well - guts feelings mixed with fairy dust?
So, lets look at OCA's units (i.e. care beds, care suits and village units) at 30-9-23 (i.e. HY report). At this stage I just took totals, feel free to do the analysis as well on an individual basis.
They say (e.g. on slide 24) they have (at 30/9/23) a total of 4267 units (so I guess this is 100%).
They say that they have 409 new units for sale - which would be 9.6% of their stock (lets call this close enough to the claimed occupancy rate of 90.3%, shall we? And yes, I know, there are some resale units for sale and as well some units occupied by renters, which pretty much seem to even out)?
They say that they have 382 units under construction (ok, this will over time (whenever this is) increase the number of stock to sell), but they say as well (if you throw your eyes on slide 25) that only 60 of them are due to completion in FY2024 (check the comments on slide 25).
So, yes - they will need to sell these 60 on top of the 409 vacant units.
On the other hand - they sold in the first HY 84 new and 171 resale units. This means, if we add in HY2 60 more new and nothing changes with the sales numbers (I hear, they are increasing), than they will end up at FY with less than 409 vacant units. Isn't this great - they are reducing their stock!
.... and this is not even taking their April 15 announcement into account where they said that their sales volumes increased by 20% vs last year). Isn't this marvellous? ... Things are even better than a plain extrapolation of their HY data would suggest.
Sure, they don't say when they intend to complete these remaining 382-60=322 units, but it won't be in FY2024. They talk as well about plans to increase the total number of units to 5801 (without timeline, and they have already some of them consented).
But - nobody forces them to start their development unless there is demand.
So - what exactly is the fuss about? Is this what beagles do? Bark first and let think later?
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/411935/395028.pdf
Its actually pretty simple BP, I thought you could work this out for yourself.
In last years repot, link above, they sold a total of 128 new units, (74 care suites and 54 apartments).
New sales are up ~ 20% per April 15 2024 announcement so that suggests they sold 154 new units in FY24.
They sold 84 new units in 1H FY24 so their total new sales for the year are 154, (a 20% increase on last year), they only sold 70 new units in 2H (154-84)
What's not in dispute is they had 409 new unsold units as at 30/09/2023.
If you have another look at the half year presentation you'll see they had the following new blocks to be completed in 2H FY24, (after building 63 apartments in 1H.
The Helier 32 care suites
Bayview 28 apartments
Blenheim 55 care suites
Total units scheduled for 2H completion 115.
In the April 15 announcement they said they'd completed 182 new units for the year so after completing 63 apartments in 1H that means they actually delivered 119 new units in 2H FY24 (182-63).
Therefore unsold stock when up by 49 units in the second half (total 458 new unsold) because they delivered 119 new units in 2H and only sold 70.
I make total unsold new units as at 31 March 2024 459.
At their most recent annual sales rate for new units of 154 units per annum that's 2.97 years worth of unsold new stock. That compares by exactly the same measure to be just over 8 months of unsold new stock for SUM. Given a lot of these care suites churn, or are supposed to churn every 2-5 - 3 years of unsold stock is a serious problem. I think it's fair to say the professional analysts are quite right, they have an ocean of unsold stock that keeps getting bigger every year.
I repeat, no analyst is saying that about any other company in this sector. Are all the professional analysts stupid or maybe you are looking at this on a one-eyed basis, which of these is more likely ?
They've been building far in excess of demand for years. That's why their unsold stock keeps growing every year. Go back and look at the numbers over the years. As a bondholder I am starting to get a little concerned whether some of this stock is actually sellable or not ?
Quote from: Breezy on May 03, 2024, 05:40 PMHe hasn't got the time yet plenty of time for endless long posts on a stock he can't stand
I made it clear I have a substantial investment in the bonds and i was time poor for most of today, (not every day).
Why not post something useful for a change. I asked you quite a while back how do you explain the poor second half sales and you have given no answer or explanation. So let's hear your wonderful insights please.
Ah so Oceania have about 459 new units for sale
Full year sales F24 were 154
Therefore 3 years worth of new stock for sale ....at current rates
Interesting in F24 they sold 154 new units but delivered 182 new units
They have two options to keep afloat: borrow or raise capital.
Here's a summary of new units delivered and new unit sales since listing ..taken from their announcements
In 2 years they sold a few more than delivered ...other years delivered more than sold ...and in the period shown they have delivered 395 more than sold
No further comment
IMG_5786.png
Quote from: Azz on May 03, 2024, 06:53 PMThey have two options to keep afloat: borrow or raise capital.
You know this company is profitable don't you? On ignore, goodbye.
Quote from: Buzz on May 03, 2024, 07:15 PMYou know this company is profitable don't you? On ignore, goodbye.
Is it profitable on an
operational basis? Because if it isn't, and I don't think it is, it means the business is entirely dependent on money coming in from a never-ending supply of "new sales" - and there's a name for that.
To be fair they have made fairly good money on unit resales Azz.
Quote from: winner (n) on May 03, 2024, 07:10 PMHere's a summary of new units delivered and new unit sales since listing ..taken from their announcements
In 2 years they sold a few more than delivered ...other years delivered more than sold ...and in the period shown they have delivered 395 more than sold
No further comment
IMG_5786.png
The unsold stock problem seems to have gained really strong momentum in FY22 and FY23. Need to have a good look at what was built those years and ask why it isn't selling now. Research for another day.
Quote from: Basil on May 03, 2024, 08:00 PMTo be fair they have made fairly good money on resales Azz.
The Azz reckons it's all just a big Ponzi, not just OCA, all the RV's, and he detests the RV business model that don't do what Fletcher's do with their Care-(less) offering and basic services for able bodied residents and their selfish benefactors who would prefer them dead and cash out the inheritance. Bugger the infirmed that our RV's so capably care for, and at marginal profitability.
We can move beyond that, our listed RV's occupy a specific and well proven commercial property development niche domiciled in the RV sector, the relative performance of them is all we're talking about. OCA's performance is justifiably in question, relative to its industry peers.
But all of them are profitable, they're all making money, there's no question about that.
The market is a dire beast, it punishes any uncertainty. OCA really does need to prove that it can sell its backlog of property, and until then it will be punished. I've said repeatedly, and sorry for boring you, it's about sales, sales and sales. So far, OCA continues to disappoint.
The viability of the property development business model per se is not in question, imo, it is well proven and sustainable. Those who choose to question this have other motivations that I don't relate to.
Quote from: Buzz on May 03, 2024, 08:27 PMhe market is a dire beast, it punishes any uncertainty. OCA really does need to prove that it can sell its backlog of property, and until then it will be punished. I've said repeatedly, and sorry for boring you, it's about sales, sales and sales. So far, OCA continues to disappoint.
You're certainly not boring me, I totally get that. He's my theory why the sales are not going that well. I suspect that OCA is delivering the market product that's simply not in strong demand. Let me unpack that a bit.
Years ago Earl Gasparich at the Auckland branch of the NZSA gave a presentation unpacking their business case. Therein he clearly stated we are not trying to replicate the RYM or SUM full land-based cruise ship experiences, we're smaller, boutique with more limited facilities. He went on to say we're targeting the 85+ age group.
Now let's have a look at that and consider that the demand is now starting to flow from the baby boomers, a vast population demographic with high spending power widely considered to have been a post-world war 2 phenomenon that kicked off in 1946, 78 years ago.
Late 70's is widely considered in the industry to be the average age of entry for ILU R.V. living.
It seems to me that the large full feature facilities provided by the likes of SUM are what people in their mid to late 70's really want and OCA are currently targeting a much smaller pool of 85+ year old's. My contention is that in time, over the next 7 -10 years there will be a much larger demand for the care suites and smaller boutique villages OCA provides.
I acknowledge they are trying to turn things around and if they can sell all the basic care villages they're endeavoring too and realise close to $100m, that will quite possibly enable them to continue their transformation program and move the needle in a meaningful way towards a greater percentage of their units being ILU.
QuoteIn FY2025 Oceania intends to complete deliveries of a further 224 units at Elmwood in Manurewa, Awatere in Hamilton and Waterford in Hobsonville Point.
This target however, against a current run rate of annual sales of circa 150 suggest their overstock problem is only going to get worse. Why they are not throttling back their development rate in the face of slow sales and a vast ocean of unsold stock...Go figure ?.
All that said RYM seem to have their problems as well with the shares closing down 8 cents to an eleven year low of only $3.94. Surely, they're not going to do an ARV or OCA and head down to around 50% of NTA or slightly worse...or maybe they are ?
Quote from: Buzz on May 03, 2024, 08:27 PMThe Azz reckons it's all just a big Ponzi, not just OCA, all the RV's, and he detests the RV business model that don't do what Fletcher's do with their Care-(less) offering and basic services for able bodied residents and their selfish benefactors who would prefer them dead and cash out the inheritance. Bugger the infirmed that our RV's so capably care for, and at marginal profitability.
We can move beyond that, our listed RV's occupy a specific and well proven commercial property development niche domiciled in the RV sector, the relative performance of them is all we're talking about. OCA's performance is justifiably in question, relative to its industry peers.
But all of them are profitable, they're all making money, there's no question about that.
The market is a dire beast, it punishes any uncertainty. OCA really does need to prove that it can sell its backlog of property, and until then it will be punished. I've said repeatedly, and sorry for boring you, it's about sales, sales and sales. So far, OCA continues to disappoint.
The viability of the property development business model per se is not in question, imo, it is well proven and sustainable. Those who choose to question this have other motivations that I don't relate to.
I'm genuinely concerned for shareholders of OCA. There are other stocks not doing great and I am not commenting on those stocks because they have issues that the shareholders seem to have in hand.
There are a number of issues with the RV business model. But let me focus on what it means for OCA (ie, not the customer end). And why I do not see it as being beneficial for OCA.
* The premium time [for OCA finances] for a resident to leave the RV is after exactly three years, and then at that point, and after any cosmetic and structural fixes to the property, the premium outcome is that the newly available license is then picked up (a "resale") immediately by a new resident.
* But, there is negative incentive for a resident to leave after exactly three years; it is actually the opposite: the longer the resident stays the better for the resident because that means the rent (ie, the 30%) is spread out over a longer term.
* Because an extra 70% has been taken in by OCA, this debt is then owed to any resident that leaves. This is a real problem, and nothing can be more dangerous than "free" money that at some point needs to be paid back. Remember the US subprime meltdown? That was all, at its heart, caused by "free" money.
* If there is no new buyer (a resale not occurring), OCA does not pay the previous licensee (the resident, the tenant) until there is a new buyer. But the debt is still owed.
What I'm trying to get across is that this whole setup - if you pardon the pun - is a house of cards. If there are any problems with finance - eg, lack of sales, lack of resales, a loss on the day-to-day operation of the RVs, a genuine overbuild, a major house price correction (be it short and sharp, or just as bad but over a longer time period), internal "robbing Peter to pay Paul", etc - then each step of the sales and resales process could mean problems for the next step. It could mean not being able to pay out exited tenants due to non-executed - or even with executed - resales (and the terrible PR this would produce); it could mean not enough new sales to keep the operations running; it could mean a number of these sequential mini disasters that, all taken together, add up to something much worse.
Quote from: Basil on May 03, 2024, 09:40 PMLate 70's is widely considered in the industry to be the average age of entry for ILU R.V. living.
It seems to me that the large full feature facilities provided by the likes of SUM are what people in their mid to late 70's really want and OCA are currently targeting a much smaller pool of 85+ year old's. My contention is that in time, over the next 7 -10 years there will be a much larger demand for the care suites and smaller boutique villages OCA provides.
Are you sure about that? I haven't done a thorough search but The Sands minimum age is 65, Meadowbank minimum age is 70, Eden is 70, Remuera Rise is 70, St Johns is 70, Hutt Gables is 70, The Oaks is 70.
I can't find anything mentioning 85.
I also think that your implication that OCA doesn't provide "large full feature facilities" to residents under the age of 85 is incorrect. Numerous OCA villages are very well appointed, and it appears they are mostly accessible from 70 years young.
Quote from: Buzz on May 04, 2024, 10:52 AMAre you sure about that? I haven't done a thorough search but The Sands minimum age is 65, Meadowbank minimum age is 70, Eden is 70, Remuera Rise is 70, St Johns is 70.
I can't find anything mentioning 85.
I also think that your implication that OCA doesn't provide "large full feature facilities" to residents under the age of 85 is incorrect. Numerous OCA villages are very well appointed, and it appears they are mostly accessible from 70 years young.
Minimum age is different to target market.
Quote from: Hectorplains on May 04, 2024, 11:00 AMMinimum age is different to target market.
Well perhaps you're right but they are literally advertising to their 'target market' with minimum age limits stated, most of them I've found are 70 years young.
Quote from: Basil on May 03, 2024, 09:40 PMYou're certainly not boring me, I totally get that. He's my theory why the sales are not going that well. I suspect that OCA is delivering the market product that's simply not in strong demand. Let me unpack that a bit.
Years ago Earl Gasparich at the Auckland branch of the NZSA gave a presentation unpacking their business case. Therein he clearly stated we are not trying to replicate the RYM or SUM full land-based cruise ship experiences, we're smaller, boutique with more limited facilities. He went on to say we're targeting the 85+ age group.
Now let's have a look at that and consider that the demand is now starting to flow from the baby boomers, a vast population demographic with high spending power widely considered to have been a post-world war 2 phenomenon that kicked off in 1946, 78 years ago.
Late 70's is widely considered in the industry to be the average age of entry for ILU R.V. living.
It seems to me that the large full feature facilities provided by the likes of SUM are what people in their mid to late 70's really want and OCA are currently targeting a much smaller pool of 85+ year old's. My contention is that in time, over the next 7 -10 years there will be a much larger demand for the care suites and smaller boutique villages OCA provides.
I acknowledge they are trying to turn things around and if they can sell all the basic care villages they're endeavoring too and realise close to $100m, that will quite possibly enable them to continue their transformation program and move the needle in a meaningful way towards a greater percentage of their units being ILU.
This target however, against a current run rate of annual sales of circa 150 suggest their overstock problem is only going to get worse. Why they are not throttling back their development rate in the face of slow sales and a vast ocean of unsold stock...Go figure ?.
All that said RYM seem to have their problems as well with the shares closing down 8 cents to an eleven year low of only $3.94. Surely, they're not going to do an ARV or OCA and head down to around 50% of NTA or slightly worse...or maybe they are ?
Sobering how Ryman's sp is now 58% of NTA! Was once the premium RV stock with its huge premium to NTA.
Looking like same issue with OCA that they have unsold stock building up and costing irrecoverable huge holding costs?
Answer when there's unsold stock building up in any company is to discount and get rid of the stock. Is that happening or are the RVs just waiting and hoping that the property market will pick up and solve that problem for them?
Heck, even Sky TV is now giving away its Sky Box free (after initially charging $200) because it is clear that subscribers are happy to keep the old boxes.
Quote from: Buzz on May 04, 2024, 11:03 AMWell perhaps you're right but they are literally advertising to their 'target market' with minimum age limits stated, most of them I've found are 70 years young.
The other things that makes no sense if their 'market' was 85+ years old, is that would reduce their addressable market from 11.4% of the total population aged 70+, to only 1.8%.
70-74 years 221,430 4.2%
75-79 years 172,040 3.3%
80-84 years 111,510 2.1%
85-89 years 59,940 1.1%
90 years and over 34,880 0.7%
https://rep.infometrics.co.nz/new-zealand/population/age-composition
Quote from: Teitei on May 04, 2024, 12:11 PMSobering how Ryman's sp is now 58% of NTA! Was once the premium RV stock with its huge premium to NTA.
Looking like same issue with OCA that they have unsold stock building up and costing irrecoverable huge holding costs?
Answer when there's unsold stock building up in any company is to discount and get rid of the stock. Is that happening or are the RVs just waiting and hoping that the property market will pick up and solve that problem for them?
Heck, even Sky TV is now giving away its Sky Box free (after initially charging $200) because it is clear that subscribers are happy to keep the old boxes.
What's discounting going to achieve when the business model itself is broken? This is why we're seeing the behavior we're seeing.
Quote from: Azz on May 04, 2024, 12:19 PMWhat's discounting going to achieve when the business model itself is broken? This is why we're seeing the behavior we're seeing.
Discounting to meet the market, achieve sales to free up funds and reduce carrying costs.
That's what sensible businesses do.
Quote from: Teitei on May 04, 2024, 12:22 PMDiscounting to meet the market, achieve sales to free up funds and reduce carrying costs.
That's what sensible businesses do.
I get what you're saying, and agree.
But what I'm saying is that sensible has gone out the window because the problems here go beyond "unsold stock".
Here's an example of the weird that can be created by this business model:
A potential customer has a choice between a "new build" and a "resale". When things are good (sales of all sorts humming along), OCA would prefer that the customer buy the new build. When things are bad, OCA would prefer that the customer buy the resale license (otherwise too many exited customers will be waiting to be paid out).
Quote from: Teitei on May 04, 2024, 12:22 PMDiscounting to meet the market, achieve sales to free up funds and reduce carrying costs.
That's what sensible businesses do.
Just as well they have that huge FLOAT that's getting bigger by the day
Quote from: winner (n) on May 04, 2024, 12:40 PMJust as well they have that huge FLOAT that's getting bigger by the day
I'm guessing that's tongue in cheek. :-)
But that "float" is nothing but debt. A very big and dangerous debt.
Quote from: Azz on May 04, 2024, 12:45 PMI'm guessing that's tongue in cheek. :-)
But that "float" is nothing but debt. A very big and dangerous debt.
The 'float' is great if the funds are invested properly and profitably.
Not when it is used however (along with ever higher debt) to buy & develop ever more expensive land & villages which do not sell as they do not meet the needs of the market.
Supermarket operators have enormous float as they get free credit from their suppliers while selling their products for cash. And their high turnovers mean they are never caught with unsold stock.
Quote from: Azz on May 04, 2024, 12:38 PMHere's an example of the weird that can be created by this business model:
A potential customer has a choice between a "new build" and a "resale". When things are good (sales of all sorts humming along), OCA would prefer that the customer buy the new build. When things are bad, OCA would prefer that the customer buy the resale license (otherwise too many exited customers will be waiting to be paid out).
Assuming the new build and the resale were the same price why is there any difference? With the resale you pay the old customer out with the money from the new customer, with the new build you can use the sale proceeds to pay out the old customer from the resale unit. They have to pay them out anyway.
Quote from: Plata on May 04, 2024, 01:24 PMAssuming the new build and the resale were the same price why is there any difference? With the resale you pay the old customer out with the money from the new customer, with the new build you can use the sale proceeds to pay out the old customer from the resale unit. They have to pay them out anyway.
I think the OCA contract only pays out the exited customer when a new license is purchased for that unit?
Quote from: Azz on May 04, 2024, 01:27 PMI think the OCA contract only pays out the exited customer when a new license is purchased for that unit?
Ah yes you may right, they don't specify they will definitely pay you back after a time period waiting. They do say they pay interest on the refund amount after 6 months though. Apologies
Quote from: Teitei on May 04, 2024, 01:24 PMThe 'float' is great if the funds are invested properly and profitably.
Not even it is used along with increased debt to buy & develop ever more expensive land & villages which do not meet the needs of the market.
Supermarket operators have enormous float as they get free credit from their suppliers while selling their products for cash. And their high turnovers mean they are never caught with unsold stock.
There isn't a comparison for what OCA does in any other industry: takes in 100% of a house price, rents that house (the 30% fee), then gives back the 70%. This is big-time debt being created with every new license contract signed.
Quote from: Plata on May 04, 2024, 01:31 PMAh yes you may right, they don't specify they will definitely pay you back after a time period waiting. They do say they pay interest on the refund amount after 6 months though. Apologies
No probs. And I think there might even be competitors that will pay it back fully even if the unit hasn't sold.
Paragraph 2 of post 1195. I'm just reporting what Earl Gasparich said.
Quote from: Teitei on May 04, 2024, 12:11 PMSobering how Ryman's sp is now 58% of NTA! Was once the premium RV stock with its huge premium to NTA.
Looking like same issue with OCA that they have unsold stock building up and costing irrecoverable huge holding costs?
Answer when there's unsold stock building up in any company is to discount and get rid of the stock. Is that happening or are the RVs just waiting and hoping that the property market will pick up and solve that problem for them?
Heck, even Sky TV is now giving away its Sky Box free (after initially charging $200) because it is clear that subscribers are happy to keep the old boxes.
RYM a rudderless ship. Probably headed to 50% of NTA.
Quote from: Basil on May 04, 2024, 01:36 PMParagraph 2 of post 1195. I'm just reporting what Earl Gasparich said.
1195 was my post? In any event, Gasparich is long gone, and it's pretty clear that they are targeting the 70+ age group, which debunks your thesis.
Quote from: Azz on May 04, 2024, 01:33 PMThere isn't a comparison for what OCA does in any other industry: takes in 100% of a house price, rents that house (the 30% fee), then gives back the 70%. This is big-time debt being created with every new license contract signed.
Not an accurate reflection of how it works - the 70% is only given back when the unit is resold (fully refurbished at the previous tenant's cost) and any capital gains go to the RV.
Quote from: Buzz on May 04, 2024, 01:44 PM1195 was my post? In any event, Gasparich is long gone, and it's pretty clear that they are targeting the 70+ age group, which debunks your thesis.
1195 is my post. The type of villages is not long gone.
Quote from: Teitei on May 04, 2024, 01:49 PMNot an accurate reflection of how it works - the 70% is only given back when the unit is resold (fully refurbished at the previous tenant's cost) and any capital gains go to the RV.
I know that, and reading my posts shows that.
OCA has borrowed the 70%, that's what I'm saying. It is not being paid by the customer for any service. It is an interest-free loan to OCA. And must be paid back at some point. The thing with debt is: it's the paying back that is the hard part.
Quote from: Teitei on May 04, 2024, 01:49 PMNot an accurate reflection of how it works - the 70% is only given back when the unit is resold (fully refurbished at the previous tenant's cost) and any capital gains go to the RV.
Not to mention the weekly fees paid by the resident, or government if they qualify. It appears that someone who has a lot to say doesn't actually understand of the actual business model.
Quote from: Buzz on May 04, 2024, 01:54 PMNot to mention the weekly fees paid by the resident, or government if they qualify. It appears that someone who has a lot to say doesn't actually understand of the actual business model.
I understand it completely.
Quote from: Basil on May 04, 2024, 01:52 PM1195 is my post. The type of villages is not long gone.
You made a big deal of the 85+ to support your argument. When shown to be incorrect, you don't acknowledge, but double down on another angle.
#1195
Quote from: Azz on May 04, 2024, 01:53 PMAnd must be paid back at some point. The thing with debt is: it's the paying back that is the hard part.
Are you sure that's the position you want to take?
That the refundable ORA account must be paid back?
Quote from: ValueNZ on May 04, 2024, 02:04 PMAre you sure that's the position you want to take?
That the refundable ORA account must be paid back?
Yes, quite sure.
And to correct your misquote: I wrote "must be paid back
at some point."
Quote from: Buzz on May 04, 2024, 01:59 PMYou made a big deal of the 85+ to support your argument. When shown to be incorrect, you don't acknowledge, but double down on another angle.
#1195
I'm just reporting what I heard. Their villages are designed to target the 85+ age group. Sure their minimum entry age is lower but that is the demographic they are targeting. Thanks for posting age stat's, that explains a lot about their slow sales. Have a fabulous weekend
Quote from: Azz on May 04, 2024, 02:05 PMYes, quite sure.
And to correct your misquote: I wrote "must be paid back at some point."
At what point is that?
For a vacated villa/apartment to be refunded, a new resident must enter. Meaning that on a net basis, the account doesn't decrease.
You show me a single cashflow statement where receipts from ORA's are less than payments for ORA's (meaning the "loan" value has decreased), in the entire history of these RV providers. I doubt there is a single period where that has happened.
Quote from: ValueNZ on May 04, 2024, 02:44 PMAt what point is that?
For a vacated villa/apartment to be refunded, a new resident must enter. Meaning that on a net basis, the account doesn't decrease.
You show me a single cashflow statement where receipts from ORA's are less than payments for ORA's (meaning the "loan" value has decreased), in the entire history of these RV providers. I doubt there is a single period where that has happened.
In other words, this massive debt is protected only by a buoyant property market.
Quote from: Basil on May 04, 2024, 02:13 PMI'm just reporting what I heard. Their villages are designed to target the 85+ age group. Sure their minimum entry age is lower but that is the demographic they are targeting. Thanks for posting age stat's, that explains a lot about their slow sales. Have a fabulous weekend
So Earl said something prior to March 2021 when he resigned, and you're holding onto it as a core to your thesis [that OCA care is stuffed]. I think targeting is a poor choice of words, as they are targeting the 70+ age demgraphic. Their villages are not "designed" for 85+, that's ridiculous, they are designed for all ages from 70+ to their death.
Why does 70+ explain the poor sales, all the RV's target the same/similar minimum entry age?
Quote from: Azz on May 04, 2024, 02:48 PMIn other words, this massive debt is protected only by a buoyant property market.
Not at all. The debt will never decrease due to this replacement policy (one resident out, another in before refund is made).
Don't believe me? Look at Ryman's 2008 financial statements.
Quote from: ValueNZ on May 04, 2024, 02:52 PMNot at all. The debt will never decrease due to this replacement policy (one resident out, another in before refund is made).
Don't believe me? Look at Ryman's 2008 financial statements.
What happens if there are no buyers (no new customers)?
My view is that a "no buyers" scenario would be catastrophic for OCA, for the reason I - and you - have described:
OCA is reliant on new customers to pay off the debt owed to customers who have exited. There is one word that sums up what this is, and it's not "Beware" (which it could be I guess).
The market is telling us that people who are healthy and in their 70's prefer fully featured villages with all the bells and whistles like SUM build and just like Toyota has a dominant market share, they also make products people want and can afford.
People can stamp their feet and have a tantrum if they like, it will make no difference. The market is speaking loud and clear.
Yeah, looks like the 70+ year olds are really SlUMming it in their OCA apartments, villas and care suites. I bet they wish they'd chosen SUM eh? ::)
https://oceaniahealthcare.co.nz/location/eden
https://oceaniahealthcare.co.nz/location/meadowbank
https://oceaniahealthcare.co.nz/location/remuera-rise
https://oceaniahealthcare.co.nz/location/waterford
https://oceaniahealthcare.co.nz/location/lady-allum
https://oceaniahealthcare.co.nz/location/the-sands
https://oceaniahealthcare.co.nz/location/awatere
https://oceaniahealthcare.co.nz/location/st-johns-wood
https://oceaniahealthcare.co.nz/location/the-bayview
https://oceaniahealthcare.co.nz/location/whitianga
https://oceaniahealthcare.co.nz/location/eldon
https://oceaniahealthcare.co.nz/location/green-gables
https://oceaniahealthcare.co.nz/location/marina-cove
https://oceaniahealthcare.co.nz/location/the-bellevue
https://oceaniahealthcare.co.nz/location/the-oaks
Quote from: Buzz on May 04, 2024, 04:42 PMYeah, looks like the 70+ year olds are really SlUMming it in their OCA apartments, villas and care suites. I bet they wish they'd chosen SUM eh? ::)
https://oceaniahealthcare.co.nz/location/eden
https://oceaniahealthcare.co.nz/location/meadowbank
https://oceaniahealthcare.co.nz/location/remuera-rise
https://oceaniahealthcare.co.nz/location/waterford
https://oceaniahealthcare.co.nz/location/lady-allum
https://oceaniahealthcare.co.nz/location/the-sands
https://oceaniahealthcare.co.nz/location/awatere
https://oceaniahealthcare.co.nz/location/st-johns-wood
https://oceaniahealthcare.co.nz/location/the-bayview
https://oceaniahealthcare.co.nz/location/whitianga
https://oceaniahealthcare.co.nz/location/eldon
https://oceaniahealthcare.co.nz/location/green-gables
https://oceaniahealthcare.co.nz/location/marina-cove
https://oceaniahealthcare.co.nz/location/the-bellevue
https://oceaniahealthcare.co.nz/location/the-oaks
OMG they look so cool ...you'd think they would selling like hot cakes eh
Quote from: Basil on May 04, 2024, 01:41 PMRYM a rudderless ship. Probably headed to 50% of NTA.
Can you guarantee that like your $15 oh wait wasn't it $10 call on FPH, your crystal ball is obviously malfunctioning.
Quote from: Basil on May 04, 2024, 01:36 PMParagraph 2 of post 1195. I'm just reporting what Earl Gasparich said.
Earl still has a whole stack of OCA shares he's not selling, just thought I'd report on that.
Quote from: Breezy on May 04, 2024, 06:00 PMCan you guarantee that like your $15 oh wait wasn't it $10 call on FPH, your crystal ball is obviously malfunctioning.
How are we getting on with your claim RYM will always be twice the share price of SUM...can't be right that SUM are nearly three times the price of RYM. Must be a mistake eh :P
Quote from: Basil on May 04, 2024, 07:29 PMHow are we getting on with your claim RYM will always be twice the share price of SUM...can't be right that SUM are nearly three times the price of RYM. Must be a mistake eh :P
Well it was right for many years and thats a whole lot of right in market time so I was pretty happy with that call and it was the gold standard at the time. ;D
Quote from: Buzz on May 04, 2024, 04:42 PMYeah, looks like the 70+ year olds are really SlUMming it in their OCA apartments, villas and care suites. I bet they wish they'd chosen SUM eh? ::)
https://oceaniahealthcare.co.nz/location/eden
https://oceaniahealthcare.co.nz/location/meadowbank
https://oceaniahealthcare.co.nz/location/remuera-rise
https://oceaniahealthcare.co.nz/location/waterford
https://oceaniahealthcare.co.nz/location/lady-allum
https://oceaniahealthcare.co.nz/location/the-sands
https://oceaniahealthcare.co.nz/location/awatere
https://oceaniahealthcare.co.nz/location/st-johns-wood
https://oceaniahealthcare.co.nz/location/the-bayview
https://oceaniahealthcare.co.nz/location/whitianga
https://oceaniahealthcare.co.nz/location/eldon
https://oceaniahealthcare.co.nz/location/green-gables
https://oceaniahealthcare.co.nz/location/marina-cove
https://oceaniahealthcare.co.nz/location/the-bellevue
https://oceaniahealthcare.co.nz/location/the-oaks
Thanks for that, quite inspirational really. The stated prices I read are pretty attractive and I would say affordable for most. I do feel the property market locally is well stacked with homes for sale, more than I have seen in a decade. I can see large numbers of rental quality stock unsold and higher end homes at rock bottom prices, things must move sooner or later. My guess is later. More than triple the number of open homes compared to when we were looking last July August. That is a statement.
Quote from: mike2023 on May 05, 2024, 10:10 AMThanks for that, quite inspirational really. The stated prices I read are pretty attractive and I would say affordable for most.
So why are stock levels building up?
Don't judge a book by its cover - advice which comes to mind.
Looks very reasonable ... nice stock on hand to have... probably sell at some point...
does that mean the stock (share) is a https://www.youtube.com/watch?v=Juci-kAqjes
but the actual residents get a bargain...
Quote from: winner (n) on May 03, 2024, 07:10 PMHere's a summary of new units delivered and new unit sales since listing ..taken from their announcements
In 2 years they sold a few more than delivered ...other years delivered more than sold ...and in the period shown they have delivered 395 more than sold
No further comment
IMG_5786.png
Interesting - but isn't this just showing that a growing company has as well more stock?
I am wondering whether the occupation rate would be a more meaningful indicator ... ?
Quote from: Basil on May 03, 2024, 06:10 PMhttp://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/411935/395028.pdf
Its actually pretty simple BP, I thought you could work this out for yourself.
In last years repot, link above, they sold a total of 128 new units, (74 care suites and 54 apartments).
New sales are up ~ 20% per April 15 2024 announcement so that suggests they sold 154 new units in FY24.
They sold 84 new units in 1H FY24 so their total new sales for the year are 154, (a 20% increase on last year), they only sold 70 new units in 2H (154-84)
What's not in dispute is they had 409 new unsold units as at 30/09/2023.
If you have another look at the half year presentation you'll see they had the following new blocks to be completed in 2H FY24, (after building 63 apartments in 1H.
The Helier 32 care suites
Bayview 28 apartments
Blenheim 55 care suites
Total units scheduled for 2H completion 115.
In the April 15 announcement they said they'd completed 182 new units for the year so after completing 63 apartments in 1H that means they actually delivered 119 new units in 2H FY24 (182-63).
Therefore unsold stock when up by 49 units in the second half (total 458 new unsold) because they delivered 119 new units in 2H and only sold 70.
I make total unsold new units as at 31 March 2024 459.
At their most recent annual sales rate for new units of 154 units per annum that's 2.97 years worth of unsold new stock. That compares by exactly the same measure to be just over 8 months of unsold new stock for SUM. Given a lot of these care suites churn, or are supposed to churn every 2-5 - 3 years of unsold stock is a serious problem. I think it's fair to say the professional analysts are quite right, they have an ocean of unsold stock that keeps getting bigger every year. I repeat, no analyst is saying that about any other company in this sector. Are all the professional analysts stupid or maybe you are looking at this on a one-eyed basis, which of these is more likely ?
They've been building far in excess of demand for years. That's why their unsold stock keeps growing every year. Go back and look at the numbers over the years. As a bondholder I am starting to get a little concerned whether some of this stock is actually sellable or not ?
...
Might be a bit of "perception is reality". It appears we do agree on some data, and others you seem to interpret differently than I do.
We do seem to agree on the number of vacant units at 30/9/23 - this is good.
I do accept that I misread the sales forecast for 2024 (mea culpa). You are right - the mid April announcement points to only something like 154 new sales but as well 319 re-sales (which is a new high for the company). In total they are likely to report 473 sales in FY 2024! Not bad. They never sold that many units before in any year!
I don't see how you add up all these units
for completion in 2HY2024 - I see only a reference to 60 more units (on slide 25). Sure, they have more unfinished stock, but where do they say that they complete that all in 2HY2024?
Anyway, in two or three weeks we will anyway have the updated numbers - so probably no point to analyse this part to death based on old data.
What I see is a retirement company with only marginally lower occupation rates than SUM (and there are good reasons for that, like different types of housing as well as shorter occupancy times (and with that more frequent vacancy times) for the care suites.
What I see as well is that they rent out some of their units (e.g. in the Helier), which improves the vacancy rates (and I suppose the financials), but makes them obviously on a pure sales based comparison less attractive.
Did they hope for a better sell of their top end units released since 2021/22? You guess. Are they responsible for the housing downturn, which started to bite around the opening of the Helier - of course not, which makes the consistent down ramping and management bashing sort of tiresome.
Do they have any problems which can't be fixed with a moderate adaptation of the build rate? I can't see that ...
And hey - there always is this old Palestinian proverb: "At times when Apricots are cheap, plant Apricot trees". Think about it - useful input for anybody who looks further than just the short term trend.
Not sure, what to make out of your reference to "professional analysts". I can give you literally hundreds of examples where analyst consensus was wrong in the past ... and significantly less examples where analyst consensus has been right. We all know that, given that analysts are not better in predicting the future than any of us.
But if you are just in a phase where you happen to think that analyst predictions are any good: professional analyst consensus for OCA (according to market screener) is currently 93 cents for the SP and the professional analyst recommendation is 8.7 out of 10 (which is a pretty streight forward BUY). But I assume you are telling us that analysts exhausted their wit by correctly agreeing with you on OCA's housing stock, which unfortunately lead to all other professional analyst statements of them related to OCA have been non-sense?
Clearly professional analysts are only good if they agree with the beagle, but if they do (and only then) they are infallible :P ;
SUM dogs clearly like to run with the hares and hunt with the hounds, whatever floats their boat on any given day.
Sales are not going to help. Every sale adds a horrific amount of debt (70% of the license contract). And the way OCA "pays off" this debt is with a future customer's debt, and that new debt then has to be paid off with another future customer's debt, ... This thing ain't gonna end well. I'm surprised it's lasted this long.
Your saying the margin isnt enough to create a profit on sale...
What is the current Profit/Loss on sale of units and can you even find accurate data in the financials to calucate it...
Quote from: Waltzing on May 05, 2024, 01:02 PMYour saying the margin isnt enough to create a profit on sale...
What is the current Profit/Loss on sale of units and can you even find accurate data in the financials to calucate it...
I'm saying it's a ponzi. Not a deliberate one; but a ponzi nonetheless.
Quote from: Azz on May 05, 2024, 01:05 PMI'm saying it's a ponzi. Not a deliberate one; but a ponzi nonetheless.
Is insurance a Ponzi as well?
Why don't you give us your definition of a Ponzi scheme?
Quote from: ValueNZ on May 05, 2024, 01:08 PMWhy don't you give us your definition of a Ponzi?
Paying off old debt (ie, exited customers) with new debt funded by future currently-non-existent customers would be a good definition.
Why do you continue to "pick on" OCA, when this applies to
all providers who use this model?
Quote from: Azz on May 05, 2024, 12:50 PMAnd the way OCA "pays off" this debt is with a future customer's debt, and that new debt then has to be paid off with another future customer's debt, ... This thing ain't gonna end well. I'm surprised it's lasted this long.
Quote from: Untamed on May 05, 2024, 01:17 PMWhy do you continue to "pick on" OCA, when this applies to all providers who use this model?
I don't think OCA is the only one in trouble.
BlackPeter ...I understand that when Oceania refers to Occupancy Rates they are only referring to care units (ILU units excluded)
If so are you calcs meaningful?
Quote from: Azz on May 05, 2024, 01:20 PMI don't think OCA is the only one in trouble.
In that case, please discuss it in the general Retirement Sector thread, instead of continually cluttering up the OCA thread. Anyone who is interested in what you have to say, can go over there to read and participate. While the rest of us can get on with talking about OCA specifically.
Quote from: winner (n) on May 05, 2024, 01:32 PMBlackPeter ...I understand that when Oceania refers to Occupancy Rates they are only referring to care units (ILU units excluded)
Really? Where did you find that information? I don't recall seeing that clarification anywhere, ever.
Quote from: Untamed on May 05, 2024, 01:33 PMIn that case, please discuss it in the general Retirement Sector thread, instead of continually cluttering up the OCA thread. Anyone who is interested in what you have to say, can go over there to read and participate. While the rest of us can get on with talking about OCA specifically.
I truly don't understand why any long in a stock would prefer sticking their head in the sand to hearing analysis that, if proven correct, means bye bye to the stock. I'm posting in the OCA thread because what I'm saying is pertinent to OCA - and also they will likely be first cab off the rank.
I understand what you believe, are your reasons for posting this here. But I am politely telling you, once is enough. We are all reasonably intelligent people here, and we have well and truly "heard" your concerns about OCA. Nobody is sticking their heads in the sand. We simply disagree that your so-called analysis, will ever mean "bye, bye to the stock."
You can repeat it until the cows come home. It won't make it true. You don't need to understand us. You just need to be respectful and accept that we disagree with you.
As I said, if anyone does want to discuss it with you, they can do that on the general thread. I don't think it is too much to ask that you take it, and keep it there, now.
Quote from: Azz on May 05, 2024, 01:44 PMI truly don't understand why any long in a stock would prefer sticking their head in the sand to hearing analysis that, if proven correct, means bye bye to the stock. I'm posting in the OCA thread because what I'm saying is pertinent to OCA - and also they will likely be first cab off the rank.
Quote from: Untamed on May 05, 2024, 02:11 PMI understand what you believe, are your reasons for posting this here. But I am politely telling you, once is enough. We are all reasonably intelligent people here, and we have well and truly "heard" your concerns about OCA. Nobody is sticking their heads in the sand. We simply disagree that your so-called analysis, will ever mean "bye, bye to the stock."
You can repeat it until the cows come home. It won't make it true. You don't need to understand us. You just need to be respectful and accept that we disagree with you.
As I said, if anyone does want to discuss it with you, they can do that on the general thread. I don't think it is too much to ask that you take it, and keep it there, now.
Yep take your axes to grind elsewhere or get more hobbies.
Quote from: Untamed on May 05, 2024, 01:35 PMReally? Where did you find that information? I don't recall seeing that clarification anywhere, ever.
Came up in an analysts review a few years ago and Oceania only seem to use it when talking about care suites ....and even use care beds instead of suites at times so that's how I interpret it
I may be mistaken though .... A metric I don't often look at
Quote from: Untamed on May 05, 2024, 02:11 PMI understand what you believe, are your reasons for posting this here. But I am politely telling you, once is enough. We are all reasonably intelligent people here, and we have well and truly "heard" your concerns about OCA. Nobody is sticking their heads in the sand. We simply disagree that your so-called analysis, will ever mean "bye, bye to the stock."
You can repeat it until the cows come home. It won't make it true. You don't need to understand us. You just need to be respectful and accept that we disagree with you.
As I said, if anyone does want to discuss it with you, they can do that on the general thread. I don't think it is too much to ask that you take it, and keep it there, now.
I disagree with you on this stock - but I'm not asking you to go elsewhere. I thought this was a chat forum. You, yourself, can repeat what
you say until the cows come home, and that's fine with me, I can handle it - but it doesn't make you chief censor.
The comments I just made were not even remotely "censorship." They were about posting in a more appropriate thread, but if that's how you choose to see them, that's your issue not mine. I made a polite and very respectful request, hoping that you might be equally polite and respectful in return.
For some ridiculous reason, I keep giving you the benefit of the doubt, and hoping that at some point, you might actually display some maturity and an ability to "get along" with people. Clearly, that's never going to happen, so welcome to my "ignore" list.
Quote from: Azz on May 05, 2024, 02:54 PMI disagree with you on this stock - but I'm not asking you to go elsewhere. I thought this was a chat forum. You, yourself, can repeat what you say until the cows come home, and that's fine with me, I can handle it - but it doesn't make you chief censor.
Quote from: Azz on May 05, 2024, 02:57 PMIf I'm right about this stock - will you apologize to me (for your hyper-aggressive personal attacks)?
We will know in another half a dozen years so until then that would be a no, hyper aggressive personal attacks you must be kidding, only the extremely woke would think that, I've said nothing about you personally or attacked you in any way.
Quote from: Azz on May 05, 2024, 02:56 PMYou don't know what a ponzi actually is. Bitcoin is mined, it is decentralized, it has no debt to be paid off by future debt. It is in no way, shape, or form - a ponzi.
Bitcoin is an imaginary electronic signature floating around in cyberspace unlike the retirement sector which has physical land and buildings which can be seen and actually exist.
Well what ever the model thats is being used thanks for posting the links to the Villages and apartments ... had not seen the full range of what was on offer.
Even if the balance sheet isnt perfect there is at least some land and buildings behind it and some of them look very reasonably priced..
There is a RYM village going in down the road and it looks very expensive for what you get.. sobering reminder..
well back to gardening and what a lovely late summer its been.. im sure those in RV's with small gardens have had a great time..
Do you get afternoon tea and scones in the gardens brought out? or is one expecting a bit much?
cream with the scones?
Quote from: winner (n) on May 05, 2024, 01:32 PMBlackPeter ...I understand that when Oceania refers to Occupancy Rates they are only referring to care units (ILU units excluded)
If so are you calcs meaningful?
Good question. I don't know (depending on the occupancy rate of the rest).
However - if this would be the case, I'd call their reporting misleading - clearly a case for the NZX (not that anybody would fear that paper tiger, but anyway).
Have a look e.g. at slide 8 of the HY presentation ... they present the occupancy rate at the top next to other group numbers and they present it without any qualification (like "only for this segment").
OCA occupancy FY24H1.JPG
Why would you think that the occupancy rates they report are not applicable for the whole group?
Quote from: BlackPeter on May 05, 2024, 05:16 PMHave a look e.g. at slide 8 of the HY presentation ... they present the occupancy rate at the top next to other group numbers and they present it without any qualification (like "only for this segment").
OCA occupancy FY24H1.JPG
Why would you think that the occupancy rates they report are not applicable for the whole group?
I agree with you. I interpret that slide to mean
total occupancy (of the total assets). But who knows? I have emailed them to ask for clarification. Not holding my breath for an answer though.
Group probably does mean everything as the slide posted
But go the Slide 18 where report on Care Segment they quote the same 90.3% which to me in the this context implies car beds only.
Again one of the confusing matrices Oceania (and others) use
Hope you get a reply to your email untamed
Quote from: Breezy on May 05, 2024, 03:46 PMBitcoin is an imaginary electronic signature floating around in cyberspace unlike the retirement sector which has physical land and buildings which can be seen and actually exist.
You can fight against reality as much as you like; not my problem! I find it quaint, actually.
Are you aware that Bitcoin's market cap is five times bigger than New Zealand's GDP? ...just to provide some context.
But Bitcoin's not a ponzi. And that's what the subject was: ponzi.
It's interesting that the [
non-deliberate] ponzi financial structure of OCA which I have described is not addressed in any way. Instead it's insult and more misdirection than within the obfuscation contained in an OCA half-yearly report.
I don't know of many businesses that take in huge six- or seven-figure interest-free loans from their customers. That's really nice of those customers I reckon. But where's the money? Those loans cannot be paid back unless future currently-non-existent customers take over the risk and pay out the old debt and at that point provide OCA with new debt. This defined-in-contract financial shenanigans is the very definition of ponzi; ie, the paying out of debt (or sharing of "profit") with new debt from brand new customers. That's what a ponzi
is. And OCA even borrowed to pay dividends - so they've essentially covered all the ponzi bases.
What happens to OCA when enough people stop buying licenses and at the same time many licenses are exited? There's only one outcome. And it's not good. People will want their money. And accusations will fly all over the show. For example, accusations of the alleged misuse of the "you don't get your money until your unit is resold" clause (a clause which is dependent on company behavior such as good-faith attempts to resell exited units) will probably be made. (I should add that I do not view OCA as acting in this manner; I don't think they're operating in bad faith.)
Quote from: Azz on May 05, 2024, 07:07 PMYou can fight against reality as much as you like; not my problem! I find it quaint, actually.
Are you aware that Bitcoin's market cap is five times bigger than New Zealand's GDP? ...just to provide some context.
But Bitcoin's not a ponzi. And that's what the subject was: ponzi.
It's interesting that the [non-deliberate] ponzi financial structure of OCA which I have described is not addressed in any way. Instead it's insult and more misdirection than within the obfuscation contained in an OCA half-yearly report.
I don't know of many businesses that take in huge six- or seven-figure interest-free loans from their customers. That's really nice of those customers I reckon. But where's the money? Those loans cannot be paid back unless future currently-non-existent customers take over the risk and pay out the old debt and at that point provide OCA with new debt. This defined-in-contract financial shenanigans is the very definition of ponzi; ie, the paying out of debt (or sharing of "profit") with new debt from brand new customers. That's what a ponzi is. And OCA even borrowed to pay dividends - so they've essentially covered all the ponzi bases.
What happens to OCA when enough people stop buying licenses and at the same time many licenses are exited? There's only one outcome. And it's not good. People will want their money. And accusations will fly all over the show. For example, accusations of the alleged misuse of the "you don't get your money until your unit is resold" clause (a clause which is dependent on company behavior such as good-faith attempts to resell exited units) will probably be made. (I should add that I do not view OCA as acting in this manner; I don't think they're operating in bad faith.)
Its not the Bitcoin thread and the only reason I bought it up is because you call OCA a ponzi scheme and yet you are a hard-core Bitcoin junky, im sure many reading this will find that extremely ironic. OCA aside from their buildings they also own land, both of which are physical/real and have both value and price in real world terms.
Quote from: Breezy on May 05, 2024, 07:27 PMIts not the Bitcoin thread and the only reason I bought it up is because you call OCA a ponzi scheme and yet you are a hard-core Bitcoin junky, im sure many reading this will find that extremely ironic. OCA aside from their buildings they also own land, both of which are physical/real and have both value and price in real world terms.
I walk the talk: I own Bitcoin; I do not own OCA shares. So far I'm ahead.
Quote from: Azz on May 05, 2024, 07:32 PMI do not own OCA shares.
If you don't own OCA shares, and have no intention of owing OCA shares ever, because in your opinion the business model is a fraud, broken, and OCA are destined to oblivion, why then would you bother posting extensively on the OCA investment thread? What precisely do you hope to achieve spending your time posting here?
Hey there, first time poster - I'm trying to understand the ORA receipts number in the 2024 HY report and wondered if anyone could help? Cashflow statement says $105m below:
ORA2024.jpg
but when you add up the sales numbers and multiply by the average sales prices, you get ~ $129m*, which I think Forbar quoted in their report after the HY earnings. Does anyone know how where this difference comes from? Thanks
* = 847k*62 (apartments) + 634k*40 (villas) + 336k*153 (care suites)
Hello and welcome to ST.
In the presentation on page 28 is a reconciliation of "resales cash flow". Most importantly we can see a number there of $46m for "New Sales".
If you break out the "new" sales x the average prices then you get expected ORA 'new' receipts of $52m versus $46m per that page (being 5x$634k + 43x$847k + 36x$336k). A difference of $6m.
$105m - $46m = $59m is theoretical ORA 'resale' receipts.
Multiplying resale volumes x the average prices gives an expected receipt of $77m for 'resales' but we calculated this as $59m above. Difference is $18m.
Back to page 28 we can see a number of adjustments to resales cash flow which possibly explains the difference. Also, don't forget there has been growth in the Accounts Receivable value since year end of $15m. So some of the 'missing' cash may not have been collected by period end and could be sitting in AR - although I admit I don't know the actual invoicing & collection process for OCA with regard to ORAs. Someone else may have experience with a relative having entered into such an agreement.
Quote from: Buzz on May 05, 2024, 08:03 PMIf you don't own OCA shares, and have no intention of owing OCA shares ever, because in your opinion the business model is a fraud, broken, and OCA are destined to oblivion, why then would you bother posting extensively on the OCA investment thread? What precisely do you hope to achieve spending your time posting here?
I'm posting here because this is a CHAT board, and I happen to have a different opinion from you. What sort of chat board would this be if only people of one mind were allowed to post? And I follow probably the number one rule for stock investment: never fall in love with a stock... and alongside that, don't whatever you do construct an echo chamber, there's no benefit to an echo chamber, in fact it's of extreme negative benefit.
Quote from: jfb51 on May 05, 2024, 08:21 PMHey there, first time poster - I'm trying to understand the ORA receipts number in the 2024 HY report and wondered if anyone could help? Cashflow statement says $105m below:
ORA2024.jpg
but when you add up the sales numbers and multiply by the average sales prices, you get ~ $129m*, which I think Forbar quoted in their report after the HY earnings. Does anyone know how where this difference comes from? Thanks
* = 847k*62 (apartments) + 634k*40 (villas) + 336k*153 (care suites)
I am no accountant, but is it possible that the receipts from customers of 107m includes an estimate of the DMF from the sales?
So the 105m inflow from new ORAs only includes an estimate of the refundable portion?
Hmm.
Not quite. Note the reconciliation on page 28 of the presentation shows the 'DMF Realised' - this is where the RV gets to deduct the DMF invoiced to the client from the repayment of the ORA to the outgoing resident's estate. They wouldn't deduct it from the $105m in the cash flow at the time the ORA is received given the actual value will not be known at that point and it would contravene accounting policies.
It could also be that OCA was pre-counting sales that did not yet have a financial impact.
Quote from: ValueNZ on May 06, 2024, 11:46 AMI am no accountant, but is it possible that the receipts from customers of 107m includes an estimate of the DMF from the sales?
So the 105m inflow from new ORAs only includes an estimate of the refundable portion?
Hmm.
Hey Ferg, thanks for those thoughts, makes sense.
Quote from: jfb51 on May 06, 2024, 09:09 PMHey Ferg, thanks for those thoughts, makes sense.
You're welcome. It was a good question which had me looking at a few different reporting periods last night. The numbers seem to bounce around. I need to fully get my head around that reconciliation they provided. OCA have a habit of changing what is reported and we are starting to see more aggregated data so we may not have the same degree of granularity previously seen, which is a shame.
Quote from: jfb51 on May 05, 2024, 08:21 PMHey there, first time poster - I'm trying to understand the ORA receipts number in the 2024 HY report and wondered if anyone could help? Cashflow statement says $105m below:
ORA2024.jpg
but when you add up the sales numbers and multiply by the average sales prices, you get ~ $129m*, which I think Forbar quoted in their report after the HY earnings. Does anyone know how where this difference comes from? Thanks
* = 847k*62 (apartments) + 634k*40 (villas) + 336k*153 (care suites)
$129m is sales on accounting accruals basis and $105m is sales cash receipts?
Both gross numbers including DMF.
NOTICE OF RESULT ANNOUNCEMENT
Oceania Healthcare Limited will announce its result for the year ended 31 March 2024 on the morning of
Friday 24 May 2024.
The result presentation will be available following its lodgement with NZX and ASX directly through both
exchanges and also on the website at www.oceaniahealthcare.co.nz/investor-centre
Oceania Healthcare Limited will also hold a webcast at 11 am NZST (9 am AEST) on Friday 24 May 2024
hosted by Brent Pattison (Chief Executive Officer) and Kathryn Waugh (Chief Financial Officer). The live
webcast can be accessed via the following link: https://events.vidcom.com/Oceania/Results
To listen to the webcast, you are advised to log on to the website and complete your registration details at
least 10 minutes before it commences.
A recording of the briefing will be available following the webcast.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/430634/417969.pdf
Quote from: Whacc on May 07, 2024, 12:48 PM$129m is sales on accounting accruals basis and $105m is sales cash receipts?
Both gross numbers including DMF.
When you sell something you count it as Revenue (as the money is contractually bound to be paid) but the cash statement only records money when it is physically received. The difference should be in Receivables, ie the money owed under a contract for sale but not yet received.
Quote from: Azz on May 09, 2024, 08:14 PMI find this "greedy family" argument, which is always fallen back on, extraordinary: It's somehow preferable for the RV company to take 70% of a house price from a retiree for no service given (in fact it's a sly interest-free loan to the RV company), than for family members to try and protect this money??!
Azz, I have said to you before. Go create your own RV business and build villages.
Set up your on fee structure, build amenities that make these places so desirable that the current OCA residents currently enjoy who have no issues with fees etc you keep talking about.
See how you go. Maybe go talk to FBU and come up with some plan where you work together with them. Maybe 50/50. They build you Manage.
Quote from: Azz on May 09, 2024, 08:14 PMI find this "greedy family" argument, which is always fallen back on, extraordinary: It's somehow preferable for the RV company to take 70% of a house price from a retiree for no service given (in fact it's a sly interest-free loan to the RV company), than for family members to try and protect this money??!
You mean family members that haven't had a bar of said resident for years in many cases suddenly becoming very interested in protecting their desired inheritance when said resident is getting closer to throwing off their mortal coil, yep I've seen many and its both pathetic and sad.
Nothing sly about it Azz. Everyone knows the ORA value is much like an interest free loan. The resident has purchased an exclusive right to occupy the premises, much like when you buy a house, unit or flat. The only difference is the repurchase price at a yet to be determined future date is already fixed, with a deduction of 30% for maintenance (and village services). The deduction of 30% is considered a lease but is not actually a lease.
As for your concerns about relying on future customers for future cash flows......doesn't that describe (almost) every business? Spark, Hallensteins & Mainfreight are all reliant on future customers for future cash flows. So why does this business model overly worry you? The concept of ORAs has been put in front of the Retirement Commissioner and from memory the only major concern was delayed payouts of ORAs if the unit remained unsold. I believe most or all RVs have moved away from the policy.
Quote from: Ferg on May 09, 2024, 08:25 PMAs for your concerns about relying on future customers for future cash flows......doesn't that describe (almost) every business?
It certainly does not. What is happening with OCA is a debt is being repaid by a future debt (times x amount of customers). That is how a ponzi operates, it's literally what a ponzi is. It's not "future cash flows"; it is
DEBT.
Quote from: Azz on May 09, 2024, 08:33 PMNo, I mean family members who don't want their Mum & Dad to give hundreds of thousands of dollars to an RV company in the way of an interest-free loan, and especially when Mum & Dad are being asked to pay for a lifetime lease as well.
What Mum & Dad want to do with their money willingly is up to them, they can turn it into cash and have a bonfire if they so desire if that makes them happy.
Quote from: Ferg on May 09, 2024, 08:25 PMNothing sly about it Azz. Everyone knows the ORA value is much like an interest free loan. The resident has purchased an exclusive right to occupy the premises, much like when you buy a house, unit or flat. The only difference is the repurchase price at a yet to be determined future date is already fixed, with a deduction of 30% for maintenance (and village services). The deduction of 30% is considered a lease but is not actually a lease.
"an exclusive right to occupy the premises", is a
lease lol. Why can't the customer just pay for the service received? - ie, the lease?
I don't understand why people can't see it. Every single ORA license in play is a massive debt (many over a million dollars) owed to an actual person or estate by OCA. And the only way that that individual debt can be paid back is if ANOTHER person - a brand new customer from the future - takes on the risk and hands over the same amount of money to OCA as the new debt. It's ponzi. It will collapse.
Quote from: Breezy on May 09, 2024, 09:19 PMaccusing OCA of being a ponzi
I'm not
accusing OCA of being a ponzi. I'm outlining - and it's extremely simple - the steps that
make it a ponzi.
It's not a deliberate ponzi, by OCA. It's a bunch of people thinking they're really clever designing a company around a system of finance that gives them what they think is "wriggle room" so they can find money to develop property - but nah, the reality is a textbook ponzi lol.
Quote from: Azz on May 09, 2024, 08:42 PMIt certainly does not. What is happening with OCA is a debt is being repaid by a future debt (times x amount of customers). That is how a ponzi operates, it's literally what a ponzi is. It's not "future cash flows"; it is DEBT.
The amounting owing to the client's estate being ORA #1 less fees is repaid with the
cash proceeds from the sale of ORA #2. ORA #2 is repaid (less fees) at some future unknown date using the cash proceeds from the sale of ORA #3 and so on. Yes there is a future obligation - no one is denying that. If there was no certainty of future customers lining up to live in a safe, caring and sociable environment then the business would fail the 'going concern' test - then the directors, staff, bankers, customers/residents and investors would all run for the hills. Are you seeing this happening? I'm not.
Overlay macro factors such as growth in the number of elderly people, longer expected lives and the Western trend whereby most dwellings have 1 or 2 generations living in them (as opposed to 3 or maybe even 4), and we have an increasing demand for the services offered by RVs. This will continue until the local population goes into decline and/or there are some fundamental shifts to the macro factors mentioned.
BTW the 30% doesn't just pay for the refurbishment of the unit, it also pays ongoing wages, maintenance and other bills that make the village a community. This is what the resident is buying - a community and not being alone. Your suggestion for a business to invest capital to build facilities but only be paid the 30% upfront for an unknown duration is not a business that will make money.....that is a charity.
Yes I get it is not
*fair* to surviving family members, but the resident knows exactly what they are doing and what they are getting for their money. And it is no-one else's business. Commentary around 'spending kids inheritance' is outright wrong, and unbelievably entitled.
The expectation the business continues on the basis of attracting new business is not unique to RVs. That IS pretty much ALL business. You haven't explained why this issue is unique to RVs.
Also, everyone knows each ORA has to be repaid at some point in the future - no one cannot see this. The macro factors suggest there will be many people lining up for many years (or many decades?) to come. Will it fail at some point where ORAs cannot be repaid? Sure - that will be the day we no longer have a sizable elderly population and/or the elderly are living with extended family. So you have a point there but you are missing the other macro factor being the current low levels of penetration - the percentage of elderly population that currently occupy a unit in a RV is very low.
gosh you falla's post some long stuff and lots of it on this company... need AI to summarise it us ...
there is the new one perplexity ... or will it just do the same and we all ... well perplexed...
is this the most posted on stock?
while NV and AI make the news world wide ,, this this thing ... is ta star attraction in NZ forums...
Quote from: Ferg on May 09, 2024, 09:43 PMThe amounting owing to the client's estate being ORA #1 less fees is repaid with the cash proceeds from the sale of ORA #2. ORA #2 is repaid (less fees) at some future unknown date using the cash proceeds from the sale of ORA #3 and so on. Yes there is a future obligation - no one is denying that. If there was no certainty of future customers lining up to live in a safe, caring and sociable environment then the business would fail the 'going concern' test - then the directors, staff, bankers, customers/residents and investors would all run for the hills. Are you seeing this happening? I'm not.
Overlay macro factors such as growth in the number of elderly people, longer expected lives and the Western trend whereby most dwellings have 1 or 2 generations living in them (as opposed to 3 or maybe even 4), and we have an increasing demand for the services offered by RVs. This will continue until the local population goes into decline and/or there are some fundamental shifts to the macro factors mentioned.
BTW the 30% doesn't just pay for the refurbishment of the unit, it also pays ongoing wages, maintenance and other bills that make the village a community. This is what the resident is buying - a community and not being alone. Your suggestion for a business to invest capital to build facilities but only be paid the 30% upfront for an unknown duration is not a business that will make money.....that is a charity.
Yes I get it is not *fair* to surviving family members, but the resident knows exactly what they are doing and what they are getting for their money. And it is no-one else's business. Commentary around 'spending kids inheritance' is outright wrong, and unbelievably entitled.
The expectation the business continues on the basis of attracting new business is not unique to RVs. That IS pretty much ALL business. You haven't explained why this issue is unique to RVs.
Also, everyone knows each ORA has to be repaid at some point in the future - no one cannot see this. The macro factors suggest there will be many people lining up for many years (or many decades?) to come. Will it fail at some point where ORAs cannot be repaid? Sure - that will be the day we no longer have a sizable elderly population and/or the elderly are living with extended family. So you have a point there but you are missing the other macro factor being the current low levels of penetration - the percentage of elderly population that currently occupy a unit in a RV is very low.
The problem with every single ponzi in history is that at a certain point the new debt - to pay off the old debt - cannot be found. Maybe this one will be different...........
I'm very suspicious of OCA's unsold stock level, which in a normal environment would be described as "high, and they need to pull out the stops and get selling".
But I think it's becoming difficult for OCA to juggle two conflicting things:
* They need to sell the built stock of new units to receive in "cashflow"; but:
* ...Each new ORA adds a massive new debt.
It's catch-22.
The stress must be horrific at the top levels of leadership.
well the next FA result and the next, next one after that.... and add Infinitum will either confirm your theory or there wont be a run on the banks...
After numerous warnings went unheeded, Azz has been permanently banned for trolling in this thread. Please continue any further discussion about retirement villages in the context of inheritance, in the lifestyle category. I have deleted certain posts where appropriate to reduce the mess.
Quote from: Administrator on May 09, 2024, 10:05 PMAfter numerous warnings went unheeded, Azz has been permanently banned for trolling in this thread. Please continue any further discussion about retirement villages in the context of inheritance, in the lifestyle category. I have deleted certain posts where appropriate to reduce the mess.
Many Thanks.
Maybe Oceania need to convert some unsold villas into community houses -
He's "lucky" to now flat with 11 other seniors in a community house provided by registered charity Abbeyfield, which has 14 homes across Aotearoa.
https://www.stuff.co.nz/nz-news
I think a very good solution to the hundreds of unsold care suites is to convert them into low cost independent living units. Not everyone has the ability to purchase a $700K+ ILU 2-bedroom apartment and I think there's a big market for ILU suites in the $400K area. A lot of older single people, all they want is a 35 sq meter or thereabouts, quality smaller apartment.
Hopefully a new CEO can zoom out and take a high level helicopter view of the ocean of unsold care suite stock and make some changes.
If you do that, you immediately remove the ability to provide any continuity of care, barring the minimal number of government subsidised, standard care beds.
But of course, you don't care about that.
Quote from: Basil on May 10, 2024, 10:13 AMI think a very good solution to the hundreds of unsold care suites is to convert them into low cost independent living units. Not everyone has the ability to purchase a $700K+ ILU 2-bedroom apartment and I think there's a big market for ILU suites in the $400K area. A lot of older single people, all they want is a 35 sq meter or thereabouts, quality smaller apartment.
Hopefully a new CEO can zoom out and take a high level helicopter view of the ocean of unsold care suite stock and make some changes.
Quote from: Untamed on May 10, 2024, 10:22 AMIf you do that, you immediately remove the ability to provide any continuity of care, barring the minimal number of government subsidised, standard care beds.
But of course, you don't care about that.
You've got the wrong end of the stick...as is not unusual in respect to my posts. To be clear, what i am suggesting is there is probably quite a bit of mileage in right sizing their care offer. For example, at Lady Allum village in Milford they have built over 100 care suites and that's likely to take an exceptionally long time to fill, probably several years. Maybe they should try selling half of them as small ILU apartments. There's very few facilities at that village for ILU living but maybe the location does it for people at a certain price point. Not far to Takapuna beach or Lake Pupuke.
You will see later this month the effect of having hundreds of unfilled units when they report their annual result and I predict it won't be pretty. I know you fancy yourself as an altruistic investor investing for the care and that makes you feel good and all that and you're not alone but most people expect the company to try and optimize returns for shareholders. Efficient use of capital and providing good care are not mutually exclusive activities...just need a CEO that better understands the balance.
I do wonder if it's time for some board changes as well as the CEO. Maybe Liz Coutts should also go ?
Quote from: Basil on May 10, 2024, 10:28 AM...
To be clear, what i am suggesting is there is probably quite a bit of mileage in right sizing their care offer. For example, at Lady Allum village in Milford they have built over 100 care suites and that's likely to take an exceptionally long time to fill, probably several years. Maybe they should try selling half of them as small ILU apartments. There's very few facilities at that village for ILU living but maybe the location does it for people at a certain price point. Not far to Takapuna beach or Lake Pupuke.
I'd agree with that. If care units are empty, than they clearly are in no way helping to reduce the care crisis.
So - absolutely, why not turn empty care units into needed ILU's? Sounds like a win-win to me.
Quote from: BlackPeter on May 10, 2024, 10:36 AMI'd agree with that. If care units are empty, than they clearly are in no way helping to reduce the care crisis.
So - absolutely, why not turn empty care units into needed ILU's? Sounds like a win-win to me.
As a shareholder I'd be against it, as it is in effect selling care suites at a massive discount.
Quote from: Buzz on May 10, 2024, 10:55 AMAs a shareholder I'd be against it, as it is in effect selling care suites at a massive discount.
I get you think that, but the DMF is similar but with less churn...then again if you can't sell them in the first place there is no care suite DMF or churn.
Quote from: Basil on May 10, 2024, 11:01 AMI get you think that, but the DMF is similar but with less churn...then again if you can't sell them in the first place there is no care suite DMF or churn.
You lost me there, how can 30% DMF of a much smaller ORA be similar to the DMF if sold at marketed prices? I presume also that the entry age would be a lot younger as it's not a care suite anymore and the churn could move out by many years?
Anyway, it's an interesting thought to ponder, as you say, selling them for something is better than not selling them at all.
Quote from: Buzz on May 10, 2024, 10:55 AMAs a shareholder I'd be against it, as it is in effect selling care suites at a massive discount.
Quote from: Basil on May 10, 2024, 11:01 AMI get you think that, but the DMF is similar but with less churn...then again if you can't sell them in the first place there is no care suite DMF or churn.
Exactly.
Clearly - if they can sell it as care unit, than they should. Makes a lot of (not just) economic sense.
However - if it is just unsold stock, collecting dust (and eating unproductive capital) than I as a shareholder would want them to turn these units into ILU's (or whatever brings some return). Obviously - when the care tsunami happens to arrive, then there is nothing stopping them to turn them back into care units as soon as the ILU residents depart. Some of them might even benefit from a conversion back to care while they live there. Could be an additional sales argument for the ILU's ...
Quote from: Buzz on May 10, 2024, 11:29 AMYou lost me there, how can 30% DMF of a much smaller ORA be similar to the DMF if sold at marketed prices? I presume also that the entry age would be a lot younger as it's not a care suite anymore and the churn could move out by many years?
ORA for ILU's is typically higher than ORA for care suites. On the other hand do care suites have an average churn of 3 years and ILU's 8 years - which tends to balance the issue out.
Quote from: Buzz on May 10, 2024, 11:29 AMYou lost me there, how can 30% DMF of a much smaller ORA be similar to the DMF if sold at marketed prices? I presume also that the entry age would be a lot younger as it's not a care suite anymore and the churn could move out by many years?
If it takes about 3 years to sell a care suite, then it's occupied for 3 years and takes another 3 years to resell and given both care suite and ILU are 30% DMF I'm not sure there's much in it either way, ILU or care suite from a DMF perspective. More important at this stage to simply get them sold and get the debt down.
Have seen Lady Allum care suites advertised for circa $375K on Trade Me before, maybe a slightly higher price could be asked for ILU living?
What about letting the customer choose what support they want with the unit using the time honored successful selling strategy that the customer is always right and allowing people to chose what level of support they start with and then being flexible to meet their needs as they get older.
Just noticed this is what Arvida are doing https://www.trademe.co.nz/a/property/retirement-villages/auckland/auckland-city/epsom/listing/4652308801
Excerpt: This studio apartment has been designed with comfort and convenience in mind. Better still, we offer varying levels of support – from fully independent, to assisted living, to full rest home care – all from your apartment. So you can relax knowing support is on hand. Surely tweaking their business model a bit to allow some of this sort of flexibility makes sense with hundreds of unsold care suites...
Quote from: Basil on May 10, 2024, 10:28 AMI know you fancy yourself as an altruistic investor investing for the care and that makes you feel good and all that ...
Wrong. Nothing altruistic, or "feel good" about it at all. I invest in a company that provides care, because
care is what I know and understand. Sometimes that, is actually more important as an investor, than simply being a financial whizz.
You might understand property/real estate, but you do
not understand care. Which is why you have tunnel vision and cannot understand that an RV without a care component, and continuity of care, won't cut the mustard
in the future. Down the track however, when you quite possibly may require some level of care yourself, you will finally understand what I've been trying to explain - when the RVs have all ditched care (because of lack of government support), and the only option you have is a standard rest home bed in a NFP rest home. Assuming of course, any of those still exist.
I've lost count of the number of times I've said it's about right sizing the care side of operations so all stakeholders do well.
Even OCA themselves are trying to do this.
Yes, you have, and your suggestion has some merit
but if OCA decides to convert some care suites into IL apartments (which is what they would be, as the care suites are arranged in the building as apartments are), they are committing those care suites to that designation, for an indefinite period of time. If the demand for care suites then increases, those suites are no longer available for that purpose. So "right sizing" the care offerings is not as simple as it may seem.
In addition to that, care suites, as we know, are designed specifically for continuity of care, with room design, and equipment oriented towards the resident needing an increasing level of care assistance for the rest of their life, in most cases. Independent living units, by definition, are for people who require no assistance. So are you going to tie up a purpose built "care" suite, with someone who may be in their early seventies who quite possibly won't need any assistance for another ten years? If demand for care suites increases over the next year or two, is OCA going to have to turn people away, because they panicked and turned some into ILU as you are suggesting?
As far as "stakeholders doing well" goes, anyone who buys any RV, looking to make a quick buck, is investing in the wrong sector. Those who are willing to hang in there for the long term, will do OK. None of these RVs are going bust. They are all ticking along, doing what they do, and at some point things will turn around. But if they lose sight of the importance of care/continuity of care, it will be a different story.
Anyway, enough for today.
Quote from: Basil on May 10, 2024, 01:54 PMI've lost count of the number of times I've said it's about right sizing the care side of operations so all stakeholders do well.
Even OCA themselves are trying to do this.
For anyone who is interested, I actually received a response from OCA re my email asking for clarification re occupancy rates.
" Thanks for your enquiry, happy to clarify this for you.
Occupancy rates are a metric used by Oceania in relation to care only – that includes both care suites (occupied by residents under an ORA) and standard care beds combined. We provide the occupancy rates in our care portfolio in our biannual results presentations and reports, for example see Appendix 3 of our 1HY2024 results released in November 2023
Which backs up Black Peter's recent comments that OCAs last reported occupancy rate, is only marginally lower than SUM's.
Interestingly, the email I received came from an "investor" email address which I have never seen before, so maybe they have decided it is time to "do better."
Quote from: Untamed on May 11, 2024, 09:06 AMFor anyone who is interested, I actually received a response from OCA re my email asking for clarification re occupancy rates.
" Thanks for your enquiry, happy to clarify this for you.
Occupancy rates are a metric used by Oceania in relation to care only – that includes both care suites (occupied by residents under an ORA) and standard care beds combined. We provide the occupancy rates in our care portfolio in our biannual results presentations and reports, for example see Appendix 3 of our 1HY2024 results released in November 2023
Which backs up Black Peter's recent comments that OCAs last reported occupancy rate, is only marginally lower than SUM's.
Interestingly, the email I received came from an "investor" email address which I have never seen before, so maybe they have decided it is time to "do better."
Thanks untamed
Glad I was correct lol
Quote from: winner (n) on May 11, 2024, 09:22 AMThanks untamed
Glad I was correct lol
OK, BP
and winner(n) ;)
I am happy with the way I have calculated the seriousness of their unsold stock situation and the methodology used including ILU units. Analysts are right to be concerned about their "ocean of unsold stock", their words not mine.
Ok, so can you please explain to me, how a 91% occupancy rate (which is what I think it was at last report) of
care suites and standard care beds, equates to an "ocean of unsold stock?"
Unless I am mistaken, your focus has always been on poor sales of
care suites, not ILUs. Hence our previous conversation about the possibility of converting unsold suites to apartments. But this clarification from OCA shows that care suites are obviously selling. If we hear in a couple of weeks, that the occupancy rate has increased from that figure, then clearly care suites
are a success story, not the bane of all evil, that you would like us to believe they are.
I note however, that you have amended your usual narrative to include ILU units, in the "unsold stock" situation. If it is ILU's that are not selling, maybe they should convert a few to care suites ;)
Quote from: Basil on May 11, 2024, 09:48 AMI am happy with the way I have calculated the seriousness of their unsold stock situation and the methodology used including ILU units. Analysts are right to be concerned about their "ocean of unsold stock", their words not mine.
Quote from: Untamed on May 11, 2024, 10:06 AMOk, so can you please explain to me, how a 91% occupancy rate (which is what I think it was at last report) of care suites and standard care beds, equates to an "ocean of unsold stock?"
I have already fully explained it. If you haven't got it by now, you're not going to. If you're serious about trying to understand it go back to the debate I had with BP about it, read the half year presentation available on the NZX which stated the number of unsold units and re-read my posts. It's all in there but it would probably help if you opened both eyes 😉...or you could choose to not do the work and pretend there isn't a stock problem and it's going to recover to $1 by Christmas and good luck with that.
Quote from: Basil on May 11, 2024, 10:20 AMI have already fully explained it. If you haven't got it by now, you're not going to.
Ditto!
I've actually done a lot of work to understand why the company is struggling. I trust my own work.
Quote from: Basil on May 11, 2024, 10:28 AMI've actually done a lot of work to understand why the company is struggling. I trust my own work.
I am sure you have, and I respect that. I am well aware that I have literally nothing to offer with respect to discussions about financials, so I actually do value what you contribute as far as financials go. All I have to offer, is my knowledge of the process of ageing, and aged care in general. Along with my personal experience, and anecdotal evidence, as someone working in the sector. Caregivers are the people on the ground, caring for and supporting our elderly. We are the ones who genuinely know our residents - much more so than nurses or managers. We see what is broken. We see what works well. I share some of that here, in the hope that people will perhaps see the RV sector from a different perspective to simply that of "investor."
I do have an emotional stake in my RV investment but not because I am a woke, touchy feely do-gooder. It is because the business is about caring for people. Human beings. Someone's Mum or Dad, or Nana or Grandad, and I believe OCA provides that care well. It is very easy to just have a chuckle at my posts, roll your eyes and mutter about me being in it for altruistic reasons, but I can tell you this. When you are in a rest home or care suite, the caregiver that
I am, is the caregiver you will hope for.
By the way, just as an aside. Last week, we sent two residents on to facilities with higher levels of care (hospital and dementia). We have a third transfer pending. Three of our "family" who consider our rest home, their "home." Three people whose lives, relationships, friendships and security, are being uprooted -
because we are not resourced to provide continuity of care. Two of them left without me even having a chance to say goodbye. They will be well cared for where they are going, just as they were with us. But sometimes that move, can be the catalyst to a downward spiral in health and/or emotional well-being. It is not uncommon for us to hear that someone who recently moved, has died. Often within weeks of leaving us. Sure, sometimes it is due to their health condition, but sometimes it is not .... :(
I stand by my prediction that continuity of care will become the number one selling point for RVs.
Time to get outside and enjoy the day.
I am sure you find your job incredibly rewarding from a people perspective and its great there are people like you prepared to put their heart and soul into their work for modest pay. I'm happy to take you at your word that you do your best for the people you care for. When my time comes, I hope I receive the care I need from dedicated hard working caregivers who genuinely care about their residents.
Like many, I started off investing in OCA in the belief the business transformation program Earl Gasparich so eloquently outlined would be a program that not only provided great levels of care and excellent LIU living but also would be a company that would be very rewarding to own as a shareholder. I remember early on, the time I organised a share trader meeting down at the Viaduct and many of us enjoyed a fabulous day out getting drunk in the sun and toasting our future success with OCA when it was ~ $1 and the saying of the day was "Oceania, you can't have too many" I think every time we said that it was compulsory to toast and have another drink lol. Disappointingly, that is just a distant fond memory from many years ago.
Over the seven years I have watched, studied and intensely analyzed OCA to the point it would give me bad headaches, I have yet to see any evidence whatsoever that the transformation program is working in terms of improving returns. Quite the opposite in fact and I think the market is quite correctly pricing the stock where it is, also for ARV and RYM for different reasons.
I think the whole sector faces serious headwinds, (posted more thoughts on that in the general retirement thread earlier today). Unfortunately, those in the sector who provide the highest level's of care face the most serious headwinds. As a bondholder, (and I have quite a few), I do have concerns about the level of their gearing, (highest in the sector), and am mystified as to why they would announce a targeted build rate for FY25 some 50% higher than the run rate they have previously been selling at given they have record level's of unsold stock already on hand. As an accountant that's been advising clients for over 40 years this makes no sense to me. Perhaps more information and / or explanations will be forthcoming when they report later this month.
As per my previous post, if anyone ever wants to contact OCA with queries, this is the email address to use:
investor@oceaniahealthcare.co.nz
That address has been around for yonks fyi. If you search it with double quotes around it "investor@oceaniahealthcare.co.nz"
It comes up on releases going back a few years
Quote from: TGB on May 11, 2024, 09:16 PMThat address has been around for yonks fyi. If you search it with double quotes around it "investor@oceaniahealthcare.co.nz"
It comes up on releases going back a few years
OK but it is not noted anywhere on their website, not even in the investor section, so I did not know it existed until they emailed me from that address.
I agree with that, just thought it was worth mentioning.
Quote from: Untamed on May 11, 2024, 09:35 PMOK but it is not noted anywhere on their website, not even in the investor section, so I did not know it existed until they emailed me from that address.
It's definitely not in plain sight, but if you click on https://oceaniahealthcare.co.nz/investor-centre and 'Enquire Now', it auto creates an email to investor@oceaniahealthcare.co.nz (ergo an email to Computershare).
Thanks for that. I had not seen the "enquire" button there.
Doesn't work for me as I use an iMac and third party email client. Clicking on "enquire" automatically defaults to Apple Mail, with no option to copy the email address.
Having said that, the email I received from that address came from:
HEATH MILNE M&A, Strategic Projects Manager, Oceania Healthcare - which clearly isn't Computershare, unless they forward to him? Either way, it is the first time anyone has ever responded to my emails, so that was a pleasant surprise.
Not long to wait now for results - would be a bonus if they announce a replacement for Brent while they're at it.
Quote from: Buzz on May 11, 2024, 10:36 PMIt's definitely not in plain sight, but if you click on https://oceaniahealthcare.co.nz/investor-centre and 'Enquire Now', it auto creates an email to investor@oceaniahealthcare.co.nz (ergo an email to Computershare).
HEATH MILNE M&A, Strategic Projects Manager,
Sounds a good job ..... wonder if working on any Merger or Acquisition at the moment or just managing Strategic Projects whatever they might be
A youngish bloke who took an internship at Jardens and then worked there for a few years .......probably knew Brent who might have influenced his joining Oceania in Feb 2020 (LinkedIn)
These days Oceania don't seem to mention its sales pricing strategy against the CBRE affordability ratio. This ratio measures the median house price versus our pricing for the respective surrounding catchment.
Maybe be included in full year presentation
xxxxxxxxxxxxxxxxxx
Bringing up that guy Milne's name made me wonder if Oceania were interested in that chunk of land at Ellerslie that Auckland Racing Club were hocking ...great site for a retirement village it was touted
Ant Sam Stubbs from Simplicity end up buying it
Quote from: winner (n) on May 12, 2024, 11:27 AMThese days Oceania don't seem to mention its sales pricing strategy against the CBRE affordability ratio. This ratio measures the median house price versus our pricing for the respective surrounding catchment.
Maybe be included in full year presentation
Well spotted. It was there in the previous HY report although I see other items on that page have also been revamped. Maybe this is part of their ESG initiative for printing less?!? ;D The last reported affordability stats at FY23 had 63% for villas and 64% for apartments which were up on the values for 1H23.
Let's hope Fiona Cameron can bring some much needed momentum to the sales effort. Experience with Hanover property she has seen worse
https://www.hobsonleavy.com/fiona-cameron-appointed-as-general-manager-sales-for-oceania-healthcare/ (https://www.hobsonleavy.com/fiona-cameron-appointed-as-general-manager-sales-for-oceania-healthcare/)
Quote from: Mos on May 13, 2024, 09:22 AMLet's hope Fiona Cameron can bring some much needed momentum to the sales effort. Experience with Hanover property she has seen worse
https://www.hobsonleavy.com/fiona-cameron-appointed-as-general-manager-sales-for-oceania-healthcare/ (https://www.hobsonleavy.com/fiona-cameron-appointed-as-general-manager-sales-for-oceania-healthcare/)
Ouch.
On the other hand - she used to be Marketing Manager and Sales Consultant for Hanover Property. I don't think it was bad sales or marketing which killed them ...
The other thing is - she left Hanover in 2008 when it was still flying high. The crash was (from memory) in 2010. So - better celebrate her arrival, but better monitor if she decides to leave :) ;
Quote from: Ferg on May 12, 2024, 09:15 PMThe last reported affordability stats at FY23 had 63% for villas and 64% for apartments which were up on the values for 1H23.
I've noticed that OCA ILU units are generally priced at a far more affordable level than RYM or SUM which are reporting close to 100% pricing relative to suburb. e.g. OCA Meadowbank price leader, (realistically, probably south facing with no view), for an ILU is just $720K which seems very reasonable indeed for the area.
It's quite a riddle because despite a significant apparent price advantage they're still struggling to sell them. Any thoughts on this Ferg?
Quote from: Basil on May 13, 2024, 11:10 AMIt's quite a riddle because despite a significant apparent price advantage they're still struggling to sell them. Any thoughts on this Ferg?
A fair comment and question. Maverick is much closer to site activity and unit sales than me. So my thoughts are based more around macro views and/or the financials.
I don't have any anecdotes to share although IMO Ryman and Summerset are top of mind for a number of retirees due to historic marketing efforts. It could be OCA has struggled to be on point with their marketing messaging given the large number of care beds/suites versus ILUs and the focus on development (plus the ESG distraction!).
We will likely see a bump in unsold stock value due to slower sales activity than expected and the continued development. Plus The Helier with high average prices may skew the unsold value more than the unsold volume. I will do a deep dive into this when the numbers are released.
But something has been sub-optimal with their sales volumes for a time, although their occupancy rates suggest otherwise. The sale of PACs instead of ORAs is also muddying the waters for stocks of care suites and it's not easy to unpick. Edit: forgot to mention the sales volume should also be seen in light of the property market overall where days to sell has increased which brings delays - but this should also been viewed relative to other RV operators.
I'm not close enough to their sales processes to comment on specifics, although IMO the recent appointment is a step in the right direction. It's possible they fell into the "build a better mousetrap" way of thinking and thought the developments would sell themselves. In addition, generally speaking Accountants do not make good CEOs...present company excepted of course! ;D
Am I worried? No. This is neither my largest position nor the one that keeps me up at night.
Thanks Ferg, I appreciate your thoughts. You could be right about RYM and SUM with their well-known brands simply being top of mind for retiree's. Stick with well known brands a bit like how Toyota keep dominating the vehicle sales charts.
I think OCA need a new marketing campaign, "Believe in better" seems to be falling on deaf ears with the obvious apparent response to "Believe in better" being, better what ? Maybe I am quite cynical of all marketing, I think it pays to be,, but that's the question that immediately pops into my head when anyone makes a claim like that. Maybe people don't like being told what to believe in? Anyway...I really do believe the advertising agency needs to be fired and a whole new approach taken.
Quote from: Buzz on May 11, 2024, 10:36 PMIt's definitely not in plain sight, but if you click on https://oceaniahealthcare.co.nz/investor-centre and 'Enquire Now', it auto creates an email to investor@oceaniahealthcare.co.nz (ergo an email to Computershare).
Haha, I guess we have different definitions of plain sight.
Not sure how much more plain sight you need than a huge banner on the landing page of the 'Investor Centre' with a big button saying 'Enquire now'
https://oceaniahealthcare.co.nz/investor-centre
I am not home at the moment so cannot check on my desktop, but on my phone that button is right down at the bottom and there is no "banner" anywhere.
Quote from: Whacc on May 15, 2024, 01:54 PMHaha, I guess we have different definitions of plain sight.
Not sure how much more plain sight you need than a huge banner on the landing page of the 'Investor Centre' with a big button saying 'Enquire now'
https://oceaniahealthcare.co.nz/investor-centre
Great new Oceania ad on TV
Quote from: winner (n) on May 15, 2024, 06:41 PMGreat new Oceania ad on TV
Believe in better gone or kept the same theme and dressed it up a bit ?
Quote from: Basil on May 15, 2024, 08:56 PMBelieve in better gone or kept the same theme and dressed it up a bit ?
Believe in better still features at the end.
Fantastic add.
https://youtube.com/watch?v=OkDGrNYVI30&fbclid=IwY2xjawCxbE9leHRuA2FlbQIxMQABHclWOdjoHLwg07y7sFFHhPnPODLYVobe8gdGvd4sk1ta7siivoKFlhJ9eg_aem_AeERX2uTns2Y8ZrYuNf-XuuGcj4LsAMLdkOkgQ_9IeDkXSz0HDKG9upMGKi8X5jgABPPN-Ts-gZ7qqXCFRfGiUhb
Yes a great ad
Interesting that's it aimed at oldies children to say it's good to put mum/dad in a home ....rather than the hard sell to the oldies to buy a place off us.
Suppose it's all about the emotive/ branding stuff these days
From Oceania Facebook page -
We're proud to share our new Aged Care brand campaign, which follows the journey of a father and son through life's key milestone events, and the shift that takes place as the parent ages.
With the help of Bill Withers "Lean on Me" narrating this honest interpretation of the journey many of us face, we hope to relieve some of the guilt felt whilst navigating the best care decisions for loved ones.
Oceania is honoured to support families going through this transition, providing them peace of mind and letting them focus on what's important; spending precious, quality time together.
Quote from: winner (n) on May 16, 2024, 07:58 AMYes a great ad
Interesting that's it aimed at oldies children to say it's good to put mum/dad in a home ....rather than the hard sell to the oldies to buy a place off us.
Suppose it's all about the emotive/ branding stuff these days
From Oceania Facebook page -
We're proud to share our new Aged Care brand campaign, which follows the journey of a father and son through life's key milestone events, and the shift that takes place as the parent ages.
With the help of Bill Withers "Lean on Me" narrating this honest interpretation of the journey many of us face, we hope to relieve some of the guilt felt whilst navigating the best care decisions for loved ones.
Oceania is honoured to support families going through this transition, providing them peace of mind and letting them focus on what's important; spending precious, quality time together.
My parents are approaching retirement age and this add really struct me. The music is perfect, a very emotional add which I understand is one of the most successful marketing strategies. Well done OCA.
New CEO appointed - starts in July.
https://www.nzx.com/announcements/431670
Results should please holders....... no signs of a cap raise...... but no final divvy.
https://www.nzx.com/announcements/431667
Highlights for the 12 months ended 31 March 2024
•Total Comprehensive Income of $70.5m, up 104.3% on pcp.
•Reported Net Profit after Tax of $31.5m, up 104.5% on pcp.
•Unaudited Underlying NPAT of $62.1m, up 6.0% on pcp.
•Total Assets increased to $2.8b and Net Assets increased to $1.0bn at 31 March 2024, up 9.3% and 6.7% respectively.
•Total sales volumes were up 16.7% on pcp including a 22.7% uplift in new sale volumes to 157 independent living units (ILU) and care suites.
•Operating Cashflow increased to $85.4m, 21.7% above pcp, and included total cash receipts from occupation right agreements of $226.3m, up 26.6% on pcp.
•Undrawn net debt headroom of $88.5m as at 31 March 2024 increasing to circa $100.0m as at 23 May 2024.
•During FY2024 six sites were exited or closed as part of a divestment programme, with aggregate gross sales proceeds of $21.0m.
•Post balance date, the sale of two further sites were settled with gross sale proceeds of $16.2m, and a further site is currently under conditional contract for sale.
Looks good BUT
EPS 4.4 cents FB forecast 6.3. Craig's 6.5
Profit $31m FB forecast $52m. Craig's $54m
Overall pretty good for the times we are in, new CEO appointment looks solid. US markets down overnight so not expecting much with the sp except steady or down.
Revaluations up to offset increased operating losses and increased debt.
Looks more like rental property investments - capital gains the name of the game?
But will the market buy the revaluations when properties out there in the real world are down, down and still under pressure?
Craig's say
Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -
As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity
Quote from: Teitei on May 24, 2024, 09:45 AMRevaluations up to offset increased operating losses and increased debt.
Looks more like rental property investments - capital gains the name of the game?
But will the market buy the revaluations when properties out there in the real world are down, down and still under pressure?
As a non holder its not for you to spend much time concerning yourself with, im sure things will balance out over the longer term.
Quote from: Breezy on May 24, 2024, 11:40 AMAs a non holder its not for you to spend much time concerning yourself with, im sure things will balance out over the longer term.
That's like saying your neighbour shouldn't point out your house is in fire.
Quote from: Gerald on May 24, 2024, 01:33 PMThat's like saying your neighbour shouldn't point out your house is in fire.
I see no fire here just a gentle flame.
Further from Craig's today
Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. - OCA is paying a very low effective interest rate on its borrowings, less than 3% in FY24, which is providing is supporting its compliance with bank covenants. This is a credit to OCA's finance team who locked in low rates long term during Covid, however these facilities reset FY28. If these facilities were to be reset to market rates of 6-7% today, we estimate OCA would be in breach...........
Quote from: Shareguy on May 24, 2024, 05:20 PMFurther from Craig's today
Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. - OCA is paying a very low effective interest rate on its borrowings, less than 3% in FY24, which is providing is supporting its compliance with bank covenants. This is a credit to OCA's finance team who locked in low rates long term during Covid, however these facilities reset FY28. If these facilities were to be reset to market rates of 6-7% today, we estimate OCA would be in breach...........
So? FY28 is a long way out, and there is plenty of water to flow under the bridge between now and then. This kind of hypothetical musing, is meaningless. Craig's giving praise with one hand and taking it away with the other.
Quote from: Untamed on May 24, 2024, 05:24 PMSo? FY28 is a long way out, and there is plenty of water to flow under the bridge between now and then. This kind of hypothetical musing, is meaningless. Craig's giving praise with one hand and taking it away with the other.
I'd take Craigs with a grain of salt, they are no better than your average punter at predicting anything.
The big question is whether OCA's result means the Warriors will win this weekend?
lol, Brent getting his largest STI so far - $390k (pg 86 of annual report)
For doing what???
Quote from: Whacc on May 24, 2024, 07:01 PMlol, Brent getting his largest STI so far - $390k (pg 86 of annual report)
For doing what???
How about answering that yourself? Tell us what business metrics have improved since Pattison took over from Gasparich, and for balance which have declined.
Quote from: Buzz on May 24, 2024, 07:20 PMHow about answering that yourself? Tell us what business metrics have improved since Pattison took over from Gasparich, and for balance which have declined.
Are you serious?
If my understanding is correct, his incentives are (& payments should be) based on TSR and Underlying EBITDA growth.
Both those metrics have been dire under him. The stock is trading well below IPO if you need reminding.
All the earnings 'growth' metrics presented yesterday were off a small base and paper off the fact they had been torpedoed over the past couple of years.
Aside from that his accomplishments were a couple of small acquisitions and hasn't provided any proof they have been accretive.
He has managed to turn over pretty much an entire executive team and some.
Other than that he hasn't sold down completed stock and as a result racked up far higher gearing than Earl, beyond the Board's long stated target range.
Did I miss a great redeeming factor?
Yes, you missed that he very successfully lead the company into a position where it can't afford to pay a single cent in dividends to shareholders. That's surely worth double the pay Earl was on plus a huge bonus lol
Quote from: Whacc on May 24, 2024, 07:01 PMlol, Brent getting his largest STI so far - $390k (pg 86 of annual report)
For doing what???
Negotiated exit package?
For those that don't know, there's a full transcript of the analysts call on the other channel and it appears there's lots of confusion with the financial accounts...there's a big surprise lol. It would seem they are selling some care suites on credit terms. There seems to be a lot of confusion about the debt level and how come its grown. Also a lot of confusion about unsold stock level's, reported number has gone down from first half number but the number built in the second half exceeded the number sold in that half. Winner suggested obfuscation. Its either that or a real dog's breakfast, or more likely some combination of that.
The only value I can add to that debate is to me it seems quite clear that at the first half result in late November they showed a graphic of unsold stock and separately identified numbers which were temporarily occupied as premium room accommodation. At the full year result the unsold numbers were down because they no longer included unsold stock temporarily occupied under premium daily rate.
Whether this is deliberate obfuscation or just generally a really slack and inconsistent approach used by the CFO from one period to another, judge for yourself but my opinion is the accounts are actually extremely messy and complicated even for professionals and analysts to understand and the senior management team do a very, very poor job maintaining consistency with reporting around certain key details of key metrics from one period to another. That does them absolutely no favours with institutional investors.
The increase in debt level is again concerning but it appears they are clearly in "tapering off development mode" and will be reducing their build rate in the future in line with how RYM and ARV are doing this to try and stop their debt going up. I think new unit deliveries in FY26 and FY27 will be quite modest. The impact of that on profit in future years remains to be seen.
Management seems confident that returns on care beds are improving and I acknowledge they have made decent progress with the reduction is basic care services, in terms of the number of beds with basic care villages sold or closed which is encouraging but there is a long way to go.
My view is that in certain respects the company has been very poorly lead and governed in the last few years. Even in FY25, despite hundreds of new unsold care suites they are still building heaps more of them. With proper leadership that simply wouldn't be happening. From the call, thankfully it would seem FY25 is the last year for quite some time that vast amounts of new care suites will be built.
Interesting comment from Brent that the new CEO has a lot of "cleaning" to do. Can't help wondering what "cleaning" really means ? Like others on the other channel, I think he has "checked out" already.
Conclusion: I think this looks okay to me as a bondholder and the level of debt will gradually start to come down in the years ahead. Shareholders can make their own minds up but for me, this seems anchored in the sub 50% of NTA zone until such time as they can clearly execute on a greatly enhanced volume of new unit sales. Forbar have been picking 275 for FY25, up nearly 50%. That looks like fantasy land stuff to me with the housing market in the sombre state it's in.
One thing that really caught my eye on the call was only 13 confirmed apartment sales at the Helier out of (from memory 72 apartments) and that's with all the pre-construction sales hype, opening a sales office in St Heliers and Brent previously assuring shareholders they had really good levels of enquiry.
Given the very best north facing units with sea views always sell quickly to cashed up MINO's (money is no object) I think its going to be a very long hard slog to sell the other 59 units.
Maybe the new CEO brings a new approach that generates better results or maybe just even more ESG focus...time will tell.
Disc: Bondholder,, no shares held..
Just some of my thoughts. If others see it very differently that's absolutely fine and good luck.
thanks for your well thought out "thoughts" Mr Beagle.
Not unusual for a company struggling to use a lot of smoke n mirrors.
Some, like yourself, see why they use this sort of reporting style.
Plenty hung up on the fact that care suites are a necessity rather than a choice, they are right of course, but many have had tunnel vision based on this and failed to see the other strong macro factors that are at play.
Long term this be be a winner but entry timing is gonna be key.......suspect now is not the time to enter
Does anyone know where I can download the full transcript? I can't see it on the OCA website anywhere.
For Bars Review by Andrew Ibbotson
OUTPERFORM
Oceania Healthcare (OCA) reported an in-line result at our annuity EBITDA line and a decent beat at the volatile new sales gain line. We see the results as a side show to the broader issues of: (1) too much debt; (2) capital raise concerns; and (3) long-term cash generation and profitability. On the first two issues we believe OCA got the message and appears to be targeting a dramatic reduction in capex. Capex declined by ~-NZ$50m sequentially in 2H24, and we estimate investing cash flow for the next three years to be ~NZ$100m annually, half the previous three years. This will result in a substantial decline in new unit deliveries in FY26 and FY27, but the associated ~NZ$300m lower net debt is far more important for the investment case. With assets ~7x its market value of equity, lowering debt rather than growing assets should be the focus — profitability should follow. We reiterate our OUTPERFORM rating with an increased target price of NZ$1.00.
What's changed?
Earnings: Increased annuity EBITDA +2%/+5%/+3% and underlying earnings +12%/+18%/+1% over FY25/FY26/FY27
Target price: Increased to NZ$1.00, due to lower net debt and increased earnings offsetting lower dividends.
The Helier appears to be performing well — a young portfolio should command a higher earnings multiple
The most significant surprise versus our estimates was OCA's expectation to have recovered all capex for its flagship development, The Helier, by the end of FY25. OCA has fallen short on its expectations before, but this suggests a reduced tail risk. More broadly, 85% of OCA's book value of assets now come from sites developed or acquired since 2017. A young and not fully sold down portfolio under earns today but should deliver stronger growth going forward. We estimate that OCA has the lowest level of resales relative to independent living units (ILUs) and the largest gap between ILU new and resale prices in the sector. Both point to growth ahead.
Signs are accumulating that we are through the worst in care
OCA reported care EBITDA from ongoing operations ~+8% ahead of our estimates, up ~+15% year-on-year in 2H24. This was driven by a combination of daily care fees growing ahead of staff expenses for the first time since listing, and continued growth in DMF and resale gains. One swallow does not a summer make, but we forecast care margins to expand meaningfully from here.
The aged care companies have a credibility issue with regards to non-GAAP disclosure; OCA did not help itself
Non-GAAP measures make up ~80% to 90% of through the cycle 'underlying earnings' for the major listed aged care operators. Consequently, the quality, consistency and accuracy of these many non-GAAP disclosures is crucial. At 1H24 OCA stated that it had 409 new units 'currently available for sale' and 382 'additional units currently under construction'. As it turns out, rectified but not highlighted at this result, OCA counted ~100 units that were delivered in 2H24 in both categories.
Quote from: Greekwatchdog on May 27, 2024, 07:41 AMTarget price: Increased to NZ$1.00, due to lower net debt and increased earnings offsetting lower dividends.
Are they still assuming a "miraculous" 50% increase in property sales to about 275 units this year as a key assumption supporting their thesis ?
Quote from: Basil on May 26, 2024, 10:51 AMWhether this is deliberate obfuscation or just generally a really slack and inconsistent approach used by the CFO from one period to another, judge for yourself but my opinion is the accounts are actually extremely messy and complicated even for professionals and analysts to understand and the senior management team do a very, very poor job maintaining consistency with reporting around certain key details of key metrics from one period to another. That does them absolutely no favours with institutional investors.
For me this is the biggest difference between Earl & Brent.
Earl seemed to have a consistent pack and reported with a consistent format each time, good or bad.
Now the reports just cherry pick the best metrics they can find at each print and as a result it confuses everyone.
Analysts and brokers spend more time searching in vain for figures presented in the last reports to look at trends, then are forced to pivot to whatever framing & smokescreen has been disclosed.
Very high quality research released by Ridgewell at Craigs today.
Included the following.
QuoteFor OCA shares to begin to close the c.60% discount to adj NTA ($1.46), and
indeed to remain a going concern, cash generation from existing assets must
improve. With OCA consistently failing to deliver the improvement guided to
by management, it has become a "show me" story. We see the appointment
of new CEO Suzanne Dvorak (ex Bupa MD) as potentially a positive catalyst
for change, but she will need to deliver quick results to regain investor trust.
Retain Neutral, target price -10% to $0.67[/quote]
For mine, his research is better than anything you will read on either channel.
His rating is neutral. Reckons it will take 4 years to sell down the Helier.
Forbar doing their best to talk it up seeing as Forsyth Barr Investment management are one of the biggest shareholders with 5%.
Arie at Jardens still negative
Market conditions, high inventory levels and the debt situation are all
reasons to pause while providing more con- fidence on the operating outcomes being generated from OCA's strategy is also key." Jarden target price $0.69. Rated N
Arvida said ' With the assistance of advisors, Arvida is also considering a range of alternative options to accelerate value recognition that includes engaging with other market participants on various capital partnerships, restructuring options and strategic alternatives for the Company.
Is this code for Oceania to merge with Arvida ...that'll be fun
Craigs forecasting the following dividends for FY25, FY26 and FY27 0, 0, 0.
RYM and even ARV joined in the zero-dividend policy while stay paying their senior staff huge salaries and bonus's. Hmmm
Quote from: Basil on May 28, 2024, 04:33 PMCraigs forecasting the following dividends for FY25, FY26 and FY27 0, 0, 0.
RYM and even ARV joined in the zero-dividend policy while stay paying their senior staff huge salaries and bonus's. Hmmm
Dividends don't really make sense in this sector as never imputed. Share buy back at deep discount when cash flow allows would be better for shareholders
Agree but OCA too busy extending their balance sheet right out buying more land in front of the Helier, (which itself will take many years to sell down) at top market rates.
Quote from: Basil on May 28, 2024, 05:42 PMAgree but OCA too busy extending their balance sheet right out buying more land in front of the Helier, (which itself will take many years to sell down) at top market rates.
Sell down has certainly been very slow to date. Good to see some of the lesser assets being sold off which has also taken ages. If they can streamline the portfolio to less than 20 premium villages it would be a more consistent and valuable proposition in my view. Hopefully the new CEO is a sales orientated straight talker.
Quote from: Mos on May 28, 2024, 04:52 PMDividends don't really make sense in this sector as never imputed. Share buy back at deep discount when cash flow allows would be better for shareholders
They don't make sense because these are stocks that should be reinvesting for growth given the demographic tailwinds they are building for (the point regarding bonuses is still relevant even though not that material).
This whole confused situation where they are confusing their target investor demographic with their target resident demographic.
Just because you sell residences to old people who prefer yield doesn't mean you should necessarily be selling your stock to those same people.
If these businesses hadn't paid out millions in dividends when the market was buoyant then they wouldn't be contending with the debt burden they have now and could keep developing through the cycle.
Instead they pander & apologise to a greedy superannuitant retail investor cohort who would rather strip their yield out at the expense of longer term profitability.
Quote from: Whacc on May 28, 2024, 08:04 PMInstead they pander & apologise to a greedy superannuitant retail investor cohort who would rather strip their yield out at the expense of longer term profitability.
Just commenting on your obvious bias here. Firstly, at the IPO a big meal was made with OCA and to some extent ARV, that due to the much higher level of care in their business model a feature of bringing these companies to market was that they could afford to pay a very modest dividend.
Its not investors who are greedy it is management trying for ever higher pay rates and bonus's and trying to achieve that by building ever increasing new monuments to their ego that so saturate the market with supply and so lever up the balance sheet to the extreme limit that the companies cannot afford to even feed a single crumb from the table to shareholders while despite this, management gorge themselves on ever increasing salaries and bonuses.
Crikey...............Over on the other channel Value NZ today posted the following bullish OCA 2021 posts from 'guru' posters...... interesting......and a bit scary.... mind you, 2021 was sssooo long ago!
Originally Posted by winner69
With a booming property market (even the RBNZ wants it to keep going up) and low interest rates and with Oceania's plans coming to fruition the future is bright
For believers in relativity theory OCA share price at least $2.40 next year
YOU CAN'T HAVE TOO MANY OCA
Originally Posted by winner69
And then we will able say 'we'll never see $1.50 again'
Originally Posted by winner69
OCA - the share you can't have too many of (unless one has self imposed portfolio weighting limits)
Originally Posted by Beagle
I am comfortable one year hence from here at 18 times forward earnings = 18 x 10.3 cps = $1.85 updated target price early 2022. Over time as they prove their growth rate I expect that multiple will expand to about 20 times as they prove over a number of years they can grow eps at a CAGR of something like 15%. We could see eps of 20 cps in FY26 and the market pricing the company on a forward basis in late 2025 at 20 times that number = ~ $4.
As I said earlier, the real money will be made by those with the patience to hold this for at least 5 years which is what I intend to do.
Originally Posted by Beagle
If we see strong and reliable growth in OCA's eps in the years ahead, (one broker has FY26 estimated at 19 cps) we could see a PE in the mid 20's applied to that multiple and given the market is always forward looking that opens up the prospect of 25 times 19 cents ($4.75) being recognized as early as 2025.
Originally Posted by Snow Leopard
Still trades at a discount to what I consider fair value but not cheap enough for me to buy more. It is currently my #3 holding on the NZX
Originally Posted by Snow Leopard
Fundamentally I value it at $1.68 right here, right now, with a modest $1.71 for a year hence.
Just shows what an extremely disappointing company this has been.
Sold most of mine more than 2 years ago at $1.40 and made heaps of posts since then explaining why and warning what a dog this is.
Bit disingenuous to post comments from several years ago without posting more recent posts from the same people.
Leftie .....that guy and his mates over on the other place are only trying to comfort/convince themselves that OCA is the greatest thing since sliced bread ...and can't understand why the share price is where it is ......although the cheaper the better lol
Quote from: Left Field on Jun 04, 2024, 01:37 PMCrikey...............Over on the other channel Value NZ today posted the following bullish OCA 2021 posts from 'guru' posters...... interesting......and a bit scary.... mind you, 2021 was sssooo long ago!
Originally Posted by winner69
With a booming property market (even the RBNZ wants it to keep going up) and low interest rates and with Oceania's plans coming to fruition the future is bright
For believers in relativity theory OCA share price at least $2.40 next year
YOU CAN'T HAVE TOO MANY OCA
Originally Posted by winner69
And then we will able say 'we'll never see $1.50 again'
Originally Posted by winner69
OCA - the share you can't have too many of (unless one has self imposed portfolio weighting limits)
Originally Posted by Beagle
I am comfortable one year hence from here at 18 times forward earnings = 18 x 10.3 cps = $1.85 updated target price early 2022. Over time as they prove their growth rate I expect that multiple will expand to about 20 times as they prove over a number of years they can grow eps at a CAGR of something like 15%. We could see eps of 20 cps in FY26 and the market pricing the company on a forward basis in late 2025 at 20 times that number = ~ $4.
As I said earlier, the real money will be made by those with the patience to hold this for at least 5 years which is what I intend to do.
Originally Posted by Beagle
If we see strong and reliable growth in OCA's eps in the years ahead, (one broker has FY26 estimated at 19 cps) we could see a PE in the mid 20's applied to that multiple and given the market is always forward looking that opens up the prospect of 25 times 19 cents ($4.75) being recognized as early as 2025.
Originally Posted by Snow Leopard
Still trades at a discount to what I consider fair value but not cheap enough for me to buy more. It is currently my #3 holding on the NZX
Originally Posted by Snow Leopard
Fundamentally I value it at $1.68 right here, right now, with a modest $1.71 for a year hence.
The fickleness of the human state up for display here and why not to trust anything written on a random internet forum.
Quote from: winner (n) on Jun 04, 2024, 02:02 PMLeftie .....that guy and his mates over on the other place are only trying to comfort/convince themselves that OCA is the greatest thing since sliced bread ...and can't understand why the share price is where it is ......although the cheaper the better lol
Of course it's all about the motives of the poster...... begs the Q.... what was your motive back in 2021?
Quote from: Breezy on Jun 04, 2024, 02:15 PMThe fickleness of the human state up for display here and why not to trust anything written on a random internet forum.
Not at all. We were all sold a pup. It's just that some people have stopped drinking the OCA cool aid and others still lap up as much as they can
Quote from: Basil on Jun 04, 2024, 02:30 PMNot at all. We were all sold a pup. It's just that some people have stopped drinking the OCA cool aid and others still lap up as much as they can
Punters also thought they were sold a pup when XRO went from $45 down to $12 before it headed to the ASX, (I was one of them and how wrong i was) the rest as they say is history, there are plenty of other examples as well.
Nobody gets it right every time. The trick is to get it right most of the time.
Oceania's Underlying NPAT per share over the years
No comment needed
IMG_5810.png
Basically, no growth on average underlying eps of 8 cps.
The problem is inflation has been quite gnarly in recent years and inflation adjust the earnings at listing and compared to current eps, inflation adjusted eps in FY24 is down ~ 30% compared to 7 years ago. So much for the transformation process that Earl Gasparich told us was going to deliver huge gains after the 6 year program was complete. Maybe in another 6 years...
I know it's a lot of work Winner, but when you get a chance, no hurry, would you mind doing the same graph for ARV please?
Surely, we have done this to death now? Maybe it is time to just chill and wait and see how things go once the new CEO takes over in July. There is literally zero point going over and over history, and what CEO's to date, did or didn't do. CEOs are not unlike politicians. Sometimes they get it right, sometimes they don't, but what is done is done. Investors will either decide to take their money and run, or they will decide to give the new CEO the benefit of the doubt, for X period of time, before making any major decisions.
Perhaps it would be more interesting now, to chat about where we might see her taking the company, what her focus might be etc? I watched a couple of interviews with her, from back when she was with BUPA - couldn't find anything more recent. To be honest, I wasn't overly impressed, but hey, they were just short interviews based on pretty stupid questions from the interviewer, so not exactly a fair depiction of who she is or what she has to offer.
One would hope we have a better idea, by the end of the year.
Quote from: Untamed on Jun 05, 2024, 10:37 AMSurely, we have done this to death now? Maybe it is time to just chill and wait and see how things go once the new CEO takes over in July. There is literally zero point going over and over history, and what CEO's to date, did or didn't do. CEOs are not unlike politicians. Sometimes they get it right, sometimes they don't, but what is done is done. Investors will either decide to take their money and run, or they will decide to give the new CEO the benefit of the doubt, for X period of time, before making any major decisions.
What gets me is we have had the same Chair (and largely the same Board) throughout this period, ultimately they are the ones critiquing this strategy and approving (or as it may be withholding) all spend and/or critical strategic moves.
Why is it only the CEO coming in for criticism while the Board seems to either get off scot-free or be lauded for their brilliance?
They appear to be very adept at being present when there is a ribbon to be cut then fading into the hedge-work or, worse, pointing the the finger whenever accountability is required.
The Chair showed she is particularly skilled at this competency when she exited the Port.
Quote from: Whacc on Jun 05, 2024, 01:05 PMWhat gets me is we have had the same Chair (and largely the same Board) throughout this period, ultimately they are the ones critiquing this strategy and approving (or as it may be withholding) all spend and/or critical strategic moves.
Why is it only the CEO coming in for criticism while the Board seems to either get off scot-free or be lauded for their brilliance?
They appear to be very adept at being present when there is a ribbon to be cut then fading into the hedge-work or, worse, pointing the the finger whenever accountability is required.
The Chair showed she is particularly skilled at this competency when she exited the Port.
I agree. Personally though, I am not experienced enough to feel at all confident in my ability to judge/rate the various board members. I do know that some trusted posters here, are very supportive of Liz and Greg in particular. Having said that, I hear what you are saying. Brent hasn't been running the show in isolation.
Quote from: Untamed on Jun 05, 2024, 01:44 PMI agree. Personally though, I am not experienced enough to feel at all confident in my ability to judge/rate the various board members. I do know that some trusted posters here, are very supportive of Liz and Greg in particular. Having said that, I hear what you are saying. Brent hasn't been running the show in isolation.
Your mate on the other channel gone bush again ? Unusually quiet after the last result?
QuoteThey appear to be very adept at being present when there is a ribbon to be cut then fading into the hedge-work or, worse, pointing the the finger whenever accountability is required. The Chair showed she is particularly skilled at this competency when she exited the Port.
If I recall correctly Liz Coutts quit as chairperson of Auckland ports after a death or was it two?, at Auckland Ports. True story, a friend phoned me and asked if she should face a manslaughter charge for culpable liability? I told him I wasn't a lawyer and had no idea if liability for alleged breaches of serious safety protocols extended to the board as to whether proper oversight of safety matters was a board responsibility, my best guess is its pretty unlikely.
Regarding Greg, Heartland Bank also pluming decade lows...seems a lot of respect for him from others so maybe that's just a coincidence.
My 2 cents is that Oceania's board should have woken up and smelled the coffee a LONG time ago that care suite sales uptake was very poor and steered the ship in a different direction. Remarkable after all these years and an ocean of unsold care suite stock, there's heaps more still being built in FY25. Serious failure of governance there in my opinion.
Quote from: Basil on Jun 05, 2024, 04:13 PMYour mate on the other channel gone bush again ? Unusually quiet after the last result?
You are going to wish you hadn't asked me this.
The fact that you even asked it, speaks volumes. Maverick has graciously and generously, shared his work on OCA, for years. He has never once asked for, or expected any gratitude or recognition for it. You, and others, ridiculed and disrespected him at every opportunity. Yet he kept sharing. He is one of the most humble, kind, and respectful posters at ST, and you have treated him like shit. But here you are, looking for another opportunity to make a judgement about his absence, so you can have yet another "go" at him.
You are right about one thing. He
is my mate. He has earned my respect and friendship.
You do not deserve access to his contributions.
Just a "slight" overreaction lol Just wondered why he hadn't commented on the last result.
Quote from: Basil on Jun 05, 2024, 04:40 PMLOL what a comical overreaction. You certainly chose your user name well lol
I did (choose my name well), and it was intentional.
Don't try to make yourself look better by making it about me. You asked me where my mate was, for one reason, and one reason only. It's what you do, and everyone knows it.
You knew exactly what my reaction would be.
Lots of ongoing agro on the other channel with this stock and some drunken sailor dredging up old posts, his ramblings are next level and psychotic. Some pretty weird stuff on here as well.
Quote from: Basil on Jun 05, 2024, 04:13 PMYour mate on the other channel gone bush again ? Unusually quiet after the last result?
I was wondering the same thing.
Quote from: ValueNZ on Jun 06, 2024, 09:31 AMI was wondering the same thing.
ValueNZ, I actually like you, and I think you have a bright future, but please, please, please, don't buy into Basil's BS. You are fairly new here, so you are not fully aware of historical "behaviours." I do not feel at all comfortable speaking for Maverick, but I am not going to sit by and let
anyone diss him, in any way whatsoever. Go read my reply to Basil. Maverick has been treated incredibly disrespectfully, for a very long time - by certain people. He has finally realised that he is better to share his work with those of us who appreciate it, than to share it publicly as he was before. Which, is the best possible decision he could make as far as I am concerned.
So no, as it stands right now, "my mate" will not be back at ST, or anywhere else. No doubt you and Basil will choose to read something into that, but that is nothing more than fantasy. I have explained his reasons for no longer posting. Up to you whether you choose to accept and respect that or not.
Be careful. I can tell you from personal experience, that there are people here, and at ST, who are
not completely trustworthy. Their number one reason for hanging out at these forums is
not the reason you or I hang out. Yes, they do have valuable investing experience to share, but at the end of the day, they hang out in these forums, to feed their egos. That's a truth that you will no doubt have to learn for yourself. But you would do well to heed my warning.
Quote from: Untamed on Jun 06, 2024, 09:45 AMValueNZ, I actually like you, and I think you have a bright future, but please, please, please, don't buy into Basil's BS. You are fairly new here, so you are not fully aware of historical "behaviours." I do not feel at all comfortable speaking for Maverick, but I am not going to sit by and let anyone diss him, in any way whatsoever. Go read my reply to Basil. Maverick has been treated incredibly disrespectfully, for a very long time - by certain people. He has finally realised that he is better to share his work with those of us who appreciate it, than to share it publicly as he was before. Which, is the best possible decision he could make as far as I am concerned.
So no, as it stands right now, "my mate" will not be back at ST, or anywhere else. No doubt you and Basil will choose to read something into that, but that is nothing more than fantasy. I have explained his reasons for no longer posting. Up to you whether you choose to accept and respect that or not.
Be careful. I can tell you from personal experience, that there are people here, and at ST, who are not completely trustworthy. Their number one reason for hanging out at these forums is not the reason you or I hang out. Yes, they do have valuable investing experience to share, but at the end of the day, they hang out in these forums, to feed their egos. That's a truth that you will no doubt have to learn for yourself. But you would do well to heed my warning.
Good morning, the reason I ask is because Maverick's analysis is very high quality. He clearly understands the business far better than any other poster on ST, so it's a shame to no longer have his contribution to ST.
And trust me, I know all about the Beagle and his BS.
Quote from: ValueNZ on Jun 06, 2024, 10:01 AMGood morning, the reason I ask is because Maverick's analysis is very high quality. He clearly understands the business far better than any other poster on ST, so it's a shame to no longer have his contribution to ST.
And trust me, I know all about the Beagle and his BS.
I have sent you a PM.
Ironic how I have been consistently right with my calls on OCA and hated for it some other posters have been consistently over optimistic and wrong and they are loved for it. Some serious Stockholm syndrome going on here. People loving the captor who led them down the capital loss rat hole.
For me, I am happy to read professional analysts like the one at Craigs that's done a very thorough job on this.
Quote from: Basil on Jun 05, 2024, 04:13 PMIf I recall correctly Liz Coutts quit as chairperson of Auckland ports after a death or was it two?, at Auckland Ports. True story, a friend phoned me and asked if she should face a manslaughter charge for culpable liability? I told him I wasn't a lawyer and had no idea if liability for alleged breaches of serious safety protocols extended to the board as to whether proper oversight of safety matters was a board responsibility, my best guess is its pretty unlikely.
Yes, she left and the CEO at the time was thrown under the bus to take all the heat for that.
An independent report was damning.
https://www.nzherald.co.nz/business/former-auckland-port-chair-brings-in-lawyer-over-highly-critical-independent-report/AU7W4AOV56QBGKUH7PPZ3HTAX4/
Also bad timing receiving this award too, which highlight how fake & baseless the criteria are for winning.
https://www.munz.org.nz/2020/12/06/business-award-for-ports-of-auckland-board-chair-must-be-returned/
Quote from: Basil on Jun 06, 2024, 10:09 AMIronic how I have been consistently right with my calls on OCA and hated for it some other posters have been consistently over optimistic and wrong and they are loved for it. Some serious Stockholm syndrome going on here. People loving the captor who led them down the capital loss rat hole.
For me, I am happy to read professional analysts like the one at Craigs that's done a very thorough job on this.
Nobody led anybody down a rabbit hole. People made their own decisions about investing in OCA. Many of us were already invested long before we ever read a Maverick post. But what you fail to understand is that it is not a competition and never has been.
You are the one who has made it a competition, in your own head. Maverick has never ever done that. Your posts are always a reflection of your obsessive need to be "right." You have a lot of good stuff to contribute, but your ego always lets you down. You don't earn respect by demanding it.
The truth is,
nobody knows where OCA will be in a year, five years, ten years or further down the track. You could end up being right, or you could end up being wrong. So could Maverick. So could any one of us. What I do know though - if and when OCA "comes right" and things are looking good,
you will buy back in, and when that time comes
you will be here ramping OCA up again. Guaranteed.
Oh, and by the way, you are not hated for your calls on OCA.
If you are hated, it is because of your behaviour and treatment of people. You have nobody to blame for that, but yourself.
Yes, I hate some of your behaviours and the way you often treat people, but I don't actually hate
you, just for the record.
Quote from: Untamed on Jun 06, 2024, 10:38 AMNobody led anybody down a rabbit hole. People made their own decisions about investing in OCA. Many of us were already invested long before we ever read a Maverick post. But what you fail to understand is that it is not a competition and never has been. You are the one who has made it a competition, in your own head. Maverick has never ever done that. Your posts are always a reflection of your obsessive need to be "right." You have a lot of good stuff to contribute, but your ego always lets you down. You don't earn respect by demanding it.
The truth is, nobody knows where OCA will be in a year, five years, ten years or further down the track. You could end up being right, or you could end up being wrong. So could Maverick. So could any one of us. What I do know though - if and when OCA "comes right" and things are looking good, you will buy back in, and when that time comes you will be here ramping OCA up again. Guaranteed.
Oh, and by the way, you are not hated for your calls on OCA. If you are hated, it is because of your behaviour and treatment of people. You have nobody to blame for that, but yourself.
I actually don't hate you by the way, just for the record.
Wow so much truth in here, reminds me of a very good old saying "No one cares how much you know until they know how much you care".
Quote from: Basil on Jun 06, 2024, 10:09 AMIronic how I have been consistently right with my calls on OCA and hated for it some other posters have been consistently over optimistic and wrong and they are loved for it. Some serious Stockholm syndrome going on here. People loving the captor who led them down the capital loss rat hole.
For me, I am happy to read professional analysts like the one at Craigs that's done a very thorough job on this.
To be honest Basil thats rich from you given your track record on ST. You were one of the most bullish at the time. And if I recall you were very Downbeat on HGH only to change your mind again a few weeks later.
I will say it again you are not a Pied Piper. If people don't do there own research and highlight at the time of investing if they are in for a short time, Momentum Trader or Long Term then this sort of crap always comes up.
What ever happened to DYOR FFS we are investing our own money. Are people that stupid and ignorant? OCA was not about 4/5 years. It was closer to 10. Remember they suffered the most during Covid.
There debt whist high is cheap and locked in too 2028
Be interesting to see where we are at in 12 months, and yes I will say the samething about HGH as I do about OCA, we will both do well in the long run.
B4 investing in OCA I think it is good to be aware of the Chair, Liz Couts her history with Port of Auckland and her involment with property development in different parts of NZ as well as all her other board commitments.
It is good understanding Liz's dayly workload and realising how little time she has left to managing the board of OCA.
Once I understood her workload, I understood why she has no time for answering his shareholder's concerns.
Only if you are happy with the Chair's qualities and commitments it is wise to invest, this goes ofcourse for any company. Best to do you own research.
Quote from: Stockgathering on Jun 06, 2024, 07:57 PMB4 investing in OCA I think it is good to be aware of the Chair, Liz Couts her history with Port of Auckland and her involment with property development in different parts of NZ as well as all her other board commitments.
It is good understanding Liz's dayly workload and realising how little time she has left to managing the board of OCA.
Once I understood her workload, I understood why she has no time for answering his shareholder's concerns.
Only if you are happy with the Chair's qualities and commitments it is wise to invest, this goes ofcourse for any company. Best to do you own research.
She owns a lot of shares in the company but, putting her money where her mouth is with serious skin in the game.
Quote from: Breezy on Jun 06, 2024, 08:16 PMShe owns a lot of shares in the company but, putting her money where her mouth is with serious skin in the game.
And there's no way she's going to go easily with that commitment to OCA, and besides, I don't think that there's anything wrong with the company that won't be fixed by progressively selling down the stock backlog which is progressing well. There is no desperate or urgent situation here, despite what some would prefer that we believe.
So much negativity is said, but it's all from the momentum traders. It is low level noise, pumped up by currently non-holders' momentum traders who mostly are lurking around looking for their next feed, and the smell of that feed is growing stronger as the SP approaches capitulation.
Watch and learn, or confirm, they'll be fighting for the next entry when the time is right, and the time could be closer than most think. Then we'll get a year or two of posts about how fabulous OCA is, pumping up the volume until our ears bleed and then .. oh, sold out at the absolute perfect high, hero me.
Muh haha, we ride!
OCA's problems are a direct consequence of the company deciding to leverage up big time using debt to become principally a property developer.
Quote from: Teitei on Jun 06, 2024, 09:28 PMOCA's problems are a direct consequence of the company deciding to leverage up big time using debt to become principally a property developer.
Like they are the only one to do that. But they
are the only one smart enough to lock that debt in cheaply until 2028.
Quote from: Untamed on Jun 06, 2024, 09:37 PMLike they are the only one to do that. But they are the only one smart enough to lock that debt in cheaply until 2028.
They did but what they save in interest, they gave away big time by overpaying for the land they bought and the developments they built. Best example is The Helier.
Quote from: Teitei on Jun 06, 2024, 10:12 PMThey did but what they save in interest, they gave away big time by overpaying for the land they bought and the developments they built. Best example is The Helier.
In your opinion. Not necessarily fact.
Quote from: Untamed on Jun 06, 2024, 10:14 PMIn your opinion. Not necessarily fact.
Market's opinion too but obviously you know better.
Anyone in the property development game can tell you that for free.
Why the angst?
Now wait for the new CEO to do a wholesale revision of values when she takes charge. Going to be a happening thing!
Quote from: Teitei on Jun 06, 2024, 10:27 PMMarket's opinion too but obviously you know better.
Did I say I knew better? All I said was your comment was your opinion, not confirmed fact.
QuoteAnyone in the property development game can tell you that for free.
Given that I don't know anyone in the property game, care to provide some evidence that OCA paid way too much for the land you are talking about?
QuoteWhy the angst?
No angst here. I just get a little tired of people making these kinds of claims without providing any evidence.
QuoteNow wait for the new CEO to do a wholesale revision of values when she takes charge. Going to be a happening thing!
I am sure you are correct. I imagine any incoming CEO (of any company) would wish to start with a revision of the business as that would be the most effective way for them to get a handle on where things are currently at. I think new blood will be a positive for OCA and I am sure she will bring new perspective to the role. We will have to wait and see what that looks like.
Quote from: Teitei on Jun 06, 2024, 09:28 PMOCA's problems are a direct consequence of the company deciding to leverage up big time using debt to become principally a property developer.
There debt whist high is cheap and locked in too 2028. Only you short term trader/momentum traders care.
Give it time all will be revealed Balance
Quote from: Teitei on Jun 06, 2024, 10:27 PMMarket's opinion too but obviously you know better.
Anyone in the property development game can tell you that for free.
Why the angst?
Now wait for the new CEO to do a wholesale revision of values when she takes charge. Going to be a happening thing!
I don't think they overpaid for the initial block of land from Greg Oliver.
The subsequent purchases to complete the block and around the edges were a bit crazy.
Neighbours got wind of the golden goose on their doorstep (quite literally) and made the most of it.
Good report out today from Oceania
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/433012/420932.pdf
Quote from: winner (n) on Jun 18, 2024, 12:55 PMGood report out today from Oceania
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/433012/420932.pdf
Now watch all the naysayers turn up to tear this to shreds.
Quote from: Untamed on Jun 18, 2024, 01:00 PMNow watch all the naysayers turn up to tear this to shreds.
MMh - maybe I should not comment on the NZ style of humour ... but I think winner was just pulling our legs (obviously in all decency).
This is the climate report. No concrete actions I can see (other than talkfests) reported on. Maybe they can pile the reports up and use them in lieu of sandbags when the next flood arrives. This would be good (though, I believe, sand bags would be friendlier to the environment).
I could help but notice that the village on Page 23 (Picton?) looks very close to sea level. Wouldn't want the hothouse scenario that involves sea level's rising
But isnt that why Oceania take these issues seriously
Quote from: BlackPeter on Jun 18, 2024, 01:23 PMMMh - maybe I should not comment on the NZ style of humour ... but I think winner was just pulling our legs (obviously in all decency).
This is the climate report. No concrete actions I can see (other than talkfests) reported on. Maybe they can pile the reports up and use them in lieu of sandbags when the next flood arrives. This would be good (though, I believe, sand bags would be friendlier to the environment).
Winner doesn't do humour - he does "stirring" ;)
I get why people get angsty about this sustainability stuff, but the reality is, it is now an expected, if not required part of business in NZ. Probably elsewhere in the world too, so they are simply doing what needs to be done.
I don't have an issue with it, but neither do I bother reading the details. If a business can be sustainable whilst performing acceptably for shareholders (and customers), I'm fine with it. If the sustainability aspect of the business is impacting negatively on returns, that might be a different story. And yes, I do realise this is OCA we are talking about, and the possible irony of that comment.
So glad Oceania came out with this report today.
If not for OCA, where would the world temperatures be in 50 years?
So glad my capital is being used in such a productive manner.
Funny, I don't remember much discussion when SUM released their report back in February, or RYM in May. Not that I could find anyway.
https://company-announcements.afr.com/asx/snz/c36a4ee2-d41c-11ee-9921-de853d9bf918.pdf
https://www.rymanhealthcare.co.nz/about-us/sustainability
Time to spread the disdain around boys.
Quote from: ValueNZ on Jun 18, 2024, 02:06 PMSo glad Oceania came out with this report today.
If not for OCA, where would the world temperatures be in 50 years?
So glad my capital is being used in such a productive manner.
It wouldn't matter where your money is invested. Right now, at this point in time,
all major businesses have a sustainability component. I think you would be hard pressed to find one that doesn't.
Allan Issac adds 50k shares to his holding.
Insto's are in buy mode. 8)
NZX50 rebalance today.
Liz Coutts buys a few more to take her over 2 mill.
Quote from: Breezy on Jun 26, 2024, 11:54 AMLiz Coutts buys a few more to take her over 2 mill.
Poor Liz ... didn't put much in this time did she
Her average cost is now $1.03 and she's now $983k (nearly a million bucks) out of the money
Good she keeping the faith and remaining loyal though ....but is it really a 'positive sign'
Interesting that Greg hasn't bought any for a while ...maybe saving up for the capital raise when it comes.
Quote from: winner (n) on Jun 26, 2024, 01:03 PMPoor Liz ... didn't put much in this time did she
Her average cost is now $1.03 and she's now $983k (nearly a million bucks) out of the money
Good she keeping the faith and remaining loyal though ....but is it really a 'positive sign'
Interesting that Greg hasn't bought any for a while ...maybe saving up for the capital raise when it comes.
God, your never ending stirring BS gets tiresome. Have you really got nothing better to do with your time?
Quote from: winner (n) on Jun 26, 2024, 01:03 PMPoor Liz ... didn't put much in this time did she
Her average cost is now $1.03 and she's now $983k (nearly a million bucks) out of the money
Good she keeping the faith and remaining loyal though ....but is it really a 'positive sign'
Interesting that Greg hasn't bought any for a while ...maybe saving up for the capital raise when it comes.
Maybe just maybe Liz has a slightly longer term view than the end of her nose, as for Greg well i highly doubt any poster on here has done as well as he has financially and after all he owns over 26 mill shares already so why does he have to own more?
Annual Meeting tomorrow
Anybody expect any updates?
If their smart and can read the room a sales update would be top of the list.
A maiden speech from the new sales director Fiona Cameron on sales, sales, sales?
Ps hope she's actually started work..I have no idea?
Quote from: Perky on Jun 26, 2024, 03:30 PMIf their smart and can read the room a sales update would be top of the list.
A maiden speech from the new sales director Fiona Cameron on sales, sales, sales?
Ps hope she's actually started work..I have no idea?
I understand that Fiona hasn't started yet
Unlikely to ever see at an ASM ...I don't think she not even part of Leadership Team
Cheers winner...thought that might be the case...
if I was running Oceania ...I would have my sales boss right outside my door to the right and my clinical care and customer experience boss on the left side.. Put my customers and sales front of centre of the organisation..need to know what's happening at the coalface
All the other dept like finance, legal, property, hr would be down the back with the cleaners and maintenance team ;D
Good to see a dedicated sales manager coming on board sometime soon
ASM not today ...27th JULY
stupid me ...my bad
Quote from: winner (n) on Jun 27, 2024, 10:48 AMASM not today ...27th JULY
stupid me ...my bad
Notice is hereby given
that the Annual Meeting
of Shareholders of
Oceania Healthcare
Limited (Company) will
be held at the Park Hyatt
Auckland, 99 Halsey Street,
Auckland and online at
https://meetnow.global/nz
on
Thursday 27 June 2024
commencing at 2.00pm.
https://api.nzx.com/public/announcement/431809/attachment/419504/431809-419504.pdf
It is indeed today
Me bad again
Anyone willing to take a screen recording of the meeting for me? I'd really appreciate it.
Quote from: winner (n) on Jun 27, 2024, 11:33 AMIt is indeed today
Me bad again
Notes to AGM released.
No sales update W69?
Quote from: Teitei on Jun 27, 2024, 01:50 PMNotes to AGM released.
No sales update W69?
Maybe just wait and see what is discussed in the meeting, before making a judgment. Better still, log in and submit a question now, before the meeting starts. With a bit of luck you might even get an answer.
Quote from: Teitei on Jun 27, 2024, 01:50 PMNotes to AGM released.
No sales update W69?
Lmao, Were you expecting something? Golly after that last effort they may as well stay away from giving that given it lacked any clear details
Hey Untamed, wonder why your question wasn't answered. Mine was.
Maybe there's a problem with submitting questions before the meeting starts? I submitted mine after it began.
Good to see Maverick still involved ...and asking questions at ASM
Did get Brent to say that 24 sales at The Helier ...but Brent wasn't entirely convincing as to what a sale really us.
Quote from: ValueNZ on Jun 27, 2024, 03:13 PMHey Untamed, wonder why your question wasn't answered. Mine was.
Maybe there's a problem with submitting questions before the meeting starts? I submitted mine after it began.
I didn't ask one ;D
Did last time but it was never addressed, so I didn't bother this time.
EDIT: were you referring to my earlier post? That was me suggesting TeiTei (aka Balance) could ask a question instead of just bitching here.
Quote from: winner (n) on Jun 27, 2024, 03:16 PMGood to see Maverick still involved ...and asking questions at ASM
Did get Brent to say that 24 sales at The Helier ...but Brent was entirely convincing as to what a sale really us.
So 4 more St Helier apartments sold in the last quarter?
Jeez our Liz looked terribly uninterested ....didn't really want to be there it seemed.
Shouldn't really say this but I will - Her own investment being a million under water could be seen as a case of the principles of natural justice playing out as she's done such a shit job with governance of OCA.
Hard to see things changing
Quote from: winner (n) on Jun 27, 2024, 03:26 PMJeez our Liz looked terribly uninterested ....didn't really want to be there it seemed.
Shouldn't really say this but I will - Her own investment being a million under water could be seen as a case of the principles of natural justice playing out as she's done such a shit job with governance of OCA.
Hard to see things changing
Agreed, Winner.
Voted against
Absolutely resounding support from shareholders for reappointment of Directors, kind of brings into question the judgement of detractors here. Whiners and stirrers views are clearly not held by the vast majority of shareholders!
https://api.nzx.com/public/announcement/433633/attachment/421725/433633-421725.pdf
Quote from: Buzz on Jun 27, 2024, 06:48 PMAbsolutely resounding support from shareholders for reappointment of Directors, kind of brings into question the judgement of detractors here. Whiners and stirrers views are clearly not held by the vast majority of shareholders!
https://api.nzx.com/public/announcement/433633/attachment/421725/433633-421725.pdf
Agreed, although it would not be an ideal time to be making major Board changes, with the new CEO about to start shortly. Maybe some investors had considered that when making their votes?
It will no doubt take Suzanne a few months to embed herself into the role, but I would hope to see her taking stock of the business, and potentially "shaking things up" in a positive way, between now and the end of the year. Particularly with regard to shareholder communication and transparency. Which reminds me that I
did want to raise something at the meeting, but completely forgot. That is, shareholders deserve significantly better treatment when it comes to responding to shareholder queries via email, and it is something they need to acknowledge and address.
Quote from: Buzz on Jun 27, 2024, 06:48 PMAbsolutely resounding support from shareholders for reappointment of Directors, kind of brings into question the judgement of detractors here. Whiners and stirrers views are clearly not held by the vast majority of shareholders!
https://api.nzx.com/public/announcement/433633/attachment/421725/433633-421725.pdf
Only 45% shares were voted só hardly a resounding endorsement
Could be a case of shareholder apathy ...and they happy with their returns.
But you need to wonder what the likes of Isaac and Prendergast have really done in the 7 to 8 years they've been involved.
Quote from: winner (n) on Jun 28, 2024, 08:11 AMOnly 45% shares were voted só hardly a resounding endorsement
Could be a case of shareholder apathy ...and they happy with their returns.
But you need to wonder what the likes of Isaac and Prendergast have really done in the 7 to 8 years they've been involved.
It's very simple to me, W69.
Any property developer with nous knows that you do not follow the hype (& create even more hype) and load up on ever more expensive land using debt late into the property cycle. In fact, they would be selling.
I have dealt with property developers like James Kirkpatrick (amongst others) and that's how they not only survive the down cycle but actually prosper - because they keep their powder dry and buy, buy, buy when others are selling in distress.
The whole board and management of OCA (and for that matter, the other RVs) are boom time amateur players. The Helier is the best example of how they got totally carried away.
Anyway, they and OCA are caught like possums in the headlights and behaving like such imo. If Liz looked disinterested at the AGM, it is because she has no idea what next to do except wait for the cycle to turn.
So if OCA are useless and don't know what they are doing testing the helier concept what are these other high end rv operators doing?
https://www.thefoundationvillage.co.nz/
https://www.northbrook.co.nz/?gad_source=1&gclid=CjwKCAjwm_SzBhAsEiwAXE2Cv-A_XMvdxQjir4SlmeSNYBQf77u0rnXVc_iCyFNKu0XuIS90jHA3SBoC2sIQAvD_BwE
I guess time will tell if they have the market for these type of high end RVs right or wrong. Julian Cook seemed pretty well regarded in his time at Summerset...pretty sure he wouldn't be leading Winton down the road of a no demand product.
Pretty easy to keep taking take cheap shots at the bottom of the cycle. Can you post any nzx listed property company that share price is performing well in last 2 years?
Quote from: Perky on Jun 28, 2024, 09:57 AMSo if OCA are useless and don't know what they are doing testing the helier concept what are these other high end rv operators doing?
https://www.thefoundationvillage.co.nz/
https://www.northbrook.co.nz/?gad_source=1&gclid=CjwKCAjwm_SzBhAsEiwAXE2Cv-A_XMvdxQjir4SlmeSNYBQf77u0rnXVc_iCyFNKu0XuIS90jHA3SBoC2sIQAvD_BwE
I guess time will tell if they have the market for these type of high end RVs right or wrong. Julian Cook seemed pretty well regarded in his time at Summerset...pretty sure he wouldn't be leading Winton down the road of a no demand product.
Pretty easy to keep taking take cheap shots at the bottom of the cycle. Can you post any nzx listed property company that share price is performing well in last 2 years?
Try GMT for starters if you want to see a property company holding its won in the last few years.
You are assuming of course that the other operators know what they are doing. I can tell you for free that Winton has a few alligators biting them currently.
Quote from: winner (n) on Jun 28, 2024, 08:11 AMOnly 45% shares were voted só hardly a resounding endorsement
Could be a case of shareholder apathy ...and they happy with their returns.
But you need to wonder what the likes of Isaac and Prendergast have really done in the 7 to 8 years they've been involved.
Prendergast a far better mayor of Wellington than the current woke/green extreme that is Tory Whanau. Thank goodness she is not on the OCA board aye.
Quote from: Teitei on Jun 28, 2024, 10:24 AMTry GMT for starters if you want to see a property company holding its won in the last few years.
You are assuming of course that the other operators know what they are doing. I can tell you for free that Winton has a few alligators biting them currently.
Really...it looks to me like the GMT share price is the same as it was 5 years ago, the SUM share price is up about 70% to what is was 5 years ago
That's not a bad effort for a bunch of boom time amateurs as you call them.
LEKS chart tells the story..noting GMT closed at 2.01 yesterday.
https://stocktalk.co.nz/index.php?action=dlattach;attach=1678
Annual meeting addresses talked a lot about climate change and sustainability
Question time had on residents parking ...... lack of it in general and where there was plenty that it was out on in the open and residents got wet on wet days etc etc
The answer is solar panels over the carpark .....might even reduce the power bil as well
.IMG_5840.jpeg
Had another look at ASM preso and couldn't help but think about the Outlook statement in it ..... as below
Pretty meaningless I reckon. A good case study in how to have an outlook statement without having one. Even comments about 25% of people will be 65 by 2030...what relevance is that to the outlook of the company in FY25 or for that matter FY30 given their target market is people 80 years+.
Seems typical of how Oceania work and how they treat shareholders ....all a bit vague and seemingly not caring about them.
Never mind they won some Property Awards so that's good.
IMG_5843.jpeg
Ohh No....That's the kiss of death winner ..winning industry awards is normally a reason to sell.
Remember...
Comvita won best growth story Deloitte top 200 about 6 months ago...
They have managed to half their share price in the last 6 months
That's some mighty growth story right there..lol
The funniest thing is Oceania was the naming sponsor of the award they won
Oceania Retirement Living & Aged Care Property Award
Best in Category: The Helier
Proudly holding this award winning share in my award winning nz portfolio.
Winner, it's difficult to give forward guidance when so much depends on uncertain sales numbers.
You used to be very critical of OCA management not selling a story.
Quote from: allfromacell on Jul 01, 2024, 01:53 PMWinner, it's difficult to give forward guidance when so much depends on uncertain sales numbers.
You used to be very critical of OCA management not selling a story.
Winner is "very critical" of everything OCA. He doesn't hold as far as I am aware.
Quote from: Untamed on Jul 01, 2024, 01:58 PMWinner is "very critical" of everything OCA. He doesn't hold as far as I am aware.
Honestly, Winner is one of my favorite posters if not favorite. He's got a deep understanding of the sector and business management generally.
I understand he still holds some 'free carry'.
His posts are often a bit sarcastic and he likes to stir a bit but I don't believe his intention is to upset anyone. I understand how some might find that irritating.
Winner, I apologise for my previous post. I was out of line, and I am sorry.
Quote from: Untamed on Jul 01, 2024, 09:51 PMWinner, I apologise for my previous post. I was out of line, and I am sorry.
Ok Untamed but no real need to do that as you're the first to call me a clown but I'll accept your apology.
In a subsequent post you said I was 'very critical' of everything Oceania. At the moment thats true.
I have found that being 'critical' has been a great investment attribute. Over the years it has worked well for me. A critical view and an assessment of market sentiment can take one a long way. It gives one a sense of reality.
It has kept me out or made me very cautious about the likes of Synlait, Comvita, Fletchers, Steel and Tube, Warehouse, kathmandu and many others. These are still good 'trading' per se stocks but I've never seen them as long term holds ...trading in this context can be traded lasting years.
Funny just this morning Jenny Ruth did a piece on Vista. Untamed, this extract seems to sum up our exchange -
I emailed Ridgewell about his note: "My impression of reading your work over the years is that you're more likely to be a sceptic than not. Would you think that's fair?"
He responded: "All good analysts need to have a healthy level of scepticism, but a good eye for risk and reward is needed (not just risk), to get it right more often than not," he said.
"I've tended to be more supportive of growth companies than my peers, backed by rigorous research (including asking a lot of sceptical/cynical questions to verify the story, ie what management are saying is true, more or less) and, on balance, this part of the market has out-performed."
Quote from: winner (n) on Jul 02, 2024, 10:13 AMOk Untamed but no real need to do that as you're the first to call me a clown but I'll accept your apology.
In a subsequent post you said I was 'very critical' of everything Oceania. At the moment thats true.
I have found that being 'critical' has been a great investment attribute. Over the years it has worked well for me. A critical view and an assessment of market sentiment can take one a long way.
It has kept me out or made me very cautious about the likes of Synlait, Comvita, Fletchers, Steel and Tube, Warehouse, kathmandu and many others. These are still good 'trading' per se stocks but I've never seen them as long term holds ...trading in this context can be traded lasting years.
Funny just this morning Jenny Ruth did a piece on Vista. Untamed, this extract seems to sum up our exchange -
I emailed Ridgewell about his note: "My impression of reading your work over the years is that you're more likely to be a sceptic than not. Would you think that's fair?"
He responded: "All good analysts need to have a healthy level of scepticism, but a good eye for risk and reward is needed (not just risk), to get it right more often than not," he said.
"I've tended to be more supportive of growth companies than my peers, backed by rigorous research (including asking a lot of sceptical/cynical questions to verify the story, ie what management are saying is true, more or less) and, on balance, this part of the market has out-performed."
I would just make the observation, W69, that almost all holders of OCA are sitting on losses (some rather horrendous) so they are feeling rather sensitive and rather touchy.
Quote from: Teitei on Jul 02, 2024, 10:21 AMI would just make the observation, W69, that almost all holders of OCA are sitting on losses (some rather horrendous) so they are feeling rather sensitive and rather touchy.
Forums like these are made up of members with varying intentions, you've got long term holders/day traders/momentum traders etc. You've got those that run with the hares and hunt with the hounds and downright trolls, you've got good-hearted people and nasty people and of course you've got hard core narcissists. Not really any wonder that you get tensions running high from time to time with all these people clashing, is it.
Quote from: winner (n) on Jul 02, 2024, 10:13 AMOk Untamed but no real need to do that as you're the first to call me a clown but I'll accept your apology.
In a subsequent post you said I was 'very critical' of everything Oceania. At the moment thats true.
I have found that being 'critical' has been a great investment attribute. Over the years it has worked well for me. A critical view and an assessment of market sentiment can take one a long way.
It has kept me out or made me very cautious about the likes of Synlait, Comvita, Fletchers, Steel and Tube, Warehouse, kathmandu and many others. These are still good 'trading' per se stocks but I've never seen them as long term holds ...trading in this context can be traded lasting years.
Funny just this morning Jenny Ruth did a piece on Vista. Untamed, this extract seems to sum up our exchange -
I emailed Ridgewell about his note: "My impression of reading your work over the years is that you're more likely to be a sceptic than not. Would you think that's fair?"
He responded: "All good analysts need to have a healthy level of scepticism, but a good eye for risk and reward is needed (not just risk), to get it right more often than not," he said.
"I've tended to be more supportive of growth companies than my peers, backed by rigorous research (including asking a lot of sceptical/cynical questions to verify the story, ie what management are saying is true, more or less) and, on balance, this part of the market has out-performed."
Winner, as I said, I crossed the line with my post so that is on me. To be honest, it isn't your criticism of OCA that bothers me. Well not your
constructive criticism at least. It is the constant sarcasm and what feels to me, to often be "winding up" that gets my hackles up. If I logged in and saw you posting something negative about OCA (or any company actually) but
without the sarcasm/stirring component, I would have no problem. I would probably actually take the time to read past the first sentence. You make it very difficult for some of us (not just me) to know whether you are being serious about something, or joking, and that can make it hard to sort the wheat from the chaff. I have nothing against joking, and I contribute my fair share of sarcasm, but not
all the time. I know that you do contribute valuable stuff, and I appreciate and respect that. But the constant sarcasm, just gets tiring. To be honest, with regard to OCA, it also sometimes feels like you are having a good laugh at the expense of those who are invested and currently underwater. When you (and others) make people feel like dicks for still holding, that has the potential to make us second guess ourselves and possibly make a bad investing decision. It isn't your critical analysis that makes
me feel that way. It is the constant sarcasm/winding up.
Or maybe I'm just tired, getting old, and a bitch.
Either way, thank you for accepting my apology.
Quote from: Untamed on Jul 02, 2024, 10:34 AMWinner, as I said, I crossed the line with my post so that is on me. To be honest, it isn't your criticism of OCA that bothers me. Well not your constructive criticism at least. It is the constant sarcasm and what feels to me, to often be "winding up" that gets my hackles up. If I logged in and saw you posting something negative about OCA (or any company actually) but without the sarcasm/stirring component, I would have no problem. I would probably actually take the time to read past the first sentence. You make it very difficult for some of us (not just me) to know whether you are being serious about something, or joking, and that can make it hard to sort the wheat from the chaff. I have nothing against joking, and I contribute my fair share of sarcasm, but not all the time. I know that you do contribute valuable stuff, and I appreciate and respect that. But the constant sarcasm, just gets tiring. To be honest, with regard to OCA, it also sometimes feels like you are having a good laugh at the expense of those who are invested and currently underwater. When you (and others) make people feel like dicks for still holding, that has the potential to make us second guess ourselves and possibly make a bad investing decision. It isn't your critical analysis that makes me feel that way. It is the constant sarcasm/winding up.
Or maybe I'm just tired, getting old, and a bitch.
Either way, thank you for accepting my apology.
Well unpacked.
Sally Evans adds 61k shares to her collection.
Coffee with a mate today
We chatted about the performance of Summerset and Oceania ......he said Summerset is the Briscoes of the RV sector while Oceania is the Warehouse of the sector
I tried not to laugh
Smoking hot today.
Does The Helier allow dogs?
If so they probably have got dog walkers on the payroll.
Just out of interest, how many of you traders bought in at the lows of $0.50???
RSI starting to look topped out on any month and longer chart.
Quote from: Breezy on Jul 18, 2024, 02:48 PMRSI starting to look topped out on any month and longer chart.
It does eh breezy ....usually not a good sign is it
But then again about to break through the 200MA ... that might even get Basil interested eh
Quote from: winner (n) on Jul 18, 2024, 03:38 PMIt does eh breezy ....usually not a good sign is it
But then again about to break through the 200MA ... that might even get Basil interested eh
There will be no mistaking when Basil has entered the room, the barking will commence in earnest.
ITS A SCREAMING BUY, YOU CAN'T HAVE TOO MANY !!!! LOL
No, I haven't bought back in, just winding you guys up a bit.
Still have quite a few of the OCA corporate bonds OCA010. Reasonably happy camper with those.
Quote from: Basil on Jul 18, 2024, 04:42 PMITS A SCREAMING BUY, YOU CAN'T HAVE TOO MANY !!!! LOL
No, I haven't bought back in, just winding you guys up a bit.
Still have quite a few of the OCA corporate bonds OCA010. Reasonably happy camper with those.
Would you even tell us if you had? Serious question.
Probably couldn't help myself, I think you know that already lol
Quote from: Basil on Jul 18, 2024, 06:09 PMProbably couldn't help myself, I think you know that already lol
One never knows with you ... "I think you know that already lol" ;)
On a different note, the new CEO starts her job on Monday. Previous statement said Brent would stay in the role until Suzanne's commencement date to support her introduction to the business. From that, I guess we can assume he has done that, and will be gone by Monday.
I really hope she's got what it takes.
I'm normally quite transparent.
She's got a LOT of work ahead of her. If she starts embracing all things ESG like a desperately long-lost friend like Kathryn the CFO does...oh dear...
Quote from: Basil on Jul 19, 2024, 04:29 PMI'm normally quite transparent.
She's got a LOT of work ahead of her. If she starts embracing all things ESG like a desperately long-lost friend like Kathryn the CFO does...oh dear...
She has no choice. As others have explained (and shared the evidence) in the past, these ESG policies are regulatory requirements. They have to meet those requirements. So your issue is not with providers, but with the Government.
Quote from: Untamed on Jul 19, 2024, 04:33 PMShe has no choice. As others have explained (and shared the evidence) in the past, these ESG policies are regulatory requirements. They have to meet those requirements. So your issue is not with providers, but with the Government.
Look, I see your point of view but there's different ways of handling one's obligations.
Let me put it this way, when the CFO starts her end of financial year presentation with all their ESG accomplishments, as she did in her annual review for FY24, as though it's the very first and most important feature of their year's accomplishments, you know they have their priorities all wrong, or far more likely, are engaging in deliberate greenwashing attempting to disguise their lackluster financial results.
I think the CFO is a very weak underperformer who has little real idea how to try and contain costs, there, i finally said it, been meaning to say that for a while.
Growth in DMF revenue is useless if costs grow at a faster rate. That's one of OCA's deep systemic issues right there, a problem almost all others in this sector share. From an operational point of view, they have to try and contain costs better otherwise they're ostensibly a charity and you'll get returns commensurate with a charitable organization.
Quote from: Basil on Jul 19, 2024, 04:41 PMLook, I see your point of view but there's different ways of handling one's obligations.
Let me put it this way, when the CFO starts her end of financial year presentation with all their ESG accomplishments, as she did in her annual review for FY24, as though it's the very first and most important feature of their year's accomplishments, you know they have their priorities all wrong, or far more likely, are engaging in deliberate greenwashing attempting to disguise their lackluster financial results.
I think the CFO is a veery weak underperformer who has little real idea how to try and contain costs, there, i finally said it, been meaning to say that for a while.
Did she? Interesting, because I watched the webinar and I don't remember
any of the ESG stuff. I do however remember everything else - so maybe it really doesn't matter what order they present the info in?
But I get your point. How do the other providers present their info? In a similar order or do they leave the ESG stuff till the end?
Maybe it is by design, so that when they open for questions at the end, the important, financial/performance stuff, is fresh in their minds, not the ESG stuff?
https://api.nzx.com/public/announcement/431667/attachment/419254/431667-419254.pdf
Here's OCA's investor presentation, see page 9. The first thing she leads off with is sustainability and climate, page 10 and then goes on to review financial performance thereafter.
By comparison here's SUM's annual investor review presentation
https://api.nzx.com/public/announcement/426789/attachment/413412/426789-413412.pdf
All financial aspects of the operation are reviewed before dealing with environment and sustainability on page 15.
Here's how ARV handled it. I love their annual review presentation. They start with the forward strategy for FY25. Then review very fully their strategy and financials' for FY24 and sustainability stuff is right down towards the end, see page 27 https://api.nzx.com/public/announcement/431824/attachment/419581/431824-419581.pdf
Maybe I'm being a bit pedantic about the order of things in annual review investor presentations, but I still think it's VERY strange that Kathryn starts her review that way. Frankly I have never seen that before. More annoying is the mistakes she's made with the numbers of unsold apartments and care suites that analysts have talked about in their reviews. I think she's engaging in deliberate "greenwashing" and obfuscation, trying to divert attention away from their lackluster financial performance but others will have a different view and think maybe she's just a "Greenie" and deeply cares about the environment more than anything else. Who can know for sure.
On a more positive note. Maybe 50 cents recently was the bottom ?
That Kathryn has been at Oceania for 15 years ......so you could say very much entrenched in the "Oceania Way"
The market seems to clamouring for RVs to report financials in a way that reflects 'value generation'.
That much loved FB Ryman report had some new ideas/ways RV operators should be looking at things.
Kathryn might be a smart cookie but with due respect to he abilities I doubt she would be willing/grasp a very different way of doing things.
Just my opinion
The Forbar report is calling out the whole RV listed sector reporting, basically saying they have fabricated a collective reporting method that hides the true value of the companies. They further suggested that RYM has the most at stake, first-mover role in terms of unlocking visibility of that value and is likely to lead the re-think.
You guys have for years called out how complicated and confusion the financial reporting is. I agree, but my analysis eventually focused on whether these companies should 1. spin off 'development' from 'operations' so that we can see the true financial performance of each side of the business, and 2. somehow treat what some have called the 'float' differently, as currently stated as a pure liability is denying the inherent value due to it's unusual characteristics.
Underlying profit from operations is fine as a reporting measure in that it encapsulates all realized profit from operations, or loss from operations as the case may be plus new unit development profit and resale profit.
Some companies, notably RYM have participated in a carefully orchestrated campaign to mislead investors by falsifying the underlying profit by using a range of financial engineering measures such as reporting sales as profit from large numbers of sales that have not settled, capitalizing large amounts of new village development costs including initial staff costs to run the operations when the villages opened and other financial engineering that amounts to deliberate and egregious deception. RYM are not completely alone, others are reporting profit on sales that haven;t actually settled at balance date.
IFRS 16 which is the international financial reporting standard, requires that all unrealized profit from changes in the fair value of properties is included in the profit and loss. Again, RYM have been deceiving investors by using their own directors' assumptions of properties values rather than undertaking independent valuations for all properties each year like other sector participants do.
IFRS is a useful reporting framework in as much as it encapsulates all profit both realized and unrealized and gives a useful heads-up in terms of embedded value, (unrealized profit) that will be released as underlying profit, (realized) in future years. For example, ARV have embedded value of $1.72 per share. you think that might be useful in the years to come...
Its beyond belief that the company RYM that has brazenly been deceiving investors on both reporting measures, (where the auditors were I have no idea), wants to reinvent financial reporting standards that have stood the test of time for centuries, and in regard to underlying profit conventions, for decades. In case there's any remaining doubt, I have nothing but contempt for what RYM's current board and management are trying to do. if they had not fraudulently misled investors with their carefully orchestrated litany of lies for years, there would be no need to change existing conventions that work well. The shame of what the board and management have done lies with them and should rest with them forever and a day.
RYM trying to reinvent new accounting conventions to suit themselves better is absolutely laughable but also more worryingly, a continuation of their attempted deception and arrogance to think they should not be accountable under past reporting frameworks in as much as they don't want to disclose how weak their future financial performance is under existing accounting principles when they're finally forced to work within them. Lies, lies and more attempted lies is how I see it.
Quote from: Buzz on Jul 19, 2024, 05:49 PMbut my analysis eventually focused on whether these companies should 1. spin off 'development' from 'operations' so that we can see the true financial performance of each side of the business, and 2. somehow treat what some have called the 'float' differently, as currently stated as a pure liability is denying the inherent value due to it's unusual characteristics.
1. Most companies in this sector already disclose profit from new developments in their investor presentations). Some are heavily manipulated, especially RYM.
2. Look, to be completely frank about it, "the float" is the biggest load of crap ever invented on the other site. It's simply interest free loans from residents to the business, nothing less and nothing more. Some try and make the spurious unfounded argument that because these loans are never repaid by the company itself, the exiting resident is never repaid until the unit is resold) the liability doesn't exist so this contingent liability should in effect not be recognized as a liability at all. Again, this is absolute garbage. We all know this interest free liability exists and the benefits of it but it only takes one line in an amendment to the Retirement villages Act to force companies to repay this money within a certain timeframe, e.g. 12 months and the liability becomes crystal clear and very real. In the meantime, accounting conventions that date back 500 years or more require this liability to be recognized as such. Of course, every now and again some people dream up idea's that think that gives them the right to change accounting conventions that have stood the test of time for centuries. These people are amateur idiots in my opinion and get far too much useless bandwidth on the other forum. I am sorry but my professional opinion of your report is its a complete load of rubbish.
Quote from: Basil on Jul 19, 2024, 06:30 PM1. Most companies in this sector already disclose profit from new developments.
2. The float is the biggest load of crap ever invented on the other site. It's simply interest free loans from residents to the business, nothing less and nothing more. Some try and make the spurious unfounded argument that because these loans are never repaid by the company itself, the exiting resident is never repaid until the unit is resold) the liability doesn't exist so this contingent liability should in effect not be recognized as a liability at all. Again, this is absolute garbage. We all know this interest free liability exists and the benefits of it but it only takes one line in an amendment to the Retirement villages Act to force companies to repay this money within a certain timeframe, e.g. 12 months and the liability becomes crystal clear and very real. In the meantime, accounting conventions that date back 500 years or more require this liability to be recognized as such. Of course, every now and again some people dream up idea's that think that gives them the right to change accounting conventions that have stood the test of time for centuries. These people are amateur idiots in my opinion and get far too much useless bandwidth on the other forum. I am sorry but my professional opinion of your report is its a complete load of rubbish.
Whoa, someone tweaked your Beagle tail! Lol.
I'm ill equipped to argue with a lifetime professional accountant, but it does seem odd that a 'whatever you call it' ORA, that will never be repaid by the company (it's paid by the incoming resident), -ergo uncallable, and no interest payable, and is leveraged by the company as an asset (literally cash in the bank), sits on the Balance sheet as a pure liability - IRFS accounting standards notwithstanding.
Perhaps you could entertain us by putting yourself in the invidious position of CFO of an RV, and having to account for this pseudo ever growing asset that is leveraged into development, versus not ever having to repay it - except with incoming residents money, and never paying interest on it.
I know, it's a mind f*ck from an accounting perspective and that's what these RV's have to get their head around imo, as in OCA's case, it's appearing to hide almost a $1 billion of shareholder embedded value, and worse, it's subtracting that value as a liability.
Quote from: Buzz on Jul 19, 2024, 06:42 PM'm ill equipped to argue with a lifetime professional accountant, but it does seem odd that a 'whatever you call it' ORA, that will never be repaid by the company (it's paid by the incoming resident), -ergo uncallable, and no interest payable, and is leveraged by the company as an asset (literally cash in the bank), sits on the Balance sheet as a pure liability - IRFS accounting standards notwithstanding.
It has the legal character of a liability as I've described it above, and indeed is callable if the legislative environment ever changes.
It's certainly not an asset. There's plenty of evidence out there that companies are not fully recovering the total cost of a new village constructed in the initial sell down so cash from new unit sales is more than fully expended on the creating of new units. I concur that the original liability when the company floated, which others euphemistically call "the float" is unlikely to be callable unless there's a legislative change forcing some time frame for repayment upon the company's, but that change could come at any time with the review of the Retirement Villages Act, if not in this review, perhaps some future one.
This so-called secret float and reserve of secret asset should by all accounts have therefore generated outsized earnings for ARV who floated a decade ago or OCA, 7 years ago but no evidence of earnings growth has been forthcoming to suggest this float has any value.
Quote from: Buzz on Jul 19, 2024, 06:42 PMPerhaps you could entertain us by putting yourself in the invidious position of CFO of an RV, and having to account for this pseudo ever growing asset that is leveraged into development, versus not ever having to repay it - except with incoming residents money, and never paying interest on it.
Why not, its Friday night after all. Look, the very definition of an asset in accounting convention is something that confers an enduring future benefit to the owner whether that be a tangible asset like land and buildings or some intangible asset like goodwill, or some derivation of that term, call it the float just for our amusement. This so-called intellectual property, or structural benefit the existing industry norms confers if you prefer, could only be argued to be of worth if indeed it did confer an enduring future benefit but where is the earnings evidence from this so-called hidden ever-growing asset to validate its existence and worth? AWOL is where it is, nowhere to be seen.
Look, we've known the legal structure of the industry and interest free loan status forever and a day since RYM listed in the late 1990's. Now, people want to completely rescope how this is allegedly benefitting new companies that float in this sector. Spare me, it's a desperate act of pitiful fools who don't want to confront the reality of the total lack of realized eps growth for those new participants in the sector.
When desperate and forced into a corner, people will try and come up with all sorts of reasons why existing accounting standards and principles don't encapsulate the real performance or financial position of a company. RYM and desperate holders of underwater positions in that and other companies are doing exactly that, trying to deceive themselves and others. The liability exists, how the company repays it, is what's immaterial and that could, as suggested in my previous post, easily change with the single stroke of a legislative pen.
Existing accounting standards and principles, (when they're applied correctly and not egregiously falsified) work perfectly fine and accurately represent the true state of the company's financial performance, (underlying profit), IFRS16 (total comprehensive profit both realized and unrealized) and their financial position. We all know the exact legal character of the resident's financial arrangement they have with RV companies being an interest free loan and we always have. There's nothing new here and certainly no asset hidden that's generating outsized returns. Far from it, the financial and share price performance of recently listed companies ARV and OCA in this sector has been very, very poor over the last 10 and 7 years respectively.
No doubt that's all going to change radially in the future because this hidden float will magically come to light, and believe it or not I just saw a huge herd of pink pigs just fly past my office window ;) I hope you have been suitably entertained by a dry old bean counter that is silly enough to think professional standards and existing accounting conventions do work and there is nothing new here that hasn't already existed in this sector for decades. Have a good weekend.
Quote from: Basil on Jul 19, 2024, 07:32 PMIt has the legal character of a liability as I've described it above, and indeed is callable if the legislative environment ever changes.
It's certainly not an asset. There's plenty of evidence out there that companies are not fully recovering the total cost of a new village constructed in the initial sell down so cash from new unit sales is more than fully expended on the creating of new units. I concur that the original liability when the company floated, which others euphemistically call "the float" is unlikely to be callable unless there's a legislative change forcing some time frame for repayment upon the company's, but that change could come at any time with the review of the Retirement Villages Act, if not in this review, perhaps some future one.
This so-called secret float and reserve of secret asset should by all accounts have therefore generated outsized earnings for ARV who floated a decade ago or OCA, 7 years ago but no evidence of earnings growth has been forthcoming to suggest this float has any value. Why not, its Friday night after all. Look, the very definition of an asset in accounting convention is something that confers an enduring future benefit to the owner whether that be a tangible asset like land and buildings or some intangible asset like goodwill, or some derivation of that term, call it the float just for our amusement. This so-called intellectual property, or structural benefit the existing industry norms confers if you prefer, could only be argued to be of worth if indeed it did confer an enduring future benefit but where is the earnings evidence from this so-called hidden ever-growing asset to validate its existence and worth? AWOL is where it is, nowhere to be seen.
Look, we've known the legal structure of the industry and interest free loan status forever and a day since RYM listed in the late 1990's. Now, people want to completely rescope how this is allegedly benefitting new companies that float in this sector. Spare me, it's a desperate act of pitiful fools who don't want to confront the reality of the total lack of realized eps growth for those new participants in the sector.
When desperate and forced into a corner, people will try and come up with all sorts of reasons why existing accounting standards and principles don't encapsulate the real performance or financial position of a company. RYM and desperate holders of underwater positions in that and other companies are doing exactly that, trying to deceive themselves and others. The liability exists, how the company repays it, is what's immaterial and that could, as suggested in my previous post, easily change with the single stroke of a legislative pen.
Existing accounting standards and principles, (when they're applied correctly and not egregiously falsified) work perfectly fine and accurately represent the true state of the company's financial performance, (underlying profit), IFRS16 (total comprehensive profit both realized and unrealized) and their financial position. We all know the exact legal character of the resident's financial arrangement they have with RV companies being an interest free loan and we always have. There's nothing new here and certainly no asset hidden that's generating outsized returns. Far from it, the financial and share price performance of recently listed companies ARV and OCA in this sector has been very, very poor over the last 10 and 7 years respectively.
No doubt that's all going to change radially in the future because this hidden float will magically come to light, and believe it or not I just saw a huge herd of pink pigs just fly past my office window ;) I hope you have been suitably entertained by a dry old bean counter that is silly enough to think professional standards and existing accounting conventions do work and there is nothing new here that hasn't already existed in this sector for decades. Have a good weekend.
Thank you, I will have a good weekend, but I've also had a couple of nice Pinot's so I'll refrain from responding until that wears off. ;)
Darn it I was just starting to have fun gnawing on this bone lol
Buzz says they should 1. spin off 'development' from 'operations' so that we can see the true financial performance of each side of the business,...
Oceania essentially do that now in there segment reporting. All development impacts shown under 'Village' and 'Care' just showing operations per se. Probably because Care makes no money they do include a note as to how much realised gains/revaluations from care units there are.
The big issue is how do you allocate the $30m odd of Other expenses ....assuming HQ costs
Talking of 'floats' Air New Zealand has pretty big one. ....$1.7 billion last count ..when used the amounts get replaced by more cash
Don't always pay it back either
Could call that an asset as well
Quote from: Basil on Jul 19, 2024, 06:30 PM2. Look, to be completely frank about it, "the float" is the biggest load of crap ever invented on the other site. It's simply interest free loans from residents to the business, nothing less and nothing more. Some try and make the spurious unfounded argument that because these loans are never repaid by the company itself, the exiting resident is never repaid until the unit is resold) the liability doesn't exist so this contingent liability should in effect not be recognized as a liability at all. Again, this is absolute garbage. We all know this interest free liability exists and the benefits of it but it only takes one line in an amendment to the Retirement villages Act to force companies to repay this money within a certain timeframe, e.g. 12 months and the liability becomes crystal clear and very real. In the meantime, accounting conventions that date back 500 years or more require this liability to be recognized as such. Of course, every now and again some people dream up idea's that think that gives them the right to change accounting conventions that have stood the test of time for centuries. These people are amateur idiots in my opinion and get far too much useless bandwidth on the other forum. I am sorry but my professional opinion of your report is its a complete load of rubbish.
Basil finds ze 'oat' een ze throat of ze 'float'!
Ze question zhat remains: Who eez ze 'goat'?
RB
OCA having a good day.... rising on the Arvida tide.
https://yhoo.it/3y8pCos
Quote from: Untamed on Jul 18, 2024, 05:28 PMWould you even tell us if you had? Serious question.
Yes and yes I now have. Bought some of the ones I sold years ago at $1.40 back at half price. Not too shabby reallocations of my portfolio seeing as they've paid very little in dividends in the last 3 years.
Not as big a position as I once had by any means but there's been a clear change in direction form RBNZ and sentiment towards the sector is improving on the back of the takeover of ARV. On top of that, the chart shows a clear break above the 200 day MA and there is early indicative talk of more interest in the housing market. We could see mortgage rates 1.5-2.0% lower by the end of 2025.
From a FA perspective OCA made 8.5 cps last year underlying. Even if they don't manage to grow that in the years ahead, with lower interest rates my valuation model will be changing to a no growth company is worth a PE of 8.5 and 8.5 x 8.5 = 72 cents so they seem underpinned here from a fundamental perspective as well. I'd welcome a takeover with open arms at $1.00 but think that's very unlikely.
I'm aware that some shareholders may disapprove of my return, but that concern should be directed to someone who is interested.
Quote from: Basil on Jul 23, 2024, 10:44 AMYes and yes I now have. Bought some of the ones I sold years ago at $1.40 back at half price. Not too shabby reallocations of my portfolio seeing as they've paid very little in dividends in the last 3 years.
Not as big a position as I once had by any means but there's been a clear change in direction form RBNZ and sentiment towards the sector is improving on the back of the takeover of ARV. On top of that, the chart shows a clear break above the 200 day MA and there is early indicative talk of more interest in the housing market. We could see mortgage rates 1.5-2.0% lower by the end of 2025.
From a FA perspective OCA made 8.5 cps last year underlying. Even if they don't manage to grow that in the years ahead, with lower interest rates my valuation model will be changing to a no growth company is worth a PE of 8.5 and 8.5 x 8.5 = 72 cents so they seem underpinned here from a fundamental perspective as well. I'd welcome a takeover with open arms at $1.00 but think that's very unlikely.
I'm aware that some shareholders may disapprove of my return, but that concern should be directed to someone who is interested.
Ah too funny! Willing at 70c after a 40% rise but not at 50c.
There's nowt so queer as folk.
Quote from: ValueNZ on Jul 23, 2024, 10:52 AMAh too funny! Willing at 70c after a 40% rise but not at 50c.
There's nowt so queer as folk.
LOL, maybe you missed the bit where I sold years ago at $1.40 and FYI have got excellent returns on that money elsewhere in the intervening years.
There's no shame in waiting for a clear change of direction and confirmation of 200 day MA break, especially when you've been out of the stock for so long in the multi year prevailing downtrend, beforehand. Onwards and upwards from here. Forsyth Barr reckon its worth at least $1. What could possibly go wrong lol
Quote from: Basil on Jul 23, 2024, 10:44 AMYes and yes I now have. Bought some of the ones I sold years ago at $1.40 back at half price. Not too shabby reallocations of my portfolio seeing as they've paid very little in dividends in the last 3 years.
Not as big a position as I once had by any means but there's been a clear change in direction form RBNZ and sentiment towards the sector is improving on the back of the takeover of ARV. On top of that, the chart shows a clear break above the 200 day MA and there is early indicative talk of more interest in the housing market. We could see mortgage rates 1.5-2.0% lower by the end of 2025.
From a FA perspective OCA made 8.5 cps last year underlying. Even if they don't manage to grow that in the years ahead, with lower interest rates my valuation model will be changing to a no growth company is worth a PE of 8.5 and 8.5 x 8.5 = 72 cents so they seem underpinned here from a fundamental perspective as well. I'd welcome a takeover with open arms at $1.00 but think that's very unlikely.
I'm aware that some shareholders may disapprove of my return, but that concern should be directed to someone who is interested.
Lol your return was predicted and certain.
Quote from: Breezy on Jul 23, 2024, 10:59 AMLol your return was predicted and certain.
You and as many others care too, can laugh all you want. I'm very content with my approach and track record with this one and am only reinvesting past profits so this is a free ride. If you are honest about it, buy and hold forever has not worked, (ask Liz Coutts), but other strategies have.
The new CEO has truck loads of housework to do. Let's see how she goes.
Quote from: Basil on Jul 23, 2024, 10:44 AMI'm aware that some shareholders may disapprove of my return, but that concern should be directed to someone who is interested.
You mean me? 😉
I actually don't disapprove at all. You made me smile because it was only a matter of time, and we all knew that.
Having said that, thank you for being upfront and honest about it. Transparency in these forums is really important for investing newbies who may be lurking and watching the more experienced investors/traders, like yourself.
Let the ramping begin!
;D
Quote from: Buzz on Jul 23, 2024, 11:24 AMLet the ramping begin!
;D
LOL don't hold your breath. We don't need ramping because we have this magic thing called "the float" ;)
I for one am glad to see the hound back on the register. It can't be denied he is much more often right than wrong.
Welcome back, Basil.
Quote from: Untamed on Jul 23, 2024, 11:14 AMYou mean me? 😉
I actually don't disapprove at all. You made me smile because it was only a matter of time, and we all knew that.
Having said that, thank you for being upfront and honest about it. Transparency in these forums is really important for investing newbies who may be lurking and watching the more experienced investors/traders, like yourself.
Quote from: allfromacell on Jul 23, 2024, 11:45 AMI for one am glad to see the hound back on the register. It can't be denied he is much more often right than wrong.
Welcome back, Basil.
That's very nice of you guys, thank you. I am under no illusion that some will feel very differently though lol
Quote from: Basil on Jul 23, 2024, 11:05 AMYou and as many others care too, can laugh all you want. I'm very content with my approach and track record with this one and am only reinvesting past profits so this is a free ride.
It's reinvested profits and therefore somehow a free ride? What strange logic...
Capital is capital. Nothing changes because you owned it in the past and made some money on it. It's all about figuring out what the future return is likely to be at the current price.
Quote from: Basil on Jul 23, 2024, 11:26 AMLOL don't hold your breath. We don't need ramping because we have this magic thing called "the float" ;)
Hey Basil its starting to look toppy, might be getting near time to take the money and run.
Quote from: Breezy on Jul 23, 2024, 03:03 PMHey Basil its starting to look toppy, might be getting near time to take the money and run.
;D ;D ;D
Quote from: Breezy on Jul 23, 2024, 03:03 PMHey Basil its starting to look toppy, might be getting near time to take the money and run.
LOL I know Beagle Bait when I see it.
I reckon there's a chance the RBNZ have got things so badly wrong they start cutting next month.
Then there's the part to come where ARV shareholders get their cash and many will reallocate it here.
You'd love me to give you a price target for early 2025 and i bet you're not the only one lol...but I'll just say, higher than where it is now :D
Quote from: Basil on Jul 23, 2024, 10:44 AMYes and yes I now have. Bought some of the ones I sold years ago at $1.40 back at half price. Not too shabby reallocations of my portfolio seeing as they've paid very little in dividends in the last 3 years.
Not as big a position as I once had by any means but there's been a clear change in direction form RBNZ and sentiment towards the sector is improving on the back of the takeover of ARV. On top of that, the chart shows a clear break above the 200 day MA and there is early indicative talk of more interest in the housing market. We could see mortgage rates 1.5-2.0% lower by the end of 2025.
From a FA perspective OCA made 8.5 cps last year underlying. Even if they don't manage to grow that in the years ahead, with lower interest rates my valuation model will be changing to a no growth company is worth a PE of 8.5 and 8.5 x 8.5 = 72 cents so they seem underpinned here from a fundamental perspective as well. I'd welcome a takeover with open arms at $1.00 but think that's very unlikely.
I'm aware that some shareholders may disapprove of my return, but that concern should be directed to someone who is interested.
Welcome back Basil. I also have been adding
52 week high is 80 cents
That'll be taken out tomorrow
Quote from: winner (n) on Jul 23, 2024, 06:05 PM52 week high is 80 cents
That'll be taken out tomorrow
Could do as long as the ARV punters want to bid it up, 70c should hold up on any pull back.
Quote from: Breezy on Jul 23, 2024, 06:58 PMCould do as long as the ARV punters want to bid it up, 70c should hold up on any pull back.
Tend to agree. ARV caught out all the traders, it was one of those 'if you aren't holding already you'll miss out on the pop' with the buyout offer.
I've sold all my ARV and rotated into OCA, can't see the point of hoping for another 10 cents on the buyout rather than cashing in $1.60 now and putting it to better use.
Quote from: Breezy on Jul 23, 2024, 06:58 PMCould do as long as the ARV punters want to bid it up, 70c should hold up on any pull back.
You raise an excellent point that I must admit I hadn't had time to think about previously, today.
The smart money won't wait for $1.70 in early 2025 from the ARV sale, they'll do exactly what Shareguy has astutely done, take about $1.60 now, foregoing only about a further 6% return that you have to wait at least 6 months for, (probably a bit longer for final court orders under the scheme), and reinvest the money in beaten down stocks like OCA, and others for that matter like he has done with HGH.
Just had a look. Its plainly evident the international arbitrage funds are already extremely active on the ARV deal and there's ostensibly unlimited demand at $1.60 from funds looking to make an easy return so the money is flowing out of ARV already and in a BIG way. I note a whopping 79 million shares traded today, That's nearly 11% of all ARV shares on issue traded in a single day. Wow !!
Far be it to me to make price predictions upwards on this now, (I'm too cunning for that these days and know I would be taken out the back of the dog kennel and shot by you and others if I did lol), but I expect that tsunami of money from people cashing in their chips early on ARV to continue.
P.S. Just saw Buzz's post above and I couldn't agree more. Smart move.
Quote from: Buzz on Jul 23, 2024, 08:15 PMTend to agree. ARV caught out all the traders, it was one of those 'if you aren't holding already you'll miss out on the pop' with the buyout offer.
I've sold all my ARV and rotated into OCA, can't see the point of hoping for another 10 cents on the buyout rather than cashing in $1.60 now and putting it to better use.
I sold part of mine yesterday, my main holding I will discuss on Friday with my advisor and seek advice but I am happy to sell the remainder of my holding at $1.60 (500k).
Of course the offer has got to get passed the post. Independent Valuation will be interesting. Must confess to being a little frustrated as I really wanted to stick it up these clowns at the ASM after turning the first offer down.
Quote from: Greekwatchdog on Jul 23, 2024, 09:00 PMI sold part of mine yesterday, my main holding I will discuss on Friday with my advisor and seek advice but I am happy to sell the remainder of my holding at $1.60 (500k).
Of course the offer has got to get passed the post. Independent Valuation will be interesting. Must confess to being a little frustrated as I really wanted to stick it up these clowns at the ASM after turning the first offer down.
Hey GWD, why do you have an advisor? You seem like a smart guy who would be capable of constructing a portfolio himself.
Quote from: ValueNZ on Jul 24, 2024, 09:29 AMHey GWD, why do you have an advisor? You seem like a smart guy who would be capable of constructing a portfolio himself.
If I had anywhere near that kind of money to invest, I would probably use an advisor for very major decisions like this. You and I are still beginners, with much to still learn, so there is nothing wrong with seeking a second opinion with regard to our investing decisions. I can't afford an advisor for such a small portfolio, but I have, on two occasions taken advantage of local advisors offering an initial free consultation. I am always up front with them, and make sure they are aware I have no "business" to bring them. On both occasions they have been very happy to give me 30-60 minutes of their time. Not to "advise" me, but to let me run them past what I am doing myself, and what I am thinking in terms of my financial future. I found both consults very helpful.
Be careful not to get caught up in the "personality battles" in these forums. They will turn you into someone you eventually realise you don't much like. Take it from one who knows.
Quote from: ValueNZ on Jul 24, 2024, 09:29 AMHey GWD, why do you have an advisor? You seem like a smart guy who would be capable of constructing a portfolio himself.
Hi Value NZ,
I have 2 portfolios, One I play with and control whenever the time suits myself and the other is my retirement portfolio that has larger holdings for long term. If I feel I need to lean on someone for some advice just to confirm my own thoughts and be sure I am making the best decision I see.
It never hurts to listen to someone else on occasions.
Those ARV punters keep reloading that bid line at 78c, if that stopped it would fall back 4-5 cents swiftly. Okay I know I'm talking to myself which is the first sign of madness.
Quote from: Breezy on Jul 25, 2024, 02:55 PMThose ARV punters keep reloading that bid line at 78c, if that stopped it would fall back 4-5 cents swiftly. Okay I know I'm talking to myself which is the first sign of madness.
Yep,on that basis it seems 70 cents could well become the new support
Better than 50 eh
But rates coming down and after a bonza of a half year result I still see 130 early next year
That new CEO a lucky one helps
over 4 to 1 on the sell...
some comp props are also high on the sell side trading the chairs comments ....
Quote from: Waltzing on Jul 25, 2024, 04:12 PMover 4 to 1 on the sell...
some comp props are also high on the sell side trading the chairs comments ....
Appears that way however the 78c line is reloading around 200k shares at a time and the 80c line is an out of the action wall.
Quote from: Breezy on Jul 25, 2024, 02:55 PMThose ARV punters keep reloading that bid line at 78c, if that stopped it would fall back 4-5 cents swiftly. Okay I know I'm talking to myself which is the first sign of madness.
LOL don't worry, I talk to my dog all the time and would wager good money he understands me every time lol
wonder what winston will want to do for the gold card holders... surely the retirement sector support is on someone portfolio interest as older people still get to vote....
its a very very serious matter
has anyone got a new take on the retirement village sector or is it a case of another report ....
where are all the reports filed anyway and will they start a royal commission ? or has there already been several.
they have a commissioner but NZ has it seems a commissioner for everything...
Quote from: Basil on Jul 25, 2024, 04:20 PMLOL don't worry, I talk to my dog all the time and would wager good money he understands me every time lol
Yep life would be very lonely at times without dog/s to talk to when you spend a lot of time at home. They can be expensive when you go away for 6 wks but they are worth every cent.
Quote from: Breezy on Jul 25, 2024, 02:55 PMThose ARV punters keep reloading that bid line at 78c, if that stopped it would fall back 4-5 cents swiftly. Okay I know I'm talking to myself which is the first sign of madness.
It is actually a sign of intelligence. There are some really interesting research articles on the subject. I talk to myself all the time ;)
Quote from: Breezy on Jul 25, 2024, 04:33 PMYep life would be very lonely at times without dog/s to talk to when you spend a lot of time at home. They can be expensive when you go away for 6 wks but they are worth every cent.
Off topic. I couldn't agree more and would add that they're also a great icebreaker for talking to others. (I've seen a UK research study that shows if you are walking your dog along the footpath people are 41 times more likely to stop and talk to you than without a dog). They're great at retirement villages too as often people want a dog but don't have the capacity to care for one but really enjoy the "therapy" of meeting other residents' dog's. I am sure you have seen the joy dog's bring to old folks at retirement villages in your line of work.
I love my daily walks with Tony the Pony at the dog park where I've made a good friend that I often catch up with and enjoy his company as well as his super cute Cocker Spaniel. Best part about being semi-retired is having time to enjoy taking time out during the day like that to enjoy life's simple pleasures which are gourmet food for the soul.
I'm loving that keen punter that wanted 621k shares on close at 79c, he only got about half that and then he was gone, hopefully he will be back like Arnie. And yes in case your wondering I do have an obsession with depth charts.
real time orders means direct access. Doesnt mean it will be back but certainly showing that even if OCA sees big orders than thats good news for the whole NZX...
Quote from: Breezy on Jul 25, 2024, 05:04 PMI'm loving that keen punter that wanted 621k shares on close at 79c, he only got about half that and then he was gone, hopefully he will be back like Arnie. And yes in case your wondering I do have an obsession with depth charts.
2.1 million done after the market close @ 79 cents in a special crossing too. Rising share price on rising volumes is encouraging for the future.
Quite something for a stock that was $0.51 in early July and $0.60 before the Arvida bid was announced at the start of this week. I wonder if someone is building a 19.99% stake prior to launching a takeover offer. Or is it just the Arvida money looking for a new home? Will be very interesting to see how this plays out.
Quote from: Mos on Jul 25, 2024, 05:58 PMQuite something for a stock that was $0.51 in early July and $0.60 before the Arvida bid was announced at the start of this week. I wonder if someone is building a 19.99% stake prior to launching a takeover offer. Or is it just the Arvida money looking for a new home? Will be very interesting to see how this plays out.
Agree, I think a few things in the past weeks have combined to wake up the market up to how massively under-priced OCA is, and even now it's still 44% discount to NTA.
TA wise, bear in mind .80 is a triple top and has stalled the bolt upwards. All indicators are overbought but the SP is in the past two-three days showing
consolidation, not profit taking, i.e.
distribution. Volumes are up hugely from average but I did note that the mornings are slow/low volume.
I see no reason why this couldn't get to $1 more quickly than some people might think.
Quote from: Buzz on Jul 25, 2024, 06:10 PMAgree, I think a few things in the past weeks have combined to wake up the market up to how massively under-priced OCA is, and even now it's still 44% discount to NTA.
TA wise, bear in mind .80 is a triple top and has stalled the bolt upwards. All indicators are overbought but the SP is in the past two-three days showing consolidation, not profit taking, i.e. distribution. Volumes are up hugely from average but I did note that the mornings are slow/low volume.
I see no reason why this couldn't get to $1 more quickly than some people might think.
Feeling good about my buys in the 50c range...
Thanks to all that sold me their shares for dirt cheap, keep acting irrationally and following the herd.
Bonds go up when interest rates go down... be interesting to see what holders of the bonds are going to get across the NZX property stocks of which this is one..
who bought the bonds recently and do they expect to make on them..
---------------------------------------------------------
SUM ARG GMT OCA charts have all moved in line ...
--------------------------------------------------------
notice the fixed yield deposits stats and how long till the yield rate is expected to fall below the yield rates on com props of which these stocks are a proxy. That wall of money is not yet crossing the market for at least another 12 months.
overhang now approaching 10-1
be very interesting to see where this goes in the next week.....
Quote from: Waltzing on Jul 26, 2024, 06:38 PMoverhang now approaching 10-1
be very interesting to see where this goes in the next week.....
No probs as long as those ARV punters keep reloading that bid line.
There are maths that cover probability .... and it may well be that behavioural factors will play a part...
Some of the ARV money found a home.
To: NZX Limited
and
To: Oceania Healthcare Limited
Relevant event being disclosed: Movement of 1% or more in substantial
holding
Date of relevant event: 25 July 2024
Date of this disclosure: 30 July 2024
Date last disclosure made: 3 April 2024
Substantial product holder(s) giving
disclosure:
Full name(s): Forsyth Barr Investment Management Limited
(FBIM)
Summary of substantial holding
Class of quoted voting products: Oceania Healthcare Limited Ordinary Shares
Summary for FBIM
For this disclosure,—
(a) total number held in class: 51,954,370
(b) total in class: 724,231,030
(c) total percentage held in class: 7.174%
For last disclosure,—
(a) total number held in class: 44,565,970
(b) total in class: 724,154,779
(c) total percentage held in class: 6.154%
OCA over hang looks to be moving back into something normal .. plenty to sell but buyers also lining up... 2-1 approx...
no one in a hurry then...pretty much like the economy...
and now for some sideways pastel wiggly lines....
OCA sp drop coinciding with a drop off in ARV sell volume shows clearly where the support is coming from.
Share price might have got a bit ahead of itself in the short run, ditto for RYM in my opinion mainly as a result of what you mention, the ARV cash flowing out. Notable that RYM said at its annual meeting late last week that trading in the first four months had been "more challenging" I expect that to be sector wide. I trimmed my position at 79 cents.
Massive fall in average prices in Auckland last month, down a whopping 8.8% in a single month !
https://www.interest.co.nz/property/129053/big-drop-selling-prices-pushes-sales-barfoot-thompson-vendors-prepared-meet-market
It'll be interesting to see how the nationwide stat's look later this month when REINZ data comes out but vendors are capitulating in Auckland and taking whatever they can get if they want to sell.
back to 10 - 1 ... not looking great odds for a trade at the moment... tide out but .. tides do come in ... this one just not regular moon tide...
QuoteWinner Heartbreak for Warriors as they go down 34-32 in extra time to the Dolphins. Big comeback to draw level after normal time but effort to no avail. Fans are gutted but some are still in hope that miracles happen and this will still 'be our year' ...other fans are more realistic and accept this is not to be but say we have the team blah blah and 2025 will be the 'this is our year'. UP THE WAHS ...maybe not.
Oceania share price was down 2 cents last week and closed at 77 cents. Fans were rather quiet, probably still basking in the glory of the last few weeks. However the cheerleaders came out at end of week reminding us of the impending tailwinds like next weeks rate cut etc and there was even mention of tsunamis. So the future is looking all good and the next step up is imminent. GO OCEANIA YOU BEAUTIFUL THING.
A casual observer would say 'this is our year' is all over for the Warriors and looking a bit uncertain for Oceania who need a lot of external factors to go their way....and w won't be hearing anything from the company itself until November so hoping things are actually going OK
Love how you cover all the possible bases with your weekly commentary on the other channel lol.
I have no idea which way the share price is going either but the Warriors look like dog tucker this season mate.
One thing I do know for sure is the dividend yield on OCA will either be almost zero or zero this year so relative to other property shares like ARG or KPG for example, the shares need to go up to compensate investors for loss of income. I think a lot depends on the real estate market finding new momentum upwards. The fall in average Auckland prices, Oceania's biggest market, down a really shocking 8.8% in July relative to June 2024, is maybe an aberration, or perhaps the new reality for Auckland? Time will tell but, in the meantime, the national medium price action for July to be released by REINZ this week will be very interesting. I think the sector follows the fortunes of the real estate market a LOT more closely than many people realize.
By the way, I asked Matt Peek, investment manager at Kingfish at the ASM last week if OCA was on their radar. No it's not. They have concerns about the level of care in the business and the Helier not selling well.
QuoteCupsy mentioned Oceania's embedded value .... and like a true fan said something like it's better understanding the embedded value in the business, as opposed to share price action alone. Yep Oceania's embedded value of 71 cents is impressive and then on top of that they have $400m of unsold stuff.
The Wahs also have significant embedded value. That being the enormously talented of class players in the squad. As Ferg inferred class (embedded value) will always prevail
Quote Winner - other channel.
ARV had embedded value of $1.72 and the takeover was $1.70. If you follow the same methodology through and OCA got taken over for a fraction less than embedded value the takeover would only be at 70 cents. Not sure the Warriors have all that much embedded value either.
70-72 cents in where I see fair value on a fundamental basis. Anything above that is probably just a sugar rush from ARV takeover money and that rush has hit a brick wall at 80 cents. I'm concerned the new CEO will do a RYM and "Kitchen Sink" a lot of historical issues. That concern is based on more than just the usual concern that new CEO's do this sort of thing quite often. It's based on Brent's own admission in his last call before he left that the new CEO has a lot of "housework" to do. I hate housework with a vengeance, just ask Mrs Beagle, she'll confirm that lol
Quote from: Basil on Aug 13, 2024, 04:40 PMIt's based on Brent's own admission in his last call before he left that the new CEO has a lot of "housework" to do. I hate housework with a vengeance, just ask Mrs Beagle, she'll confirm that lol
Ferg posted the below back in June on the other channel. Sharing it here for those who might have missed it.
"The transcript posted by SR had some typos in it. For instance references to IOUs were actually ILUs. And the "cleaning" quote was incorrect, the actual transcript of that sentence is:
"um, we`ve got plenty of um , plenty ahead of us."
Brent repeated the word 'plenty' which was mistaken for 'cleaning'."
"
New boss putting her foot print on things already.
A new executive position Chief Sales and Marketing Officer has been created.
As part of this change, the Operational Team will temporarily report to Andrew Buckingham, Chief Property Officer and Clinical Care will report to the Chief Executive Officer.
Suzanne Dvorak, CEO said that "These structural changes are designed to sharpen our focus on sales and clinical care, setting us up for future strategic growth. Additionally, we're considering other functional changes to best position us for the future. The newly created Chief Sales and Marketing Officer will have full responsibility and accountability for Sales & Marketing. The elevation of sales to the executive level will provide renewed focus for Oceania in this key area."
As part of this restructure, Anita Hawthorne concluded her role at Oceania Healthcare on Friday, 16 August 2024. The Board thanks Anita for her contribution to Oceania.
Quote from: Greekwatchdog on Aug 20, 2024, 08:36 AMNew boss putting her foot print on things already.
A new executive position Chief Sales and Marketing Officer has been created.
As part of this change, the Operational Team will temporarily report to Andrew Buckingham, Chief Property Officer and Clinical Care will report to the Chief Executive Officer.
Suzanne Dvorak, CEO said that "These structural changes are designed to sharpen our focus on sales and clinical care, setting us up for future strategic growth. Additionally, we're considering other functional changes to best position us for the future. The newly created Chief Sales and Marketing Officer will have full responsibility and accountability for Sales & Marketing. The elevation of sales to the executive level will provide renewed focus for Oceania in this key area."
As part of this restructure, Anita Hawthorne concluded her role at Oceania Healthcare on Friday, 16 August 2024. The Board thanks Anita for her contribution to Oceania.
Very interesting. I would like to know what is behind Anita's "departure" - was she pushed? Know nothing about her, but structural changes resulting in the removal of the COO, surely raises some questions.
Quote from: Untamed on Aug 20, 2024, 08:59 AMVery interesting. I would like to know what is behind Anita's "departure" - was she pushed? Know nothing about her, but structural changes resulting in the removal of the COO, surely raises some questions.
I agree although it could be a personality thing. Also, I wasn't aware sales & marketing weren't on the exec team.....so I see that as a good thing. IMO an exec team needs the boss (CEO), someone looking outwards (sales/marketing), someone looking inwards (operations/production), someone looking after the numbers (CFO) and maybe a 4th position for the old timer with grey hair and in depth knowledge of the company and industry. In the case of RVs, I would split the internal role into two being development and village/care. All IMHO.
Deleted
Ryman changes to DMF and weekly fees good for competitors including Oceania, as is Ryman dialling back development reducing future supply.
https://www.nzx.com/announcements/437275 (https://www.nzx.com/announcements/437275)
Oceania announces governance changes
3/09/2024, 14:26 NZST, ADMIN
Oceania Healthcare Limited (NZX, ASX, OCA) advises governance changes.
The Oceania Board announced today that Peter Dufaur will retire from the OCA Board on 30 September 2024.
Mr Dufaur was appointed to the OCA Board on 17 September 2021 with over 25 years experience in the New Zealand property market. Peter is currently Managing Director of Mayfair Group Limited and is retiring from the Board due to work commitments.
Oceania Chair, Elizabeth Coutts said "Peter has made a signification contribution to Oceania with his property and business experience and the Board thank him for his contribution and wish him and his family the best for the future."
Following Mr Dufaur's retirement, Gregory Tomlinson will Chair the Development Committee and Oceania's Board will reduce to six directors.
In addition, there have been changes made to the Board Committees with Rob Hamilton appointed Chair of the People and Culture Committee and Sally
Evans appointed as Chair of the Sustainability Committee effective from today.
https://www.nzx.com/announcements/437406
Another Aged care Operator being taken over. Can only be a matter of time until someone comes after OCA
Australia's largest residential aged care provider Opal HealthCare has found itself a motivated core-plus infrastructure buyer as non-binding bids land in the hands of sell-side adviser Morgan Stanley. (from AFR)
Quote from: Poet on Sep 20, 2024, 11:01 AMAnother Aged care Operator being taken over. Can only be a matter of time until someone comes after OCA
Australia's largest residential aged care provider Opal HealthCare has found itself a motivated core-plus infrastructure buyer as non-binding bids land in the hands of sell-side adviser Morgan Stanley. (from AFR)
They can "come after" OCA if they wish, but I don't see any takeover being successful at the price some here have bandied about. I would be extremely disappointed in the Board if they supported a takeover at anywhere near that price, and I would vote against it. Actually, right now, I would vote against it regardless of offer price. I don't think I would be in the minority there.
Quote from: Untamed on Sep 20, 2024, 12:39 PMThey can "come after" OCA if they wish, but I don't see any takeover being successful at the price some here have bandied about. I would be extremely disappointed in the Board if they supported a takeover at anywhere near that price, and I would against it. I don't think I would be in the minority there.
We should take comfort in the fact that the Board are shareholders themselves and that they paid rather steep prices (relative to what you can pick them up for today), in 2021. They'll be looking for a sufficient return on investment themselves so I can't personally see a takeover occurring without there being a significant premium attached.
All IMHO.
Quote from: Poet on Sep 20, 2024, 11:01 AMAnother Aged care Operator being taken over. Can only be a matter of time until someone comes after OCA
Australia's largest residential aged care provider Opal HealthCare has found itself a motivated core-plus infrastructure buyer as non-binding bids land in the hands of sell-side adviser Morgan Stanley. (from AFR)
You might have had a point if it were not for a couple of things. Firstly, the care sector here is so egregiously underfunded many small operators are going broke and nobody else is getting anything like a reasonable return on capital invested. (SUM for example recently disclosed they are losing money on care). Secondly, our house prices have been very weak relative to Australia. Consider this, the Arvida takeover, highly likely to be approved at a special vote next week was pitched at 2 cents less than just the embedded value of the company, $1.70, when ARV had embedded value of $1.72 per share (unrealized profit on current occupation licenses). Nothing was paid for goodwill, their development "skills", or I would argue lack thereof, their landbank or anything else, most especially their care facilities of which they have many but are they are probably struggling to break even on, like everyone else.
In effect care is like a loss leader that the RV sells to sweeten the pot on buying an independent living unit and OCA has such an extensive suite of loss leader villages, it's quite an unattractive proposition.
OCA's embedded value is a long way south of the current share price, (61 cps from memory) and they have the highest level of poorly performing care, (from a financial perspective) in the listed RV sector so I think shareholders can relax about the prospect of anyone making an offer for their shares. ARV offer weas pitched at a ~ 17% discount to NTA of $2.05 = $1.70. OCA shareholders would in my opinion get a "get out of jail free card" if anyone pitched an offer at even a 25% discount to NTA, 75% x $1.41 = ~ $1.06, such is the extent of their care problem. I don't see it happening, the returns on capital employed in the care sector are so poor, nobody is likely to be interested in a company that has a very high level of care in its business model. Notably, OCA was left on the shelf when MET was taken over, and again when ARV is about to be taken over. SUM probably more vulnerable than any other due to its exceptional track record of growth and superb management and fit for purpose, modest level of care in its business model. A very slight premium to NTA is nothing when you consider their exceptional track record of growth since listing 13 years ago. Interestingly, that strong growth in earnings was gained while all the others, including RYM, have languished...
Opal owners been looking for somebody to buy them for a while
Maybe Oceania is also looking for a suitor
Talk of takeovers reminds me Phradeus post on ST.....and it sounds like the dance of the desperate.
Quote from: Ferg on Sep 21, 2024, 03:38 PMTalk of takeovers reminds me Phradeus post on ST.....and it sounds like the dance of the desperate.
Indeed. I think these posts on the other channel from Bottom Feeder and Winner "sum" the situation up
QuoteQuote Originally Posted by bottomfeeder View Post
When Brent was appointed, I thought, great from an accounting bacground he will get the figures right. I liked the bond raise at a low interest rate, a capital raise when the SP was at a high. How disappointing he turned out. He couldnt even do an adequate cash flow projection. Overcommitted the company for expansion and growth which killed the SP. Then in such a bind that he cancelled the dividend.
The SP tanked to such an extent that most shareholders were under water at 50cents. OK its recovered a bit but way below where it should be. You could think that when the dividend stopped, the profits being reinvested would buoy the shareprice and NTA. The SP tanked to over 60% less than NTA.
The board deserves the title of pathetic. What turned this company into a pariah and shareholders wealth destroyer.
No doubt the new CEO comes in, taking little responsibility for the predicament the company is in, blaming the outgoing CEO.
The board needs to do someting different and quickly. They need to stop any new development projects to stop the cash burn and reinstate dividends.
----------------------------------------------------------------------------------------
"Winner" Composition of Board a bit of a problem ..... too many been there too long ......collecting their fees while pretending to be vibrant directors
Chair Coutts been there 10 years, Isaac 9 years, Prendergast 8 years, Evans 5 years. Hamilton and Dufaur came joined in 2021.
Tomlinson has been on and off the Board a few times but been around for an ages and seeing he basically founded the outfit we'll live with him eh.
Bottomfeeder.... Board might not be 'pathetic' but one gets the impression they've been there too long and lack any great enthusiasm. Watching them at ASM was interesting ....most looked bored as and like they didn't really want to be there with the 'stuff shareholders' look
So don't expect miracles mate
Only one company in this sector has come through the last few years with its reputation for growth intact. Huge oversupply of houses set to "dog" this sector for some time to come ? https://www.interest.co.nz/property/130130/more-homes-are-flooding-already-crowded-housing-market-making-potential-buyers
Interesting article - credit to Winner69 for the link:
https://newsroom.co.nz/2024/10/22/with-choice-comes-dignity-new-oceania-boss-wants-to-lead-with-purpose/?fbclid=IwY2xjawGJqpFleHRuA2FlbQIxMQABHTQ2Xc8z4Qq6nn35r7ihb8iIN-1GkBLosVUYhJuc7EHnV-KiJ8rYPnkXpQ_aem_XXxbauxyFa8qv07bvZMZsg
I like the way she thinks.
Well credentialled when it comes to philanthropy and not for profit ventures that's for sure, but shareholders will need to see growth in earnings if the share price is ever to be lifted out of the doldrums.
Have not looked at this for a while. Have been looking at broker expectations going forward. Both Jarden and FB see growth. Mind you they could both be wrong.
2024 actual normalised eps 8.7 cps
Jarden 2025f eps 10.5 cps and 14.9 cps 2026
Fbar 2025f eps 10.5 cps and 12.6 cps 2026
Will be looking for any change in strategy with the new ceo
Debt and inventory in the spotlight.
Interest rates on the way down is a key positive. Just need signs that the housing market is turning.
Quote from: Shareguy on Oct 28, 2024, 07:31 AMHave not looked at this for a while. Have been looking at broker expectations going forward. Both Jarden and FB see growth. Mind you they could both be wrong.
2024 actual normalised eps 8.7 cps
Jarden 2025f eps 10.5 cps and 14.9 cps 2026
Fbar 2025f eps 10.5 cps and 12.6 cps 2026
Will be looking for any change in strategy with the new ceo
Debt and inventory in the spotlight.
Interest rates on the way down is a key positive. Just need signs that the housing market is turning.
Thanks shareguy
The eps forecasts are interesting ...Oceania will need to increase sales a lot to achieve them ...especially that guess by Jardens of 14.9 cents in 2026
Be good if Oceania did nearly double underlying profit in 2 years
Couldn't resist adding Jarden forecast to my EPS chart
Could mean Brent was pretty useless and Suzanne is the lucky one
Let's see how it all goes ...maybe an indication in a months time
IMG_5959.png
Quote from: winner (n) on Oct 28, 2024, 08:16 AMThanks shareguy
The eps forecasts are interesting ...Oceania will need to increase sales a lot to achieve them ...especially that guess by Jardens of 14.9 cents in 2026
Be good if Oceania did nearly double underlying profit in 2 years
I agree. Jardens research (Arie Dekker) is top notch. Jarden have it on a PE of 5.3 for FY26. Not long to wait for some clarity.
Quote from: Shareguy on Oct 28, 2024, 09:53 AMI agree. Jardens research (Arie Dekker) is top notch. Jarden have it on a PE of 5.3 for FY26. Not long to wait for some clarity.
Those eps forecasts seem extremely optimistic to me given their long-established track record of zero earnings growth and well-known intense pressure on the business through appallingly low returns on care. The only way I can see of them getting anywhere within a mile of there in FY26 is with a massive boom in the real estate market both in terms of price and volumes sold. Even if that happened that sets them up for the next down leg of the cycle as property becomes even more heinously overpriced relative to average income than it already is. You got some shares and backing his research with your own capital mate ?
For what it's worth I think the shares are about fair value and with no dividends and the prospect of only a very minimal unimputed yield going forward, other assets in the property sector are preferred. Worth remembering that international investors would have run the ruler over the entire sector in recent years and in the takeover of both MET and ARV, both those acquiring companies chose to leave Oceania on the shelf.
These are the two paragraphs of interest to me:
QuoteAs Kiwis age, their retirement needs will be contingent on their financial position, which will vary from the very wealthy to those struggling to make ends meet. Part of the challenge for retirement providers will be ensuring they have the right mix in their portfolio to meet the needs of the population as it ages.
"Not everything has to be premium or luxury, like The Helier," says Dvorak, referring to Oceania's flagship premium retirement village in the Auckland beachfront suburb of St Heliers.
"There are different ways to retire. There are also mid-market price points that are more accessible to more people."
Getting that balance right will be integral to all retirement providers as they make longer-term plans to meet the steepening demand for their services in the coming decades.
Quote"It is time to look at how we change it to make it more accessible,
says Dvorak.
"The steadily growing population means we could face a housing crisis as time goes on, so having people vacate larger properties to move into retirement is going to be beneficial for everyone. I believe there needs to be different avenues for making that possible."
Creating sustainable solutions will require a strategic, long-term approach, but Suzanne is committed to driving meaningful change from the outset.
"Living with dignity is always about choice," says Dvorak.
"And if Kiwis have greater ability to choose the life they want to lead when they want to, then we're doing our jobs properly."
It seems to me that Suzanne is very quickly "summed up" the aged care crisis situation in this country, and recognises that providers need to re-think their current mix of offerings, to include options for those who are not wealthy, but who may, at some point require some level of assisted living. We may well end up being pleasantly surprised by her leadership after all.
Quote from: Basil on Oct 28, 2024, 10:01 AMThose eps forecasts seem extremely optimistic to me given their long-established track record of zero earnings growth and well-known intense pressure on the business through appallingly low returns on care. The only way I can see of them getting anywhere within a mile of there in FY26 is with a massive boom in the real estate market both in terms of price and volumes sold. Even if that happened that sets them up for the next down leg of the cycle as property becomes even more heinously overpriced relative to average income than it already is. You got some shares and backing his research with your own capital mate ?
For what it's worth I think the shares are about fair value and with no dividends and the prospect of only a very minimal unimputed yield going forward, other assets in the property sector are preferred. Worth remembering that international investors would have run the ruler over the entire sector in recent years and in the takeover of both MET and ARV, both those acquiring companies chose to leave Oceania on the shelf.
Yes I do agree that the eps forecast does seem optimistic,time will tell. Yes still holding and added with some of my Arvida proceeds some time ago. Ryman my largest holding in this sector.
FWIW Matt Peek of Kingfish has chosen to allocate 3.1% to RYM and nearly three times as much, 8.4% to SUM and nothing to OCA.
https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Newsletter-September-2024.pdf
Quote from: Basil on Oct 28, 2024, 05:10 PMFWIW Matt Peek of Kingfish has chosen to allocate 3.1% to RYM and nearly three times as much, 8.4% to SUM and nothing to OCA.
https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Newsletter-September-2024.pdf
Yes, that's a nice return on the retirement sector. In his newsletter he boasts of returns of 28% for SUM and 21% for RYM over the relevant period. He doesn't talk about the 37% return for OCA over the same period for some reason
Quote from: Poet on Oct 28, 2024, 05:36 PMHe doesn't talk about the 37% return for OCA over the same period for some reason
;D brilliant! At 45% discount to NTA, in a falling interest rate and bottoming property market environment, OCA is still cheap as. Doubled down in the 50's. Happy holder.
Quote from: Poet on Oct 28, 2024, 05:36 PMHe doesn't talk about the 37% return for OCA over the same period for some reason
LOL, you know that post is going to get a response. The reason he doesn't talk about it is, quite obviously they don't own OCA shares. They're long-term investors not traders and are interested in shares that have key attributes that give them a competitive advantage in various sectors. They've been shareholders of SUM since it listed in late 2011 for $1.35, last traded at $12.45 and have made more than 9 times their money in the last 13 years. On the other hand, OCA, seven and a half years after listing are still languishing below their IPO price.
https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Newsletter-December-2011.pdf,
Investment returns speak for themselves and show Kingfish have chosen very well.
I spoke with Matt after the recent Kingfish annual meeting some months back and asked if he thought OCA were worth looking at. He was unequivocal in his response. Far too much care in their business model which will give below sector returns and he went on to share he thought the Helier had a very limited addressable market.
He didn't think much of Greg Tomlinson's other major listed investment either, (HGH). Wrong timing in the economic cycle to be owning that company he said. Mind you, that was a few months ago so maybe its bottoming out now and at least there's a ~ 10% gross yield there which provides much needed help when it comes to having patience holding them. He really likes Turners and shared he had a meeting scheduled with Todd and Aaron for September, but I see they have yet to action a disclosable stake there as at the end of Sept but given modest liquidity, they could be quietly accumulating. I'd wager they will have a disclosable stake in Turners by their December quarter report. Full disc: Turners is my #1 position on the NZX.
Matt impressed me. He used to work alongside Julian Cook when they were both at UBS. Don't think there's any doubt whatsoever how much value Julian added to SUM.
Quote from: Basil on Oct 28, 2024, 06:14 PMLOL, you know that post is going to get a response. The reason he doesn't talk about it is, quite obviously they don't own OCA shares. They're long-term investors not traders and are interested in shares that have key attributes that give them a competitive advantage in various sectors. They've been shareholders of SUM since it listed in late 2011 for $1.35, last traded at $12.45 and have made more than 9 times their money in the last 13 years. On the other hand, OCA, seven and a half years after listing are still languishing below their IPO price.
https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Newsletter-December-2011.pdf,
Investment returns speak for themselves and show Kingfish have chosen very well.
I spoke with Matt after the recent Kingfish annual meeting some months back and asked if he thought OCA were worth looking at. He was unequivocal in his response. Far too much care in their business model which will give below sector returns and he went on to share he thought the Helier had a very limited addressable market.
He didn't think much of Greg Tomlinson's other major listed investment either, (HGH). Wrong timing in the economic cycle to be owning that company he said. Mind you, that was a few months ago so maybe its bottoming out now and at least there's a ~ 10% gross yield there which provides much needed help when it comes to having patience holding them. He really likes Turners and shared he had a meeting scheduled with Todd and Aaron for September, but I see they have yet to action a disclosable stake there as at the end of Sept but given modest liquidity, they could be quietly accumulating. I'd wager they will have a disclosable stake in Turners by their December quarter report. Full disc: Turners is my #1 position on the NZX.
Matt impressed me. He used to work alongside Julian Cook when they were both at UBS. Don't think there's any doubt whatsoever how much value Julian added to SUM.
And yet you got pissed off at Julian for building to many units and not selling enough so you sold out after trying to blow his house down.
It was only a few weeks ago you were slamming other's for calling HGH a dog and were were backing up the truck buying and telling then about how cheap it was and eps was going to be this blah blah blah.
Honestly who really cares what you say about OCA anymore?
Not you obviously lol. I was just sharing what Kingfish think about OCA. The fact that Matt's opinion lines up with my own, obviously hits a raw nerve with you and possibly some others.
Quote from: Basil on Oct 28, 2024, 06:26 PMNot you obviously lol. I was just sharing what Kingfish think about OCA.
Everyone is entitled to their opinion Basil incl Kingfish, but comparing OCA to SUM is a crock of pig crap.
Remember grumpy dog, the OCA worm will turn its just whether you are on the carriage and unless you are going to change 360 degrees again and buy back in. Sshh best you keep that a secret
Quote from: Basil on Oct 28, 2024, 06:14 PM...Far too much care in their business model ...
You and Matt are wrong.
Quote from: Greekwatchdog on Oct 28, 2024, 06:37 PMbut comparing OCA to SUM is a crock of pig crap.
So "eloquently" put. Why? investors are always going to compare companies in the same sector. It's been happening since Adam was a boy.
Quote from: Untamed on Oct 28, 2024, 06:37 PMYou and Matt are wrong.
I love how you posted that like a statement of fact lol. Good luck with that, he's a very smart guy and I didn't come down in the last shower either. Perhaps you should have included the words "In my opinion" ;)
Quote from: Basil on Oct 28, 2024, 06:58 PMSo "eloquently" put. Why? investors are always going to compare companies in the same sector. It's been happening since Adam was a boy.I love how you posted that like a statement of fact lol. Good luck with that, he's a very smart guy and I didn't come down in the last shower either. Perhaps you should have included the words "In my opinion" ;)
We will see if Jarden are right with their extraordinary earnings forecast for FY26. You'll be able to bowl me over with a feather if they are. OCA is definitely a "show me' company now. The market is saying in no uncertain terms, priced at just 9 times last years eps, they are a no growth company in terms of earnings per share. They won't rerate until they can prove they can grow earnings per share, in my opinion.
Same sector yes, but one has heavily invested in care, a point of difference that has always made OCA a different beast and a easy target to investors when they don't meet there expectations.
Some might say OCA is well positioned for the future with all the care, I am fascinated to see where Suzanne guides the business from here. Don't care about half year result, low expectations
Quote from: Basil on Oct 28, 2024, 06:58 PMI love how you posted that like a statement of fact lol. Good luck with that, he's a very smart guy and I didn't come down in the last shower either. Perhaps you should have included the words "In my opinion" ;)
Yes, it
is my opinion, but it is also fact. The two are not mutually exclusive 😉
Quote from: Untamed on Oct 28, 2024, 07:11 PMYes, it is my opinion, but it is also fact. The two are not mutually exclusive.
With all due respect, the fact of the matter is that SUM shares have vastly outperformed OCA since OCA listed seven and a half years ago. That is a statement of fact which cannot be disputed. Where too from here is anyone's guess but Matt has the opinion that SUM's business model is best placed to give superior returns in this sector going forward. Better suited than RYM too who have a lot of "housekeeping" to do.
Quote from: Basil on Oct 28, 2024, 07:18 PMWith all due respect, the fact of the matter is that SUM shares have vastly outperformed OCA since OCA listed seven and a half years ago. That is a statement of fact which cannot be disputed. Where too from here is anyone's guess but Matt has the opinion that SUM's business model is best placed to give superior returns in this sector going forward. Better suited than RYM too who have a lot of "housekeeping" to do.
My posts had nothing to do with OCA v Summerset, or whether KFL chooses to invest in OCA or not. I was simply responding to your "too much care" comment. You and Matt are of course, free to believe that if you choose to. But my knowledge of, and experience in, aged care at the ground level, tells me otherwise.
Having said that, it's not a competition and I don't
have to be right. If I'm proven wrong and I'm still alive, I'll apologise.
Quote from: Poet on Oct 28, 2024, 05:36 PMHe doesn't talk about the 37% return for OCA over the same period for some reason
Or the 56% SP rise from the lows in June, just four months.
Quote from: Buzz on Oct 28, 2024, 08:05 PMOr the 56% SP rise from the lows in June, just four months.
That's pretty good eh buzz
Probably a lot more to come over the next year. Plenty of tailwinds and a new leader all good. Methinks this is going to be our year
Warriors fans thinking positively too. Tailwinds and a couple of new players replacing has beens bode well for doing heaps better than last season. Fans eagerly looking forward to 'this is our year' ....Up the Wahs
Westpac guy predicting house prices +8% in 2025
That'll help OCA get to Jarden's targets ....as long as they actually sell many.
Half Year Result 22nd Nov.
Quote from: winner (n) on Oct 29, 2024, 07:45 AMUp the Wahs
Gosh it could be Up the Orcas soon
https://www.nzherald.co.nz/kahu/new-zealand-consortium-headed-by-sir-graham-lowe-makes-360-million-bid-to-join-national-rugby-league-competition/LMA7XADJLBAWLBI4PDR5NQXDAE/
Wonder what 22 Nov announcement will bring. My guess, another lackluster report.
I am looking for a debt reduction, be the first in the sector if they can make it happen otherwise steady as she goes that will disappoint your whinging traders.
New CEO on her plans will also be of interest and any cost outs.
Radius reduced their debt last report .... Substantially they said
Quote from: winner (n) on Nov 07, 2024, 07:03 PMRadius reduced their debt last report .... Substantially they said
I am talking about the big 3 listed given ARV is no longer
Housing market on fire
Should be good for Oceania
From REINZ ......
. On the sales front, total properties sold nationally increased by 20.0% compared to October 2023. Sales for New Zealand, excluding Auckland, rose 22.7% year-on-year, with notable increases in Nelson (+112.8%) and Marlborough (+29.5%).
Arvida Half Year result out
Hope Oceania report a lot better than what Arvida have reported
https://api.nzx.com/public/announcement/442194/attachment/432270/442194-432270.pdf
I'm expecting them to report much of a muchness as they have reported before but higher village and care operational losses offset by perhaps a very modest improvement in property gains. Net, net, more of the same or very similar to the past.
QuoteHope Oceania report a lot better than what Arvida have reported Winner
https://api.nzx.com/public/announcement/422074/attachment/407732/422074-407732.pdf
In 1H FY24 receipts from customers were $107.4m but payments to employees and suppliers were $121.5m so they lost $14.1m ($28.2m on an annualized basis), from their village and care operations in the six-month period. See page 21.
This worsened to cash outflow loss from core operations of $55.4m for the full year to 31 May 2024, see page 22
https://api.nzx.com/public/announcement/431667/attachment/419254/431667-419254.pdf
It will be interesting to see how much these village and care operational losses have worsened in the current six-month period. Just as well they will do so well from property, (or will they?), they will be able to mask this ever-worsening problem so that most will overlook it as an inconsequential issue, but I would suggest in doing so, many are ignoring the elephant in the room in that there's no money in care or village operations, in fact it's a huge problem that keeps getting worse.
I think the losses from village operations and provision of care are now so bad, this is the reason nobody wants to take over OCA.
Capitalize annual cash losses on village operations in FY24 of $55m at say 8.5 times, (ignoring the alarming rate they are growing at, which itself is a very serious concern), and that's $467.5m off NTA right there. That's 64.6 cps on 723.67m shares. Jarden website claims OCA reckon NTA is $1.41 per share.
I reckon adjusted for capitalized losses on village and care operations the net effective NTA is $1.41 - 64.6 cps = 76.4 cps.
Roughly about where the share price is. I think the market is a lot more efficient when pricing these shares than many others think it is.
More to the point when valuing shares, it's all about the no growth eps of circa 8.5 cps. Until they can prove then can grow eps, I think this is destined to stay moribund around its IPO price forever and a day. With little if anything in the way of dividends from this property company, because of the cash burned in operating it, to me this means capital invested is "dead money"
Just my way of valuing shares, (and I seem to have done okay over the years), but others will have different ways of arriving at their fair value and that's perfectly fine and good luck with that.
Probably the most transparent and honest results narrative I have seen since I first invested in OCA. Some here will pick it to pieces no doubt, but it is clear that the new CEO has her finger on the pulse, and a very clear understanding of what needs to happen. I am pleased to see the introduction of a resident centred care framework, and a focus on sales expansion, and debt gearing.
I think Suzanne can do what is needed, to turn OCA into the business it always had the potential to be.
Quote from: Basil on Nov 20, 2024, 06:13 PMIn 1H FY24 receipts from customers were $107.4m but payments to employees and suppliers were $121.5m so they lost $14.1m ($28.2m on an annualized basis), from their village and care operations in the six-month period. See page 21.
This worsened to cash outflow loss from core operations of $55.4m for the full year to 31 May 2024, see page 22
https://api.nzx.com/public/announcement/431667/attachment/419254/431667-419254.pdf
H125 numbers Receipts $106.0m and payments to employees and suppliers $129.4m
Your loss of $14.1m last year has expanded to $23.4m this year
But they 'restated' F24 numbers and the $14.1m was really only $4.8m ...oops things really are worse. Restate to try and show continuing operations ..like don't count the things given away
Quote from: winner (n) on Nov 22, 2024, 09:22 AMH125 numbers Receipts $106.0m and payments to employees and suppliers $129.4m
Your loss of $14.1m last year has expanded to $23.4m this year
But they 'restated' F24 numbers and the $14.1m was really only $4.8m ...oops things really are worse. Restate to try and show continuing operations ..like don't count the things given away
Do you
ever look for the positive in anything? Nobody was expecting a financially significant result. You and I both know that Brent had "lost his way," so it was pretty obvious that whoever took over, was going to have their work cut out. Suzanne has only been in the role for four months.
What I was looking for, was an indication that Suzanne is working on turning things around - and that her goals were inline with my own. She is, and they are, so I am satisfied with this result, and now have some confidence that we will see progress and improvement from this point on. Give the woman a chance.
Your mileage obviously varies, but maybe just
try to show a little optimism.
Quote from: winner (n) on Nov 22, 2024, 09:22 AMH125 numbers Receipts $106.0m and payments to employees and suppliers $129.4m
Your loss of $14.1m last year has expanded to $23.4m this year
Didn't realise profit and losses were calculated on a cash basis.
Quote from: Untamed on Nov 22, 2024, 08:58 AMProbably the most transparent and honest results narrative I have seen since I first invested in OCA. Some here will pick it to pieces no doubt, but it is clear that the new CEO has her finger on the pulse, and a very clear understanding of what needs to happen. I am pleased to see the introduction of a resident centred care framework, and a focus on sales expansion, and debt gearing.
I think Suzanne can do what is needed, to turn OCA into the business it always had the potential to be.
Agreed - the presentation is refreshingly open and honest. Hey, they even publish the occupancy of the Helier (and no, its not flash). And yes, they did some selling down of unoccupied stock, but still lots to do. They say acknowledgment of the issues is the first step to improvement - and I think as well the new CEO deserves a chance.
Can anyone tell me who this Aaron dude is, currently asking questions on the live presentation? I didn't catch which broker he represents. Bit of a rude, disrespectful fellow, whoever he is. His questions are valid, but his attitude is not.
Quote from: Untamed on Nov 22, 2024, 11:44 AMCan anyone tell me who this Aaron dude is, currently asking questions on the live presentation? I didn't catch which broker he represents. Bit of a rude, disrespectful fellow, whoever he is. His questions are valid, but his attitude is not.
Forsyth Barr.
https://www.forsythbarr.co.nz/contact/meet-the-team/aaron-ibbotson
Quote from: ValueNZ on Nov 22, 2024, 11:46 AMForsyth Barr.
https://www.forsythbarr.co.nz/contact/meet-the-team/aaron-ibbotson
Thanks.
https://api.nzx.com/public/announcement/442413/attachment/432562/442413-432562.pdf
Good to see a reduction in the level of corporate B.S.and ESG nonsense, from frankly an abhorrent level with Brent.
QuoteH125 numbers Receipts $106.0m and payments to employees and suppliers $129.4m
The cash burn at a village operational level is a deep systemic issue that all in this sector are grappling with and it seems clear to me that the greater the level of care in the business model the worse the problem is. With the Govt strapped for cash its hard to see how they can possibly arrest this ever-increasing problem and returns from care seem destined to be very poor for the foreseeable future.
They're moving towards 50% care so despite some reduction in the level of care facilities during the half, there's a long way to go.
How I see it. They're always going to be the runt of the litter because of the systemic unresolvable problem that the returns on care are appallingly low. I don't see that ever changing.
Underlying profit is down, not flat as I expected. Things have got worse, not better as many others were predicting. Never mind, next year will be their year and the WAHS are going to win the NRL too so you can bet the ranch on both those things happening ;) New CEO has a vast mountain of work to do over the next 5 years. Will she be somewhat more successful in her endeavors than the last two CEO's who have failed so miserably? I doubt it.
My view remains unchanged from that expressed a couple of days ago
"More to the point when valuing shares, it's all about the no growth eps of circa 8.5 cps. Until they can prove then can grow eps, I think this is destined to stay moribund around its IPO price forever and a day. With little if anything in the way of dividends from this property company, because of the cash burned in operating it, to me this means capital invested is "dead money"
It looks like there's no dividends for the foreseeable future.
Quote from: Basil on Nov 22, 2024, 12:25 PMNew CEO has a vast mountain of work to do over the next 5 years. Will she be somewhat more successful in her endeavors than the last two CEO's who have failed so miserably? I doubt it.
Congratulations Basil! Once again, you have met all my expectations, and have responded exactly as I anticipated. One thing's for sure, there are never any surprises with you. You are solidly, and consistently predictable. ;D
Fortunately, some of us are still willing to give Suzanne a chance to "do better." You may end up being the one who is surprised. We will see.
Quote from: Untamed on Nov 22, 2024, 12:36 PMYou may end up being the one who is surprised. We will see.
No worries about the current lackluster performance, the future is going to be so much better ;D ...wait, haven't we heard that before? Yes we have, every single time they have ever issued a report lol To their credit, at least they are finally, (after all the endless years of B.S., deliberate obfuscation and concealment), being open about the seriousness of the challenges they face. I see meaningless ESG stuff has been shifted from leading off in the presentation with multiple pages of stuff, to one page at the end of the latest investor presentation where it belongs. I suppose that at least signals a change in their focus which is at least making a start on trying to fix their mess.
Quote from: Basil on Nov 22, 2024, 12:43 PMTo their credit, at least they are finally, (after all the endless years of B.S., deliberate obfuscation and concealment), being open about the seriousness of the challenges they face. I see meaningless ESG stuff has been shifted from leading off in the presentation with multiple pages of stuff, to one page at the end of the latest investor presentation where it belongs. I suppose that at least signals a change in their focus which is at least making a start on trying to fix their mess.
Which is precisely the point I was making in my previous post. Suzanne has been in the role just under four months. (ESG stuff aside, as it is the least of my concerns), this is the most transparent and honest report I have seen in the time I have been a holder. It is also the first time I have seen clear goals outlined, and a very clear commitment to reduce debt and improve sales. You are right - we haven't seen that for a long time. So maybe just give Suzanne some slack, so she
can work towards "fixing the mess" - and remember, it isn't
her mess she needs to fix.
It is a bit like politics, only for some reason, people have more patience with political parties trying to fix the previous party's "mess" than they do for CEO's doing the same. Which is a bit ridiculous.
Agreed, the presentation kicked off with the leading headline "Oceania must continue to sell down unsold stock, and reduce leverage" She's also recognized the need for a cost out program.
I would have thought these things should have been glaringly obvious to the last CEO especially with his background as an investment banking director with Jarden. All Brent and Katheryn for that matter too, seemed to want to do was to disguise the problems and / or sweep them under the carpet and pretend problems didn't exist.
Third line into the presentation reads thus: "Sales is a core issue for the business that we need to urgently and structurally address" This is exactly what I have been saying on both forums for years and its great she sees the matter as one of urgency.
Where was Brent in confronting this most urgent matter?
While its good that OCA now appears to have a CEO that can actually see the wood for the trees and isn't blinded my mindless thinking that as long as residents have the best of everything, it will all work out fine in the end, there is no quick fix / silver bullet here and getting the good ship Oceania, (actually that's quite a good name for a ship eh), back on an even keel is likely to be a multiyear project.
Even then, the business is stuck with far more care in its business model than others in this sector and as I have said many times before, no matter how you slice and dice it, there's very little money in care. Anyway, good luck with it. I will leave it at that and let the share price do the talking.
Quote from: Basil on Nov 22, 2024, 04:35 PMAgreed, the presentation kicked off with the leading headline "Oceania must continue to sell down unsold stock, and reduce leverage" She's also recognized the need for a cost out program.
I would have thought these things should have been glaringly obvious to the last CEO especially with his background as an investment banking director with Jarden. All Brent and Katheryn for that matter too, seemed to want to do was to disguise the problems and / or sweep them under the carpet and pretend problems didn't exist.
Third line into the presentation reads thus: "Sales is a core issue for the business that we need to urgently and structurally address" This is exactly what I have been saying on both forums for years and its great she sees the matter as one of urgency.
Where was Brent in confronting this most urgent matter?
While its good that OCA now appears to have a CEO that can actually see the wood for the trees and isn't blinded my mindless thinking that as long as residents have the best of everything, it will all work out fine in the end, there is no quick fix / silver bullet here and getting the good ship Oceania, (actually that's quite a good name for a ship eh), back on an even keel is likely to be a multiyear project.
Even then, the business is stuck with far more care in its business model than others in this sector and as I have said many times before, no matter how you slice and dice it, there's very little money in care.
Yep, I agree with pretty much all of that. I don't expect a quick fix. As you rightly said, the "fix" is going to take time to bear fruit. As long as I see forward progress from here on in, I am willing to be patient.
As for care. There was actually quite a bit of new information provided around that. I am pleased that they are continuing to include care, and I think a 50/50 split between care and independent living is appropriate and achievable. This is the first report that has mentioned any specific care "framework" and I am very happy that they are now developing one, with a visible person centred care focus. That is exactly how it should be. Some of the care related notes I made included:
"New care suite sales outperformed our expectations with 51 new care suites sales during the period. This reflects our excellent reputation for provision of care, founded on our everything we do."
"Our offer sets itself apart in the market for its resident centred approach, based on our Clinical Excellence Strategy. To support this we elevated our Director of Clinical Governance role to the Executive table. We continue to innovate when it comes to resident care, expanding our care offering to a continuum of care. We have extended our clinical excellence through the Nurse Practitioner Model. We are refining our development pipeline to ensure that resident wellbeing and care is at the heart of everything we do, delivering and planning developments that optimise residents' care and comfort, including the expansion of care suites and couples care suites"She also said they are working on a new price structure which will be published on 13th December. I assume she meant "published" for both potential customers
and investors.
This is also the first time I have seen the CEO specifically recognise investors, with this comment:
"while we deleverage, and right size the business and operational costs to improve returns to shareholders."I know you hate care as an investor, but care will never be up for debate. Retirement villages without care, won't survive for much longer - if there are even any out there. Continuity of care is the priority for most prospective customers. I would hazard a guess that it is more important to most of them, than price and fees. OCA just has to get creative to ensure care becomes more profitable. Suzanne said as much today.
I feel more positive about the future of OCA than I have in a long time. I think this CEO will work for customers
and investors. I never felt that Brent did.
For anyone that doesn't know already. A full transcript of the analyst's call is available on the other channel and makes for a very interesting read.
DYOR and form your own opinion, mine is already well known lol.
Craigs latest note is not good reading. Apart from not selling enough and reports that the Hellier is a "ghost town" there costs are just to high
Craigs say
with its wage/revenue ratio of c.70% at the top end of the industry, which reflects its highly corporatised model of delivering care. Reducing wage/revenue to c.55%, in line with industry best practice, would improve OCA's aged care uEBITDA to c.$45-50m per year (up from c.$17m now). This would however require a radical restructure.
Cash flows were also surprisingly soft, with OCA's existing assets burning $14m of cash (excluding new sales and interest, but after maintenance). The net debt reduction that OCA had forecast for the period was also "delayed" due to "subdued" sales
I have been in since it listed but think this is going to take a long time to come right and there are better opportunity's in the meantime. Corporate activity the only real rationale to own OCA at present and I agree with Basil that high care is going to be the killer of that.
Disc/ Sold out last week.
Forsyth Barr analyst really called them out on the analysts call, see transcript on the other channel. Bet they're not happy either.
Quote from: Basil on Nov 25, 2024, 03:10 PMForsyth Barr analyst really called them out on the analysts call, see transcript on the other channel. Bet they're not happy either.
The Forbar man really grumpy
Apparently said Forbar only hope is 'selling the villages individually or merging OCA with one of the two large, privately held, aged care operators has the potential to unlock meaningful value."
Maybe Suzanne from Bupa there to sous out that possibility and become CEO of a really big company
Quote from: winner (n) on Nov 25, 2024, 03:17 PMThe Forbar man really grumpy
Apparently said Forbar only hope is 'selling the villages individually or merging OCA with one of the two large, privately held, aged care operators has the potential to unlock meaningful value."
Maybe Suzanne from Bupa there to sous out that possibility and become CEO of a really big company
You mean combining OCA's hidden and unrealized value and Bupa's care problems (Actually Suzanne mentioned them in the recent report to make OCA look good - see below) could be a marriage made in heaven. They say that opposites are attracting each other, don't they?
From the transcript of the HY presentation (Suzanne):
QuoteYou probably know that I have worked in health care and aged care, in particular, for many years. I've seen care at its very worst. When I went to Bupa, it had 17 sanctions across its sites and at most places that I've worked, care is perfunctory at best. At Oceania, I can say with certainty that we provide the very best of care. I've been out to visit many of our sites and when I do visit our sites, there are 3 things that stand out to me: Our homes are full of loved ones and visitors.
Quote from: BlackPeter on Nov 25, 2024, 03:57 PMYou mean combining OCA's hidden and unrealized value and Bupa's care problems (Actually Suzanne mentioned them in the recent report to make OCA look good - see below) could be a marriage made in heaven. They say that opposites are attracting each other, don't they?
From the transcript of the HY presentation (Suzanne):
QuoteYou probably know that I have worked in health care and aged care, in particular, for many years. I've seen care at its very worst. When I went to Bupa, it had 17 sanctions across its sites and at most places that I've worked, care is perfunctory at best. At Oceania, I can say with certainty that we provide the very best of care. I've been out to visit many of our sites and when I do visit our sites, there are 3 things that stand out to me: Our homes are full of loved ones and visitors.
Seems like you and I are the only ones who heard that. I found that
very interesting. Last thing I would want is an investment in an RV providing "perfunctory" care. Suzanne seems like a hands on, feet on the ground floor, kind of CEO, and that is a very good thing in my opinion. She clearly understands care, while at the same time recognising and accepting the fact that she needs to find ways to make it more profitable.
Breath of fresh air.
Quote from: Shareguy on Nov 25, 2024, 12:53 PMwith its wage/revenue ratio of c.70% at the top end of the industry, which reflects its highly corporatised model of delivering care. Reducing wage/revenue to c.55%, in line with industry best practice, would improve OCA's aged care uEBITDA to c.$45-50m per year (up from c.$17m now). This would however require a radical restructure.
I think its great that someone has finally nailed down just how poorly their care operations are performing in terms of the pathetic return to shareholders. While nobody wants to see residents receive inadequate standards of care, the fact is the returns on care are so bad they might as well be running a charity, which frankly, is how I have seen it for quite some time. OCA a great company to own for pure philanthropic purposes. Basically, all other stakeholders, (residents, staff, management, directors, even bondholders who bought the bonds recently at a 7% yield to maturity), are doing extremely well from the company and shareholders are getting absolutely nothing, and frankly I think that situation is unlikely to change any year soon.
Not specific to OCA, I found this interesting but the volume of paper and fine print is nutso
https://youtu.be/FjOVNkhQ8pk?si=53svWJqDb4rLXbXI
Quote from: Untamed on Nov 25, 2024, 05:23 PMSeems like you and I are the only ones who heard that. I found that very interesting. Last thing I would want is an investment in an RV providing "perfunctory" care. Suzanne seems like a hands on, feet on the ground floor, kind of CEO, and that is a very good thing in my opinion. She clearly understands care, while at the same time recognising and accepting the fact that she needs to find ways to make it more profitable.
Breath of fresh air.
Agree. A relief to have a straight talker in charge at last. Hopefully actions follow through.
Jenny Ruth posted an interesting piece on OCA today. Better not share the detail as it's a breach of copyright. In brief, it's one thing to acknowledge some of your problems but fixing them is quite another thing.
Quote from: Basil on Nov 27, 2024, 06:02 PMJenny Ruth posted an interesting piece on OCA today. Better not share the detail as it's a breach of copyright. In brief, it's one thing to acknowledge some of your problems but fixing them is quite another thing.
Wasn't that long ago people were saying the same thing about Ryman.
There is enough to be pessimistic about in the world right now. I'm choosing to temper the negative (which I fully accept), with the positive. At least now there
are some positive actions being taken.
Remind me, because it is hard to keep track, do you hold any OCA currently?
Ryman still have an absolute mountain of work to do. I have some OCA corporate bonds, no shares.
Article in the Hearld today, paywalled, best not to read it if you want to try and stay positive.
https://www.nzherald.co.nz/business/why-new-150m-auckland-retirement-village-the-helier-is-69-empty-new-ceo-explains/FLBODVXTPNFT3DJXCWXEMVERCU/?lid=cme23ou6o9wh
Quote from: Basil on Nov 27, 2024, 07:01 PMRyman still have an absolute mountain of work to do. I have some OCA corporate bonds, no shares.
Article in the Hearld today, paywalled, best not to read it if you want to try and stay positive.
https://www.nzherald.co.nz/business/why-new-150m-auckland-retirement-village-the-helier-is-69-empty-new-ceo-explains/FLBODVXTPNFT3DJXCWXEMVERCU/?lid=cme23ou6o9wh
Unfortunately, I can't afford to pay for paywalled articles, given that I have wasted all my money investing in OCA ;D
To be honest, I was always a little concerned about the Hellier, as it is obviously aimed at a very niche market, so I'm not surprised at the sales figures to date. I suspect it would never have been built had Suzanne been CEO at the time. We can't change the past, so OCA needs to find a way to "make the best of it" now. If that means dropping prices, so be it. Better to have full occupancy at reduced prices, than empty apartments, especially given the fact that they have to maintain full staffing levels to provide the current few residents with the services they are paying for.
I have no doubt that Suzanne will be looking very closely at it, and working hard on coming up with possible, maybe even temporary, options, alongside the already stated focus on marketing and increasing sales.
I am not wearing rose coloured glasses, no matter what you believe. I am a realist. I cannot sell without locking in a significant loss (peanuts for you, but significant for me). I don't want a takeover as I seriously doubt any offer would be enough for me to break even, let alone make a profit. I still believe in the sector, and I now believe we at least have a chance, with Suzanne at the helm. Even the naysayers have admitted that they believe it will "come right" over time. Probably more time than I would like, but hey ...it is what it is.
So what alternative is there? Might as well focus on the positives, now that there are a couple, rather than stress myself out with the negatives, don't you think? We both know what stress can do to one's health.
I'm giving Suzanne 12 months. We will see where things sit in a year, at which time I will re-visit my position. I am optimistic and hopeful, but not delusional ;)
I think if you look at the history of undervalued assets such as these, the take overs give you an insight into actual value. That is what keeps me holding OCA.
NZ is all about dividends, which undervalues stocks like this.
If they could unload The Hellier, maybe as a high-end hotel, that would be great. But surely dropping the entry price would create division amongst current residents?
We need a Tina or a Spot.
Quote from: mike2023 on Nov 28, 2024, 07:04 AMI think if you look at the history of undervalued assets such as these, the take overs give you an insight into actual value. That is what keeps me holding OCA.
NZ is all about dividends, which undervalues stocks like this.
If they could unload The Hellier, maybe as a high-end hotel, that would be great. But surely dropping the entry price would create division amongst current residents?
We need a Tina or a Spot.
Yes, if they chose to reduce prices, they would have to do a deal of some kind with existing residents.
Maybe they need to look at offering a "bonus" for new sign ups? I don't know - maybe a reduced weekly fee or free chauffeur service/spa/ or whatever, for six months. I honestly have no idea.
Quote from: Basil on Nov 27, 2024, 07:01 PMRyman still have an absolute mountain of work to do. I have some OCA corporate bonds, no shares.
Article in the Hearld today, paywalled, best not to read it if you want to try and stay positive.
https://www.nzherald.co.nz/business/why-new-150m-auckland-retirement-village-the-helier-is-69-empty-new-ceo-explains/FLBODVXTPNFT3DJXCWXEMVERCU/?lid=cme23ou6o9wh
Actually - not sure what negative you read in the article which wasn't already clearly spelled out in the HY presentation? We discussed the occupancy of the Helier already to death ... but actually the article is describing the current look and feel in the Helier quite positive.
It does mention as well an in my view huge advantage of the Helier:
QuotePattison explained: "It's the first time we're aware of that we have a private resident-paying model. While we will still be certified under the Ministry of Health, we will not be entering into an authorised care contract with the Government."
That means the transfer to a higher level of care won't be controlled by the standard government model but is within the resident and Oceania's control, offering a big point of difference to most other retirement village hospitals.
Well, we obviously don't hope that we ever will get into the situation of needing high level care, however - if the need arises than I definitely would prefer if I can sort and arrange that between me and my care provider without the need to make knee falls all along a highly incompetent and inefficient public health bureaucracy. Not sure about you, but I would see this as a huge benefit.
So - sure, they might have overdone the luxury a bit (hard to read the market in advance), and they clearly have been very unlucky in picking the right time window to open the appartments in a perfectly modelled recession. Tough planning - how couldn't they not know that in 5 years later there will be a recession when they started? However - looking forward, I see them reasonably positioned and I am sure they will learn from that as well (which may or may not be the right lesson in a then different economic environment - I hear others are developing now super luxurious retirement places).
Look, it is absolutely ok if you don't hold, but it does not really add value to constantly repeat the same old warmed up bad vibes. OCA's SP is low, and this clearly reflects both the economic cycle as well as some previous misjudgments from board / management. However - going forward from here I am pretty sure that OCA is more likely to double its SP in the next say 5 years, than e.g. the much praised SUM.
Quote from: BlackPeter on Nov 28, 2024, 09:21 AMPattison explained: "It's the first time we're aware of that we have a private resident-paying model. While we will still be certified under the Ministry of Health, we will not be entering into an authorised care contract with the Government."
That means the transfer to a higher level of care won't be controlled by the standard government model but is within the resident and Oceania's control, offering a big point of difference to most other retirement village hospitals.
Thanks for the reminder - I had forgotten about that.
Quote from: Untamed on Nov 27, 2024, 08:03 PMWe can't change the past, so OCA needs to find a way to "make the best of it" now. If that means dropping prices, so be it. Better to have full occupancy at reduced prices, than empty apartments, especially given the fact that they have to maintain full staffing levels to provide the current few residents with the services they are paying for.
Yes, I imagine the Helier from an operational perspective is costing them a fortune to run at present with just 31% occupancy and then there's the borrowing costs on funds invested which can no longer be capitalized. Very concerning is they started marketing this more than 2 years ago and are at just 31% occupancy, despite all the creative B.S. from Brent it was selling well..
My contention is this is actually a lot worse than it looks as there's always some money from some MINO's (money is no object), sloshing around looking for a home and the very best north facing units would have already been taken by those people. Selling the rest could be more challenging. I think it's not just a question of the initial capital cost, weekly operating fees for a couple of $550 for the unit would put a lot of people off and I would think that's just the facility fees. If you want to start using the butler service, in house chef and so on, I'd wager the costs are off the charts to what most would expect. Maybe you need $1,000 a week extra disposable income to really enjoy living there? How many people have that ?
It we just take a linear extrapolation of the sales rate, 31% has taken 2 years, that suggests about 15.5% per year which is ~ 6.5 years to fill the Helier, another 4.5 years hence from here. With people moving out through the natural cycle of life and death, it may never be full. Who knows what effect tweaking the prices a bit will have but I strongly suspect the $550 weekly fee has a lot to do with the very slow sales and that fee is not going to change with their revised marketing plan, or is it and OCA will have to wear operational losses from the Helier forever and a day ?
As to the question of how many people have somewhere near a million for a care suite and are then prepared to pay $3,500 per week for care unfunded by the Govt, I would think that's an even smaller market niche.
Its a very good site with great views and it looks extremely well built. I'm just not sure that such an upper end niche product is ever going to sell very well.
Quote from: Untamed on Nov 27, 2024, 08:03 PMI'm giving Suzanne 12 months. We will see where things sit in a year, at which time I will re-visit my position. I am optimistic and hopeful, but not delusional
That makes sense to me but I'm not sure all that much will change in the next year. Time will tell. Good luck.
Quote from: Basil on Nov 27, 2024, 06:02 PMJenny Ruth posted an interesting piece on OCA today. Better not share the detail as it's a breach of copyright. In brief, it's one thing to acknowledge some of your problems but fixing them is quite another thing.
In that Jenny piece she said " Yes, the residential property market has been depressed for a couple of years now, but fellow retirement village operator Summerset Group continues to demonstrate that it's still possible to sell units."
Sales April/September for each in sector compared to last year
Oceania +1%
Arvida +2%
Ryman +5%
Summerset +17%
REINZ reported sales volumes +7% (will be adjusted upwards when late returns included)
So in spite of most saying challenging times blah blah sales can be made and Jenny was right in do it properly and you'll sell.
At least Suzanne says we need to sell more
Can't help but notice how the sector pecking order is still relevant
Quote from: BlackPeter on Nov 28, 2024, 09:21 AM..........
I am pretty sure that OCA is more likely to double its SP in the next say 5 years, than e.g. the much praised SUM.
This chart will look a bit different if OCA share prices and SUM doesn't won't it BP ...reversing a 7+ year trend
I keep updating it regularly because I find such a trend intriguing
IMG_6003.png
At the rate things are going so fat this month I'll need to adjust the y-axis scale ....might go below 5% 🤩 😯
Well done Oceania ....doing good things that matter.
From their Facebook -
We had an incredible night at the Deloitte Top 200 Awards gala, celebrating the best of New Zealand business. We are thrilled to have been a finalist in the Snowflake Sustainability category alongside some of the most impactful and forward-thinking businesses in the country.
Congratulations to Spark on their well-deserved win in the Sustainability category, and to all the other winners and finalists. It's inspiring to see the innovation and leadership shaping New Zealand's future.
OCA came in for a single mention at last week's stock talk gathering. In quite stark contrast to the gathering 6 years ago where almost everyone there was toasting their future success when OCA was $1. Last Friday, not a single investor there thought they were a good investment going forward and one poster on here that will remain nameless, lamented how the very smooth talking of another very popular well-known former prolific poster on the other channel had drawn him into the OCA fold and what a dismal performance he'd subsequently endured. I'd wager there are dozens more that were smooth talked down the OCA capital destruction rat hole.
One argument I suppose ongoing holders could espouse, is at least they haven't lost all that much money from the IPO price of 79 cents in the last 7.5 years. 71 cents is not to bad and next year will be our year they keep repeating every single year. This is way better since listing than for example MFB but that sets such an awfully low bar. Sadly that school of thought has three holes in it so wide you could drive an oil tanker through them. Firstly, on an inflation adjusted basis the shares should be now just north of $1 just to keep pace with inflation with no real return, (source RBNZ inflation calculator), secondly the shares have only ever paid a very modest unimputed dividend and it's now been suspended and who knows when a really tiny dividend might be paid again and lastly, what about the opportunity cost of investing in something that really is growing and paying decent dividends. Its been an absolute disaster for long term holders and yet some skillful traders have managed to pull a 6-figure realized profit out of this dog. All the proof you need that if worked right, you can trade and make money out of almost any old dog lol
Sadly, I think their focus on all things ESG, I am looking at the CFO Katherine Wargh here, has cost them plenty in terms of the fact that their focus should have been on running their business more efficiently and effectively. OCA would definitely make it onto my finalist list for the worst managed companies in the NZX50 with a very good chance of winning.
Quote from: Basil on Dec 10, 2024, 04:40 PMOCA came in for a single mention at last week's stock talk gathering. In quite stark contrast to the gathering 6 years ago where almost everyone there was toasting their future success when OCA was $1. Last Friday, not a single investor there thought they were a good investment going forward
The best investments are usually the ones that are unpopular. ;D
Quote from: Basil on Dec 10, 2024, 04:40 PMOne poster on here that will remain nameless, lamented how the very smooth talking of another very popular well-known former prolific poster on the other channel had drawn him into the OCA fold and what a dismal performance he'd subsequently endured. I'd wager there are dozens more that were smooth talked down the OCA capital destruction rat hole.
Always easier to blame others eh... When things go well, you're an investing genius, when it doesn't, well it's the other fellas fault.
Also that prolific poster on the other channel - Would that happen to have been you circa 2021? :-X
Quote from: Basil on Dec 10, 2024, 04:40 PMOne argument I suppose ongoing holders could espouse, is at least they haven't lost all that much money from the IPO price of 79 cents in the last 7.5 years. 71 cents is not to bad and next year will be our year they keep repeating every single year. This is way better since listing than for example MFB but that sets such an awfully low bar. Sadly that school of thought has three holes in it so wide you could drive an oil tanker through them. Firstly, on an inflation adjusted basis the shares should be now just north of $1 just to keep pace with inflation with no real return, (source RBNZ inflation calculator), secondly the shares have only ever paid a very modest unimputed dividend and it's now been suspended and who knows when a really tiny dividend might be paid again and lastly, what about the opportunity cost of investing in something that really is growing and paying decent dividends. Its been an absolute disaster for long term holders and yet some skillful traders have managed to pull a 6-figure realized profit out of this dog. All the proof you need that if worked right, you can trade and make money out of almost anything including rubbish lol
This is all well and good but it is not the past return that matters but the forward return.
Also it's not been bad for all long-term holders. My average price is ~60c, with the majority of the shares purchased over the last year so sitting on an acceptable CAGR.
I've cautioned extensively about OCA since 2021 and been one of the most unpopular posters on the other channel for it, but the fact is my warnings were soundly basxed and turned out to be right.
Quote from: Basil on Dec 10, 2024, 04:40 PMOCA came in for a single mention at last week's stock talk gathering. In quite stark contrast to the gathering 6 years ago where almost everyone there was toasting their future success when OCA was $1. Last Friday, not a single investor there thought they were a good investment going forward and one poster on here that will remain nameless, lamented how the very smooth talking of another very popular well-known former prolific poster on the other channel had drawn him into the OCA fold and what a dismal performance he'd subsequently endured. I'd wager there are dozens more that were smooth talked down the OCA capital destruction rat hole.
You provide an outstanding point for the argument that nobody is able to predict the future, not even a group of distinguished online posters sitting together for a beer. As you say, they couldn't get it right six years ago , and I would not know whey they would be more accurate this time around.
Why would you think that the punters got it "righter" this time than six years ago? It is a well understood mechanism that punters are euphoric when shares are on the way up and depressed when they are low. Nothing new.
Quote from: BlackPeter on Dec 11, 2024, 11:26 AMWhy would you think that the punters got it "righter" this time than six years ago?
Easy question to answer. We've all seen the fruitlessness of all their endeavors, (in terms of trying to grow eps) over the last 6 years and can see all the issues they now have to overcome.
6 years ago the care suite model was unproven, and all took Earl Gasparich at his word that returns from care would substantially improve from the care suite model they were pioneering. The exact opposite has happened, and returns have more than halved from $19.5K EBITDA per bed to under $9K.
All at the gathering can see their business transformation program has been an epic failure and they face ever strengthening headwinds from Govt underfunding of care as well as a range of other issues I have previously discussed.
Quote from: winner (n) on Dec 01, 2024, 04:06 PMThis chart will look a bit different if OCA share prices and SUM doesn't won't it BP ...reversing a 7+ year trend
I keep updating it regularly because I find such a trend intriguing
IMG_6003.png
I believe the trend will continue because OCA's business model has so many severe headwinds they can't escape from, whereas SUM's business model is the only one in the R.V. market that's fighting fit for purpose against the severe headwinds of Govt underfunding of care, a major factor that I predict will continue indefinitely. You're going to need a 3% on that left hand axis of the chart at some stage in the years ahead mate.
Hey guys. Question for the accountants
Can someone please explain the tax implications regarding the development of units, initial sales and subsequent resales.
So in my scenario OCA develops at cost unit for 600k, it's then valued to 800k. Initially sold for 800k, then resold 7 years later for 960k.
I know as the DMF is amortized as revenue over the 7 years, that's obviously revenue and taxable. My question is whether there are any other taxable events in this process.
1. Development gain (200k), 2. Initial Sale, 3. Resale gain (160k).
I believe that there is no "sale" it is just a lease. The operator retains ownership of the unit.
disc. not a tax accountant
Quote from: Dolcile on Dec 13, 2024, 12:51 PMI believe that there is no "sale" it is just a lease. The operator retains ownership of the unit.
disc. not a tax accountant
Yeah that's right, all the RV's refer to them as sales in their annual reports though.
Functionally very similar to a sale except as you say the operator retains ownership and earns the cash flows in perpetuity from the units resale gains and whatever DMF accrues. Since they are held for DMF purposes it appears their development and resale gains are totally untaxed. Although I'm not entirely sure about that hence why I'm asking.
Quote from: ValueNZ on Dec 13, 2024, 01:54 PMYeah that's right, all the RV's refer to them as sales in their annual reports though.
Functionally very similar to a sale except as you say the operator retains ownership and earns the cash flows in perpetuity from the units resale gains and whatever DMF accrues. Since they are held for DMF purposes it appears their development and resale gains are totally untaxed. Although I'm not entirely sure about that hence why I'm asking.
Yeah the development gains are also untaxed.
REINZ property sales volumes steadily rising
Oceania et al won't really be able to blame a weak property market for not reporting robust sales growth this year
IMG_6019.png
Quote from: winner (n) on Dec 17, 2024, 07:24 PMREINZ property sales volumes steadily rising
Oceania et al won't really be able to blame a weak property market for not reporting robust sales growth this year
IMG_6019.png
Of course they can, depends what you have available for sale. Village or Care Suites. In the end be interesting to see if there so called record sales numbers for Sept, Oct continue. Hmmm..
Dead right to be skeptical because we've heard them cry wolf in that regard before and then the numbers come in and it's a shocker. Remember Brent saying several times before how well sales were going at the Helier?
Aside from that, so called record sales for Sept have already been brought to account in the Sep half year result and that was an absolute shocker.
Quote from: ValueNZ on Dec 13, 2024, 01:54 PMYeah that's right, all the RV's refer to them as sales in their annual reports though.
Functionally very similar to a sale except as you say the operator retains ownership and earns the cash flows in perpetuity from the units resale gains and whatever DMF accrues. Since they are held for DMF purposes it appears their development and resale gains are totally untaxed. Although I'm not entirely sure about that hence why I'm asking
It's a 'sale' of an occupancy right. Such sales are referenced in the investor presentations and words within the annual report, but such wording is absent from the financial statements. Instead you can see the ORA receipts in the cashflow statement.
This might help with some background info on the tax treatment:
https://taxworkinggroup.govt.nz/sites/default/files/2019-02/twg-bg-4074124-retirement-villages-and-capital-income.pdf
In short the initial receipt from the resident is an interest free loan. Receipts of principal amounts on loans is not taxable. Not a tax expert....but that is my understanding. However, any deductions from the loan repayment for the likes of DMF are taxable.
Comes under the financial arrangements provisions of the Income Tax Act.
Resident never owns the unit, just makes an interest free loan to secure a license to occupy with a bunch of conditions around weekly fees and deferred management fees.
https://www.nzherald.co.nz/business/summer-questions-oceania-healthcare-ceo-suzanne-dvorak/6RJCACH45RGRLFYDCFUTFOKLXU/
What is your New Year's resolution? I want to find more time for exercise.
At the risk of stating the completely obvious, maybe she should walk her dogs more often....speaking of which Tony the Pony needs his walk...and I sure need to walk off yesterday's excess eating lol
I see Brent Pattison is now CEO of Heritage Lifecare
Takes over from Norah Barlow
For anyone who is interested, I finally received an email from OCA (had to send it twice as nobody bothered to respond the first time). In my email, I asked about the fee increases that were mentioned in the last results presentation. I asked if this project had been completed, and if so, could OCA please share the new fee structure with investors.
Here is the reply I just received:
Dear Carren,
Thank-you for your email. The portfolio review and assessment of unit pricing across key development sites has been completed. At this point there is no material information that will be publicly released. As we continue to focus on sales outcomes ahead of FY25 year end, we will look to include any relevant information related to sales as part of our update in May 2025.
Thank-you for taking the time to get in touch.
Kind Regards,
RYAN BIDDULPH, Corporate Finance Manager
I have responded accordingly, not that it will make any difference.
Thanks for that. Disappointing to see the next update will be in May - I thought they were going to do quarterly sales updates.
New CEO, same shite. They forget who owns the business. The Shareholders.
I agree. I sent him a reply. A couple of comments I made below:
With respect, may I ask why you have chosen not to release this information to investors, now? If the new fee structure across sites has been completed, surely this information is now public information in the sense that it is accessible to prospective customers? If that is the case, I see no reason whatsoever, why your loyal investors should not also have access to that information.
There is a great deal of investor dissatisfaction currently, given that the share price has been undervalued for years now. Investors have seen some refreshing "changes" since Suzanne took over the role, but we had hoped for a great deal more transparency, and more regular (brief) updates, between general reporting announcements.
I just feel that perhaps OCA management could spare a little more thought for those of us who are "hanging in there" and continuing to support OCA, when there are actually other RVs that would be a better financial investment at this point.
May, is a long way off.
Quote from: Greekwatchdog on Jan 30, 2025, 11:11 AMNew CEO, same shite. They forget who owns the business. The Shareholders.
Quote from: Greekwatchdog on Jan 30, 2025, 11:11 AMNew CEO, same shite. They forget who owns the business. The Shareholders.
The only time they have ever remembered who owns the company is when they have to, when they hand around the begging bowl and B.S. investors about an eps accretive acquisition.
I had a very pleasant lunch on Tuesday at "The Russley Village" [Bespoke,Upscale & Personalised Care] with a couple of current ,and a couple of retired booksellers, and an lovely retired rep. .
Our host was still a little sad as 6 residents had died so far this year.One lovely lady had danced the night away before moving to the big dance floor in sky in her sleep.
I wondered why The Russley Village had been advertising so much.
However they are not alone, as The Press and The Star appear to be only staying in because of the retirement villages together with Harvey Norman advertising.
Therefore it appears supply still far exceeds demand,and will stay that way for perhaps another year or two.
Well this is really disappointing. If cutting care hours is Suzanne's answer to improving care revenue, I am not impressed.
Lady Allum Retirement Village in Milford.
NZNO members and supporters took action for safe staffing in response to proposed roster changes made by Oceania. The proposed roster changes will affect caregiver hours at the facility which will reduce take home pay for caregivers and may negatively affect residents.
Quote from: Untamed on Jan 31, 2025, 12:33 PMWell this is really disappointing. If cutting care hours is Suzanne's answer to improving care revenue, I am not impressed.
Lady Allum Retirement Village in Milford.
NZNO members and supporters took action for safe staffing in response to proposed roster changes made by Oceania. The proposed roster changes will affect caregiver hours at the facility which will reduce take home pay for caregivers and may negatively affect residents.
So - if you would sit in Suzanne's chair, what would you do?
Clearly - the care business is loss making. So, the only options she has to improve the situation are either to increase the fees for residents (no matter, which) or to reduce the cost to the business.
To reduce the cost she either can reduce the wages (though there are obviously contracts to consider) - or she can reduce the hours (and hope she can increase efficiency to make up for that).
Do you see any other option without squaring the circle?
I am sure she would be more than pleased to learn about an option allowing her to turn the business from loss maker into earning at least some profits - and at the same time keep everybody not just employed, but continue to keep rising their wages.
Quote from: BlackPeter on Jan 31, 2025, 01:52 PMSo - if you would sit in Suzanne's chair, what would you do?
I am not your "normal" OCA investor, because I chose this company
specifically because it was (at the time) the RV that appeared to be more aligned with my own passion for "care." I would never have invested in the company if it had not been. Having said that, if I were sitting in Suzanne's chair, I would have to ask myself (and the board) - does that focus still apply? If the answer is yes, then I would have to find better ways to increase care profitability, because reducing care hours, absolutely
will reduce the time caregivers spend with residents. They will become task focussed, not people focussed, and that is where the whole concept of "quality care" will start to go downhill.
QuoteClearly - the care business is loss making. So, the only options she has to improve the situation are either to increase the fees for residents (no matter, which) or to reduce the cost to the business.
To reduce the cost she either can reduce the wages (though there are obviously contracts to consider) - or she can reduce the hours (and hope she can increase efficiency to make up for that).
Do you see any other option without squaring the circle?
I don't have enough inside information to answer this. I would be looking at reducing costs in the area of back office staff, re-negotiating contracts for supplies such as continence products (assuming OCA meets that cost, not the resident. Standard rest homes meet that cost, and it is the second highest cost, after wages), cleaning supplies, laundry supplies etc. Staffing will
always be the biggest cost with care, and there is no getting around that, without lowering your standard of care.
QuoteI am sure she would be more than pleased to learn about an option allowing her to turn the business from loss maker into earning at least some profits - and at the same time keep everybody not just employed, but continue to keep rising their wages.
I know this was sarcasm, but I doubt Suzanne would be even remotely interested in anything we, as investors have to say. My recent interaction with whoever he was, demonstrated that much. OCA should keep in mind that in the event of a capital raise down the track, should it become necessary, we are the ones she will come to for that money. I don't have any money, so she won't get it from me, but even if I did, right now I still wouldn't contribute. I am losing faith in the company, and I can't believe I am saying this, but if someone offered me $1.40 - I'd more than likely sell. I was willing, and happy enough to give Suzanne a chance to turn things around, without compromising on their care focus. But I am feeling pretty damned disappointed now.
None of this has really answered your questions, but I'm not the one paid huge money to solve these issues. Suzanne and the board are. But if reducing care hours (or RN hours) is going to be their solution, they are no longer a company I am interested in supporting. If that is the case, I will be "out" as soon as it is financially viable for me to do so.
Quote from: Untamed on Jan 31, 2025, 02:13 PMI am not your "normal" OCA investor, because I chose this company specifically because it was (at the time) the RV that appeared to be more aligned with my own passion for "care." I would never have invested in the company if it had not been. Having said that, if I were sitting in Suzanne's chair, I would have to ask myself (and the board) - does that focus still apply? If the answer is yes, then I would have to find better ways to increase care profitability, because reducing care hours, absolutely will reduce the time caregivers spend with residents. They will become task focussed, not people focussed, and that is where the whole concept of "quality care" will start to go downhill.
I don't have enough inside information to answer this. I would be looking at reducing costs in the area of back office staff, re-negotiating contracts for supplies such as continence products (assuming OCA meets that cost, not the resident. Standard rest homes meet that cost, and it is the second highest cost, after wages), cleaning supplies, laundry supplies etc. Staffing will always be the biggest cost with care, and there is no getting around that, without lowering your standard of care.
I know this was sarcasm, but I doubt Suzanne would be even remotely interested in anything we, as investors have to say. My recent interaction with whoever he was, demonstrated that much. OCA should keep in mind that in the event of a capital raise down the track, should it become necessary, we are the ones she will come to for that money. I don't have any money, so she won't get it from me, but even if I did, right now I still wouldn't contribute. I am losing faith in the company, and I can't believe I am saying this, but if someone offered me $1.40 - I'd more than likely sell. I was willing, and happy enough to give Suzanne a chance to turn things around, without compromising on their care focus. But I am feeling pretty damned disappointed now.
None of this has really answered your questions, but I'm not the one paid huge money to solve these issues. Suzanne and the board are. But if reducing care hours (or RN hours) is going to be their solution, they are no longer a company I am interested in supporting. If that is the case, I will be "out" as soon as it is financially viable for me to do so.
Fair enough and I do understand your view, even if I don't share it.
BTW - my last paragraph was not sarcasm, but sure - a dose of irony was certainly added. I don't think that any individual CEO will be able to square this circle ... our society has a problem. We do have limited resources and we can't eat our cake and have it, too.
No country with a mediocre income and performance can afford to build the best free health system, the best education system, the best age care system, the best care for anybody impaired and for how long it takes, a defense force which allows to to navigate between dangerous autocratic sharks - and pay everybody top rates. One does not be a rocket scientist to see this does not fit - and at this stage NZ has neither of above, but I think we pay already too much for the social stuff. It will kill us.
We are at the limits of what our society is able to pay- and whether we found so far the best compromise to spread the crumbs, I doubt.
OK - but this is clearly for a different thread. Just wanted to say - while I don't know, whether Suzanne is the best CEO (or just good enough, or just another dud) - I do see her problem. She could however communicate better, this is something she could manage and she does it not well.
... and I guess just to make sure this discussion does not turn too dark, as an investor I do like the current TA, which I suppose means the markets seem to like what's happening in the company. SP passed the Golden Cross in September - and despite some wobbly plateauing since then it never dropped back below the MA200. Nice uptrend in January, and now the SP is above all relevant MA's with MA100 as well as MA50 above the MA200.
Another stock not effected by Dumps trade war?
With all those MAs as they are I suppose you could say OCA share price is in an uptrend eh Peter
Takeover on way?
Quote from: winner (n) on Feb 03, 2025, 10:15 AMWith all those MAs as they are I suppose you could say OCA share price is in an uptrend eh Peter
Takeover on way?
Good point. Seems to be the time for low ball offers. Investors better place their chips.
Beagle getting some stick in the other place for the timing of his OCA manouvers which made me laugh as he's possibly the only investor in N.Z. sitting on realised profits of over $100,000 which have been reinvested and now worth more than double that!
Quote from: Basil on Feb 05, 2025, 03:47 PMBeagle getting some stick in the other place for the timing of his OCA manouvers which made me laugh as he's possibly the only investor in N.Z. sitting on realised profits of over $100,000 which have been reinvested and now worth more than double that!
Nominal dollar figures really don't tell you much about an investors ability to allocate capital at high rates of return...
What would be more interesting to know would be your portfolio's CAGR over the last 5 years.
Most people in your position, would not have posted this. They would have simply read those posts, smiled to themself, then moved on with their day, without feeling the need to skite about it.
Just saying.
Quote from: Basil on Feb 05, 2025, 03:47 PMBeagle getting some stick in the other place for the timing of his OCA manouvers which made me laugh as he's possibly the only investor in N.Z. sitting on realised profits of over $100,000 which have been reinvested and now worth more than double that!
Just putting the record straight that's all. You'll note I haven't answered ValueNZ's question and there are good reasons for that which I won't expand on. You have a lovely day.
Quote from: Basil on Feb 07, 2025, 11:54 AMJust putting the record straight that's all. You'll note I haven't answered ValueNZ's question and there are good reasons for that which I won't expand on. You have a lovely day.
I mean that's my point, you haven't set the record straight at all. Jumping in and out of positions may have worked in this one particular case, but has it worked in aggregate?
Untamed just told me off for skiting.
I can't please everyone so I'm going to leave it at that.
Just received a second reply from OCA, in response to my follow up email at the end of January.
Hi Carren,
Thank you for your feedback. We appreciate your continued investment and involvement in Oceania.
For clarity, there has been no widespread fee structure amendments other than the regular indexing and upward review of weekly service fees, which is done annually. Changes to management fees on a portfolio basis would be regarded as material information that would be captured under our continuous disclosure obligations. Similarly, if the unit pricing had materially changed across the portfolio, we would update our investor base.
The work that was completed (which we signalled was underway in November) was a review of individual unit pricing across key development sites, and in aggregate there are no material changes. Specific pricing of our units is not public information and our customer base would not be able to quantify the pricing changes unless they had enquired on a specific unit last year and reignited interest this year.
The only additional information I can give you is that given the rule of averages, there was some revision in unit pricing down and some revision of pricing up which has supported our inhouse view on portfolio pricing. We are confident in our offering and that the portfolio is appropriately priced, and we will continue our strategic efforts to sell down stock using the tools available to us.
Please let me know if I can be of more assistance.
Kind regards,
Ryan
RYAN BIDDULPH, Corporate Finance Manager
Great they are confident with their pricing but if you don't mind me observing, we've heard that song before from them many times over.
At least the share price is holding at 80 cents just 1 cent above the IPO price 8 years ago. I suppose that's something. Probably best not to think about the last 8 years inflation and not wonder what the share price should be just to hold it's value in real inflation adjusted terms,(no return whatsoever, just hold it's value), or what it should be taking into account the capital raise years ago at $1.30 not forgetting no dividends for quite some time now and very modest unimputed ones before that. Not forgetting too, the opportunity cost of investing in OCA, what you could have made investing in SUM much better company.
Hard to belive loyal holders still think this company will generate great levels of wealth for them in the future when all that's been demonstrated in the last 8 years is this company is a capital destruction machine. Looks to me, all they are doing is rearranging the deck chairs on the Titanic.
Stockholm syndrome is alive and well on the NZX, no finer example of proof than this company.
Just as well the WAHS are going to win the NRL this year and everything going forward for OCA will be brilliant, or so some say...
Quote from: Basil on Feb 08, 2025, 06:23 PMGreat they are confident with their pricing but if you don't mind me observing, we've heard that song before from them many times over.
I don't mind you "observing" at all. And yep, I hear you.
QuoteHard to belive loyal holders still think this company will generate great levels of wealth for them in the future when all that's been demonstrated in the last 8 years is this company is a capital destruction machine. Looks to me, all they are doing is rearranging the deck chairs on the Titanic.
Stockholm syndrome is alive and well on the NZX, no finer example of proof than this company.
I don't disagree with any of that, but you do need to remember, that some of us cannot afford to sell at a loss, unless we are talking about an absolutely "dog" company, that is clearly going backwards. Someone like you, can probably afford to "wear" the occasional loss, and can take your money and move onto something
better else. I can't do that. As I have said recently, I'm not overly happy with the way things are tracking now either, and if and when there is a takeover offer, that is high enough for me to get out, I won't lose any sleep, or tears over accepting an offer. I invested in OCA for various reasons, but I'm not a blind loyalist. If those reasons for investing, no longer apply, or the company is no longer aligned with my personal principles with regard to aged care, I will have no problem pulling out, providing I can at the very least, break even. I don't have
blind loyalty to
anyone. So, contrary to what you probably believe, your Stockholm Syndrome analogy does not apply to me.
I
never believed OCA would generate wealth for me. I don't have enough money to ever get wealthy from investing. All I was ever looking to do, was to build a little extra financial security for my old age. I have actually done that (across my portfolio), despite small losses in some areas. Because the money I have invested over the last however many years, is money I
saved. I would never have saved that much, without the motivation to save, that investing gave me. So I have zero regrets about any of it. OCA may still manage to turn things around. I'm not holding my breath, especially given that they have now apparently rescinded on what they said at the last results presentation, that the next update would be March. Now they say, May. That is disappointing to say the least.
Anyway, to use a saying that I generally detest - "it is what it is" - and at this point some of us just have to stay the course, for at least a bit longer. We are not all the same, nor are we all "in the same boat."
Quote from: Basil on Feb 08, 2025, 06:23 PMGreat they are confident with their pricing but if you don't mind me observing, we've heard that song before from them many times over.
At least the share price is holding at 80 cents just 1 cent above the IPO price 8 years ago. I suppose that's something. Probably best not to think about the last 8 years inflation and not wonder what the share price should be just to hold it's value in real inflation adjusted terms,(no return whatsoever, just hold it's value), or what it should be taking into account the capital raise years ago at $1.30 not forgetting no dividends for quite some time now and very modest unimputed ones before that. Not forgetting too, the opportunity cost of investing in OCA, what you could have made investing in SUM much better company.
Hard to belive loyal holders still think this company will generate great levels of wealth for them in the future when all that's been demonstrated in the last 8 years is this company is a capital destruction machine. Looks to me, all they are doing is rearranging the deck chairs on the Titanic.
Stockholm syndrome is alive and well on the NZX, no finer example of proof than this company.
Just as well the WAHS are going to win the NRL this year and everything going forward for OCA will be brilliant, or so some say...
For the second time today I'll use a line from the Sailor.
I'm not interested in what has happened
but what will happen.It's simply not true to say the company has destroyed massive amounts of wealth either. In fact it has created massive amounts of shareholder wealth. I am not talking about the squiggly line at which people transact their shares. Price is not value.
Quote from: Untamed on Feb 08, 2025, 07:04 PMI don't mind you "observing" at all. And yep, I hear you.
I don't disagree with any of that, but you do need to remember, that some of us cannot afford to sell at a loss, unless we are talking about an absolutely "dog" company, that is clearly going backwards. Someone like you, can probably afford to "wear" the occasional loss, and can take your money and move onto something better else. I can't do that. As I have said recently, I'm not overly happy with the way things are tracking now either, and if and when there is a takeover offer, that is high enough for me to get out, I won't lose any sleep, or tears over accepting an offer. I invested in OCA for various reasons, but I'm not a blind loyalist. If those reasons for investing, no longer apply, or the company is no longer aligned with my personal principles with regard to aged care, I will have no problem pulling out, providing I can at the very least, break even. I don't have blind loyalty to anyone. So, contrary to what you probably believe, your Stockholm Syndrome analogy does not apply to me.
I never believed OCA would generate wealth for me. I don't have enough money to ever get wealthy from investing. All I was ever looking to do, was to build a little extra financial security for my old age. I have actually done that (across my portfolio), despite small losses in some areas. Because the money I have invested over the last however many years, is money I saved. I would never have saved that much, without the motivation to save, that investing gave me. So I have zero regrets about any of it. OCA may still manage to turn things around. I'm not holding my breath, especially given that they have now apparently rescinded on what they said at the last results presentation, that the next update would be March. Now they say, May. That is disappointing to say the least.
Anyway, to use a saying that I generally detest - "it is what it is" - and at this point some of us just have to stay the course, for at least a bit longer. We are not all the same, nor are we all "in the same boat."
The price you paid is irrelevant to whether you should hold your shares at today's prices. Ergo not selling because you would realise a loss is simply irrational.
Great post other than that. I also have found investing a great motivator to be frugal and work hard, finally starting to see some fruit bearing from that.
Quote from: ValueNZ on Feb 08, 2025, 08:13 PMThe price you paid is irrelevant to whether you should hold your shares at today's prices. Ergo not selling because you would realise a loss is simply irrational.
In your opinion maybe. But as I said, we are not all the same, and neither are our situations. MY situation is
very different to yours. I am also a hell of a lot older than you, so I do not have the luxury of time, to wait indefinitely for
any company to provide me with a return, whether that be dividends or capital gain. So, I disagree with you. My average buy in price absolutely
does have a bearing on whether I can sell at any given point, assuming I wanted to. I have sold out of companies that were, in my opinion, going nowhere, in the past. At a small loss. Which was the right decision for me at the time. Had I continued to hold, the value of those holdings would be worth next to nothing now. OCA is not in that category. I have no doubt that OCA will eventually come right, but whether I want to leave my investment tied up for too many more years, hoping to make a decent capital gain, remains to be seen. Probably not. As Basil has said, and its not often that he and I agree, but I do in this instance, sometimes, at some point, one has to think about the wisdom (or not) of tying up money in a company that is no longer paying dividends, and a share price that continues to be less than my average buy in price. Retirement is looming, I own no property (in case you are not aware, I live in my caravan), so I need to seriously think about what is the best thing to do with what little I have in the way of investments. Which, by the way, is miniscule - my total portfolio is only worth around $30,000. Small bikkies compared to yours, or anyone else's here. I guess the point I'm trying to make is, always remember, that one size does not fit all. You are young and I am really impressed with what you are doing/achieving, but you sometimes come across as "cocky." Sailor Rob is very knowledgeable and a savvy investor from what I can tell, but he is a grumpy bastard, and that gets people's backs up, often. So just be yourself. Learn from him, but don't adopt his personality. One grumpy bastard is more than enough ;)
QuoteGreat post other than that. I also have found investing a great motivator to be frugal and work hard, finally starting to see some fruit bearing from that.
Had I started at your age, I'd be home and hosed by now. No question. Hindsight is a wonderful thing.
Quote from: Untamed on Feb 08, 2025, 08:30 PMIn your opinion maybe. But as I said, we are not all the same, and neither are our situations. MY situation is very different to yours. I am also a hell of a lot older than you, so I do not have the luxury of time, to wait indefinitely for any company to provide me with a return, whether that be dividends or capital gain. So, I disagree with you. My average buy in price absolutely does have a bearing on whether I can sell at any given point, assuming I wanted to. I have sold out of companies that were, in my opinion, going nowhere, in the past. At a small loss. Which was the right decision for me at the time. Had I continued to hold, the value of those holdings would be worth next to nothing now. OCA is not in that category. I have no doubt that OCA will eventually come right, but whether I want to leave my investment tied up for too many more years, hoping to make a decent capital gain, remains to be seen. Probably not. As Basil has said, and its not often that he and I agree, but I do in this instance, sometimes, at some point, one has to think about the wisdom (or not) of tying up money in a company that is no longer paying dividends, and a share price that continues to be less than my average buy in price. Retirement is looming, I own no property (in case you are not aware, I live in my caravan), so I need to seriously think about what is the best thing to do with what little I have in the way of investments. Which, by the way, is miniscule - my total portfolio is only worth around $30,000. Small bikkies compared to yours, or anyone else's here. I guess the point I'm trying to make is, always remember, that one size does not fit all. You are young and I am really impressed with what you are doing/achieving, but you sometimes come across as "cocky." Sailor Rob is very knowledgeable and a savvy investor from what I can tell, but he is a grumpy bastard, and that gets people's backs up, often. So just be yourself. Learn from him, but don't adopt his personality. One grumpy bastard is more than enough ;)
Apologies if I come across as cocky. But what I said holds up. If you're required to sell to pay for something then the buy price is still irrelevant, you just take the price the market gives you. Even if it's lower. That's just the risk you take on by having a relatively short investing horizon.
Other than that a decision to sell should be on the basis of value.
If I buy a dollar for 10c and it rises to 50c should I sell because I just 5xed my money? Nope, you'd be selling a dollar for 50c.
Quote from: Untamed on Feb 08, 2025, 08:30 PMHad I started at your age, I'd be home and hosed by now. No question. Hindsight is a wonderful thing.
I am incredibly privileged, no doubt about it.
I wish you the best.
I'm with vnz.
If your money can work harder for you elsewhere, within your risk tolerance that's where it should be regardless of average purchase price
If it cant work harder elsewhere then thats great!
I have sold a few loss makers that have FINALLY turned around but like to think the best lessons aren't free and we learn as we go..
On oca, does anyone know roughly how many sales they'd need to make at the helier to break even.
Quote from: ValueNZ on Feb 08, 2025, 09:16 PMIf you're required to sell to pay for something then the buy price is still irrelevant, you just take the price the market gives you. Even if it's lower. That's just the risk you take on by having a relatively short investing horizon.
That's an entirely different scenario. I'm not talking about selling shares to pay for something. I'm talking about needing to consider whether staying invested in OCA, is the best use of what money I have, given that OCA is providing me with literally
nothing right now. No dividends, and no capital gain (on paper currently). So Basil is right (don't gloat ;) ) - one does have to wonder just how long we are going to have to wait with this company.
Having said that, I don't
need to sell, so why would I choose to sell at a loss? I don't have disposable income for investing now, beyond what I already hold. So I cannot wear a loss, as easily, or as painlessly, as some of you probably can.
But I do have to face the reality that I could be dead before I get any return from OCA.
P.S. I'm really not doing a good job of explaining this
sometimes a share can turn around due to the market getting a lift and you can sell out at cost or even better a profit..
a case in point is ANZ and WBC... both hit by the investigations back in 2017 into improper business operations.
Today both these stocks are back where they were and even higher than in 2016..
now this might been seen as exceptional due to buy backs..
a weak KIWI means that OCR may in fact take longer to come down..
but if inflation in tamed in a year or two and the OCR comes back down and the government does something to help this sector an investor can rotate out...
Unfortunately the writing was on the wall for this sector a while ago and this companies complex accounting made it difficult to see the real picture...
its always very difficult to make these decisions but the best thing is to model the possible loss in a spreadsheet and model investing in other companies to see when your investments turn from debits to credits..
The growing role of nurse practitioners (https://newsroom.co.nz/2025/01/29/transforming-healthcare-the-growing-role-of-nurse-practitioners-in-nz/), an interesting insight to OCA's nursing staff model
There are now five OCA facilities cutting staffing hours:
https://www.rnz.co.nz/news/national/541822/slashed-staffing-hours-trigger-protest-at-auckland-aged-care-home?fbclid=IwY2xjawIbMb9leHRuA2FlbQIxMQABHbsAh7XjvmbAJ348KlSP_7_pycqTduvT7PIAoQ4M3_09zZoe3dmimnbk4g_aem_Ucv1Neq5NIZc7-WpwMsWnQ
Funny how, so far, cuts to staffing hours is apparently the only cost-cutting measure Suzanne has taken.
Bring on the takeover offer. I am no longer interested in this company.
Quote from: Untamed on Feb 14, 2025, 09:18 AMThere are now five OCA facilities cutting staffing hours:
https://www.rnz.co.nz/news/national/541822/slashed-staffing-hours-trigger-protest-at-auckland-aged-care-home?fbclid=IwY2xjawIbMb9leHRuA2FlbQIxMQABHbsAh7XjvmbAJ348KlSP_7_pycqTduvT7PIAoQ4M3_09zZoe3dmimnbk4g_aem_Ucv1Neq5NIZc7-WpwMsWnQ
Funny how, so far, cuts to staffing hours is apparently the only cost-cutting measure Suzanne has taken.
Bring on the takeover offer. I am no longer interested in this company.
Your passion for the industry is compelling, however the time has come for changes. I am ok with this as long as they do not compromise the quality of care they the residents require.
Whilst there are disgruntled staff they tend to be pissed because changes like this cost them. Could they run leaner and become more efficient with a reduced work force? Has the occupancy fallen? Are staff numbers high still because of Covid?
Ultimately OCA Management need to improve the performance of the business and they believe they can without compromising quality of care. Time will tell.
Whilst you are obviously pissed with the decision, your willingness to see another NZ Asset to foreign Invader is disappointing especially given MET and ARV were sold off cheaply.
We are all here to get a return on our money and frankly OCA have been disappointing with the returns on our dollars over the last 4 years, yes given that Covid hit them the hardest. Excuses I am over.
Time to start making money for the shareholders, just not employing people for the hell of it. Starting to make this sound more like an inept over bureaucratic Government agency which OCA is not.
Quote from: Greekwatchdog on Feb 14, 2025, 10:06 AMUltimately OCA Management need to improve the performance of the business and they believe they can without compromising quality of care. Time will tell.
Once, I would have given them the benefit of the doubt on this. But my experience and gut instinct tells me that cutting care staff (in particular) absolutely
will have an impact on residents. Sure, they will probably still get their showers, assistance with dressing and toileting, but "care" is a hell of a lot more than simply personal care tasks. OCA stated in that article that they will still be meeting government guidelines for staffing levels. Those of us in the know, understand that those guidelines are just that - guidelines - which were created some years ago. There is currently an ongoing campaign for "Safe Staffing Levels" with submissions already made to government, asking for regulated staffing levels, not just guidelines. The current guideline levels are inadequate and below what is considered "safe staffing levels." So OCA's assurance that they are still meeting the guidelines, are meaningless.
If people simply want Mum or Dad clean, and fed, sure - go ahead and cut staffing levels. But if you want more than that for your parent, reduced staffing levels should concern you.
QuoteWhilst you are obviously pissed with the decision, your willingness to see another NZ Asset to foreign Invader is disappointing especially given MET and ARV were sold off cheaply.
Yep, I agree. I am
disappointed in myself for now being open to a takeover. Go back through my many posts on OCA and you will see that a takeover has always been the very last thing I ever wanted. I will publicly admit, here and now, that in hindsight, I should have never invested in the RV sector. It is a sector that is "too close to home" and yes, I also admit to becoming emotionally invested in OCA. So, I have nobody to blame but myself.
QuoteWe are all here to get a return on our money and frankly OCA have been disappointing with the returns on our dollars over the last 4 years, yes given that Covid hit them the hardest. Excuses I am over.
Time to start making money for the shareholders, just not employing people for the hell of it. Starting to make this sound more like an inept over bureaucratic Government agency which OCA is not.
Nobody in this sector is employing people just for the hell of it. Well not the staff on the ground anyway.
Many care homes have cut staff hours and the biggest cuts are not to nursing staff, mainly support like activities, cleaners, laundry and maintenance. I have family working in one unlisted company. What they actually do with care is reduce minimum hours and offer extra shifts or employ casuals on an as needed basis. If you saw how much maternity leave these places are handing out, it's almost like the place to work when you plan on having kids, I have heard of people coming back 6 months pregnant.
Before this was listed under private equity ownership they were making $19.5k EBITDA per annum per care bed.
8 years into the transformation program that was supposed to lift returns on care they are now making $8.5k EBITDA, less than half.
Worse, in inflation adjusted real terms compared to $19.5k 8 years ago, they are only making approx one third of what they used to make. That's seriously messed up. No surprise to me that the new CEO is trying to clean up that mess to some degree.
Of course it would be lovely if staff had heaps of time to talk to lonely old people for longer than while they are attending to their physical needs but we don't live in a perfect world.
Quote from: Basil on Feb 14, 2025, 11:18 AMBefore this was listed under private equity ownership they were making $19.5k EBITDA per annum per care bed.
8 years into the transformation program that was supposed to lift returns on care they are now making $8.5k EBITDA, less than half.
Worse, in inflation adjusted real terms compared to $19.5k 8 years ago, they are only making approx one third of what they used to make. That's seriously messed up. No surprise to me that the new CEO is trying to clean up that mess to some degree.
Of course it would be lovely if staff had heaps of time to talk to lonely old people for longer than while they are attending to their physical needs but we don't live in a perfect world.
So - at the moment we seem to have some people who want Platinum care for everybody, but unfortunately clients and state seem only to be prepared to pay for Bronze.
Here might be a solution: OCA (and other care providers) could, and I think should cost a standard care program which is sufficient to satisfy the legal requirements ... and offer a top-up solution (as many levels as you like: Silver, Gold or Platinum care) with the customer choosing (and paying) whatever option suits them.
Asking for the Rolls, but only prepared to pay for the Mini clearly does not work.
What about that?
Makes sense mate and that's what they're doing at the Helier with privately funded care operations that have no link whatsoever to state funding. $3,500 per week "theoretically" gets you Rolls Royce service. Not sure if there's an upfront capital cost to buy the Rolls as well, probably.
Quote from: Basil on Feb 14, 2025, 11:18 AMOf course it would be lovely if staff had heaps of time to talk to lonely old people for longer than while they are attending to their physical needs but we don't live in a perfect world.
I genuinely hope you never find yourself in a position where you have to experience that "imperfect" level of care.
Quote from: Untamed on Feb 14, 2025, 01:48 PMI genuinely hope you never find yourself in a position where you have to experience that "imperfect" level of care.
Is thats OCA's problem? If the state are not going to help as much as you have been saying it should why should OCA be burden with it?
Sadly times have changed and OCA have a new CEo with a new agenda. Its like a hotel, there is a cycle from to many employees and PR to cuts and stabilse to make money and we now are at payback for shareholders..
Quote from: Greekwatchdog on Feb 14, 2025, 02:01 PMIs thats OCA's problem? If the state are not going to help as much as you have been saying it should why should OCA be burden with it?
Sadly times have changed and OCA have a new CEL with a new agenda. Its like a hotel, there is a cycle from to many employees and PR to cuts and stabilse to make money and we now are at payback for shareholders..
I didn't invest in a hotel complex. So excuse me for no longer wanting to be part of a company that sold itself (and prized itself) on being "focussed on quality care."
Oh, and btw, people here have been harping on about a takeover, for years, but when
I decide I am now willing to support one (at the right price)
I'm suddenly the bad guy, and the one you are disappointed in for supporting a foreign takeover?
Why I even let that bother me, is beyond me.
Have a lovely weekend everyone.
Quote from: Untamed on Feb 14, 2025, 01:48 PMI genuinely hope you never find yourself in a position where you have to experience that "imperfect" level of care.
The standard of care funded by the Govt is, to use BP's analogy, a bronze service. I belive in user pays. If you want a silver, gold or platinum service you should pay for that yourself. One of OCA's biggest problems is they have been trying to provide gold standard service with bronze level funding.
This will be my last post, but I just saw this article by NZNO, on Facebook. Regardless of what any of us believe or what our individual perspectives are, on OCA or the RV sector in general, articles like this do not help their cause. They will simply add weight to the public's general perception that RVs are all greedy, uncaring corporates. Sharing for your information only.
https://kaitiaki.org.nz/article/oceania-healthcare-company-books-in-good-shape-but-workers-face-more-struggles/?fbclid=IwZXh0bgNhZW0CMTEAAR2i7DjphUxAfZnryihNCUUdk7S3MvOAsyfzaxdthrbBfdmmt1hE7PR6Tok_aem_ut2TCUIJRRX9pkC5V8p8HA
Oceania Healthcare national operations manager Jodie Schorn told RNZ that discussions with unions and staff were still ongoing.
She said their objective was ensuring fair shift allocation while maintaining high-quality care.
"We reject any suggestion that these changes will impact the quality of care our residents receive."
Seems totally reasonable to me. Oceania as an entity is not run for the benefit of nurses. If the board believes that they can cut hours without impacting care (at least too much) then I support their decision 100%.
Quote from: Untamed on Feb 14, 2025, 02:17 PMI didn't invest in a hotel complex. So excuse me for no longer wanting to be part of a company that sold itself (and prized itself) on being "focussed on quality care."
At the end of the day OCA is a profit maximising entity run for it's shareholders, as it is required to be. If cutting hours has a major impact on care then obviously it's probably a bad management decision as fewer people choose to move into OCA villages.
But they believe they can cut care hours without impacting care quality too much. So they should do exactly as they are doing.
Quote from: Untamed on Feb 14, 2025, 10:30 AMOnce, I would have given them the benefit of the doubt on this. But my experience and gut instinct tells me that cutting care staff (in particular) absolutely will have an impact on residents. Sure, they will probably still get their showers, assistance with dressing and toileting, but "care" is a hell of a lot more than simply personal care tasks. OCA stated in that article that they will still be meeting government guidelines for staffing levels. Those of us in the know, understand that those guidelines are just that - guidelines - which were created some years ago. There is currently an ongoing campaign for "Safe Staffing Levels" with submissions already made to government, asking for regulated staffing levels, not just guidelines. The current guideline levels are inadequate and below what is considered "safe staffing levels." So OCA's assurance that they are still meeting the guidelines, are meaningless.
This is well argued and you may be right.
I guess the key thing to understand is even if they run a slight loss on the day to day stuff like care it's not the end of the world as they are really a property development business at heart.
The way I see it is the rate at which human resource costs have been rising in recent years has been truly alarming, all the more so in the context of very modest unit sales and very small increases in care revenue.
At an operational level they have been burning through tens of millions in cash per annum which is unsustainable going forward. What they are attempting to do with their cost out program is absolutly vital for the company's survival.
In time, there is a chance it makes the company an investment proposition again.
In the meantime, my view remains that management have an enormous amount of work to do in terms of proving the market is really accepting of the type of units they're building. They've poured a lot of resource Into their highly focused sales program. Will that deliver an improved sales performance?
Time will tell but the time for excuses is over
Yes Basil since listing people costs have been rising at a significantly higher rate than revenues and other operating expenses don't look too flash either ..and that's happened even though care %age has reduced
Only time will tell if they manage to put in decent fix
No wonder trades a big discount to NTA
None of you seem to get it. Across the board, in the whole sector, contracts have been cut, to minimum hours. So, if you had 37.5 in your contract you now have 30 but chances are you're doing 40, I believe the max allowed is 80 per fortnight. Like regulations for drivers there are max hours allowable. The extra hours are on offer on a casual basis. It is more about efficiency than just saving money on hours. The cuts also coincided with a pay rise which was back dated.
If OCA made another 70M, why is it in the doldrums? Bombastic headlining for affect in that article. To be honest I have never been inside an OCA facility but I have been in many other companies, and they are all playing the same tune.
I get it. The care sector has become ever increasingly underfunded, which is exactly why OCA is struggling to get any return on its care assets.
The market has quite rightly priced OCA at a big discount to theoretical NTA because it believes the care side of their business, when you factor in an appropriate share of head office costs is losing the company tens of millions per annum.
Sluggish care suite sales over the years have not been effective In enabling the company to lift its returns and that explains why the share price is moriboind around it's IPO price 8 years ago, (down approx 30% in real inflation adjusted terms inclusive of capital subsequently raised after the IPO)
I haven't put this chart of OCA share price as %age of SUM share price up for a while so here goes.
Says (amazingly) the trend is still in place
Essentially says that over time for nearly 8 years the SUM share price has outperformed OCA share price.
Had to change the y-axis because the current %age is the lowest it's ever been. (Based on monthly closes that is).
You'd think the line can't keep going down forever eh ...maybe that's a BUY OCA signal....might be a big final spike up when that $1,20 takeover comes in.
Whatever I find such trends intriguing ...esp. ones that last last so long counter to popular opinion.
IMG_6091.png
since the actual BM is probably worthless...
whats the land and buildings worth?
The trend remains intact as I have been predicting it would for years.
No surprises as far as I am concerned lol
People saying it's a takeover prospect convientiently overlook the fact it's been overlooked twice already. Once when MET was taken over and then again when ARV were taken over.
Suppose third time lucky is what some are hoping for like the WAHS fans hoping they will win the NRL this year. This is our year. UP THE WAHS LOL
Quote from: Basil on Mar 03, 2025, 07:10 PMPeople saying it's a takeover prospect convientiently overlook the fact it's been overlooked twice already.
Who are you referring to? The most prolific 'fan' taking about takeovers here is winner.
Quote from: winner (n) on Mar 03, 2025, 06:35 PMI haven't put this chart of OCA share price as %age of SUM share price up for a while so here goes.
Says (amazingly) the trend is still in place
Essentially says that over time for nearly 8 years the SUM share price has outperformed OCA share price.
Had to change the y-axis because the current %age is the lowest it's ever been. (Based on monthly closes that is).
You'd think the line can't keep going down forever eh ...maybe that's a BUY OCA signal....might be a big final spike up when that $1,20 takeover comes in.
Whatever I find such trends intriguing ...esp. ones that last last so long counter to popular opinion.
Quote from: winner (n) on Feb 03, 2025, 10:15 AMWith all those MAs as they are I suppose you could say OCA share price is in an uptrend eh Peter
Takeover on way?
Quote from: winner (n) on Sep 20, 2024, 01:16 PMOpal owners been looking for somebody to buy them for a while
Maybe Oceania is also looking for a suitor
Winner seems pretty keen on a takeover.
Quote from: Ferg on Mar 03, 2025, 07:53 PMWho are you referring to? The most prolific 'fan' taking about takeovers here is winner.
There's been a few in recent months, some on this channel and others on the other one. They might like to have a look at the operational cash burn of OCA. That would make any potential suitor run a mile.
You still hanging in with this perennial underperformer Ferg ?
Quote from: Basil on Mar 03, 2025, 07:10 PMThe trend remains intact as I have been predicting it would for years.
No surprises as far as I am concerned lol
Please spare us your self praise.
It seems to me the most prolific poster on the subject of a takeover is winner. I'm happy to be proved wrong. I have seen other odd posts recently on this subject, but talk of a takeover seems to be a figment of winner's imagination.
Quote from: Basil on Mar 03, 2025, 09:09 PMYou still hanging in with this perennial underperformer Ferg ?
As an investment, it's not underperforming for me. I didn't buy at the time of IPO like others; my average cost is significantly lower. I think I have said this previously but it is neither my largest position nor the one that keeps me up at night.
Lately we have seen a good sales result from SUM and a poor sales result from RYM. Time will tell if Ryman's issues are Ryman's alone or if SUM is doing well in a soggy environment and what that means for OCA. What was survive until '25 has become survive through '25 for many...!
Quote from: Basil on Mar 03, 2025, 09:09 PMThere's been a few in recent months, some on this channel and others on the other one. They might like to have a look at the operational cash burn of OCA. That would make any potential suitor run a mile.
How do you feel about the "operational cash burn" of SUM
Quote from: Ferg on Mar 04, 2025, 09:03 AMAs an investment, it's not underperforming for me. I didn't buy at the time of IPO like others; my average cost is significantly lower. I think I have said this previously but it is neither my largest position nor the one that keeps me up at night.
Underperforming the rest of my portfolio for me but not negative. All good though, I don't mind what happens to the SP as long as the company grows year over year. Which contrary to what some say, it definitely is.
Quote from: ValueNZ on Mar 04, 2025, 10:11 AMHow do you feel about the "operational cash burn" of SUM
I don't own any SUM so have not looked into it. They have a long and highly credible track record of growing earnings unlike all others in this sector.
Ferg, you must be one of the very few not underwater. Good luck with it. For me, Winners post #1693 sum's up very "graphically" what an absolute disaster this has been compared to the best of breed. As different as chalk and cheese.
Quote from: Basil on Mar 04, 2025, 12:56 PMFerg, you must be one of the very few not underwater. Good luck with it.
Thanks. I tend not to post what I am doing given I often have the reverse Midas touch. No point in me broadcasting my occasional awful timing!
But when the OCA price starts with a 5, IMO it's in oversold territory. I know others who are in a similar position who also loaded up then. As ValueNZ says it's not performing as well as other potential investments but it's all swings and roundabouts.
I say let's get some actual news so we can all discuss the facts rather than conjecture.
Quote from: Ferg on Mar 04, 2025, 01:44 PMThanks. I tend not to post what I am doing given I often have the reverse Midas touch. No point in me broadcasting my occasional awful timing!
I like your humility mate. I don't think anyone gets it right every time, but I like to think with some analytical skills I get it right most of the time.
Quote from: Ferg on Mar 04, 2025, 01:44 PMBut when the OCA price starts with a 5, IMO it's in oversold territory.
History suggests a "5" handle is a good opportunity to open a "trading position". Long term, SUM has proven its blue chip status as a company that consistently grows profits in good times and bad, something OCA has never done in either good times or bad.
Quote from: Ferg on Mar 04, 2025, 01:44 PMI say let's get some actual news so we can all discuss the facts rather than conjecture.
What happened to the talk by one devoted holder that they were going to report sales results quarterly?
Quote from: Basil on Mar 04, 2025, 04:39 PMWhat happened to the talk by one devoted holder that they were going to report sales results quarterly?
I'm not 100% sure of the origin of that and I had heard about it....whether there has been a change of heart or the person who said it did not have the approval of the Chair .... possibly? Or maybe the numbers are rubbish. I honestly don't know. I might need to re-read the meeting transcript to see if we interpreted that correctly but that is a bit of a mystery.
I am in 2 minds about quarterly reporting. I like the idea of quarterly updates given it removes some of the information asymmetry that exists between Directors who are shareholders and other shareholders. However, having had to go through US quarterly reporting in a previous life, it is an awful process. Plus some CEOs/CFOs will take it upon themselves to smooth results (HGH comes to mind re smoothing) so you start to take quarterly financials with a grain of salt. Also, as you cut something into smaller and smaller time slices, you have potential swings and variations......and the market can react to deviations from expectation.....even if it's just a timing difference. In an odd way, supplying more information can result in more volatility in the SP.
So I'm on the fence with quarterly reports/updates - nice to have but not crucial IMHO. Insofar as the OCA quarterly sales - this would be a new thing for OCA, and I have no idea if it is real or not given I am struggling to find the origin of it.
[edit] I'm starting to wonder if it was either hearsay or wishful thinking. Can you recall where you first heard it?
https://www.nzx.com/announcements/447846
Oceania Healthcare Limited (NZX: OCA) today announced a market update outlining progress made during 2H25 across key strategic areas of the business.
Banking syndicate reaffirms support
A refinance of debt facilities was successfully completed on 4 March 2025. Good demand from existing and new lenders resulted in the addition of a new syndicate member, optimal pricing, extended tenor and no change to covenants. The Group has no requirement for additional capital or bank borrowings.
Improving sales momentum
Sales are improving with new sales volumes +29% and resales volumes +6% in 3Q25 vs 3Q24, with pleasing sell down progress at The Helier (Auckland), now 34% occupied, and the newly completed apartment developments at Waterford (Auckland) and Awatere (Hamilton).
Oceania's CEO Suzanne Dvorak noted "We have a clear priority to continue to increase our sales cadence. Unsold stock remains our biggest lever to reduce debt."
Developments
A more flexible short term development pipeline provides a focus on reducing gearing while balancing continued growth.
Portfolio transition
Development completions and continued divestment of non core sites are transitioning the portfolio toward a >50% retirement portfolio mix, currently 54% care / 46% ILU, with a focus on premium offerings and amenities.
Business Optimisation
A centralised dedicated team is being established to support the delivery of long term savings expected to be in the range of $10-15m annually, reflecting the right sizing of support functions in light of divestments. The $5m annualised cost right sizing program signaled at HY25 has been completed with benefits to be realised from FY26.
With changes to the certification pathways for overseas nurses recently introduced, a decision has been made to close the Wesley Institute of Nursing Education, with March 2025 being the final intake.
Wow....happy to be proved wrong on the quarterly update. See what I mean about the reverse Midas touch? Maybe I will stop posting. ;D
Volumes for Q3 up 13% on same period last year. Q3 looks to be a seasonally low period for volumes, being pre-Xmas. Volumes for the 9 months are up 4.5%. Debt tenure has been extended out by 3 years. No capital raise needed.
https://www.nzx.com/announcements/447845
Oceania Healthcare Limited (NZX: OCA) is pleased to announce that it has extended the maturity of its bank debt facilities to three and five years and introduced a new lender to the syndicate with financial close to occur on 1 May 2025.
Oceania Chief Financial Officer Kathryn Waugh said, "we are pleased with the ongoing support of our lenders and the changes provide OCA with extended tenor, optimal pricing and no change to financial covenant metrics which reflects a strong market appetite for the business". Mrs Waugh acknowledged the ongoing support of syndicate members ANZ, ASB and ICBC and the introduction of BNZ to the syndicate.
With strong appetite from lenders, and no requirement for additional capital, the total limit of bank facilities will remain at $500 million. The split between facility limits remains as $235 million of core facilities and $265 million of development facilities. The current weighted average tenure of total debt facilities has been extended to 4.8 years, with $50 million maturing 30 April 2028, and $450 million maturing 30 April 2030.
As at 30 September 2024, total net debt headroom was $96 million which provides prudent headroom to allow for the execution of current and future development plans.
This announcement has been authorised for release by Oceania's board of directors
looks like land and buildings comes to the rescue...
Commercial property stocks should therefore get a kick up later this year or next...
NZ investors are probably going to continue to support L&B investments ...
something went badly wrong with RYM... maybe OCA will not follow suit..
Quote from: Waltzing on Mar 05, 2025, 10:19 AMlooks like land and buildings comes to the rescue...
Commercial property stocks should therefore get a kick up later this year or next...
NZ investors are probably going to continue to support L&B investments ...
something went badly wrong with RYM... maybe OCA will not follow suit..
Go look at how many apartments they brought to market at once and how long they take to sell down. RYM also had a lot of other things going on as well which has been well covered already
I'm glad to see they carried through with providing a market update, hopefully this will continue.
The detail is in a presentation linked in the market update. There's some excellent progress here https://api.nzx.com/public/announcement/447846/attachment/439003/447846-439003.pdf
Highlights for me are:
- very +ve new sales and resales (noting Q3 is usually a bit slow)
- debt restructured at favourable rates and longer dated
- NO cap raise imminently required
- cost out making good progress and more to come
- development focused on brownfield extensions
- divestments progressing, more to come currently in negotiation
- newly opened sites selling well
Might be the last chance for some OCA in the $0.60's
Quote from: Sideshow Bob on Mar 05, 2025, 08:49 AMhttps://www.nzx.com/announcements/447846
Oceania Healthcare Limited (NZX: OCA) today announced a market update outlining progress made during 2H25 across key strategic areas of the business.
Banking syndicate reaffirms support
A refinance of debt facilities was successfully completed on 4 March 2025. Good demand from existing and new lenders resulted in the addition of a new syndicate member, optimal pricing, extended tenor and no change to covenants. The Group has no requirement for additional capital or bank borrowings.
Improving sales momentum
Sales are improving with new sales volumes +29% and resales volumes +6% in 3Q25 vs 3Q24, with pleasing sell down progress at The Helier (Auckland), now 34% occupied, and the newly completed apartment developments at Waterford (Auckland) and Awatere (Hamilton).
Oceania's CEO Suzanne Dvorak noted "We have a clear priority to continue to increase our sales cadence. Unsold stock remains our biggest lever to reduce debt."
Developments
A more flexible short term development pipeline provides a focus on reducing gearing while balancing continued growth.
Portfolio transition
Development completions and continued divestment of non core sites are transitioning the portfolio toward a >50% retirement portfolio mix, currently 54% care / 46% ILU, with a focus on premium offerings and amenities.
Business Optimisation
A centralised dedicated team is being established to support the delivery of long term savings expected to be in the range of $10-15m annually, reflecting the right sizing of support functions in light of divestments. The $5m annualised cost right sizing program signaled at HY25 has been completed with benefits to be realised from FY26.
With changes to the certification pathways for overseas nurses recently introduced, a decision has been made to close the Wesley Institute of Nursing Education, with March 2025 being the final intake.
we are busy with AI these days and dont get to notice this Company except what you investors report...
A healthy retirement sector is a good thing to have right? Over the next 10 years what is the prospect for these company's or is it just to hard for the government to figure out the regs...
lets face it if labour comes in again and we know they and the greens plus IWI cant count...
it just looks like commercial property is safer?
care is costly...and you cant do without it... warehouses can be automated, this sector not so much.
Quote from: Ferg on Mar 05, 2025, 09:06 AMVolumes for Q3 up 13% on same period last year. Q3 looks to be a seasonally low period for volumes, being pre-Xmas. Volumes for the 9 months are up 4.5%. Debt tenure has been extended out by 3 years. No capital raise needed.
Tomlinson seems to have learned that deeply discounted rights issues are very value destructive for shareholders so that's good. Considering how much extra stock they have on hand and that FY24 sales set such a low bar, I'm not sure the 4.5% increase for the nine months sales is really much good.
Divestment program of older care villages seems to be going okay. Helier sales still very slow in my opinion. 34% occupancy about 2.5 years after the Helier was launched is not something the company can be proud of. I am sure you can remember the days RYM villages sold out completely before they were actually delivered. Gosh, how much has the market changed over the years !
Shareholders who care about returns should be pleased with the new $10-15m cost out program, desperately needed and the best bit of news in the update in my opinion.
If I recall correctly, The Helier opened September 2023, so that's about 1.5 years. OCA have another 5 contracts in negotiation and expect occupancy increase to 39% in Q126 (that's the quarter beginning next month).
Good to see Awatere and Waterford starting to sell ORA's as well.
Marketing launch of the Helier started in 2022, from memory. I see from the presentation they have had to decrease the fees, = to 1% DMF per year. Said in very small print. It's not specified what this is, but it does say for the first 5 years. Maybe throwing in all their concierge and service fees for nothing for the first 5 years, who knows? If the average unit is $2m, that's $20,000 per annum in lower fees. It would seem the very high weekly operating fee originally asked at the Helier has met with considerable customer resistance.
Bottom of page 3 of the prsentation
Quote1. Discontinued an additional fee charged at the Helier which was the equivalent of 1% of annual DMF per annum over the first 5 years of the residents tenure.
Quote from: Basil on Mar 05, 2025, 10:54 AMShareholders who care about returns should be pleased with the new $10-15m cost out program, desperately needed and the best bit of news in the update in my opinion.
I speak Beagle and believe this roughly translates to "BBB" (Beagle busy buying)
In all seriousness, the focus on cost cutting is very welcome. Very satisfactory update.
Well done, Suzanne.
Quote from: Buzz on Mar 05, 2025, 11:08 AMIf I recall correctly, The Helier opened September 2023, so that's about 1.5 years. OCA have another 5 contracts in negotiation and expect occupancy increase to 39% in Q126 (that's the quarter beginning next month).
Good to see Awatere and Waterford starting to sell ORA's as well.
Correct - though some records say August 2023, but this is just one month.
https://www.nzherald.co.nz/business/companies/aged-care/watch-first-look-inside-150m-st-heliers-retirement-village/MPWYCFVRNBGOHLWQZUGNIX54IM/
Actually - given that it typically takes something like 4 to 5 years to fill such a project are they by selling 26% pa even slightly ahead of plan!
Well done OCA, given that they started selling in the middle of a property crisis.
Quote from: allfromacell on Mar 05, 2025, 11:21 AMI speak Beagle and believe this roughly translates to "BBB" (Beagle busy buying)
LOL but no. In my opinion this is a very lukewarm result in terms of lifting sales numbers 4.5% year to date considering the vast amount of stock they have had on hand all year and that's comparing sales to FY24 which were very weak. Huge amount of work to do on the sales front in my opinion and I suspect the increase in sales is ILU units and there remains a vast amount of old stock in the form of care suites remaining on the market. Debt extension was good, they'll need that. No idea why they would close the nursing school when its contributing over $5m to EBITDA. On the face of it, that seems like a very strange decision.
Quote from: Basil on Mar 05, 2025, 11:29 AMNo idea why they would close the nursing school when its contributing over $5m to EBITDA. On the face of it, that seems like a very strange decision.
$5m EBIT
DA. Graduate nurses depreciate very rapidly at Oceania. One year on zite 'vork experience' and zhey are off vor better pay in ze hospital zystem.
RB
Quote from: Basil on Mar 05, 2025, 11:19 AMMarketing launch of the Helier started in 2022, from memory. I see from the presentation they have had to decrease the fees, = to 1% DMF per year. Said in very small print. It's not specified what this is, but it does say for the first 5 years. Maybe throwing in all their concierge and service fees for nothing for the first 5 years, who knows? If the average unit is $2m, that's $20,000 per annum in lower fees. It would seem the very high weekly operating fee originally asked at the Helier has met with considerable customer resistance.
Bottom of page 3 of the prsentation
DMF wouldn't be 2m, it'd cap at 30% of selling price
So maybe 2*0.3*0.01
gosh that a lot of posting to keep up with... well done posters...
34 to 39 percent?
imagine if the COMP Props had those leasing stats....oh dear... suppose the profits are a lot higher on these units than the small margins on leases however...
at that rate its 4-5 year to sell down..
Was looking at the Helier last year for a family member. Family member had a friend already there who said it was "a ghost town"
Today had a call from Oceania to say now 30 residents reside. Does not seem like a lot.
Very slow. I believe SUM recently said they had 30% presales for their St John's village that's only just opened.
Quote from: Shareguy on May 01, 2025, 04:41 PMWas looking at the Helier last year for a family member. Family member had a friend already there who said it was "a ghost town"
Today had a call from Oceania to say now 30 residents reside. Does not seem like a lot.
Said 34 in half year to September
Sales should only be reported as such when they're unconditional and a proper 10% deposit is received, in my opinion. Even then a sale can fall over if the incoming resident can't sell their home. Just out of curiosity, what methodology do OCA use to record something as being "sold".
All will be revealed in 21 days..
Quote from: Basil on May 01, 2025, 06:14 PMSales should only be reported as such when they're unconditional and a proper 10% deposit is received, in my opinion. Even then a sale can fall over if the incoming resident can't sell their home. Just out of curiosity, what methodology do OCA use to record something as being "sold".
Goodness knows when a unit is 'sold' ...seems to change quite often
Whatever last March they had the best part of $100m in receivables from oRA.s ...no doubt 'sold' still to be paid for (in full)
That's a heck lot of receivables eh. Well over 100 properties at OCA's average asking price. What's the bet some of these sales are just a few thousand dollars down and the incoming resident uses best efforts to sell their home to afford the rest and a fair few of them are struggling to sell their homes.
Buying from someone already committed to moving into a village is the dream at the moment, no one is prepared to meet the market more. Have seen it so many times in the last 12 months.
Volume profile shows a boat load of script crossing at $0.78, best case short term resolutions when price exits wedge beginning year 26 is 78c IMHO.
OCA_2025-05-02_11-26-19~2.png
FY25 Result – Building on momentum
Oceania Healthcare (NZX: OCA) reported underlying EBITDA of $86.0m for the year ended 31 March 2025, up 4.1% on FY24, reflecting steady sales momentum and stock sell down. Building on this momentum, the company has signalled a sharpened strategy centred on strengthening its foundation, enhancing efficiency, and setting the stage for accelerating growth.
Financial summary and highlights
•Total comprehensive income of $74.6m (FY24: $70.5m).
•Reported NPAT of $30.4m (FY24: $31.5m).
•Underlying EBITDA rose to $86.0m, up 4.1% on FY24.
•Underlying NPAT was $52.5m, (15.5%) lower than FY24, a result of interest charges on completed developments no longer able to be capitalised.
•Operating cashflow increased to $110.3m, up 6.7% from FY24.
•Total assets increased to $2.9b, a $158m increase on FY24 largely a reflecting the completion of Elmwood, Waterford and Awatere alongside fair value movements due to the sell down of independent living units at other sites.
•Debt gearing reduced to 36.3%, down from FY24's 38.3%. All banking covenants were met.
•Realised capital gains rose to $83.2m, an increase of 22.6% on FY24.
•Premium care revenue was up 12.5% on FY24, reaching $25.4m.
•Total sales volume at The Helier increased 100% from FY24, with 24 apartments and care suites sold in FY25 and full development cost recovery expected by FY26.
•A broader business optimisation programme is underway, targeting $15m to $20m of cost savings with full benefits realised in FY27.
Steady sales momentum
Sales momentum accelerated in the second half of FY25, with new sales volumes increasing by 17.2% and resales up 5.3% on prior year, notwithstanding market conditions. This growth was driven by a revitalised sales and marketing approach, refined pricing strategies, and enhanced leadership in sales.
Strong sell down results were achieved across key development sites. Occupancy increased at The Helier in Auckland with 41% occupancy as at 20 May 2025 compared to 14% as at 31 March 2024. Additionally, Oceania successfully completed the full sell down of independent living apartments at The Bellevue in Christchurch shortly after year end, within just 24 months. The new care suite centre at Redwood in Blenheim has reached 62% occupancy in record time with expectations to be fully occupied within 12 months.
Financial performance
Total sales volumes were up 9.2% on the prior corresponding period (pcp), including a 17.2% uplift in new sales volumes to 184 independent living units (ILUs) and care suites.
Operating cash flow increased to $110.3 million, a 6.7% rise compared to $103.4m in FY24. This was driven by higher cash receipts from occupation right agreements, up 30.1% on pcp, reflecting key drivers such as improved settlement timing, reduced unsold stock, and increased care revenue.
Underlying NPAT was $52.5m for the 12 months ended 31 March 2025. This included total capital gains of $83.2m, an increase of $15.3m or 22.6% on the previous year.
Chair, Liz Coutts noted "As at 31 March 2025, undrawn net debt headroom was $97.0m and gearing reduced to 36.3%, down from 38.3% as at 31 March 2024. This improvement reflects continued capital discipline, divestment of non core assets, a sharpened sales focus and a targeted cost optimisation programme."
In March 2025, Oceania successfully refinanced its syndicated banking facilities, extending debt maturities and securing competitive terms with unchanged covenant conditions. The refinancing, supported by existing lenders ANZ, ASB, ICBC, and new lender BNZ, underscores lender confidence and positions Oceania for ongoing growth.
Final Dividend
Ms Coutts announced that "The Directors have resolved not to declare a final dividend. Work is underway to review our Dividend Policy so that it better aligns with the operating cashflows of the business. Our revised Dividend Policy will be announced at the time of the ASM in June."
Stabilising the core
In FY25, Oceania initiated an operational optimisation programme to realign the business and support its future strategy. This has already delivered $5m in cost savings, which will be realised in FY26.
Suzanne Dvorak, CEO said "We initiated a right sizing programme in FY25 to reshape the business and align with Oceania's future strategy. To date this programme has implemented cost savings of $5m that will be realised in FY26. Building on this, a broader business optimisation programme is underway, targeting $10m to $15m of sustainable annualised savings. So far in FY26, a further $5.2m of cost savings have been identified with benefits to be realised from 2HY26. Full benefits will be realised in FY27, with a focus on system consistency, margin discipline, and operational simplicity."
Over the next 12 months, Oceania will continue to sharpen execution, reinforce leadership capability, and ensure the business is well positioned to activate its new strategy from FY27.
Setting our strategic direction
The Board has approved a new strategic direction to guide Oceania through the next five years. Developed through deep engagement with the Board, executive team, employees, and independent consumer research with residents and families. It reflects both the lessons of the past and a clear vision for the future. Oceania's refreshed purpose — "Supporting and empowering people to live well as they age" — serves as the anchor for our next strategic phase. While grounded in Oceania's existing strengths, this is not a simple extension. It is a sharper and more ambitious plan, designed to meet changing resident expectations, increasing care needs, and a more complex operating environment.
Ms Dvorak added "Our strategy is structured around four refined focus areas — Connected Care, Inspired Living, Empowered People, and Purposeful Impact — the strategy will guide planning, investment, and operational decision making across the business."
This strategic direction positions Oceania to lead with clarity and confidence, supported by a strategy that is practical, measurable, focussed on creating value for our shareholders and is aligned with what matters most: people, purpose, and performance."
The full five year strategy will be further communicated in the coming months.
Amazing. So many positive signals and than they end up with a still lower RoE and EPS than last year. Hmm.
So -
NTA up to $1.51/share. This must be good, isn't it?
avg Occupation up (though they seem to have changed the definition, its now occupation in units not impacted by development).
Resale and development margins improved - hey this must bring the earnings up - right? Oops, wrong!
Helier now occupied to 41% - give it another 2 to 3 years and they might approach Bau.
Gearing down (though only marginal)
Dividend unchanged (NIL)
but then:
RoE drops from a measly 3.1% to a mislier 2.8% and
EPS is now 4.2 cents per share (vs 4.3 cents).
Didn't they hit inflection point already a handful of years ago, and still building momentum? This must be a monumental swing ... give it another decade or so, and they might be in the money?
I agree with the tone of your post BP and note underlying profit hit a multi year low of $52.5m and on 723m shares that's just 7.26 cps.
They've averaged about 8 cps since they listed 8 years ago, I think the peak was close to 9 cps underlying one year they sold down a lot of the Sands development.
Blind Freddy can see there's no earnings growth here after 8 whole years. When OCA listed they promised a full transformation program over the next 6 years that would transform the business model and deliver superior returns for shareholders.
We're now 8 years into that 6 year plan and there's no other way to describe it, the transformation program to date has been a epic failure in terms of delivering for shareholders. Its clear all other stakeholders especially residents, the board, management and staff have enjoyed the transformation program and its delivered tangible results for all those stakeholders but nothing for shareholders who now languish without a dividend.
No worries, I am sure it will be much better in the future...that's what the zealot holders tell us every year...but I do note for the presentation a massive increase in aged stock over 12 months old, the unsold care suite legacy that simply won't go away that I have been talking about for years. Looks like very modest progress in selling old unsold care suites. CBRE think this is concerning to and marking them down but what would they know...
Fair value is no more than 8.5 times, (no growth PE and that's being generous as eps has been in decline) current year underlying eps of 7.26 cps = ~ 62 cents.
Others will listen to all the words from the current CEO and think going forward its going to be better. I am sorry, I have literally lost count of how many years we've heard the corporate B.S. regurgitated in so many different ways.
I am tempted to think the current CEO may be on the right path with her efficiency drive but lets see the results of that before getting too excited eh.
Quote from: Basil on May 22, 2025, 10:46 AMI agree with the tone of your post BP and note underlying profit hit a multi year low of $52.5m and on 723m shares that's just 7.26 cps.
They've averaged about 8 cps since they listed 8 years ago, I think the peak was close to 9 cps underlying one year they sold down a lot of the Sands development.
Blind Freddy can see there's no earnings growth here after 8 whole years. When OCA listed they promised a full transformation program over the next 6 years that would transform the business model and deliver superior returns for shareholders.
We're now 8 years into that 6 year plan and there's no other way to describe it, the transformation program to date has been a epic failure in terms of delivering for shareholders. Its clear all other stakeholders especially residents, the board, management and staff have enjoyed the transformation program and its delivered tangible results for all those stakeholders but nothing for shareholders who now languish without a dividend.
No worries, I am sure it will be much better in the future...that's what the zealot holders tell us every year...but I do note for the presentation a massive increase in aged stock over 12 months old, the unsold care suite legacy that simply won't go away that I have been talking about for years. Looks like very modest progress in selling old unsold care suites. CBRE think this is concerning to and marking them down but what would they know...
Fair value is no more than 8.5 times, (no growth PE and that's being generous as eps has been in decline) current year underlying eps of 7.26 cps = ~ 62 cents.
Others will listen to all the words from the current CEO and think going forward its going to be better. I am sorry, I have literally lost count of how many years we've heard the corporate B.S. regurgitated in so many different ways.
I am tempted to think the current CEO may be on the right path with her efficiency drive but lets see the results of that before getting too excited eh.
Basil/BP, do you see this poor performance as a management/board/governance issue? ie do you think it would perform better under new management/board/ownership. That's my view which is why I see this is probably presenting a good opportunity for takeover given the high value of underperforming assets (NTA=$1.51) vs market capitalisation.
A new owner might fancy their chances of increasing the ROE considerably and can buy at pennies on the $ right now
Quote from: Poet on May 22, 2025, 10:58 AMBasil/BP, do you see this poor performance as a management/board/governance issue? ie do you think it would perform better under new management/board/ownership. That's my view which is why I see this is probably presenting a good opportunity for takeover given the high value of underperforming assets (NTA=$1.51) vs market capitalisation.
A new owner might fancy their chances of increasing the ROE considerably and can buy at pennies on the $ right now
Hi Poet,
I think the new CEO is on the right path with a major cost out exercise. If she can get the ~$20m per annum efficiencies she's looking for and they can get on top of their problems with vast numbers of old stock of unsold care suites the company becomes more investable.
Please note that the adjusted NTA is $1.43, (CBRE have marked down the value of the problematic old stock considerably).
Systemic legacy issues remain of grossly inadequate return on assets in the care sector, due to successive governments egregiously underfunding the true cost of care. They've now sold 18 of the original facilities they listed with at the IPO which is a sad indictment on the lack of quality that private equity brought to market, so they are making progress but there's a LOT of work to do.
In terms of takeover prospects its worth noting that both ARV and MET had a substantially more efficient business model which a much lower level of care in their business models.
ARV being the most recent takeover target was taken over within a couple of cents of embedded value and I think that's the best proxy for any possible takeover level, if it ever eventuates and the risk here is the care side of the operations provides such egregiously low returns on equity, OCA is almost bullet proof to takeover, other than at a deeply discounted level by some party looking to extract head office and operational synergies.
Embedded value stood at $591m up 14% YOY equivalent to 82 cps. I'd be very surprised if anyone would pay anything much more than that and even more surprised if that was sufficient to execute the deal.
For me, its well worth remembering that potential acquirers have had the opportunity to take this over for many years now and passed it over first in favour of MET and then in favour of ARV.
On the other hand, you could argue that every dog has its day and the strategic direction of the company could generate improved returns in the years ahead and some acquirer might take that view too.
Good luck with it Poet. For me, I like the chances of a much improved takeover for MCK a LOT more than I do for the chances of this being taken over. Aside from that, $4.70 / $2.80 for MCK is a much better prospect for percentage gains than say 85 cents / 65 cents. That and CDL already own 84% of the shares and 91% of the preference shares. My motto is one takeover play at a time as that keeps things simple in my head lol
Quote from: Poet on May 22, 2025, 10:58 AMBasil/BP, do you see this poor performance as a management/board/governance issue? ie do you think it would perform better under new management/board/ownership. That's my view which is why I see this is probably presenting a good opportunity for takeover given the high value of underperforming assets (NTA=$1.51) vs market capitalisation.
A new owner might fancy their chances of increasing the ROE considerably and can buy at pennies on the $ right now
Interesting question.
While I haven't done as much groundwork research as some others on the other channel, I have seen some of their local villages and think that the substance of the new builds is in good shape. And clearly, there is demand for their services. Some of their premises however seem to mismatch market demand (like the Helier).
So - yes, they clearly made mistakes in the past, and some are easier to fix than others. It feels they wasted some of their original advantages of starting with crappy sites in great locations by building too high density buildings on these sites instead of staying with NZ's love for stand alone villas. Having said that, I am sure that there is value for somebody who knows how to run an enterprise like that to turn it around.
As beagle already stated, the latest CEO is still new ... and at this stage it feels she is moving in the right direction. Will she succeed? Time will tell.
Other retirement providers (though admittedly with a different mix of villas vs care suits) seem to be able to achieve a better RoE. No, not Ryman (they are still more pathetic at 0.1%), but SUM had in FY24 already an RoE of 11.4%.
So - I assume they will improve even under the current CEO (but its hard to make at this stage a case for best of breed), and a new owner well might be able to turn the ship somewhat faster around. How much they would be prepared to pay for it at current? Not sure, but given that residential real estate is still at the cyclical bottom (and might stay there for some time to come) I agree with beagle, that the takeover premium probably won't be outrageous.
Craig's thoughts
OCA has reported a FY25 result in line with consensus, but FCF remains stubbornly negative (net debt increased in 2H25) which we see as incrementally disappointing. With little outlook commentary, there is not much to get excited about here. uEBITDA increased 4% YoY to $86m, but uNPAT fell 15%, both in-line with consensus. uNPAT declined as (i) net debt and gross interest expense increased and (ii) interest expense recognised in the P&L increased $10m YoY following completion of key developments (meaning the interest can no longer be capitalised).
Biggest impediment to the remote chance of any possible future takeover attempt is an intransigent board putting their own interests first and dismissing any approach without even bringing it to shareholders attention for a vote on the basis that it's below their assessment of fair intrinsic value. Recall how the board of ARV dismissed the first approach at $1.70 out of hand and it only came to the public's attention after one of the institutional shareholders who was consulted leaked it to the media.
Another good example Steel and Tube board rejecting FBU's bid at $1.90. Look how that worked out for shareholders.
As Craig's say. Nothing to get excited about here with this company that burns through cash in a stubbornly depressing way
Interesting the investor presentation was rereleased separately at 5.04pm
Are they cap raising?
No I don't think so, there was a mistake on pg 5 of original preso whichthey said on investor call they had picked up and would correct....but never let the truth get in the way of a good story...
Quote from: Turkey on May 23, 2025, 07:39 AMNo I don't think so, there was a mistake on pg 5 of original preso whichthey said on investor call they had picked up and would correct....but never let the truth get in the way of a good story...
I and I suppose a few others told them that the sales prices on the chart looked nonsense ....and they changed it and posted an updated presentation.
Quote from: winner (n) on May 23, 2025, 08:16 AMI and I suppose a few others told them that the sales prices on the chart looked nonsense ....and they changed it and posted an updated presentation.
The 'Average Sales prices (resales)' were significantly understated for all three years, in the first presentation. CFO picked it up, not others.
CFO usually puts together that power point presentation in the first place so she's only fixing her own mistakes. The one consistent senior management role through all the changes in the CEO role over the years has been the CFO. She has presided over consistent poor performance well before, and for all the years after OCA listed.
Food for thought. Is she really any good ? Why wasn't the current efficiency drive initiated many years ago ? Isn't that one of the core roles of a CFO to look for efficiencies and ways to grow earnings so what has she been doing all these years ? Why does it take a new incoming CEO to try and make the business more efficient ? What was Brent doing all the years he was there ? So many questions with OCA and so few answers...
Quote from: Buzz on May 23, 2025, 08:44 AMThe 'Average Sales prices (resales)' were significantly understated for all three years, in the first presentation. CFO picked it up, not others.
Some interesting numbers there Buzz. Comparing HY25 to (amended) FY25 prices:
New apartments $1088 -> $1108 (up)
New suites $358 -> $356 (down)
Villa resales $582 -> $594 (up)
Apartment resales $914 -> $963 (up)
Suite resales $363 -> $358 (down)
Average prices in the second half year were up for apartments and villas, and down for care suites. Whilst apartments will be skewed by sales The Helier, it is a good outcome nonetheless for ILU's.
There was a slight fall in average prices for care suites. Care suites make up 56% of sales by volume, and around 31-32% by value so the impact is somewhat muted, or dwarfed by ILU sales.
Yes Kathryn was fixing her own mistake (mistakes are definitely not good), but one positive is that she was able to recognise it was wrong straight away on the investor call. Any CFO should be able to look at a number and know straight away if it is roughly right or roughly wrong so good on her for seeing it and calling it straight away. But I am curious as to what those numbers were....they were not H2 average prices, nor H1.
Full transcript of the call is on the other channel. Gosh operational losses at existing villages are really running away on themselves. All those oldies on cheap weekly fees fixed for life while village operational costs grow at low double digit percentages year on year on year...and many oldies living well past the time when their DMF fees stop accruing. HUGE systemic problem that appears to be growing at quite an alarming rate. I'm staying well away. Only one worth owning is SUM and even then, only when real estate is going gangbusters.
Reporting Oceania performance the Ryman way and using PBTF as the measure of operational performance is revealing. Shown in table below.
Some have expressed concern how the 'losses' seem to be increasing and so they should be.
Oceania head up results "Building on Momentum". The TBTF sure has some momentum but I don't think they were referring to that.
IMG_6151.png
It's real concern when at analysts briefing they avoid discussing it in detail, just vague mumbo jumbo.
WOW !! That is scary. From the transcript, one of the analysts unable to understand why village operational losses grew for $5m in the first half to $22m in the second half. That, despite their so called cost out program. Really scaling back new developments will really hurt future development profits.
Really interesting to compare 2018 line items, the first full year after it listed with 2025.
CEO's salary grown from $630K to $1.86m, nearly tripled....but she has come up with a new mantra of helping people live well as they age, or similar words to that effect...wow, how inciteful is that new policy, that's worth another million dollars on its own surely, (sarcasm)
CFO grown from a band of $430-$440K to $830-$840K, assumes she's the second highest paid at OCA, (never mind she makes mistakes year after year)
Other expenses grown from $52.5m to $82.2m
Total Wages and employee benefits grown from $113.3m to $178m per annum despite selling a whopping 18 of the villages they had at the time of the IPO. Gosh, its obviously a great place to work.
In the meantime cash burn has gone ballistic and dividends have gone from 4.7 cps per annum to nothing.
Management are gorging themselves at the trough and shareholders don't even get the crumbs left on the table from their enormous banquet.
Directors and management telling everyone in their report about progress and growth. Yeah, its pretty clear where the real growth is.
Totally uninvest-able but that won't stop the usual zealots from throwing more money down this rat hole.
Its taking the main protagonist on the other channel a lot longer than usual to try and put a positive spin on the OCA results and come out with the usual, no worries, next year is our year and growth is just around the corner....the same thing we've been hearing for so many years now I have lost count. I guess some results are so bad its impossible to put a positive spin on them...
I see Jarden are saying no divi for the foreseeable future.
AFFO double analysts forecast of a $15m loss
Cash flows were the weak point of the result, with OCA's existing assets consuming $40m of cash over FY25.
Rymans result to come. It will also be bad. Hopefully not as bad as some expect.
"Dekker and Vishal use their own metric to assess cashflows from existing operations: Jarden AFFO. Although "lumpy", the analysts calculated Oceania's full-year Jarden AFFO ended up being a loss of $31 million – more than double analysts' forecast of a $15m loss". Extract from businessdesk article
Dekker has the best handle of any of the analysts on the true extent of the problems at OCA, in my opinion.
The $31m is very close to what I am seeing. Take the receipts less payments, normalise the swings on debtors & creditors (which are a timing difference) and add back $32m of DMF realised, gets me to ($30m) normalised cash loss versus ($18m) using the same metric for the prior year. There are some horrendous swings on creditors payments with -$10m last year and +$10m the year before.....what is that about??
Luckily next year will be better ay? ;D
Graphs for OCA:
OCA EPS 2025 - Copy.JPG
OCA Equity 2025 - Copy.JPG
OCA Debts 2025 - Copy.JPG
Over the period 2017-2025, CAGRs:
~ Sales +5.5% p.a.
~ NPAT% +0.1% p.a.
~ shares on issue +2.2% p.a.
~ EPS +3.3% p.a. (from 5.6c to 7.2c)
~ P/E -6.9% p.a.
~ share price from 83c to 61c
Interesting to read old threads.
They teach you that our gurus or heroes or whatever frequently tend to unisono praise shares into the sky or beat them down into the mud. Some of us still might remember the amazing guru who told us probably less than a decade ago that 1 Ryman share will always be worth 5 SUM shares or 10 OCA shares. Check this ratio today. And no, he was not dumber than anybody else who can't see the future (which would be all of us).
Remember the times when Ryman was still the star and this never could change? Year right.
Remember the times when one couldn't hold enough OCA shares - year right.
Remember the times when SKL was a dirty word and people still selling the shares below 50 cents? - Yeah right.
Remember the highs and Lows of A2M - and everybody knew what a great and what a terrible company this was?
So - OCA still on the downbeat, is it? Actually - my Jarden (well, invest direct) account shows that OCA made me in the last 12 months 12.03%. Of course - just on the paper - tomorrow might be better (or worse).But still - market seems to see opportunities. Funny coincidence? - maybe, but maybe not such a bad investment after all?
So, what I am wondering is - everybody here really just keep kicking the dying horse and waiting for OCA to roll up its toenails and die as a going concern, to move afterwards on to the next bad run company (like WHS, HGH, ....?) or anybody seeing opportunities as well?
I heard NZ will have a significant shortage in hotel accomodation over the years to come. Same issue with rental accomodation.
Are there opportunities to review the use of some of the OCA properties? What about turning parts of the Helier into a luxury hotel or upmarket appartments? Can they sell some of the elder villages they have to Kāinga Ora (in this case I would not envisage mixed use, but whatever)?
Somebody mentioned recently that a new owner might be able to change course ... (T/O) - I heard Metlifecare isn't doing that bad these days.
Anybody else seeing opportunities?
Thanks for sharing your graphs Ferg. I've never held OCA (or any retirement village stock) and have a morbid (thankful) fascination watching from the sidelines. Lots of lessons from the days of "back up the truck" and "you can't have enough OCA."
To be fair, a lot of false promises and misleading information has been forthcoming from OCA over the years. It wouldn't be to unkind to call it an orchestrated litany of lies. The CFO is an absolute masterclass in obfuscation and various CEO's over the years have also been very economical with the truth. All they ever seem to do is highlight anything they can which is positive and sweep everything else under the carpet like its completely immaterial.
Thankfully my nose for corporate B.S. and deliberate disinformation did start working after a while and I realised the game was up many years ago, took a 6 figure profit, moved on and very successfully reinvested it elsewhere. I doubt there would be many other investors up 6 figures on this flea ridden pup.
Quote from: Basil on May 27, 2025, 11:49 AMThankfully my nose for corporate B.S. and deliberate disinformation did start working after a while and I realised the game was up many years ago, took a 6 figure profit, moved on and very successfully reinvested it elsewhere. I doubt there would be many other investors up 6 figures on this flea ridden pup.
Basil to be fair you weren't the only one making such calls back in the days, and I wasn't calling you out.
You're a good poster and well respected for your particular bias to retail investments like TRA and HLG .
However, when boasting about your own x figure gains on OCA, I wonder if you have any empathy for other investors sucked in by all the enthusiasm.... and still holding?
Quote from: Left Field on May 27, 2025, 12:58 PMHowever, when boasting about your own x figure gains on OCA, I wonder if you have any empathy for other investors sucked in by all the enthusiasm.... and still holding?
To be fair, nobody has done anywhere near the literally, hundreds of posts I have put up over several years now, highlighting the weaknesses in their business model. I don't think I'm that well understood on public forums. I do try and add value, (nobody in their right mind would expend that amount of effort if they didn't want to try and help others), but in recent times I have more of less given up on posting on OCA because of the hate. People don't want to hear bad news. Unfortunately the fact of the matter is, confirmation bias is alive and well on public forums. That last sentence was in response to some of the absolute nonsense on the other channel. I am just setting the record straight.
Quote from: Shareguy on May 27, 2025, 07:18 AMI see Jarden are saying no divi for the foreseeable future.
AFFO double analysts forecast of a $15m loss
Cash flows were the weak point of the result, with OCA's existing assets consuming $40m of cash over FY25.
Rymans result to come. It will also be bad. Hopefully not as bad as some expect.
At some point, considering the social importance of these companies, it will behove the Govt to stick their nose in and find out if these operators are still solvent. It would appear to me, most are not. They rely on unrealised non-cash profits from revaluing real estate assets to make it appear as though they are.
As they say, when the (real estate) tide goes out, you get to see who is swimming naked.
Neither government actually cares these days. Last lot considered the company's capitalist and the current seem to have less of a social conscience than I would have hoped for.
Basil you feeling particularly litigious tonight mate?
Quote from: ValueNZ on May 27, 2025, 08:22 PMBasil you feeling particularly litigious tonight mate?
Shouldn't you be busy burying cash in the ground somewhere?
The problem with your approach is the obvious cost of use of money while the company treads water. It's catastrophically stubborn to argue year after stagnant year.
Quote from: mike2023 on May 27, 2025, 08:33 PMShouldn't you be busy burying cash in the ground somewhere?
The problem with your approach is the obvious cost of use of money while the company treads water. It's catastrophically stubborn to argue year after stagnant year.
Busy burying cash into a university exchange deposit and a transmission...
Would love to be throwing cash into the abyss as per normal.
The company is not treading water it is growing fast.
Quote from: ValueNZ on May 27, 2025, 08:38 PMBusy burying cash into a university exchange deposit and a transmission...
Would love to be throwing cash into the abyss as per normal.
The company is not treading water it is growing fast.
[/quote
Now tell me how the share price isn't the business. If it's stagnant another year you're better off with a TD and you need a degree to start one of those?
Quote from: ValueNZ on May 27, 2025, 08:38 PMBusy burying cash into a university exchange deposit and a transmission...
Would love to be throwing cash into the abyss as per normal.
The company is not treading water it is growing fast.
Making larger and larger operating losses doesn't feel like growth in the right direction to me.
Quote from: ValueNZ on May 27, 2025, 08:22 PMBasil you feeling particularly litigious tonight mate?
I can assure you that your friends ban on the other channel has nothing whatsoever to do with me.
Quote from: Dolcile on May 27, 2025, 09:13 PMMaking larger and larger operating losses doesn't feel like growth in the right direction to me.
If you have a business model where the more you grow the more you lose, you eventually end up going broke. Ask the WeWork investors how that model works out.
Quote from: KW on May 29, 2025, 03:54 PMIf you have a business model where the more you grow the more you lose, you eventually end up going broke. Ask the WeWork investors how that model works out.
One larger holder has listed a million for sale at 65 cents. Whoever that is has obviously had as big think about things after the recent extremely poor result.
Perhaps a certain sailor's boat needs new sails,and engine.?
Way it was drifting about rudderless and trolling around on the other chanel it did need repairs and a new anchor too....lol
Back in the 50's no doubt at the opening bell. SR and VNZ will be ecstatic me too I've got a TD maturing the 12th and no way rolling it over for a 3% return. Small request boys, hold of buying till next week let the sp drift to 55c, I'll pick up a cool 100k at that price and join the uprampers brigade ;D
Quote from: TraderRay on Jun 04, 2025, 03:34 AMBack in the 50's no doubt at the opening bell. SR and VNZ will be ecstatic me too I've got a TD maturing the 12th and no way rolling it over for a 3% return. Small request boys, hold of buying till next week let the sp drift to 55c, I'll pick up a cool 100k at that price and join the uprampers brigade ;D
TraderRay I wish you well with OCA, however your strategy (and post) sounds very much like that of a certain Sailor who just got him/herself banned from the other forum?
Take care.
TraderRay sounds fishy alright...
Tom Marvolo Riddle
Warriors showing true grit and going well but OCA...oh dear.
I wonder if these businesses have the right business model. In general they require a buoyant property market to both outpace development costs and maintain demand at a high or increasing price point. They rely on resident loans to fund the business, however this borrowing capacity will necessarily fluctuate, and not necessarily in line with development costs. They are a developer, but one that can never exit their development. And you can never by completely sure that they have actually made any money, there is constant debate on how to even measure success or otherwise!
They are sort of an artificial financial arrangement to use residents to fund the operation, hoping that the stars align across the metrics that squeeze more cash from the temporary "customers". The well run ones are a great ecosystem, but are they great businesses? Under what circumstances would they become great business for investors, throwing off cash for distribution?
Maybe they should have gone down the rent-to-build path, at least that has a transparent business model that everybody understands. Finance it, build it, rent it, maintain it. KPL seem to be demonstrating that you can earn a rental premium based on the strength of your offer, location etc. I reckon plenty of oldies would be happy to pay a premium rent in exchange for lifetime occupancy contract and keeping their house sale proceeds..
Just spitballing after very many very astute comments on this thread.
(not a holder)
RAD's excellent performance with healthcare profitability is making OCA's management look like total Muppets. Just as well the current year is going to be different...(sarcasm).
Auckland members of NZSA visited OCA premises at Meadowbank recently. The following update was provided.
https://api.nzx.com/public/announcement/453789/attachment/446089/453789-446089.pdf
OCA not part of my portfolio but interesting to see OCA addressing investors concerns.
Interesting feedback from Ronaldson on the other channel that the 40 unit dementia facility in Meadowbank completed in May didn't yet have a single resident.
OCA trying to break new ground here with units available under ORA from $650K with 30% DMF. Care fees are on top of that. It will be interesting to see how many people are prepared to put their loved ones into care and with a substantial capital outlay, 30% DMF and care fees as well.
My Dad was in a RYM facility for a while. No capital outlay, weekly fees mostly covered by Government funding and we paid a modest daily rate on top, (from vague memory about $40 a day) for a so called premium room. Given residents of these secure facilities are basically "out of it", my view is there is going to be an extremely small market for people prepared to pay all the extra costs under an ORA for their loved one.
OCA think they can create a new market here with dementia units. My thoughts. How's that worked out for them so far with their care suites...
I think the fact that there's no residents yet despite this facility opening in May, speaks for itself.
https://api.nzx.com/public/announcement/454142/attachment/446451/454142-446451.pdf
Liz Coutts thinks OCA is a success. "
QuoteI want to begin by thanking everyone who plays a part in Oceania's success-our nearly 2,700 staff, our business partners, and you, our shareholders"
.
Quote"Suzanne and her team have developed a five-year plan that builds on our strengths and focuses on
what matters most - improving resident outcomes, developing our workforce, and operating sustainably
over the long term. The Board fully supports this new strategy".
Its clear where their focus is.
Then there's this from the new CEO.
https://api.nzx.com/public/announcement/454142/attachment/446452/454142-446452.pdf
They've sold 18 of the 25 properties they listed with. In other words, private equity sold the market "a pup"
Not a single mention by anyone that eps has been declining over the years and we are not doing well enough for our shareholders. No apology, no contrition, no remorse...just "we're doing a great job and we're growing stronger together".....so management say while they are patting themselves on the back with massive pay increases while shareholders get nothing. How are shareholders growing stronger with the share price well under the IPO price when it listed 8 years ago and dividends cut to zero ?
Just as well its all going to be so much better for shareholders going forward ;)
Some great recent posts on the other channel. Poet and Joshuatree telling it like it really is.
Quote from: Basil on Jul 03, 2025, 11:15 AMSome great recent posts on the other channel. Poet and Joshuatree telling it like it really is.
Rich coming from you of all people. How many threads have you pumped up??
I've warned about this dog for years.
Quote from: Basil on Jul 03, 2025, 11:51 AMI've warned about this dog for years.
And just like you used to ramp this stock up and thats after other posters were warning you and other investors.
OH the irony
I occasionally see Basil (Beagle) bitterly accused of pumping, ramping etc. Apparently because he flipped sides on a stock he was previously positive about.
My observation is that he develops an initial thesis on a stock, takes a position then forcefully argues it, normally extremely well. And in the process his enthusiasm, consistency of position and strong logic carries a lot of other investors along for the ride (he probably talks himself into it too?). Then something happens to change his mind, a little doubt or concern creeps in, a straw breaks the camels back, and he flips his view and 'switches teams'.
So I would say Basil is probably a victim of his own success (in that he is so convincing and has called more right than not), and so sticks out a bit more than the average bear when he does change his mind! At worst he could be accused of being a fair weather friend of his investments, in that they have to earn then work to keep his loyalty, an approach that seems to have worked pretty well for him.
This MB is all the richer for posters like Basil, keep it coming I say. And to those that disagree - DYOR!
Quote from: Popeye on Jul 03, 2025, 04:17 PMI occasionally see Basil (Beagle) bitterly accused of pumping, ramping etc. Apparently because he flipped sides on a stock he was previously positive about.
My observation is that he develops an initial thesis on a stock, takes a position then forcefully argues it, normally extremely well. And in the process his enthusiasm, consistency of position and strong logic carries a lot of other investors along for the ride (he probably talks himself into it too?). Then something happens to change his mind, a little doubt or concern creeps in, a straw breaks the camels back, and he flips his view and 'switches teams'.
So I would say Basil is probably a victim of his own success (in that he is so convincing and has called more right than not), and so sticks out a bit more than the average bear when he does change his mind! At worst he could be accused of being a fair weather friend of his investments, in that they have to earn then work to keep his loyalty, an approach that seems to have worked pretty well for him.
This MB is all the richer for posters like Basil, keep it coming I say. And to those that disagree - DYOR!
Argh ha, as this is the OCA thread I will keep it to OCA. Everyone is entitles to there views and philosophy on investments.
Sadly for Beagle/Basil as he continues to stick it up those who don't agree with him.
Funny he hates For Bar analysis except whern it agrees with his. You followers are welcome to it, hope he doesn't lead you off the cliff.
Keep it civil people I'm still watching ;D
Quote from: Greekwatchdog on Jul 03, 2025, 05:55 PMArgh ha, as this is the OCA thread I will keep it to OCA. Everyone is entitles to there views and philosophy on investments.
Sadly for Beagle/Basil as he continues to stick it up those who don't agree with him.
Funny he hates For Bar analysis except whern it agrees with his. You followers are welcome to it, hope he doesn't lead you off the cliff.
I did not mean to stir up a hornets nest or anything. All I meant was there are a number of commenters on this MB worth reading carefully, and Basil is definitely one of them.
Personally, I can cope with someone switching tack on their investment theses, even 180 degrees. On a forum like this there is the open opportunity for others to challenge or present a dissenting view, so it is not as if one opinion holds sway or anything. To me it is more about the strength of the argument than the conviction of the arguer, so the more views the merrier.
I would imagine most of us would agree it would be unwise to "follow" anyone blindly, like I said DYOR!
I should add, in terms of OCA I am pretty unbiased as I no longer have a holding. I follow out of curiosity as I have noticed the RV's are rather tricky to assess due to the many moving parts and a business model (aided and abetted by inconsistent and obfuscatory reporting practices) that make it difficult to parse whether the business is doing well or not. That is the real reason there is so much debate on these.
With most businesses it is pretty clear whether they are profitable, and the debate is about their future prospects. The only thing investors seem to agree about with RVs like OCA is whether the operations themselves are being run well, as opposed to whether they are a actually a good investment!
There are a lot of things that have to go right for RVs to consistently and predictably generate cash, the ultimate measure of a investment. The question to me is, are enough of the factors within the control of RV management to justify investment? And at what price?
To my mind, the thing most in control of RV management (running a good operation) is not the thing that delivers or will deliver superior or predictable returns to investors, which makes me wary of all of them... Love the debate though.
Quote from: Popeye on Jul 04, 2025, 07:56 AMI did not mean to stir up a hornets nest or anything. All I meant was there are a number of commenters on this MB worth reading carefully, and Basil is definitely one of them.
Personally, I can cope with someone switching tack on their investment theses, even 180 degrees. On a forum like this there is the open opportunity for others to challenge or present a dissenting view, so it is not as if one opinion holds sway or anything. To me it is more about the strength of the argument than the conviction of the arguer, so the more views the merrier.
I would imagine most of us would agree it would be unwise to "follow" anyone blindly, like I said DYOR!
Well said. Changing views on a stock is perfectly acceptable. Often more information becomes available or other opportunities present themselves.
Thank you for your kind words Popeye and for your contributions on here. Please post more often !
The first CEO Earl Gasparich was a very charming and articulate gentleman and many were drawn in by his charismatic personality and his conviction of wanting to do better for residents. He presented extremely well one evening at the Auckland branch of the N.Z. shareholders association and clearly articulated OCA's 6 year transformation plan which promised not only much enhanced experiences for residents but also transformative returns to shareholders. EBITDA per care bed back when OCA listed was just over $19K. Unfortunately things have not panned out anything like what was promised.
I was fortunate to get most of my stake in the early years at around 70 cents and saw the writing on the wall several years later and sold most of my holding for $1.40 and apart from a couple of very small and very modestly rewarding trades, (which were not worth my time), have remained out since then.
I don't get emotionally attached to stocks, as a numbers man when the numbers no longer make sense I sell and always clearly articulate on here, (or in days past), on the other channel why I believe the stock is no longer the best place to allocate your capital.
Nobody gets every call right. The tall poppy syndrome is alive and well, that's all I have to say about my detractors.
Over the years the whole care suite model simply hasn't got that much traction and I have warned many times that the unsold care suites are an extremely serious problem.
I believe the quality of management is very poor. Imagine for a minute being paid approx $1.7m as the top dog plus bonus's and then calling in outside consultants to tell you how to manage a core and very simple part of your business that is selling units. That is absolutely farcical.
The one consistent over the years has been the CFO who has done an absolute stellar job of highlighting anything positive, (not that there has been much), and obfuscating everything else.
The fact that they have now sold 18 of the original 25 villages they floated with tells you that private equity floated a dog. Whether they can turn this around and stem the extraordinary cash burn of existing village operations which has got worse and worse year on year remains to be seen but I note they've had more than 8 years to try and transform this business, far more than the originally articulated 6 year transformation plan and earnings are still lower than the first full year after they floated, substantially lower in inflation adjusted terms.
Over that same timeframe, SUM which is a very well managed business has grown earnings substantially along with its share price.
Finally, I remind observers that senior management's salaries have more than doubled since they listed and investors are getting nothing. Not once in the annual meeting speeches was earnings per share mentioned. That speaks for itself and should sound a warning bell for any experienced investor.
Just as well everything is going to change going forward and they will laser focus on improving returns to shareholders, (sarcasm).
Quote from: Basil on Jul 04, 2025, 10:57 AMI don't get emotionally attached to stocks
Very delusion.
Well said Basil.
I'm still holding but no longer expecting the current management and leadership to improve things. Only hope for long suffering investors is a takeover.
At the recent ASM the chair had this to say
'Suzanne and her team have developed a five-year plan that builds on our strengths and focuses on
what matters most - improving resident outcomes, developing our workforce, and operating sustainably
over the long term.'
IMO this is exactly back to front
The five year plan should be focussed (as for any business) first and foremost on profitability. The secondary and corollary focus should then be to work out what needs to be done to create that profitability -that will obviously include providing good value and great service to residents and staff.
It is unbelievable that a chair would address a SGM and never mention profit.
Thanks Poet. Yes I noticed their new 5 year transformative plan and agree 100% they have got this all backwards. For more than 8 years now Liz Coutts has lead the board and selected replacement CEO's on the basis that if you look after residents well, everything else will fall into line.
Its clear she is wrong and their new focus is misplaced.
The very real risk with hoping for a takeover as I see it, is the board, (which I rate as the same level of competence as management) will simply dismiss any approach made as being below fair intrinsic value. There's a very real chance several approaches have already been made over the years and that's exactly what's happened. Consider how that's worked out for Steel and Tube's shareholders with the $1.90 attempted takeover by FBU many years ago which was dismissed on that basis.
To hold on the basis of a possible takeover is to hold on believing the board hold a realistic view of the fair value of the business, would disclose any approach made, recall how ARV tried to conceal the original $1.70 takeover offer from shareholders), and will put shareholders interests above their own vested interest. Keep in mind too that this was passed over while both MET and ARV were acquired. That speaks for itself.
My two cents worth is that there is a danger on this site and the other that a few loud, insistent voices drown out other views and opinions, and can, if not careful, stifle debate rather than encourage it. I have seen this happen first hand and it is discouraging when opposing views are not welcomed or considered, and instead invite derision and put-downs. I lament the fact that there is a few people whose views and experiences I valued no longer post because of the flak they got from certain people.
I have said it time and again - there is numerous ways of investing and we all take the approach that works for us over our own timeframes. An echo chamber doesn't work for anyone.
Investor Day 16th Sept. Guess we won't be getting any new information before then.
I wrote to the Oceania Healthcare Board on Friday, I have attached the letter to this post for download. Alternatively you can read it on my substack (https://tommyscrivener.substack.com/p/open-letter-to-the-oceania-healthcare?r=41ua5w&utm_campaign=post&utm_medium=web&triedRedirect=true)
If only shareholders value & wealth where their main priority, anyhow good luck with that.
Rock on Tommy
Quote from: Auto Rower on Aug 31, 2025, 02:51 PMIf only shareholders value & wealth where their main priority, anyhow good luck with that.
Rock on Tommy
Remember, the board members are all also shareholders, collectively owning ~5% of the company. Our incentives are aligned.
"Show me the incentive and I'll show you the outcome" - Charlie Munger
Good letter and makes good common sense. From memory under the listing rules the maximum number of shares any company can buy-back within any 12 month period is 5% so that's one obstacle and it would therefore need to be a multi year program. The biggest problem however is neither the board or management seem to have any concern for, of focus on shareholders at all and frankly they never have. Frankly they have always appeared to act as though the most important stakeholders are themselves, (doubling and more in pay since listing for key C suite management a good example) and after themselves residents, staff and the environment all seem to be their key priorities. Shareholders or earnings per share only ever get considered when they're handing around the begging bowl for another capital raise that's allegedly eps accretive.
Good luck getting the board to take a more shareholder centric focus. You'll need it but I commend you for trying. Stay on their case. Hound them at the annual meeting is my advice. How about this as a question for the next Annual meeting. What the heck is the point of building new units especially care suites when you have so much unsold stock and could buy back your own shares for 41 cents on the dollar. I'm almost tempted to buy a few and start the ferocious barking at the next annual meeting myself. If they can't see the logic in what you're suggesting why are they even on the board purporting to be serving shareholders best interests ? I'd suggest at the next meeting, you suggest that if they're not prepared to take some action they should resign. I'd love to do the barking but I'm an old dog now and its time for the next generation to make their mark. I look forward to you making some noise at the next annual meeting. My advice, don;t hold back, really rip into them.
Quote from: ValueNZ on Aug 31, 2025, 12:40 PMI wrote to the Oceania Healthcare Board on Friday, I have attached the letter to this post for download. Alternatively you can read it on my substack (https://tommyscrivener.substack.com/p/open-letter-to-the-oceania-healthcare?r=41ua5w&utm_campaign=post&utm_medium=web&triedRedirect=true)
[/quot
Great letter. Sad that the board have not taken this action long ago.
Quote from: ValueNZ on Aug 31, 2025, 12:40 PMI wrote to the Oceania Healthcare Board on Friday, I have attached the letter to this post for download. Alternatively you can read it on my substack (https://tommyscrivener.substack.com/p/open-letter-to-the-oceania-healthcare?r=41ua5w&utm_campaign=post&utm_medium=web&triedRedirect=true)
Tommy I think you on the right track and commend your activism. I engaged with the Board on this at an ASM around 5 years ago and Liz Coutts the Chair showed zero interest in a buy back initiative to create value then (from memory was more than 40% discount to NTA at the time). Her response implied that the Board thought their growth/building plan would create more value. Since then Oceania has built on a tonne of stock that has been very slow to sell. I think they were firstly not open minded to alternative (and more probable) ways of creating value and had secondly had misplaced confidence in their blue sky DCF models (easy to build a DCF spreadsheet model showing massive value creation - execution is a different matter altogether).
Probably the only way to get them meaningfully interested in the buy back idea is for it to be the CEO or Greg Tomlinson's idea. That is the challenge.
To be fair to Oceania they have divested around 18 of their weakest properties from a value creation perspective. It would be good to see this continue for the reasons you outline.
I can't get my head around continuing to build new care suites and apartments in Hamilton (slow sellers) at today's construction costs when they can effectively buy the existing portfolio at a 58% discount to NTA.
Also the variation in the standard of properties means the Oceania brand has no consistency ranging from top end premium to bang average or worse. It would be great to see them refining it to 20 great premium villages that are value creation engines and aggressively divesting what does not fit from value creation and brand perspectives. The progress towards this seems more of a laboured crawl than decisively swift. There is value in there but they do a good job of ensuring it does not show up anytime soon.
Keep up the good work.
Great post ValueNZ. You have made some good points. Have you noticed that there has been no insider buying for some time. Even at these levels. Speaks volumes to me.
Let us know how you get on. Best of luck..
Quote from: Mos on Aug 31, 2025, 07:51 PMProbably the only way to get them meaningfully interested in the buy back idea is for it to be the CEO or Greg Tomlinson's idea. That is the challenge.
I agree 100% with Mos. Try and team up with Maverick and see if you can meet up with the CEO for a chat. The trick is to let them think it was their idea. You've never got a better chance as they've radically scaled back their new build rate so you are half way there.
A good letter and good to she shareholders holding the board to account
My concern is, I think you'll find that while NTA should reflect market value, the chance of them realising that value in the market is low.
Quote from: Dolcile on Sep 01, 2025, 11:44 AMA good letter and good to she shareholders holding the board to account
My concern is, I think you'll find that while NTA should reflect market value, the chance of them realising that value in the market is low.
Thanks Docile.
Previous divestments were done at/near market value. There's a large margin of safety between NTA and what the sale price would be so even if they sold something at 0.85x it still makes sense to do.
Quote from: Basil on Sep 01, 2025, 10:38 AMI agree 100% with Mos. Try and team up with Maverick and see if you can meet up with the CEO for a chat. The trick is to let them think it was their idea. You've never got a better chance as they've radically scaled back their new build rate so you are half way there.
Thanks for your comments. Not a bad idea, but I'm currently in Aus on exchange so not really an option at the moment.
Quote from: Mos on Aug 31, 2025, 07:51 PMTommy I think you on the right track and commend your activism. I engaged with the Board on this at an ASM around 5 years ago and Liz Coutts the Chair showed zero interest in a buy back initiative to create value then (from memory was more than 40% discount to NTA at the time). Her response implied that the Board thought their growth/building plan would create more value. Since then Oceania has built on a tonne of stock that has been very slow to sell. I think they were firstly not open minded to alternative (and more probable) ways of creating value and had secondly had misplaced confidence in their blue sky DCF models (easy to build a DCF spreadsheet model showing massive value creation - execution is a different matter altogether).
Probably the only way to get them meaningfully interested in the buy back idea is for it to be the CEO or Greg Tomlinson's idea. That is the challenge.
To be fair to Oceania they have divested around 18 of their weakest properties from a value creation perspective. It would be good to see this continue for the reasons you outline.
I can't get my head around continuing to build new care suites and apartments in Hamilton (slow sellers) at today's construction costs when they can effectively buy the existing portfolio at a 58% discount to NTA.
Also the variation in the standard of properties means the Oceania brand has no consistency ranging from top end premium to bang average or worse. It would be great to see them refining it to 20 great premium villages that are value creation engines and aggressively divesting what does not fit from value creation and brand perspectives. The progress towards this seems more of a laboured crawl than decisively swift. There is value in there but they do a good job of ensuring it does not show up anytime soon.
Keep up the good work.
Thank you.
I've also made online questions at past ASM's regarding a buyback, but nothing came out of it. I also sent an email earlier in the year which was met with a generic email thanking me for my interest in the company.
That's why this time I've taken a more formal approach, I've also sent the letters to their addresses listed on the register as well as HQ.
Quote from: Basil on Aug 31, 2025, 03:36 PMThe biggest problem however is neither the board or management seem to have any concern for, of focus on shareholders at all and frankly they never have.
Well the board are shareholders themselves, so it doesn't really make sense to think they don't have concern for themselves. Which is why I'm optimistic about the chances of a buyback being implemented.
Quote from: Basil on Aug 31, 2025, 03:36 PMGood luck getting the board to take a more shareholder centric focus. You'll need it but I commend you for trying. Stay on their case. Hound them at the annual meeting is my advice. How about this as a question for the next Annual meeting. What the heck is the point of building new units especially care suites when you have so much unsold stock and could buy back your own shares for 41 cents on the dollar. I'm almost tempted to buy a few and start the ferocious barking at the next annual meeting myself. If they can't see the logic in what you're suggesting why are they even on the board purporting to be serving shareholders best interests ? I'd suggest at the next meeting, you suggest that if they're not prepared to take some action they should resign. I'd love to do the barking but I'm an old dog now and its time for the next generation to make their mark. I look forward to you making some noise at the next annual meeting. My advice, don;t hold back, really rip into them.
I'll definitely consider that if they haven't got a buyback implemented by then.
Hmm ... Chief Legal Officer leaving immediately?
https://www.nzx.com/announcements/458383
She started only 20 months ago:
https://www.nzx.com/announcements/423712
Clearly she has another job within the industry. This is a common occurence and just not exec level
Quote from: Greekwatchdog on Sep 09, 2025, 11:20 AMClearly she has another job within the industry. This is a common occurence and just not exec level
Who knows, but given that her LinkedIn profile still (10. 09) shows her as Oceania Chief Legal and Risk Officer, I am not so sure about that option.
Wouldn't this be something somebody with her leadership and legal authority would fix first?
No idea, what happened, but it looks to me more like something for both sides somewhat surprising.
We shall see.
Quote from: BlackPeter on Sep 10, 2025, 08:43 AMWho knows, but given that her LinkedIn profile still (10. 09) shows her as Oceania Chief Legal and Risk Officer, I am not so sure about that option.
Wouldn't this be something somebody with her leadership and legal authority would fix first?
No idea, wht happened, but it looks to me more like something for both sides soemwhat surprising.
We shall see.
Gone to Stride Prop ...starts November
Quote from: winner (n) on Sep 10, 2025, 08:45 AMGone to Stride Prop ...starts November
Interesting. Gives her time to update her LI profile.
Quote from: winner (n) on Sep 10, 2025, 08:45 AMGone to Stride Prop ...starts November
Nice long holiday before she starts the new position. Stride probably offered a LOT more money. On top of that they have extra annual leave, (5 weeks minimum) and additional contributions to Kiwisaver above the statutory minimum. Stride so generous with their staff, maybe even more generous than OCA if that's even possible, seeing as both companies have declining EPS.
https://api.nzx.com/public/announcement/458810/attachment/452155/458810-452155.pdf
Lots of talk about strengthening sales teams but very modest results.
Radically lowering the build rate in future years will really eat into development profits...(not something they mention anywhere in this presentation).
Stripping out costs...the mind boggles...what have they been doing for the last 8 years not running the business efficiently ?
There's something in this presentation for everyone. There's no foreseeable dividend coming for many many years that I can see as 40-60% of negative cash flow is nothing.
Great they have a new 6 year plan to FY31. Wonder what happened to the previous 6 year plan when they listed that was supposed to lead to a point of inflection with earnings ?
Any change to the Retirement Villages Act that forces companies to buy-back units from a departing resident within a prescribed timeframe, would really hurt the sector and OCA, by far the worst with their very slow selling care suites.
I expect OCA to continue to limp along earning similar EPS in future years as they did last year. No growth 7.5 cps x 8.5 = 64 cents. OCA will continue to disappoint investors in the years ahead with a lack of growth in underlying EPS...mark my words.
Others will no doubt have a very different view and that's fine.
For Bars Review. They see no divvie until 2028 earliest
Oceania Healthcare's (OCA) 2025 investor day focused on transparency, sales execution, and cash discipline. That said, the handful of numbers provided were only average: enough to underpin the recent modest recovery in the share price, but not enough to create a real buzz on the day. All in all, we view the day as acceptable rather than exceptional. The positive is that sales applications have improved dramatically—what OCA has changed appears to be working—but we will likely have to wait until its FY26 result to see this reflected in reported sales growth. The slight disappointment is the lack of new cost initiatives and a continued stubborn focus on returning to growth—something we think OCA is years away from having earned the trust of investors to do. The glass-half-full view is that we have likely seen the trough in sales and the peak in both net debt and like-for-like opex. The slow recovery continues, with the potential to accelerate in 2H26. OCA is cash-generative and trades at <0.5x book value. We retain OUTPERFORM with an unchanged target price of NZ$0.84.
Sales have troughed ...
OCA's sales outlook was positive. It guided to ~+5% year-on-year growth in occupational rights agreement (ORA) sales for 1H26, broadly in line with our expectations. The more encouraging sign is that sales applications are up nearly ~+60% year-on-year in 1H26 and improved month-on-month in the period. Conversion of applications to sales is, if anything, improving slightly, suggesting a potentially strong sales recovery in 2H26/1H27. To reach our FY26 forecasts, OCA would need total ORA sales to grow ~+22% year-on-year in 2H26—achievable, in our view, in light of the sales applications. We leave our forecasts unchanged. Its update on its flagship development, The Helier, was slightly disappointing but is edging towards critical mass. Roughly seven additional units have sold since May 2025—just below the 'one every two weeks' guidance and shy of our hopes. At ~50% occupancy, however, we believe the development has reached critical mass, helped by a pricing reset and improved marketing.
... while net debt and costs have peaked
OCA guided to 100–150 units to be delivered in FY27, well ahead of our ~60-unit estimate. This higher build rate explains its medium-term gearing target of 30%–35% (versus our ~25% estimate). OCA is clearly planning to continue to build and even add to the landbank. This is not in line with our forecasts and will slow its reduction in absolute net debt. We do not expect OCA to proceed with these developments unless its current high level of applications converts into sales and runs down its unsold inventory. The return to prioritising new development and the prospect of unimputed dividends (likely from FY27/FY28)—while no consideration appears to have been given to buying back shares at <0.5x book value—is confusing.
Unlike its FY25 result, no new cost-out plan was announced. This was disappointing, though OCA reiterated the ~NZ$20m in annualised savings already in execution, with the full run-rate benefit to show in FY27. The programme appears on track, and investors were left with the impression that there could be more to come—just not announced at this stage.
Thanks for sharing Forbar's view GWD. Below is perspective from Craig's. Personally I would rather have buybacks and more aggressive portfolio streamlining. Seems like more of the the same glacial progress. Is anyone else irrationally irritated by the unnecessary corporate jargon "sales cadence" when they are just talking about sales?
Craig's on OCA...
OCA – STOP PRESS - OCA's investor day yesterday highlighted the following (i) sales momentum improved over July/August and is set to continue in September, which may partly reflect changes to marketing approach (more localised) and also price cuts where needed (ii) the company is on track to reduce costs by c.$20m (Ridgewell notes this is a net figure) (iii) the company plans to develop 100-150 units per year. The Development plans caused the most debate in the Q&A session, given the mixed success OCA has had with developments in the past, high debt levels, and the lack of detail provided by management to support the case to grow organically via development relative to other uses of capital (debt repayment, buybacks, M&A, and eventually dividends). Moreover, an intent to continue developing means the business will continue to carry a lot of debt medium term, rather than pay it down as has been central to the bull case espoused by other commentators (we estimate c.$500-550m, down only modestly from current levels ($636m) notwithstanding divestment of c.$50m of older villages, including c.$225m of core debt and c.$200-300m of unsold stock assuming a <2 year average sell down). Management was optimistic that the company would be in a position to resume dividend payments in FY27 or FY28 as it returned to positive adjusted FCF. Overall, we think there have been some positive changes to OCA's execution under new CEO Suzanne Dvorak and welcome the improved operating momentum, but we question whether the commitment to greenfield development makes sense – with M&A (either as acquiror or acquiree) likely to deliver scale (and hence higher free cash yields) faster than organic growth. Ridgewell rates OCA as Neutral.
Quote from: Mos on Sep 17, 2025, 11:36 AMIs anyone else irrationally irritated by the unnecessary corporate jargon "sales cadence" when they are just talking about sales?
My view is management went out of their way to use corporate's jargon to obfuscate as much as possible. Count how many times the word cadence was used in the presentation Obfuscation is something new for OCA (sarcasm)
Ridgewell has the best handle of any analyst on this company in my opinion. Its telling that he rates it only neutral when its trading well south of 50% of NTA.
How difficult is it for the board and management to understand that instead of building new units at current construction costs and then waiting for 2 years to sell them,, (which may or may not be eventually slightly value accretive to shareholders), you can buy your own shares back at only 45 cents on the dollar and get an instant value accretion of 122% (100/45) for shareholders ?
That would be EPS accretive unlike their previous claims that other village acquisitions would be. Why can't management and the board who are supposed to be acting in shareholders best interests see this ? Surely not because they're greedy self serving pigs with their snouts in the trough looking for ever increasing annual payments because of the expanding asset base of this "growth" company...
My view is that board changes need to happen. A proactive CFO who is shareholder focused is also badly needed. Without these changes this very poorly managed and governed lame duck will just keep waddling along at a glacial pace. I might buy a few shares and do some serious barking at the next annual meeting. Unless there's major changes this is only ever going to be a trading stock, buy in the 50's and sell in the 70's.
Quote from: Basil on Sep 17, 2025, 12:00 PMI might buy a few shares and do some serious barking at the next annual meeting.
Do it.
I'll be there as well.
Quote from: Basil on Sep 17, 2025, 12:00 PMMy view is management went out of their way to use corporate's jargon to obfuscate as much as possible. Count how many times the word cadence was used in the presentation Obfuscation is something new for OCA (sarcasm)
I ran their presentation through Grok, asking for it's opinion but to also look at "buzz phrases"...I did the same to the KMD presentation. I think "cadence" comes up 6 times, whereas "capital management" comes up a staggering 30 times! Kind of puts Forbars comment about share buybacks into perspective (also a shout out to ValueNZ who agitated for a buyback, at least one of the analysts is now talking about it).
Here is Grok's view on the OCA presentation:
Quote### High-Level Overview of OCA Investor Day 2025 Presentation
Oceania Healthcare Limited (OCA, listed on NZX since 2017 IPO) is a leading New Zealand provider of aged care and retirement village services, operating 36 sites as of August 31, 2025 (down from 48 at IPO through strategic divestments). The portfolio includes ~1,190 traditional care beds, ~1,123 premium care suites, ~813 villas, and ~1,059 apartments, with ~95% care occupancy at unaffected villages and ~2,600 employees. Focused on modern, integrated sites, OCA emphasizes care as its foundation while expanding independent living units (ILUs).
The 63-page Investor Day presentation (September 16, 2025) introduces a refreshed executive team under CEO Suzanne Dvorak (appointed 2024), highlighting market tailwinds like senior population growth (projected 75+ population doubling to 1.4M by 2078) and ILU undersupply (~115 villages by 2048). It addresses challenges such as economic pressures, regulatory reforms, workforce cycles, and housing market softness (e.g., median days to sell at 48 in July 2025).
The "Supporting and Empowering People to Live Well as They Age" strategy balances near-term priorities (FY25-27: sales performance via targeted campaigns/pricing; business excellence with $20.4M annualized savings; capital management targeting 30-35% gearing via stock sell-down/divestments) and long-term objectives (FY27-31: Customer Choice for high NPS/occupancy; Service Expansion via lifestyle pilots; Future Development with ~1,000-unit landbank at 100-150 annual build rate). Aims for YOY free cash flow/earnings growth, regular dividends (40-60% FCF), and resilience through tech, sustainability, and culture.
Overall, OCA positions itself as undervalued with a resilient, care-led model poised for sustainable growth, targeting debt reduction (~$342M from unsold stock/divestments), operational efficiencies, and market share in high-demand regions.
### Buzz Phrase Analysis
To measure buzz phrases (vague/aspirational/overused terms as defined earlier, e.g., "strategic," "leverage," "cadence," "intelligent" combos, plus hybrids like "financial guardrails"), I scanned the full document text (~6,795 words, excluding numbers/symbols/repetitive headers). This identified 190 instances, for an incidence rate of ~2.8% (about 1 in 36 words).
#### Top Buzz Phrases and Counts
Concentrated in strategy sections (e.g., pages 5-11, 32-60), where motivational language peaks. Examples include:
| Buzz Phrase | Count | Example Context |
|------------------------------|-------|-----------------|
| capital management | 30 | Repeated in "capital management framework" and priorities. |
| service expansion | 28 | Core objective (e.g., "Service Expansion: unlocking new revenue streams"). |
| customer choice | 27 | Pillar like "Customer Choice: what consumers want." |
| business excellence | 27 | Priority area (e.g., "Business Excellence: optimisation embedded"). |
| future development | 24 | Objective (e.g., "Future Development: landbank of ~1,000 units"). |
| strategic | 16 | In "strategic expansion," "strategic framework." |
| sustainable growth | 7 | Theme (e.g., "Sustainable growth, disciplined execution"). |
| disciplined execution | 6 | Repeated in summaries (e.g., "Disciplined execution today"). |
| cadence | 6 | In "sales cadence improvements," "application cadence." |
| high performing | 3 | E.g., "high performing sites," "high performing workforce." |
| year on year growth | 3 | In "Year on Year growth in free cash flow." |
| leverage | 2 | E.g., "leverage brownfield expertise." |
| scalable | 1 | In "more scalable systems." |
| customer-centric growth | 1 | Exec bio: "customer-centric growth." |
| leveraging data insights | 1 | Exec bio: "leveraging data insights to drive performance." |
| change management | 1 | Exec bio: "change management." |
| next phase of growth | 1 | In "team driving our next phase of growth." |
| empowered people | 1 | Pillar: "Empowered People." |
| purposeful impact | 1 | Pillar: "Purposeful Impact." |
| connected care | 1 | Initiative: "Connected Care." |
| seamless care | 2 | In "seamless care and trusted relationships." |
| inspired living | 1 | Initiative: "Inspired Living." |
Added phrases fit the "nice words with little chance" criteria, e.g., "sustainable growth" sounds aspirational but ties to specifics like savings/divestments. "Intelligent" combos not found, but "data driven" (implied in "data driven targeting") could qualify if expanded.
#### Rating on the Scale: Grounded in Reality vs. Full of Hot Air
On a 1-10 scale (1 = fully grounded, 10 = pure hot air), a **5**—balanced, similar to KMD, leaning grounded with specifics backing the flair.
- **Grounded elements**: Anchored in metrics (e.g., $20.4M savings, 30-35% gearing, 100-150 build rate, NPS >70), timelines (FY26 pilots, FY27-31 objectives), and actions (e.g., divest 4-6 sites for $50M, pilots at 3 sites). Market data (demographics, undersupply) and case studies (Eversley EBITDA $23k/bed) add credibility.
- **Hot air lean**: Repetitive aspirational terms like "sustainable growth" (7x), "disciplined execution" (6x) add polish but risk vagueness without full execution. Density (2.8%) is moderate for investor decks, clustered in strategy overviews.
Typical for sector presentations: Buzz motivates, but numbers (e.g., landbank ~1,000 units, debt reductions) make it credible. If you'd like to scan more phrases or focus sections, let me know!
Quote from: ValueNZ on Sep 17, 2025, 12:53 PMDo it.
I'll be there as well.
It might be tempting if it gets down into the 50's. More for the opportunity to really rip into management and the board than for the profit though. You're doing a great job with shareholder activism so far. Give yourself a pat on the back mate.
Interesting, thanks Ferg. Of course any assessment of this latest investor presentation needs to be viewed in the light of the almost endless stream of obfuscation and creative corporate B.S. speak that's emanated from management and the board in the past. I'm sure you have noticed that they never ever mention earnings per share unless its to lie about an acquisition they want to fund from shareholders being EPS accretive. That's literally the only time you hear EPS mentioned in any management commentary or report.. They're of course happy to wax lyrical about the fantastic growth in their assets to justify their egregiously generous increases in salaries. (CEO and CFO salaries have more than doubled since this listed more than 8 years ago while earnings per share have reduced and dividends cut to zero for years) You'd be easily forgiven for thinking they couldn't care less about shareholders and are running this company entirely for their own benefit.
For Bar update
Oceania Healthcare's (OCA) ongoing portfolio transformation is yet to deliver meaningful improvements in annuity earnings or cash generation, despite significant growth in its total asset base. That said, there are encouraging reasons to believe we are finally approaching an inflection point: (1) sales application momentum is improving; (2) ~NZ$20m of cost-out benefits will be largely realised in FY27; and (3) OCA's care suite portfolio is well positioned for NZ's widening care supply–demand imbalance. OCA has laid the groundwork to lead the sector in generating sustainable free cash flow from operations. Under new leadership, it must prove it can deliver on this foundation. While execution risk remains, we continue to see upside and we reiterate our OUTPERFORM rating with an increased target price of NZ$1.00
What's changed?
Earnings: Annuity EPS rises +32%/+1%/+2% over FY26/FY27/FY28 on higher DMF and modestly lower opex.
Target price: Increased to NZ$1.00 on earnings changes and the incorporation of a discounted cash flow (DCF) valuation.
OCA's asset growth has not translated to financial performance historically
Despite a near doubling of its independent living unit (ILU) footprint from ~1,050 units in FY17 to ~2,000 units today, OCA has failed to deliver growth in either: (1) our annuity EPS metric; or (2) free cash flow from ongoing operations. Village revenue (excluding resales) increased ~+75% over this period, while village opex and head office/ support costs rose +160% and +115% respectively. We expect an improvement in these trends with time.
Improving sales momentum and cost-out programmes underpin our belief in an inflection point
OCA's total sales applications through the first five months of 1H26 were +58% ahead of the comparable period in 1H25, with sequential monthly improvements from April through to August. Strong application momentum bodes well for settlements in 2H26 and into FY27, supporting the sell-down of unsold stock and improved village occupancy. Together with ~NZ$20m of annualised cost savings to be largely realised in FY27, these trends underpin our view that OCA's earnings are nearing an inflection point.
Care portfolio well positioned to benefit from intensifying demand pressures
OCA has NZ's largest portfolio of care suites (~850) sold under an occupational rights agreement (ORA). While the economically sound rationale behind care suites is yet to manifest in tangible improvements in care returns, a deterioration in core care margins over the last five years has obscured strong growth in ORA-related revenue. With cost pressures subsiding and occupancy rising across the sector, we expect these premium revenue streams to drive a material improvement in care profitability going forward.
Earnings revisions
We make relatively modest changes to our near-term earnings estimates, with higher DMF and marginally lower opex partially offset by lower resales gains. Our annuity earnings increase +32%, +1%, and +2% across FY26, FY27 and FY28 respectively. We also increase our build rate to align with the midpoint of OCA's medium-term guidance range of 100 to 150 units delivered per year, which leads to lower free cash flow and higher net debt from FY27.
Valuation (Dividend discount model [DDM] swapped out for DCF)
We have adjusted our valuation methodology to include a DCF (replacing our DDM). Our new target price of NZ$1.00 is based on a DCF valuation of NZ$0.90 and an annuity PE valuation of NZ$1.05, weighted evenly. Our DCF uses a weighted average cost of capital (WACC) of 9.1% and a terminal growth rate of 1.5%.
For Bars Preview of half year result
Oceania Healthcare (OCA) will report its 1H26 result on Friday, 21 November. We expect a solid improvement in annuity earnings, with strength in sales applications from April to August 2025 providing a strong platform for further growth in 2H26. Our key focus areas will be: (1) whether sales application momentum has continued following OCA's investor day update on 15 September 2025; (2) inventory levels and net debt; (3) progress with cost-out initiatives; and (4) care profitability. OCA is trading at ~0.5x NTA. For the market to reduce this discount going forward, the 1H26 result must demonstrate a clear pathway towards durable free cashflow generation.
Key points of interest
Sales progress: We forecast 270 total unit sales for 1H26, +5% ahead of 1H25 and at the midpoint of OCA's guidance (265 to 275 units) provided at its September investor day. We look for signs strong application momentum in 1H26 (total applications were +58% ahead of 1H25 through the first five months) is continuing and/or beginning to translate into settlements.
Inventory: OCA reported NZ$392m of unsold stock at its FY25 result in May, including NZ$342m of new sales stock. We expect inventory levels to fall during 1H26, with minimal new deliveries and management focused on clearing aged stock.
Balance sheet/net debt: OCA should report a reduction in net debt (FB: -NZ$33m) for the third consecutive half in 1H26, underpinned by positive development free cashflow (FB: +NZ$39m). Any updates on OCA's flagged divestment programme (four to six sites to be sold, releasing NZ$30m to NZ$50m of capital) will be of interest.
Cost out: We expect another nominal reduction in total opex in 1H26, with ~NZ$20m of annualised cost out underway.
21/11/2025, 08:30 NZDT, HALFYR
Momentum Building on Stronger Foundations
Oceania Healthcare (NZX:OCA) has delivered a much improved result for the six months ended 30 September 2025, reflecting disciplined execution and sustained momentum across its strategic priorities of sales performance, business excellence, and capital management. Improved sales conversion, cost efficiencies, and a sharper focus on working capital have strengthened operating cash flow. Gearing has reduced to within target range and the business is well positioned for further sustainable improvement in the second half.
Financial and Operating Highlights1
• Total Comprehensive Income: $40.4 million, up $28.6m on 1HY25
• Reported NPAT: $4.9m, compared to a loss ($17.1 million) in 1HY25
• Proforma Underlying EBITDA2: $41.8 million, up 19.7% on 1HY25
• Proforma Underlying NPAT2: $24.1 million, up 18.9% on 1HY25
• Free Cash Flow from Operations: $(8.4) million, 30.0% improvement from 1HY25
• Annualised cost savings: $20.4 million identified, with $4.0 million delivered in 1HY26 and on track to deliver $13.2m in FY26
• Care EBITDA per bed: up 45.5% to $12.4k, reflecting a renewed and disciplined approach to operational excellence and strong sales of care suites
• Total assets: increased to $3.0 billion, up 3.3% on FY25
• Net tangible assets: $1.57 per share, a 3.8% increase on FY25
• Gearing: 34.8%, down 1.5 percentage points from March 2025 and within the target range of 30 – 35%
1 All balances have been extracted from the 30 September 2025 interim financial statements and are unaudited.
2 Underlying NPAT and Underlying EBITDA are non-GAAP measures of financial performance. The calculation of Underlying NPAT and Underlying EBITDA requires a number of estimates to be approved by the Directors in their preparation. Both the methodology and the estimates may differ among companies in the retirement village sector. A reconciliation of Reported NPAT to Underlying NPAT and Underlying EBITDA is included in Note 2.1 of the Interim Report. Proforma Underlying NPAT and Proforma Underlying EBITDA are adjusted for the impact of the closure of the Wesley Institute of Nursing Education in April 2025. A reconciliation of Underlying NPAT and Underlying EBITDA to Proforma NPAT and Proforma EBITDA is included on page 9 of the Interim Report.
Sales performance
Sales performance strengthened through the period, underpinned by targeted initiatives to improve conversion rates and reduce unsold stock. Total sales volumes rose 5.0% to 271 units, reflecting broad based momentum across the portfolio. Sustained demand for care suites delivered 161 sales in line with the prior period. Independent living unit sales improved, rising 13.4% to 110 units. At The Helier, in Auckland, sales continue to improve, with 54.5% of residences either occupied or under application as at 20 November 2025 and targeting full cash recovery, including interest, by 31 March 2026. Enquiry and conversion levels continue to build, reflecting growing market recognition of The Helier's full range of living options combined with its premium resident experience.
At Franklin, in Auckland, presales continued to build strongly, with 11 villa sales secured to date ahead of completion. Construction remains on schedule, with 31 independent living units set to welcome their first residents in January 2026.
Suzanne Dvorak CEO said "The early sales success at our Franklin development reflects the growing strength of Oceania's sales capability, with product design, pricing, and location increasingly aligned to customer demand. The project illustrates the effectiveness of Oceania's disciplined approach to development."
Financial Performance
Total Comprehensive Income was $40.4m, up $28.6m, reflecting the initial positive impacts of the cost out programme and the impact of fair value gains. Operating Cash Flow increased to $79.0 million, up 12.2% compared to $70.4m in 1HY25. This was driven by higher cash receipts from occupation right agreements (ORAs), up 3.2% on the prior corresponding period, supported by lower payments to suppliers and employees, down 3.8% on the prior corresponding period. The care segment recorded a 40% increase in underlying EBITDA compared with the prior period, supported by enhanced clinical systems, digital workflow tools, and refined acuity management. Annualised care EBITDA per bed, excluding resale gains, rose to $12.4k, up 45.5%, with more than half of the portfolio generating over $15.0k per bed per annum.
Proforma Underlying EBITDA was $41.8m for the 6 months ended 30 September 2025. This included total capital gains of $38.4m, an increase of $0.2m on the previous year.
Gearing reduced to 34.8%, down from 36.3% at 31 March 2025, leaving undrawn net debt headroom of $116.1m at 30 September 2025 as planned.
Interim Dividend
The Board announced a new dividend policy in June 2025 to align with operating cashflows and targeting a payout ratio of between 40 and 60% of Free Cashflow from Operations, subject to capital requirements and investment opportunities.
Chair, Liz Coutts advises that "The Board has decided not to declare an interim dividend for 1HY26, in line with the policy. Dividend payments are expected to resume when the business achieves positive free cash flow from operations, supporting a return to payment of dividends."
Strategy and Outlook
Oceania Healthcare's strategic direction is clear and in motion. In September, the company hosted a well-attended Investor Day for institutional investors and equity analysts.
The near-term priorities of Sales Performance, Business Excellence, and Capital Management outlined on the day are being executed with discipline.
Mrs Coutts said "Oceania is first strengthening its foundations to position the business for its next phase of growth. The longer-term strategic horizon (FY27–FY31) will build on these foundations, focusing on customer choice, service expansion, and future development."
Oceania's land bank and operational footprint provide significant optionality, and development activity will continue to be paced to align with market conditions and capital availability. The company is taking a disciplined approach to growth, building only when and where conditions are right. It will build towards its target of 100-150 units per year over the near term.
For the remainder of FY26, the focus is on executing these foundations with precision. Increasing sales cadence and reducing debt remain central to this effort. Key operational priorities include:
• strong sales at The Helier, targeting full recovery of development costs by March 2026;
• completing Stage One at Franklin with increasing presales (currently at 35.5%);
• further improving care profitability;
• implementing $20.4 million in annualised cost-out initiatives from FY27;
• completing four planned divestments targeting ~$40 million in capital release;
• delivering significant debt reduction to maintain gearing within the targeted range of 30 – 35%; and
• returning to positive free cash flow from operations and resuming the payment of dividends.
Ms Dvorak said: "We have acted quickly and decisively as a leadership team. The progress over this focused period of execution ensures Oceania enters the next stage of its strategy with stronger cash generation, a leaner cost base, and the balance sheet strength to pursue disciplined, value-accretive growth. Oceania enters 2HY26 with significantly improved sales, financial, and operational momentum.
We said we'd strengthen sales, improve operational efficiency, and reduce debt. We're delivering on all three. That disciplined execution gives us confidence as we move into the second half and beyond."
Cool how senior management's salaries have more than doubled since the IPO but shareholders get nothing year after year.
Market not happy
Groundhog Day again. Slow progress dressed up as knocking the lights out. Being a holder of Oceania requires the patience of a saint; like driving behind a campervan over the Lindis Pass while being forced to listen to them talk about their performance like they are Max Verstappen coming through the field for the win. The excessive gilding the lily does them a disservice - a bit more humility, reality and Mainfreight style straight talking would be more credible.
Positives
- Improving care profitability trends finally
- Focus and some traction on the $20 m cost reduction target
- Reducing debt
- Slow progress but some progress on The Helier sell down
- Decent initial pre sales for Franklin stage 1 (much better than The Helier)
- Continued focus on selling down properties that don't create value and detract from brand consistency. If they get the 4 villages away for ~$40m that will be a good step forward and I reckon there are another 10-12 villages that don't fit and I suspect they will sell over the next 3 years or so
- Very low cost of debt until at least 27/28
- Ryman DMF and weekly fees hike facilitating a better competitive environment
Negatives
- How they can describe sales performance as strong at the start of the presentation I don't know, later in the presso they more realistically describe both resales and new sales as steady - will take a long time to unwind the excess stock position at this rate
- Free cash flow from operations negative -$8.4m
- Taking a long time to streamline to the portfolio
- Lack of Board/Management interest in buy back at 50% of NTA is baffling and frustrating. Suggests they either don't care about creating shareholder value efficiently and/or they actually believe the value of the business is around 50% of NTA. Hopefully the institutions and brokers will change the Board's mindset on this but based on track record not holding my breath
- Stale Board that have overseen years of drift
Value
- With strong sales execution, effective cost management, continuing to improve care profitability, delivering on portfolio streamlining, a buy back programme - it has the potential to close the gap to NTA over the next 2-5 years in my view
- With more of the same including continued slow sales and no buy back it is hard to see a catalyst for much of a rerate
Disclosure
- Hold at 3% of portfolio but not adding at this price until they start kicking some goals
Craigs not impressed
uNPAT of $23.8m is in-line with the pcp and tracking below consensus for FY26 uNPAT of $62.2m or +19% YoY. 1H26 uEBITDA increased 8% YoY to $41.5m but tracking 21% below consensus for $111.35m (+29% YoY) for the full year. Normalising for the impact of divesting sites from their ongoing operations and the closure of the Institute of Nursing Education in April 2025, proforma uEBITDA for 1H26 was $41.8m, +19.7% on 1H25. This included total capital gains of $38.4m, an increase of $0.2m YoY.
Operating cash inflows of $79m increased 12% YoY, driven by higher cash receipts from occupation right agreements (ORAs), up +3.2% on pcp, supported by lower payments to suppliers and employees, down -3.8% on the prior corresponding period. Investing cash outflows fell 30% YoY to $59.5m.
Net debt fell 3% HoH to $608.9m (107% of FY26 consensus for $569.6m and 102% of CIPe consensus for FY26). Gearing eased slight to 34.8% (from 36.3%) and is within OCA's targeted gearing range of 30-35%.
Free cash flow from operations remains negative at -$8.4m, a 30% improvement from -$12.0 at 1H25 but still disappointing.
Mos said "Stale Board that have overseen years of drift"
Datamine have a Board Scorecad. Ranked about 80 directors based on the performance of the companies hey are involved in.
Oceania Director rankings are
Coutts. 7th
Isaac. 11th
Hamilton. 57nd
Tomlinson. 65th
Seems Coutts is high through her involvement with Ebos. Isaac involved with Scales and Z Skellerup helps him.
Maybe your staleness is from Tomlinson and Hamilton
Prendergast et al don't get ranked as only on one Board but I'd say Prendergast is a lame duck anyway
Quote from: Mos on Nov 21, 2025, 03:49 PMthey actually believe the value of the business is around 50% of NTA.
Great post. But I would suggest that they know the business is undervalued, for most/all their average price paid per share sits well north of the current share price.
Why they don't repurchase the shares, maybe it's a lack of understanding of how a share buyback works? Or they don't want to rock the boat and do something outside of the industry norm.
Maybe they are afraid if they implement it now all of the shareholders will be questioning why they didn't do it years ago?
It might also be a case of empire building.
Quote from: ValueNZ on Nov 21, 2025, 05:42 PMWhy they don't repurchase the shares, maybe it's a lack of understanding of how a share buyback works? Or they don't want to rock the boat and do something outside of the industry norm.
That was answered today
"And as a management team, we haven't recommended a share buyback at this time. We currently -- we lack the free cash flow at the moment. A buyback would require additional borrowing.
And -- but importantly, we do believe that as we have capital free up, so over and all the things we talked about today through divestments, improvement, sell-down of development stock, we are freeing up capital.
Our current view, though, is that there are better growth opportunities such as value-adding developments that would deliver greater long-term value than returning the funds to shareholders at this point in time.
We'll obviously keep revisiting that as a Board, and we'll come back to you again in March, and I expect the same question, and we'll be able to answer it again then. But at this point, we're not recommending a share buyback"
Quote from: Greekwatchdog on Nov 21, 2025, 06:09 PMThat was answered today
"And as a management team, we haven't recommended a share buyback at this time. We currently -- we lack the free cash flow at the moment. A buyback would require additional borrowing.
And -- but importantly, we do believe that as we have capital free up, so over and all the things we talked about today through divestments, improvement, sell-down of development stock, we are freeing up capital.
Our current view, though, is that there are better growth opportunities such as value-adding developments that would deliver greater long-term value than returning the funds to shareholders at this point in time.
We'll obviously keep revisiting that as a Board, and we'll come back to you again in March, and I expect the same question, and we'll be able to answer it again then. But at this point, we're not recommending a share buyback"
Yeah, I asked one of the Forbar analysts this morning to ask about repurchases and am glad they did.
I am extremely unsatisfied with that answer and will come back to it with my thoughts at some point.
Govt introduces mandatory 12 month buyback for units. I can think of one company this is really going to hurt. Will also hurt Ryman and to a lesser extent SUM. Paywalled https://www.nbr.co.nz/politics/govts-retirement-village-reforms-introduce-12-month-buyback/
Quote from: Basil on Dec 04, 2025, 12:01 PMGovt introduces mandatory 12 month buyback for units. I can think of one company this is really going to hurt. Will also hurt Ryman and to a lesser extent SUM. Paywalled https://www.nbr.co.nz/politics/govts-retirement-village-reforms-introduce-12-month-buyback/
Yes, not the greatest news for RVs, however on the plus side (and as per the parliamentary bill as proposed), the law won't be in force until 2027 at the earliest and more importantly for the RVs, the repayment requirements will only apply to new contracts.
Its a real shame the 50,000 + existing residents will still get a raw deal. This will allow unscrupulous operators to continue to hang them out to dry with the resale of their unit while the village heavily promotes its own brand new stock. I believe that disgraceful practice is more widespread than investors would care to know about. It commonly takes the form of significant sales incentives for new units that are not applicable to resale units
Additionally the village sets the price difference between new and resale units, if any and they are simply not motivated to resell former residents old units when they have lots of new stock they're struggling to sell.
Quote from: Basil on Dec 04, 2025, 01:57 PMIts a real shame the 50,000 + existing residents will still get a raw deal. This will allow unscrupulous operators to continue to hang them out to dry with the resale of their unit while the village heavily promotes its own brand new stock. I believe that disgraceful practice is more widespread than investors would care to know about. It commonly takes the form of significant sales incentives for new units that are not applicable to resale units
Additionally the village sets the price difference between new and resale units, if any and they are simply not motivated to resell former residents old units when they have lots of new stock they're struggling to sell.
I guess with the huge contraction in new builds that we will see over the next few years, this issue will resolve itself to a large extent
They'll just increase DMF and weekly costs to 'recover' this added burden
12 month limit I think is fair and was expected. Has just been introduced in NSW and Victoria.
OCAS just released this.
4 December 2025
Proposed changes to Retirement Villages Act 2003
Oceania acknowledges the importance of the proposed changes to the Retirement Villages
Act.
They provide clarity and certainty to residents, their families and the Operators of
Retirement Villages.
Oceania already operates within the parameters proposed by the Government.
We buy back villas, apartments and care suites within a 12-month period and pay interest to residents
from the 6-month mark and do not charge fees or accrue any deferred management fee
from the time of vacant possession.
Our focus remains on supporting our residents to live well, with confidence and peace of
mind.
This announcement has been authorised for release by the Chair of the Oceania Board
Quote from: Basil on Dec 04, 2025, 12:01 PMGovt introduces mandatory 12 month buyback for units. I can think of one company this is really going to hurt. Will also hurt Ryman and to a lesser extent SUM. Paywalled https://www.nbr.co.nz/politics/govts-retirement-village-reforms-introduce-12-month-buyback/
You may want to do more research before having a crack
Quote from: Greekwatchdog on Dec 04, 2025, 05:08 PMYou may want to do more research before having a crack
That's a bit inconvenient for the recidivous naysayers who didn't know that OCA had already implemented exactly the policy proposed by government. Like, it has no, zero effect on OCA.
The government bill is more likely to severely affect the smaller to medium non-listed RV / rest home entities, than the listed ones who are more involved and proactively anticipating sector reform changes.
Quote from: Basil on Dec 04, 2025, 12:01 PMGovt introduces mandatory 12 month buyback for units. I can think of one company this is really going to hurt. Will also hurt Ryman and to a lesser extent SUM.
Quote from: Greekwatchdog on Dec 04, 2025, 05:08 PMYou may want to do more research before having a crack
Indeed..... RNZ reporting SUM is most affected by these changes.... SUM still using the 12 month buyback requirement while other operators were using 6 months buyback long ago.
Here's OCA's statement
Oceania acknowledges the importance of the proposed changes to the Retirement
Villages Act. They provide clarity and certainty to residents, their
families and the Operators of Retirement Villages. Oceania already
operates within the parameters proposed by the Government. We buy back
villas, apartments and care suites within a 12-month period and pay interest
to residents from the 6-month mark and do not charge fees or accrue any
deferred management fee from the time of vacant possession
Disc - Don't hold OCA or any other retirement sector.
The gold rush is over for this sector as per my post in the RYM thread. reproduced below.
Interesting coincidence that OCA made that statement right after the Govt announcement. I don't believe in coincidences especially from companies that have been proven to be masters of information obfuscation over many years but regardless of whether you accept their announcement at face value or not the gold rush is over and I believe this sector will deliver well below acceptable returns on capital employed for the foreseeable future. You see that in the fact that RYM and OCA have had to suspend dividends for years and recently radically dialing their build rate back in a desperate attempt to be cash flow positive.
The poor sods that took up shares at the IPO eight and a half years ago are more than 30% underwater in inflation adjusted terms, (share price has to get to $1.27 just to match inflation over that period let alone get any return at all on their capital, (source RBNZ inflation calculator), much worse for those poor unfortunates that subscribed to the capital raise at $1.30 several years ago.
Lets face it, IPO subscribers were sold "a pup" with this company. A significant majority of the villages this floated with have either been sold or are on the market. This was and remains a lame dog because its saddled with a business model with far too much care which will give very weak returns on capital employed forever and a day. This is without doubt the worst business model of any of the listed companies in this sector for those actually interested in shareholder returns. RYM probably gets the prize for the worst management in the recent past. Whether the current lot are any good or not is anyone's guess.
Disc: No stake in any company in this sector.
QuoteThe Gold Rush is Over
Ryman listed in June 1999 and for more than a decade enjoyed unprecedented demand as the leading listed company in its field. Not only did it enjoy first mover listed advantage there was virtually no competition from unlisted players and we were enjoying an unprecedented sustained period of house price inflation.
Between mid 1999 and the peak of the housing market in late 2021 housing went up 456% whereas general inflation went up only 65% (source RBNZ inflation calculator and their real estate index calculator) so for more than 20 years housing inflation outstripped general inflation by more than seven to one ! Putting some numbers on this, a mid priced house worth $200K in mid 1999 went up to $1,112K whereas if it has just matched inflation it would be worth $330K. This enabled RYM an opportunity to resell licenses to occupy units for two to three times the original development cost and then do it again 10 years thereafter. The sector looked to be invincible and indeed RYM took on market darling status.
Housing became so unaffordable over that timeframe we've seen a sustained drop of 16% since then, despite inflation of 17.5% so housing is less outrageously overpriced in real inflation adjusted terms by a factor of one third than it was at the peak, but still vastly more expensive in real terms that when RYM listed. This sustained correction may have more road to travel due to a much lower pattern of immigration, lack of affordability and sustained efforts by central government to free up more land resources for development.
RYM's model was built upon selling mainly first class units at high prices and charging fixed fees for life and then reselling those licenses to occupy about ten years later for several times the original price. This was always where the real gold was made and is analogous to walking around and picking up huge nuggets of gold just lying on the ground.
It was so lucrative that just like any other gold rush there were soon other players itching to get into the action. Summerset listed in November 2011 at $1.40 and has carved out a niche in the middle segment of the market and done extremely well. In fact it's listing can be traced to when RYM's golden period of first mover advantage ended.
These days there are so many companies trying to extract an advantage from this sector its easy to make the case the market is vastly over supplied and only the very best operator SUM can make any money along with those supplying the picks and shovels to this sector.
My contention is quite simple. In most investors lifetimes, its exceptionally unlikely you'll ever see another sustained period of 20 years where housing outperforms the rate of inflation by 7:1 or even anything remotely similar but that is exactly the sort of sustained extreme bullish real estate environment that's needed for retirement companies to make serious coin again. Its simply not going to happen as housing even after the recent correction is still at unaffordable level's.
SUM have some really significant competitive advantages over RYM now which include:-
They still have a fully integrated internal development model with huge economies of scale.
They are still building new units at scale ~ 700 per annum, (the only one doing so of the listed players as others desperately try and repair stretched balance sheets and rectify slow moving stock issues) which confers huge market share gains to SUM in future years and better economies of scale with their head office costs.
SUM are not saddled with legions of residents stuck on ultra low fixed fees for life that's literally draining the lifeblood out of business operations at a village level. i.e. people still paying for example $99 per week fixed fees for life at RYM's villages are literally laughing all the way to the bank as its probably costing RYM near twice that now to service their needs. This will cause a huge drain on cash flow that will only gradually abate over the next decade or so.
There is only one company on the NZX in this sector worth investing in in my opinion. Only one that has come through the baptism of fire this sector has experienced with their reputation intact. Even SUM will only perform in a mediocre way in a new environment of heightened competition, losses in care and where all you are likely to ever make on a unit is in the initial development margin, (often sunk back into the village with common area facilities) and then the ongoing DMF going forward.
RYM performed well when it had all the sector tailwinds behind it, enjoyed first mover advantage and enjoyed the legendary services of the CEO Simon Challis. None of these factors apply any more. Worse, management that have followed on from Simon have all been underwhelming to say the very least.
There's vast amounts of listed and unlisted competition now for RYM and all now seem to be struggling to eek out even a very modest return on assets, a situation I expect will continue indefinitely. RYM have done themselves no favors with the myriad of accounting standard changes and highly questionable and quite frankly misleading original accounting practices. Two 1 billion dollar capital raises has avoided the ship sinking but I see systemic weaknesses now in their business model and while the good ship Titanic is now very unlikely to sink, it lacks some of the key drivers it once had and the analogy I see is it will limp along with bent propellors at a very mediocre cruising speed.
My 2 cents worth. Others will see it differently and think this sector will return to its glory days at some stage soon. Good luck with that.
Average of 4 professional analysts sees this getting to $3.20 one year hence and its rated an average hold.
Assets that cannot grow in real inflation adjusted terms and cannot give you a half decent dividend yield, investing money there is a dead end in my book. If all you can ever make with villages is the DMF maybe that's an acronym for Dead Money Forever in this sector ?
Quote from: Basil on Dec 05, 2025, 10:14 AMThe gold rush is over for this sector as per my post in the RYM thread. reproduced below.
Interesting coincidence that OCA made that statement right after the Govt announcement. I don't believe in coincidences especially from companies that have been proven to be masters of information obfuscation over many years but regardless of whether you accept their announcement at face value or not the gold rush is over and I believe this sector will deliver well below acceptable returns on capital employed for the foreseeable future. You see that in the fact that RYM and OCA have had to suspend dividends for years and recently radically dialing their build rate back in a desperate attempt to be cash flow positive.
Disc: No stake in any company in this sector.
The poor sods that took up shares at the IPO eight and a half years ago are more than 30% underwater in inflation adjusted terms, (share price has to get to $1.27 just to match inflation over that period let alone get any return at all on their capital, (source RBNZ inflation calculator), much worse for those poor unfortunates that subscribed to the capital raise at $1.30 several years ago.
You must have sold your stake in SUM that you bought into a little bit back.
You can paint it anyway you like but you quoted it wrong again.
When the IPO came out, I recall you as saying this is a home run, put it in the draw for 10 years.
As always everyone should do their own respective research.
All OCA did was confirm what some already new to market. Absolute nothing wrong with that. Also I note at the time of Govt annoucement that SUM;s shareprice sank whilst OCA's when up again.
Quote from: Greekwatchdog on Dec 05, 2025, 10:25 AMYou must have sold your stake in SUM that you bought into a little bit back.
You can paint it anyway you like but you quoted it wrong again.
When the IPO came out, I recall you as saying this is a home run, put it in the draw for 10 years.
As always everyone should do their own respective research.
All OCA did was confirm what some already new to market. Absolute nothing wrong with that. Also I note at the time of Govt annoucement that SUM;s shareprice sank whilst OCA's when up again.
Looks like Basil is a bit caught in his views ... but hey, most of us are in some areas, and this is ok, isn't it?
Just looking into the market trends - it looks like OCA, RYM and yes, SUM are in an uptrend (above MA200 and MA50) - and while the market is not more often right about the future than all these analysts - at the moment the consensus seems to be that things go up for the sector. Not bad to hold stocks going up.
Was it yesterday that RNZ had this discussion about a serious shortage of retirement homes and care homes and things sigificantly worsening within the next decade or so? Can't be that bad that some companies are still providing some of the units.
Personally I am rather optimistic with this sector - and holding OCA, RYM and SUM. Not all of them worked ideally in the past - but all of them offer something people will need. Maybe even more than 13 year olds need stuff from HLG, but this is a different discussion.
Quote from: BlackPeter on Dec 06, 2025, 10:41 AMLooks like Basil is a bit caught in his views ... \
Simply he tried to shoot the worst performing stock in the sector down again but making a number of assumptions because of his own ignorance only to defend what he said with crap.
OH the irony. But wait he is allowed to put false information on here without ever having to acknowledge his wrong doings.
Seems like Oceania had $43m of unsold buy backs as at September
Used this as an excuse for debt not reducing as much as market was expecting. Adds to the interest bill.
Does seem to be taking a long time to find a buyer of vacated units. Maybe Basil has a point when he said they probably more motivated to sell newly developed units than vacated ones, like the big up sell to higher margins trick.
But then they have $137m of new stock >12 months old that hasn't been sold as well. Seems they don't try hard enough to sell stuff.
Quote from: winner (n) on Dec 06, 2025, 02:40 PMSeems like Oceania had $43m of unsold buy backs as at September
Used this as an excuse for debt not reducing as much as market was expecting. Adds to the interest bill.
Does seem to be taking a long time to find a buyer of vacated units. Maybe Basil has a point when he said they probably more motivated to sell newly developed units than vacated ones, like the big up sell to higher margins trick.
But then they have $137m of new stock >12 months old that hasn't been sold as well. Seems they don't try hard enough to sell stuff.
You miss the point as usual, he was sounding off vs Govt RV intro claiming this will effect OCA more so than the others (SUM last)
SUM is most effected, then RYM then OCA.
Quote from: Greekwatchdog on Dec 06, 2025, 03:39 PMYou miss the point as usual, he was sounding off vs Govt RV intro claiming this will effect OCA more so than the others (SUM last)
SUM is most effected, then RYM then OCA.
Sorry mate buts it you whose missing the point
I wasn't commenting on the Govt announcement and its impact. I was commenting on how much aged stock Oceania had and how long it seems to take them to sell them.
The Summerset man says the changes might inhibit future development growth but made some interesting comments to BusinessDesk
Summerset chief executive Scott Scoullar said the six-month interest requirement would have significant consequences for the industry, particularly smaller operators who may be unable to afford it. The "double financial hit" of the six-month interest requirement and 12-month buy-backs made it likely that operators would need to adjust their financial model and consider whether they needed to lift the prices of retirement village units or additional ongoing fees, he said. "We'd expect to have to recoup the extra cost burden over time," Scoullar said
No doubt Oceania et al will follow suit ..if they haven't already done so.
Quote from: winner (n) on Dec 06, 2025, 03:52 PMSorry mate buts it you whose missing the point
I wasn't commenting on the Govt announcement and its impact. I was commenting on how much aged stock Oceania had and how long it seems to take them to sell them.
Thats old news get over it.
Quote from: winner (n) on Dec 06, 2025, 04:17 PMThe Summerset man says the changes might inhibit future development growth but made some interesting comments to BusinessDesk
Summerset chief executive Scott Scoullar said the six-month interest requirement would have significant consequences for the industry, particularly smaller operators who may be unable to afford it. The "double financial hit" of the six-month interest requirement and 12-month buy-backs made it likely that operators would need to adjust their financial model and consider whether they needed to lift the prices of retirement village units or additional ongoing fees, he said. "We'd expect to have to recoup the extra cost burden over time," Scoullar said
No doubt Oceania et al will follow suit ..if they haven't already done so.
OCA have already made the annoucement. More to come who knows as they are not the most forth coming of info
Quote from: Greekwatchdog on Dec 06, 2025, 04:23 PMThats old news get over it.
Quote from: Greekwatchdog on Dec 06, 2025, 04:23 PMThats old news get over it.
I thought it was a reasonable and pertinent comment
C'mon GWD ...stop acting like a self appointed admin / moderator
Cheers
Quote from: winner (n) on Dec 06, 2025, 03:52 PMSorry mate buts it you whose missing the point
I wasn't commenting on the Govt announcement and its impact. I was commenting on how much aged stock Oceania had and how long it seems to take them to sell them.
Actually - while spreading mischief is always good - are you sure that this is any relevant in the context of the governments announcement?
As far as I know has Oceania not more and not less unoccupied units for resale than its competitors, and this is the only units which would fall under any govenment changes. They do have still a higher number of first sales (mainly from their top-luxury establishments), but given they didn't had a previous owner, this is absolutely irrelevant in this context.
So, I guess the question is, did you erroneously wrote that not understanding the circumstances ... or did you try to mislead the discussion by providing wrong information?
Quote from: BlackPeter on Dec 06, 2025, 06:13 PMSo, I guess the question is, did you erroneously wrote (sic) that not understanding the circumstances ... or did you try to mislead the discussion by providing wrong information?
In my interpretation of the above posts GreekWD pointed out that a certain esteemed poster has been knocking OCA for a long time while often promoting SUM at the same time ....but now the same esteemed poster admits that he no longer holds SUM (or any retirement sector stock) ??
Perhaps GreekWD was not misleading and merely noted these apparent contradictions...and perhaps someone else had been misleading?
Meanwhile on the TWR thread the same esteemed poster has been promoting the size of his... growing holding.... in TWR.
So perhaps posters and GreekWD have cause to ask questions;
1.) was someone ramping SUM while also selling SUM around the recent announcements?
2.) Was someone selling SUM in order to buy TWR?
Disc - Don't hold OCA or any retirement operators.... but have long held TWR and also noted some recent possible contradictions on this thread.
ps since this was posted today there was a response which has now been deleted (?) ....... in summary the poster answered....
1.) No and he only had a small holding in SUM
2.) No
Good to know .
Good publicity for Oceania to inform market they already abide by new rules
Should have gone further and said what it cost them, being nice and fair and reasonable is costly.
Quote from: winner (n) on Dec 07, 2025, 09:47 AMGood publicity for Oceania to inform market they already abide by new rules
Should have gone further and said what it cost them, being nice and fair and reasonable is costly.
I guess it depends whether you want them to do a quick trick and disappear, or whether you want them to grow a sustainable business.
Anyway - given you seem to know its expensive, justy give us the numbers: How many of their resales are empty for more than 12 months?
Quote from: BlackPeter on Dec 07, 2025, 10:02 AMI guess it depends whether you want them to do a quick trick and disappear, or whether you want them to grow a sustainable business.
Anyway - given you seem to know its expensive, justy give us the numbers: How many of their resales are empty for more than 12 months?
Seems to $43m worth
Quote from: winner (n) on Dec 07, 2025, 10:13 AMSeems to $43m worth
Where did you get $43m from?
Edit:
Cancel that.....I see it is on p19 of the HY26 presentation.
$43m is the total buyback stock as at 30 Sept 2025.
It appears the total buyback stock was higher in FY25 (given cash was released in HY26) and the growth over FY24 & FY25 was driven by:
QuoteBuybacks include the closed building at The Oaks and at Elmwood relating to villas which have been ear marked for redevelopment.
You have to wonder why if their buy- backs are on industry leading terms this fact does not feature prominently on their website or indeed at all ?
https://oceaniahealthcare.co.nz/retirement-living/#four-point-promise
All I've ever seen on there is mention that the the refund of the occupation license, after deduction of DMF gets paid out when the unit is resold. https://oceaniahealthcare.co.nz/faq/how-much-will-be-refunded-when-i-leave-my-villa-or-apartment/
Shareholders might wonder when this 12 month buy-back change came into effect ? Does it apply to all residents or just some who bought units quite recently ? If the estates of early residents are being paid out before the units resell, as an extra measure over and above the original contracts terms, how is this in the best interests of shareholders who haven't got a single cent in dividends for years ?
My opinion expressed earlier was based on publicly available information available on OCA's website, see links above.
That's all I have to say on this matter and I will not be drawn into endless debate which is simply a waste of my time.
Quote from: winner (n) on Dec 07, 2025, 10:13 AMSeems to $43m worth
Hmm.
Good Ferg seems to have found it, but I see not how which value on page 19 of the HY report points to how much it costs OCA to pay es residents after 12 months for their unsold unit (and add interest from the 7th month).
Given that the average resell time is below 6 months must it be a small number of units - and basically provide a loan for some months (until it is sold).
If the 43m is e.g. the number of unsold preloved units (after 12 months) - than we still would need to know what interest rate they pay and for how long. Say 5% interest and 3 months, than this would be something like 500k per year.
Must be my lack of peacounting ... could you just help us to explain where the number comes from and what it exactly is ... ?
Quote from: BlackPeter on Dec 07, 2025, 03:49 PMHmm.
Good Ferg seems to have found it, but I see not how which value on page 19 of the HY report points to how much it costs OCA to pay es residents after 12 months for their unsold unit (and add interest from the 7th month).
Given that the average resell time is below 6 months must it be a small number of units - and basically provide a loan for some months (until it is sold).
If the 43m is e.g. the number of unsold preloved units (after 12 months) - than we still would need to know what interest rate they pay and for how long. Say 5% interest and 3 months, than this would be something like 500k per year.
Must be my lack of peacounting ... could you just help us to explain where the number comes from and what it exactly is ... ?
You only asked what the units >12 months value was. I assumed that was $43m of unsold resale units. Migh5 be wrong.
What is financial impact of unsold resales? We'll never be told. Besides interest expenses incurred there's also the lost fees and DMF until sold again. They all add up and impact profitability at some point in time.
Quote from: winner (n) on Dec 07, 2025, 06:01 PMYou only asked what the units >12 months value was. I assumed that was $43m of unsold resale units. Migh5 be wrong.
What is financial impact of unsold resales? We'll never be told. Besides interest expenses incurred there's also the lost fees and DMF until sold again. They all add up and impact profitability at some point in time.
OK - so, if the 43m is the number of unsold resale units (vs unsold of all units) ... than at least half of them are less than 6 months unsold (based on average resale time with 5 yrs residence and 90% occupation), i.e. no interest at all.
For the other half OCA will need to pay for some months some interest. Some $100k per year?
Does not sound to me like the big hammer which is wedged for years in this and other forums gainst OCA (and other retirement villages), but if this is the big thing, than buying them now while the interent hype is so bad, could be good.
Apart from that - I think total occupation in OCA was last time I checked about 91% and occupation of resale villas was more something like 94% (but hey, this is a couple of years ago and from memory) ... i.e. the real costs are still smaller (and they pay them already anyway). So - rather small costs and OCA pays them already anyway.
Quote from: Basil on Dec 07, 2025, 11:27 AMShareholders might wonder when this 12 month buy-back change came into effect ?
It has been there every year since FY17.
The $43m is after a suite or unit has sat unsold for 12 months. It would have cost OCA interest paid to the estate of the departed resident from months 7-12. Once it passes 12 months and is bought back by OCA, then it will still cost interest but instead OCA pay interest to the banking syndicate. Keep in mind OCA did not pay $43m for that buyback stock...that is based on the estimated (or listed) resale prices.
I estimate about 62 suites & units had been bought back by OCA at the end of HY26, give or take a few.
To your point BP I reckon there was around $7m of unsold resale stocks at HY26, of which a proportion (half?) would be subject to interest payments to the estate of the outgoing resident. It is small beer.
But the bigger issue for OCA is the number of new unsold apartments...whilst this has come down by 49 since the end of FY25, it is still a large number and will be the bulk of the $302m new unsold stock.
OCA stocks:
OCA Stocks - Copy.JPG
My "unsold %" percentage does not take into account care suites occupied under a PAC arrangements that have yet to be sold under an ORA. OCA have a higher occupancy % due to that plus they may have an occupancy % weighted over the period instead of at a point in time.
Quote from: Ferg on Dec 08, 2025, 03:58 PMIt has been there every year since FY17.
Hey thanks Ferg, for this and your other well informed posts. I find it disappointing that a vocal minority here are so out of touch and for whatever reason choose to constantly and repetitively spread misinformation.
Quote from: Buzz on Dec 08, 2025, 07:33 PMHey thanks Ferg, for this and your other well informed posts. I find it disappointing that a vocal minority here are so out of touch and for whatever reason choose to constantly and repetitively spread misinformation.
I personally value reasoned opposing viewpoints on a forum like this more than anything else.
Then again all I have posted on lately is NTL
I'd rather buy OCA than them
Quote from: Crackity on Dec 08, 2025, 08:13 PMI personally value reasoned opposing viewpoints on a forum like this more than anything else.
Then again all I have posted on lately is NTL
I'd rather buy OCA than them
Everyone does, but when its done without research and constant Poop Poop people get a little fed up considering some of these so called posters are supposed to be formative posters.
Once again I am drawn to this festering wound of a thread and being asked to take sides.
I don't have time to investigate who is right and who is wrong. I only see who is calling who names.
I know some of you are invested in this both financially and emotionally, but that is not an excuse to be rude.
This is a strict thread. Moderation action has been taken against multiple people for making personal attacks and being rude, any more and whoever is doing it will be taking a nice long Christmas holiday.
In a similar vein, spamming incorrect information constantly will also get one removed, however I note this thread has been inactive for weeks until recently.
Please keep things civil, so we can all have a peaceful and profitable Christmas 8)
Quote from: Buzz on Dec 08, 2025, 07:33 PMHey thanks Ferg, for this and your other well informed posts.
Thanks Buzz.
I probably should have added more context to my post but I was focussed on my other post at that time.
Where to find the relevant value for buy backs is in the presentation that accompanies the annual accounts - in particular the page titled 'Reconciliation of resales cash flow'. On that page is a line titled 'less: Net Buybacks'. The earliest recorded instance I could find of this is in the FY18 presentation and they included a value for FY17. The FY17 presentation did not contain that particular page.
The accompanying note in FY25 says:
QuoteNet Buybacks is the difference between the gross ORA payments made in relation to units bought back (and not resold) during the year and the gross ORA receipts from units resold during the year that were bought back in prior financial years.
And the note in the FY18 presentation says:
QuoteNet Buybacks is the difference between the gross ORA payments made in relation to units bought back (and not resold) during the year and the gross ORA receipts from units resold during the year that were bought back in prior financial years.
So it appears to have been a policy since at least FY17, and my guess is it likely pre-dates then.
Edit: I just found this in the 2014 accounts prior to listing: "Note the Group has an obligation to buy back some of any unsold Assisted Living Suites after a period of 90 days on contracts entered into prior to 6 July 2011."
Quote from: Ferg on Dec 08, 2025, 09:39 PMThanks Buzz.
I probably should have added more context to my post but I was focussed on my other post at that time.
Where to find the relevant value for buy backs is in the presentation that accompanies the annual accounts - in particular the page titled 'Reconciliation of resales cash flow'. On that page is a line titled 'less: Net Buybacks'. The earliest recorded instance I could find of this is in the FY18 presentation and they included a value for FY17. The FY17 presentation did not contain that particular page.
The accompanying note in FY25 says:
And the note in the FY18 presentation says:
So it appears to have been a policy since at least FY17, and my guess is it likely pre-dates then.
Edit: I just found this in the 2014 accounts prior to listing: "Note the Group has an obligation to buy back some of any unsold Assisted Living Suites after a period of 90 days on contracts entered into prior to 6 July 2011."
Ferguson - is there any noticeable trend (getting bigger or stable?) in the Net Buybacks amounts or do they just reflect the ebb and flows of business.
Winnerson: it is ebbs and flows per the image below.
Net buybacks were relatively minor until FY23 and then we see some larger swings in FY24 & FY25. It will naturally ebb and flow as resale stocks build up and then sell down depending on the state of the property market, plus it is one of the joys of "as at" reporting..... ::)
OCA Resales - Copy.JPG
Three other points to note from the image:
1) "
Development buybacks" have cost OCA $40m in 9 years....I believe this is where OCA demolish a facility (for instance) and need to pay out the current resident. TBC
2)
Deferred settlements is the impact of the sales incentive to "buy now pay later" with the last say 5 or 10% of the ORA value (% TBC)....we can see there was a buildup of ~$31m over the past 9 years that will either reverse or rollover depending on the state of the property market as these unwind. These become another deduction from the ORA payout when the resident departs. This is partly the reason (as well as increased sales activity) for the massive growth in ORA debtors over the years. In FY17 ORA debtors was $0.88m and in FY25 this value had grown to $93.9m.*
*There was a note in the FY25 accounts which said:
QuoteOccupation licence receivable includes an amount of $65.1m in relation to short term occupation licence receivables expected to be recovered in less than 12 months. (31 March 2024: $74.0m).
3)
DMF Realised: once again OCA are hampered by IFRS and this line item is IMO a cash inflow to OCA that you don't see in the cashflow statement. DMF is not pure profit as such...rather it is income to fund expenses. Accordingly, the CF statement understates the cash received (or not paid out) when a resident departs. OCA collect the management fees that have been charged over the years by deducting that amount from the final ORA payment.
Take for instance FY25, the CF statement has ~$107m of ORA payments out per the 2nd image below. In my opinion this should be shown as a cash outflow of $139m with another line showing a cash inflow of DMF realised of $32m. That would provide greater transparency around operating cashflows.
I have more to say about the inaccuracy of operating cashflows but that can wait for another time.
OCA CF - Copy.JPG
This way of showing the reconciliation of resale gains makes more sense to me:
OCA Resales2 - Copy.JPG
Good work there Ferg
Re DFM realised. I enquired once and was told it was the difference between the new DFM and the amount of the DMF included in the previous sale.
The whole accounting for DMFs by RV is complicated/confusing as no doubt accrued over the tenancy and included in Revenue.
I've given up trying to 'reconcile' DMF related bits in the Income Statement, Balance Sheet and Cash Flow Statements.
But valuable spreadsheet there you posted
Nice to see a new slide in the Appendices of the half year preso
14 Available Stock - which gives a breakdown of available stock in March 25 and Sept 25.
As at September 271 new and 73 resales available. of the 344 soem41 are Under Application which I assume is buyers in throes of buying.
The last year or so 350 seems about the average available
Quote from: winner (n) on Dec 09, 2025, 12:04 PMAs at September 271 new and 73 resales available. of the 344 soem41 are Under Application which I assume is buyers in throes of buying.
Yeah, "under application" is unhelpful given that it's not a formal, defined legal term in New Zealand property law. It is commonly used by real estate agents to indicate the current status of a rental property listing, whereby a prospective tenant has submitted a formal application for a rental property, and the landlord or property manager is reviewing it (background checks, references etc.)
Quote from: Ferg on Dec 08, 2025, 03:58 PMIt has been there every year since FY17.
That's a bizarre situation Ferg,
You may recall Ryman used to guarantee they would buyback a former resident's unit within 6 months and it used to form one of their key 7 promises which featured very prominently in their marketing including on their website. It never used to be an issue for them when they had first mover advantage and most of their villages had waiting lists but as the market gradually changed after Summerset listed it was very quietly dropped many years ago as it stated costing them too much money and cash flow.
To the best of my knowledge the 12 month buyback that Oceania appears to be doing has never featured prominently in their marketing, (that said I no longer follow this company and only have an academic interest as to why it persistently underperforms, my unhealthy obsession with train wrecks, so this may have featured in their marketing at some point), and yet now appears to be on industry leading terms and is costing shareholders significant holding costs and cash flow with stock held for resale. It appears this is another reason why OCA have always had very high stock level's and have woefully underperformed the sector since they listed.
It beggars belief they would not include this in their marketing as one of their key promises to residents and key points of difference to their competitors.
Questions shareholders might like to ponder
1. Why have OCA not promoted this policy as a key point of difference in their marketing material ?
2. What is this costing shareholders ?
3. If its not costing shareholders a lot in terms of holding costs and cash flow how else do you explain why shareholders have not received a single cent in dividends in years ?
Intelligent thoughts shared on this most unusual situation are welcome, the far too common abuse and personal attacks from the usual perpetrators are not.
As at September 73 resales available. Previous 12 months total sales were 330.
There were 271 new units for sale. Previous 12 months there were 159 sales
Resales seem to turnover well but new sales numbers highlight the ongoing problem in that takes a while to move on development stock.
Quote from: winner (n) on Dec 09, 2025, 05:00 PMAs at September 73 resales available. Previous 12 months total sales were 330.
There were 271 new units for sale. Previous 12 months there were 159 sales
Resales seem to turnover well but new sales numbers highlight the ongoing problem in that takes a while to move on development stock.
Thats what happens when you have so many appartments and care units to sell down.
Up to $0.90 today. Interesting increase post half year.
Thou to justify they still have to show the money to the market
Quote from: winner (n) on Dec 09, 2025, 05:00 PMAs at September 73 resales available. Previous 12 months total sales were 330.
There were 271 new units for sale. Previous 12 months there were 159 sales
Resales seem to turnover well but new sales numbers highlight the ongoing problem in that takes a while to move on development stock.
The 271 includes care suites so it's a mix of independent living units & care suites....not forgetting there were 40 new care suites delivered in HY26.
From memory Maverick mentioned it typically takes 3 years to sell down a newly built site. There is often a slow start as people don't want to be first into an empty building, but once you surpass maybe 50%, then the buzz & momentum takes it to full capacity. So the new stock numbers are sensitive to new builds plus I think everyone (myself included) over-estimated how fast The Helier would sell down. Whilst it has stunning views and is a stunning complex, it's not 100% convenient in that older folk can't necessarily walk to the local village....what a shame, they have to go in the limo instead! ;D
Another thing to keep in mind with premium apartments such as The Helier, OCA changed their policy for recognising the DMF income for 'premium apartments' - this is a relatively new thing. The impact is less revenue in the P&L for any reporting period, as the DMF that is charged in the first 3 years is now released into the P&L over 7 years instead of 5. Previously all apartments were 5 years. From AR25:
QuoteThe timing of the recognition of deferred management fees is a critical accounting estimate and judgement. The deferred management fee is recognised on a straight line basis over the average expected occupancy. The expected periods of occupancy are based on historical Group averages, for the relevant accommodation they are estimated to be 7 years for units and premium apartments, 5 years for apartments and 3 years for care suites from the date of occupation.
Quote from: Basil on Dec 09, 2025, 04:36 PMThat's a bizarre situation Ferg,
You may recall Ryman used to guarantee they would buyback a former resident's unit within 6 months and it used to form one of their key 7 promises which featured very prominently in their marketing including on their website. It never used to be an issue for them when they had first mover advantage and most of their villages had waiting lists but as the market gradually changed after Summerset listed it was very quietly dropped many years ago as it stated costing them too much money and cash flow.
To the best of my knowledge the 12 month buyback that Oceania appears to be doing has never featured prominently in their marketing, (that said I no longer follow this company and only have an academic interest as to why it persistently underperforms, my unhealthy obsession with train wrecks, so this may have featured in their marketing at some point), and yet now appears to be on industry leading terms and is costing shareholders significant holding costs and cash flow with stock held for resale. It appears this is another reason why OCA have always had very high stock level's and have woefully underperformed the sector since they listed.
It beggars belief they would not include this in their marketing as one of their key promises to residents and key points of difference to their competitors.
Questions shareholders might like to ponder
1. Why have OCA not promoted this policy as a key point of difference in their marketing material ?
2. What is this costing shareholders ?
3. If its not costing shareholders a lot in terms of holding costs and cash flow how else do you explain why shareholders have not received a single cent in dividends in years ?
Intelligent thoughts shared on this most unusual situation are welcome, the far too common abuse and personal attacks from the usual perpetrators are not.
So in your mind they're damned if they didn't, and damned if they do, either way, they're damned. There's no point in trying to answer your questions, you'll figure out a way to deflect and shaft OCA, as you always do.
80% up from the ridiculous low of 0.51 and people are still complaining! Any momentum trader would've spotted this and put aside their misgivings for a sizeable capital gain. LT investors on the other hand will have bought in large and reduced their average holding price, which most will be profitable by now.
Enough of the bagging OCA, the only remaining detractors are the ones who missed both the trade, and the LT accumulation.
Quote from: winner (n) on Dec 09, 2025, 11:14 AMGood work there Ferg
Re DFM realised. I enquired once and was told it was the difference between the new DFM and the amount of the DMF included in the previous sale.
Thanks.
I think that has been mis-remembered. At the time of the resale, the full DMF for the resale is not known given AFAIK it takes 25 months to charge the 30% (i.e. in months 1, 13 & 25). It is the deduction from the ORA payment for an outgoing resident.
Quote from: Ferg on Dec 10, 2025, 07:22 AMThanks.
I think that has been mis-remembered. At the time of the resale, the full DMF for the resale is not known given AFAIK it takes 25 months to charge the 30% (i.e. in months 1, 13 & 25). It is the deduction from the ORA payment for an outgoing resident.
When it was explained to me it went along the lines like this -
A unit sold for say $600k is going to produce DMF $180k over x years
The unit resells some years later for say $800k so expected DMf from the resale is $240k
Realised Gain on DMF is $60k (new $240k less previous $280k)
Seemed to make sense
I might have been told incorrectly but that's how I have understood it ever since
Would love to be corrected if this is wrong.
I'm not sure if this is helpful but..
A unit sold for $600k with a 30% has a $180k DMF.
The DMF contractually accrues to the operator over a 3 year period (i.e. it becomes a receivable, net off the amount owed back to the resident).
The DMF income is recognised over the expected tenure of the resident, normally 9 years.
If the unit is later sold for $800k. The amount is allocated as follows:
$420k to repay outgoing resident/their estate
$180k to settle the amount owing by the resident to the operator
$200k is a realised capital gain (but doesn't flow through the income statement because there isn't actually a sale, there is just a change in value of the investment property.
Just seen a network graph of Directors of NZX50 companies.
If I read it right it seems Oceania Directors are also involved with Heartland, Mercury, Tourism Holdings, Skellerup and Ebos
Pretty diverse experience to bring to Oceania Boardroom
Good news ... OCA share price going to outperform the SUM share price in the future ... for how long nobody knows
Chart shows why. There's been an 'inflection' point and the line is 'pivoting' up wards
Many said it would take OCA 7 to 8 years to show their true worth. Maybe it's now happening
Hey Basil me ol' mate - did you think this would ever happen? A guy on the other channel is keen to hear what you think lol
Screenshot 2025-12-31 091429.png
From your own chart it appears any deviation from the trend is very short lived. Just as well OCA shareholders know its different this time ;) Mind you its simply not plausible that the trend line continues as is, as it took less than 3 years for the price relativity to go from 10% to 5% so unless OCA goes into receivership in 2029 the trend simply has to change.
Quote from: winner (n) on Dec 31, 2025, 11:31 AMGood news ... OCA share price going to outperform the SUM share price in the future ... for how long nobody knows
Quote from: winner (n) on Dec 31, 2025, 11:31 AMGood news ... OCA share price going to outperform the SUM share price in the future ... for how long nobody knows
Chart shows why. There's been an 'inflection' point and the line is 'pivoting' up wards
Many said it would take OCA 7 to 8 years to show their true worth. Maybe it's now happening
Hey Basil me ol' mate - did you think this would ever happen? A guy on the other channel is keen to hear what you think lol
Screenshot 2025-12-31 091429.png
Not quite what you said, maybe you should quote for quote...
Quote from: Basil on Dec 31, 2025, 11:43 AMFrom your own chart it appears any deviation from the trend is very short lived. Just as well OCA shareholders know its different this time ;) Mind you its simply not plausible that the trend line continues as is, as it took less than 3 years for the price relativity to go from 10% to 5% so unless OCA goes into receivership in 2029 the trend simply has to change.
Yeah it couldn't go to zero so there had to be an inflection point some time eh
Not saying OCA outperforming SUM is an indictment on SUM - after all they reckon their NTA has an $12 plus uplift from current developments. Heck NTA is currently about $13 so goodness knows where SUM share price will end up
Basil, if OCA follows maybe time for you to get back in and have another go with them them. Could be more lucrative then the last go you had when selling at those highs around 150/160. You pretty good at gettingout near tops eh
Quote from: winner (n) on Dec 31, 2025, 12:07 PMBasil, if OCA follows maybe time for you to get back in and have another go with them them. Could be more lucrative then the last go you had when selling at those highs around 150/160. You pretty good at gettingout near tops eh
Thanks. Not sure how many are sitting on a 6 figure realized profit but I think there would not be very many.
Yes, I could freeride a stake and see what happens but the operational cash burn at a village level, (also a VERY serious problem for RYM), is deeply concerning. One of my favorite sayings as an accountant is cash flow is the lifeblood of a business. Without cash flow the model these companies rely upon is one of house price growth. I still have serious reservations we'll see meaningful real inflation adjusted house price growth any year soon.
On a risk reward basis I see better opportunities elsewhere.
That point of inflection was supposed to be 6 years mate. 9 year mark coming up. Hmmm
Brett said Oceania were at an 'inflection point' in 2021 (or thereabouts)
That didn't turn out to well so now they are pivoting
Sounds good eh
Quote from: winner (n) on Dec 31, 2025, 12:45 PMThat didn't turn out to well so now they are pivoting
How many times can you cry wolf and people still believe you ? To be fair, I acknowledge they are trying to make changes to their business model and extricating themselves from old care facilities and have made decent progress with that so I guess the point of inflection should happen sometime in the next few years, but which year is the $64,000 question ?
I see the average of 4 analysts price target one year hence is 95.75 cps so on a time value of money basis with no realistic prospect of dividends anytime soon that suggests about 10% less than that is fair value spot price now, (86 cents). I think the market at 92-93 cents now has perhaps to some extent already priced in the promised inflection point for FY26 earnings but what if its FY27 or FY28 or even FY29 ?. https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/
Quote from: winner (n) on Dec 31, 2025, 11:31 AMGood news ... OCA share price going to outperform the SUM share price in the future ... for how long nobody knows
Chart shows why. There's been an 'inflection' point and the line is 'pivoting' up wards
Many said it would take OCA 7 to 8 years to show their true worth. Maybe it's now happening
Hey Basil me ol' mate - did you think this would ever happen? A guy on the other channel is keen to hear what you think lol
Screenshot 2025-12-31 091429.png
OCA SP has been outperforming SUM for quite a while now, hardly surprising when SUM got priced for perfection and stalled out while OCA got priced for disaster but presented possibly the best and last realistic opportunity to really load up for the long haul. Might put up a relativity chart if I get time later.
Quote from: winner (n) on Dec 31, 2025, 12:45 PMBrett said Oceania were at an 'inflection point' in 2021 (or thereabouts)
That didn't turn out to well so now they are pivoting
Sounds good eh
I guess Covid f**ked that up especially as OCA was embedded with Care so costs soared
Quote from: Buzz on Dec 31, 2025, 01:08 PMOCA SP has been outperforming SUM for quite a while now, hardly surprising when SUM got priced for perfection and stalled out while OCA got priced for disaster but presented possibly the best and last realistic opportunity to really load up for the long haul. Might put up a relativity chart if I get time later.
Yes Buzz ....OCA been outperforming SUM the last few months
OCA the blue line
Screenshot 2026-01-02 093702.png
Quote from: winner (n) on Jan 02, 2026, 09:39 AMYes Buzz ....OCA been outperforming SUM the last few months
OCA the blue line
Screenshot 2026-01-02 093702.png
On a weekly (closing basis) chart, OCA SP has outperformed SUM since about late April 2024, whereas interestingly SUM has pretty much tracked the NZ50C. This also shows how badly RYM SP has performed by comparison.
https://invst.ly/1eas0w
Quote from: Basil on Dec 31, 2025, 12:34 PM......
operational cash burn at a village level, (also a VERY serious problem for RYM), is deeply concerning. One of my favorite sayings as an accountant is cash flow is the lifeblood of a business. Without cash flow the model these companies rely upon is one of house price growth.
Had another look at cash burn for day to day to operations. I define this as reported Operating Cash less the net movement in ORA (cash for new ones and payments for outgoing ones)
Truly horrific and it seems to be getting worse. The Operating Cash Flow numbers since listing are -
F18 +$4m
F19 -$8m
F20 -$44m
F21 -$25m
F22 -$42m
F23 -$32m
F24 -$43m
F25 -$79m
Sep25 -$84m (12 months to Sep 25 being H225 + H126)
Suzanne on top of it so no worries
Was reading recently RYM's operational cash burn is $110m per annum which is also horrendous but a little bit less hidieous than OCA on a per share basis. RYM issued shares 1024m, OCA 724m.
Easiest way to think about this is RYM is burning 11 cps at a village operational level and OCA 12 cps.
No wonder neither has been able to afford to pay a single cent of a dividend in years.
Quote from: winner (n) on Jan 02, 2026, 10:42 AMHad another look at cash burn for day to day to operations. I define this as reported Operating Cash less the net movement in ORA (cash for new ones and payments for outgoing ones)
Truly horrific and it seems to be getting worse. The Operating Cash Flow numbers since listing are -
F18 +$4m
F19 -$8m
F20 -$44m
F21 -$25m
F22 -$42m
F23 -$32m
F24 -$43m
F25 -$79m
Sep25 -$84m (12 months to Sep 25 being H225 + H126)
Suzanne on top of it so no worries
Is it possible some costs related to new developments fall under operations expenses making this look more dire than it is?
Quote from: Plata on Jan 02, 2026, 12:08 PMIs it possible some costs related to new developments fall under operations expenses making this look more dire than it is?
No doubt there are development costs included. The big unknown is how much 'development costs' are capitalised so never show up in P&L or Operating Cash Flow portion of the Cash Flow Statement
Another way of looking at day to day profitability is taking Underlying NPAT and deducting realised gains (new and resales) to arrive at what I call Operating Profit
Also paints a pretty gloomy picure over recent times -
F18 +$12.8m
F19 +$6.1m
F20 -$2.9m
F21 +$0.2m
F22 +$0.5m
F23 +$0.4m
F24 -$5.8m
F25 -$30.7m
Sept 25 -$31.1m being 12 months to Sept, ie H225 +H126
Not looking too good eh ... and some might say Suzanne is just clearing up Brent's legacy....and some thought Brent was the bee's knees and would take Oceania forward. Numbers put Earl's efforts in good light
Quote from: winner (n) on Jan 02, 2026, 10:42 AMHad another look at cash burn for day to day to operations. I define this as reported Operating Cash less the net movement in ORA (cash for new ones and payments for outgoing ones)
Did you take into account the DMF realised whereby the ORA payments out are reduced by the amounts owing by the resident?
Quote from: winner (n) on Jan 03, 2026, 09:53 AMNo doubt there are development costs included. The big unknown is how much 'development costs' are capitalised so never show up in P&L or Operating Cash Flow portion of the Cash Flow Statement
Another way of looking at day to day profitability is taking Underlying NPAT and deducting realised gains (new and resales) to arrive at what I call Operating Profit
Also paints a pretty gloomy picure over recent times -
F18 +$12.8m
F19 +$6.1m
F20 -$2.9m
F21 +$0.2m
F22 +$0.5m
F23 +$0.4m
F24 -$5.8m
F25 -$30.7m
Sept 25 -$31.1m being 12 months to Sept, ie H225 +H126
Not looking too good eh ... and some might say Suzanne is just clearing up Brent's legacy....and some thought Brent was the bee's knees and would take Oceania forward. Numbers put Earl's efforts in good light
I'm not sure why you don't look at Operating cashflow the way that OCA defines it - ie taking account of and including the realised DMFs and Capital gains from resale of ORAs. That, after all, represents the core of the business (when you exclude the development aspects)
Free cash flow from operations is calculated as cash flows from ongoing operations including realised Deferred
Management Fees and Capital Gains from resale of ORA contracts, less maintenance capital expenditure and
finance costs on core debt (excluding development debt).The number from hy26 is -$8.4 million and we can probably expect an improving trend for fy26 and forward as OCA sell down completed developments.
Quote from: Poet on Jan 03, 2026, 04:16 PMI'm not sure why you don't look at Operating cashflow the way that OCA defines it - ie taking account of and including the realised DMFs and Capital gains from resale of ORAs. That, after all, represents the core of the business (when you exclude the development aspects)
Free cash flow from operations is calculated as cash flows from ongoing operations including realised Deferred
Management Fees and Capital Gains from resale of ORA contracts, less maintenance capital expenditure and
finance costs on core debt (excluding development debt).
The number from hy26 is -$8.4 million and we can probably expect an improving trend for fy26 and forward as OCA sell down completed developments.
I would but there's no history to go by and trying to come up numbers for the past or so probably wouldn't agree with what they calculate.
Quote from: Poet on Jan 03, 2026, 04:16 PMI'm not sure why you don't look at Operating cashflow the way that OCA defines it - ie taking account of and including the realised DMFs and Capital gains from resale of ORAs. That, after all, represents the core of the business (when you exclude the development aspects)
Free cash flow from operations is calculated as cash flows from ongoing operations including realised Deferred
Management Fees and Capital Gains from resale of ORA contracts, less maintenance capital expenditure and
finance costs on core debt (excluding development debt).
The number from hy26 is -$8.4 million and we can probably expect an improving trend for fy26 and forward as OCA sell down completed developments.
That -$8.4m free cash flow would have been +ve if they hadn't treat the $14m GST refund as a one off
Could have paid a divie if they hadn't done that
A one off GST refund of $14m is a big amount
Assume a good story behind why they got a refund
From the Nov 25 Earnings Call
Kathryn Waugh talking about operating cashflow
While there is a one-off GST refund relating to development expenditure, the underlying themes reflect stronger sales activity, higher care occupancy, and the early benefits of the cost measures now in place. As development stock reduces and as our settlements continue to flow, we expect operating cash generation to strengthen even further during the second half.
Quote from: Poet on Jan 04, 2026, 01:14 PMFrom the Nov 25 Earnings Call
Kathryn Waugh talking about operating cashflow
While there is a one-off GST refund relating to development expenditure, the underlying themes reflect stronger sales activity, higher care occupancy, and the early benefits of the cost measures now in place. As development stock reduces and as our settlements continue to flow, we expect operating cash generation to strengthen even further during the second half.
Doesn't answer why a one off refund. Did they pay GST when they didn't have too or something?
Just curious
Quote from: Poet on Jan 04, 2026, 01:14 PMFrom the Nov 25 Earnings Call
Kathryn Waugh talking about operating cashflow
While there is a one-off GST refund relating to development expenditure, the underlying themes reflect stronger sales activity, higher care occupancy, and the early benefits of the cost measures now in place. As development stock reduces and as our settlements continue to flow, we expect operating cash generation to strengthen even further during the second half.
A question you might like to ponder. Why did it take a new CEO to initiate cost out initiatives, isn't that what a decent quality CFO would have recommended to the board many years ago ? There are high quality CFO's who help drive EPS growth and there are people who simply compile the numbers...
Quote from: Basil on Jan 05, 2026, 07:55 AMA question you might like to ponder. Why did it take a new CEO to initiate cost out initiatives, isn't that what a decent quality CFO would have recommended to the board many years ago ? There are high quality CFO's who help drive EPS growth and there are people who simply compile the numbers...
Absolutely, no argument from me there.
I am on record saying that IMO this is one of the worst managed and governed and opaque businesses on the NZX (and that's saying something!)
Quote from: Poet on Jan 05, 2026, 09:44 AMAbsolutely, no argument from me there.
I am on record saying that IMO this is one of the worst managed and governed and opaque businesses on the NZX (and that's saying something!)
That's saying something Poet .....and I agree
Love the way they now have a 'one off' line and often use 'if only this' had happened things would have looked better.
Quote from: Poet on Jan 05, 2026, 09:44 AMAbsolutely, no argument from me there.
I am on record saying that IMO this is one of the worst managed and governed and opaque businesses on the NZX (and that's saying something!)
It seems Mr market agrees, down to 68 cents. Is this company headed back for another test of 50 cents and would it be worth buying there as a trade ?, (notice I said a trade not a long term hold). Tricky questions for you guys to ponder over Easter.
I take problem with the below statement:
"Capital is increasingly directed toward assets and locations where returns are strongest"
Meanwhile $100m went towards debt reduction. Meaning they think debt reduction results in the greatest return for their money (circa 5%?)??
Also is the implication is that they weren't already allocating capital in a manner that maximises shareholder returns?
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I also take issue with the statements surrounding sustainability throughout the annual reports. After all, the social responsibility of business Is to increase its profits. For example, the Board views sustainability not as a standalone workstream, but as part of responsible stewardship across capital allocation, development, operations, people and resident outcomes.
By prioritising "responsible stewardship" over simple profit/value maximisation, management and the board are essentially using shareholder capital to advance its own social agenda without explicit authorization. This creates an agency problem that prioritises philanthropic objectives, forgoing the best use of capital thus eroding long-term value.
I would suggest if Suzanne wishes to pursue philanthropic objectives, she do it with her own massive $2.4m pay package, rather than our precious capital.
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When questioned on the earnings call as to whether Oceania would consider a strategic review to close the NTA gap, Kathryn said this.
I guess what that one is probably pointing at is whether we consider a share buyback. I know that's been a topic of conversation over the last couple of years. And I feel like I've spoken too much, so I'll let Suzanne answer this one.
Whilst a share buyback may be the result of a strategic review, it does not necessarily entail one. Full sale of the business may also be the result of a strategic review and should at least be considered given the persistent undervaluation of Oceania.
Suzzane then said:
Yes. Thank you. So we hear the question and we recognize the discount with accretion possible at the current share price. But right now, our priority is cash generation and the balance sheet discipline that we've spoken to. So we will continue to review, but no update at this stage.
Management and the board recognise the value accretion possible with a buyback, but choose not to act on it. This is to me, a breach of fiduciary duty. Maybe not in the court of law. But in the court of public opinion? For sure.
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Look at the way Kathyrn answered my question here...
Q. Will tax efficiency be a consideration in whether an unimputed dividend should be paid in the future?
A. Yes, that one, I'd probably have to defer to our tax experts. But absolutely, it's something that we look at when we do them. And for us, right now, the priority is very much around turning the dividends back on.
Why does she need to defer to the tax experts? The CFO doesn't know there are millions and millions in tax losses? And imputation credits come from tax payments once the losses are fully used...?
Why would the priority be on turning dividends back on whilst they are unimputed. The ultimate goal is to maximise shareholder value. You do not do that by forcing taxable unimputed dividends down your investors throats who require you to act in their best interests by compounding capital at the historical rates you have through development of new villages OR buying back shares.
Good questions ValueNZ.
Craigs latest note. Not feeling the love either....
Investment case remains uncompelling: retain Neutral
CEO Suzanne Dvorak is doing a good job turning OCA around, balancing the
need for better financial performance with obligations to residents. That said,
the investment case remains far from compelling. Per our recent note on
RYM, we think investors will eventually demand a 6%+ CFEO yield on mature
aged care/retirement businesses. We forecast positive CFEO for OCA in FY27
and FY28, but a CFEO yield of <2% and a dividend yield of c.1%. In this
context, and given OCA's mixed track record in development and lack of
scale, we are unconvinced OCA's strategy to re-ramp the build rate to 150+
from FY31 will add shareholder value. This all suggests that OCA's current
valuation (0.44x NTA) is fair, and with others preferred, we retain Neutral.
Forbar rating Outperform, with 12 mth TP $1.05 +47.9% from $0.71 at 22 May.
Quote from: Shareguy on May 25, 2026, 12:15 PMGood questions ValueNZ.
Craigs latest note. Not feeling the love either....
Investment case remains uncompelling: retain Neutral
CEO Suzanne Dvorak is doing a good job turning OCA around, balancing the
need for better financial performance with obligations to residents. That said,
the investment case remains far from compelling. Per our recent note on
RYM, we think investors will eventually demand a 6%+ CFEO yield on mature
aged care/retirement businesses. We forecast positive CFEO for OCA in FY27
and FY28, but a CFEO yield of <2% and a dividend yield of c.1%. In this
context, and given OCA's mixed track record in development and lack of
scale, we are unconvinced OCA's strategy to re-ramp the build rate to 150+
from FY31 will add shareholder value. This all suggests that OCA's current
valuation (0.44x NTA) is fair, and with others preferred, we retain Neutral.
Stephen Ridgewell of Craigs has the best handle on this sector of any of the analysts by miles in my opinion.
Quote from: ValueNZ on May 25, 2026, 10:38 AMI would suggest if Suzanne wishes to pursue philanthropic objectives, she do it with her own massive $2.4m pay package, rather than our precious capital.
She and Katheryn have very strong ESG beliefs they are hoisting upon all shareholders whether they like it or not. When Earl Gasparich ran the company he was on $600K. 9 years later Suzanne is being paid 4 times that and there's been no dividends for years.
Quote from: ValueNZ on May 25, 2026, 10:38 AMManagement and the board recognize the value accretion possible with a buyback, but choose not to act on it. This is to me, a breach of fiduciary duty. Maybe not in the court of law. But in the court of public opinion? For sure.
They're complete Muppets.
Quote from: ValueNZ on May 25, 2026, 10:38 AMA. Yes, that one, I'd probably have to defer to our tax experts. But absolutely, it's something that we look at when we do them. And for us, right now, the priority is very much around turning the dividends back on.
They're doing a massive cost out program. She's been there ever since it listed. It begs the obvious question, why wasn't she driving the cost out efficiency program many years ago ? There are bean counters that do only that and there are those that add a lot of value to shareholders through their intellectual capabilities they apply to drive a business. The way she answered this question is laughable.
For me in this sector its SUM or None...I choose None until the real estate market climbs out of its endless malaise.