OCA - Oceania Group - retirement villages

[King1212]

Haha...classic bull..that why I like about u.....nothing... nothing at all

[King1212]

Basically the article is another evidence, as we discussed about the overseas riches moved to NZ....that will support n push NZ assests up

On the article said...there are number of riches moving to NZ

[clip]

Basically the article is another evidence, as we discussed about the overseas riches moved to NZ....that will support n push NZ assests up

On the article said...there are number of riches moving to NZ

The article also said there were was no evidence, consents, or local knowledge of any bunkers being built in NZ and it is likely a marketing ploy by the companies creating the bunkers?? lol

[Paradox]

The article also said there were was no evidence, consents, or local knowledge of any bunkers being built in NZ and it is likely a marketing ploy by the companies creating the bunkers?? lol

Whilst overseas rich listers and returning expats may drive the price up in the short term, OCA’s business model does not depend on it to sustain. NZ demographics alone would be adequate for share price appreciation.

[James108]

More people are currently leaving NZ than coming in and on top of that more NZ residents are leaving than coming in. doesn’t seem too good for OCA or any property share to me. Still hold tho.

[Paradox]

More people are currently leaving NZ than coming in and on top of that more NZ residents are leaving than coming in. doesn’t seem too good for OCA or any property share to me. Still hold tho.
But the ones who are in the country must age ....

[James108]

But the ones who are in the country must age ....

Sure, was just point out stories of loads of foreigners moving to safe haven NZ aren't really supported by the stats, in fact the opposite appears to be true.

And also you are kidding yourself if you think just because there is an aging population the share price is going to out perform. Every man and his dog knows about these demographic trends and the market is awash with capital fighting for a slice of the pie. I wouldn't be surprised if retirement village operators under perform the market.

That said OCA is currently one of the few focusing on care and I hold.

[Paradox]

Sure, was just point out stories of loads of foreigners moving to safe haven NZ aren't really supported by the stats, in fact the opposite appears to be true.

And also you are kidding yourself if you think just because there is an aging population the share price is going to out perform. Every man and his dog knows about these demographic trends and the market is awash with capital fighting for a slice of the pie. I wouldn't be surprised if retirement village operators under perform the market.

That said OCA is currently one of the few focusing on care and I hold.
Sure, but what does OCA have that others don’t or have less of? What does OCA not have that others have? Therein lies the answer...

[James108]

If you have some insights please feel free to share..

[Paradox]

If you have some insights please feel free to share..
Most Experienced in aged care, able to cross-sell same or more than other players, land bank for 2000 units, consented and potential to convert suites to villas (not all have this luxury),

What they don’t have is enough experience in property play (self-assessed by the Board), sites/growth in South Island, and easy entry path in other markets.

Agree?

[BlackPeter]

More people are currently leaving NZ than coming in and on top of that more NZ residents are leaving than coming in. doesn’t seem too good for OCA or any property share to me. Still hold tho.

That's not what the recent modelling says.

https://tradingeconomics.com/new-zealand/population#:~:text=Population%20in%20New%20Zealand %20is,according%20to%20our%20econometric%20models.


NZ population steadily rising. One of the reasons our housing market doing that well.

Where would your statement come from?

[James108]

That's not what the recent modelling says.

https://tradingeconomics.com/new-zealand/population#:~:text=Population%20in%20New%20Zealand %20is,according%20to%20our%20econometric%20models.


NZ population steadily rising. One of the reasons our housing market doing that well.

Where would your statement come from?


https://www.interest.co.nz/property/106062/new-zealand-residents-have-been-leaving-country-greater-pace-they-have-been-arriving

The stats do not back up the narrative that a net increase in residents are coming back to NZ due to coronavirus safe haven status.

[King1212]

not sure which one to trust eh....

hold on...i will call my mate...one of national MP to leak out the legit data....

[James108]

The graph in Black Peters link depicts a long trend of population growth and is not incompatible with the recent months where more people have left the country.

[winner69]

https://www.interest.co.nz/property/106062/new-zealand-residents-have-been-leaving-country-greater-pace-they-have-been-arriving

The stats do not back up the narrative that a net increase in residents are coming back to NZ due to coronavirus safe haven status.

Seems pretty convincing doesn’t it James

Through thick and thin and good times and bad times more NZers have left than come back every year since the 80’s

But I’m told there are a million kiwis overseas and they all going to come home over next year or so so that’s good.

[Beagle]

A few thoughts. We only went to Covid level 1 in early June 2020 so the above stat's don't reflect the desirability of our Covid status from an international perspective.
Likewise its only in the last month or two that Covid 19 has really become really rampant in some developed countries, (America), a good example.
It takes time for ex pats to uproot their lives, their homes and business's and get back here and that assumes there's sufficient flights and quarantine facilities.
Anecdotally real estate clients of mine are reporting very brisk business from ex pat's prepared to pay top dollars for the right home for their family.

I think it is highly likely we'll see a significant number of those ex pats come back in the next year or two which will be good for the sector.
Interesting to note that housing stock level's for sale across the industry according to REINZ data is very low. Low stock and emerging higher demand usually has a fairly predictable effect on pricing. I think the house price outlook is considerably less gloomy than almost every economic forecaster (throwing darts ?) is forecasting.

Build it and they will come appears to be some other companies mantra...which usually works for those companies with a stellar reputation for first class care like OCA does. Hope OCA is full steam ahead with its development program.

[BlackPeter]

The graph in Black Peters link depicts a long trend of population growth and is not incompatible with the recent months where more people have left the country.

Fair enough. However - for residential property demand I suppose long term trends are more relevant than arrivals / departures impacted by lock down conditions.

As well - don't forget that at the moment many more people are queuing up for a return than are allowed to come. Gummit closed the tap due to quarantine limitations and told airlines to restrict the incoming traffic. I trust that at some stage they will manage to sort out quarantine and provide places for all who need them.

[James108]

Beagle intuitively I would agree with you but I am conservative by Nature so will remain unconvinced until I see a bit of evidence.

[Beagle]

No harm in being conservative and prudent. I'm not buying any more until I see next weeks result.

[winner69]

Beagle intuitively I would agree with you but I am conservative by Nature so will remain unconvinced until I see a bit of evidence.

Suppose it’ll all change when NZ is no different to the rest of the world (virus wise)

[+++++]

Sold. Will consider buy back upon decent results and fair SP entry opportunity if presents itself.

[IAK]

Tony Alexander thinks there's no longer a brain drain but a brain gain.


http://www.tonyalexander.nz/resources/TV%2016%20July%202020.pdf (http://www.tonyalexander.nz/resources/TV%2016%20July%202020.pdf)

[Beagle]

Tony Alexander thinks there's no longer a brain drain but a brain gain.


http://www.tonyalexander.nz/resources/TV%2016%20July%202020.pdf (http://www.tonyalexander.nz/resources/TV%2016%20July%202020.pdf)

He's one of the few economists I respect. Reading some of the reports that appear to be little more than dart throwing by some others makes my eyes glaze over in record time.

[winner69]

He's one of the few economists I respect. Reading some of the reports that appear to be little more than dart throwing by some others makes my eyes glaze over in record time.

He’s generally good reading ....but then I respect all economists I agree with.

[dobby41]

He's one of the few economists I respect. Reading some of the reports that appear to be little more than dart throwing by some others makes my eyes glaze over in record time.

The thing with Tony is he tells you why he thinks something - you can decide yourself if you like his data or not.
Others just spout and you usually have no idea how they came up with what they say.

[winner69]

“Imagination is more important than knowledge. Imagination is the language of the soul. Pay attention to your imagination and you will discover all you need to be fulfilled” so said a guy called Einstein

I can imagine having Oceania having a good year and It’s shareprice over $1.50 by this Christmas ...I’m paying attention to that imagination.

[Cyclical]

Will consider buy back upon decent results and fair SP entry opportunity if presents itself.

Good luck with that combination of events.


Tony Alexander thinks there's no longer a brain drain but a brain gain.


http://www.tonyalexander.nz/resources/TV%2016%20July%202020.pdf (http://www.tonyalexander.nz/resources/TV%2016%20July%202020.pdf)


He's one of the few economists I respect. Reading some of the reports that appear to be little more than dart throwing by some others makes my eyes glaze over in record time.


He’s generally good reading ....but then I respect all economists I agree with.


The thing with Tony is he tells you why he thinks something - you can decide yourself if you like his data or not.
Others just spout and you usually have no idea how they came up with what they say.

Yep, I too like the odd episode of TV (Tony's View). Probably even better now that he's left the bank and out on his own.

Re the discussion on immigration flows of late, I suspect a lot of the exodus will be low paid foreign workers who've suddenly found themselves out of work with no support to be had in NZ, plus a bunch of foreign students (I sat next to a young German lad on the plane the other day who said a good chunk of other German exchange students bailed in March but he did the full 6 months and loved it). Can't really see too many others making the choice to depart NZ ATM unless the wheels have been in motion and plans well advanced.

Inbound, sure, there'll be a bunch of young ones that have had their OE curtailed, but there are also likely to be plenty of Kiwis returning that would like to get into the property market...maybe those that had been sitting on the fence about returning anyway, or have found themselves out of work in their chosen place of residence.

Overall, I suspect flat to slightly positive in favour of the NZ property market.

[Chinesekiwi]

https://www.interest.co.nz/property/106062/new-zealand-residents-have-been-leaving-country-greater-pace-they-have-been-arriving

The stats do not back up the narrative that a net increase in residents are coming back to NZ due to coronavirus safe haven status.

Of course the numbers out vs in are tracking the way they are.

NZ is proving damn hard to get into - 3 weeks flight stoppage etc

The folks leaving have been as much the stranded foreigners as much as anything else and folks whose work visas cannot be renewed.

We have any number of mates stuck overseas unable to get home.

Looking at short term arrival/departure COVID skewered stats and drawing a longer term conclusion for in this case OCA is a very very long bow indeed.

[Chinesekiwi]

Seems pretty convincing doesn’t it James

Through thick and thin and good times and bad times more NZers have left than come back every year since the 80’s

But I’m told there are a million kiwis overseas and they all going to come home over next year or so so that’s good.

No one has said that Winner - don't go making things up now.

[Snow Leopard]

No one has said that Winner - don't go making things up now.

No, it is definitely true. I am stuck in the UK at the moment where 60,000 kiwis wanting to come home are in a single queue, all 2 meter socially distancing and wearing face masks, that stretches along the A4 from London Heathrow Airport to Chippenham.

I am about half way along sitting on the pavement in the western outskirts of Newbury.

[King1212]

Many kiwis will come home..... overseas job market not looking good.

Why would kiwi expat stay overseas when they loose thier jobs....while coming back home...bringing thier cash n straight to DOLE...job seeker subsidy ...what a bloody great wet dream

[Waltzing]

can the snow cat please post a photo of this huge queue somewhere on an off market thread or video it and place on you tube..or somewhere..

[King1212]

Like...u expecting them to line up....then say...cheers ..u are on the candid camera...punters in the share forum would like to see u all....lol

My good mate mcduffy will mark my comment irrelevant...wtf

[macduffy]

My good mate mcduffy will mark my comment irrelevant...wtf

No problem, Kingi. Anything goes on the OCA thread these days.

;)

[Panda-NZ-]

Many kiwis will come home..... overseas job market not looking good.

Why would kiwi expat stay overseas when they loose thier jobs....while coming back home...bringing thier cash n straight to DOLE...job seeker subsidy ...what a bloody great wet dream

Plus their super too I would think. maybe another reason to introduce a form of CGT.

[King1212]

Lol.... mcduffy....all your posts are relevant and highly rated....hahhaha...wtf

[winner69]

Wonder if one should put a risk factor into ones thinking when assessing Oceania’s (and the others) value / share price due to the inevitiable return of the virus.

Complacency lead to what’s happening now in Victoria //NSW and aged care seems to be a problem.

We dodged a bullet last time but when it returns it will be worse. Can’t keep it out forever.

[Soolaimon]

I think the risk factor is allready in there, otherwise we would be up to at least $1.20 and MET around $6.50. My reason for this is that with TD rates where they are us oldies have to "risk" investing a greater percentage of our savings into equeties to try and maintain our incomes.

[macduffy]

Wonder if one should put a risk factor into ones thinking when assessing Oceania’s (and the others) value / share price due to the inevitiable return of the virus.

Complacency lead to what’s happening now in Victoria //NSW and aged care seems to be a problem.

We dodged a bullet last time but when it returns it will be worse. Can’t keep it out forever.

Yes, we should. But shouldn't we also be taking this risk into account with all companies? It's hard to find any that wouldn't be impacted in some way or other if/when the virus returns.

[Beagle]

Wonder if one should put a risk factor into ones thinking when assessing Oceania’s (and the others) value / share price due to the inevitiable return of the virus.

Complacency lead to what’s happening now in Victoria //NSW and aged care seems to be a problem.

We dodged a bullet last time but when it returns it will be worse. Can’t keep it out forever.

Its a possibility, not inevitable, but for some reason doesn't seem to be that much of a factor in any of the other sector companies except MET ? Many other companies would be worse hit, (OCA can still provide care services and sell care suites during lockdown level 4 if reimposed)
Charging for quarantine might slow down the flow a bit https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12349183

[winner69]

Its a possibility, not inevitable, but for some reason doesn't seem to be that much of a factor in any of the other sector companies except MET ? Many other companies would be worse hit, (OCA can still provide care services and sell care suites during lockdown level 4 if reimposed)
Charging for quarantine might slow down the flow a bit https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12349183

..and increased death rates good as well ...improves churn

[Beagle]

OCA managed the risks extremely well last time. Shareholders can feel a sense of pride in having a share in the ownership of a company committed to the very highest standards of care.

[Cyclical]

..and increased death rates good as well ...improves churn

Dude, we don't say that! But seeing as you already went there, one might suggest it would be a double edged sword, due to the culling of potential future customers. Indeed it would be interesting to know what the impact of the virus is having on demand (present and future) in the RV sector in some of the harder hit countries.

[Waltzing]

was only joking about photos... but how long was that queue again? could that be the queue waiting for OCA shares ...once you all get your rich rewards from MET.

as far as property prices go and i rely on my young builder friends as i have no skills in either DIY or property sales and purchase. Interests report is out and prehaps those here with knowledge of the NZ property market may comment.

https://www.interest.co.nz/property/106099/sales-achieved-46-properties-auctions-monitored-interestconz

[winner69]

Guru Mark from Craig’s says money flows imply punters buying Oceania with their Met money

[Beagle]

Guru Mark from Craig’s says money flows imply punters buying Oceania with their Met money

Higher $ turnover in ARV today. I think a fair bit is going that way as well as SUM and RYM.
I think there's still a bit of pensiveness with OCA at this point in time with people hanging back waiting for their report on Thursday.
Provided its not awful...

[Baa_Baa]

Oceania Healthcare in the year ending 31 May 2019, with Underlying Net Profit after Tax from continuing operations of $49.7m and Total Comprehensive Income of $99.8m.

Gurus' reckon Underlying Net Profit after Tax:
- Maverick $50m ("very confident") - $53m ("possibility")
- Beagle $40 - $45 ("perhaps overly pessimistic"). Anything >$50m "be impressed"

Even a flat to slightly down result would be awesome considering the period covers the whole of the Covid situation, and increased care worker costs. A lot depends on how sales went I guess. Company trading back above IPO but at discount to NTA. Imagine that, if you stopped the business, liquidated all the assets and paid out shareholders, you'd get more per share than they trade on market today. Weird. Cheap.

So full year results announce on Thursday morning, with live webcast 10:30am. Can hardly wait!

Gltah

[Paradox]

So full year results announce on Thursday morning, with live webcast 10:30am. Can hardly wait!
Gltah

If we take a 5-year and a longer term view, 40-50m in a one-off situation shouldn’t make much of a difference.

Seeing $1.04 today with good support above $1 lately, this augurs well.....

[Waltzing]

praying for a shocker....winner nn said .70?

[Beagle]

Oceania Healthcare in the year ending 31 May 2019, with Underlying Net Profit after Tax from continuing operations of $49.7m and Total Comprehensive Income of $99.8m.

Gurus' reckon Underlying Net Profit after Tax:
- Maverick $50m ("very confident") - $53m ("possibility")
- Beagle $40 - $45 ("perhaps overly pessimistic"). Anything >$50m "be impressed"

Even a flat to slightly down result would be awesome considering the period covers the whole of the Covid situation, and increased care worker costs.

I think that's the key point. Other companies reporting recently, namely ARV and RYM have only reported results that encompass a small initial part of the effect of the Covid 19 lockdown. As you know I have my own views that the total overall cost of Covid 19 could easily run to $10-15m given the intensity within their business model of the care side of things and the number of sites.

There would also have been some impact on sales of independent living units that could push the total overall effect to circa $20m inclusive of profits lost from sales that would otherwise have happened but for Covid 19. In that context even a figure as low as $35m isn't too bad. Market will just be happy to get the result behind it, quantify the effect but will quickly be thinking about how sales will rebound in the current year. Market is a forward looking beast, always has been and always will be.

[nevchev]

praying for a shocker....winner nn said .70?

Many recent predictions have been proven to be quite fanciful. Maybe there needs to be a dedicated thread for this

[Waltzing]

Mr B says possible 35M; if so a sell off and then recovery. If the speed of traffic in the central north island is anything to go by the population has recovered from the shock of global disturbances and so too will the share price of OCA. Speedily recover...

[value_investor]

I'm going to say between $45-49m. I think they'll do well to get to the same place as last year and I'd be very impressed if they do or even beat it. I'd be pleased if I'm proven wrong.

I'm more interested to see if they've made any progress on stemming the gradual decline on the care side of the business. I still see this as the short term pain point for the next 2-3 financial years until they can convert more growth to the higher end of the market.

[Maverick]

I'm going to say between $45-49m. I think they'll do well to get to the same place as last year and I'd be very impressed if they do or even beat it. I'd be pleased if I'm proven wrong.

I'm more interested to see if they've made any progress on stemming the gradual decline on the care side of the business. I still see this as the short term pain point for the next 2-3 financial years until they can convert more growth to the higher end of the market.
I think your going to very disappointed Value with the "care profits" if you are looking for a rise this year. I`m picking about 20m where last year was 24m. That's without the extra costs of Covid`s PPE and extra wages chucked in. Its likely to be REALLY bad if that's included too. (who knows how/where those costs will be included).
Putting Covid expenses aside the reason the "care profits" will appear bad is because they have to demolish units to rebuild them . That means turning paying customers away and still paying to retain care staff for several years.
Then there are 2 more handbrakes for the care profit. Firstly it takes 2-3 years to completely refill a new delivery (so a stack of inefficiencies during that time) and then on the first sale of each new care suit the "new build margin profit" is counted over in the "village profit" section of the accounts.
So I`m expecting this years "care "result to be circa $20m (down from 24m pcp) but the "care suit new sales margins" to be 14m (up from 5.8 pcp) so all up that a net gain of about $4m.
Again, all of these figures don`t include the inevitable and substantial covid costs.

I do expect this years care profits to be the bottom of the entire project/pipeline and will gradually firm up in next years result and beyond.

Anyway....ONE MORE SLEEP TO GO. ...ahhhh I can taste free beer already.:t_up:

[Beagle]

Love a bit of positive talk on the eve of the announcement. Thought I'd take a selfie getting ready to head to the pub to buy Maverick his beer.
Just look how happy I will be if the underlying profit is over $50m https://www.bing.com/images/search?view=detailV2&ccid=cjbAZDeB&id=620C0B111B3331E788DF777E3FA04F947D7643FD&thid=OIP.cjbAZDeBMTPHehafKXiVtAHaFs&mediaurl=https%3a%2f%2fwww.theglobeandmail.com%2fr esizer%2fLzUHXFsYM56Y2_13R88F4UoRnoU%3d%2f1200x0%2 ffilters%3aquality(80)%2farc-anglerfish-tgam-prod-tgam.s3.amazonaws.com%2fpublic%2fE35PB7AHMZBTHBEOQ 7YIBF6H6A&exph=924&expw=1200&q=barking+beagle&simid=608054901023441685&ck=5DEB0B2CCFC29691FFC2383533DE12C1&selectedIndex=50&ajaxhist=0

[winner69]

It doesn’t really matter what underlying profit is tomorrow ....whether it’s $35m or $50m or $70m it really is irrelevant in the big picture

This year just another step forward in their conversion program which will lead to immense value creation

Don’t forget the valuation is in the story ...not meaningless financial metrics,

Might get a 3 cent divie ... but that not really a good thing.

[trader_jackson]

It doesn’t really matter what underlying profit is tomorrow ....whether it’s $35m or $50m or $70m it really is irrelevant in the big picture

This year just another step forward in their conversion program which will lead to immense value creation

Don’t forget the valuation is in the story ...not meaningless financial metrics,

Might get a 3 cent divie ... but that not really a good thing.

Winner, you know tn this world the story is better than the bottom line....
Look at APT, ZEL and AIR... their bottom lines are all going to be absolutely horrid for the next few years at least, and they might have different stories, but the stories are all oh so very strong, and that's all that matters!

[bottomfeeder]

In this economic climate, its the long term potential to cope and be successful that is more important in setting value. While profit is always good, I'm not really concerned about the results or in fact the divvie.

[Beagle]

The word is out, $68.7m !!!!...who would have thought :D

[winner69]

I reckon $71m

Bit shy of $84m where Earl said it would be a couple of years — but at least an improvement on last year

They’ve got to break this habit of selling heaps more stuff and making stuff all more ....$71m will do that

So it’s going to be $69m

Thought I was about right a few weeks ago.

Pity it’s not Earl promised a couple of years ago ...hecseduced many with 35% pa growth talk.

[Playa]

Where can shareholders watch tomorrow's announcement?

[Beagle]

Where can shareholders watch tomorrow's announcement?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/355438/325486.pdf

[Playa]

Thanks Beagle

[allfromacell]

The word is out, $68.7m !!!!...who would have thought :D

Is there a source for this?

[winner69]

Is there a source for this?

Like politics mate ....emails mysteriously appear in your inbox.

[Baa_Baa]

Like politics mate ....emails leaked

I’m obviously out of the loop! So $68.7 UPAT, is that right? fingers crossed having scooped up another 30% total holding this week. Please say it’s so, I won’t sleep tonight otherwise 😉

[Cyclical]

So it’s going to be $69m

Thought I was about right a few weeks ago.

Pity it’s not Earl promised a couple of years ago ...hecseduced many with 35% pa growth talk.

Given what's been thrown at them this year, that seems a very glass half empty reaction. ~11c EPS...I don't think we should be sneezing at that. What do people think this means for divvy?

[thegreatestben]

I bought quite a few of these. Should I be hyped?

[Zaphod]

If the details contained in the email are correct, then this raises a whole lot of other concerns for me about the company or associated institutions that I did not have previously!

[Cyclical]

If the details contained in the email are correct, then this raises a whole lot of other concerns for me about the company or associated institutions that I did not have previously!

The company being OCA, or the source of the email?

[Zaphod]

The company being OCA, or the source of the email?

OCA or the institutions associated with it that leaked.

[King1212]

Nah...no leak....just playing around...chill out!! Tomorrow will be revealed

[Waltzing]

there is still 12 to 24 months before you need to buy in again? lets face it this thing is not going parabolic any time soon..... i hope not... not in with anything worth keeping yet... i am hoping it will take 2.5 to 3 years before it gets over 175...and it will still be cheap.

[Beagle]

The word is out, $68.7m !!!!...who would have thought :D

There's no leak guys...come on...the huge grin made it obvious I was just having a bit of fun.

[Waltzing]

with the recent gold plated impersonations , leaky photo messages of all shorts of portrait art by reputable honorary folk before during or after lock down one cant be sure what to believe anymore ... :eek2: ...68 million! boy that earl is some sales man and the sandy shore apartments must have done the job after all! .. of course i have no idea but MR B say its a long term story and that surely means 5 - 7 years unless accountants have suddenly change the meaning of Fixed Assets to current assets and brought forward future revaluations into current assets in a new standard we havnt seen in the research archives yet and published as a research discussion paper. Bit like the advanced trusts paper was in 1995? or was it 1997? Look how long that took to come home to roost...

anyone want to go higher than 2 dollars in 2.5 years? surely the man who calls himself MAV who has a model will soon know.

[Leftfield]

There's no leak guys...come on...the huge grin made it obvious I was just having a bit of fun.


Oh no...... went to bed last night with a huge happy grin on my face dreaming of $68.7 mill........for awhile I thought ShareTrader was taking after our politicians with all their leaks......what could possibly go wrong!!??
;)

Anyway....whatever the result GLH.

(Disc = Holder with av SP around 84c.)

[Paradox]

with the recent gold plated impersonations , leaky photo messages of all shorts of portrait art by reputable honorary folk before during or after lock down one cant be sure what to believe anymore ... :eek2: ...68 million! boy that earl is some sales man and the sandy shore apartments must have done the job after all! .. of course i have no idea but MR B say its a long term story and that surely means 5 - 7 years unless accountants have suddenly change the meaning of Fixed Assets to current assets and brought forward future revaluations into current assets in a new standard we havnt seen in the research archives yet and published as a research discussion paper. Bit like the advanced trusts paper was in 1995? or was it 1997? Look how long that took to come home to roost...

anyone want to go higher than 2 dollars in 2.5 years? surely the man who calls himself MAV who has a model will soon know.

Yes, I’m calling >$2 within 2.5 years. My conservative valuation suggested a present value of $1.90; next year’s half and full year results will trigger a re-rating of this stock if not next week.

Disc: holding some in 5-year portfolio

[Baa_Baa]

There's no leak guys...come on...the huge grin made it obvious I was just having a bit of fun.

Not obvious at all. Bad dog. 🤬

[Waltzing]

there we have PARADOX has it over 2 dollars within 24 months! No one went for the email leak, Earl would have kittens and its not even april fools day. Definitely a huge forward weighting machine and with you all looking to invest your MET GAINS paradox might be right and no where to get a TD deposit return any time soon MR B may be right on the money... its show time any hour now..unless you have a huge gains on microsoft and that is fully valued now for sure according to CNBC traders Mr Worth.

why then do we have sellers at 103,04, because these are just a few who bought at 40-50 and taking a small profit? and will we see these numbers going forward in the sales column for the next 12 months? If so there is no hurry to buy.

[trader_jackson]

$43m underlying net profit after tax it is... but a reported net loss after tax!
On a first look, I am glad my biggest holding is ARV.

[winner69]

Nobody guessed a LOSS

[Waltzing]

handle with care

look at you all siting right on the NZX right now.

i said hoped for a shocker...

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356711/326868.pdf

"Financial Performance Audited Underlying EBITDA from continuing operations of $63.5m for the year ended 31 May 2020 was in line with the prior corresponding period. This was pleasing considering the loss of the final quarter of retirement village unit sales due to the Government lockdown, which occurred in our peak sales season, and also increased costs that were incurred in aged care due to COVID-19. Once restrictions were lifted by the Government in Alert Level Two, we experienced a strong increase in enquiries and have taken a greater number of applications over late May and June than we recorded last year. Audited Reported Net Loss after Tax of$13.6m included an unrealised decrease of $21.7m in the valuation of Investment Property, predominantly driven by changes to key valuation assumptions made in response to COVID-19, including lower unit price growth rates. Operating cashflow increased 11.3% to$99.4m as a result of the sales proceeds from recently completed developments."

[winner69]

I see that Underlying Earnings before Interest, Tax, Depreciation and Amortisation is now the main profit reporting metric

That’s sneaky - In line with last year ...that’s good


These financials mean nothing ...but to most they will be more than satisfactory ...the gunna story is still intact ...watch out 2024

The value is in the story

[bull....]

reduced dividend as well

[winner69]

$43m underlying net profit after tax it is... but a reported net loss after tax!
On a first look, I am glad my biggest holding is ARV.

And a big increase in borrowings as well

[trader_jackson]

And a big increase in borrowings as well

Alot of the preso seems devoted to justifying/explaining what they are doing is what they said they would do in previous statements - just the top and bottom lines haven't delivered like it was implied at the time of those statements... hmm
But the justifications/explanations are good at strengthening the story - that the big top and bottom line increases are just around the corner now (the big borrowing is certainly already here - borrowings and finance costs have doubled from just 2 years ago)... Equity down... hmm
Average resale gain per unit/care suite the lowest in 5 years... hmm

There is a few too many hmm's in these results

[nevchev]

Disappointed!!!. Wasnt hoping for to much in the current climate but i think the problems run deeper than covid

[trader_jackson]

Results been out for 40 minutes now... the silence on here is deafening

[sb9]

There are about 173 users browsing this thread currently, shows the level of interest...

[trader_jackson]

There are about 173 users browsing this thread currently, shows the level of interest...

Yes - and hardly any posts.
Rushing off to buy ARV maybe?
Okay, I'll stop the ARV plug

[sb9]

Yes - a hardly any posts.
Rushing off to buy ARV maybe?
Okay, I'll stop the ARV plug

Guess no one predicted these numbers reported today, looks like lot of disappointed punters out there...

[Ggcc]

Results been out for 40 minutes now... the silence on here is deafening
Lots of reading to do. I feel longterm this is still a winner, but maybe what Nevchev mentioned, there maybe problems deeper than COVID that need sorting out.

[trader_jackson]

Lots of reading to do. I feel longterm this is still a winner, but maybe what Nevchev mentioned, there maybe problems deeper than COVID that need sorting out.

If there has to be lots of reading done to understand the results, this is not a good thing at all.

[Waltzing]

happy we moved wholesale from PCT, GMT HGH to ARG and traded OCA only... DISC: only trading this stock now.

[winner69]

Alot of the preso seems devoted to justifying/explaining what they are doing is what they said they would do in previous statements - just the top and bottom lines haven't delivered like it was implied at the time of those statements... hmm
But the justifications/explanations are good at strengthening the story - that the big top and bottom line increases are just around the corner now (the big borrowing is certainly already here - borrowings and finance costs have doubled from just 2 years ago)... Equity down... hmm
Average resale gain per unit/care suite the lowest in 5 years... hmm

There is a few too many hmm's in these results

Nice to have somebody to talk to tj

Hmmm ...remember it’s a gunna to be great story

Shares priced / valued on the story

[Food4Thought]

Lots of reading to do. I feel longterm this is still a winner, but maybe what Nevchev mentioned, there maybe problems deeper than COVID that need sorting out.

Could also be a conservative reporting.

Leaving them ample space to more in the right direction moving forward ...

I've seen it before. Report down. Play it safe... long term steady recovery...

Interesting. Must read more when have the time

[winner69]

If there has to be lots of reading done to understand the results, this is not a good thing at all.

Pretty pathetic returns for all that capital used ....equity + borrowings nearly $1 billion (not counting what they owe residents)

[fish]

Guess no one predicted these numbers reported today, looks like lot of disappointed punters out there...

I am not surprised-sold some yesterday at 1.04 .
However that was partly to rebalance my portfolio as I have too many OCA .
The narrative in the annual report is good .
Its about caring for people ,growth and being rewarded for doing so.
Retaining good staff and rewarding them.
I do not care what the sp does-I am with them for the long-term

[winner69]

Alot of the preso seems devoted to justifying/explaining what they are doing is what they said they would do in previous statements - just the top and bottom lines haven't delivered like it was implied at the time of those statements... hmm
But the justifications/explanations are good at strengthening the story - that the big top and bottom line increases are just around the corner now (the big borrowing is certainly already here - borrowings and finance costs have doubled from just 2 years ago)... Equity down... hmm
Average resale gain per unit/care suite the lowest in 5 years... hmm

There is a few too many hmm's in these results

That low average resale gain is a worry

[nevchev]

Increased borrowings and a decrease in divy?Why even pay a dividend if you need more money!ridiculous

[Waltzing]

trade at below .90

[Paradox]

trade at below .90 need to digest all the metrics. $43m underlying profit is slightly more than what I had. Overall, market will perceive this to be a weak performance and sell down heavily, methinks. Keeping my cash ready for .90 or below;

[Beagle]

Underlying profit at $42.9m is as I expected and right in the mid point of the range I have been forecasting $40m - $45m. Kudos where its due and shows good old fashioned bean counting experience counts for something. Look forward to my free beer Mav :)

Cash flow is up 11.3% - Cash flow is the lifeblood of business - another old accounting adage.

They are prudently managing the delivery of new units in the year ahead. Bean counters love that word "prudent"

Valuations assumption changes by the valuers do not surprise me and shouldn't have surprised anyone else because as at balance date 31 May, all the experts thought real estate prices would tank. Fact is they haven't which augers extremely well for the future.

This is the first company to report on the full effects of the full period of the Covid 19, nobody should be surprised that the costs were huge, I have been saying this for a long time now $10 - $15m impact on underlying profit.

The heartwarming stories of how staff stepped up to help residents with their physical and mental health are awesome reading in the annual report.

They have navigated an extremely challenging period very well and really looked after their residents and staff exceptionally well and that makes me very proud to support this company.

Rome was not built in a day and I continue to believe this is an excellent long term hold and very resilient needs based business.

Good to see that applications for units are stronger in late May and June than this time last year and underscores the safety of living in one of OCA's villages.

Interesting to see the new CFO is working hard on what appears to be an application to the Govt for additional funding to meet the full impact of costs of Covid 19 which suggests to me that potentially some of these costs might be recoverable in the current year ?

All things considered, in my opinion this result is in line with expectations and is quite satisfactory considering the extremely challenging effects of Covid 19.
The team have done a fantastic job, (putting their own lives at risk) at protecting the wellbeing of residents and deserve our upmost respect and admiration.

[iceman]

Yes - and hardly any posts.
Rushing off to buy ARV maybe?
Okay, I'll stop the ARV plug

Or maybe people are digesting the results before they comment too much ! There have been a lot of big statements made on this thread lately, bordering on ramping.

[bull....]

ive always argued oca was the runt of the pack , just proved right again

[Beagle]

ive always argued oca was the runt of the pack , just proved right again

This is the first company in this sector to report covering the full period of Covid 19. It appears some people thought the effects would be less.

[winner69]

Don't forget to tune into the webcast starting soon

The tone will say if good or maybe bad

[cymonger]

Underlying profit at $42.9m is as I expected and right in the mid point of the range I have been forecasting $40m - $45m. Kudos where its due and shows good old fashioned bean counting experience counts for something. Look forward to my free beer Mav :)

Cash flow is up 11.3% - Cash flow is the lifeblood of business - another old accounting adage.

They are prudently managing the delivery of new units in the year ahead. Bean counters love that word "prudent"

Valuations assumption changes by the valuers do not surprise me and shouldn't have surprised anyone else because as at balance date 31 May, all the experts thought real estate prices would tank. Fact is they haven't which augers extremely well for the future.

This is the first company to report on the full effects of the full period of the Covid 19, nobody should be surprised that the costs were huge, I have been saying this for a long time now $10 - $15m impact on underlying profit.

The heartwarming stories of how staff stepped up to help residents with their physical and mental health are awesome reading in the annual report.

They have navigated an extremely challenging period very well and really looked after their residents and staff exceptionally well and that makes me very proud to support this company.

Rome was not built in a day and I continue to believe this is an excellent long term hold and very resilient needs based business.

Good to see that applications for units are stronger in late May and June than this time last year and underscores the safety of living in one of OCA's villages.

Interesting to see the new CFO is working hard on what appears to be an application to the Govt for additional funding to meet the full impact of costs of Covid 19 which suggests to me that potentially some of these costs might be recoverable in the current year ?

All things considered, in my opinion this result is in line with expectations and is quite satisfactory considering the extremely challenging effects of Covid 19.
The team have done a fantastic job, (putting their own lives at risk) at protecting the wellbeing of residents and deserve our upmost respect and admiration.


Thank you Beagle for being the voice of reason. The absolute joy people take in a stock doing poorly always astounds me. This is money we've invested for our homes, and children's futures and to care for elderly parents one day. Delighting in other people's misfortune is just bad form.

Today this feels like a small setback, six months from now people will barely remember this report. Two years from now, it will just be a tiny blip in a a much larger narrative. I think back to what Warren Buffett said, "i'd be a much richer man than I am today if I never sold any stock." No selling for me. Just more buying into the inevitable overreaction.

[Waltzing]

MR B is correct but im still looking for .90 handle in the short term.

A market is just that a market. Buy and sell short term is not SHORTING a stock and is not a vote of not confidence in a market listed stock merely the moving of assets into and out of assets classes.


Its true OCA is not an AIR LINE. But it will offer multiple opportunities over the next 10 years as money moves classes.

[peat]

the story is intact , and the price is better

[Bjauck]

This is the first company in this sector to report covering the full period of Covid 19. It appears some people thought the effects would be less.
Well said.
No of unit sales was UP by 17.5%. Which other companies in the sector have achieved that or better in the same 12-month period?

Does there need to be a dose of reality for some in the wider share market with all the money sloshing around looking for a home and/or yield?

[allfromacell]

Well said.
No of unit sales was UP by 17.5%. Which other companies in the sector have achieved that or better in the same 12-month period?

Does there need to be a dose of reality for some in the wider share market with all the money sloshing around looking for yield?

39% sales increase in June as well

[fish]

Or maybe people are digesting the results before they comment too much ! There have been a lot of big statements made on this thread lately, bordering on ramping.

Posts on this thread have in general been very informative .
Results are as expected.
If you are disappointed do not blame others.
You will have learnt a lesson which is important and should never be forgotten if you want to grow your portfolio.

[850man]

First of the bunch to report including the Covid effect, got that one out of the way and it wasn't as bad as it could have been. Future looks promising. Be interesting when the others report over that same period.

[bull....]

This is the first company in this sector to report covering the full period of Covid 19. It appears some people thought the effects would be less.

probably price ran ahead of expectations , thats why i sold out before announcement. anyway performance of OCA relative to others in the sector over years is the worst bar met so everyone talking about long term holds for massive gains should check there history and keep living in hope

[peat]

Valuations assumption changes by the valuers do not surprise me and shouldn't have surprised anyone else because as at balance date 31 May, all the experts thought real estate prices would tank. Fact is they haven't which augers extremely well for the future.

And yet property writedowns are not that significant and are reduced by specific property gains.
eg (4.6)m

Change in fair value of investment property (21,724)
Change in fair value of right of use investment property 17,086


Also, there is way too much OTHER - 50m of expenses and 23m net of income!!

[bottomfeeder]

In this economic climate, its the long term potential to cope and be successful that is more important in setting value. While profit is always good, I'm not really concerned about the results or in fact the divvie.
Nothing changed, now I can move my MET money if it goes below 90.

[Beagle]

Nothing changed, now I can move my MET money if it goes below 90.

Predicting the future is always difficult but I think the pathway to future growth is clear enough such that those looking to buy at an opportunistic price are likely to be disappointed.

I think in the last 3 months of the year they would have struggled to break even. Pretty good result for 9 months of profitable operations.

[iceman]

Posts on this thread have in general been very informative .
Results are as expected.
If you are disappointed do not blame others.
You will have learnt a lesson which is important and should never be forgotten if you want to grow your portfolio.

fish you've completely misread my post. I was totally out of OCA by end of Jan and bought in again in a modest way on 24 March at 42 & 45c. Haven't bought or sold since then. I totally agree this thread has been very informative but it has been very very bullish. That's all I was saying. I still think the result today is reasonably good and am happy to hold this in my long term portfolio. But the unimputed dividends should STOP completely while borrowings are growing.

[Paradox]

Did anyone join the webinar and get further insights? Thanks

[Maverick]

Well Beagle I well and truly owe you that beer. Well done on your estimate....excellent work!:)
Im frustrated to be tied up all day today on other stuff so cant dig into the numbers today.
At first glance its very disappointing , then at second glance its not too bad at all...so lots of proper homework to be done before I`m informed enough to comment,which will take at least a few days.

[stoploss]

Well Beagle I well and truly owe you that beer. Well done on your estimate....excellent work!:)
Im frustrated to be tied up all day today on other stuff so cant dig into the numbers today.
At first glance its very disappointing , then at second glance its not too bad at all...so lots of proper homework to be done before I`m informed enough to comment,which will take at least a few days.
"Ballsiest prediction i ever saw Mav ".......:ohmy:

[Beagle]

Did anyone join the webinar and get further insights? Thanks

Yes I did. See post #6118 (last sentence above). Not explicitly said by them that the last quarter was a loss but they did keep referencing 9 months so the overall sense is this is a very satisfactory result for what ostensibly amounts to 9 months of profitable operations.

Note change of balance date next year to 31 March 2021 (ten months next year). They expect their 217 new units to be completed within that 10 month period. My VERY PRELIMINARY thinking is FY21 will be in the range of $50-55m for the ten month period, (annualised rate of approx. $60-66m). I expect annualised underlying earnings of circa 10 cps. Forward PE at $1.00 is about 10.

Makes for an interesting comparison with my estimate of forward underlying PE for SUM of 19-20 and ARV, (premilitary thinking 15-16).

OCA is a slow burner but has reached the point of inflection where ~ 50% of its units are premium and I always said that was the right time to invest for the long term. As they roll out the remaining 20% of premium care suites, beds and premium apartments and start to generate recurring DMF revenues from the ORA model I think we can look forward to steady growth in the years ahead.

Steady growth does not normally go with a forward PE of just 10, especially in this sort of ultra low interest rate environment when even a no growth stock should command a PE of at least 11.5 in my opinion.

I remain comfortable with my 1 year price target of $1.38. Happy long term holder. OCA is being priced as a no growth stock...time will tell if this is correct or not but I think the pathway to profit growth is clear enough to see in the years ahead.

[macduffy]

Changing balance date to 31 March makes sense, 31 May is an odd one. But it'll make next year's comparison difficult.

[BlackPeter]

First of the bunch to report including the Covid effect, got that one out of the way and it wasn't as bad as it could have been. Future looks promising. Be interesting when the others report over that same period.

Sort of agree ... only the first company reporting on Covid-19 impact and investors need to get used to dampening somewhat their exuberance. Not too disappointed, other that I didn't sell more of my shares before the result (I did sell some - OCA is one of my larger holdings and I reduced it from "XL" to "L").

Despite their smoke screen reporting (it takes a lot of time to extract out of their reports the numbers which really count) do I still like the story - and I do see lots of potential for them over the coming decade or so.

However - looking at where we are now:

NTA is now 88 cts / share (hardly changed);
Earnings is obviously negative (i.e. lets not talk about RoCE) - and their liabilities to asset ratio did further deteriorate (up to nearly 62%);
Surprised they don't expect any Covid-19 impact on their current FY. Hope they don't need to eat their words on that.

I noticed that analyst consensus dropped last week to $1.04 - i.e. somebody smelled something;
For what its worth - ShareClarity DCF shows currently 86 cts / share;

Anyway - I would be surprised if a 90 cent handle is over the next handful of months (when the real economic Covid-19 impact comes through) the lowest it will get. Might be interested to buy the shares I sold last week back when the handle reaches 70 cent. Here it is hoping.

[Paradox]

Yes I did. See post #6118 (last sentence above). Not explicitly said by them that the last quarter was a loss but they did keep referencing 9 months so the overall sense is this is a very satisfactory result for what ostensibly amounts to 9 months of profitable operations.

Note change of balance date next year to 31 March 2021 (ten months next year). They expect their 217 new units to be completed within that 10 month period. My VERY PRELIMINARY thinking is FY21 will be in the range of $50-55m for the ten month period, (annualised rate of approx. $60-66m). I expect annualised underlying earnings of circa 10 cps. Forward PE at $1.00 is about 10.

Makes for an interesting comparison with my estimate of forward underlying PE for SUM of 19-20 and ARV, (premilitary thinking 15-16).

OCA is a slow burner but has reached the point of inflection where ~ 50% of its units are premium and I always said that was the right time to invest for the long term. As they roll out the remaining 20% of premium care suites, beds and premium apartments and start to generate recurring DMF revenues from the ORA model I think we can look forward to steady growth in the years ahead.

Steady growth does not normally go with a forward PE of just 10, especially in this sort of ultra low interest rate environment when even a no growth stock should command a PE of at least 11.5 in my opinion.

I remain comfortable with my 1 year price target of $1.38. Happy long term holder. OCA is being priced as a no growth stock...time will tell if this is correct or not but I think the pathway to profit growth is clear enough to see in the years ahead.
Thanks much. Let me go through the statements tomorrow and tweak the valuation but I suspect nothing much would change overall.

[Cyclical]

Yes I did. See post #6118 (last sentence above). Not explicitly said by them that the last quarter was a loss but they did keep referencing 9 months so the overall sense is this is a very satisfactory result for what ostensibly amounts to 9 months of profitable operations.

Note change of balance date next year to 31 March 2021 (ten months next year). They expect their 217 new units to be completed within that 10 month period. My VERY PRELIMINARY thinking is FY21 will be in the range of $50-55m for the ten month period, (annualised rate of approx. $60-66m). I expect annualised underlying earnings of circa 10 cps. Forward PE at $1.00 is about 10.

Makes for an interesting comparison with my estimate of forward underlying PE for SUM of 19-20 and ARV, (premilitary thinking 15-16).

OCA is a slow burner but has reached the point of inflection where ~ 50% of its units are premium and I always said that was the right time to invest for the long term. As they roll out the remaining 20% of premium care suites, beds and premium apartments and start to generate recurring DMF revenues from the ORA model I think we can look forward to steady growth in the years ahead.

Steady growth does not normally go with a forward PE of just 10, especially in this sort of ultra low interest rate environment when even a no growth stock should command a PE of at least 11.5 in my opinion.

I remain comfortable with my 1 year price target of $1.38. Happy long term holder. OCA is being priced as a no growth stock...time will tell if this is correct or not but I think the pathway to profit growth is clear enough to see in the years ahead.

Nice one Beagle. I like the look of the $1.38 1 year target, but of course the big risk here is an Aussie style return of the virus, which may well keep the shackles on for a while. Will be interesting to see if the SP can stay around a buck over the coming weeks, or if it drifts down to the point where I'll have to load up on a few more.

[winner69]

And yet property writedowns are not that significant and are reduced by specific property gains.
eg (4.6)m

Change in fair value of investment property (21,724)
Change in fair value of right of use investment property 17,086


Also, there is way too much OTHER - 50m of expenses and 23m net of income!!

Anybody really understand How this right of use asset at Everil Orr village impacts thevaccounts?

Peat shows it has favourable in his post above .... there’s an Rental expense of $19.2m somewhere else

Two thing ..change in fair value and rental expense .....sometimes one is included while one is excluded when doing the diferent profit reporting and sometimes both are included.

[Waltzing]

cant see any signs of panic selling yet..

waiting for someone with extensive expert knowledge of the reporting standard to comment.

"Two thing ..change in fair value and rental expense .....sometimes one is included while one is excluded when doing the diferent profit reporting and sometimes both are included." ect.

All we see in P&L is a group consolidation over a lot of assets and complex business. Others here have spent years on this one and we should pay to go to an independent presentation on this one. i for one would a pay and attend.

[bottomfeeder]

I think the report does not really take into account subsequent events. As always an accountants conservative approach has been used to revalue the property holdings. Property prices have been firm recently, although not so firm as at balance date. Future looks good, inflationary pressures will boost values by next balance date. Would love to see OCA drop below 90 in the short term, so I can get my fill from the MET proceeds.

[Beagle]

One other interesting snippet from the call this morning. The valuers have applied a discount of just over 27% to unsold units as at balance date due to uncertainties at that time, up from 25% at the interim report. This amounts to $64m or just over 10 cps, up from 8 cps at the interim period report. This again is another Covid effect. People who had singed up to move in before balance date couldn't sell their homes due to Covid so some sales were delayed and will shift to FY21.
Interesting to note applications were up 39% in June 2020 on the same month last year.

When you add absolutely everything up, direct costs less subsidy, lost development margin from units that could not be completed on time and lost profit from sales that could not be completed in FY20 because people couldn't sell their homes during lockdown I do not think its unreasonable at all to suggest the effect was that at best, the company traded at break even for the final quarter, (which Early suggested is traditionally their busiest quarter).

Given this it would appear to be quite conservative to simply gross up 9 months to 12 months and suggest underlying profit would have been 42.9 x 12/9 = $57.2m Total all encompassing Covid effect is estimated at approx. $57.2m - $42.9m =$14.3m. If anything I think that probably understates it. (How conservative ? Keep in mind a whopping 89 units could not be completed by balance date due to Covid 19)

Shares look very cheap to me relative to the rest of the sector. Yes there's the risk of community spread again but that appears to be fully priced into OCA but not the others, which is a little perplexing.

[Waltzing]

Thank you Mr B.

I am a starter for a professional presentation on this business if there is ever something arranged. Happy to pay for the opportunity.

[peat]

Shares look very cheap to me relative to the rest of the sector. Yes there's the risk of community spread again but that appears to be fully priced into OCA but not the others, which is a little perplexing.

Which tells me that the risk of covid spread is not the reason for the differential.

[Joshuatree]

One thing im watching is what happens to property prices once the wage subsidy finishes in september.

[Beagle]

Which tells me that the risk of covid spread is not the reason for the differential.

Market expectations were for more profit, more units completed and less overall Covid 19 effect. Not understanding the total effect of Covid is the reason. 89 units unable to be completed is more than one third of the number that had been projected for the year. That's a really massive effect right there. They've slowed down development for FY21 too, not trying to force the issue of the 89 unit catch up plus what was previously planned for FY21.
I like the conservative way they're running it.

[Snoopy]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356711/326868.pdf

"Financial Performance Audited Underlying EBITDA from continuing operations of $63.5m for the year ended 31 May 2020 was in line with the prior corresponding period. This was pleasing considering the loss of the final quarter of retirement village unit sales due to the Government lockdown, which occurred in our peak sales season, and also increased costs that were incurred in aged care due to COVID-19. Once restrictions were lifted by the Government in Alert Level Two, we experienced a strong increase in enquiries and have taken a greater number of applications over late May and June than we recorded last year. Audited Reported Net Loss after Tax of $13.6m included an unrealised decrease of $21.7m in the valuation of Investment Property, predominantly driven by changes to key valuation assumptions made in response to COVID-19, including lower unit price growth rates. Operating cashflow increased 11.3% to $99.4m as a result of the sales proceeds from recently completed developments."


Can anyone explain the bold bit I have highlighted?

1/ I understand the idea of having 'Investment Property' for future development and sale.
2/ I understand that over time you might expect the value of the investment property to go up.
3/ I DO NOT understand how you book an expected increase in future investment property value into today's balance sheet before it happens.

If OCA are taking $21.7m off the value of their Investment Property this year based on 'future changes in value', how is it that 'future changes in value' come to be baked into present day investment property values in the first place?

SNOOPY

[Beagle]

Valuers use "fancy" DCF models to put a current value on units. Helps justify their outrageous fees ;) They reverse engineer values based on DCF models to get values that the market is telling them anyway based off market evidence. Clear as mud my Beagle friend ? Discounted cash flow models are vastly overrated in usefulness in this dog's opinion as they contain far too much guesswork and assumptions about long term matters. Discounting future cash flows at 14-20% when the long term risk free interest rate is less than 1% is but one example of the types of "work" that goes into their DCF model's.

Discounting the present value of completed but unsold units by more than 27% just because they are unsold when there's ample evidence they will be sold in due course at market value is another example of the "usefulness" of the valuation work that goes into these valuations. (This discount alone on completed unsold units is $64m or 10.4 cents per share).

More on the assumptions they use on page 20 of the analyst presentation http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356710/326865.pdf

Not saying they have no idea what they're doing but really NAV of $1.10 looks extremely conservative to me.

[Beagle]

Well Beagle I well and truly owe you that beer. Well done on your estimate....excellent work!:)
Im frustrated to be tied up all day today on other stuff so cant dig into the numbers today.
At first glance its very disappointing , then at second glance its not too bad at all...so lots of proper homework to be done before I`m informed enough to comment,which will take at least a few days.

Thanks mate. I wish you had of been right but it was always going to be a really tough ask to get close to last year with all of the Covid 19 effects considered. Shortfall of 89 units built is one big fat material item all in itself ! I think all things considered this is a very satisfactory result and another year clicked off in their journey to transform the company to 70% premium care units. 3 years down, another 3-4 years to go and they'll really be cooking with gas !!

They're playing things pretty conservative with this coming 10 months build rate which I think is a good thing.

[Snoopy]

Valuers use fancy DCF models to put a current value on units. They reverse engineer values based on DCF models to get values that the market is telling them anyway based off market evidence. Clear as mud my Beagle friend ? DCF's vastly overrated in usefulness in this dog's opinion as they contain far too much guesswork and assumptions about long term matters.


I can understand that commercial property that does not change hands very often is valued on a DCF basis. But we are talking about residential units in a retirement village here. I know that residential units do not change hands every year. But generally in a retirement village some units change hands each year. And in many cases they are cookie cutter clones of the units that do not change hands. I would have thought that in any particular village there are enough units changing hands to provide quite accurate valuations of those units that do not change hands. Even if you were in the midst of building a whole new retirement village, the size of units and even geographical location should be similar enough to an existing village to allow accurate present day valuations to be determined.

Assuming that if you turn the sod on a new village today, that you will be able to charge 20% (say) above current market rates in two years time for any capitalised development (mainly new units being built) on the books sounds insane to me. How much future property inflation is built into the balance sheets of other retirement village operators?

SNOOPY

[Beagle]

2-3% per annum average underlying growth is built into a lot of valuation assumptions Snoops. Quite a body of evidence that construction costs generally move up at a rate slightly higher than the inflation rate as do property prices over the very long run.

Discounting brand new units by more than 27% just because they are unsold at balance date when there's a vast body of evidence of sales of other units ostensibly the same supporting the asking prices is something I struggle to make any sense of :confused:

[Snoopy]

2-3% per annum average underlying growth is built into a lot of valuation assumptions Snoops. Quite a body of evidence that construction costs generally move up at a rate slightly higher than the inflation rate as do property prices over the very long run.


Assuming that construction costs move up 2-3% per year sounds prudent. Assuming that you will be able to get the 'rent' increased on a new occupation contract to cover those increased construction costs sounds reckless.

SNOOPY

[Beagle]

Assuming that construction costs move up 2-3% per year sounds prudent. Assuming that you will be able to get the 'rent' increased on a new occupation contract to cover those increased construction costs sounds reckless.

SNOOPY

I don't think so Snoopy. Fact is inflation has been running at somewhere around 2% on average for the last 20 years so 2%-3% per annum assumed increases in revenues is actually just keeping pace with inflation with a bit left over for profit growth. e.g. Govt approved weekly payments for people in care went up by 3.0% from 1 July 2020 as approved by the director general of health Dr Ashley Bloomfield.
PM me your email address and I'll email you confirmation of this if you want it.

[RTM]

Increased borrowings and a decrease in divy?Why even pay a dividend if you need more money!ridiculous

Because in the same way they are caring to their customers, they are caring to their shareholders.
Only reason I can think of. I am pleased to get something....but somewhat surprised.

[Beagle]

I have posted their dividend policy twice quite recently and for anyone who wonders why.... this is their stated policy so there should be no surprises going forward !
Extract from 2017 annual report prepared just after the IPO. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/304591/262296.pdf
Page 3 under shareholder returns and I quote "Oceania Healthcare has established a dividend policy with a targeted pay out ratio of 50% to 60% of annual underlying NPAT".

Some people want income and for others they have a dividend reinvestment program wherein you can elect to receive shares in lieu of dividend at a 2.5% discount.
I posted a link to the plan booklet last week for anyone interested in this.

[Snoopy]

I don't think so Snoopy. Fact is inflation has been running at somewhere around 2% on average for the last 20 years so 2%-3% per annum assumed increases in revenues is actually just keeping pace with inflation with a bit left over for profit growth. e.g. Govt approved weekly payments for people in care went up by 3.0% from 1 July 2020 as approved by the director general of health Dr Ashley Bloomfield.
PM me your email address and I'll email you confirmation of this if you want it.


I don't doubt your information on the care payment allowance going up by 3% on 1st July 2020 Beagle. The question underlying this is what happens to the capital value of a care unit when the cost of running it goes up by 3% and the payment to cover the running cost goes up by 3%? Net increase increase in income from running that care unit is zero. So net change in capital valuation of that care unit is - drum roll - zero! Isn't that how residential units are valued?

SNOOPY

[Beagle]

There's little value in providing basic care services funded by the Govt Snoopy. Nobody is building new supply of basic care units which typically are only circa 15 sq metes.
I am going off memory here but when OCA listed they were about 70 / 30 basic govt funded care v premium care units.
Over time as they complete their redevelopment program they are moving to 30 / 70 basic v premium care units.
This year marks the point of inflection as noted in their annual report where its about 50/50.
Over the years ahead the sale of occupation right agreement units both apartments and care suites will generate a much higher return on invested capital than the Govt funded basic units would.
A good long read of the investor presentation and annual report would dramatically lift your understanding of their business model.
Investor presentation http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356710/326865.pdf
Annual Report...some good heartwarming stories in there about how well residents were cared for which got me thinking its not all about just the numbers...bet you never thought a greedy bean counting dog would say that ;) http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356711/326868.pdf

[Waltzing]

the Beagles post at 6137 is boggling and boiling the brain. Thats what i mean i love to attend a very comprehensive presentation on this share. Holding hundreds of thousands and millions for some investors and upwards for investors is not a light decision on something as complex as valuations on property using Discounted cash flow models. is not something the average investor wants to take a chance on. Thats is why a sector ETF is usually purchased instead.

But in a busy day covering many shares and markets knowing a single company in depth is almost impossible.

DISC: trading this share only until its reporting is untangled.

[Enrix]

Solid operating result from Oceania Healthcare in a challenging environment. Looking ahead, the company expects to complete a further 217 beds and units in FY21F and maintained medium-term guidance of 250+ beds and units while the key negative from OCA’s result was the 4% decline in NTA/share to NZ$0.95. Target price NZ$1.08 (prev NZ$1.00) - reflects near-term earnings upgrades

From a major broker.

[Paradox]

Solid operating result from Oceania Healthcare in a challenging environment. Looking ahead, the company expects to complete a further 217 beds and units in FY21F and maintained medium-term guidance of 250+ beds and units while the key negative from OCA’s result was the 4% decline in NTA/share to NZ$0.95. Target price NZ$1.08 (prev NZ$1.00) - reflects near-term earnings upgrades

From a major broker.

Just listening to the webinar Q&A; the guidance of 200-250 units and all other figures is for the period ending March 2021 and not a full year.

For those who want to listen, here’s the link

https://globalmeet.webcasts.com/viewer/event.jsp?ei=1332504&tp_key=dc7b3b8293

[Beagle]

the Beagles post at 6137 is boggling and boiling the brain. Thats what i mean i love to attend a very comprehensive presentation on this share. Holding hundreds of thousands and millions for some investors and upwards for investors is not a light decision on something as complex as valuations on property using Discounted cash flow models. is not something the average investor wants to take a chance on. Thats is why a sector ETF is usually purchased instead.

But in a busy day covering many shares and markets knowing a single company in depth is almost impossible.

DISC: trading this share only until its reporting is untangled.

Earl Gasparich presented at the N.Z. shareholders association Auckland branch, if my memory serves me correctly, in Sept 2018. Most I spoke to afterwards were impressed with his clear presentation. Perhaps I might have a word with Noodles and see if we can get him back to present sometime in 2021 to get an update on how things are going in what will hopefully still be a post Covid environment.

Other than that the annual meeting is always a good chance to ask questions both during the meeting and afterwards over refreshments and to meet the directors and management and get a feel for yourself on the calibre of people. 27 August 2020 2.00 p.m. at Eden Park Kingsland.

I plan to organise a lunch just around the corner at my nephews restaurant in Kingsland before the meeting. Anyone wanting to come along is most welcome, further details to be provided in due course. Phil is an award winning Michelin star chef and knows how to cook :)

[clip]

^ That would be at Phil's Kitchen i assume? Can confirm they turn out some epic food

[Beagle]

^ That would be at Phil's Kitchen i assume? Can confirm they turn out some epic food

He sure does, but he's just doing dinners there now. Now owns another more casual and much less expensive restaurant for lunches across the road and I'm in trouble as I'm a bad uncle and haven't been there to support him in that new venture yet :blush:

[King1212]

wow...what a hectic!! I have been very busy the last two days...and read the result.

Overall, this is a keeper. Where u can find $1 stock, with a solid assets and paying a dividend stock??

That is me,,my verdict is a hold.

[fish]

wow...what a hectic!! I have been very busy the last two days...and read the result.

Overall, this is a keeper. Where u can find $1 stock, with a solid assets and paying a dividend stock??

That is me,,my verdict is a hold.

Fully agree.
Dividends from stocks are going to be in short supply this year .

[Entrep]

Cash is trash. Just loaded some orders in for this a bit lower

[Davexl]

wow...what a hectic!! I have been very busy the last two days...and read the result.

Overall, this is a keeper. Where u can find $1 stock, with a solid assets and paying a dividend stock??

That is me,,my verdict is a hold.


Would like to make this a hold also like Infratil, but constantly need the income and so capital recycling. Have bought back in on the recent dip, hunting for dividends. Thank you also Beagle for your 50/50 tipping point analysis. Looking forward to the AGM. This is an allround quality company that I keep coming back to.

[iceman]

Fully agree.
Dividends from stocks are going to be in short supply this year .

While I like the dividend from my modest holding of OCA, I really struggle to understand why companies pay unimputed dividends while taking on debt. I have read Beagle's post with the dividend policy a few posts ago, but it makes no economic sense to me.
Much prefer the 8.3% fully imputed SFF announced yesterday and which King1212 obviously hasn't seen according to his most recent post !

[Beagle]

I believe RYM pay 50% of underlying profit as an unimputed dividend, SUM are about 30%, again unimputed and both have loaded up with massive debt to expand their development program so OCA's approach is certainly not unusual for this sector.

Debt is cheap now Iceman, circa 3% so its no big deal.

[iceman]

I believe RYM pay 50% of underlying profit as an unimputed dividend, SUM are about 30%, again unimputed and both have loaded up with massive debt to expand their development program so OCA's approach is certainly not unusual for this sector.

Debt is cheap now Iceman, circa 2% so its no big deal.

Agree mate. This worries me a little for this sector, they are all borrowing money to pay to SH. I'd expect an astute accountant like yourself would question that.

[Beagle]

Agree mate. This worries me a little for this sector, they are all borrowing money to pay to SH. I'd expect an astute accountant like yourself would question that.

Mate, there is no ambiguity about why they are borrowing. They are borrowing to fund their development program, that's the express and only purpose of borrowing. The purpose for OCA embarking on a business transformation program should be crystal clear to all shareholders. You're drawing a very long bow to argue they're borrowing to pay dividends. I have no concerns whatsoever. Debt is merely a tool to achieve an objective.
OCA stated from the very outset with their IPO what their dividend policy is, to pay out between 50-60% of underlying profit after all costs including the cost of borrowing.

At a theoretical conceptual level I can understand your perspective. It's not tax efficient to force shareholders to incur a tax liability on unimputed dividends while contemporaneously incurring higher level's of debt to fund their development program. The problem is if you get too clever with the Govt and can't point to the sector at least paying some tax either at a company or shareholder level...that might not work out to be in the best interests of shareholders in the long run.

Whenever the thorny issue of tax for this sector has come up before the public eye before, RYM has often taken the sector lead and pointed to the tax paid by shareholders on dividends paid. To date their representations (sort of on behalf of the sector) seem to have kept the tax wolves at arms length.
Who would be silly enough to start poking a pack of sleeping wolves ?

[Entrep]

The problem is if you get too clever with the Govt and can't point to the sector at least paying some tax either at a company or shareholder level...that might not work out to be in the best interests of shareholders in the long run.

Can you elaborate?

[Beagle]

Can you elaborate?

I expanded further in that earlier post already. At this point in time the capital gains made on the resale of occupation right agreements are tax free as an ORA or licence to occupy is deemed to be a financial arrangement under the financial arrangements section of the income tax act. A financial arrangement is basically, you give OCA, say $300K to occupy a care suite for the rest of your life and when you pass on your estate gets 70% of that back ($210K). OCA is taxed on the $90K difference less any costs of refurbishment but if they resell that licence to occupy for $400K to the next incoming resident they are not taxed on the $100K capital gain as actual and real ownership of the property never changed hands, OCA simply granted a licence to occupy.

The sector is currently very tax efficient for shareholders and we want it to stay that way. Iceman should know that its unwise to rock the boat ;)

[dibble]

I expanded further in that earlier post already. At this point in time the capital gains made on the resale of occupation right agreements are tax free as an ORA or licence to occupy is deemed to be a financial arrangement under the financial arrangements section of the income tax act. A financial arrangement is basically, you give OCA, say $300K to occupy a care suite for the rest of your life and when you pass on your estate gets 70% of that back ($210K). OCA is taxed on the $90K difference less any costs of refurbishment but if they resell that licence to occupy for $400K to the next incoming resident they are not taxed on the $100K capital gain as actual and real ownership of the property never changed hands, OCA simply granted a licence to occupy.

The sector is currently very tax efficient for shareholders and we want it to stay that way. Iceman should know that its unwise to rock the boat ;)

Indeed. One argument might go that if a company's MO meant there were never any imputations and as a result their policy was never to pay a dividend then the only way an investor could make a return would be to sell a few shares at a profit. Knowing this in advance suggests the investor could ONLY have the intention of making a capital gain therefore become subject to CGT. The IRD would only need one victory in court and probably the whole sector would then be caught up.

[iceman]

I expanded further in that earlier post already. At this point in time the capital gains made on the resale of occupation right agreements are tax free as an ORA or licence to occupy is deemed to be a financial arrangement under the financial arrangements section of the income tax act. A financial arrangement is basically, you give OCA, say $300K to occupy a care suite for the rest of your life and when you pass on your estate gets 70% of that back ($210K). OCA is taxed on the $90K difference less any costs of refurbishment but if they resell that licence to occupy for $400K to the next incoming resident they are not taxed on the $100K capital gain as actual and real ownership of the property never changed hands, OCA simply granted a licence to occupy.

The sector is currently very tax efficient for shareholders and we want it to stay that way. Iceman should know that its unwise to rock the boat ;)

Well done mate. You've explained very well in laymans's terms how it is and what keeps the shareprices as high as they are. . I shall crawl back into my bunk :-)

[Entrep]

I expanded further in that earlier post already. At this point in time the capital gains made on the resale of occupation right agreements are tax free as an ORA or licence to occupy is deemed to be a financial arrangement under the financial arrangements section of the income tax act. A financial arrangement is basically, you give OCA, say $300K to occupy a care suite for the rest of your life and when you pass on your estate gets 70% of that back ($210K). OCA is taxed on the $90K difference less any costs of refurbishment but if they resell that licence to occupy for $400K to the next incoming resident they are not taxed on the $100K capital gain as actual and real ownership of the property never changed hands, OCA simply granted a licence to occupy.

The sector is currently very tax efficient for shareholders and we want it to stay that way. Iceman should know that its unwise to rock the boat ;)

Thanks, very interesting and helpful.

[Onion]

The sector is currently very tax efficient for shareholders and we want it to stay that way. Iceman should know that its unwise to rock the boat ;)

I didn’t see any beagles on the list (published recently) of millionaires wanting to pay more tax.

[bullfrog]

I expanded further in that earlier post already. At this point in time the capital gains made on the resale of occupation right agreements are tax free as an ORA or licence to occupy is deemed to be a financial arrangement under the financial arrangements section of the income tax act. A financial arrangement is basically, you give OCA, say $300K to occupy a care suite for the rest of your life and when you pass on your estate gets 70% of that back ($210K). OCA is taxed on the $90K difference less any costs of refurbishment but if they resell that licence to occupy for $400K to the next incoming resident they are not taxed on the $100K capital gain as actual and real ownership of the property never changed hands, OCA simply granted a licence to occupy.

The sector is currently very tax efficient for shareholders and we want it to stay that way. Iceman should know that its unwise to rock the boat ;)

Nicely summarised, thank you!

[King1212]

Cash is trash. Just loaded some orders in for this a bit lower


send your cash to my account mate!! if your cash is trash! hahah

[Snoopy]

Valuers use "fancy" DCF models to put a current value on units. Helps justify their outrageous fees ;) They reverse engineer values based on DCF models to get values that the market is telling them anyway based off market evidence. Clear as mud my Beagle friend ? Discounted cash flow models are vastly overrated in usefulness in this dog's opinion as they contain far too much guesswork and assumptions about long term matters. Discounting future cash flows at 14-20% when the long term risk free interest rate is less than 1% is but one example of the types of "work" that goes into their DCF model's.

Discounting the present value of completed but unsold units by more than 27% just because they are unsold when there's ample evidence they will be sold in due course at market value is another example of the "usefulness" of the valuation work that goes into these valuations. (This discount alone on completed unsold units is $64m or 10.4 cents per share).

More on the assumptions they use on page 20 of the analyst presentation http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356710/326865.pdf

Not saying they have no idea what they're doing but really NAV of $1.10 looks extremely conservative to me.


Thanks for pointing me to page 20 of the presentation. The footnote on that page appears to hold the answer regarding the $22.5m 'property impairment'.

"1. Fair value movement includes impact from right of use asset (Everil Orr village). This is a lease arrangement under which Oceania is the village operator. There is a corresponding rental expense of $19.2m (excluded from Underlying Profit). Note Everil Orr also contributed $1.5m to Deferred Management Fee revenue ($0.7m in FY2019)."

The note reads like almost all of the write down is associated with the "Everil Orr Village". The "Everil Orr Village" is leased/rented. I think this means this whole exercise could be tied up with the adoption of NZ IFRS 16 and how lease costs are reported? To further explain, under NZ IFRS 16, any property lease is recorded as a 'right of occupation' asset. That 'right of occupation asset' is then amortised each year as 'rental expenses' are charged up against it.

Having said this, I don't understand how a rental expense be excluded from underlying profit. It seems very obvious to me that rental expenses must be tax deductible in the income statement. Can you make any sense of that footnote on slide 20 Beagle?

SNOOPY

[Beagle]

I'll have a look next week if I get some spare time mate.

I know I've already taken more than one pot shot at the valuers but I find the lower part of page 48 more than a little perplexing. Why would the company instruct valuers to value everything up as at 30 April 2020 when we were in the real thick of the Covid 19 crisis when the company has a 31 May 2020 balance date ?

If the valuers were doing their work as at 31 May 2020 when the crisis had more or less passed I'd be surprised if they were as overtly negative as the view they appear to have taken deep inside Covid 19. I think the difference in the underlying assumptions a reasonable valuer would have used as at 31 May could have been materially different from those used in April and certainly all evidence since then including the crucial REINZ medium sales data for June 2020 has confounded all the experts and being far more robust than anyone expected.

Given this valuation timing anomaly I am even more convinced that the low valuation has created a situation where the $1.10 NAV is not actually a true and fair view of the companies net asset value as at 31 May 2020.

[Leftfield]

Beagle, Just wanted to say a BIG THANK YOU for all your input to the OCA thread lately. It's really appreciated.

IMHO the OCA accounts seem overly complex and so your input is a great help to us lesser accountants. Unfortunately the changing balance date is going to provide more opportunity for confusion in the FY ahead.

Disc - I'm only a small holder (currently in the green) but won't be adding until I see more upward momentum.

[Paradox]

The CFO alluded in the Q&A session to the challenges in preparing the financial statements at this time of the year, so could have been referring to the valuers and auditors.

[bottomfeeder]

The CFO alluded in the Q&A session to the challenges in preparing the financial statements at this time of the year, so could have been referring to the valuers and auditors.

The difficulty is that they have to come up with a valuation using the information available at balance date. While subsequent events have some bearing, with a volatile and dynamic economy, everything moves so quickly. In April May the consensus was that property prices were depressed, however subsequent property transactions have shown they are not. So I think the reduction in NTA is overstated. However we can't get over exuberant as things could change quite markedly by the end of March next year. Further I feel personally that with the govt expenditure, inflation will take off towards the end of the year and continue for some time. Combine this with the ever increasing demand by the older population coming through, values will be increasing quite markedly. Let's say NZ moves into depression. Retirement villages will be able to defer levies until a final settlement (if you know what I mean). So retirement operators are perfectly placed to weather the coming financial crisis. At least in the medium term of say up to 8 years. So a safe, secure and growth investment as I see it.

[Baa_Baa]

Nice healthy chart, weekly. Traded within the MA’s, stopped at natural resistance 61.8% fib. Respectable RSI and Bollinger with room to the upside. Looks primed for a re-rate once people get their heads around the discount to NAV. Can see 25% upside here on the chart without breaking a sweat.

[iceman]

Beagle, Just wanted to say a BIG THANK YOU for all your input to the OCA thread lately. It's really appreciated.

IMHO the OCA accounts seem overly complex and so your input is a great help to us lesser accountants. Unfortunately the changing balance date is going to provide more opportunity for confusion in the FY ahead.

Disc - I'm only a small holder (currently in the green) but won't be adding until I see more upward momentum.

I second that LF. Beagle, Maverick et al have done a great job with this company/tread and I am sure all members appreciate it. I certainly do and respect their views.

[value_investor]

My thoughts on the result

- The negative net profit from the unrealised movement in valuation is not of the biggest concern to me. I understand the valuers perspectives but from what we can see generally in the market, property prices are still doing very well. I'm not sure Covid-19 has actually had the effect first feared. Valuers aren't valuing the property from the perceptive that there will be a time where shortages in the industry will make it price sensitive. I don't think you can quantify that.

- I'm more worried about a few others things. Firstly, the financing costs are almost double that of last year which to me highlights and annoys me to why they are paying a dividend. Secondly, not a fan of this use of Underlying EBITDA. Its kind of like saying financing costs and depreciation aren't important parts of a business which is inaccurate.

- The care side of the business is still struggling to make significant headway. I still think it will require 3 or 4 years for the transformation to the premium side they are talking about and even then, without a funding boost I'm not sure if its lucrative.

- The development and sales side of the business is still doing well. The presentation did say they struggled in the last quarter greatly. Getting 45 more sales despite Covid-19 is very impressive from them. I do think this is their actual core competency (not the care business). I have not seen a company in NZ actually get consented and deliver so many units on time and on budget.

Overall, I think the company are showing they are perhaps a few years behind in terms of delivering the potential it has. I still think the best days won't be for a few years yet. They were the first to report numbers in the sector post covid and I think perhaps the others might not be flash either especially if the valuers are like this.

From a valuation perspective, I would say $1.00 is a fair valuation, from a $1.00 price and on 7c EPS based on underlying profit its a 14 PE stock. In the current climate its not a bad buy. I know I say that after saying bad things but just remember price is what you pay and value is what you get. I think FPH is an amazing company but I wouldn't buy on the valuation. If you are buying though, I think you have to be on the perspective that its a long term hold and won't be a A2 Milk type story. Its going to be a slog.

One thing that does annoy me also is the difficulty reading these reports. The use of acronyms throughout, the amount of useless graphs, the use of some accounting jargon that even someone with an accounting background struggles with. The fact the annual report is over a 100 pages long with text on a backing that isn't the easiest to read. Its surely put off retail investors.

Disc: Continuing to hold. I'll reduce if it goes up to a silly valuation ie over $1.10 and I'd buy again over 90c.

[King1212]

Thanks Master Beagle!

[Maverick]

Two solid days deep on these accounts now and I've finally got there.

Firstly I absolutely commend Beagle on his nose for foreseeing this result, I've no idea how he plucked out the covid impact but he has proved to be spot on…..I'll be delighted to square you up after the AGM mate.:t_up:

Now, about that bit of egg on my face.
The care side of the profit is a very difficult beast to predict and I'm pleased to have got that part of my forecast right at $20m (it was actually exactly $20m) . This is important for more than my ego but because it validates the foundation for my workings that my entire pipeline “care profit” projections are based on. This needs to be right as Care profits will be evermore important to OCAs as it progresses.
The good news for shareholders is that based on the spreadsheets projecting the full pipeline of development, I have recently said here that this result will be the lowest point of care profit before climbing up again. (It's been falling in a most ugly fashion for the last 3 yrs now from $32m to $20m.)
Interestingly , Earl has just said for the first time that the care profits are now at a “point of inflection” -( “inflection”,...ooh I like that word:cool:), Beagle has recently mentioned the same idea and I've said too...so nice to be all agreeing on that.
Care profits are onward and upward from here, contributing increasingly at last instead of taking away.

Moving on from the “care” division to the “village” division.
This is where I estimated the Covid disruption quite wrong, which led to my 50m forecast being too high.
This is difficult to explain but really worth considering as it will affect next year's OCA profit in a positive way.
Basically I wrongly considered the disruption to sales/ resales to be limited to about 4 weeks lost (lock-down L4) then all will get up and going again straight away.
I also based the Covid sales disruption effect based on Summersets recent sales quarter results from April-May-June.
So here goes....
While I thought the disruption was just 4 weeks lost, I have now learned there are actually 2 parts to the disruption.
Part1 is the “lost” part of sales during L4 , Basically April written off-easy.
Part 2 is the “deferred” part of sales of about a month following L4 (May) . This month was spent getting the real estate sales gogs moving again so pre lockdown contracts can become unconditional. (Earl mentions it and i`ve confirmed it by searching Auckland housing statistics.) These are sales previously signed pre- lockdown ,OCA lost 11% of them during L4/3. ( ie still retaining 89%)
Because of these 2 months of non and frozen sales ,the deferred 1 month of sales mostly only got settled in the following month of June. And this is on top of the new June sales that were going to happen anyway.
Interestingly SUM sales results encompassed the “lost month” -April , the “deferred month”-May and the “catch-up month”- June, plus add on new normal sales for June ( a double whammy for June). All up the net result for SUM for the 3 months only reveals the lost month of May. (because June balances out May,)

In OCA`s case their financial year unfortunately cut off immediately after the deferred month of May but before the catch up/double whammy month of June. That leaves 2 really ugly sales months in this report . The catch up month of June still exists but wont show up until the next HY. This is supported by OCAs saying sales applications at June 30th are 39% ahead of last year.
So to summarize, OCA had a lot of delayed sales contracts which significantly impacted FY20 have simply shunted into June -FY21. The pendulum will now swing the other way in IHY21 so to speak. This has a significant negative effect on 2HY20 but an almost equally positive effect on 1HY21 underlying profit. In my workings/estimations those delayed contracts 's cost OCA delayed profit of 5-7m down in 2HY20 , this will then show as catch up when it will be lumped in with the normal 1HY21 sales.

Of course I have updated my projections and independently arrived at a similar estimate with Beagles around $55-$60m. FY21 (adjusted for a full year comparison).

After a deep dive into these accounts for a couple of days I remain just as positive about OCAs prospects as I've always been. My conclusion is that despite yet another sucky underlying profit which looks consistently poor to probably everyone, when you really dig deep there is every bit of evidence things are going exactly to plan. Problem with the share price in the time being is that who is really going to look that deep?

I agree for yet another time with Beagle (sorry if this is getting just too sickly folks:)) , the Covid impact on this result just has to be “looked through.”

Notwithstanding a NZ reinfection or property collapse in NZ I am very happy holding and waiting for the pendulum that swung against them in 2HY20 to swing the other way for them 1HY21. IMO it will finally be the start of great results actually showing up on the bottom line which Covid really messed things up for us all this time around.

[winner69]

some say 'cash is king'and others say 'follow the money'

That's why I like recasting the cash flow statements that I reckon shows where the cash goes and comes from. It is below and red is cash out and black is cash in

That big cash outflow from day to day activities a bit of a worry I reckon .....and as Iceman says maybe divies are a real extravagance as not funded from cash generated in the business.

that top line - cash burn for day to day stuff was evenly split across the half years

Make what you want from this - probably a load of the old proverbial

[James108]

Hi Winner, I don't think your cash flow analysis tells the full story here.

Firstly I believe you included rental payments for right to use investment property as 'day to day'. I believe this is mostly related to the Everil Orr village, payments are made to the lessor as ORA are sold and then again as they are resold. Therefore I think this should be included as a 'building things' expense.

I believe you have also included interest, which again cannot really be separated from the 'building things' as that is what the debt is used for, although I suppose interest would meet the definition of a day to day expense.

Further, more and more cash is coming from the DMF rather than care fees, and this cash is captured as part of the difference between Payments for incoming ORA and payments for outgoing ORA. When means the cash OCA receive from caring for the elderly day to day is increasingly being captured in your 'building stuff' line item.

In terms of the dividend, I believe OCA can borrow at a much lower rate than the return I am looking for on my equity so am happy for them to keep paying dividends, even as borrowing increases. This is provided the overall debt is kept at a sensible and moderately conservative level. We can all judge what level of debt that is for ourselves.

[Hoptimus]

Opportunity is missed by most people because it is dressed in overalls and looks like work. --Thomas Edison
Two solid days deep on these accounts now and I've finally got there.

Firstly I absolutely commend Beagle on his nose for foreseeing this result, I've no idea how he plucked out the covid impact but he has proved to be spot on…..I'll be delighted to square you up after the AGM mate.:t_up:

Now, about that bit of egg on my face.
The care side of the profit is a very difficult beast to predict and I'm pleased to have got that part of my forecast right at $20m (it was actually exactly $20m) . This is important for more than my ego but because it validates the foundation for my workings that my entire pipeline “care profit” projections are based on. This needs to be right as Care profits will be evermore important to OCAs as it progresses.
The good news for shareholders is that based on the spreadsheets projecting the full pipeline of development, I have recently said here that this result will be the lowest point of care profit before climbing up again. (It's been falling in a most ugly fashion for the last 3 yrs now from $32m to $20m.)
Interestingly , Earl has just said for the first time that the care profits are now at a “point of inflection” -( “inflection”,...ooh I like that word:cool:), Beagle has recently mentioned the same idea and I've said too...so nice to be all agreeing on that.
Care profits are onward and upward from here, contributing increasingly at last instead of taking away.

Moving on from the “care” division to the “village” division.
This is where I estimated the Covid disruption quite wrong, which led to my 50m forecast being too high.
This is difficult to explain but really worth considering as it will affect next year's OCA profit in a positive way.
Basically I wrongly considered the disruption to sales/ resales to be limited to about 4 weeks lost (lock-down L4) then all will get up and going again straight away.
I also based the Covid sales disruption effect based on Summersets recent sales quarter results from April-May-June.
So here goes....
While I thought the disruption was just 4 weeks lost, I have now learned there are actually 2 parts to the disruption.
Part1 is the “lost” part of sales during L4 , Basically April written off-easy.
Part 2 is the “deferred” part of sales of about a month following L4 (May) . This month was spent getting the real estate sales gogs moving again so pre lockdown contracts can become unconditional. (Earl mentions it and i`ve confirmed it by searching Auckland housing statistics.) These are sales previously signed pre- lockdown ,OCA lost 11% of them during L4/3. ( ie still retaining 89%)
Because of these 2 months of non and frozen sales ,the deferred 1 month of sales mostly only got settled in the following month of June. And this is on top of the new June sales that were going to happen anyway.
Interestingly SUM sales results encompassed the “lost month” -April , the “deferred month”-May and the “catch-up month”- June, plus add on new normal sales for June ( a double whammy for June). All up the net result for SUM for the 3 months only reveals the lost month of May. (because June balances out May,)

In OCA`s case their financial year unfortunately cut off immediately after the deferred month of May but before the catch up/double whammy month of June. That leaves 2 really ugly sales months in this report . The catch up month of June still exists but wont show up until the next HY. This is supported by OCAs saying sales applications at June 30th are 39% ahead of last year.
So to summarize, OCA had a lot of delayed sales contracts which significantly impacted FY20 have simply shunted into June -FY21. The pendulum will now swing the other way in IHY21 so to speak. This has a significant negative effect on 2HY20 but an almost equally positive effect on 1HY21 underlying profit. In my workings/estimations those delayed contracts 's cost OCA delayed profit of 5-7m down in 2HY20 , this will then show as catch up when it will be lumped in with the normal 1HY21 sales.

Of course I have updated my projections and independently arrived at a similar estimate with Beagles around $55-$60m. FY21 (adjusted for a full year comparison).

After a deep dive into these accounts for a couple of days I remain just as positive about OCAs prospects as I've always been. My conclusion is that despite yet another sucky underlying profit which looks consistently poor to probably everyone, when you really dig deep there is every bit of evidence things are going exactly to plan. Problem with the share price in the time being is that who is really going to look that deep?

I agree for yet another time with Beagle (sorry if this is getting just too sickly folks:)) , the Covid impact on this result just has to be “looked through.”

Notwithstanding a NZ reinfection or property collapse in NZ I am very happy holding and waiting for the pendulum that swung against them in 2HY20 to swing the other way for them 1HY21. IMO it will finally be the start of great results actually showing up on the bottom line which Covid really messed things up for us all this time around.

[Beagle]

Firstly I absolutely commend Beagle on his nose for foreseeing this result, I've no idea how he plucked out the covid impact but he has proved to be spot on…

I have a range of tricks to keep myself well fed, watered and entertained, (see at the 20 second mark), there are some of my other tricks, enjoy :) https://www.youtube.com/watch?v=CJU7Ot9zv2s

[Waltzing]

and YTD 2021 full year estimate profit anyone? and underlying profit roughly then? of course if you dont want those viking know... i promise not to email it to anyone in skane.

[King1212]

Set up a DRP....let it grows....will leave and forget OCA now.

[Baa_Baa]

Set up a DRP....let it grows....will leave and forget OCA now.

Me too, a wealth engine for the medium long term, let it do the work for you. Just make sure you have a position you can live with come whatever. If opportunity presents, accumulate more.

[King1212]

Met fund will either come to ARV or OCA as I could see RYM struggling with oz aged care

https://www.smh.com.au/politics/federal/aged-care-workers-across-australia-will-be-given-paid-pandemic-leave-20200727-p55fyy.html

[Joshuatree]

"Notwithstanding a NZ reinfection or property collapse in NZ I am very happy holding and waiting for the pendulum that swung against them in 2HY20 to swing the other way for them 1HY21"

Interesting interview with Bruce Shepphard about "Mum andDad "bank. At the re 2min 25 sec mark he give s reasons why he believes the housing market will drop and bottom re mid 2021.

Also at the re 10.49 mark" a sea of homes that will not be able to be made compliant to the healthy homes legislation". But eventually there will be a shortage as many of these will have to be knocked down





'Bank of Mum and Dad' putting parents at risk (https://www.rnz.co.nz/national/programmes/sunday/audio/2018756586/bank-of-mum-and-dad-putting-parents-at-risk)

[bull....]

Me too, a wealth engine for the medium long term, let it do the work for you. Just make sure you have a position you can live with come whatever. If opportunity presents, accumulate more.

lol thats what people been hoping for years ...

[X630]

Lots of catching up to do still, but a couple of interesting things skimming through the report. Here’s where I could use some guidance:


Expense growth rate higher than revenue growth rate (not so major if it’s all temporary due to covid, but is it?)
Debt up 55m on an cap of 500-600m. This translated to increased assets so maybe not so much to worry about.
Equity down 15m. Mostly due to the 100m increase in ORA liabilities. Am I right in saying that this isn’t too troubling since the 181m cash collected for ORAs wasn’t recorded as revenue?
Higher applications in June but if they are almost operating at bed capacity. Surely this can only drive limited amounts of increased revenue if they are operating at capacity? I must be wrong though since people seem so positive about the applications being up in June.
It seems that the development pipeline hasn’t resulted in significant increased revenue (revenue growth wasn’t the ~10% I was expecting annually based o their build rate). Is this just because there is a 3-year wait to fully benefit from the DMFs? Maybe someone can enlighten me here - I’m not sure how the lifetime of revenue from DMFs/ORAs is recorded as revenue from an accounting perspective.

[Beagle]

Set up a DRP....let it grows....will leave and forget OCA now.

Yeap...it is a long term investment and as I have a project on with a fixed deadline 2 weeks hence that precludes me from spending any more time analysing OCA complex accounts or answering questions at this stage. OCA management have done a very good job in extremely difficult circumstances in recent times. Onward and upward !

[Cadalac123]

I had a chance to recoup my losses from OCA when I first started investing years ago and it crashed for no reason. Glad to exit.. SP behavior is beyond strange.

[Waltzing]

certainly care is required with OCA as the profit and loss has included some very strange contra accounts over the years which seem to have vanished in this year and last year reports. If your under water on a long termer like this its often best to just leave it if you can. We got lucky several times on this one by just being patient. Easy to say but stocks are always a long term horizon just look at PEB which i forgot to follow in the end and missed the big money. Did not lose thought... only lost on AIR and prehaps one day ... far into the future we might get another go at it in say ... 5 to 10 years time? take the long view... these guys here are in for the long haul...and some of them are role models and provide the rest of us with some much needed balance ... like Mr B and M

[Bjauck]

...
'Bank of Mum and Dad' putting parents at risk (https://www.rnz.co.nz/national/programmes/sunday/audio/2018756586/bank-of-mum-and-dad-putting-parents-at-risk) Where else are so many Aucklanders going to raise a deposit for a dwelling unless they are prepared to wait until middle-age or until their families have left home...? There are various social costs to having a housing shortage and unaffordable residential housing.

[bull....]

Where else are so many Aucklanders going to raise a deposit for a dwelling unless they are prepared to wait until middle-age or until their families have left home...? There are various social costs to having a housing shortage and unaffordable residential housing.

flat pack housing on the way with scale. your even get a guarantee of 10 yrs? on them

[Bjauck]

flat pack housing on the way with scale. your even get a guarantee of 10 yrs? on them No use without a suitable area of free land!

[RTM]

Trying to get my head around this announcement.
What does this mean ? That the dividend is essentially "free" to Oceania as they just issue stock to cover it ?
And us poor pensioners who need the dividend are progressively diluted ? Is my understanding correct ?
Does this happen with other companies ? Not sure I've seen it before. I wonder how long this continues ?


"On 23 July 2020 Oceania Healthcare Limited announced its final dividend of
1.2 cents per share is payable on 17 August 2020 to those shareholders on the
record date of 5.00pm on 3 August 2020.

Oceania also advised that its dividend reinvestment plan (DRP) would apply to
the dividend, for those shareholders that elect to participate by 5.00pm on 4
August 2020. Under the DRP, shares are offered at a 2.5% discount to the
volume weighted price of Oceania shares traded through the NZX Main Board in
the 5 trading days starting on 31 July 2020.

Oceania advises that it intends to enter into an underwriting agreement with
Macquarie Securities (NZ) Limited, under which shares equivalent to the
portion not taken up by Oceania shareholders under the DRP would be issued to
the underwriter on 17 August 2020 on the same terms as offered under the DRP. "

[winner69]

Trying to get my head around this announcement.
What does this mean ? That the dividend is essentially "free" to Oceania as they just issue stock to cover it ?
And us poor pensioners who need the dividend are progressively diluted ? Is my understanding correct ?
Does this happen with other companies ? Not sure I've seen it before. I wonder how long this continues ?


"On 23 July 2020 Oceania Healthcare Limited announced its final dividend of
1.2 cents per share is payable on 17 August 2020 to those shareholders on the
record date of 5.00pm on 3 August 2020.

Oceania also advised that its dividend reinvestment plan (DRP) would apply to
the dividend, for those shareholders that elect to participate by 5.00pm on 4
August 2020. Under the DRP, shares are offered at a 2.5% discount to the
volume weighted price of Oceania shares traded through the NZX Main Board in
the 5 trading days starting on 31 July 2020.

Oceania advises that it intends to enter into an underwriting agreement with
Macquarie Securities (NZ) Limited, under which shares equivalent to the
portion not taken up by Oceania shareholders under the DRP would be issued to
the underwriter on 17 August 2020 on the same terms as offered under the DRP. "

Sort of correct on both counts

‘Free’ to the extent that they use very little cash in paying the divie (the cash dividends they pay are covered by Macquarie)

Yes, if you take cash instead of shares there will be some dilution (progressively as you say)

But at the end of the day Oceania gets a bit more capital

And the taxman gets his share from you.

[Maverick]

So MAQ want out , then they want back in. They must see something still of value in this ol' dog.;)

[BlackPeter]

So MAQ want out , then they want back in. They must see something still of value in this ol' dog.;)

Get in low, get out high - that's a game MAQ seems to master. Shareholders better listening ...

[winner69]

So MAQ want out , then they want back in. They must see something still of value in this ol' dog.;)

Maybe just in for a quick buck .....take the discount and maybe a few cents more over a few days.

[peat]

Maybe just in for a quick buck .....take the discount and maybe a few cents more over a few days.

underwriters usually get fees too, though I wouldnt know if that would be appropriate in this case.

BTW Maverick
awesome post on the 25th, I didn't see it until a couple of days ago.

[Paradox]

Maybe just in for a quick buck .....take the discount and maybe a few cents more over a few days.
Ex-dividend, there will be downward pressure to 95cents, methinks.

[Bjauck]

underwriters usually get fees too, though I wouldnt know if that would be appropriate in this case.

BTW Maverick
awesome post on the 25th, I didn't see it until a couple of days ago.
I second that. I have only just read the post from Maverick on the 25th. Thanks for sharing your thoughts.

[trader_jackson]

Maybe just in for a quick buck .....take the discount and maybe a few cents more over a few days.

Maybe OCA want a bit more cash monies but don't want to borrow more nor cut the dividend further so get their mates at MAQ onboard to help out?

[Joshuatree]

Where else are so many Aucklanders going to raise a deposit for a dwelling unless they are prepared to wait until middle-age or until their families have left home...? There are various social costs to having a housing shortage and unaffordable residential housing.

Sure.But my point was that there maybe well be a great time to buy/topup OCA as property prices drop in the coming months/year.Happy to await this with cash atpit.

'Bank of Mum and Dad' putting parents at risk (https://www.rnz.co.nz/national/programmes/sunday/audio/2018756586/bank-of-mum-and-dad-putting-parents-at-risk)

[Joshuatree]

"New Zealand’s real estate market could hit a crunch in September as the end of wage subsidies and mortgage holidays combine with the uncertainty of the election, it has been warned. Banks have also been offering payment deferral on mortgages for people who have been affected financially by Covid-19 for six months. This scheme started on March 27 and will also finish in September www.globalnews.co.nz

[winner69]

Maybe OCA want a bit more cash monies but don't want to borrow more nor cut the dividend further so get their mates at MAQ onboard to help out?

'mates' being the key word here eh tj ....the big end of town mates love playing games

[winner69]

The divie is only $7m odd so not going to make much difference to anything

[trader_jackson]

more than pays OCA's bonuses at least, probably helps some at MAQ's earn a bonus as well... win win... shareholders lose with additional dilution... but not that much as you say.

[teabag]

Hi guys
Can anyone make sense of the Buy/Sell table from ASB for OCA, takenjust before 5pm today - some buyers at $1.09, some sellers at $0.94.
Is this an after closing aberration of some kind?




11835

[winner69]

Hi guys
Can anyone make sense of the Buy/Sell table from ASB for OCA, takenjust before 5pm today - some buyers at $1.09, some sellers at $0.94.
Is this an after closing aberration of some kind?




11835

It’s how things are done at the end of day ...the closing auction

Start with this from NZX ....and research further if you really keen

https://www.nzx.com/investing/nzx-trading-hours/anatomy-of-a-trading-day

[bottomfeeder]

I read about the underwriting of the dividend reinvestment. Sounded strange to me. Why would that be necessary. Still a relatively small amount. But one thing about a small dividend the SP doesn't move so much when going Ex.

I have been pushing OCA as a long term hold, but have recently had some doubts. Just with the inevitable 2nd wave to come in NZ. Ending of the QE etc. But balancing that with the holding of large amounts of cash, I am really in a quandry as to whether to sell. or hold. Never before have I been in a position as to not knowing what to do. Take a profit or hold for security for the future.

[Beagle]

Is it an inevitability and has the possibility / probability ? of another regional or nationwide lockdown already been fully factored into the current share price of some companies and not others....that's the $64,000 question.

Why do the risks appear to have been factored into some companies and not others ? (If you can work that out please let me know the answer).
My estimate is that on an annualized basis OCA can earn about 9.5 - 10.0 cents per share in ten months of FY21, *(assuming no nationwide shutdown), which puts the stock on a forward PE of just 10-10.5. Why are other retirement companies that bear ostensibly similar Covid risks trading at much higher multiples ?

If one is going to reduce their investment position due to the possible risks of another outbreak some careful thought should be applied as to which of one's shares are more vulnerable and which have a proven track record of being resilient.

One might consider applying "the sleep test" to their portfolio allocations. If something about your portfolio allocations is keeping you up at night then adjust one's investment position(s) until you sleep reasonably soundly. Cash is presently returning almost nothing and there seems little prospect of this changing in the foreseeable future.

Hope this helps.

[Baa_Baa]

Haven’t had time to reconcile this yet but on the drip I’ve just got 1.2% more new shares than I had before at a 2.5% discount to market. I love the drip, it’s way more satisfying accumulating shares, than getting a pile of cash dividend that I’d have to figure out what to do with and probably just buy more OCA anyway.

[flyinglizard]

Three problems:

- Occupancy rate is lower (although OCA is improving) , compared with other competitors
- Resident/Staff ratio is too low, inefficiency. SUM has 5500 residents, 1500 staff. OCA has 3600 residents, 2800 staff.......way to high. What's wrong with the management team? If you look at MET, oh~~~5600 residents with only 1000 staff.
- All players rush into the premium apartment business model, heavy competition in the niche market

[bottomfeeder]

Thanks, decided to hold and if it goes down, will accumulate.

[Cyclical]

I read about the underwriting of the dividend reinvestment. Sounded strange to me. Why would that be necessary. Still a relatively small amount. But one thing about a small dividend the SP doesn't move so much when going Ex.

I have been pushing OCA as a long term hold, but have recently had some doubts. Just with the inevitable 2nd wave to come in NZ. Ending of the QE etc. But balancing that with the holding of large amounts of cash, I am really in a quandry as to whether to sell. or hold. Never before have I been in a position as to not knowing what to do. Take a profit or hold for security for the future.

It's natural that after the adrenaline fueled events of the last few months, with things now having settled down somewhat, plus having just gone ex divvy and watching the mayhem unfold in the west island that one might want to take stock (or not, as the case may be) and reassess. Personally, there's nowhere else I'd rather have my money atm.

[iceman]

Haven’t had time to reconcile this yet but on the drip I’ve just got 1.2% more new shares than I had before at a 2.5% discount to market. I love the drip, it’s way more satisfying accumulating shares, than getting a pile of cash dividend that I’d have to figure out what to do with and probably just buy more OCA anyway.

Same. But we still hold about the same percentage of the company as we did before. So nothing much has changed at all. Agree with Cyclical that I think this is a good long term hold for a MODEST part of my portfolio. But unlike Cyclical, I see better places where I want to have bigger chunks of my money invested at the moment.

[Snow Leopard]

Remember your/my 1.2c comes without any imputation/supplementary so we are going to be docked 33%/15% and the dregs buys us our DRiP shares :(.

[Cyclical]

But unlike Cyclical, I see better places where I want to have bigger chunks of my money invested at the moment.

I'm all ears, iceman. Please share ;-)

[BlackPeter]

I read about the underwriting of the dividend reinvestment. Sounded strange to me. Why would that be necessary. Still a relatively small amount. But one thing about a small dividend the SP doesn't move so much when going Ex.

I have been pushing OCA as a long term hold, but have recently had some doubts. Just with the inevitable 2nd wave to come in NZ. Ending of the QE etc. But balancing that with the holding of large amounts of cash, I am really in a quandry as to whether to sell. or hold. Never before have I been in a position as to not knowing what to do. Take a profit or hold for security for the future.

I know - diversification is boring, but boring is good for sleep. I kept some of our money in shares (like OCA), put some of it into gold (-miners), some into bear funds and some is kept as cash. Admittedly - the upside potential is limited, but the downside potential as well ... and hey - my wife tells me that I am sleeping quite well these days :):

[Leftfield]

.... Agree with Cyclical that I think this is a good long term hold for a MODEST part of my portfolio. But unlike Cyclical, I see better places where I want to have bigger chunks of my money invested at the moment.


I'm all ears, iceman. Please share ;-)

Perhaps it's not all about dividend plays and I agree with Iceman, OCA is not 'the only game in town.'

If you want to see what other better options there are, simply check out the top entries in the 2020 Share Picking Competition (https://sites.google.com/view/nzsharepicks).

[winner69]

Perhaps it's not all about dividend plays and I agree with Iceman, OCA is not 'the only game in town.'

If you want to see what other better options there are, simply check out the top entries in the 2020 Share Picking Competition (https://sites.google.com/view/nzsharepicks).

Good point Leftie

Sharetrader Top 5 would be doing a lot better in the comp if so many hadn’t jumped on the OCA bandwagon seduced by all the hype of riches to come.

Jeez ATM up 40% while OCA down 20%

[arekaywhy]

Hi guys
Can anyone make sense of the Buy/Sell table from ASB for OCA, takenjust before 5pm today - some buyers at $1.09, some sellers at $0.94.
Is this an after closing aberration of some kind?




11835

This guy explains it well

https://www.youtube.com/watch?v=8ay1lOK1l9Y

[Maverick]

I am really in a quandry as to whether to sell. or hold. Never before have I been in a position as to not knowing what to do. Take a profit or hold for security for the future.
The sleep test is a great way of figuring out if you are investing (and you know your investment- and in OCAs case that is very difficult without a load of effort) or you are gambling.
If you can roll your Covid dice for another few weeks (after all , there's been no community transmission for 3 months now) then why not wait to see what the directors do now they have a buying window.

I`ve particularly got an eye on what Greg T does , He`s been with the company from what it was way back then to where it is currently sitting at this stage of its transformation. I've met him only once but and he really impressed me that he knows this puppy inside and out.

[RTM]

The sleep test is a great way of figuring out if you are investing (and you know your investment- and in OCAs case that is very difficult without a load of effort) or you are gambling.
If you can roll your Covid dice for another few weeks (after all , there's been no community transmission for 3 months now) then why not wait to see what the directors do now they have a buying window.

I`ve particularly got an eye on what Greg T does , He`s been with the company from what it was way back then to where it is currently sitting at this stage of its transformation. I've met him only once but and he really impressed me that he knows this puppy inside and out.

That's a great idea, thanks. They are slightly oversized in my portfolio...I am slightly in the black ignoring the gain I made when I sold ~50% @136. And was wondering whether to reduce my portfolio % or just sit. One thing for sure...if /when they get back to mid 130's.....I will be reducing my allocation a tad.

[Leftfield]

Good point Leftie

Sharetrader Top 5 would be doing a lot better in the comp if so many hadn’t jumped on the OCA bandwagon seduced by all the hype of riches to come.

Jeez ATM up 40% while OCA down 20%

Lest we forget ATM SP has averaged around 100%pa gains for the last 5 yrs or more! (In my portfolio it shows as being up over 9,000%.... and that is conservative!)

[winner69]

That's a great idea, thanks. They are slightly oversized in my portfolio...I am slightly in the black ignoring the gain I made when I sold ~50% @136. And was wondering whether to reduce my portfolio % or just sit. One thing for sure...if /when they get back to mid 130's.....I will be reducing my allocation a tad.

Hope that when OCA gets back to mid 130s they will be a smaller % of your portfolio .....and you won’t have to reduce your holding. :)

[RTM]

Hope that when OCA gets back to mid 130s they will be a smaller % of your portfolio .....and you won’t have to reduce your holding. :)

That would be a fantastic result....but would mean that everything else will have to grow slower than OCA......hmmmm....doesn't feel like that is a likely outcome....who knows. Be interesting to come back to that in 12 months or so.

[Waltzing]

Commercial property stocks appear to be the new inflation hedging stocks some only paying now 2.5% the new term deposit and with property prices holding up nicely it maybe you will get your 1.30 after all.

[peat]

Commercial property stocks appear to be the new inflation hedging stocks some only paying now 2.5% the new term deposit and with property prices holding up nicely it maybe you will get your 1.30 after all.
I thought industrial property was getting all the attention

[dreamcatcher]

Wouldn't get too excited about property prices booming imo crunch may be around Christmas.

[Baa_Baa]

That 61.8% Fib Retrace is a thing eh @Winner, stalled out again, waiting for some upside positive like the property market Is going nuts, or a COVID second wave and we can again buy up even larger at below NTA again. Patience is a b1tch.

[Beagle]

I reckon the most likely outcome is the share price will hang around the 98 cents - $1.05 range for quite a while. Speculators / traders and punters are likely to get pretty bored with that but investors like Mav and I won't care, we're in for the long haul. If we stay Covid free in the community we should see the share price starting to wake up to the prospect of a really good first half, sometime quite late in 2020.

Maybe there will be some insights at the annual meeting on 27 August or maybe there's some in the annual report that arrived yesterday.
I intend to waddle along to the annual meeting and see what the scones are like. Might even get to hear some more heart warming stories about how the old folks were really looked after in lockdown. This dog might be starting to go soft in the snout / head as I get towards retirement as I am starting to think its not just all about money...and really do enjoy the fact that residents were superbly looked after. Help, what's happening to me lol

[Davexl]

I reckon the most likely outcome is the share price will hang around the 98 cents - $1.05 range for quite a while. Speculators / traders and punters are likely to get pretty bored with that but investors like Mav and I won't care, we're in for the long haul. If we stay Covid free in the community we should see the share price starting to wake up to the prospect of a really good first half, sometime quite late in 2020.

Maybe there will be some insights at the annual meeting on 27 August or maybe there's some in the annual report that arrived yesterday.
I intend to waddle along to the annual meeting and see what the scones are like. Might even get to hear some more heart warming stories about how the old folks were really looked after in lockdown. This dog might be starting to go soft in the snout / head as I get towards retirement as I am starting to think its not just all about money...and really do enjoy the fact that residents were superbly looked after. Help, what's happening to me lol

Think I'll go all soft & gooey with you Beagle, approaching that timeframe makes you susceptible to such thinking. Just a decent, properly run company that cares about its residents. And that alone will be reflected in the share price too.

Same with Wesfarmers in Aust. They are paying all their employees themselves, no govt subsidies, thru the Covid disruptions in Victoria. One, because they can and two, because it's the right thing to do - giving capitalism a good name after all...

[winner69]

Think I'll go all soft & gooey with you Beagle, approaching that timeframe makes you susceptible to such thinking. Just a decent, properly run company that cares about its residents. And that alone will be reflected in the share price too.

Same with Wesfarmers in Aust. They are paying all their employees themselves, no govt subsidies, thru the Covid disruptions in Victoria. One, because they can and two, because it's the right thing to do - giving capitalism a good name after all...

Yep, right thing to do ,,,,Bunnings getting $27m from NZ govt Covid Wage Subsidies

Spose that’s capitalism

[Davexl]

Yep, right thing to do ,,,,Bunnings getting $27m from NZ govt Covid Wage Subsidies

Spose that’s capitalism

in Aust (SMH) "Wesfarmers is not eligible for the government’s JobKeeper stimulus package as it has traded strongly through the recent lockdowns, so it will pay staff itself."

Not quite the same perhaps, but good enough nonetheless IMO...

[winner69]

Pleasing to see some are coming around to this what I posted a few months ago.

The world in a sorry state today because guru economist Milton Friedman said “the only responsibility of business is to maximize shortterm profits, regardless of the social and environmental costs.”


We’ve got to change that “Maximize short-term profits, regardless of the social and environmental costs” attitude to “maximize long-term benefits for all people and nature.”

I don’t give a stuff what Oceania’s (or any company) short term profits are as long as they work towards creating a better life for all of us in the future.

[winner69]

in Aust (SMH) "Wesfarmers is not eligible for the government’s JobKeeper stimulus package as it has traded strongly through the recent lockdowns, so it will pay staff itself."

Not quite the same perhaps, but good enough nonetheless IMO...

.....and all this warm fuzzy stuff from them to ‘persuade’ the govt to allow them to open during the lockdown ....their pleas about how essential they are bring tears To ones eyes.

[Davexl]

.....and all this warm fuzzy stuff from them to ‘persuade’ the govt to allow them to open during the lockdown ....their pleas about how essential they are bring tears To ones eyes.

Bit too cynical for me on a sunny Sat afternoon, but i take your point...:)

[Beagle]

Think I'll go all soft & gooey with you Beagle, approaching that timeframe makes you susceptible to such thinking. Just a decent, properly run company that cares about its residents. And that alone will be reflected in the share price too.
I'm in the middle of getting a first hand lesson in the real value of late stage care and what it means to people
I only have a few months left to enjoy being with my Mum. She has incurable liver cancer which has already spread to one of her ribs as of a month ago, probably more than one now. Although she's not in an OCA facility it is wonderful to see she is being well supported by the her friends, family, the nurse of the retirement village where she has resided for the last ten years and the local DHB are stepping up her in unit assistance as her needs change. There's a very good hospice just down the road for when things get really tough and at this stage she attends a weekly outpatient support group where other terminal patients who are still mobile meet. I've got to say I think the local DHB and hospice have been very good so far...so really good care is certainly not limited to just OCA facilities but this experience is shining the spotlight for me on the true value of high quality care for our elderly folks. I thought long and hard about getting her moved to a really good care suite at the Sands with a nice view of the beach, (money is no object when it comes to my Mum as far as I am concerned), but the truth is she is so happy in her current retirement village surrounded by all her friends, one of whom is a retired nurse, I think she would be really miserable anywhere else. She has a nice sunny two bedroom unit with its own sunroom and her sister who is 9 years younger and still very well has flown up from Dunedin to stay for the next 6 weeks. She told me today they sit in the sunroom together in the morning over a coffee and breakfast and talk about their early days together.

I initiated a weekly meeting for our extended family so we all meet each Saturday for lunch and to reflect on our life together as a family which is a really cool way to riminess about old times. Most of the brothers wives come along most of the time. Mum told me last week she feels completely surrounded with loving arms and heaps of support. There is nothing more I could hope to hear than this at this time. It brought tears to my eyes and really gives me a fresh understanding of the value that real quality support provides for elderly vulnerable people. At this point she is pain free...I know it will get more grueling later on but I feel blessed to have a chance to spend time with her these last few months and to say goodbye while her mind is unaffected by any serious hard core pain medication.

The specialists are confident she will at least make it to her 91st birthday late next month...they gave her 5-8 months as of early July. Although this is not a story of OCA care, OCA do have an excellent reputation for late stage care and I think investors can feel a real sense of satisfaction of being a part of a company that's doing so much good for our elderly vulnerable folks.

I get the warm fuzzies as a shareholder that I'm a small part in this enterprise that does so much good.

[James108]

That is great beagle and heart warming.

I have a grandfather who is very confused, dementia but really went down hill after he took a fall. He is relatively happy and very well taken care of with hospital grade care and a premium suite (not oca). It is clear to me that there is immense value to him and the family in the premium care he receives. I don’t begrudge any operator making a buck when they offer such value.

[percy]

Not an easy time.
Yet everything in your post is so positive.
In the right place with all the right people caring for her.Pleasing her sister made the trip to be with her for 6 weeks.
I am sure everyone on ST are thinking of your mum,and her loving family.

[Davexl]

You are very much in our thoughts Beagle, you, your Mum and family. My own best friend from high school days has terminal prostate cancer and we keep in touch daily and we share his journey through scans, chemo, pain relief and life memories. The thing that links us all is our common humanity, which comes into sharp relief in times like these.
We hardly ever meet but I can just tell how much you love your Mum as I remember my own Mum and how dear she was to me. With all you have given of yourself to us all Beagle, let us help share the burden a little at this sensitive time for you all, if you would like this. Message anyone of us you know to share if you should need it. We've got your back mate...

[Leftfield]

Sorry to hear your news Beagle. Thanks for sharing. My thoughts and best wishes are with you. You are doing all the right things. Surround yourself with family and enjoy your times with them. Best wishes.

[trader_jackson]

My thoughts are with you beagle - as you are probably aware, the 'care' aspect is something I have banged on about for many years (mainly over on the ARV thread - well prior to OCA's listing) and is one of the reasons I have stayed away from SUM and MET (even if for some periods of time they may have produced superior returns) as they simply do not have this top notch care aspect (such as OCA, ARV and RYM have) that is really quite critical not just in terms of an overall continuum of care offering, but in a real/tangible aspect. All the best from me during these times.

[Beagle]

That is great beagle and heart warming.

I have a grandfather who is very confused, dementia but really went down hill after he took a fall. He is relatively happy and very well taken care of with hospital grade care and a premium suite (not oca). It is clear to me that there is immense value to him and the family in the premium care he receives. I don’t begrudge any operator making a buck when they offer such value.

Thanks folks for your very kind words and thoughts which are very much appreciated. I'm doing okay. I guess that highlighted part is what I am trying to say. There is immense value not just to our elderly folks in getting really good high quality care but also to their families in knowing their loved ones are being really well looked after. This is tremendously comforting.

[Beagle]

You are very much in our thoughts Beagle, you, your Mum and family. My own best friend from high school days has terminal prostate cancer and we keep in touch daily and we share his journey through scans, chemo, pain relief and life memories. The thing that links us all is our common humanity, which comes into sharp relief in times like these.
We hardly ever meet but I can just tell how much you love your Mum as I remember my own Mum and how dear she was to me. With all you have given of yourself to us all Beagle, let us help share the burden a little at this sensitive time for you all, if you would like this. Message anyone of us you know to share if you should need it. We've got your back mate...

Thanks mate and I am very sorry to hear of your news. It must be very tough to be losing your best friend who you have known so closely for so long and a warning for all of us of that age to get annual blood tests to check for prostate. My Mum was a pastor's wife and supported Dad heaps in his decades as a Presbyterian minister so I know she's going to a better place and I am at peace with knowing that. In the last few weeks I've really enjoyed listening to her tell stories about her early years, born in 1929, grew up in the great depression years on the farm, made lots of friends swapping food stamps, (the very beginnings of the welfare state in N.Z.), the war years of 1939-1945. Lots of young men heading off to war, they used to have farewell parties in Southland knowing there was a fair chance they would not return. My Dad who passed about 7 years ago was on one of the ships on his way to fight the Japanese who were known to be going to fight to the last man standing...but during the journey the American's dropped the atomic bombs on Hiroshima and Nagasaki and the Japanese surrendered. If it were not for the atomic bombs my Dad would have had to fight and may well have been killed and I may not have been born...pretty ironic isn't it !

Mum became a Karatane nurse in the late 1940's. Back in those days they didn't have incubators so the premature babies had three hotties surrounding them. The hot water bottle on each side of baby had two cups of cold water and then the rest filled with boiling water to get the temperature exactly right and the one at each babies feet had one cup of cold water to the rest boiling water so the temperature was much higher to warm babies feet. Babies were classified into four groups, really premature, weaklings, (doubt that term would be politically correct these days lol), and two other classes which from memory were something like a bit needy and normal. Stories like this will be lost when this generation passes which is why I shared.

She's had a long full life and is at peace with what's happening and she's being well surrounded with love, friendship and support. There is no stopping the natural order of how things will progress so I have found a place of peace with the process too. Best wishes to you...I hope you and your best friend find a place of peace with your journey.

I sometimes reflect about all the care givers and nurses who risked their own lives to support our elderly folks during the Covid lockdown. They are all hero's ! As a shareholder I suppose in a very small way we can also share in that pride as we are supporting a company that is building heaps of new premium care suites for our elderly vulnerable folks.

[justakiwi]

Thinking of you Beagle. Tough to deal with but I am so glad you feel this way about your Mum’s care. The lovely letters, cards and comments we receive at work, from families after their loved one has died, reflect your highlighted comment below. I go to as many residents funerals as I can, and our rest home and staff always get a mention and thank you during the service. I have shed more than a few tears, hugged more than a few family members. A colleague and I attended one graveside funeral a while back. We hung back behind family as we didn’t want to intrude, and stayed there while the family took flowers from baskets to drop into the grave. We quietly decided to leave at this point, but the resident’s daughter came running over and dragged us back with “Please don’t go. You are family too. Come and choose a flower.” I will never forget that moment and the way it made me feel.

My own Mum has been living in the care of my sister for some years now. She has Alzheimers and broke her hip a few weeks ago. My sister was determined to get her back home where she belonged, but after one night, she sadly realised that there is no longer any way she can cope with continuing to care for Mum. Mum’s needs are now simply too high and she is not safe in my sister’s older style villa anymore. So Mum is back in hospital until they can find her an emergency rest home bed next week. Then we begin the sad task of finding her a permanent placement, and everything that runs alongside that decision.Mum has already forgotten the difficult conversation my sister had with her the other day, about this decision. Which makes it so much harder and traumatic for everyone.

Dementia is a cruel bitch of a condition.

(sorry for high-jacking your post)


Thanks folks for your very kind words and thoughts which are very much appreciated. I'm doing okay. I guess that highlighted part is what I am trying to say. There is immense value not just to our elderly folks in getting really good high quality care but also to their families in knowing their loved ones are being really well looked after. This is tremendously comforting.

[Beagle]

Thank you justakiwi and I am sorry to hear your Mum has dementia. That's very tough. One trick I used when my Dad had dementia towards the end when I knew he wouldn't remember anything after a minute or two was I would go and see him at the Ryman dementia facility and greet him with saying, Hi Dad I'm your son Roger and its so good to see you. I would then sit there and spend time with him pretending he still knew who I was. Sometimes simple coping techniques like that make life more bearable for family.
I am sure you've learned quite a few coping mechanisms over the years but it is very tough with your own parent watching them slowly deteriorate over the years.
Best wishes.

Anyway its a new week and we celebrate 100 days of no transmission of Covid in the community. We are the envy of the world and can live pretty normal lives. Lets all celebrate that today and think how blessed we are. Take someone you love out for a special lunch or dinner and celebrate the freedom we enjoy here to do that :)

Looking forward to OCA's annual meeting. I might trawl through the annual report this week and see if there's any tidbits in there that I've previously missed.