(STRICT) OCA - Oceania Healthcare

[winner (n)]

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

[Basil]

That 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/

[Buzz]

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

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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.

[Greekwatchdog]

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

I guess Covid f**ked that up especially as OCA was embedded with Care so costs soared

[winner (n)]

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.

Yes Buzz ....OCA been outperforming SUM the last few months

OCA the blue line



You cannot view this attachment.

[Buzz]

Yes Buzz ....OCA been outperforming SUM the last few months

OCA the blue line



You cannot view this attachment.

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

[winner (n)]

......

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

[Basil]

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.

[Plata]

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

Is it possible some costs related to new developments fall under operations expenses making this look more dire than it is?

[winner (n)]

Is 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

[Ferg]

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)

Did you take into account the DMF realised whereby the ORA payments out are reduced by the amounts owing by the resident?

[Poet]

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

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.

[winner (n)]

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.

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.

[winner (n)]

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.

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

[winner (n)]

A one off GST refund of $14m is a big amount

Assume a good story behind why they got a refund