OCA - Oceania Healthcare

[Basil]

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.

$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.

[winner (n)]

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

[kasper]

$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.

[winner (n)]

With a few extra shares seems underlying earnings per share about same as last year

Wonder what target growth to get the incentive is?

[Basil]

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.

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.

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

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.

[Shareguy]

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.

[Whacc]

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.

[Whacc]

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.

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).

[Basil]

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 🤦

[kasper]

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"

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.

[Basil]

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.

[kasper]

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.

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?

[Waltzing]

"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.

[kasper]

"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.

[Waltzing]

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