OCA - Oceania Healthcare

[Basil]

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...

[winner (n)]

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...

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.

[Basil]

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.

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. 

[winner (n)]

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. 

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

[Shareguy]

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

[Basil]

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. 

[Left Field]

Results out and apparently it is all about 'Premiumisation' (word of the day)

https://www.nzx.com/announcements/402826

[Onemootpoint]

Not good.

Interesting 'word of the day' though.

[kasper]

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.

[Minimoke]

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.

[lorraina]

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.

[kasper]

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.

Yep some good stuff in there but there are some that only want to see the bad, they need more hobbies I reckon.

[Basil]

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.

[winner (n)]

Debt to (Debt + Equity) up 34% from 29%

RYM had a ratio like that not that long ago

[winner (n)]

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

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.