ARV - Arvida Group

[BlackPeter]

A bit of history re Underlying Earnings EPS

Suppose one could say its going up .... even though F23 was basically flat (in spite of a full year benefit (v 4 months in F22) of that big acquisition

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And hey - as we all know, the only thing which really matters is IFRS earnings. Not too flash this year, but much better than for some competitors.

Just imagine how they will rocket up as soon as the real estate market normalizes.

But yes, I forgot - beagle told us real estate will never go up again .... the coming recession will be the longest and most terrible recession in living memory, everybody will flee New Zealand or choose to live in caves and in some years people probably want to be paid for taking real estate off somebody else, if at all.

[winner (n)]

And hey - as we all know, the only thing which really matters is IFRS earnings. Not too flash this year, but much better than for some competitors.

Just imagine how they will rocket up as soon as the real estate market normalizes.

But yes, I forgot - beagle told us real estate will never go up again .... the coming recession will be the longest and most terrible recession in living memory, everybody will flee New Zealand or choose to live in caves and in some years people probably want to be paid for taking real estate off somebody else, if at all.

You alright today Peter .... seem even more of a sour puss than usual

I'm worried about your welfare - reach out if you need help

[BlackPeter]

You alright today Peter .... seem even more of a sour puss than usual

I'm worried about your welfare - reach out if you need help

Cheers for asking - I am fine ;

Just try not to get pulled down by some of our "heroes" ...

[Basil]

That chart looks a lot more encouraging than the one you posted for another company recently.

[winner (n)]

If Craig's do one of those cash flows analysis like they did for Oceania we'll be getting another lecture on not being able to eat NTA

ARV operating cash flows on same basis just as bad.....cash from existing portfolio not supporting the valuations

[lorraina]

No need for concern.
Craigs do not cover ARV.

[Basil]

But ARV are selling their units well that's one of the key differences in my opinion.

[Shareguy]

Key numbers for the 12 months ended March 23 compared with a year ago:

Arvida  FY23 VS FY22                                          Oceania FY23 VS FY22

Net profit $82.5m vs $198.9m                               Net profit $15.4m vs $61.1m
Revenue $222.0m vs $174.5m                              Revenue $247.2m vs $231.1m
Underlying profit $88m vs $51.7m                        Underlying profit $80m vs $76.2m
Gearing at 30.5%                                                  Gearing 36.9 %

Similar revenue but very different in net profit

[Basil]

I hold a significant stake in ARV bonds bought @ approx 7% yield to maturity. As a bondholder I am very comfortable with how they are running the business.  I also own a much smaller stake in OCA bonds. I'm not so comfortable there but believe the risk of default is low.

[Arbroath]

Interesting comparison the bonds around 7% and the stock likely to yield only 3-3.5% so at least you're getting a reasonable cash return on the bonds.

I prefer the shares as I think over the next 3-5 years they go back towards $2.00 again.

[winner (n)]

New sales F23 were 197 ...20% down from the 243 pcp

They have 245 new things unsold at end of March ....up from 159 year prior

Same problem as others ...excessive unsold stock of new units

No wonder debt increased significantly ....hope property market is on the rise.

[Basil]

So on your figures about 1.25 years of stock. OCA appear to have well over 2 years stock. No wonder OCA have the highest gearing in the sector and ARV the lowest gearing.

Looking ahead ARV are building about 1 year worth of new units in FY24, i.e. building at about the rate they have been selling so best guess is the extent of their problem won't get worse whereas OCA are building 200 -250 new units, at the top end of guidance, roughly twice the number of new units they sold last year!

 I foresee OCA's overstock problem and debt level getting materially worse in the year ahead.

[Basil]

Interesting comparison the bonds around 7% and the stock likely to yield only 3-3.5% so at least you're getting a reasonable cash return on the bonds.

I prefer the shares as I think over the next 3-5 years they go back towards $2.00 again.

That's a popular school of thought and you may be right. ARV still have a fairly high care aspect to their business model and quite a few of the villages from when they listed are oldish and care focused.

 If the Govt keeps strangling the listed operators with care funding as I suspect they will, I foresee them continuing to trade at a fairly significant discount to NTA for the foreseeable future.

In the very long term shareholders should do okay but in the meantime the revised yield is pretty miserable.
Well managed company but there are considerable headwinds is how I see it.

[Shareguy]

$1.20 go you good thing.

[winner (n)]

$1.20 go you good thing.

$1.30 next

Sector on fire ......property market turned and results produced no disasters so renewed confidence and enthusiasm for these RV stocks

Could be $1.40 by Matariki ...the stars are aligned