ARV - Arvida Group

[winner (n)]

Am I correct in thinking that in the last half result, if you remove resale gains and development margin then operating cashflow was basically 0? I'm not an expert on this sector so could be wrong, but I don't like that all of their existing assets seem to make no money unless prices continue to rise.

Most in the sector are like this ...some worse than others

Profit / Cash Flows from looking after people and running villages at the moment negative

[Basil]

Most in the sector are like this ...some worse than others

Profit / Cash Flows from looking after people and running villages at the moment negative

By the looks of it this is going to be an increasing problem going forward.  Fixed fees for life and costs rising at a rate greater than 7.2% inflation is not a good mix.

[Mos]

By the looks of it this is going to be an increasing problem going forward.  Fixed fees for life and costs rising at a rate greater than 7.2% inflation is not a good mix.

Agree Basil. Only Summerset has had the foresight to give themselves the option to increase weekly fees in line with Superannuation %increase. RYM, OCA and ARV have all fallen into the fixed weekly fees for life/tenure hole which will be detrimental in inflationary times as you say

[Buzz]

Agree Basil. Only Summerset has had the foresight to give themselves the option to increase weekly fees in line with Superannuation %increase. RYM, OCA and ARV have all fallen into the fixed weekly fees for life/tenure hole which will be detrimental in inflationary times as you say

There were a few who were strong vocal advocates for 'fixed fees for life', even lobbying the CEO's. Doesn't look so smart in an inflationary environment anymore, does it. From a shareholders perspective.

[Basil]

I believe SUM could ask considerably more for their units if they did offer fixed fees for life or offered that as an option under a hybrid model.  SUM are winning now that inflation is where it is but I believe they were losing out when inflation was 2%. 

For example the average price of a 2 bedroom ILU in a RYM Auckland village today is ~ $1.4m whereas for SUM its ~ $1.0m, that's a huge $400,000 difference.  Some of that is to do with the relativity of the pricing of villages being in different suburbs, some of it reflects the pricing power RYM confers upon themselves with their lower 20% DMF fee, (their lower fee is not something they give away for free), and some of it is centric to the pricing power RYM's enjoys with offering fixed fees for life.

Nobody can reliably say whether SUM holding out with fees tied to the change in super has advantaged or disadvantaged them over their 11 years in business.  There are some VERY powerful emotional and psychological factors at play in people's minds when you offer to lock down and fix their biggest weekly outgoing for life.  Its an extremely powerful marketing tool and confers significant pricing power in my view.  RYM use that and their 20% DMF fee to leverage super premium pricing for their units.

[Shareguy]

FB note out today

Outperform $1.80

ARV is still attractive, trading at ~0.5x book, but FY24 focus will be on debt
The amendments to the ICR covenants remove a key near-term concern that ARV would undertake a dilutive rights issue. At ~0.5x book value, the lowest in the sector, we view ARV as highly attractive

I agree at this level.

[winner (n)]

FB note out today

Outperform $1.80

ARV is still attractive, trading at ~0.5x book, but FY24 focus will be on debt
The amendments to the ICR covenants remove a key near-term concern that ARV would undertake a dilutive rights issue. At ~0.5x book value, the lowest in the sector, we view ARV as highly attractive

I agree at this level.

Seems too goo to be true!

[winner (n)]

ARV share price on fire today ........near top of NZX leaderboard

Finally getting some love

Go you good thing

[BlackPeter]

ARV share price on fire today ........near top of NZX leaderboard

Finally getting some love

Go you good thing

Hmm - looks like somebody invested from petty cash into ARV instead of re-stocking the coffee. Surely - you had a look at the volume, did you?

[winner (n)]

Good on you shareguy for asking Jeremy when

Amongst the good stories and pretty pictures hopefully they'll give an indication of realised gains on sales. I reckon that could be over $50m for the last six months

That would mean for the full year realised gains of at least $93m and indicate underlying profit will be about about the same (probably more)

So lets say $95m Underlying Profit - pretty good compared to last years $73m

That should get some positive momentum into a rising share price

What was Forbar's target again?

[winner (n)]

Underlying Profit say $95m pretty good - esp compared to F22

However if you believe all the crap they came out with when acquiring Arena F23 should be about $110m

So in my books still not delivering as they should .... seems to be a bad habit of theirs

Hopefully market has a short memory and they start thinking they are the bees knees

[winner (n)]

Share price really on fire now

On trajectory to 100 plus by end of week ...or earlier if Jeremy prints a good newsletter

[Shareguy]

Jeremy (CEO) says

Morning ...., yes, our usual investor newsletter is due to come out mid-week, so you should see it in the next couple of days.  cheers

I doubled my holding again today.

Disc. Now have a sizeable holding

[Davide]

Share price on the up. Brought some today.

I agree that they are good buying. Interest rate increases coming to an end. Immigration on the up and just heard today that house prices may be on the turn earlier than expected.

[winner (n)]

A buck beckons tomorrow

And what was Forbars target?