OCA - Oceania Healthcare

[Mos]

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.

[winner (n)]

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

[Basil]

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.

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.

[BlackPeter]

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.

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.

[winner (n)]

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.

[BlackPeter]

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.

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?

[winner (n)]

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

[winner (n)]

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

[Breezy]

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

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.

[Minimoke]

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.

[Basil]

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 

Oceania 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.

[Minimoke]

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 

I havent got to the diversity section in the annual report. I'll come back when I have.

[Breezy]

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.

[Basil]

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.

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. 

[BlackPeter]

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. 

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.