OCA - Oceania Group - retirement villages

[trader_jackson]

I'm guessing demand was high at a certain price so listing price may not be spectacular given pricing at lower end of range.

Look how tegel performed on its first day... was rock bottom of the $1.55 range... $1.80 on the first day or something?
This time I don't think Oceania will drop like Tegel has afterwards, fundamentals are much, much better for starters... but who knows.

I am also considering what price to put an offer in on the first day... May 5 is it?

[Benny1]

Look how tegel performed on its first day... was rock bottom of the $1.55 range... $1.80 on the first day or something?
This time I don't think Oceania will drop like Tegel has afterwards, fundamentals are much, much better for starters... but who knows.

I am also considering what price to put an offer in on the first day... May 5 is it?

Yep May 5...so a couple of weeks more to ponder this one....

[tim23]

Sell in May go away might be good time to buy?!

[noodles]

Due the emphasis in care beds, I think Arvida is the correct retirement village operator to compare against. Now we know the final price, we can do a direct comparison. I've performed it for FY18 as it will include a full year of Arvida's recent acquisitions.

	OCA	ARV	Discount
PE	9.4	16.1	71.38%
EV/EBITDA	9.9	17.8	80.64%
EV/EBIT	11.5	21.5	87.40%
DEBT/EBITDA	2.1	2.4	12.23%
price/NTA	0.94	1.27	35.11%

Unfortunately, there is not yet much visibility on development profit from FY19 onwards, so we don't really know if OCA's FY18 result will be abnormally high. With that in mind, perhaps the safer comparison is the 35% discount with price/NTA.

[winner69]

Due the emphasis in care beds, I think Arvida is the correct retirement village operator to compare against. Now we know the final price, we can do a direct comparison. I've performed it for FY18 as it will include a full year of Arvida's recent acquisitions.

	OCA	ARV	Discount
PE	9.4	16.1	71.38%
EV/EBITDA	9.9	17.8	80.64%
EV/EBIT	11.5	21.5	87.40%
DEBT/EBITDA	2.1	2.4	12.23%
price/NTA	0.94	1.27	35.11%

Unfortunately, there is not yet much visibility on development profit from FY19 onwards, so we don't really know if OCA's FY18 result will be abnormally high. With that in mind, perhaps the safer comparison is the 35% discount with price/NTA.

Looks like the bargain of the century, even if one has to pay a 'premium' after listing

[Beagle]

Hi Noodles,

I presume you are assuming that OCA achieve their projected FY18 growth of what are they saying, 40% ?
Looking at their historical financials which hardly inspire, I'd take their projected growth for FY18 with the same pinch of salt as Tegal's.
Anyone can project anything they like, the key question is what credibility does one give to their projections especially in light of the recent dramatic change in caregivers pay rates ?
That said ARV is substantially overpriced relative to SUM in my opinion who have a vastly superior track record of growth.
I think this float gives the appearance of a bargain but only if you accept their FY18 forecast at face value and compare it to what appears to be an overpriced comparative company, yes still probably the best comparative but what this tells me more than anything else is ARV is a SELL.
In my opinion it is best to tread extremely conservatively with new IPO's when there is no track record of credibility upon which the directors can hang their forecasting hat.
Think about this, if they hadn't of projected 40% growth for FY18 they may not have even got the float done !
Remember these guys have been rattling cages on both sides of the Tasman trying to float this thing for years so they are HUGELY motivated to project an extremely positive forecast for FY18, just like Tegal's promotors were with their IPO.

Still...one imagines it will appeal to mum and dad investors, its less than $1 so it must be good value

[Lewylewylewy]

...Still...one imagines it will appeal to mum and dad investors, its less than $1 so it must be good value

Joking aside, I do actually factor this into things when I value

... To be filed under "feelings" or "market sentiment"

Also, completely agree. I feel nervous buying an IPO. You have to remember a few things about shares IMO:

1. You have to trust the people managing your investment. You wouldn't go into a partnership in any other business this blind.
2. You are a small fish and can get out voted buy larger holders (which includes the current company owners) voting unabashedly in their sole interests. Look at what AUG attempted to do with NPT recently.
3. When selling a business, you spend the previous few years artificially inflating its value.
4. There are reasons you decide to sell a business. The person buying the business doesn't know these reasons, which are often industry knowledge, hidden issues or benign reasons.
5. Isn't it nice when lists go up to 3, 5 or 10 items? Makes them more snappy, don't you think?

... Oh I have a 5th point: You don't need to risk your money on this when there are other businesses on the NZX with a proven record covering all the above points.

[NZSilver]

Will be very interesting to see where this lists after the recent govt ann, according to brokers there was good demand, but will this result in increased SP post start of trading. I'm in with a small holding.

[Joshuatree]

Due the emphasis in care beds, I think Arvida is the correct retirement village operator to compare against. Now we know the final price, we can do a direct comparison. I've performed it for FY18 as it will include a full year of Arvida's recent acquisitions.

	OCA	ARV	Discount
PE	9.4	16.1	71.38%
EV/EBITDA	9.9	17.8	80.64%
EV/EBIT	11.5	21.5	87.40%
DEBT/EBITDA	2.1	2.4	12.23%
price/NTA	0.94	1.27	35.11%

Unfortunately, there is not yet much visibility on development profit from FY19 onwards, so we don't really know if OCA's FY18 result will be abnormally high. With that in mind, perhaps the safer comparison is the 35% discount with price/NTA.

Thanks for sharing that noodles, looks very favourable to me and going on their track record 40% growth for 2018 looks conservative and we know how few rated ARV and how well it has performed since listing. OCA two times over subscribed is what I've heard; so good luck to all who took up some.

[hardt]

Getting ready to ramp it up tomorrow morning...