AOG the next Ryman?

[Pumice]

I haven’t seen much on here about AOG. They are a spinoff of the retirement division from FKP which owned a fair chunk of Forest Place Group, now renamed Aveo Healthcare group. They have done very well since they stated their intention to concentrate solely on retirement healthcare. They have yet to divest their commercial property holdings from my understanding.
I had been following Forrest Place Group (FPG), but they seemed far too illiquid. But they are now under the AOG (Aveo Healthcare Group)
Fortunately living in Brisbane I have had the opportunity to view their villages and my partner who has had the luxury in working at both Ryman villages in NZ and now Aveo villages in Brisbane (community physiotherapist capacity only) informed me that she felt the Aveo villages were better presented than the Rita Angus? Ryman villages In Wellington.
Well that was good enough for us to jump in, we are hoping they will follow in the footsteps of our RYM holdings.

What do others think of this company?
I believe they are concentrated in Queensland.

Cheers.

[Joshuatree]

Hi Pumice .posted re AOG on FKP thread,check it out.. Talking to myself most of the time.Anyways i bought in and on my way to a double bagger now. They've done a great transformation morphing to a pure play retirement vessel. Divs to be reinstated this year i read somewhere. So I'm obviously buoyed by my success and optimistic.:p P S thanks for the inside comparison to RYM very int. I hold both.

[Pumice]

Hi Pumice .posted re AOG on FKP thread,check it out.. Talking to myself most of the time.Anyways i bought in and on my way to a double bagger now. They've done a great transformation morphing to a pure play retirement vessel. Divs to be reinstated this year i read somewhere. So I'm obviously buoyed by my success and optimistic.:p P S thanks for the inside comparison to RYM very int. I hold both.

Hi Joshuatree, I'll have a look at the FKP thread. I had only done a quick search on the word Aveo and nothing came up in the forums.

You must have gooten in close to $1? thats pretty good timing! I'm in at more than double that, but still see a fair bit of value here.
Given they have 12,000 residents in 76 retirement villages over all states of Australia, they seem very cheap even at $2.18. Hopefully they can get up over $7 again.
It should be an intersting year for AOG indeed.

Thanks.

[Joshuatree]

Another sale realising $56 million at re book value selling its 50% venture in MFKP.

Really like this bit " Aveo is assessing the potential use of two high profile sites one at Sanctuary Cove as major retirement hubs.This is consistent with Aveos stately of accelerating the development of more high quality retirement communities with INCREASED LEVELS OF CARE". I Hold RYM as well but more s/p growth in AOG atm ,imo.

[Joshuatree]

$2.25 close to or at a new high. The switch of some of RYM ,going south still has paid handsomely.

[Joshuatree]

Into the ASX 200 we go and a new kicker up for the s/p to a new high$2.33 today.

[OldRider]

All the more surprising, rights issue last December was not fully subscribed, so top up I subscribed for was supplied in full.
How many others enjoyed this bonus
Growth of about 60% since, even allowing for fundamentals this has surprised.

[Joshuatree]

Been great ride O R. A real stayer . Ive sold dribs and drabs; am in a great position and the track is easy ahead and firm behind.:)

[Pumice]

Been great ride O R. A real stayer . Ive sold dribs and drabs; am in a great position and the track is easy ahead and firm behind.:)

Good stuff JT, you'll be happy with the $2.35 (4.4%) spike today, looks to have had some volume to it as well.
This stock is looking good.

[Joshuatree]

Another sale announced above book value. Price been drifting but good pickup today and FIRST DIV from the new entity in June.

[OldRider]

I looked back into my records to see what price they were in the rights issue in September 2012,
found they were A$20c , extras were available under the top up as well.
Come distance since then!

[Joshuatree]

Hi OR. i vaguely remember a share consolidation so had a look back . Yes 1 for 7 end of 2012 when it had a mountain of debt. Come a long way since, rewards ahead imo. cheers JT

[Hmm]

Another sale announced above book value. Price been drifting but good pickup today and FIRST DIV from the new entity in June.

Hey JT, could you please give me the details for the June dividend or where to find them, can't seem to find any mention of them.

Cheers

[Joshuatree]

Hi Hmm,im assuming cain88's post today on H/C is accurate re"spoke to the co today" "they will announce the div amount on 19th june". cheers JT

[Pumice]

AOG's divesting their non retirement assets seems to be going well, so a divvie would be nice. Curious to know if the Aussie budget will have a negative impact like it did on Japara healthcare (JHC - Also another similar stock you might be interested in. AOG has Qld, JHC has the other states covered).

[Joshuatree]

Thanks Pumice wasn't aware of JHC ; or of negative effects from the Budget! JHC just listed this month Can you give us any background.See it listed re $2.70 dropped fast to $2.45 ouch! Are you in Mark? cheers JT

[Joshuatree]

IPO JHC $2 a share , hit re $2.70 on listing now$2.46 mkt cap re$644 mill FY 15 pe re 23 DY est 4.2%. Looks like profit taking rather than the Budget pumice, what a great gain congrats whoever.

35 props
total places 3,131
av occupancy 95.3%
Av FY2013 EBITDA/place (excl corp costs)A$21,408
Av FY2013 bondvalue/bond playing resident $A236,491
can one compare those figs with RYM SUM MET?

[Pumice]

IPO JHC $2 a share , hit re $2.70 on listing now$2.46 mkt cap re$644 mill FY 15 pe re 23 DY est 4.2%. Looks like profit taking rather than the Budget pumice, what a great gain congrats whoever.

35 props
total places 3,131
av occupancy 95.3%
Av FY2013 EBITDA/place (excl corp costs)A$21,408
Av FY2013 bondvalue/bond playing resident $A236,491
can one compare those figs with RYM SUM MET?

Unfortunately I didn’t get any at $2.00, but did pick up some at $2.39 after their asx release post budget. The fall seemed like a bit of a knee jerk reaction. The long term prospects look very exciting.

JHC (and possibly AOG) were negatively affected by the repealing of the payroll tax subsidy they enjoyed. (JHC did put out an ASX statement saying it would have a circa $4m impact, but haven’t seen anything from AOG)
Hopefully RYM have looked into this as well.

[Joshuatree]

Thanks pumice.
AOG today has announced purchase of 2 sites in Sanctuary cove and Norwest business park.as major new retirement hubs totalling 14.4 hectares for $53.6 million. Proposed developments of 740 units/agedcare beds with an end value of $380 mill to accommodate 1,000 people.

Target of 200 new units annually by 2016
and 500 annually by 2018

[Joshuatree]

Debt expected to be reduced to $A350 mill by end of June (7/4/14 announcement )mkt cap atm $A985 mill. Price rangebound atm. Would say RYM have the balance sheet to T/O?

[rocketship]

Well, that is an interesting proposition!

I'm hoping the SP will recover to near NTA levels in the medium term though...

[Joshuatree]

No div annouce as yet but a few hours to go.

But good announcement re "in home care and support" service alliance with RDNS for 22 villages across Aus, today.

"With this appointment Aveo'sstated target of delivering comprehensive low care services to over 90% of its villages by the end of FY14 has been achieved"

[Joshuatree]

DIvs reinstated Est 4c for S/holders record date 30th June. Well done AOG/FKP.

[rocketship]

DIvs reinstated Est 4c for S/holders record date 30th June. Well done AOG/FKP.

The word is out! Nice lift today of the SP - over 5% :t_up:

[Joshuatree]

NTA was $2.78 in feb I'm sure AOG will trade closer to this (currently re $2.11) like similar companies do.Plenty of upside to come imo. Significantly derisked now and divs will grow.But DYOR

[Well Endowed]

Bought a small parcel yesterday @ $2.02, been on the watch list since late last year and I'd figured I missed the boat & ex div date, but has fallen back a little and worth chucking a couple dollars into a long term holding.

[Joshuatree]

You picked a vast fast boat yest W E. :t_up:
another great announcement today more sales of apartments etc and debt reducing faster than updated earlier. sp re $2.09 today

[NZSilver]

Hi JT, you sound very enthusiastic about AOG, just wondering if you have carried out much research on them and what you have found?, at a quick glance looks like they have good potential.

[Joshuatree]

Mate I'm forgetful, still wrestling with this blimim iMac, so I'm inefficient re storing accessing, slow typist, poor recorder..

Ive been in since it started morphing from the disaster of o verleveraged FKP which came unstuck big time people lost amotza. a new broom has transformed this to nearly a pure play retirement vehicle which is way below NTA. The mkt will recognise it soon and it will trade above NTA re $2.78 . My opinion only based on what i read and who i know. I don't do more than a shallow look at figs or Join dots well, this one the dots are already joined so well you can tear like a paper towel and use to clean up the opposition :) DYOR.

[Well Endowed]

Looking good again today, decent volume heading through. I added to my small parcel a week back with some more late yesterday.

[Joshuatree]

Underlying profit of $42.1 mill.
Record retirement sales of 711 units
gearing down to 16%
Commencement of construction on 4 sites.
purchase of 2 hi quality sites to house 740 units /beds
NTA $2.78 per unit (currents/p $2.15 :)
4 cent div
Outlook FY15 for profit increase re 15-20% and 5 cent div
target of ROA 6-6.5% by 2016 and 7.5-8% by FY18.
Buyback of up to 32 million shares , re 500 mill on issue

[Joshuatree]

PDF (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01597238)

Aveo extends its care business."we now have in place a platform to continually enhance the range of care and support services available to our circa 12000 residents across australia."

[Joshuatree]

Who's still in?. Just realised I'm well past double bagger on this ;A$2.83 today but still along way to go to get anywhere near RYM's PE.

[Joshuatree]

A pipeline of 5335 new retirement units ahead


Aveo Group and Springfield Land Corporation to deliver a major newconcept for Australian seniors living at Health City, Greater Springfieldin Queensland
Australia’s leading owner, operator and manager of retirement communities, Aveo Group Limited(ASX: AOG) today announced a major initiative and new concept for retirement living in Australia asit continues its transformation to Australia’s leading pure retirement group.
Aveo Group and Springfield Land Corporation (“SLC”) have signed an agreement to develop anintegrated seniors living campus at ‘Health City Springfield Central’ in Queensland. SLC is the multiaward winning developer of the Greater Springfield city-building project in South East Queensland.
Aveo Group has been appointed as the exclusive developer of up to 2,500 new seniors housing unitsand other health and integrated facilities at ‘Health City Springfield Central’. The development willbe known as ‘Aveo Springfield’.
Aveo Chief Executive Officer, Geoff Grady said: “This type of innovation in seniors living and agedcare in Australia is a very exciting concept and a function of our strategy to be Australia’s leadingpure retirement group.”
At its half year results in February 2015, Aveo outlined a development pipeline of 2835 newretirement village units. The Aveo Springfield development will add significantly to this pipeline bydelivering up to 2500 additional retirement village units over the next 15 years.

[PSE]

Another good choice JT.
These guys seem to have been reading what you said, convinced it is the next Ryman and started buying in too.
http://www.firstsamuel.com.au/what-are-you-looking-for/wry-and-dry/39-fy-15/

[Joshuatree]

Cheers PSE .A new high in share price.Great to see AVEO innovate here. is this an industry first, below.?

Geoff Grady: So My Aveo Way came about because of customer feedback. And this is a very important thread through our business overall, listening to what the customers have to say. So out of the survey of over 5,000 residents last year, there were a number of touch points that concerned customers in retirement villages, generally. And they related to the way they come into the villages and the way they exit. So we set about engineering a new relationship, a new contract with our residents that solves some of those problems for them.

Giving them a 21 day cooling-off period, a 90 day settling-in assurance and then on the way out, they don’t have to worry about when their property will sell. We’ll buy it back after certain periods. We don’t charge them any selling fees, or any marketing fees and they don’t have to worry about refurbishing their units. And we know already that customers will accept those, as addressing part of their concerns.

[Pumice]

Cheers PSE .A new high in share price.Great to see AVEO innovate here. is this an industry first, below.?

Geoff Grady: So My Aveo Way came about because of customer feedback. And this is a very important thread through our business overall, listening to what the customers have to say. So out of the survey of over 5,000 residents last year, there were a number of touch points that concerned customers in retirement villages, generally. And they related to the way they come into the villages and the way they exit. So we set about engineering a new relationship, a new contract with our residents that solves some of those problems for them.

Giving them a 21 day cooling-off period, a 90 day settling-in assurance and then on the way out, they don’t have to worry about when their property will sell. We’ll buy it back after certain periods. We don’t charge them any selling fees, or any marketing fees and they don’t have to worry about refurbishing their units. And we know already that customers will accept those, as addressing part of their concerns.

Aveo up to $3.36 has been a great run up from below $2
I'm very interested in the china JV. Aged care is potentially a big export opportunity for companies like AOG. (hopefully they have a head start)
JHC also doing well for you too JT.

[Joshuatree]

24/6/14
NTA was $2.78 in feb I'm sure AOG will trade closer to this (currently re $2.11) like similar companies do.Plenty of upside to come imo. Significantly derisked now and divs will grow.But DYOR

$3.24 now $2.11 june 14. RYM has gone sideways !!:confused::cool:

[Pumice]

$3.40 Must be a 2 year high. Now also holds 71% of RVG.

[babymonster]

I like reg better, coming out from its low, plenty upside

[Pumice]

Hit $3.51 (5 year high?) has been a solid little earner. Divvie of 8cps coming up as well.
Seems to have performed much better than REG, EHE and JHC. Assume it has been less by recent government policy changes to the ACFI.

[Joshuatree]

Yes AOG is "MAINLY a retirement Home Reit for those that do not need any extra care"
Have sold off over a few well spaced trades. Been a great turnaround story from FKP riddled with debt to this successful transition.

[Joshuatree]

The Australian: major Aveo shareholder Mulpha likely to buy out the ... (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=2ahUKEwifnNq8rajdAhXJA4gKHSbBCnIQFjADegQIBxAB&url=https%3A%2F%2Fwww.theweeklysource.com.au%2Fthe-australian-major-aveo-shareholder-mulpha-likely-to-buy-out-the-village-operator%2F&usg=AOvVaw0msPpMXiR3FCYKFc9kaiPQ)
Retirement operator Aveo a buy for Mulpha: Ascot Securities (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=2ahUKEwifnNq8rajdAhXJA4gKHSbBCnIQFjACegQICBAB&url=https%3A%2F%2Famp.afr.com%2Freal-estate%2Fretirement-operator-aveo-a-buy-for-mulpha-ascot-securities-20180904-h14y4l&usg=AOvVaw0WG2JPvs_PpHwuusGHotEk)


The six largest for-profit companies were given over $2.17 billion in government subsidies in 2017, representing 72 per cent of their total revenue of more than $3 billion.
The six companies reported profits of $224 million.
Various methods were used to avoid paying tax, including stapled security trust structures and renting their aged care facilities from themselves (one security in the stapled structure rents to another). Loans from shareholders, related entities and loans between securities are also common.
The largest company, BUPA, recorded almost $7.5 billion in total income in Australia in 2015-16 – mostly from health insurance – and paid $105 million in tax on a taxable income of only $352 million. As reported here, BUPA uses partnership entities in its complex global web.
Its Australian aged care business, BUPA made over $663 million in 2017 and over 70 per cent ($468 million) of this was from government funding.
The second largest operator Opal, recorded total income of $527.2 million in 2015-16 but paid only $2.4 million, having reduced its taxable income to just $7.9 million. Bear in mind the majority of tax avoidance is likely to occur by ramping up costs/deductions and declaring a low taxable profit, rather than by paying a low tax rate.
Opal disclosed 76 per cent of its income ($441 million) was from government funding in 2016.
Allity had total income of $315.6 million in 2015-16 and paid no tax. Some 67 per cent ($224 million) of Allity’s revenue was from government funding in 2016-17.
Regis, Estia, and Japara are listed on the Australian Stock Exchange (ASX) but appear to be using methods to reduce the amount of tax they pay while receiving $1 billion in government subsidies.
Family-owned aged care companies Arcare, TriCare, and Signature receive between $42 million and $160 million each in annual government subsidies but provide very little public information about their operations and financial performance.

[Joshuatree]

Have taken a punt in this very undervalued stock. The co is reviewing what to do to improve s/p and a buyback has just started(s/p has not lifted!!).

Gearing sub 20%
NTA $3.92ish s/p re $2.26 atm 44% discount to NTA
FY19 earnings yield est 8%
Anecdotally im not sure if the class action (from 2017 event ) has much legs)
Construction on track for re 420 units 2019
Re 13,000 residents in 89 villages

Mulpha are the overhang and worry here, very opaque and with a complicated structure with little transparency.Mulphas s/p (on malaysia bourse )is re 70% plus under nta ,they own some great assets besides their re 23% in AOG so caution warranted and why the s/p is where it is.

Int to see PIE funds are now a holder of AOG




FY18 Results Presentation (https://hotcopper.com.au/threads/4359870/)

An opinion from elsewhere
"" When you stack AOG up against the eight competitors, on most metrics, they look way undervalued.
First Place in EV/EBIT, PB Ratio, PE Ratio and P/NTA.
At a Return on Assets (a pretty good indicator for this class) in FY18 of 8.1% AOG has made up good ground on the NZ stars in Ryman and Summerset...but then their premiums to NTA are stellar...3.6x and 2.25x and absolutely dwarf AOG at a lowly 0.56!!!""

DYOR!!

[h2so4]

Well that just seems like an absolute screaming bargain.

AOG was all over the media recently and from my experience you don’t have to go far to find someone that has had a bad experience.

But what a bargain aye.

[silu]

I had it on my watch list for ages but never bought in because although I thought it looked attractive the market decided otherwise. Will keep an eye on it and do some more research. I'm currently looking to buy defensive stocks to hold long term so the aged care sector is always attractive despite already holding SUM, RYM & MET.

[shasta]

Have now bought into AOG, with the NTA about 1.50 above the current SP, certainly interested to see how the strategic review plays out to narrow the discount.

[Joshuatree]

AOG hs taken a small hit even though it has few care facilities. Down 6% . Deep value with fishhooks.!

https://www.fool.com.au/2018/09/17/i...sion-meltdown/ (https://www.fool.com.au/2018/09/17/investors-beware-this-sector-is-next-to-face-a-royal-commission-meltdown/)

[Joshuatree]

News: AOG UPDATE 1-Australian aged-care stocks plunge as powerful inquiry looms (https://hotcopper.com.au/threads/news-aog-update-1-australian-aged-care-stocks-plunge-as-powerful-inquiry-looms.4436813/?post_id=35648468)

[trader_jackson]

Under $2 at one stage to day... wowee
I have to say, this is looking tempting... is AOG really THAT bad?
(to be trading at a PE of 3 and nearly half its NTA?)

[h2so4]

News: AOG UPDATE 1-Australian aged-care stocks plunge as powerful inquiry looms (https://hotcopper.com.au/threads/news-aog-update-1-australian-aged-care-stocks-plunge-as-powerful-inquiry-looms.4436813/?post_id=35648468)

Since 2009 there have been 10 inquiries. Part and parcel of aged care in Australia.
Media love it.

[shasta]

Under $2 at one stage to day... wowee
I have to say, this is looking tempting... is AOG really THAT bad?
(to be trading at a PE of 3 and nearly half its NTA?)
Whilst the share price feels the general negative media, the underlying assets, ie. NTA hasn't.

Its how long it takes and how they unlock value that will get things moving.

This is a "play" on the strategic review for me then I'm out.

[Joshuatree]

Yep , me too atp, patience required. Exiting Mulphas holding (23%) is the key i think,as it looks to be a big obstruction to others(instos etc) taking stakes. I HAVN'T verified but have read Mulpha ,having some great assets, carries a lot of debt $682 mill,with a mkt cap of $225 mill and the shares discounted to nta by 70% ,(as stated above). Conclusion/resolution of any class action will help as well.

[h2so4]

More than happy to wait it out with this one.

[Joshuatree]

Aveo holders hope second buyback achieves more than first | afr.com (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwiJiaLDtdLdAhUXUd4KHYr4A4wQFjAAegQIAhAB&url=https%3A%2F%2Fwww.afr.com%2Fbrand%2Frear-window%2Faveo-holders-hope-second-buyback-achieves-more-than-first-20180923-h15r08&usg=AOvVaw3Si_rRgLunQplVZsl7qzjF)

[tipsy]

lol, didn't realise the poo jogger was an AOG exec.

[Joshuatree]

Heres an int post from portfolio plus on H/C responding to a suggestion that RYC (Ryman) could be a buyer of Mulphas stake. Int van comparisons.

Portfolio Plus
"I don't think Ryman are the answer...AOG obviously think they are good at this game as well...and the FY18 results show them to be so, judged on ROE (AOG 19% and RYM 21.58%)
I just cannot fathom why RYC are at the price they are - who in their right mind would pay an EV/EBIT of 19.3x versus AOG at 4.42x.

Initially I thought it might be that AOG aren't generating CASH and most of their profits are as a result of revaluing assets...but not so. I looked at both companies over the past four years comparing Net income with Cash from Operations and there wasn't much in it. Over the four years, RYC received 94.3% of their stated income as Cash Ops...AOG was 94.8%!

True, RYC is more consistent in generating cash whilst AOG are lumpy but that is more a result of them running down their property development investments.

Leaving aside AUD/NZD differences, RYC have been more proactive in investing for the future....but they plough back in profits (surplus to dividends paid) of $978m and then borrow...$782m in extra debt over the past 4 years. That's investments for the future of $1.76bn

AOG have ploughed back some $650m in profits surplus to dividends and used a combination of debt and share issues ($205m and $126m respectively.) Total $0.980bn

AOG's dividends as a % of 4 years on net income were 17.8% versus RYC of 24.3% - again not much difference.

Where there is a difference is in the Enterprise value - presently RYC have an EV of $7.76bn NZD versus AOG $1.83bn AUD. Roughly adjusting for exchange rates, is RYC really worth 3.90x AOG"

[h2so4]

Yes JT this is a stock that is so undervalued that in reality not much is expected from it. However there are some versions out there that anticipate the unlocking of AOG’s value at some time in the future.

[Gonzo]

how badly does this thing pong, ? due to the "Bleed them dry until they die" adverse TV doco

chairmans address today 8 pages
"It is our view that Aveo’s current security price
which is trading at a discount of 52% to net asset value
does not reflect the underlying value of our market
-
leading retirement business which has grown
strongly and consistently over the past five years."

[Joshuatree]

"On track to deliver 418 major development units in FY19" dropped from 500 i think



"The Directors have established a committee and process to assess various structuring alternatives. This will ensure that any offers received are subject to consideration by the Directors within an appropriate period of time"

Im feeling distrustful about them and mulpha.Wonder if RYM are running ruler over too.
Download Document 2.99MB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvSDYL4g%2B 7zRn%2Fv%2FZ2%2BLFiGug%3D)

[percy]

Was only 4 or 5 weeks ago I looked at AOG when they were about $2.05.
A big drop yesterday,the day of their agm.
Another drop today.
Down to $1.595.
Seem to remember Macquaries had them as a buy a couple of years ago at $3.20.

[Joshuatree]

Yes im RED on this atm:eek2:
RYM one of the companies currently running the ruler over it?

[percy]

Yes im RED on this atm:eek2:
RYM one of the companies currently running the ruler over it?

I very much doubt it.
RYM have always developed their own villages.
Never brought any one else's.

[stoploss]

I very much doubt it.
RYM have always developed their own villages.
Never brought any one else's.
Percy , wasn't there one on Burma rd Wellington they took it over and converted it to a RYM ?

[percy]

Percy , wasn't there one on Burma rd Wellington they took it over and converted it to a RYM ?

That would be the Malvina Major village.I think you are right, but I can't remember.

[winner69]

That would be the Malvina Major village.I think you are right, but I can't remember.

It was the Burma Tavern that expanded into the Burma Lodge (accomodation) over the years. It was closed in the late 1999s and the Johnsonville Licensing Trust sold the property and land to Ryman .....and they turned it into Malvina Major

Doubt whether much of the original buildings are left

Burma was bit of dive ...too many Khandallah people went there

[stoploss]

It was the Burma Tavern that expanded into the Burma Lodge (accomodation) over the years. It was closed in the late 1999s and the Johnsonville Licensing Trust sold the property and land to Ryman .....and they turned it into Malvina Major

Doubt whether much of the original buildings are left

Burma was bit of dive ...too many Khandallah people went there

yea I think the old stuff got hit in our last quake , so it might all be Ryman by now ...."Boomer at the Burma " lol

[Joshuatree]

Looks like RYM may not be running the ruler over AOG like many others are

"As announced at the Annual General Meeting on 14 November 2018, Aveo Group (ASX: AOG) and Merrill Lynch Markets (Australia) Pty Limited (Merrill Lynch) are encouraged by inquiries from a significant number of parties, mostly from Asia, North America and Australia interested in transactions with Aveo Group either as a whole or for a partnership at the asset level, as part of the Strategic Review of Aveo Group’s retirement portfolio and operations."





Download Document 100.91KB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvSDYL4gy9y BT0v%2FZ2%2BLFiGug%3D)

[100101]

A pleasing increase to $1.76 as at 1.27 nz time.

[Joshuatree]

​Is this the future for aged care and retirement living, hi rise rented apartments?



Aveo Newstead Aged Care
Aveo Newstead is Brisbane’s first 19 level, resort-style retirement and aged care community where luxury facilities and the very best in care are an important part of every day. Your loved one can be part of a welcoming community where all levels of care are available under the same roof.Located above a vibrant retail hub in the heart of the Gasworks precinct, just minutes from the CBD, Aveo Newstead delivers a full range of aged care options in community that is unlike any other.

[Beagle]

^^Could be JT...at least when renting you can hopefully shift if you're really unhappy..
Nice rise today but OUCH at the SP graph ! I can see why you are gun shy on this sector now after your recent beating on this one :eek2:
Investors must be expecting a LOT of trouble coming from the Govt review.
35% DMF does look excessive especially amortized over just 3 years, bordering on exploitive perhaps ? No doubt an issue the Australian Govt will look forward to getting their teeth into along with the obvious need for increased service standards. Had a little look at this earlier...then had to do some real work this afternoon. From memory, (which I am not pretending is razor sharp after a long day of hard work) one thing that stood out, An 83% customer satisfaction survey is nothing to be proud of and suggests nearly one in five residents is dissatisfied or deeply dissatisfied with their living arrangements and probably many of which have no way out considering their retirement unit is their most valuable asset. Nearly one in five residents potentially feeling trapped and unhappy seems very sad.

SUM has a 96% resident satisfaction standard by comparison...only one in 25 residents unhappy. Bounce trade only for some, I'm not sure I would want to invest in a company with so many unhappy residents.

[Joshuatree]

Yeah thats the lingering hangover from this below in 2017. they've come along way since but mud sticks and maybe a new broom is needed.
Aveo: Exploitation of the elderly rife in retirement villages - ABC News ...www.abc.net.au/news/2017-06-24/elderly-exploited-in-aveo-retirement.../8645876 (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwiiwsbH9oLfAhXHqI8KHbxGDgoQFjABegQICBAB&url=http%3A%2F%2Fwww.abc.net.au%2Fnews%2F2017-06-24%2Felderly-exploited-in-aveo-retirement-villages%2F8645876&usg=AOvVaw0NPIqjm-Fix5n3TDNNRfKv)

[Beagle]

Yeah thats the lingering hangover from this below in 2017. they've come along way since but mud sticks and maybe a new broom is needed.
Aveo: Exploitation of the elderly rife in retirement villages - ABC News ...www.abc.net.au/news/2017-06-24/elderly-exploited-in-aveo-retirement.../8645876 (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwiiwsbH9oLfAhXHqI8KHbxGDgoQFjABegQICBAB&url=http%3A%2F%2Fwww.abc.net.au%2Fnews%2F2017-06-24%2Felderly-exploited-in-aveo-retirement-villages%2F8645876&usg=AOvVaw0NPIqjm-Fix5n3TDNNRfKv)

That really is shocking. Even if they are making some moves to reform what look like exploitive corporate behavior patterns, as you suggest the CEO and board have set the culture and we know a tiger doesn't usually change its stripes, (with the odd exception like a spotted snow leopard). As you rightly suggest, a new broom is probably required.

[Joshuatree]

It was an extreme rather sensationalist reporting.Some balance in this article.Aveo targeted by Fairfax/Four Corners but the village sector and truth ...https://www.theweeklysource.com.au (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&uact=8&ved=2ahUKEwiiwsbH9oLfAhXHqI8KHbxGDgoQFjAGegQIAhAB&url=https%3A%2F%2Fwww.theweeklysource.com.au%2Fave o-targeted-fairfaxfour-corners-village-sector-truth-victim%2F&usg=AOvVaw3z9tF7M7rMQeCwcfAvLlyN) › Opinion › Chris Baynes

[shasta]

That's a very unprofessional and misleading article, what's Adele Ferguson's beef with Aveo?

Current management is addressing the historical issues, but to deliberately miss report "facts" which has a detrimental and quantifiable impact on the business may well end up in legal action.

Meantime I'd love to know the updated NTA figure.

AOG SP trading well below 50% of NTA, with the strategic review in progress attracting a lot of interest.

Still holding on for the ride...

[Joshuatree]

Yes me too , one of my itchy fingers wants to do a pocket dial and average down .

[Pumice]

Yes me too , one of my itchy fingers wants to do a pocket dial and average down .

Ditto.
If it gives you any confidence, Mulpha & Aveo Chairman Seng Lee has acquired almost 9m shares at an ave of $1.89 taking their holding from 22.86% to 24.38% in a little over a month

No idea what they paid for the other 132.8m shares

[Joshuatree]

Mulpha ARE the worry for me , i dont trust them and their agendas and their incestuous relationship with Aveo.

[Joshuatree]

S/P $1.57 atm, wish id averaged down on this one.

Stockland to sell all retirement assets , see portfolio plus post below. I vouch for his integrity.



"Word on the street suggests that just before Xmas SGP appointed Morgan Stanley to sell its entire retirement portfolio. There are more than a few observatons to make here.

Have SGP lost interest in the retirement industry and its ultra low return on assets? Could be. At a tad over 4% EBIT/net Retirement Assets they performed worse than AOG in FY18 who returned close to 4.7%. But these figures are way behind the returms they are used to getting in their residential, commercial and logistics divisions.

Do they see problems and hassles ahead? Possibly. The RC into the aged has reputedly fielded some 20,000 to 30,000 individual complaints against age care providers. BUPA can expect a shellacking judging on their atrocious recent record. I don't expect SGP or AOG will get much direct heat but they will 'feel the burn' as a consequence of industry proximity.

Has SGP deliberately picked NOW as the time to sell? Yep, they would expect to disrupt a number of candidates looking at AOG. The reverse of this argument would be that they know AOG has attracted quite some interest.

So who is the better choice?

AOG is bigger with 98 villages if you count USA with some 11,992 units. SGP has 65 villages with 9,609 units.
FY18 EBIT was $141m for AOG and $56m for SGP.

The critical comparison is the EBIT return on net retirement assets and as stated above AOG has performed better.

AOG has a bigger future pipeline (4,700 v 3,050). Its development margin was better at 28% v 20.2%.

On the other hand, SGP has a higher acceptance rating with 95% v 90% for AOG and AOG units are more expensive...its DMF are higher at 35% v 30% for SGP and they have not been as progressive as SGP in embracing the new land lease model to attract the downsizers. SGP now have some 4 villages been developed under this model and I would expect that the strategic plan for AOG will make some big announcements here.

Then again, AOG has a more mature model with the average age of residents over 83 v 80.7 for SGP. That means AOG are closer to drawing the cash when the residents move on.

The more I think about it, we are witnessing disruption to the traditional retirement model."

[Joshuatree]

Private equity funds Brookfield and Blackstone are believed to be among the parties lining up to acquire the $1 billion retirement operator Aveo that is up for sale through Bank of America Merrill Lynch.It is understood that TPG Capital may have also been in the mix during the early stages of the sale process.First round bids were due yesterday and now shortlisted parties will progress to the next stage of the competition, where they will have the opportunity to access more detailed information in a data room. Aveo has a $970 million market value. It has 93 retirement communities but only operates four aged-care facilities, so the royal commission into aged care that unfolds this year is not expected to impact the sales process to any major extent.However, a bigger challenge will be a possible class action looming over the alleged move to change the status of residents’ properties from freehold to leasehold titles.There has been scepticism about the Aveo sale process as to whether it is a price-testing exercise for 24.4 per cent shareholder Mulpha, which many say will privatise the company once the sale process is complete.Some say the Malaysian investor’s intentions remain unclear.However, in November, Aveo told the market it was encouraged by inquiries by “a significant number of parties” mostly from Asia, North America and Australia.An independent board committee has been assessing the offers and an update is expected at the company’s results on February 13.Exactly how long the private equity groups will remain in the Aveo race is unclear, as retirement assets have not typically proved a happy hunting ground for buyout funds.They are interested because Aveo’s shares look cheap after it took a battering following negative publicity about its business practices two years ago, and the suitors hope to gain control and add upside.A decade ago, the sector was right out of favour even with institutional investors who were badly burnt by investments that had soured during the global financial crisis. However, operators have gradually begun winning back support, although offloading such businesses for lucrative prices isn’t easy.Stockland also has a major stake in its $1.5bn retirement operations up for sale through Morgan Stanley and Evans Dixon, and it is understood that major Asian institutional investors such as China Investment Corporation and the Government of Singapore Investment Corporation have already shown some interest.Those parties are believed to have recently been around the market getting up to speed on the business.The sales process will get under way this month.That deal is expected to attract less opportunistic buyers, with the business widely considered a higher-quality operation, but Brookfield and Blackstone are also expected to look at the Stockland offering.Meanwhile, some say news of a sale of Healthscope to Brookfield Capital Partners may not emerge for two months, despite the private hospital operator telling the market last month that Brookfield was expected to put forward a binding bid by yesterday.Funding is in place, but the big sticking point is approval from Brookfield’s head office.Healthscope shareholder NorthWest Healthcare Properties Real Estate Investment Trust been tipped as the most likely candidate to embark on a deal with Brookfield over the property portfolio, with the Canadian pair known to have been in talks for a while.

[shasta]

AOG starting to reverse the SP trend, heading back towards $1.70+ been a wee while since at these levels.

Progress being made on the strategic review?

If the Board/Mgmt can't get the SP back to $3.00 as a result of any transaction(s) then this whole process has been a failure.

Last NTA update was $3.92 from memory.

If they can't unlock value they should look at winding up/selling the entire business at NTA.

Still holding on pending the outcome of the review.

[Joshuatree]

Market is optimising a positive outcome here value wise as the reveal gets closer. Mulpha has held back this company's value and will try to get assets cheaply maybe the malaysian ones, a breakup of AOG is on the cards

"Non-binding indicative bids from parties are due to be submitted by late January 2019. Aveo Group will provide an update as part of its Half Year Results on 13 February 2019."

[Beagle]

Looks pretty challenging to me. https://www.asx.com.au/asxpdf/20190213/pdf/442kv81fpp9gcx.pdf

[Joshuatree]

Really?
A number of bids have been received to buy the whole company.S/P rising steadily.Looking good atp..Still a big gap to nta.

[Joshuatree]

S/P over $2 now.
Lone Star Funds joins battle for Aveo GroupThe Australian Financial Review·6 hours ago (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwjMqrb8zc3gAhXRZCsKHcFCCuYQxfQBMAB6BAgAE AM&url=https%3A%2F%2Fwww.afr.com%2Fstreet-talk%2Flone-star-funds-joins-battle-for-aveo-group-20190221-h1bit1&usg=AOvVaw0Z1q2ArXY_Pt66Kw1giOE7)

[shasta]

AOG up 20c to $2.13, pause in trading.

Strategic review announcement that says absolutely nothing!

Anyone seen/heard anything that might of generated this irrelevant announcement.

Ps. Was hoping for a $4 a share takeover...

[Joshuatree]

Patience required for this to play out .August, suggested by a canny investor who has a few connections.

[shasta]

That is an awfully long time given this process started back in November.

What on earth is this costing us in advisor fees?

[Joshuatree]

I dont care and im not a helicopter parent here.

[Joshuatree]

Retirement home operator Aveo has received a confidential takeover offer and flagged a slump in its full-year profit, citing subdued property market conditions.
Read more » (https://sendy.tarawera.co.nz/l/QQMrKma8h6MjbHw96gBRew/vZFZhyO80PdZGL1yJeGz3w/znvbblwP6k4sPKHobvjymg)

Trading, Annual Distribution and Strategic Review
Download Document 148.85KB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvSDYL4gu5z Bb%2Fv%2FZ2%2BLFiGug%3D)

S/P down to $1.975 having bottomed at $1.80 yest

Some are linking AOG's downgrade performance with our sector here esp SUM and aus investors bailing from SUM etc. Maybe but AOG has uncertainty over its sale and poor management and management influence by dodgy (imo) re 20% holder Mulpha to be taken into consideration as well.

[Joshuatree]

Broofkield the only bidder, great for price tension;NOT! Media forced this announcement. 22nd July at the earliest for sale announcement.
Strategic Review Update (https://hotcopper.com.au/threads/4843678/)

[Pumice]

Hopefully they get a deal across the line. This has been an abysmal holding.
Hoping for c$2.80, but suspect it will be around $2.50 if anything
Mulpha have been a massive anchor for this company, wish current shareholder could have had the opportunity to buy them out.

[Joshuatree]

"Significant progress has been made in those negotiations. On this basis and in good faith, the Independent Board Committee (“IBC”) is continuing to engage with Brookfield in order for the parties to conclude their negotiations on the agreements leading to a Scheme of Arrangement for a whole-of-company transaction."

Update Strategic Review 1 page 112.5KB (https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=02124880)

[Joshuatree]

$2.195 minus the june div !!!!:scared:. Not from mah cold dead hands!
Update Strategic Review 1 page 467.7KB (https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=02130862)

[Pumice]

$2.195 minus the june div !!!!:scared:. Not from mah cold dead hands!
Update Strategic Review 1 page 467.7KB (https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=02130862)

Absolute low ball offer. Will vote that down
Did they mean $3.195?

[Joshuatree]

Minus the June divi ts actually $2.135. Talk of mulpha in with brookfield.Lets hope a higher offer comes from someone else wouldn't take much.Ryman and someone else?