OCA - Oceania Healthcare

[Poet]

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.

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.

[Basil]

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.

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.

[Breezy]

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.

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.

[Teitei]

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.

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?

[Untamed]

OCA 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?

Be 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.

[Teitei]

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?

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?

[Untamed]

Sp performance, cancellation of dividends and requirement for asset sales speak for themselves.

So not a fact at all.

You 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.

[Greekwatchdog]

So 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

[Teitei]

57 cents offered.

Most disappointing considering that the index overhang of $30m was done by 59c and that should have been the floor.

[Greekwatchdog]

57 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.

[Basil]

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.

[Greekwatchdog]

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.

Yes we know, I recall you highlighting the same with SUM when they had over 600 to sell. Look what happened. Go figure.

[Breezy]

57 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.

[Basil]

Yes 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.

[Basil]

57 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