OCA - Oceania Group - retirement villages

[Waltzing]

DISC: not moving more into this stock at the moment until we see a conformation that the units converted and sold convert to an increase in top line revenue and bottom line profits.

[James108]

Result is good except for less margin, which is to be expected. Would really have to wonder about anyone that thought the 40% margin or 36% margin achieved in 2h19 and 1h20 could be maintained indefinitely. I expect the current margin is closer to the long term average. I encourage people to look at the long term target margins of summerset and Ryman.

Also FYI margin would be even less than stated if common use assets e.g roads, communal buildings were Portioned out to the individual units of a new development.

[Lease]

Result is good except for less margin, which is to be expected. Would really have to wonder about anyone that thought the 40% margin or 36% margin achieved in 2h19 and 1h20 could be maintained indefinitely. I expect the current margin is closer to the long term average. I encourage people to look at the long term target margins of summerset and Ryman.

Also FYI margin would be even less than stated if common use assets e.g roads, communal buildings were Portioned out to the individual units of a new development.

They didn't mention margin % in this report but seems significantly lower compared to 1H 2020 as they sold 44% more. Have you worked out their margin % of 1H 2021?

[dompf]

*Buckles seatbelt for the next 5 years as I’m not smart enough to be a trader. :P

I like the company and results are good, real estate market still very strong.

[Rawz]

DISC: not moving more into this stock at the moment until we see a conformation that the units converted and sold convert to an increase in top line revenue and bottom line profits.

Waltzingironmansinlgescul- I have always wondered, when you say 'we' who is we? (If you don't mind saying and hope that I'm not invading on anything). Also, I appreciate your contributions on ST.

[Waltzing]

Note there is some good support coming on in the 140's.

We are not selling this stock today nor buying.


DISC: we is used as Lord Denning would use the word in relation to company law. Mr B will understand this im sure. I think if we do get the much appreciated company of the Brilliant MR B perhaps he might also change his persona to be Lord Denning himself. It may provide a more distanced yet present personification of his knowledge.

[Logen Ninefingers]

Looks like the downramping effort - which started yesterday - managed to shake a few people out.

The company is building for the future. Long-term investors will live with the lower dividend in expectation of greater rewards down the track.

I usually trade / invest on the ASX as there are not many places to put your money on the NZX. People retiring in large numbers is one thing you can bank on however.

[RTM]

Looks like the downramping effort - which started yesterday - managed to shake a few people out.

The company is building for the future. Long-term investors will live with the lower dividend in expectation of greater rewards down the track.

I usually trade / invest on the ASX as there are not many places to put your money on the NZX. People retiring in large numbers is one thing you can bank on however.

Yes...I can live with the lower dividend and intend to hold. However...I would like to have seen a little colour about why the dividend is lower and what the future plan is for the dividend. Quick scan of the various documents did not reveal anything.
They are a decent portion of our portfolio now and we try not to eat capital gains...i.e. I don't like selling.

[Jantar]

Note there is some good support coming on in the 140's.

We are not selling this stock today nor buying.

.... I am very disappointed with the low dividend, so sold 1/3 of my holding. At their current dividend yield that gives me almost 100 years of dividend payout nice and early, that I can invest in HGL or HGH for a much higher yield and some growth.

[Waltzing]

"People retiring in large numbers is one thing you can bank on however."

:t_up:


" 100 years of dividend payout nice and early, that I can invest in HGL or HGH for a much higher yield and some growth"

A calculation of profit in hand is prudent compared to the time taken to equal that with dividend alone.

We do this calculation constantly in models.

[James108]

Lease, check the presentation.

[winner69]

Good to hear Oceania's head nurse on the radio this morning saying the government needs to put aged care residents and staff higher up on the vaccination priority list

She sounded quite passionate

[Lease]

Lease, check the presentation.

Found. Thank you.

[winner69]

Good to hear Oceania's head nurse on the radio this morning saying the government needs to put aged care residents and staff higher up on the vaccination priority list

She sounded quite passionate

You can hear Dr Frances here

https://www.newstalkzb.co.nz/on-air/mike-hosking-breakfast/audio/dr-frances-hughes-oceania-healthcare-concerned-vaccine-rollout-wont-prioritise-aged-care-sector/

[WAIKEN]

1H21 result summary



1H20

1H21

% change

1H21E FB

Actual vs FB



Care fees

78.0

81.5

4%

80.7

1%



Care DMF

3.5

5.4

54%

5.6

-4%



Village DMF

10.3

12.9

25%

11.5

12%



Village fees

5.4

4.4

-18%

5.0

-12%



Resale gains

8.2

10.4

27%

6.9

51%



New sale gains

18.7

17.0

-9%

16.4

4%



Other

0.6

0.4

-34%

0.5

-15%



Total revenue

124.7

132.0

6%

126.7

4%



Total costs

90.7

96.6

6%

94.3

2%



EBITDA

34.0

35.5

4%

32.3

10%



Depreciation & amortisation

7.1

8.1

13%

7.8

3%



EBIT

26.9

27.4

2%

24.5

12%



Net interest

2.8

4.0

42%

3.9

4%



Underlying profit

24.1

23.4

-3%

20.6

13%














Annuity EBITDA

15.3

18.4

20%

15.9

16%














Operating cash flow

57.0

74.6

31%

68.1

10%














EPS (cents)

3.9

4.0

1%

3.3

20%



DPS (cents)

2.1

1.3

-38%

2.3

-42%














Sales - new units

84

145

73%

110

32%



New sales margin (%)

36%

25%

-12%

26%

-1%



Sales - resold units

102

123

21%

110

12%



Resales margin (%)

23%

21%

-2%

17%

4%




Our eps is 4 cps the FB commentary
The average PE of ARV SUM and RYM is 28.11
Assuming the second half eps will also be 4 cps share then lets assume 8 cps for full year
Multiply 8 by 28.11 and I get a comparable price for OCA of 2.25
Any comments

[winner69]

I’ve read the preso and the interim

All positives .....stuff all negative thoughts

Once sanity returns to market I reckon we could see OCA close higher today ..maybe 152

[Joh13]

Further acquisitions in the coming months... Reduced dividend for extra COVID cost precaution seems to be one reason for the reduction in the dividend which I think is a good move. Glad they have reduced their debt a little for the time being. NAV increase to $1.24 and good increase in Net cash flow from operating activities.
The result has beaten analysts expectations.


Quick calculation looks around $50M UNPAT for the 10 months and $60M annualised.

Overall good result.

[allfromacell]

I’ve read the preso and the interim

All positives .....stuff all negative thoughts

Once sanity returns to market I reckon we could see OCA close higher today ..maybe 152

Did you listen to the webcast and Q & A? Some good questions asked, seems development margins mostly effected by the mix of properties sold, all those expensive Sands apartments sold last period I guess.

[YoungBull]

Can we expect the same earnings in 2H? I thought the AGM stated that the 10month calendar year won’t be the only impact on earnings, there was a slowdown in the December period. They believed there has been significant re uptake in the past week however. I’m pleased to see that they are reasonably confident that the concerns regarding a sharing of capital gains will likely not come to pass, and they are focused on acquisitions as they recognise the current pipeline will eventually end. They anticipate funding from GOVT in their annual budgeting, which should relieve pressure. I think long term holders should be pleased today. Again, my young, inexperienced take.

[Mudfish]

Nice post Waiken. The numbers all look very positive and mostly ahead of FB. My struggle is how this does not transform into stronger Underlying Profit. Any ideas? Also, I'm not sure what PE to apply to OCA yet as it's so close to a proven and accepted model but not quite there yet. Of course this is the million dollar question.

[Lease]

Nice post Waiken. The numbers all look very positive and mostly ahead of FB. My struggle is how this does not transform into stronger Underlying Profit. Any ideas? Also, I'm not sure what PE to apply to OCA yet as it's so close to a proven and accepted model but not quite there yet. Of course this is the million dollar question.

Mudfish, this was also my initial question in terms of Underlying Profit. James108 assisted me sort it out. On page 20 of presentation shows development margin drop from over 30% to around 25%. As previous periods they sold more premium Auckland sites, now they sell down sites in more regional areas thus development margin comes down. It makes sense and 25% development margin is reasonably well.

[Snow Leopard]

Provided the long-term outlook, and thus my determination of fair value, does not take a knock, I will be contented.

By the time I have had my breakfast and started my analysis with the first cup of coffee of the day, I dare say you lot will have discussed the result in detail.

Coffee consumed and cat contented.

Still trades at a discount to what I consider fair value but not cheap enough for me to buy more. It is currently my #3 holding on the NZX

[Mudfish]

Mudfish, this was also my initial question in terms of Underlying Profit. James108 assisted me sort it out. On page 20 of presentation shows development margin drop from over 30% to around 25%. As previous periods they sold more premium Auckland sites, now they sell down sites in more regional areas thus development margin comes down. It makes sense and 25% development margin is reasonably well.

Cheers Lease, I'll have a dig into this. Either way, F and B seem to have it 90% sorted and they predict good growth over the next 5 years or so. With the share price holding well, it leads me to believe investors are now believing in OCA's business model so could soon well be a boring steady growth from here. I'm hoping so.

[Gerald]

Cheers Lease, I'll have a dig into this. Either way, F and B seem to have it 90% sorted and they predict good growth over the next 5 years or so. With the share price holding well, it leads me to believe investors are now believing in OCA's business model so could soon well be a boring steady growth from here. I'm hoping so.


Funny how it's always the "next" half year or FY with OCA. Love how companies like to bring out one abstract metric that improved to headline the result and hide the more shody ones at the back of the cupboard.


Anyway, sold some this morning at $1.49, time will tell if it was a good idea.

[Vince]

It isn't done on a whim - Vince is quite light handed really.


Quite right Dobby.

[Vince]

I agree the Beagle has a massive depth of knowledge and it would be a shame to loose him from ST completely. I am guessing his latest ban was to do with his further comments on the ATM thread about Couta. He seems unable to stop himself commenting on Couta, which is not only weird its unfair on Couta and it does need to stop. Time to move on :)


Well said and a totally correct statement.

[Waltzing]

with the pressures on the building industry in NZ over the next 12 months the margin of 25% is the key going forward.

Only time will tell if this margin can be kept as supply and demand put pressure on the system.

[dompf]

back at desk on monday , but a quick note i thought i would add it was a disappointing result , no div increase and margin erosion continues. i sold today.
sum is my preferred play in the sector.

I may have some bull... shares as I topped up. I will treat them with kindness.

[Bjauck]

I agree the Beagle has a massive depth of knowledge and it would be a shame to loose him from ST completely. I am guessing his latest ban was to do with his further comments on the ATM thread about Couta. He seems unable to stop himself commenting on Couta, which is not only weird its unfair on Couta and it does need to stop. Time to move on :) Ok thanks. I haven't been following the ATM thread recently. Beagles can be stubborn and reluctant to let things go :)

[Shareguy]

I thought this was a good result for a difficult year. Cash flow and Nav stood out and lower divi but debt reduced . I’m in for the long term and think this is a great business that will continue to do well. The land they own in st helliers is a gold mine ..

Disc , I have a large holding and will continue to accumulate on dips.

[winner69]

Slide 20 on preso is revealing -- all about New Sales

Compared to H120 (pcp)

New sales volumes up by 61 units (73%)

Average price of villas down by 21%, Apartments down 17% and care suites down 33%

Add it up and the 73% increase in volume sales led to a 36% gain in dollar sales (this is where they play the old mix by development by region trick)

But the 73% increase in volume and the 36% gain in sales $ on pcp somehow resulted in margin being down 8% in $s

They don't disclose separately for villa, apartments, care suites so can't assess costs - but on an average unit cost is down 6%. With average sell price down 21% the average gain per new sale was down 47%

So that's how you sell heaps more (73% more new units) and make 8% less

I need to digest further and think about what it really means

[DarkHorse]

Coffee consumed and cat contented.

Still trades at a discount to what I consider fair value but not cheap enough for me to buy more. It is currently my #3 holding on the NZX

I concur. If if you don't mind me asking, I'd be interested to know what your #1 and #2 holdings are (my top NZ atm CDL, PAZ, HLG, OCA respectively)

[pierre]

Well said and a totally correct statement.

I think it would be very helpful for all posters if in the future you notified on ST whenever a member is banned and for what reason.

This action will avoid speculation and not only provide clear guidance to everyone about the type of behaviour that is unacceptable, but also should serve to minimise the number of future transgressions.

What do you say?

[pierre]

A positive OCA story in NBR online today saying the company's strategy is starting to pay off. It also says Forbar has a target price of $1.65 - didn't say when though so presume that might be in 12 months?

[Greekwatchdog]

For Bar went from Neutral $1.10 target to Outperform $1.65 target on 15th Oct 20. From memory they were targeting a tick over $20m for HY. They will update early next week I guess.

[dobby41]

I think it would be very helpful for all posters if in the future you notified on ST whenever a member is banned and for what reason.

This action will avoid speculation and not only provide clear guidance to everyone about the type of behaviour that is unacceptable, but also should serve to minimise the number of future transgressions.

What do you say?

Are you thinking to put it on a 'banned' thread?
You can look at a post from a person and see that they are banned.

[Snow Leopard]

I concur. If if you don't mind me asking, I'd be interested to know what your #1 and #2 holdings are (my top NZ atm CDL, PAZ, HLG, OCA respectively)

Leopard NZX Portfolio Big to Less Big: HGH, HLG, OCA, $$$, PGW, ARV, SKL, BGP, AFT, SKT, TRA, STU, PEB.

[justakiwi]

Nope. To be honest, its none of our business. It is between Vince and the person concerned.


I think it would be very helpful for all posters if in the future you notified on ST whenever a member is banned and for what reason.

This action will avoid speculation and not only provide clear guidance to everyone about the type of behaviour that is unacceptable, but also should serve to minimise the number of future transgressions.

What do you say?

[Snow Leopard]

Slide 20 on preso is revealing -- all about New Sales

Compared to H120 (pcp)

New sales volumes up by 61 units (73%)

Average price of villas down by 21%, Apartments down 17% and care suites down 33%

Add it up and the 73% increase in volume sales led to a 36% gain in dollar sales (this is where they play the old mix by development by region trick)

But the 73% increase in volume and the 36% gain in sales $ on pcp somehow resulted in margin being down 8% in $s

They don't disclose separately for villa, apartments, care suites so can't assess costs - but on an average unit cost is down 6%. With average sell price down 21% the average gain per new sale was down 47%

So that's how you sell heaps more (73% more new units) and make 8% less

I need to digest further and think about what it really means

The $1.68 questions are:
Are these margins the new normal?
Are these new sales numbers the new normal?

and the $1.71 question is:
How are resales likely to go?

Bonus question:
How much do they really make day to day on the care stuff?

[pierre]

Nope. To be honest, its none of our business. It is between Vince and the person concerned.

Thats a bit like giving the referee the ok to issue red cards whenever he likes but nobody knows in advance what the rules of the game are. Seems like a pretty weird game to me.

[dompf]

Thats a bit like giving the referee the ok to issue red cards whenever he likes but nobody knows in advance what the rules of the game are. Seems like a pretty weird game to me.

I don’t want to see why users get banned, it’s internal and shouldn’t be up for debate the only reason I can think of is direct mis information from a company exec which needs to be highlighted .


im looking forward to all the big operators with their targets post results on OCA possibly next week.

[Snow Leopard]

Thats a bit like giving the referee the ok to issue red cards whenever he likes but nobody knows in advance what the rules of the game are. Seems like a pretty weird game to me.

Read them: https://www.sharetrader.co.nz/register.php

[Baa_Baa]

Thats a bit like giving the referee the ok to issue red cards whenever he likes but nobody knows in advance what the rules of the game are. Seems like a pretty weird game to me.

In case people don't know, there are rules (https://www.sharetrader.co.nz/misc.php?do=showrules) <-click this. They are at the bottom of every page as well.

[Baa_Baa]

Read them: https://www.sharetrader.co.nz/register.php That won't work if you are already registered.

[Snow Leopard]

That won't work if you are already registered.

A/ log out, hit register, READ THEM, log in.

B/ Use another web browser to READ THEM

C/ Follow Baa-Baa link. :blush:

[Baa_Baa]

I'm very happy with the results, they justify the confidence in the share price over the past few months, or as some might put it 'the result was priced in' and now justified based on todays market actions. The chart is a thing of beauty (https://invst.ly/tjpew) (log scale) midpoint on basic indicators, rising nicely inside a defined parallel rising channel - currently on support (absorb that, trend line support is basically almost ATH), and knocking on ATH's now. When you see the pattern - within now narrow bollinger bands, you get an idea what happens when the ATH is broken to the upside, it's off fairly quickly to the upside of that channel. My target is $2.25 in CY2021.

gltah

[Snow Leopard]

....My target is $2.25 in CY2021....

Is that based on TA, Baa Baa?

Fundamentally I value it at $1.68 right here, right now, with a modest $1.71 for a year hence.

[Baa_Baa]

Is that based on TA, Baa Baa?

Fundamentally I value it at $1.68 right here, right now, with a modest $1.71 for a year hence.

If the channel holds, yeah, but, probably more hope than TA. I'll run the FIB extensions when I get a chance, they might be encouraging. As far as FA is concerned I'd just like to see the OCA discount to market average NTA multiple closed a bit, that'd boost OCA into the big league. I think it's still very underrated, I hadn't anticipated how conservative the market is i.e. how long it takes for the consensus to accept OCA is actually a big player in the sector and their strategy which is now showing promise is a game changer.

Anyway, I have a truckload now and plenty of time to see how it unfolds. Some days I don't even check the SP! ;)

[WAIKEN]

Hi Baa baa. The price buyers will pay are based on preconceptions of value- ie one suburb over another.
One industry category over another. One retirement village operator over another. On projected PE , price divided by NTA and dividend yield we are underrated or seen as not yet being a big boy. This will change. It may be a slow or rapid rerate. I said in an earlier post assuming we only perform as well in 2H as 1H we should trade at 224 to equate with the average PE of ARV SUM and RYM. I also hold a substantial number.
Sometimes value is in plain sight but blurred by preconceptions of the majority. Like MET when it was traded down, I believe deliberately to half of its NTA of 7.00. For me that was in plain sight and I grabbed 100K shares and sold at around 6.82 not far off the original take over offer. I then rinsed and repeated when the offeror withdrew and crashed the price. There are always gifts on most trading weeks on the NZX and ASX.

[winner69]

Why is it that over the last 4 quarters the average gain (development margin) per new unit sale has fallen quite a llot.

In H219 average gain per unit was $284k, $221k in H120, $147k in H220 and now $117k in H121

They'll say mix - type of units and region - but I reckon there has to be more to it than that

That's some decline - answer that and it will to a large degree explain why they sell heaps more and make less.

[sampson]

Hi all, is the Forsyth Barr analysis report available online anywhere or if anybody has a copy they are willing to share that would be much appreciated?

Edit: all sorted now, thanks a lot.

[YoungBull]

Why is it that over the last 4 quarters the average gain (development margin) per new unit sale has fallen quite a llot.

In H219 average gain per unit was $284k, $221k in H120, $147k in H220 and now $117k in H121

They'll say mix - type of units and region - but I reckon there has to be more to it than that

That's some decline - answer that and it will to a large degree explain why they sell heaps more and make less.

If you took a rational approach, what would be the reasons a development margin may be small? This is an actual question, non rhetorical, I’m unsure what variables come into a development margin.

Oceania obviously would not be selling units at discounted prices without explaining/giving a reason for it. On the other side, is the development costs significantly increased on the particular units they sold? They explained in the AGM they select building companies in the mid range of expenses, are there other consenting costs etc that were a part of these units? Perhaps our view of what a good average margin was has been skewed by significant selling in the Auckland region over the past years, when in reality this is the true average?

[James108]

40% average margin which was achieved in recent half’s was clearly unsustainable, it was boosted by the huge gains in property value over the 3-5 years it takes from buying land to getting units built. I would expect the long term average to be between 20-25%. May pay to look over the last 5 years (or further If possible) for the margin of all the listed village operators to get some sense of what you can expect going forward. The margin achieved this half May even be higher than long term average.

[winner69]

Bonus question:
How much do they really make day to day on the care stuff?

Some analysts take off realised gains from reported profit and assume what’s left is the profit from running villages and caring for residents.

On that basis profit before tax of doing these things is a LOSS of a about $9m

[Vince]

I think it would be very helpful for all posters if in the future you notified on ST whenever a member is banned and for what reason.

This action will avoid speculation and not only provide clear guidance to everyone about the type of behaviour that is unacceptable, but also should serve to minimise the number of future transgressions.

What do you say?

I say you're banned for a month.

[winner69]

Some analysts take off realised gains from reported profit and assume what’s left is the profit from running villages and caring for residents.

On that basis profit before tax of doing these things is a LOSS of a about $9m

But they would have you believe profit from care was $11m ....

[nztx]

Some analysts take off realised gains from reported profit and assume what’s left is the profit from running villages and caring for residents.

On that basis profit before tax of doing these things is a LOSS of a about $9m


And the Feb 21 dividend reduced by 43.47% on what was paid a year earlier .. ;)

[nztx]

When did the $20 million profit difference in question hit OCA's bank account seems to be a good question ;)


The reduced dividend seems to be the answer to that one ..

[winner69]

Surprised they didn't use the old Comprehensive Income trick again this time

Comprehensive Income was $57.0m (v reported NPAT of $24.8m)

After all $32m revaluation gains are real even though unrealised

[nztx]

Surprised they didn't use the old Comprehensive Income trick again this time

Comprehensive Income was $57.0m (v reported NPAT of $24.8m)

After all $32m revaluation gains are real even though unrealised


Real enough .. but they can mysteriously evaporate which could be as early as the next reporting period .. ;)


then they become mysteriously unreal & probably still unrealised .. ;)


Whatever happened to 'Beancounter's Reporting on Conservative side' with some of these listed Outfits ? ;)


At least back then everyone knew where they stood without all the Mickey Mouse unrealised revaluations
being booked as actual trading surpluses above the line in some sectors .. ;)

[winner69]

Instead of slashing the dividend to a miserable 1.3 cents they should have just not paid one (esp as 33% goes to the tax man) - doing what they've done is an insult in light of the touted huge increase in cash flows

Doesn't signal confidence in the future - aren't they past the point of inflection so should be cock-a-hoop about things

[winner69]

Real enough .. but they can mysteriously evaporate which could be as early as the next reporting period .. ;)


then they become mysteriously unreal & probably still unrealised .. ;)


Whatever happened to 'Beancounter's Reporting on Conservative side' with some of these listed Outfits ? ;)


At least back then everyone knew where they stood without all the Mickey Mouse unrealised revaluations
being booked as actual trading surpluses above the line in some sectors .. ;)

But aren't they included in Book Value and NTA?

[nztx]

But aren't they included in Book Value and NTA?


Indeed, but a more informative reporting basis would be to take Revaluations direct to
"Asset Revaluation Reserve" in Shareholders Funds, until they are actually realised surely ? ;)

[Soolaimon]

Indeed, but a more informative reporting basis would be to take Revaluations direct to
"Asset Revaluation Reserve" in Shareholders Funds, until they are actually realised surely ? ;)

At least we could understand Asset Revaluation Reserve. Makes sense to me.

[nztx]

Let's face it - the likes of HLG, BGR, KMD and others don't book their Gross Margins on unrealised inventories
on hand into Trading Surpluses before the goods hit the Cash Register & flying out the door happens .. ;)

HGH don't book the Interest Income on their Loan Assets for next X Years ahead into Trading Surpluses before
the clock ticks over as the period's interest income & fees is actually 'earned' either ..

[Maverick]

Instead of slashing the dividend to a miserable 1.3 cents they should have just not paid one (esp as 33% goes to the tax man) - doing what they've done is an insult in light of the touted huge increase in cash flows

Doesn't signal confidence in the future - aren't they past the point of inflection so should be cock-a-hoop about things
Don't you think Winner that the reduced dividend (WELL below there mandate of paying out 50% of underlying) is a deliberate "slight of hand" to avoid attracting media attention to pay back the wage subsidy? I see no other reason for such a stray from there own policy.....marvelous play OCA, love it!

[winner69]

Nztx ..I’ve had a property for nearly 40 years. It cost me about $50k and worth maybe zillions now.

It’s in my books at cost ......is my company only worth $50k or is it worth zillions.

[Ggcc]

Don't you think Winner that the reduced dividend (WELL below there mandate of paying out 50% of underlying) is a deliberate "slight of hand" to avoid attracting media attention to pay back the wage subsidy? I see no other reason for such a stray from there own policy.....marvelous play OCA, love it!
Plus doesn't Macquarie end up buying all dividends that are not under the dividend reinvestment scheme for cash like last time? Or was that a one time deal

[winner69]

Don't you think Winner that the reduced dividend (WELL below there mandate of paying out 50% of underlying) is a deliberate "slight of hand" to avoid attracting media attention to pay back the wage subsidy? I see no other reason for such a stray from there own policy.....marvelous play OCA, love it!

Don’t think the market per se is that gullible and can’t see Earl coming out and publicly saying ‘yes we took the wage subsidy but heck we slashed shareholder dividends’

Anyway leaves Oceania as the one not repaying the subsidy ...even though they only claimed it for their sales people and as Earl says ‘it’s not that much’

Principles of it though.

[nztx]

Nztx ..I’ve had a property for nearly 40 years. It cost me about $50k and worth maybe zillions now.

It’s in my books at cost ......is my company only worth $50k or is it worth zillions.

but the value is in the underlying unrealised value of shares in your company, is it not ? ;)

If revalued in the company books - I'm sure you wouldn't want revaluations taken through P&L direct
but would prefer Revaluation gains (if made) direct to Revaluation Reserve

When / If finally you decide the company is to sell up - I'm picking these are non taxable gains as well ?

After all - a long term property holding is not necessarily a trading activity unless purchased
with intention of resale at a profit as a business activity.. ;)

Looking at OCA now - it's questionable as to whether value in 'units' they are developing, holding
buying & selling is not stock in trade incidental to .. well the rest home business and therefore
should be being carried at cost plus developmental costs, until realised unless the market
suggests lower realisation values are a likely scenario requiring provisioning .. ;)

[Maverick]

I think they are focus on the dodging "media" attention , not the market per se. I'm not wanting to make this a hot topic, it will go down the pointless conspiracy path. But I do find the actions line up.

[nztx]

Don't you think Winner that the reduced dividend (WELL below there mandate of paying out 50% of underlying) is a deliberate "slight of hand" to avoid attracting media attention to pay back the wage subsidy? I see no other reason for such a stray from there own policy.....marvelous play OCA, love it!

but they wouldn't need to - would they ..

Eliminating any unrealised fiction would bring the core result down to something that would
be respectable in terms of subsidies anyway ?

Reduced dividend is saying that stakeholders have 'shared the pain' too .. if you like or could be seen that way

Agree with others too -- 1.3 cps before being diced by a further 1/3 for DWT & no imputation credits
is a fairly miserable sort of payout for an Outfit which really hasn't suffered too badly through
Covid 19 times .. possibly incurring a bit of extra cost .. ;)

[value_investor]

My thoughts on the result:

- The biggest thing, and this has already been pointed by some others here is the sharp increase in sales but no corresponding increase in the underlying profit. The development margin hasn't seen a increase and my thoughts on why is below.

I think what you have to remember is that a year ago two of their larger finished developments, The Sands which is in Browns Bay, Auckland and Meadowbank which is in an incredibly affluent suburb in Auckland were the main drivers. The average selling price in Browns Bay is $1.03m and Meadowbank is $1.43m according to Oneroof.

I think the room to have larger development margins there vs the current developments in Tauranga, Nelson and Christchurch where average selling prices are lower explains why realised development margin in ILUs is lower. Even still, a 39% development margin to me which they did report previously in this industry is highly unsustainable. This is probably more of a Auckland house price tailwind at the time more than anything.

- My biggest worry is that a lot of sales have been deferred from the last result due to COVID and lockdowns. I'm not sure whether the increase in sales can be sustained through to future periods, to me this increase could just be a one off. I don't see any other general market factors that would have your new sales increase from 84 to 145 in the same period comparison. If that is the case, then I don't think that the underlying profit is on the upwards trajectory that has previously been said here in the shorter length of time. Now, I think long term the potential is still there but we might have to kick the can further.

- The care side of the business is starting to head in the right direction, which management have been spouting for a while now. This transformation from standard room care to a more premium offering has really been the companies point of difference. This part of their business, is probably more where their long term thesis generating stable revenues is. Interesting slide on page 17 shows this, that the care suite DMF is $5.4m and their growth rate of care revenue is 34% per half year. According to the income statement, their total revenues are $103m so there's a way to go before the premium side management fees become something of a cash machine for the business.

- The cashflow of the business is heading in the right direction, but again I'm not sure how much of this is to do with the unit sales in this period. This might be the first period I've seen that the business can actually afford to pay the dividend they have been declaring for the longest. I'm not really for the business paying it (I understand why they would), but if the management feel as though forgoing the dividend in order to build more care beds and ILUs are going to generate a better long term return, I wouldn't be against it.

Final Thoughts: I hold quite a few of these and will continue too. Reading these results against what some have said on this forum, I think that big ramp up that people were hoping for is still longer away than first thought. I think OCAs core competency is more in building units for a decent development margin and delivering projects on time. I know the care side is what they advertise as their point of difference but there are few companies on the NZX that can deliver like them.

The thing that will help you sleep at night is that they have a huge development pipeline and they've proven their capability to sell. The care side on the other hand, as their "transformation" says, is still something that is 2-3 financial years away from being a big contributing factor. However, with how demographic changes are going in the company, the tailwinds are firmly set to get better.

[The Punter]

Nice view of things VI. I got in @ 93c and will be sticking with it as long as I can...unless the car packs up.

[Waltzing]

Make that car last longer!

walk, electric bike, public transport, borrow someone else's !!!

[winner69]

Big headline in Oceania preso

Aged Care is past the point of inflection

Good buzz word that inflection

Suppose it means they are dramatically exploiting extensible paradigms

[Waltzing]

" dramatically exploiting extensible paradigms"

yes .... well the sun has come up and it looks like a very warm weather week and im sure sun block will be selling fast this week and it will be hats on when bowling at all those clubs near rest homes... before 2 PM. Tea and scones after in the air conditioned suites after..

It will be interesting to see the numbers for SUM other stocks for a comparison but i think we missed the flying express this winter that was some other stock.

[mike2020]

I think they are focus on the dodging "media" attention , not the market per se. I'm not wanting to make this a hot topic, it will go down the pointless conspiracy path. But I do find the actions line up.

I still think the FY will tell the story, the gain in asset value was not really as much as I expected either and it was attributed to expenditure on the whole, it's all very stable and conservative. Did I miss the massive rerate opposite to which the last result was blamed on a negative valuation in April?

[Zaphod]

but they wouldn't need to - would they ..

Eliminating any unrealised fiction would bring the core result down to something that would
be respectable in terms of subsidies anyway ?

Reduced dividend is saying that stakeholders have 'shared the pain' too .. if you like or could be seen that way

Agree with others too -- 1.3 cps before being diced by a further 1/3 for DWT & no imputation credits
is a fairly miserable sort of payout for an Outfit which really hasn't suffered too badly through
Covid 19 times .. possibly incurring a bit of extra cost .. ;)

If the retained earnings can be put to profitable use, then I'm okay with a small dividend given my long investment horizon. Others however might be chasing higher dividends to offset lower interest rates obtained from banks, so I can appreciate this isn't an ideal situation for everyone.

I'm not sure whether paying a lower dividend is a deliberate slight of hand. I'd need some hard evidence before coming definitively to that conclusion. It's a possibility though.

[WAIKEN]

Oceania Healthcare1H21 Result — Inflection
link
OUTPERFORM

We walk away from OCA's 1H21 result with increased confidence in our view that OCA has reached an earnings inflection point and are on track to double annuity EBITDA from FY20 to FY23. Specifically, we note three positive developments; (1) OCA reported positive free cash flow and reduced net debt from its FY20 result (May year end), the first aged care operator to do so for several years; (2) annuity EBITDA grew by ~+30% versus 2H20 and +20% versus 1H20 – we firmly believe that OCA's earnings have troughed and will continue to grow over the coming years; and (3) we were encouraged by the large proportion (we estimate 80-90%) of delivered care suites that were sold under an ORA versus care beds with an associated premium accommodation charge (PAC). We reiterate our OUTPERFORM rating with an increased target price of NZ$1.70.
What's changed?

Earnings: Small increase in annuity EBITDA driven predominately by higher resales gains, underlying earnings are largely unchanged (higher resale gains are offset by slightly higher depreciation & amortisation and lower newsale gains)
Target price: Increased to NZ$1.70 from NZ$1.65

Proving up the care suite model; an important milestoneThe biggest risk to our positive view on OCA centres around the so far relatively unproven care suite model whereby care beds are sold under an ORA. The care ORA model improve the economics of aged care meaningfully for two reasons. Firstly, and most importantly, it reduces the cash drag on growth. The ability to sell care suites, not just independent living units, implies a cash neutral or even cash positive development (growth). Secondly, it improves the profitability of care even with low positive house price inflation. OCA's 1H21 result was encouraging on both fronts as OCA was free cash flow positive for the first time in several years and our estimate of care annuity earnings grew ~+30% versus 1H20, a change in tack following a period of decline across the sector but particularly in the case of OCA.
1H21 reaffirms our positive viewOCA's 1H21 result delivered on our expectations and reaffirmed our positive view given; (1) valuation metrics remain undemanding despite its recent strong share price performance. Trading on 15x P/E and ~22x EV/Annuity EBITDA on our FY22 forecasts, OCA continues to be valued at a significant discount to its larger peers despite, (2) us forecasting it has the fastest annuity EBITDA growth in the sector over the next three years, predominately driven by the frequent recycling of (deferred management fees) DMF and resales gains from the care suite product and, (3) it has the lowest cash drag in the sector, over the past few years the sector has been characterised by rising debt levels as capital recycling has become harder. OCA reported a net debt decline in 1H21 and was free cash flow positive for the first time in several years, a rare occurrence in the aged care sector.

Aaron Ibbotson CFA
aaron.ibbotson@forsythbarr.co.nz
+64 9 368 0024

Matt Montgomerie
matt.montgomerie@forsythbarr.co.nz
+64 9 368 0124

[Curly]

Thx Waiken for the Forsyth Barr review.
Confirms this stock is a hold. I thought SP would be around recommend target price now. Maybe price will left running up to dividend X date 9 Feb.

[winner69]

Back to 150 and onwards and upwards if brokers think like they are

This time we may never see the 140s or less again

Can't have too many Oceania ...or something like that

[Snow Leopard]

Should I be worried that ForBar and I have near identical thoughts and target price? :eek2:

[peat]

resistance has become support
12252

i dont need to mark it do I?

[Waltzing]

No you dont! need to mark it. Has FB got it right for once. Better not comment on that one.

That is the kind of info we are waiting for.

DISC: yes we have access to the docs.

[Curly]

resistance has become support
12252

i dont need to mark it do I?
Starting to move now. $1.53. All time high.

[Curly]

resistance has become support
12252

i dont need to mark it do I?
Once $1.53 goes under 250k shares available up to $1.60. Average daily trade 823k.....
Looking good.

[wagwan]

Some quick thoughts on the H1 result - in no particular order:



Development

Pipeline remains strong with 5-6 years of brownfield development based on current freehold land holding
Brownfield developments to be completed in FY22/FY23 (ie: next 1-2 years) would appear to be ones with potential for a high development margin, given both location and premise type

Auckland: 49 apartments (Eden), 113 Care Suites (Lady Allum) [FY22], 79 luxury apartments (St Helliers) [FY23]
Tauranga: 39 apartments (Bay View) [FY22]


As has been noted previously by others, large portion of this is already consented. Clearly good for progressing with development, also likely provides some hidden value in land on balance sheet as more value in consented freehold land
Shorter term, appears development pipeline for FY21 weighted towards H2 (89 units + care suites H1, 128 to complete in H2)
Change in % of care suites : care beds and move towards premium offering is on strategy. Nov-2018 care suites made up 17% of care facilities, whereas Nov-2020 suites make up 30%


Trading and Cashflow

Sales volumes artificially high due to COVID bounce back post first lockdown, however also impacted by AKL second lockdown in August
Impressed by increase in operating cashflow, which continues to comfortably cover dividend payment
Increase in care profitability very encouraging as (1) OCA clearly state that this is the core component of their offering, and (2) likely reflects the increase in premium care suites coming online (eg: The Sands, Meadow Bank), linked in with inflection point reasoning that has been mentioned on here a number of times. Not. necessarily there yet, but above is early evidence.
Linked to care profitability, like the sustainability of income that comes from having ORA and DMF arrangements on premium care suites. Effectively the same as having an income hedge over the life of an occupation, as opposed to replying on development margins and churn.
Think generally exec and directors have done a better job of explaining this strategy in laymans terms in the current report.


Balance Sheet

Given ramping up of developments and pipeline, impressed at reduction of net bank debt by $12m (ex. bond issuance), with bond issuance also providing diversity of funding and certainty of tenor.
Interest rates on bank debt also attractive, evidently BKBM priced, and given how sharp they are would suggest Bank risk models are also happy with OCA position
No other significant changes to note. Change in FMV of fixed asset book already discussed so no need to touch on.



Think in current market the expectation from some is for a stock to double, triple or more in market cap - often not based on fundamentals.

Wouldn't get too focused on - for example - a relatively insignificant drop in development margin when recognising that results show OCA is executing on strategy and knowing that will take some time.

Clearly a hold for me.

[winner69]

Earl told analysts the housing market is "defying logic," making it difficult to forecast his company's results.....but he seems really upbeat about the remaining 4 months of financial year ...almost hinted surprisingly good.

Good ol’ Earl

[Baa_Baa]

Earl told analysts the housing market is "defying logic," making it difficult to forecast his company's results.....but he seems really upbeat about the remaining 4 months of financial year ...almost hinted surprisingly good.

Good ol’ Earl

He shouldn't be worried about 'the housing market', that's short term thinking. Just build em, sell em, churn em, rinse, repeat ... the numbers will take care of themselves. Of course, also look after our residents, be the best.

[winner69]

Interesting that Earl seemed quite ‘keen’ on making an acquisition ....sector consolidation inevitable

[Waltzing]

W(n) cap raise.....

[winner69]

Jeez that Bianca from UBS really cheeky challenging Earl by asking “So do you expect it to really be in an inflection point here?”

Good ol’ Earl ....expect care ebitda to grow in a linear fashion going forward

[Curly]

Over 1 mill shares sold today above daily average yet price finished the same. Another case of the market acting opposite to what you expected. Thought SP would be close to $1.60. Today. Patience needed I guess.

[winner69]

Over 1 mill shares sold today above daily average yet price finished the same. Another case of the market acting opposite to what you expected. Thought SP would be close to $1.60. Today. Patience needed I guess.

VWAP was 153.15 so quite a few sold or bought at 153 or below

We might need to wait a while before we see 160 or more

But remember 150 is strong support now

[Snow Leopard]

....Good ol’ Earl ....expect care ebitda to grow in a linear fashion going forward

Only linear? That is no good, we need exponential !!

[winner69]

Only linear? That is no good, we need exponential !!

Thinking aligned with his yet to disclosed LTI growth target

[winner69]

Only linear? That is no good, we need exponential !!

Linear seems to sum Oceania up

They create the impression they don’t really want to grow that fast and are happy plodding along with slowly growing (sometimes growing) profits ...that seems their persona, no signs of real drive but lots of warm fuzzies.

They do get excited about being past of point of inflection though

[Shareguy]

Well I like the storey and brought more yesterday. Low PE compared to pairs and the best is yet to come in my opinion.

[Waltzing]

well the market seems to like the results. depth to support well over 150 forming.

[winner69]

well the market seems to like the results. depth to support well over 150 forming.

Yep, strong end to the day with a 155 close

Bodes well for tomorrow ....hopefully 160 on Friday

[Waltzing]

Market believes the company is a safe pair of hands both for money it spends and the elderly it looks after.

[Curly]

Yep, strong end to the day with a 155 close

Bodes well for tomorrow ....hopefully 160 on Friday
Certainly does, once $1.55 goes only 10 sellers with under 180k of shares to sell to reach $1.60. Having said that once trading starts and price lifts other sellers come out of the woodwork. Overall though there seems to be an over riding view that this stock is a long term hold. The fewer who sell, the quicker the share price increase. All looks very promising to me.

[Baa_Baa]

On limited available time at the moment, but if you go back to my chart recently with the 'channel' you'll see now that OCA bounced perfectly off the support trend line and as others point out it has formed a solid buyer support base above previous ATH. When one draws a TA trend line well in advance of something happening, it's always encouraging when it actually happens! The chart is a thing of beauty, sorry can't post an update, too busy.

gltah

[Snow Leopard]

If I tilt my head just so when looking at the chart I can clearly see where you are coming from:

12255

I am just happy it is going up with nice volume (not shown) behind it.

Disc: TigerStocks5 is currently in development, has been for years, probably well be for many more.

[Dotbond]

If I tilt my head just so when looking at the chart I can clearly see where you are coming from:



Disc: TigerStocks5 is currently in development, has been for years, probably well be for many more.

What is TigerStocks5 ?

[Waltzing]

It might now be starting to viewed as a steady eddie and a safe place to park your money , almost blue chip.

If there is more consensus along the lines of (FooBar * 3) or 4 then it may move ahead of its actual performance.

[Snow Leopard]

What is TigerStocks5 ?

TigerStocks goes Client-Server ! (provided the client & server are on the same machine)

TigerStocks5, the successor to TigerStock2

3 got lost in a technology upgrade,
4 is an unlucky number but
5 brings many new features to the TigerStocks family of financial software:

New go faster chart colours;

A portfolio history which correctly handles stock consolidations (we are looking at you PGW);

Artificial Intelligence trade analyser that says "I told you so" on loosing trades;

Improved 'Snoopy' fundamental analysis modules;

Quantum Mechanics derived random stock picker for ShareTrader contents;

Fully customisable by modifying the source code;

Displays high resolution big cat pictures::
https://www.undp.org/content/dam/global-photo-library/selected-photo-collection/SDG-STORIES-COVER-PHOTOS/Goal-15/UNDP-snowleopard-wildlife-conservation-SDG15-Goal15-01.jpg
Save the Snow Leopard (https://www.undp.org/content/undp/en/home/presscenter/pressreleases/2017/08/24/undp-international-partners-launch-cross-border-initiative-to-help-save-the-snow-leopard.html)

[Dotbond]

Thank you SL :) that made me laugh

[dreamcatcher]

Friend says there's placard waving staff in front of Wesley Eden Rd demanding better wages yesterday, lets hope it's not contagious......

[bull....]

Friend says there's placard waving staff in front of Wesley Eden Rd demanding better wages yesterday, lets hope it's not contagious......

add to the fact i was just told some retirement out fits not this one are offering tradies double there rate to work on there sites. sort see why costs on builds going up margins down

[Ggcc]

add to the fact i was just told some retirement out fits not this one are offering tradies double there rate to work on there sites. sort see why costs on builds going up margins down
Getting a tradie is what is currently very concerning. I have friends in the industry who have customers offering moon money to start their jobs first. One offering $550 per hour to move them up the ladder instead of others. If you want me I need to push others down the line......

[Bjauck]

Getting a tradie is what is currently very concerning. I have friends in the industry who have customers offering moon money to start their jobs first. One offering $550 per hour to move them up the ladder instead of others. If you want me I need to push others down the line......

Fair enough. Why shouldn't those who work for income take a slice from real estate owners' windfall capital gains?

It is what happens with insufficient trade training, strong population growth, and survival of the richest.

[Ggcc]

Fair enough. Why shouldn't those who work for income take a slice from real estate owners' windfall capital gains?

It is what happens with insufficient trade training, strong population growth, and survival of the richest.
Its not the insufficient trade training from these guy. The tradies I speak to don't want to hire apprentices, as most are drugged up, or drunk, or don't turn up. Complain about everything and are useless with common sense. They are benefiting from making that decision.

My nephew is doing well for himself as a 21 year old apprentice. He has a house and wants another rental shortly. He works all day every day. So there are good stories as well.

[macduffy]

Its not the insufficient trade training from these guy. The tradies I speak to don't want to hire apprentices, as most are drugged up, or drunk, or don't turn up. Complain about everything and are useless with common sense. They are benefiting from making that decision.

Are they , really? Perhaps it's also a case of not wanting apprentices? "I can do it quicker/better, myself."

[bottomfeeder]

Perhaps they should sit back a bit and wait for more certain and reasonable times.

[tim23]

Getting a tradie is what is currently very concerning. I have friends in the industry who have customers offering moon money to start their jobs first. One offering $550 per hour to move them up the ladder instead of others. If you want me I need to push others down the line......

$550 an hour = really?

[Ggcc]

$550 an hour = really?
That was an electrician mate. He is also one of the top 50 spenders at Skycity Casino (I think The Black Club)

[justakiwi]

Who? The staff picketing?


Perhaps they should sit back a bit and wait for more certain and reasonable times.

[James108]

Hey if lawyers can charge out at $550/hour+ I say good on the tradie if his skills are in demand.

[Curly]

Hey if lawyers can charge out at $550/hour+ I say good on the tradie if his skills are in demand.
Someone is being ripped off. My lawyer with 12 years experience is $280 an hour.
Good lawyer to.

[James108]

That’s the rates I’ve seen for lawyers my company deals with. $250/hr buys you someone with 4 years experience as a lawyer or 10-15 years of engineering.. go figure.

[bottomfeeder]

Who? The staff picketing?
Oceania board should cease further development if its based on any cost will do, just get it done.

[dompf]

Looks like ATH day today. I haven’t seen or read anywhere that OCA is paying additional for tradesman for projects, can someone link me?

[fluziosaurus]

Looks like ATH day today. I haven’t seen or read anywhere that OCA is paying additional for tradesman for projects, can someone link me?

The results presentation last week - mentioned no shortage of trades people on oca sites. Probably means they don't need to offer extorinate rates

[winner69]

Aaron from FB asked Earl at the analyst briefing re any issues re builders and supplies

This is Aaron from Forsyth Barr. I have a couple of questions, maybe slightly off what you're focused on. But my first question is just in relation to construction activity and access to finishing products, and to some degree also to skilled labor. We've heard about sort of pockets of shortages here and there. I just wanted to know if you could comment around that, and see if you had any concerns with your ability to complete developments over the next 6 to 9 months or so. -------------------------------------------------------------------------------- Earl Gasparich, Oceania Healthcare Limited - CEO [15] -------------------------------------------------------------------------------- It's a good question, Aaron. I mean, particularly, we contract -- as you know, we outsource our actual construction activity. And -- but we deliberately sort of choose our construction partners in that sort of mid-level, mid-tier range of construction operators. So Watts & Hughes, for example, are gone at building 1 (inaudible) just have built our Meadowbank, et cetera. So we're dealing with long-term established construction partners and haven't experienced any labor issues to date with that. In terms of materials, simply haven't experienced anything to date. I would say of the projects we've got underway right now, we are nearing completion of The BayView and The Bellevue and Eden. So -- and one area is in earthworks, so we're not necessarily sourcing a lot of steelworks (inaudible) for example, at the moment. So that may be ahead. It's certainly something we'll keep a watch on. But short answer is we're not experiencing any of those impacts today. ---------------

[The Punter]

1.58 !! Go you good thing...and sellers almost non existent. $1.60 by close of play?

[Valiant]

Aaron from FB asked Earl at the analyst briefing re any issues re builders and supplies

This is Aaron from Forsyth Barr. I have a couple of questions, maybe slightly off what you're focused on. But my first question is just in relation to construction activity and access to finishing products, and to some degree also to skilled labor. We've heard about sort of pockets of shortages here and there. I just wanted to know if you could comment around that, and see if you had any concerns with your ability to complete developments over the next 6 to 9 months or so. -------------------------------------------------------------------------------- Earl Gasparich, Oceania Healthcare Limited - CEO [15] -------------------------------------------------------------------------------- It's a good question, Aaron. I mean, particularly, we contract -- as you know, we outsource our actual construction activity. And -- but we deliberately sort of choose our construction partners in that sort of mid-level, mid-tier range of construction operators. So Watts & Hughes, for example, are gone at building 1 (inaudible) just have built our Meadowbank, et cetera. So we're dealing with long-term established construction partners and haven't experienced any labor issues to date with that. In terms of materials, simply haven't experienced anything to date. I would say of the projects we've got underway right now, we are nearing completion of The BayView and The Bellevue and Eden. So -- and one area is in earthworks, so we're not necessarily sourcing a lot of steelworks (inaudible) for example, at the moment. So that may be ahead. It's certainly something we'll keep a watch on. But short answer is we're not experiencing any of those impacts today. ---------------


Hi Winner, are you able to share where you got this extract from? I'm interested to have a read of the Q&A as I missed this call.

[mike2020]

1.58 !! Go you good thing...and sellers almost non existent. $1.60 by close of play?

Haven't FB usually undervalued OCA?

[winner69]

Hi Winner, are you able to share where you got this extract from? I'm interested to have a read of the Q&A as I missed this call.

https://finance.yahoo.com/news/edited-transcript-oca-nz-earnings-213000352.html

I've contacted Oceania and suggested they could put it up on their website ....but doubt they will as engaging with shareholders doesn't seem high on their priority list

[Maverick]

Thanks Winner for that link, I really appreciate it. I've been looking for that with no success.
My own model underestimated the unexpected increase in finance costs, oddly they ended up paying more on finance at the same time their level of debt reduced.
The other underestimate I made was the substantial rise in corporate costs. Especially as they said last FY that that would be about the ongoing level of costs as it would be steady as she goes from there.
The last error was my misjudging the drop off in resale prices of apartment prices (no biggie as I expect these will bounce around both ways)

As you eluded to Winner about their slow or nil response to shareholders, I have yet to receive a response after contacting them regarding these issues.
Thanks to your link, all the answers are well covered, and their explanations are very acceptable .

It seems obvious now the analysists have all got a really good handle on the company and it is pleasing to see they are happy to "look through" the flat underlying bottom line at the more important numbers underpinning the unfolding story.

Word seems out now peps, OCA is not the misunderstood ugly duckling it once was.

[MauroNZ]

Oceania Healthcare

1H21 Result — Inflection


link
OUTPERFORM

We walk away from OCA's 1H21 result with increased confidence in our view that OCA has reached an earnings inflection point and are on track to double annuity EBITDA from FY20 to FY23. Specifically, we note three positive developments; (1) OCA reported positive free cash flow and reduced net debt from its FY20 result (May year end), the first aged care operator to do so for several years; (2) annuity EBITDA grew by ~+30% versus 2H20 and +20% versus 1H20 – we firmly believe that OCA's earnings have troughed and will continue to grow over the coming years; and (3) we were encouraged by the large proportion (we estimate 80-90%) of delivered care suites that were sold under an ORA versus care beds with an associated premium accommodation charge (PAC). We reiterate our OUTPERFORM rating with an increased target price of NZ$1.70.
What's changed?



Earnings: Small increase in annuity EBITDA driven predominately by higher resales gains, underlying earnings are largely unchanged (higher resale gains are offset by slightly higher depreciation & amortisation and lower newsale gains)
Target price: Increased to NZ$1.70 from NZ$1.65

Proving up the care suite model; an important milestone

The biggest risk to our positive view on OCA centres around the so far relatively unproven care suite model whereby care beds are sold under an ORA. The care ORA model improve the economics of aged care meaningfully for two reasons. Firstly, and most importantly, it reduces the cash drag on growth. The ability to sell care suites, not just independent living units, implies a cash neutral or even cash positive development (growth). Secondly, it improves the profitability of care even with low positive house price inflation. OCA's 1H21 result was encouraging on both fronts as OCA was free cash flow positive for the first time in several years and our estimate of care annuity earnings grew ~+30% versus 1H20, a change in tack following a period of decline across the sector but particularly in the case of OCA.
1H21 reaffirms our positive view

OCA's 1H21 result delivered on our expectations and reaffirmed our positive view given; (1) valuation metrics remain undemanding despite its recent strong share price performance. Trading on 15x P/E and ~22x EV/Annuity EBITDA on our FY22 forecasts, OCA continues to be valued at a significant discount to its larger peers despite, (2) us forecasting it has the fastest annuity EBITDA growth in the sector over the next three years, predominately driven by the frequent recycling of (deferred management fees) DMF and resales gains from the care suite product and, (3) it has the lowest cash drag in the sector, over the past few years the sector has been characterised by rising debt levels as capital recycling has become harder. OCA reported a net debt decline in 1H21 and was free cash flow positive for the first time in several years, a rare occurrence in the aged care sector.

Aaron Ibbotson CFA
aaron.ibbotson@forsythbarr.co.nz
+64 9 368 0024

Matt Montgomerie
matt.montgomerie@forsythbarr.co.nz
+64 9 368 0124

Thanks for sharing it. First time I read something from them, I like it how clearly explained is. I think better explained than Craigs.

[winner69]

Word seems out now peps, OCA is not the misunderstood ugly duckling it once was.

Nothing truer - OCA the star of the sector in January with its share price up 9%

ARV +0% RYM +2.4% and SUM -3% by comparison - NZX50 +0.3%

Go you little beauty - can't have too many Oceania they say (but that saying doesn't apply to diversification believers)

[winner69]

The much publicised Sharetrader Top 5 not off to a good start in 2021 -- negative after first month

Only 1 of the 5 returning positive and that's OCA with its +9%

Wisdom of crowds not always a good guide but at least OCA is doing it's thing

[Beagle]

Others have fully covered this and there's not much to add other than the result was slightly below my expectations and the main culprit was ongoing higher than expected human resources costs which have shown a surprisingly high CAGR since OCA listed. It could be their Achilles heel going forward. Shares are about fair value now in my opinion considering ongoing Covid risk. Target price $1.80 - $2.00 one year hence.
The key risk I see is in navigating the covid risk and a successful vaccine roll-out. Other than this obvious risk the outlook looks strong and very positive. Very happy holder.

[Pegasus2000]

Thanks Beagle. Welcome back!

[peat]

fair value means Beagle will be selling guys you know that right ? lol

I went full strength plus a third at 1.43 but have reduced now back to one standard position. Reduced dividend means need to work it harder!

[Joh13]

I wonder if we could start to see PE multiples in excess of the 18-20 and move further towards the likes of Sum & Rym PE. Obviously a few more years of solid growth would be needed to justify those types of multiples and gain the trust of the investing public, but it seems OCA and ARV are heading in the right direction.

[Beagle]

I wonder if we could start to see PE multiples in excess of the 18-20 and move further towards the likes of Sum & Rym PE. Obviously a few more years of solid growth would be needed to justify those types of multiples and gain the trust of the investing public, but it seems OCA and ARV are heading in the right direction.

You must be telepathic. I have been reflecting on exactly that over the weekend and reached exactly the same conclusion.

If we see strong and reliable growth in OCA's eps in the years ahead, (one broker has FY26 estimated at 19 cps) we could see a PE in the mid 20's applied to that multiple and given the market is always forward looking that opens up the prospect of 25 times 19 cents ($4.75) being recognized as early as 2025.

[winner69]

You must be telepathic. I have been reflecting on exactly that over the weekend and reached exactly the same conclusion.

If we see strong and reliable growth in OCA's eps in the years ahead, (one broker has FY26 estimated at 19 cps) we could see a PE in the mid 20's applied to that multiple and given the market is always forward looking that opens up the prospect of 25 times 19 cents ($4.75) being recognized as early as 2025.

Pretty cool - 30% pa plus capital gains and dividends great return

And that's with not much of a market rerate - PE about 20 now to 25 in 2025 not much of a step up

And I'll l look forward to SUM being over 40 bucks

[Beagle]

Strong tailwinds for the whole sector mate. Everyone's going to be a winner in this sector :cool:

Nice work Josh, you have a lovely relaxed presenting style. Keep up your good work. https://www.youtube.com/watch?v=3HCiYdQF0oQ

[Joh13]

It does look promising for the future, my own crude FY21 estimate is $52M UNPAT (8.3cps) which would suggest further potential SP appreciation to $1.66 come the FY21 results.

I also projected out using UBSs forecast up to FY26 on the basis of a PE 18-20 and assuming no hiccups along the way (which there most likely will be, but hopefully not significant) and at a current share issue of 626,400,000... obviously there will be further shares issued so this is just an approximation.

With the PE moving in the right direction these SP's will look even rosier.

2022FY Estimate UBS $64M UNPAT (626,400,000 shares)
10.2c EPS x 18 & 20 PE
$1.84 - $2.04


2023FY Estimate UBS is $76M UNPAT
12.1c EPS x 18 & 20 PE
$2.18 - $2.42


2024FY Estimate UBS $93M UNPAT
14.8c EPS x 18 & 20
$2.67 - $2.96


2025FY Estimate UBS $110M UNPAT
17.5c EPS x 18 & 20
$3.16 - 3.51


2026FY Est UBS $126MUNPAT
20.2c EPS x 18 & 20
$3.63 - $4.04

[Beagle]

Yeap...but if you get that sort of eps growth year on year on year on year I doubt very much whether the PE will stay in the 18-20 range.
Market tends to fall in love with stocks that can show consistent ~ 15% eps growth so something growing eps at an average CAGR of ~ 18% over several years could easily end up with a PE in the late 20's like SUM and RYM.

[The Punter]

[QUOTE=Beagle;869678]Strong tailwinds for the whole sector mate. Everyone's going to be a winner in this sector :cool:

/QUOTE]
Even PIL ?

[justakiwi]

Can someone please tell me if OCA offers DRP?

[McPussPuss]

Affirmative

[777]

Can someone please tell me if OCA offers DRP?

Oceania Healthcare Chair Liz Coutts advised the Board declared an interim
dividend of 1.3 cents per share (unimputed). The record date is 10 February
2021 and payment date 24 February 2021. The Dividend Reinvestment Plan (DRP)
will apply to the dividend payable on 24 February at a discount of 2.5% to
the volume weighted average price of shares sold on the NZX Main Board over
the period of the five trading days starting 9 February 2021.

[Baa_Baa]

Can someone please tell me if OCA offers DRP?

Yes they do

[justakiwi]

Thanks people!

[Beagle]

Another new all time high, very nice. I am expecting underlying profit for the ten months of FY21 of $45m-$50m, (annualised $54m - $60m).

[Baa_Baa]

Another new all time high, very nice. I am expecting underlying profit for the ten months of FY21 of $45m-$50m, (annualised $54m - $60m).

Wow, that would be exciting, I'm very grateful for the likes of Beagle, Maverick, Ferg, Winner and others who generously share their FA. Almost as much as the re-rate that started from about $1.00 that I've accumulated at for what seems a long time, even after chasing up a few more, OCA for me is currently 40% or so up.

That's plenty of head room for a decent correction, but even then I've squirrelled away another 40% cash (on whole of portfolio basis) which won't be deployed in any stocks until value buying re-emerges. [remember when OCA was under 40 cents during Covid?]. It could all end up in OCA if Covid-2 or some other 'event' happened. Who knows, time will tell.

Unbelievable but it happened, OCA bombed to half NTA!, I was too chicken to move until the low 70 cents but that significantly helped the average, enabling me to really hit the buy booster when the recovery looked confirmed and again when the re-rate locked in (and oh look at that!) and maintain an average that now sees me sleep like baby, content with what I have, but happy to buy more if the opportunity presents.

So, what is it that soothes the soul? Check out this chart (https://invst.ly/tnjw0) ... I talked recently about the big wide channel bounding the highs and lows, nicely trending upwards. Well, recently a perfectly formed smaller channel emerged, one of those 1 or 2 cents a day channels that see a nice stable linear upwards movement running on the upper Bollinger Band but not too much above it, all the while still way above moving averages. This keeps the indicators close to overbought not not quite, nothing extreme to worry about. Will it continue? That's not for me to say, being so far above the MA's I'm not too concerned with the short term unless it means I have to break out the dry powder.

You could say OCA has has finally been 'discovered' by the value investors and possibly by some of the momentum investors. Maybe even a few traders are enjoying the move. I laugh now at the angst about McQuarie selling $1.20, not so much at the time. Lol.

Will it last? TBH I don't really care too much anymore, I have no intention of ever selling this asset that I've patiently accumulated for years. OCA isn't going bust either and it's got such an attractive multi decade sector tailwind, even the dips, maybe even the really big dips, really won't stop the company, it will only present more accumulation opportunities.

A long time ago I said I'm going to 'Vaygor this'. What a legend, what a lesson, I'm eternally grateful for his(?) lessons of RYM during the GFC.

Hope you enjoy my story and are on board yourselves.

GLTAH.

[winner69]

Had a coffee with a guy who seems to know an awful lot about Oceania property sales. The insight I got was that over time their unit selling prices haven't increased as much as property prices (on a region basis). In other words they've left a bit (maybe lots) on the table and not got 'full' price for their sales. He did sale they are addressing this and hopefully will get higher prices in the future

A few other insights but it's all looking good at Oceania

Jeez analysts are talking eps 20 cents or more in 2026 and that if that huge growth sees a rerate to a PE of 30 that's a share price of $6.00 in 2025 ... not too shabby. Shareprice more than trebles in 4 tears or so ...... can't have too many Oceania .... doesn't seem worthwhile in holding anything else

[Zaphod]

Consumer NZ warns of retirement villages' 'financial sting'

https://www.stuff.co.nz/business/124118475/consumer-nz-warns-of-retirement-villages-financial-sting

Some interesting comments in there, especially those related to the deferred management fees.

Obviously this applies to the others companies in the same sector.

[James108]

I remember people saying you could never have too many Oceania several times over the last few years before proceeding to sell and then buy back later and saying the same thing. But this time is surely different.

Disc: Oceania is my equal second largest holding.

[Waltzing]

P/E 30 W(n)

well that would be interesting as SUM is on a high P/E already. The Fast Money was on SUM other share and boy oh boys and girls did we miss that express train..

want to see some good numbers going in the right direction before we move back bigger into this village.

[Mista_Trix]

I remember people saying you could never have too many Oceania several times over the last few years before proceeding to sell and then buy back later and saying the same thing. But this time is surely different.

Disc: Oceania is my equal second largest holding.

Yeah but if that person was Winner, you never know if he's being sarcastic or not...

...think he said it again just yesterday in fact :-S

[Beagle]

https://www.nzx.com/announcements/366976 Must be the season for building a deck on one's home.

[Ggcc]

https://www.nzx.com/announcements/366976 Must be the season for building a deck on one's home.
People always say, "be wary when insiders sell"

Maybe they did need to extend their deck??

[BlackPeter]

Looks like Operations Manager and Property Manager don't read this thread ... both selling - ouch, it appears they had too many :)!

General Manager Operations selling 200,000 shares:
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/366976/339635.pdf

General manager Property selling 666,666 shares:
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/366976/339636.pdf

They probably both just need a new deck, don't they?

edit:
Looks like beagle and Ggcc did beat me to it - sorry, I was a bit slow in posting and forgot to check whether somebody else notice that already.
Anyway - funny how we all formed independent from each other this deck building idea - great minds thinking alike?

Maybe time to invest in deck building companies (FBU?) - apparently OCA management thinks one can have too many OCA shares ...

[peat]

they still kept most of their holdings.
They're like me, taking some off the table every now and then - coz who knows eh?

[Beagle]

Had a coffee with a guy who seems to know an awful lot about Oceania property sales. The insight I got was that over time their unit selling prices haven't increased as much as property prices (on a region basis). In other words they've left a bit (maybe lots) on the table and not got 'full' price for their sales. He did sale they are addressing this and hopefully will get higher prices in the future

A few other insights but it's all looking good at Oceania

Jeez analysts are talking eps 20 cents or more in 2026 and that if that huge growth sees a rerate to a PE of 30 that's a share price of $6.00 in 2025 ... not too shabby. Shareprice more than trebles in 4 tears or so ...... can't have too many Oceania .... doesn't seem worthwhile in holding anything else

I get it your comment is tongue in cheek but the reality is that two retirement companies have a realistic chance of seeing the PE the market accords them materially expand over the years ahead as they prove their ongoing ability to grow eps and two don't (who have already proven their ability but are looking highly likely to stumble in their forthcoming reporting round, for one, not by any means the first time). Hmmm...when was the last year RYM did actually achieve their stated mid term objective of growing underlying eps by 15% per annum ?

On the other subject, in my opinion it never hurts to take a sip off the top of one's cappuccino (so too speak), every now and again especially if its to rebalance one's portfolio after making stellar 100%+ gains. (I have to fix one of my decks).

[davflaws]

I have to fix one of my decks.

Caulk the seams with oakum and pour on hot pitch!

[winner69]

Share price is going to get 160 ....isn’t it?

[Waltzing]

yes on the way to 6 dollars ......

[winner69]

they still kept most of their holdings.
They're like me, taking some off the table every now and then - coz who knows eh?


Pretty generous those Exec incentive schemes

[Curly]

The Birch and Stockton sales spooked the mkt otherwise sp would have hit $1.60 today. Buying opportunity if it goes lower. Get the div to up till 10.2.21. Or is it 9 Feb. need to check.

[Grimy]

The Birch and Stockton sales spooked the mkt otherwise sp would have hit $1.60 today. Buying opportunity if it goes lower. Get the div to up till 10.2.21. Or is it 9 Feb. need to check.

I think the Consumer report on contracts had as much/more to do with it.

[Beagle]

VWAP was just on $1.58...very close to an all time high, no worries.

[Maverick]

I think the Consumer report on contracts had as much/more to do with it.

Comon guys, SP fluctuations of 3 cents are the new normal. This is not a $1 share anymore. As far as govt reviews go.... do they want to look after our elderly ( I think not). This SP has enjoyed massive appreciation but none of us should expect we should go to bed on a new time high each night...its not how it works.

[Grimy]

Comon guys, SP fluctuations of 3 cents are the new normal. This is not a $1 share anymore. As far as govt reviews go.... do they want to look after our elderly ( I think not). This SP has enjoyed massive appreciation but none of us should expect we should go to bed on a new time high each night...its not how it works.

I agree completely Maverick. I was just meaning that I didn't put much weight on the share sales by staff.
I'm a happy holder and the price fluctuations don't worry me (especially when I bought in the 50s......).

[winner69]

VWAP was just on $1.58...very close to an all time high, no worries.

That higher than yesterday’s VWAP?

Maybe today is a new ATH

[Beagle]

That higher than yesterday’s VWAP?

Maybe today is a new ATH

Not sure mate.

[dompf]

That higher than yesterday’s VWAP?

Maybe today is a new ATH

if folks believe in the company buckle your seatbelt for 3 years - as an amateur investor I would say pick a company you like work it out and stay with it and buckle up for 3-5 years.

i don’t have that much of a clue with shares but OCA; my Personal seatbelt is buckled for 4 years. I understand many want to profit take but I’m in this til 2025. I’m not smart enough to trade properly so I’ll just leave it in.

I massively appreciate all posters and I’m already both doing well in this stock and I’m overweight but a happy overweight in this one for now.

(And so bull..... knows) thanks for the stock mate.

I also think OCA won’t be far away from buying more sub land to build on. Go this company.

[Baa_Baa]

if folks believe in the company buckle your seatbelt for 3 years - as an amateur investor I would say pick a company you like work it out and stay with it and buckle up for 3-5 years.

i don’t have that much of a clue with shares but OCA; my Personal seatbelt is buckled for 4 years. I understand many want to profit take but I’m in this til 2025. I’m not smart enough to trade properly so I’ll just leave it in.

I massively appreciate all posters and I’m already both doing well in this stock and I’m overweight but a happy overweight in this one for now.

(And so bull..... knows) thanks for the stock mate.

I also think OCA won’t be far away from buying more sub land to build on. Go this company.

You'll be right, no worries. If the chatter here suddenly goes to WTF OMG, then sell. Before that, which may never happen, then stay the course. You'll be right with this one.

[dompf]

You'll be right, no worries. If the chatter here suddenly goes to WTF OMG, then sell. Before that, which may never happen, then stay the course. You'll be right with this one.

I have large chunk in this - if it works out I’ll be building a Bach in 2024/25 on the money I make (minus any taxman) I’ll send photos if it’s a large one or a small one in 2025.

[Corleone]

i don’t have that much of a clue with shares but OCA; my Personal seatbelt is buckled for 4 years. I understand many want to profit take but I’m in this til 2025. I’m not smart enough to trade properly so I’ll just leave it in.


The property investors that I know who have done really well are thick as ****, they were stupid enough to leverage way too much too fast and the banks and the govt were stupid enough to cover them while society and meritocracy as we know it crumbled.

Holding a decent whack, hoping for higher divs before adding.

[arekaywhy]

The property investors that I know who have done really well are thick as ****, they were stupid enough to leverage way too much too fast and the banks and the govt were stupid enough to cover them while society and meritocracy as we know it crumbled.

Holding a decent whack, hoping for higher divs before adding.

same here, but you have to start wondering if they are actually smart...knowing that Wellington will always bail them out and rig it in their favour seeing as they are in on the game as well. None of them will have sympathy from me if it all comes crashing down. In the mean-time, I'm doing my best to learn how to invest as wisely as I can and you lot on here are a wonderful help in that regard.

I realise that some of you are very wealthy and have made your fortune with a roof over your head already, but rest assured you are doing those less fortunate a favour by sharing your knowledge and thoughts here.

[The Punter]

Well 1.60 cracked, whats next?

[winner69]

Well 1.60 cracked, whats next?

Looks like 1.56 was next

Beagle needed to buy more at market - would have needed more than 622 shares at 160 or more :)

[Waltzing]

the history of this property market is the greatest housing market in NZ history.

Depicted by the first time property investor in Christchurch who in april went out and bought 5 houses or something like it and wants 20 by 2025.

now who knows what her ratios are but this women now advises others...

the dutch flower shows were like this... but of course NZ housing just might be the over priced in the world but its the most sort after...

this is a bubble be not mistaken so if OCA cant make it big now it never will.

[TobyPascoe92]

the history of this property market is the greatest housing market in NZ history.

Depicted by the first time property investor in Christchurch who in april went out and bought 5 houses or something like it and wants 20 by 2025.

now who knows what her ratios are but this women now advises others...

the dutch flower shows were like this... but of course NZ housing just might be the over priced in the world but its the most sort after...

this is a bubble be not mistaken so if OCA cant make it big now it never will.

Whole heartedly disagree with that summation of the property market & that article. I have personally followed her journey and she is an extremely hard worker and yes is prepared to take some risk. Nothing wrong with having 20 homes - someone has to provide homes for those who can't afford it. Now I hear people saying "oh but some people can't afford homes because of investors driving up prices". Bollocks - even if the NZ media price was $400,000 there would still be a very large group of people who couldn't afford that pricing level - there will always be. So those people need safe, warm, dry homes. The government can't keep up so its down to mum and dad investors. 79% of all investors own only one investment property. They are Mum & Dad investors trying to get ahead in life.

New Zealanders have been saying there is a bubble for 10 years now. When do you predict it will pop? People (influenced by media headlines) predicted in 2011, 2013, 2016 & now 2020/21 the bubble would pop... Still waiting.

Land scarcity, RMA, Re-Zoning, Interest Rates, Building Supply, Material hold ups in the construction industry etc etc are all part of the current demand.

In terms of OCA - increasing retired population in need of future care - while OCA may appeal to a certain demographic of that retired population (more wealthy), that population is still growing each and every year. Demand is only going one way. Land is becoming more scarce. There is no bubble. There is simply just a supply & demand equation that is and basically always has been out of balance.

When Ryman Healthcare was a $1.56 in 2006, NZ was in the middle of a property boom. I wonder how many times a day bubble was mentioned.

[Greekwatchdog]

This so called Bubble is not popping anytime soon. Councils keep ticking rates up because they keep over spending on what who knows, Land developers are increasing prices on lots they sell, Govt. is increasing wage to low end income earners in April, then want to give us a all another public holiday and 5 more sick days so whos paying? End user/home owner, then I haven't even mentioned material costs which are going up add Supply vs Demand problem and you have a perfect storm.

Even when banks start to increase interest rates it will only slow down this Housing market by couple of percent but until we build enough homes to support demand its not going to pop. And idea what decade that will be?

Retirement Operators are not the issue and they will do well regardless of this so called Bubble, they provide a service to us all and the Govt is generally lucky its run so well in NZ. If they make an extra quid on their Assets so be it. We all know risk reward here.

[dobby41]

Retirement Operators are not the issue and they will do well regardless of this so called Bubble, they provide a service to us all and the Govt is generally lucky its run so well in NZ. If they make an extra quid on their Assets so be it. We all know risk reward here.

Retirement operators are part of the solution providing houses for a significant chunk of the population in a compact, land frugal, way.
Homes the residents sell can house families - much more efficient use of resources.

[Waltzing]

ive removed this bit of fun because it was found by Mac Duffy to be un readable or something....

The debt to income ratios in some business sectors in NZ have been scaring the RBNZ for decades.

If this isnt a housing bubble hate to see a real one.

[clearasmud]

Where are we in the property cycle.
Having a concept of that calms down your exposures nervousness.

[clearasmud]

So much money is being made, hence cash with its negative real return is only great when the permabearis is correct.

[Dotbond]

Property / sharemarket cycle averages out at every 18 yrs according to history dating back a few hundred years.

[clearasmud]

Correct 18.6 years

[peat]

Correct 18.6 years

here is the housing price index and would appear to have formed (a temporary ) peak around 2007 , obviously relating to the GFC
12289

so 2025?

[mike2020]

Was not really much of a dip was it? Unless you were highly leveraged and fixed around 9% and needed to sell. I do remember clearly what that little dip did to a lot of people I knew. Looks short on a graph but 3 or 4 years underwater can bring a lot of stress into your life.

[Beagle]

Closed at an all time high yesterday, you beauty !

[Waltzing]

we dont want to say much going forward as the guys have us busy but MR B is too valuable to retire just perhaps take longer holidays.....

[Beagle]

Thanks mate, I really appreciate your kind words. I miss my friend Maverick and hope he comes back regularly here too.

[Baa_Baa]

Closed at an all time high yesterday, you beauty !

Love that inner channel on the chart, guiding us up at a sustainable pace. :t_up:

OCA 2nd most chosen of the ST share picks, after ATM ... and before everything else. Funny how things change, it used to be such a quite share, seems now everyone wants a piece of future prosperity.

Disc: largest holding by far, not saying %, the diversification police will have a piece of me. Lol.

[tommy_d]

Disc: largest holding by far, not saying %, the diversification police will have a piece of me. Lol.

approx 30% for me.... won't buy any more unless i top everything else up as well

[Beagle]

Love that inner channel on the chart, guiding us up at a sustainable pace. :t_up:

OCA 2nd most chosen of the ST share picks, after ATM ... and before everything else. Funny how things change, it used to be such a quite share, seems now everyone wants a piece of future prosperity.

Disc: largest holding by far, not saying %, the diversification police will have a piece of me. Lol.

LOL
Trades ex divvy on Tuesday...not sure why the board decided to declare such a modest divvy but I'm not concerned as its not imputed and management pointed out in the call that overall their dividend policy was unchanged.

[Maverick]

LOL
Trades ex divvy on Tuesday...not sure why the board decided to declare such a modest divvy but I'm not concerned as its not imputed and management pointed out in the call that overall their dividend policy was unchanged.
As earlier stated , I remain highly suspicious that it's a " slight of hand" to throw off the " wage subsidy repayment media police. "
Disguised as...preservation of cash flow during uncertain covid times.
Any body notice their debt was actually already down and cashflow up?
The proof will be when they give a decent divi to catch up at year end.( to remain within their payout policy of which Earl has confirmed is still intact)
I applaud their strategy if it is the case. Lets see in 3.5 months whether this idea is just silly conspiracy stuff.
As you imply Beagle, a lower divi is of minimal consequence to the shareholders anyway.
P.s the subsidy repayment equates to circa 0.5 cents of NTA.

[Joh13]

I have a feeling that OCA payed a reduced Divi and decreased debt (making the gearing more attractive) in preparation for an acquisition Earl said was potentially coming in the following months, which also coincides with "uncertain covid times" and throwing off the "wage subsidy media police."

I also noticed that the low, was $1.30 now $1.50 and mean was $1.53 now $1.58 SP consensus has increase a wee bit as well as the estimated EPS on the Market Screener website, maybe that's the reason for a strong finish to the week for OCA's SP. Here's the link.
http://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

12291 12292

[winner69]

Mav et al ....I think Cashflow was up and debt down in H1 was a result of not building as much as they wanted (ie less cash out the door)

[Dotbond]

Wrong forum i know but why is this website so slooooowwwww? DDOS?

[blackie]

yes very unresponsive the last couple of days

[winner69]

One day OCA will actually break through the 160 mark

Maybe today is the day -- here's hoping

[allfromacell]

One day OCA will actually break through the 160 mark

Maybe today is the day -- here's hoping

Lets just wait a week for the DRP price to be set please :)

[Curly]

Mkt Screener has 4 Analysts. Two have OCA as a buy, one as an out perform and one as a hold. Guess if they continue to build new apartments and keep them turning over share price will reflect in capital gain. need some good press to push through to $1.80 - $2.00.

[winner69]

OMG ....median house price FELL in January (from December)



https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2021/Residential/January/REINZ%20Monthly%20Property%20Report%20-%20January%202021.pdf

[Sideshow Bob]

DRP Strike Price for 2021 Interim Dividend - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/367613)

DRP Strike Price for 2021 Interim Dividend16/2/2021, 9:28 am CORPACTDIVIDEND REINVESTMENT PLAN STRIKE PRICE FOR 2021 INTERIM DIVIDEND
Oceania Healthcare Limited (OCA) advises that the strike price for the Dividend Reinvestment Plan (DRP) operating in respect of the dividend payable on 24 February 2021 has been set at NZ$1.5331 per share.
This strike price will apply in calculating the number of shares to be issued to participants who have elected to receive additional shares rather than cash.
The strike price has been determined, in accordance with the DRP, as the volume weighted average sale price in New Zealand dollars for Oceania Healthcare shares, calculated on all trades of Oceania Healthcare shares which took place through the NZX Main Board over the period of five trading days starting on 9 February 2021, less a 2.5% discount.
Shareholders who have elected to participate in the DRP will receive shares instead of cash in respect of the dividend payable on 24 February 2021.
The new shares will rank pari passu with existing shares on issue as at the date of their issue.
ENDS

[BlackPeter]

OMG ....median house price FELL in January (from December)

https://www.reinz.co.nz/Media/Defaul...ary%202021.pdf

can't access your link, but what you say is not what other media outlets are reporting:

https://www.stuff.co.nz/life-style/homed/real-estate/124124649/housing-heat-spreads-christchurch-records-sharpest-growth-in-17-years

[winner69]

can't access your link, but what you say is not what other media outlets are reporting:

https://www.stuff.co.nz/life-style/homed/real-estate/124124649/housing-heat-spreads-christchurch-records-sharpest-growth-in-17-years

Put the link up again

I was referring to the bit below ....prices in January down from December

Suppose we only see what we want to see

[winner69]

Mind you the Housing Price Index HPI is up 1.3% from December

That’s the Gold Standard .....adjusts for high and low end sales or something

Whew ...panic over

[Davexl]

Don't panic Mr Mannering...

https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-drop-25000-sales-fall-46/Z5FKCEW3MJ2F2NFI42XR6QTW4Q/

(https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-drop-25000-sales-fall-46/Z5FKCEW3MJ2F2NFI42XR6QTW4Q/)But REINZ warned against seeing any longer-term trends in the lumpy month-on-month data, which jumps about according to how many bottom and top-end sales were made, the weather, holidays, length of time people were away from their homes and many other seasonal factors.

"The Auckland market saw a slight cooling off in prices when compared to the record high we saw in December 2020, which is what we would expect at this time of the year," said REINZ chief executive Bindi Norwell.


(https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-drop-25000-sales-fall-46/Z5FKCEW3MJ2F2NFI42XR6QTW4Q/)

[Blue Skies]

Put the link up again

I was referring to the bit below ....prices in January down from December

Suppose we only see what we want to see



It's also reported in the Herald

https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-drop-25000-sales-fall-46/Z5FKCEW3MJ2F2NFI42XR6QTW4Q/

(someone beat me to it)

[winner69]

It's also reported in the Herald

https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-drop-25000-sales-fall-46/Z5FKCEW3MJ2F2NFI42XR6QTW4Q/

(someone beat me to it)

Like the headline ....heavens above


REINZ data: Auckland house prices drop $25,000, sales fall by 46%


Hope Oceania not affected

[TobyPascoe92]

Put the link up again

I was referring to the bit below ....prices in January down from December

Suppose we only see what we want to see


Hi team,

Absolutely a pullback in prices in Jan 21 vs Dec 20 however this is a repetitive seasonal thing that plays out every year due to Christmas. Interestingly Bindi Norwell (REINZ CEO) states that the pull back this year between Dec & Jan has not been as big as other previous years. So is this a pullback? A crash? No way, I think we will see a substantial jump between January, February & March 21 as buyers jump back in to continue their scout and even more so as LVR's head to 30%, then 40% through March to May for investors. Important to remember that all new build residential including both owner occupier and investors, only require a 20% deposit. I think we will see a shift of savvy investors from purchasing existing properties to new build off the plan properties. Therefore, expect to see the biggest building boom this country has seen - we are already seeing it with the amount of consents being issued. Big times ahead for the NZ construction sector - what that means for OCA moving forward sourcing materials and labour will be anyones guess.

12311

[dompf]

Like the headline ....heavens above


REINZ data: Auckland house prices drop $25,000, sales fall by 46%


Hope Oceania not affected

What a headline clickbait - its been the best January for sales in 14 years
https://www.interest.co.nz/property/109071/real-estate-institute-new-zealand-figures-reveal-big-regional-differences-housing

[dabsman]

What a headline clickbait - its been the best January for sales in 14 years
https://www.interest.co.nz/property/109071/real-estate-institute-new-zealand-figures-reveal-big-regional-differences-housing

There are three kinds of lies: lies, damned lies, and statistics

[winner69]

Hope share price doesn’t go below 150

The ‘we’ll never see $1.50 again’ prediction could be another bad call by Winner?

But I believe the old resistance becomes support thinking so no worries.

[Old mate]

Hope sgphare price doesn’t go below 150.

Hope sgphare price doesn’t go below 150
I agree. Usually does the opposite of what I'm expecting.:t_up:

[winner69]

Hope sgphare price doesn’t go below 150.

Hope sgphare price doesn’t go below 150
I agree. Usually does the opposite of what I'm expecting.:t_up:

Fat fingers on phone key board while eating oysters and chips in the park does funny things eh

[Old mate]

Haha. Not to far off there;)

[Beagle]

Got to be good long term buying @ $1.50...OCA, you can't have too many :t_up:

[Joh13]

A bit of a feel good story for OCA https://www.nzherald.co.nz/rotorua-daily-post/news/st-johns-wood-taupo-honours-retired-nurses-who-are-now-residents/74QPOA3QZ5IU337PKVGUEUC5PU/?fbclid=IwAR2RjUhLCJDlgEZuqSTYcS-i5jbccxsu2ar8hLQ8YVpIy3p6k2Jc1GJ0IWM

[Ggcc]

Got to be good long term buying @ $1.50...OCA, you can't have too many :t_up:

Below the dividend reinvestment plan

[Waltzing]

10 Year hit? TB back to 1.02 Mr B.

[Mudfish]

It's hard to see why OCA share price has dipped. Valued by analysis at $161. I for one was happy to scoop a few more today. At the moment, short term it's a good price, long term a brilliant price.

[Habits]

It's hard to see why OCA share price has dipped. Valued by analysis at $161. I for one was happy to scoop a few more today. At the moment, short term it's a good price, long term a brilliant price.

Last 5 days OCA down 5.1 percent vs RYM up 5.35

Our company should be making up ground not losing

[Curly]

It's hard to see why OCA share price has dipped. Valued by analysis at $161. I for one was happy to scoop a few more today. At the moment, short term it's a good price, long term a brilliant price.
Agreed. Top up time. Strange how Arvida sp holds up and OCA down from high while analysts continue to signal buy. 4 cents below DRP. Market is a strange beast.

[dompf]

I’ll top up tomorrow on this if it wobbles around 1.40-1.49; long term it’s a bargain.

[bottomfeeder]

Like the headline ....heavens above


REINZ data: Auckland house prices drop $25,000, sales fall by 46%



Hope Oceania not affected

But other parts of the country booming. OCA has properties all over New Zealand.

[Waltzing]

one thing to consider is the price of materials.

although OCA doesnt build wooden villas the price of timber for housing in the US has doubled in 3 months.

[dreamcatcher]

Lets see where these Retirement stock go ....posted on 4/6

Updated -----.--4/6------....6/7--------.-5/8.............8/9..........7/10..........7/11...........3/12.........10/1............18/2

Arvida ............$1.37........$1.48 .........$1.60.........$1.65.........$1.77........ $1.78..........$1.67........$1.75..........$1.81
Summerset......$6.34........$6.73....... ..$7.80.........$8.56.........$9.15......$10 .50........$10.83......$12.35........$12.92
Ryman............$13.35......$13.04 .......$12.77.......$13.79.......$14.85......$14.7 0........$14.69.......$15.05........$15.75
Oceania...........$0.94........$0.95 ..........$1.03.........$1.04....... $1.20........$1.36..........$1.29........$1.46.... ......$1.49
Metlifecare.......$4.28........$5.76 ..........$5.92.........$5.94........$5. 98 .......$6.00..........0000.........0000..........0 000

Question- has the smart money already left and OCA people need to stop selling - ASB depth OCA Buyers 54 x 87K Sellers 52 x 743K nearly 10/1

If you believe property prices will keep increasing forever with static wages ......you can't have enough retirement stock

[bull....]

one thing to consider is the price of materials.

although OCA doesnt build wooden villas the price of timber for housing in the US has doubled in 3 months.

its not only the price of materials going up substantially its the labour problem as well. i mentioned on the thread a while ago about a retirement village operator offering double the going rate to secure tradies on there biulds.

also there are supply shortages occuring on products and product delays all which add to the cost of builds

[Greekwatchdog]

And obviously you didnt read the report where Earl said they are not experiencing any of these. Everyone will experience these costs going forward..In the end its upto each buisness to decide who is going to pay the extra. Them or end buyer.

[bull....]

And obviously you didnt read the report where Earl said they are not experiencing any of these. Everyone will experience these costs going forward..In the end its upto each buisness to decide who is going to pay the extra. Them or end buyer.

and of course he'e not going to say anything different lol , anyway these are all recent issues emerging.

where your wrong i believe is that you cannot always pass the costs on to customers due to competition , and there is plenty of competition in the retirement space.
also you cannot just say i will increase my selling price 10k cause tradie delays added to costs doesnt work that way in property development

[LaserEyeKiwi]

So was there an explanation from management as to why the Dividend was cut to such a low level?

[McPussPuss]

I think it may be as Mav suggested about Earl flying under the radar with the wage subsidy on board. If the FY dividend gets a top up that will be the explanation <finger taps nose>
So was there an explanation from management as to why the Dividend was cut to such a low level?

[Beagle]

Yeah a "little birdie" tells me he's had enough of the politically correct nonsense, (like me).
Many, many, many years of the cost of care increasing much faster than ministry of health funding has more than a little relevance to the big picture too but very few people talk about that.

[dreamcatcher]

Yeah a "little birdie" tells me he's had enough of the politically correct nonsense, (like me).
Many, many, many years of the cost of care increasing much faster than ministry of health funding has more than a little relevance to the big picture too but very few people talk about that.

If costs increasing faster then govt funding and building costs currently booming. Maybe solution is more people remain in their own homes with family and daily care givers. Some races already do that. Where do retirement village investors stand as property cycle won't last forever.

[Waltzing]

"And obviously you didnt read the report where Earl said they are not experiencing any of these."

that was last year.....

the builders are finding they need more staff..every fence is being repaired and painted...and thats just the street front...

[Beagle]

If costs increasing faster then govt funding and building costs currently booming. Maybe solution is more people remain in their own homes with family and daily care givers. Some races already do that. Where do retirement village investors stand as property cycle won't last forever.

Penetration rates of retirement villages are steadily increasing as more and more people embrace the lifestyle benefits and camaraderie that they enjoy there. My Mum really enjoyed her last 11 1/2 years at her retirement village and was very sad to move out. All her friends come and visit her at the private hospital just down the road and she has more visitors there than anyone else according to the nurses I talk too.
She tells me she has been much, much happier at the retirement village than she would have been stuck in her own home on her own. I inherit a lot less than I would have if she had of stayed in her home on her own but I couldn't care less, I am very happy that she was happy for the last 11 years. The next leg of her journey is not so good but she is comfortable and what is coming is inevitable :( The funny thing is towards the end they lose their PC filter completly. The other day she told me if I don't stop eating I'll be dead before she is lol. That's something my doctor should tell me but he's too polite. Just as well someone tells it like it is lol

[bottomfeeder]

If costs increasing faster then govt funding and building costs currently booming. Maybe solution is more people remain in their own homes with family and daily care givers. Some races already do that. Where do retirement village investors stand as property cycle won't last forever.

We are looking at long term care for my mother in law. Staying in your own home with one live in care giver is prohibitive in cost. Not only do you have to pay them while they are asleep, you have to feed them and give them holidays etc. This while you have to pay for food for the elderly person, while still paying rates, insurance, power, home maintenance and other costs relating to the property. It is much cheaper to be in a retirement village, where there are economies, even though it is expensive. So because people are living longer now and have access to good hospital care, retirement villages will be booming for some time to come.

[winner69]

Penetration rates of retirement villages are steadily increasing as more and more people embrace the lifestyle benefits and camaraderie that they enjoy there. .......

Penetration rate currently 13.9% according to JLL

Bay of Plenty 19.0% Auckland 18.1% and Gisborne 17.1% and Wellington 14.3% areas with highest penetration.

[Beagle]

Penetration rate currently 13.9% according to JLL

Bay of Plenty 19.0% Auckland 18.1% and Gisborne 17.1% and Wellington 14.3% areas with highest penetration.

Penetration starting to get up there in parts of N.Z., many thanks for sharing.
Sssshhh, don't tell Earl but I really like Summerset's one on the waterfront at Hobsonville. https://www.summerset.co.nz/find-a-village/summerset-at-monterey-park/
Nice waterfront 3 bedroom (really a house not a unit) 130 sq metres from memory, was $1.6m when I visited 3 years ago. Wonder what it is now :scared:
Wonder what OCA's apartments at Waimarie Street will sell for with their grandstand close up views of the Hauraki Golf. More than $3m surely ? Hope our friend know's how to really stick the boot in with pricing of those premier units...gotta cover the loss making care operations and leave us poor shareholders with a few quid for dividends eh ;)

[dreamcatcher]

The other day she told me if I don't stop eating I'll be dead before she is lol. That's something my doctor should tell me but he's too polite. Just as well someone tells it like it is lol

I read somewhere that you can survive 3 weeks without food but only 3 days without water your organs start shutting down and body only needs half glass of water a day to sustain life. Quirky little stats probably leave to others to test............

[percy]

Retirement Commissioner Jane Wrightson's 40 page paper on the retirement village industry recommends a policy review to consider:

an improved resale and buyback process for units;
restricting the charging of weekly fees after a resident vacates a unit;

I think it is well overdue.

[Ohdoyle]

Retirement Commissioner Jane Wrightson's 40 page paper on the retirement village industry recommends a policy review to consider:

an improved resale and buyback process for units;
restricting the charging of weekly fees after a resident vacates a unit;

I think it is well overdue.


Even though you are right it is not going to be high up the goverments priority list. To put it simply retirement operators like Oca are one of the few intergenerational wealth transfers going from boomers back to gen x and millenials. Does the govt really want to be seen to doing anything to look after that generation in the current climate ? Fair or not I just dont see regulation as a priority.

[850man]

Even though you are right it is not going to be high up the goverments priority list. To put it simply retirement operators like Oca are one of the few intergenerational wealth transfers going from boomers back to gen x and millenials. Does the govt really want to be seen to doing anything to look after that generation in the current climate ? Fair or not I just dont see regulation as a priority.

Any intervention by this government in business worries me.

[percy]

Even though you are right it is not going to be high up the goverments priority list. To put it simply retirement operators like Oca are one of the few intergenerational wealth transfers going from boomers back to gen x and millenials. Does the govt really want to be seen to doing anything to look after that generation in the current climate ? Fair or not I just dont see regulation as a priority.

I would think it is such a no brainer the sector would do the right thing without The Govt having to regulate.
They talk the talk,so it is well overdue they walk the walk.

[artemis]

Buyers have assets. That means they have choices. There is no gun to their head.

[Beagle]

Retirement Commissioner Jane Wrightson's 40 page paper on the retirement village industry recommends a policy review to consider:

an improved resale and buyback process for units;
restricting the charging of weekly fees after a resident vacates a unit;

I think it is well overdue.

We cleared everything out of my Mum's retirement unit by the end of January. Arena group are redeveloping that part of the village. Monthly fees stop straight away and they're paying us out in 4 months from the date we vacated the unit so a great result as far as we are concerned but I agree, fees should stop immediately and everyone should be paid out within 6 months.
RYM used to make a big deal about the fact that they used to do this...until they very quietly dropped that policy when it started to cost them money. In my opinion they lost reputation when they did that.
Leadership was better under Simon Challis in my opinion.

[percy]

We cleared everything out of my Mum's retirement unit by the end of January. Arena group are redeveloping that part of the village. Monthly fees stop straight away and they're paying us out in 4 months from the date we vacated the unit so a great result as far as we are concerned but I agree, fees should stop immediately and everyone should be paid out within 6 months.
RYM used to make a big deal about the fact that they used to do this...until they very quietly dropped that policy when it started to cost them money. In my opinion they lost reputation when they did that.
Leadership was better under Simon Challis in my opinion.

Good on Arena Group.
If one can do the right thing the others should be able to too.

PS.Sorry I posted on this thread,but it was the first retirement sector company that came up.