OCA - Oceania Group - retirement villages

[couta1]

What about the 2g in Ben's formula

If g is 0 then suppose your 59.5 cents is on

If g is negative does Ben say the multiplier is less than 8.5

Just as well Ben actually said in the fime print end notes in his book that his formula was a load of crap Load of crap for sure, dinosaur material in the modern age.

[Beagle]

What about the 2g in Ben's formula

If g is 0 then suppose your 59.5 cents is on

If g is negative does Ben say the multiplier is less than 8.5

Just as well Ben actually said in the fime print end notes in his book that his formula was a load of crap

I seem to have done okay using my modified 1g version of his formula. The problem with g is you have to forecast it out based on the average expected growth for the next 7-10 years which is little short of wild guesswork with this one. Factor in systemic wage cost inflation at 7-8% per annum in the healthcare sector, like there has been ever since this listed and who is to say that won't continue to eat up all their slowly rising DMF and resale gains ? What confidence can you have with any estimate of g when we've been half a decade without any ?

Share prices follow earnings and that's why the share price remains in the doldrums and will stay that way until they can prove they can grow earnings.
Best chance of a way out of this is a takeover. Even $1.30 would look really good now ! I'm just going to keep my free ones and hope for a takeover. No more no matter how low the price goes unless its less than 59.5 cps !

[winner69]

Market not liking the sector at the moment but OCA the most disliked

I put that down to Brent Pattison becoming the CEO ..... out of his depth in running a people organisation ... and the market has realised this

That was a bad move

[bull....]

most people on here have forgotten food inflation , vege's etc are going too cost a bomb next yr due to fertilzer etc and eat even further into margins.
guess some of beagles dogfood can be substituted to help keep margins up

[couta1]

Will be starting its wee run up to $1.06 next week prior to the result, bit of a gutometer guess.:cool:

[BlackPeter]

If property prices have no impact on occupancy of OCA then what is the property market's relevance to this thread?

NTA and earnings coming from revaluations ... property prices impact on OCA's (and any other retirement village's) book value, but not really on the occupancy or on their cash flow / (real) earnings.

[BlackPeter]

Market not liking the sector at the moment but OCA the most disliked

I put that down to Brent Pattison becoming the CEO ..... out of his depth in running a people organisation ... and the market has realised this

That was a bad move

Only if you use a very small time window .. For any time window larger than 5 months Ryman does worse than OCA.

[winner69]

Only if you use a very small time window .. For any time window larger than 5 months Ryman does worse than OCA.

That time frame coincides with the end of Brett’s honeymoon period and the market started to realise he wasn’t the leader Oceania really needed …that’s how I see it anyway

[Baa_Baa]

That time frame coincides with the end of Brett’s honeymoon period and the market started to realise he wasn’t the leader Oceania really needed …that’s how I see it anyway

Harsh critique, never mind all the headwinds the whole sector has faced and all of the sector turned down at the same time. Actually a bit over 7 months ago. Nothing to do with Brett per se, you sound like an angry shareholder grasping at straws and attacking the CEO in frustration.

[percy]

That time frame coincides with the end of Brett’s honeymoon period and the market started to realise he wasn’t the leader Oceania really needed …that’s how I see it anyway

Trust you are not "unwell".?
Time to revisit the Rata trees.?

[alokdhir]

https://www.newshub.co.nz/home/new-zealand/2022/05/new-data-shows-third-of-aged-care-facilities-may-be-forced-to-close-due-to-lack-of-funding.html

[mike2020]

https://www.oneroof.co.nz/news/41353

[Bjauck]

https://www.newshub.co.nz/home/new-zealand/2022/05/new-data-shows-third-of-aged-care-facilities-may-be-forced-to-close-due-to-lack-of-funding.html

Another day, another story about the chronic underfunding of rest homes. NZ voters don't want new taxes or increased taxes...so will it be a question of the basic rest home service being the provision of multi-person dormitories?

[alokdhir]

Another day, another story about the chronic underfunding of rest homes. NZ voters don't want new taxes or increased taxes...so will it be a question of the basic rest home service being the provision of multi-person dormitories?

The fact the stories are becoming more frequent and dire ...makes me think will lead to some action finally ...as now its not just question of profitability but continuing operations or not ....which any Govt cant afford as its such a sensitive issue ...Not taking care of our aged people !!

[winner69]

The fact the stories are becoming more frequent and dire ...makes me think will lead to some action finally ...as now its not just question of profitability but continuing operations or not ....which any Govt cant afford as its such a sensitive issue ...Not taking care of our aged people !!

Isn’t that the point of the PR campaign ….get some action

Just like if enough polls say get rid of GST on food that might happen as well

[Bjauck]

https://www.oneroof.co.nz/news/41353 It is still up over 18% in the last year. Once that gain has been erased, one could talk about a crash.

[Bjauck]

Isn’t that the point of the PR campaign ….get some action

Just like if enough polls say get rid of GST on food that might happen as well Who will pay for them?

[allfromacell]

It is still up over 18% in the last year. Once that gain has been erased, one could talk about a crash.


https://www.oneroof.co.nz/news/41353

The HPI is Auckland City & Wellington City is down 5.6% & 7% over the past 3 months respectively. The author has literally used the least accurate metric we have of tracking the market simply because it looks the best and he wants to defend his bags.

The settlement data is behind by several weeks, the reality on the ground is people are worried and values are falling at breakneck pace, much faster then I recall US home values falling in GFC.

I think regardless the OCA share price has fallen much more than justified but it's clear the housing market crash (and it is a crash) is playing a part in the sentiment.

P.S - For the sake of NZs future and retaining young people who are we desperately need to pay for all the boomers heading into care, this is a good thing and and great relief.

[850man]

Another day, another story about the chronic underfunding of rest homes. NZ voters don't want new taxes or increased taxes...so will it be a question of the basic rest home service being the provision of multi-person dormitories?

Our current political parties in power do not care about the aged, no enough votes to be bought there. Platitudes only, no substance.

[bull....]

Our current political parties in power do not care about the aged, no enough votes to be bought there. Platitudes only, no substance.

yep the only way grey power had a voice was thru nz first

[BlackPeter]

Our current political parties in power do not care about the aged, no enough votes to be bought there. Platitudes only, no substance.

Fact is - more than 15% of the population are 65 plus. Fact is the number of elderlies is growing and fact is that a higher proportion of them goes to the polls compared to the younger people. Actually - the elderlies might be (if united and infuriated) the biggest block of voters.

While some politicians might lie to them (as some do), only a very dumb politician would ignore them.

[Beagle]

Several years too early to make a call on Brent Pattison's expertise in my opinion.
I was impressed he made a good lot of noise in the media during the lockdown in Auckland about residents being harshly isolated unnecessarily when it was clear that RAT tests in combination with infection prevention measures were sufficient assurance....(this was long before our "rocket scientist" elected officials got on board with the idea of Rat tests).
Its desperately hard on old and isolated vulnerable people not being able to see their loved ones...what else do some of them have to live for ?...and he made his viewpoint very forthrightly clear, well done I reckon !

The key questions however as I see them are :-
Can he bring some desperately needed cost control discipline to this company ?
Can he tweak the business model so they're not throwing so much money down the Alice in Wonderland rat hole of basic care services ?
Can he pivot the business model more towards independent living units which are the proven formula for success in the retirement village community ?
Can he and his team find some more good greenfield sites for developments at reasonable prices ?
Can he and his team maintain development margins at a reasonable level given 18% construction cost inflation last year and an outlook for a similar sized increase this year ?
We will see...

This morning over a coffee I couldn't help reflect on the Sharetrader gettogether I organised, was it 4 summers ago ? at the Viaduct where we all sat around drinking far too much and ended up in this unified Chorus together as we toasted our pending success with cheers, Oceania, "You can't have too many" ! All these years later the share price is less now than it was then and the main reason I can see from the accounts that earnings haven't grown is the core issue I've been talking a lot about and that's the rampant, systemic rate of wage growth, year on year that never let's up.

I don't think any of us saw that coming...frankly...its been a very disappointing experience...and if something isn't done about rampant wage inflation in the years ahead..."any will be too many". Time will tell...Its over to Brent to provide the leadership to prove he can make this work for shareholders and grow earnings. Growing NTA will not work for the share price if you cannot grow realised earnings per share.
Other companies in this sector can grow earnings per share...the most notable being SUM even during Covid. Why not OCA ?

If they can't grow earnings then one is better off in SUM other company that can or in another type of property company like ARG that can pay you twice the yield at 8%. For me, even with a fairly modest allocation, the most I can give OCA in terms of patience is 2 more years to prove to me they can grow earnings per share because if they can't do it after 7 years of being a listed company then I think its clear the business model is a complete failure by comparison to others in the sector and one's capital is better off employed somewhere else.

[RTM]

I don't think any of us saw that coming...

And I think this is the most interesting phrase in the Beagles post. Over and over again I see this on share-trader...the collective "we" just can't know everything. We analyse, cogitate over companies without a fraction of the information we in fact need (compare Beagles financial analysis work to what officers in the companies actually know about their businesses), we look a trends in our country, the world etc and make our investment decision accordingly. But, as Beagle highlights above, so many times...sh*t happens, government policies change, wars, etc etc. Wait until Jacinda gets in for a third term and without the immediate pressures of COVID starts to implement some really big social changes. Or National with some Balance the books efforts.

In my opinion it reinforces the need for well diversified portfolios, and if you have enough cash, not just within New Zealand and perhaps Australia, more widely as well. USA, UK..Europe.

[Waltzing]

"We analyse, cogitate over companies without a fraction of the information we in fact need (compare Beagles financial analysis work to what officers in the companies actually know about their businesses)"

:t_up:

They do publish a comprehensive WIP sub section in there accounts thats for Cost Accountants to analyse.

It was pretty much a sell once it broke below 1.30 as there was no support underneath that.

It was bye bye pop deck...and jump ship.

[couta1]

"We analyse, cogitate over companies without a fraction of the information we in fact need (compare Beagles financial analysis work to what officers in the companies actually know about their businesses)"

:t_up:

They do publish a comprehensive WIP sub section in there accounts thats for Cost Accountants to analyse.

It was pretty much a sell once it broke below 1.30 as there was no support underneath that.

It was bye bye pop deck...and jump ship. Hmm I wonder how many bigger holders are selling including insiders? nope im guessing its all skittish reef fish in the main and the volume would back that up.

[Waltzing]

"bigger holders are selling "

They wont while it backed by NTA and SUM and others have made a killing. "Look ma SUM is killing it OCA is a BARGAIN!"

But do you want millions tied up for 5 years? that what its been.

If it dont perform the selling will continue as they swap and off load OFF market.

The smart money went to the cloud in 2020 and made a killing in the land of Bits and Bytes.

Maybe its the residents that got the BARGAIN!

[Beagle]

But do you want millions tied up for 5 years? that what its been.
Maybe its the residents that got the BARGAIN!
Yes, I suspect that's very true that the residents are the real winners here.
I can't help feeling a bit sorry for those that have locked up millions for years in terms of what they could have made elsewhere.
I guess being realistic about it there was always an element of experimentation with this one which still, at least to me, feels like a relatively new listing.

They pioneered the care suite model and the promise with the float and the presentations in the early years was that the SIX YEAR business transformation would prove to be the panacea that changed the returns they were getting on basic care rooms. I remember Earl at an Auckland shareholders association presentation proudly telling us that their model was different to the others and they're not providing a land based cruise ship experience but high quality care in boutique villages. He also inferred they were targeting the older demographic (85+ years)

Today I looked on Trade me and they're advertising 2 bedroom units at their premier village "The Sands" with expressions of interest from $780K...the same price they were when this village was built some years ago.

I can't help wondering why the price has never changed ? Lack of demand ? Maybe the baby boomer population bulge is currently at a point where the vast majority want the full land based cruise ship experience that RYM and SUM generally provide ? Is this why SUM have waiting lists at many of their resorts, opps sorry, villages, and can afford to be price makers not price takers with three price increases just in 2021 alone ?

A business model either works for shareholders relative to others in the sector or it doesn't. I think I'm being very generous giving them 7 years to prove it works for me when I was promised this was a 6 year transformational process. Its uncharacteristic of me to allow that extra degree of latitude to be honest about it. Prove it works for me in the next 2 years, (7 years since they listed) or I'm out. There's only so long you can hang around and be told "stories" before one demands results. The FY24 result in May 2024 has to show me real earnings per share growth, that's my final deadline for proof their business model works for me and not just for the residents, staff and management.

It feels like a pretty brave "gamble" (so to be frank it is a brave gamble...if something looks like a duck, quacks' like a duck, waddles like a duck its probably a duck), to suggest that even for a short amount of time in the future this can outperform the mighty juggernaut that is Summerset and their well proven business model with its massively impressive 33% compound annual growth rate in earnings since they listed in late 2011.

From experience, when one is taking brave gamble's its best to do it with free money, (from previous strategic re-positioning in this company), or keep the size of the bet down to a very modest level, (preferably both).

[SailorRob]

And I think this is the most interesting phrase in the Beagles post. Over and over again I see this on share-trader...the collective "we" just can't know everything. We analyse, cogitate over companies without a fraction of the information we in fact need (compare Beagles financial analysis work to what officers in the companies actually know about their businesses), we look a trends in our country, the world etc and make our investment decision accordingly. But, as Beagle highlights above, so many times...sh*t happens, government policies change, wars, etc etc. Wait until Jacinda gets in for a third term and without the immediate pressures of COVID starts to implement some really big social changes. Or National with some Balance the books efforts.

In my opinion it reinforces the need for well diversified portfolios, and if you have enough cash, not just within New Zealand and perhaps Australia, more widely as well. USA, UK..Europe.

Or the very opposite. Concentrated portfolios in companies which none of this matters. Diversification will guarantee only mediocrity at best.

Nobody living outside NZ would consider it as a destination for their capital. They might invest in one company perhaps, so I don't know why it's different for us.

[SailorRob]

Beagle said it all.

NTA that cannot produce earnings are not assets at all and thus the market will price them below book.

Maybe this company should just be development and hock off the product to the other ones that can actually operate the assets?

[couta1]

Or the very opposite. Concentrated portfolios in companies which none of this matters. Diversification will guarantee only mediocrity at best.

Nobody living outside NZ would consider it as a destination for their capital. They might invest in one company perhaps, so I don't know why it's different for us. Most people that go into business only have 1 business and put their all into it, a falling tide causes all boats to drop toward the bottom no matter how many you have.

[Beagle]

Most people that go into business only have 1 business and put their all into it, a falling tide causes all boats to drop toward the bottom no matter how many you have.

You make a good point. The whole sector is under really serious pressure and the chart looks atrocious for them all and with a rapidly falling real estate market it does beg the question of how much one really wants invested in this sector ?
Let's also not forget for one minute that we have the "wonderful pleasure" of waiting until this "fabulous" socialist government release their final report and recommended changes to the retirement sector later this year sometime. I shudder to think how else they might engage in restorative justice for the masses or are going to try and socialize the cost of care onto us shareholders that you'd easily be forgiven for thinking are perceived in the halls of power in Wellington as nothing but "greedy capitalists". Maybe they will simply change the law in the property sector yet again and simply tax the "heck" out of us and call all profit in this sector both realised and unrealised as taxable profit ?
Worse still, if as RTM correctly suggested this morning, the political risk is very very real and if Jacinda gets a third term, oh my goodness, then it really will be time to run for the hills !!!!!!
I'll probably sell every N.Z. share I have and put the lot overseas if she gets a third term.

[couta1]

You make a good point. The whole sector is under really serious pressure and the chart looks atrocious for them all and with a rapidly falling real estate market it does beg the question of how much one really wants invested in this sector ?
Let's also not forget for one minute that we have the "wonderful pleasure" of waiting until this "fabulous" socialist government release their final report and recommended changes to the retirement sector later this year sometime. I shudder to think how else they might engage in restorative justice for the masses or are going to try and socialize the cost of care onto us "greedy capitalists" or simply just tax the **** out of us.
Worse still, if as RTM correctly suggested this morning, the political risk is very very real and if Jacinda gets a third term, oh my goodness, then it really will be time to run for the hills !!!!!!
I'll probably sell every N.Z. share I have and put the lot overseas if she gets a third term. If she gets a third term due to the Maori party holding the balance of power along with the Greens, thats scorched earth material right there.

[SailorRob]

Yes, most fortunes are/have been made by owning one business. Often less risky than would be suspected as total focus.

Please don't even entertain the thought of another term. The damage that would do to this country would be unthinkable.

You can install practically any government in a country with a system of checks and balances and in 3 or 4 years there is only so much damage they can do. In 9 years, all bets are off. I made the move once she got the second term governing alone, all capital removed from NZ aside from a boat and a position in STU now also sold.

Very good point regarding the socialising of care onto the shareholders. Insurance companies are always battling this as well.

[ralph]

Worse still, if as RTM correctly suggested this morning, the political risk is very very real and if Jacinda gets a third term, oh my goodness, then it really will be time to run for the hills !!!!!!
I'll probably sell every N.Z. share I have and put the lot overseas if she gets a third term.

I'm afraid to say she /they will be in again with the race based political game she is playing with the far left groups greens and maori party They have carved a niche for themselves that will be hard to break

[Waltzing]

"Beagle said it all."

yep at MR B's Best!

[850man]

"Beagle said it all."

yep at MR B's Best!

I'll second that! For me, some very big decisions if the left get a 3rd term

[Waltzing]

" left get a 3rd term"

yes some high net worth investors may even start or already have moved funds off shore out of this tax jurisdiction.

New DOOM DAY BOOK coming in the form of tax legislation.

[bull....]

will it reach 91c today lower weekly bolly

[couta1]

will it reach 91c today lower weekly bolly No it won't and on any positive US days next week it will start to climb toward the result as some punters won't want to miss out.

[bull....]

No it won't.

is that your massive order in at 91

[couta1]

is that your massive order in at 91Nah the stock currently makes up 33% of my total portfolio so thats enough for my new conservative self.

[bull....]

Nah the stock currently makes up 33% of my total portfolio so thats enough for my new conservative self.

no doubt about you go large , i go large too. im large in cash at the moment

[couta1]

no doubt about you go large , i go large too. im large in cash at the moment Cash is dead money going backwards at the rate of inflation although everyone should have a wee stash for emergencies, there is really no place to hide in times like these.

[Beagle]

If she gets a third term due to the Maori party holding the balance of power along with the Greens, thats scorched earth material right there.
https://en.wikipedia.org/wiki/Scorched_earth Not a phrase you hear very often but entirely appropriate to the frightening scenario you outline. For those that don't know what it means it refers to things being left as a wasteland designed to thwart the efforts of the opposing party when they gain control. My thoughts about a wasteland are that if you must endure one for another three years make sure the vast majority of your assets are somewhere else !!

I like cash and short term deposits a lot, its been my favorite and best performing asset class and has made up more than 60% of my portfolio since November 2021. I have thought for quite some time now that 2022 is going to be a VERY tough year in the markets, it certainly has been so far :scared: Cash has outperformed almost all markets in the world so far this year and confers tremendous value in terms of optionality in regard to buying shares at cheaper prices in the future. In effect, you beat inflation by buying assets that are going down, (shares, houses, boats... whatever else is going down) at heavily discounted prices in the future. There's no rule that says you have to be invested 100% in the market all the time !

[bull....]

Cash is dead money going backwards at the rate of inflation although everyone should have a wee stash for emergencies, there is really no place to hide in times like these.

i mentioned on the black monday thread us dollars. thats why its so strong everyones parked up cash in it also energy is doing good. but i agree with you going forward it may get very difficult to hide

[couta1]

OCA getting wacked by far the hardest of the retirement sector stocks today.:mad ;:

[850man]

OCA getting wacked by far the hardest of the retirement sector stocks today.:mad ;:

SP at 75% of NTA - bloody hell!

[couta1]

SP at 75% of NTA - bloody hell! You can't control the reef fish. Lol

[winner69]

SP at 75% of NTA - bloody hell!


Jeez don’t frighten me …I read that comment as a 75% discount to NTA

[winner69]

OCA getting wacked by far the hardest of the retirement sector stocks today.:mad ;:

Must be a few reasons why OCA always seem to get ‘whacked the hardest’ eh

[Beagle]

The whole sector is persona non grata and likely to stay that way while the real estate market is in steep decline.

[BlackPeter]

The whole sector is persona non grata and likely to stay that way while the real estate market is in steep decline.

OCA was two years ago (for one day) on super special for 40 cents. No fundamental reasons at all, just lots of negative hype during the first Covid dip.

So, what exactly are we worried and complaining about? At worst this is another amazing opportunity to ride the negative hype wave and play a deep value game.

Just spare a thought for the poor buggers who sold the shares last time at ridiculous prices (say anything below 80 cents). They will need to live with their money destroying decision forever. Just try as well not to make the same mistake!

[Ggcc]

So, what exactly are we worried and complaining about? At worst this is another amazing opportunity to ride the negative hype wave and play a deep value game.

Lack of staff and the lack of funding.

I just hope the government either changes their funding structure for retirement villages and/or villages start charging much more for care, or the villages start focusing less on helping and more on making money.

I want the best option which benefits residents and the business.

[bull....]

OCA was two years ago (for one day) on super special for 40 cents. No fundamental reasons at all, just lots of negative hype during the first Covid dip.

So, what exactly are we worried and complaining about? At worst this is another amazing opportunity to ride the negative hype wave and play a deep value game.

Just spare a thought for the poor buggers who sold the shares last time at ridiculous prices (say anything below 80 cents). They will need to live with their money destroying decision forever. Just try as well not to make the same mistake!

there was plenty of reason it was 40c because when covid first appeared everyone thought old people would all die , therefore oca would have no business

[couta1]

Lack of staff and the lack of funding.

I just hope the government either changes their funding structure for retirement villages and/or villages start charging much more for care, or the villages start focusing less on helping and more on making money.

I want the best option which benefits residents and the business. To really stick it to the Govt all they need to do is to only take private paying punters into their care centers, the thousands left on the sidelines would then become the Govt's problem to sort out, that is essentially why all the not for profits are closing because a lot of their residents are Govt subsidised and as we know undersubsidised means loss running.

[Beagle]

"So what exactly are we worried and complaining about ?" Answered comprehensively already. This is not a 23 March 2020 "many thought the end of the world as we knew it was near type scenario". The market is waking up to the fact that underlying earnings have never grown since this listed 5 years ago and in a white hot super intense demand situation for care and nursing staff, future care cost inflation might actually be worse than what's been experienced in the past ! (7-8% per annum). Remember that OCA has experienced care cost inflation at 7-8% per annum when inflation generally was benign at 2% per annum ! What's care cost inflation going to be for them in the current much higher inflation environment ?

Even if they can execute some earnings per share growth in the next two years there was an interesting comment I took note of on CNBC this morning.
Discussion topic was of lack of authenticity in possible perceived future earnings growth due to high inflation.

Let me outline a possible future scenario to illustrate my point. Here's the thing. Suppose underlying earnings for the year ended 31 March 2024 are in fact 10-11 cents per share. At face value we might all breathe a sigh of relief that earnings have grown since they floated 7 years prior and that on the face of it the business is finally working for shareholders. Thank goodness for that we might collectively think, but wait !
If inflation is running at 7% for the next 2 years, (is there anyone left who believes its transitory anymore ?), that's 3 years of inflation at that level counting last year which combined with inflation since this listed means earnings in real inflation adjusted terms are still going nowhere ! Effectively the apparent earnings growth becomes disingenuous earnings growth through high inflation...just one more thing to keep in mind for the future for all companies not just this one.

[Ggcc]

there was plenty of reason it was 40c because when covid first appeared everyone thought old people would all die , therefore oca would have no business
After the Alpha and Delta, they see the old don’t die in their masses from covid (omicron), they all die with covid……. A death is horrible for any family to deal with, but based on stats the retirement villages and investors should not be too worried about Omicron if residents get regular boosters.

[bull....]

After the Alpha and Delta, they see the old don’t die in their masses from covid (omicron), they all die with covid……. A death is horrible for any family to deal with, but based on stats the retirement villages and investors should not be too worried about Omicron if residents get regular boosters.

exactly once time moved on people saw that and oca recovered in price accordingly

[couta1]

After the Alpha and Delta, they see the old don’t die in their masses from covid (omicron), they all die with covid……. A death is horrible for any family to deal with, but based on stats the retirement villages and investors should not be too worried about Omicron if residents get regular boosters. For sure and death is a part of life especially at the age of the ones that died with Covid, many of them would have died by now anyways in all probability. As I have mentioned before in just one care centre I know of about 4 yrs ago, 20 residents died with the flu over that winter but you never heard about it.

[Poolboy]

Without rhyme or reason Ryman is going down disproportionately. Good thing I don't have many.

I'm not buying any more OCA just in case the bomb goes off and the market collapses completely.

[Beagle]

For sure and death is a part of life especially at the age of the ones that died with Covid, many of them would have died by now anyways in all probability. As I have mentioned before in just one care centre I know of about 4 yrs ago, 20 residents died with the flu over that winter but you never heard about it.

A while back you asked where are all the deaths ? and I told you to wait and you will see. https://www.msn.com/en-nz/news/national/covid-19-update-24-further-deaths-7347-new-cases/ar-AAWY4ES?ocid=msedgntp&cvid=37e1b881332342b68971629e63f41b4a
24 more deaths announced today. People of all sorts of ages are dying from Covid including one aged under 10 yesterday, people in their 40's and 50's today are among the dead and 10-25 deaths per day seems to be the norm now. I think many are now desensitized to the seriousness of the issues and the numbers of deaths per day.

Its a very serious situation I am sure you will now agree. The extra costs the entire sector faces with infection protection measures isn't going away anytime soon and the Government isn't funding it properly. The Govt are socialising as many of the costs as they can get away with onto shareholders of retirement village companies.

To me this whole thing looks like a really enduring headwind for the foreseeable future, millions of extra dollars per annum in specific Covid inflection protection measures plus the huge surge in caregiver and nurses costs this sector faces and those most exposed to the care sector (OCA), face the strongest challenges.

I put it to you and others the shares seem cheap but they have been knocked down for a range of serious reasons and headwinds to the business the latest of which is a rapidly falling real estate market with volumes of sales drying up. Falls in value are one thing but most people have to sell their home first before they move in and if their home isn't selling in a timely way the sales of retirement village units aren't going to be completed in such a timely manner either. Reserve banks around the world are going to have to send economies into deep recession to fight inflation effectively. People hoping for a soft economic landing with interest rate increases are dreaming in my opinion.

[couta1]

Without rhyme or reason Ryman is going down disproportionately. Good thing I don't have many.

I'm not buying any more OCA just in case the bomb goes off and the market collapses completely. Lol if the bomb goes off the market will be the lest of your worries, a full scale nuke war would mean just go into survival mode and baton down the hatches to the underground bunker whilst munching on tins of baked beans.

[Beagle]

Lol if the bomb goes off the market will be the lest of your worries, a full scale nuke war would mean just go into survival mode and baton down the hatches to the underground bunker whilst munching on tins of baked beans.

We need a bit of humour on this thread to lighten the mood a bit. Speaking of baked beans Mrs B showed me this funny advertisement the other day
https://www.youtube.com/watch?v=_QD1GbIRavA&t=3s

[Ggcc]

A while back you asked where are all the deaths ? and I told you to wait and you will see. https://www.msn.com/en-nz/news/national/covid-19-update-24-further-deaths-7347-new-cases/ar-AAWY4ES?ocid=msedgntp&cvid=37e1b881332342b68971629e63f41b4a
24 more deaths announced today. People of all sorts of ages are dying from Covid including one aged under 10 yesterday, people in their 40's and 50's today are among the dead and 10-25 deaths per day seems to be the norm now. I think many are now desensitized to the seriousness of the issues and the numbers of deaths per day.

Its a very serious situation I am sure you will now agree. The extra costs the entire sector faces with infection protection measures isn't going away anytime soon and the Government isn't funding it properly. The Govt are socialising as many of the costs as they can get away with onto shareholders of retirement village companies.

To me this whole thing looks like a really enduring headwind for the foreseeable future, millions of extra dollars per annum in specific Covid inflection protection measures plus the huge surge in caregiver and nurses costs this sector faces and those most exposed to the care sector (OCA), face the strongest challenges.

I put it to you and others the shares seem cheap but they have been knocked down for a range of serious reasons and headwinds to the business the latest of which is a rapidly falling real estate market with volumes of sales drying up. Falls in value are one thing but most people have to sell their home first before they move in and if their home isn't selling in a timely way the sales of retirement village units aren't going to be completed in such a timely manner either. Reserve banks around the world are going to have to send economies into deep recession to fight inflation effectively. People hoping for a soft economic landing with interest rate increases are dreaming in my opinion.
I don’t know how to word it, but I feel all the people I speak to have had a guts full of Omicron and the bull&$@ spewed to us by this government. Omicron is not as deadly as what has been portrayed and the new variants will be with us for ever. We cannot live our lives in fear and certainly our economy can’t cope with living in fear.

The Shops I go where customers are not wearing masks anymore are growing. Supermarkets allow people in without masks, where before they didn’t.

I think England is on the right track and in pockets of Europe Covid is seen as not a thing anymore by the average person living there. Plus half the rules here make little to no sense.

[SailorRob]

A while back you asked where are all the deaths ? and I told you to wait and you will see. https://www.msn.com/en-nz/news/national/covid-19-update-24-further-deaths-7347-new-cases/ar-AAWY4ES?ocid=msedgntp&cvid=37e1b881332342b68971629e63f41b4a
24 more deaths announced today. People of all sorts of ages are dying from Covid including one aged under 10 yesterday, people in their 40's and 50's today are among the dead and 10-25 deaths per day seems to be the norm now. I think many are now desensitized to the seriousness of the issues and the numbers of deaths per day.

Its a very serious situation I am sure you will now agree. The extra costs the entire sector faces with infection protection measures isn't going away anytime soon and the Government isn't funding it properly. The Govt are socialising as many of the costs as they can get away with onto shareholders of retirement village companies.

To me this whole thing looks like a really enduring headwind for the foreseeable future, millions of extra dollars per annum in specific Covid inflection protection measures plus the huge surge in caregiver and nurses costs this sector faces and those most exposed to the care sector (OCA), face the strongest challenges.

I put it to you and others the shares seem cheap but they have been knocked down for a range of serious reasons and headwinds to the business the latest of which is a rapidly falling real estate market with volumes of sales drying up. Falls in value are one thing but most people have to sell their home first before they move in and if their home isn't selling in a timely way the sales of retirement village units aren't going to be completed in such a timely manner either. Reserve banks around the world are going to have to send economies into deep recession to fight inflation effectively. People hoping for a soft economic landing with interest rate increases are dreaming in my opinion.


Dying with Covid or of Covid?

The excess death rate per 100,000 over the 2015-2019 average is all we should be looking at.

Many people of all different age groups die every day in NZ and always have done. With Covid raging, a percentage of these people who are dying in the same number as they did in 2019 will have Covid and be reported as Covid deaths like the gangster who was shot point blank between the eyes and registered as a Covid death.

I have Covid right now and have only had a singe jab a long time ago. It's nothing more than a mild annoyance, granted different for other people but a normal flue is literally an order of magnitude worse.

So the question is who is actually dying from Covid, lets see the excess death statistics.

[SailorRob]

I don’t know how to word it, but I feel all the people I speak to have had a guts full of Omicron and the bull&$@ spewed to us by this government. Omicron is not as deadly as what has been portrayed and the new variants will be with us for ever. We cannot live our lives in fear and certainly our economy can’t cope with living in fear.

The Shops I go where customers are not wearing masks anymore are growing. Supermarkets allow people in without masks, where before they didn’t.

I think England is on the right track and in pockets of Europe Covid is seen as not a thing anymore by the average person living there. Plus half the rules here make little to no sense.

Spot on mate, Covid is a joke.

Good friend is a flying doctor in Western Australia and covers a massive area with hundreds of thousands of people. They haven't lifted ONE person due to Covid this entire time.

They were doing 3 a week at one stage with myocarditis, all guys in their 20's (none had Covid)

[Poolboy]

Lol if the bomb goes off the market will be the lest of your worries, a full scale nuke war would mean just go into survival mode and baton down the hatches to the underground bunker whilst munching on tins of baked beans.

The tip of the day? Invest in Kraft Heinz?

[couta1]

Dying with Covid or of Covid?

The excess death rate per 100,000 over the 2015-2019 average is all we should be looking at.

Many people of all different age groups die every day in NZ and always have done. With Covid raging, a percentage of these people who are dying in the same number as they did in 2019 will have Covid and be reported as Covid deaths like the gangster who was shot point blank between the eyes and registered as a Covid death.

I have Covid right now and have only had a singe jab a long time ago. It's nothing more than a mild annoyance, granted different for other people but a normal flue is literally an order of magnitude worse.

So the question is who is actually dying from Covid, lets see the excess death statistics. Yes exactly, he should have said with Covid, of Covid is just a Govt propaganda line or was. 14 of my family/extended family have had Covid (7 vaxxed and 7 unvaxxed) all cases were mild in both groups excepting 1 which required hospilization (vaxxed member) The elderly living in OCA facilities are far more protected than those in the community with the measures put in place so I don't see why there should be a greater concern, people die every day in these facilities from a variety of causes, its a hatch and dispatch type business.

[SailorRob]

The tip of the day? Invest in Kraft Heinz?


A business using 7 Billion in tangible assets and returning 6 billion pre tax on that - as Warren says, that's one hell of a business.

[Snoopy]

I don’t know how to word it, but I feel all the people I speak to have had a guts full of Omicron and the bull&$@ spewed to us by this government. Omicron is not as deadly as what has been portrayed.


Are you sure about that?

https://www.news-medical.net/news/20220504/Study-suggests-SARS-CoV-2-Omicron-is-as-deadly-as-past-variants.aspx

It could be it is only the extremely successful vaccination campaign that has made Omicron 'seem' less deadly. New Zealand is near the top of the ladder in death rates per 100,000 people right now. We are on track for around 3,000 deaths 'with Covid' this year I reckon. The historical estimate is that we lose 500 people 'with the flu' each year. So it looks like Omicron is six times worse than the flu from a mortality perspective. And that is because Covid-19 is so much more transmissible than the flu, not because it is necessarily more pathogenic. It is the R value that is the real menace behind Covid-19 these days, not the pathenogicity.



We cannot live our lives in fear and certainly our economy can’t cope with living in fear.


I am going to wait for the Omicron wave to wash though before I let my guard down. That isn't because of fear (I do believe I will get Covid-19 in the end, am resigned to it, as in the longer term there will be no way to dodge it). But I would rather catch it later, when we have more meds and the medical boffins know more about the virus, and there are more hospital beds available.



I think England is on the right track and in pockets of Europe Covid is seen as not a thing anymore by the average person living there.


The United Kingdom is currently the only country in the OECD with a higher hospitalisation and death rate than NZ. Not exactly a shining example to follow.

SNOOPY

[SailorRob]

Yes exactly, he should have said with Covid, of Covid is just a Govt propaganda line or was. 14 of my family/extended family have had Covid (7 vaxxed and 7 unvaxxed) all cases were mild in both groups excepting 1 which required hospilization (vaxxed member) The elderly living in OCA facilities are far more protected than those in the community with the measures put in place so I don't see why there should be a greater concern, people die every day in these facilities from a variety of causes, its a hatch and dispatch type business.


Lets see the EXCESS death statistics, then we can start to fear Covid more than we would wide scale Nuclear war, oh wait... Most people already do.

After that lovely fellow got blasted between the eyes with a high speed piece of lead and was subsequently presented to us as a Covid death... I thought the game was up.

Apparently not.

Beagles commentary regarding the affect it is having on these companies however is bang on.

I don't know much about Ryman but do know it's one hell of a company and I also know that either one or both of the September $16 price or the current price is significantly mispriced. Was trading at $9 in 2014 for gods sake.

The PE has never been this low. Even if it never grows from here, you have a very satisfactory investment (provided the don't blow coin chasing growth).

Despite all that Beagle has correctly raised - what am I missing? This is one of NZ's true Blue-chips selling at a fraction of the market multiple.

[Ggcc]

Are you sure about that?

https://www.news-medical.net/news/20220504/Study-suggests-SARS-CoV-2-Omicron-is-as-deadly-as-past-variants.aspx

It could be it is only the extremely successful vaccination campaign that has made Omicron 'seem' less deadly. New Zealand is near the top of the ladder in death rates per 100,000 people right now. We are on track for around 3,000 deaths 'with Covid' this year I reckon. The historical estimate is that we lose 500 people 'with the flu' each year. So it looks like Omicron is six times worse than the flu from a mortality perspective. And that is because Covid-19 is so much more transmissible than the flu, not because it is necessarily more pathogenic. It is the R value that is the real menace behind Covid-19 these days, not the pathenogicity.



I am going to wait for the Omicron wave to wash though before I let my guard down. That isn't because of fear (I do believe I will get Covid-19 in the end, am resigned to it, as in the longer term there will be no way to dodge it). But I would rather catch it later, when we have more meds and the medical boffins know more about the virus, and there are more hospital beds available.



The United Kingdom is currently the only country in the OECD with a higher hospitalisation and death rate than NZ. Not exactly a shining example to follow.

SNOOPY

I think if you put it out to vote the majority of people have had enough.

You are correct with the huge vaccination program it might have had helped somewhat but these stats we are fed are manipulated stats. I know of two people that died with covid. One by car accident, one by hanging and they are classed as covid deaths. Are those the stats that you would use?


Most of the people I know who contracted covid never put it on the New Zealand database. I have dodged so many bullets all kids, grandchildren, people at weddings who sat next to me and still no Covid. I did test for that to make sure I wasn’t the spreader.

The omicron waves won’t stop. Maybe after 20 waves you may feel more secure?

As for England who knows if they have the right idea, but the economy can’t handle more lockdowns right now. I think a minimum of 2 generations already owe money to pay off this covid debt.

Anyway we should head back to OCA discussions.

[winner69]

On a excess death seasonally adjusted basis OCA share price today is $1.46 .... some 2% off its all time high on this basis

Not too bad

[SailorRob]

On a excess death seasonally adjusted basis OCA share price today is $1.46 .... some 2% off its all time high on this basis

Not too bad

Is that kinda like community adjusted EBITDA!

[Beagle]

Lets see the EXCESS death statistics, then we can start to fear Covid more than we would wide scale Nuclear war, oh wait... Most people already do.
Despite all that Beagle has correctly raised - what am I missing? This is one of NZ's true Blue-chips selling at a fraction of the market multiple.

The sad truth is that until this current war in the Ukraine very few people I know had ever seriously worried about the threat of Nuclear war.
RYM was hideously overpriced in 2014 and called as such by Winner and I and has underperformed the market since then. I believe on an earnings basis its still the most expensive stock in this sector but based on their growth rate in recent years it doesn't deserve to be. I might run the ruler over it again after they report on the same day as Oceania on 20 May except it might not be for a few days after that because it takes a long time to digest the dog's breakfast that is OCA financial statements.

Thanks for your thoughts Snoopy. From the comments of others its clear that many, as I suggested earlier, have become desensitized to ~ 20 deaths a day with or from Covid.

[SailorRob]

The sad truth is that until this current war in the Ukraine very few people I know had ever seriously worried about the threat of Nuclear war.
RYM was hideously overpriced in 2014 and called as such by Winner and I and has underperformed the market since then. I believe on an earnings basis its still the most expensive stock in this sector but based on their growth rate in recent years it doesn't deserve to be. I might run the ruler over it again after they report on the same day as Oceania on 20 May except it might not be for a few days after that because it takes a long time to digest the dog's breakfast that is OCA financial statements.

Thanks for your thoughts Snoopy. From the comments of others its clear that many, as I suggested earlier, have become desensitized to ~ 20 deaths a day with or from Covid.

Clearly Beagle you are smart enough to realise 20 'with' is irrelevant. 20 'from' is a different story. You lump them together as if there is no difference.

We are desensitised to 20 deaths a day if this is the normal long running average for obvious reason. Death is normal - will happen to all of us.

IF there is a large spike in deaths FROM covid then I for one am not and will not be desensitised, it would be a true national tragedy.

[couta1]

The sad truth is that until this current war in the Ukraine very few people I know had ever seriously worried about the threat of Nuclear war.
RYM was hideously overpriced in 2014 and called as such by Winner and I and has underperformed the market since then. I believe on an earnings basis its still the most expensive stock in this sector but based on their growth rate in recent years it doesn't deserve to be. I might run the ruler over it again after they report on the same day as Oceania on 20 May except it might not be for a few days after that because it takes a long time to digest the dog's breakfast that is OCA financial statements.

Thanks for your thoughts Snoopy. From the comments of others its clear that many, as I suggested earlier, have become desensitized to ~ 20 deaths a day with or from Covid. RYM was about $6 in 2014 and hit $17 early 2020 so i dont think the former price was hideously overpriced compared to its 2020 price. The thing about RYM is that taking its share split some yrs ago into account it has returned far superior returns than all the other listed companies since its inception including SUM and easily overshadowing OCA.

[BlackPeter]

...

Anyway we should head back to OCA discussions.

Absolutely agree with this last sentence. Please stick to it ...

[Beagle]

RYM was about $6 in 2014 and hit $17 early 2020 so i dont think the former price was hideously overpriced compared to its 2020 price. The thing about RYM is that taking its share split some yrs ago into account it has returned far superior returns than all the other listed companies since its inception including SUM and easily overshadowing OCA.

Had a look on MS Money chart. At no point in 2014 did RYM have a 6 handle that I could see. RYM was $8.75 on 31 March 2014 when we were all enjoying a very robust debate about its future prospects. Winners and my comments predicting many years of underperformance are all on the record in that thread at that time. Not worth me repeating quotes already there for all to see. Go back and have a look for yourself in the RYM thread if you don't believe me.

The sad fact is the shares as of a few minutes ago at $8.70 are lower today than they were then. I am sure I don't need to remind you of a certain theorem you held for many, many years and how I told you one day SUM would be worth more than RYM because...as per the second line in my signature below, earnings matter ! Yes early investors in RYM did very well indeed while RYM enjoyed first mover advantage but SUM has dramatically outperformed RYM over the timeframe its been listed.

As for OCA they have neither sentiment nor earnings in their favour. Just a discount to NTA but there are many other property companies trading at a sizeable discount to NTA without all the headwinds OCA have, e.g. ARG to name just one.

[couta1]

Had a look on MS Money chart. At no point in 2014 did RYM have a 6 handle. Its all on the record. RYM was $8.75 on 31 March 2014 when we were all enjoying a very robust debate about its future prospects. Winners and my comments predicting many years of underperformance are all on the record in that thread at that time. Not worth me repeating quotes that are all already on the record. Fact is the shares are lower today than they were then. I am sure i don;t need to remain you of a certain theorem you held for many many years and how I told you one day SUM would be worth more than RYM because...see the second line in my signature below.

As for OCA they have neither sentiment nor earnings in their favour. Just a discount to NTA but there are many other property companies trading at a sizeable discount to NTA without all the headwinds OCA have, e.g. ARG to name just one. Yeah I just looked on my portfolio and it had a 6 handle late 2013. Fact is though which you didn't acknowledge is that RYM has still been the best investment in the sector since inception for long term holders (SUM has a huge gap to catch up to RYM on total returns) by the way my light hearted theorem lasted for near 7 yrs which is a whole lot more right than most of the other predictions on here.

[Snoopy]

I think if you put it out to vote the majority of people have had enough.


I have transferred my 'off topic' reply to this post to the Coronavirus thread. Fair point Couta (post 12582)

SNOOPY

[couta1]

You can vote politicians out. But you can't vote Covid-19 out, unfortunately.



The rules for recording deaths 'with Covid' are broad brush, I grant you that. But because you can pick outlier cases from a sample of hundreds of people, that does not invalidate all body bags. I am sorry to hear about the two people you knew who died. But the question is, if so many ambulance staff had not been stood down 'with Covid', and if the doctors and nurses were not overworked looking after hospital patients 'with Covid', and weren't so exhausted having to wear PPE all shift, would our car accident victim still be alive? With some car accident victims, I am picking the answer to be yes. Such car accident victims you describe can feed into the excess Covid-19 deaths, whether they had Covid-19 or not.

I am also aware of the severe mental stress put on some people from Covid-19 business wrecks, that -sadly- has lead to some suicides. I don't want to diminish the hurt caused to the immediate families of these people. However, the bald facts are suicides in NZ dropped over 2020. So all the Covid-19 lockdowns and associated business hurt resulted in less suicides overall.



Yes it is well known there is lots of under-reporting of RAT test results. This is why in the Omicron era, the number of cases reported each day is so unreliable that it should be ignored



So you admit to being in crowds where subsequently Omicron was shown to rampant, and you are still in denial because you didn't get the disease personally? It is the shear number of people getting sick with Covid-19 at one time that is the main problem. Until you grasp that, you won't be able to see the path out of the current situation.



So far being infected twice with Omicron is an exceedingly rare event. I can't predict the future, but let's just see.



You think if we had not had any lockdowns (and no vaccinations in that first year either), that the economy would have carried on as before?
Debt can always be 'inflated away'. In fact that is happening right now.

SNOOPY I didn't know this was another paralysis by analysis Coronavirus thread. Lol

[Beagle]

..............

[couta1]

.............. Dont know what you put in this post Beagle but it can't have been good, Saturday night's alright for fighting not Friday night. Lol

[Beagle]

Dont know what you put in this post Beagle but it can't have been good, Saturday night's alright for fighting not Friday night. Lol

Nothing untoward.. I just decided it wasn't really relevant to OCA.

[couta1]

Nothing untoward.. I just decided it wasn't really relevant to OCA. Have a good weekend.

[fish]

I think if you put it out to vote the majority of people have had enough.

You are correct with the huge vaccination program it might have had helped somewhat but these stats we are fed are manipulated stats. I know of two people that died with covid. One by car accident, one by hanging and they are classed as covid deaths. Are those the stats that you would use?


Most of the people I know who contracted covid never put it on the New Zealand database. I have dodged so many bullets all kids, grandchildren, people at weddings who sat next to me and still no Covid. I did test for that to make sure I wasn’t the spreader.

The omicron waves won’t stop. Maybe after 20 waves you may feel more secure?

As for England who knows if they have the right idea, but the economy can’t handle more lockdowns right now. I think a minimum of 2 generations already owe money to pay off this covid debt.

Anyway we should head back to OCA discussions.

Let’s not have such misinformation on any thread .
They would not have been classified as Covid deaths

[Ggcc]

I have transferred my 'off topic' reply to this post to the Coronavirus thread. Fair point Couta (post 12382)

SNOOPY
Thanks and have responded

[winner69]

Going back 5 years is always enlightening.

Here are a few comments Beagle made in March 2017 just prior to IPO. Hope Beagle doesn't mind me quoting him from back then)


Not too keen onthe care bed focus. Very little money to be made in that sector
Very unlikely I will participate based on what I have heard of their top heavy management structure.
Hmmmm, if it were not for gains on revaluation of properties (IFRS) they would have lost ($13m) in 2016, an improvement from losing ($23m) from operations in 2015. Talk of big growth by promotors does not impress me. Track record to date is well below par.
You cannot list on fancy pants multiples because of tailwinds in the sector unless you have a decent track record wherein you've proved your development model
Promotors promises of future growth when prior growth has been very modest always worry me, Tegal the last example of a float choc-a-bloc full of corporate spin.
After reviewing their previous year's financial performance already. Lets be honest, promotors can forecast anything they like, (Tegal anyone ?), but their historical financial performance speaks for itself and it isn't flash on an underlying basis.



Even percy said it was 'mutton dressed up as lamb' lol

Seems no money in care beds, high cist structure, no growth, losses if you take fair value gins etc etc etc still persist and punters still live with their promises that things are on track to riches.

So from 79 cents at IPO to 97 cents could be called a success - 4% pa plus divies to keep you interested not too bad

One thing its better than that that My Food Bag IPO ;)

Not a great story but just like My Food Bag things are going OK (operationally) at the moment so no worries

[SailorRob]

He's pretty bloody onto it. Have to be proud of that statement/analysis pre IPO.

There is more than one company making their 'profits' with property revaluations.

[justakiwi]

.....................

[SailorRob]

ST really needs a "puke" emoticon.

You loaded up at $1.50?

Damn.

[SailorRob]

ST really needs a "puke" emoticon.

Nothing vomit inducing about recognising and giving credit to great analysis and foresight. You may however feel sick for not having taken it on board.

[bull....]

lets get this right again it was only bull who said

1 before 2

everyone else was saying 2

[Beagle]

Going back 5 years is always enlightening.

Here are a few comments Beagle made in March 2017 just prior to IPO. Hope Beagle doesn't mind me quoting him from back then)


Not too keen onthe care bed focus. Very little money to be made in that sector
Very unlikely I will participate based on what I have heard of their top heavy management structure.
Hmmmm, if it were not for gains on revaluation of properties (IFRS) they would have lost ($13m) in 2016, an improvement from losing ($23m) from operations in 2015. Talk of big growth by promotors does not impress me. Track record to date is well below par.
You cannot list on fancy pants multiples because of tailwinds in the sector unless you have a decent track record wherein you've proved your development model
Promotors promises of future growth when prior growth has been very modest always worry me, Tegal the last example of a float choc-a-bloc full of corporate spin.
After reviewing their previous year's financial performance already. Lets be honest, promotors can forecast anything they like, (Tegal anyone ?), but their historical financial performance speaks for itself and it isn't flash on an underlying basis.



Even percy said it was 'mutton dressed up as lamb' lol

Seems no money in care beds, high cist structure, no growth, losses if you take fair value gins etc etc etc still persist and punters still live with their promises that things are on track to riches.

So from 79 cents at IPO to 97 cents could be called a success - 4% pa plus divies to keep you interested not too bad

One thing its better than that that My Food Bag IPO ;)

Not a great story but just like My Food Bag things are going OK (operationally) at the moment so no worries

Regret's...I certainly have a few. At first I was a little bit miffed to be stirred from my lengthy slumber in my kennel today but its certainly given me more clarity as its actually really useful for you to post my pre-IPO thoughts because to be honest I'd forgotten how many reservations I had right from the outset. Somewhere along the way I lost my way and allowed myself to get sucked into the hype / vortex or was it the charm of Earl and his presentation at the Auckland shareholders association meeting years ago ?, or maybe a combination of all of these things ?... not really sure what it was but I made the mistake of thinking a new experimental business plan of trying to make serious money out of care might prove more profitable than the well proven independent living focused business plan of the likes of SUM. I should of known that no matter how you slice and dice it there's very little money in care.

I think its perfectly clear that SUM's very well proven business model is far superior and its fanciful to suggest this will ever trade on the same metrics as a company that has proven they can grow earnings in such an impressive way as SUM, 10 year CAGR of 33% speaks for itself. Is there any other company on the NZX that comes close to that ? The only question left for me to address is when is the right time to fix my mistake and get out of this and back into SUM ? The share price is currently so weak I don't think this is the right time...or maybe the sooner the better...I really don't know.

[Beagle]

:sleep::sleep:

[justakiwi]

I have deleted my post, not because of the neg rep I received, but because it was out of line and I own my mistakes/errors of judgement.

[Bjauck]

You loaded up at $1.50?
Damn. I added to my holding at almost that price too....not a big proportion extra but followed a broker recommendation without much extra research....! Also back in 2021 I got a DRiP allotment at $1.533/share.

[Bjauck]

I have deleted my post, not because of the neg rep I received, but because it was out of line and I own my mistakes/errors of judgement. I have made plenty of errors of judgment. I imagine most investors have made decisions they regret too!

[ralph]

I have made plenty of errors of judgment. I imagine most investors have made decisions they regret too!
To true I also added some more as the knife fell !!!

[SailorRob]

Regret's...I certainly have a few. At first I was a little bit miffed to be stirred from my lengthy slumber in my kennel today but its certainly given me more clarity as its actually really useful for you to post my pre-IPO thoughts because to be honest I'd forgotten how many reservations I had right from the outset. Somewhere along the way I lost my way and allowed myself to get sucked into the hype / vortex or was it the charm of Earl and his presentation at the Auckland shareholders association meeting years ago ?, or maybe a combination of all of these things ?... not really sure what it was but I made the mistake of thinking a new experimental business plan of trying to make serious money out of care might prove more profitable than the well proven independent living focused business plan of the likes of SUM. I should of known that no matter how you slice and dice it there's very little money in care.

I think its perfectly clear that SUM's very well proven business model is far superior and its fanciful to suggest this will ever trade on the same metrics as a company that has proven they can grow earnings in such an impressive way as SUM, 10 year CAGR of 33% speaks for itself. Is there any other company on the NZX that comes close to that ? The only question left for me to address is when is the right time to fix my mistake and get out of this and back into SUM ? The share price is currently so weak I don't think this is the right time...or maybe the sooner the better...I really don't know.

Looks like SUM did CAGR of 43% over 10 years, just looking at morningstar data? And haven't issued many shares either. Is that right?

[Beagle]

Looks like SUM did CAGR of 43% over 10 years, just looking at morningstar data? And haven't issued many shares either. Is that right?

Thanks for your comment earlier today, that was very kind. Maybe I should have stuck with my original reservations though.
I think SUM themselves stated it was 33% CAGR for the 10 year period so that's the figure more likely to be correct. I think they have been running a shares in lieu of dividend program for most of that time but to the best of my recollection there have not been any share issues, per se, only a couple of bond issues.

One other thing. Over the time SUM has been listed its up more than 8 times your money and RYM since November 2011 is up 3.4 times your money.
Before SUM listed RYM enjoyed a period of, from memory, about 15 years of first mover advantage and really cleaned up. They had a share split 5:1 many years ago. Over the long run returns for RYM have been spectacular but in the last decade since SUM listed their star has shone much brighter.
OCA has been a real mutt by comparison. They do say every dog has its day but (in case its not perfectly obvious already LOL), my patience is wearing very thin.

[Greekwatchdog]

A spending spree. https://www.nzx.com/announcements/391675

[Balance]

A spending spree. https://www.nzx.com/announcements/391675

CR on the way

[winner69]

Buying more things ... that's good

Better still it's not just eps accretive its going to 'deliver strong accretion to underlying earnings per share' .... just like all past acquisitions

Never mind onwards and upwards and hope things get better

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/391675/370056.pdf

[Greekwatchdog]

CR on the way

They raised $100m last year on a bond offer. So can't see it.

[777]

"and are funded by existing debt facilities"

Pretty clear to me.

[Balance]

"and are funded by existing debt facilities"

Pretty clear to me.

They all say that and then, they do a capital raising.

Standard listed company practice.

Could account for why sp has been weak so imo, could be a positive.

[Beagle]

What I am really liking here is:-

1.The vast majority of units acquired are independent living - This signals a very important change of direction that Brent is bringing to the company
2. Its debt funded - no point issuing shares at deeply discounted prices
3. Brent says this will be strongly earnings accretive per share even in the first year of purchase, FY23
4. The Bream Bay acquisition has considerable scope for expansion...I hear there's strong demand for retirement units in the North where its warmer.
5. In the last line of the announcement they said they are lifting their build rate to 300 units per annum ! This is VERY good news !
6. Expansion of debt facility gives scope for possibly more acquisitions on advantageous eps accretive terms.

Bream Bay looks pretty good to me, early video of the development I found on youtube https://www.youtube.com/watch?v=fJKVBTlTOTw&list=TLGG3OVx108Iaz0wODA1MjAyMg

Finally...something positive to bark about !

Also worth noting is the last village they bought in Hobsonville was a full feature one with modest care facilities. I think we are seeing a change of direction towards more independent living facilities which is really heartening. Maybe Brent reads this thread.

[winner69]

Raving about it being EPS accretive gives the warm fuzzies eh ...must be great eh ....but its all a nonsense

All it says that with out a cap raise (ie no new shares) its going to make a profit of at least $1 ,,,strongly eps accretive means more than $1

You'd hope that all things they buy are for the intent of making a profit ..... rather than just adding to the charitable work they're doing

[Beagle]

Raving about it being EPS accretive gives the warm fuzzies eh ...must be great eh ....but its all a nonsense

All it says that with out a cap raise (ie no new shares) its going to make a profit of at least $1 ,,,strongly eps accretive means more than $1

You'd hope that all things they buy are for the intent of making a profit ..... rather than just adding to the charitable work they're doing

Yes and the more profitable villages they acquire and build waters down the percentage of (lets just be honest about this), loss making basic care beds.

Heck this acquisition might even get Maverick out of his bunker with some comments. I am sure he's more relieved than most to see some positive news.

[winner69]

Got to admit those Remuera ones look pretty impressive

Ican sense Beagle backing the truck up with share price at current prices ;)

[James108]

58 apartments and 83 villas + 12 specialist care residences for $57m

That is ~$400k per residence (some of these in remuera...) not including care facilities or shared buildings.

Does that seem very cheap to anyone else? Am I missing something here....?

Ok thinking this through, the current residence are presumably under ORA's so should be quite large liability attached to these?

[Poet]

Raving about it being EPS accretive gives the warm fuzzies eh ...must be great eh ....but its all a nonsense

All it says that with out a cap raise (ie no new shares) its going to make a profit of at least $1 ,,,strongly eps accretive means more than $1

You'd hope that all things they buy are for the intent of making a profit ..... rather than just adding to the charitable work they're doing

The presentation attached to announcement says the acquisition of the two villages will add "high single digit percent accretion to underlying earnings per share in 2023"

[Beagle]

They all say that and then, they do a capital raising.

Standard listed company practice.

Could account for why sp has been weak so imo, could be a positive.

Probably pay you to read the presentation before commenting further. Pretty modest 31% gearing after this purchase and headroom of a whopping $290m for more acquisitions plus the lift in build rate to 300 units per annum.

Brent talking high single digit percent eps accretive...by that I presume he means 0.8-0.9 cents per share underlying eps accretive.
By way of comparison when they acquired the Hobsonville village and Pukekohe greenfield site they were talking low single digit eps accretive, like 0.3-0.4 cps.

I think all this really matters when the company only makes about 8 cps underlying eps.

After reading the presentation I am very pleased indeed. Its a huge relief to see Brent earning his keep.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/391675/370057.pdf

[winner69]

The presentation attached to announcement says the acquisition of the two villages will add "high single digit percent accretion to underlying earnings per share in 2023"

So going to add about 1 cent per share --- pe of 19 means share price should mover 18 cents at least

[Beagle]

Even on a PE of about 12, which seems about right for this one, to me that should be worth 10 cps but these are strange and very difficult times in the retirement sector with the share prices of all companies in this sector in very steep decline. Its well known the real estate market is falling back at serious pace so who knows how much it might add to the share price if anything ?

[bull....]

people should do the cashflow calc's on the purchase to determine if it is good or not.
just doing a purchase doesnt mean anything
remember there assumptions in such things as eps accretion next yr are based on now not on what may change in the future

[couta1]

people should do the cashflow calc's on the purchase to determine if it is good or not.
just doing a purchase doesnt mean anything
remember there assumptions in such things as eps accretion next yr are based on now not on what may change in the future Good morning Mr Gloom n Doom.

[Beagle]

people should do the cashflow calc's on the purchase to determine if it is good or not.
just doing a purchase doesnt mean anything
remember there assumptions in such things as eps accretion next yr are based on now not on what may change in the future

Realised underlying earnings per share is positive cash flow earnings. Of course they will be investing more capex in the Bream Bay development to generate future growth in realised underlying earnings in the future and they have a $290m war chest for even more acquisitions.

Be a good chap and go onto another thread and write about something you understand :p

[Bjauck]

They raised $100m last year on a bond offer. So can't see it. At 3.3% which seems like a quite low interest rate now.

SUM issued $150m at the end of 2020 at 2.3% I think.

[Beagle]

$125m fixed for 7 years at 2.30% in October 2020.
$100m fixed for 7 years at 3.30% in September 2021.

As cunning as a hungry Beagle issuing 7 year bonds on those terms !

Disc: Not backing up the truck by any means but I did add a few OCA on the open this morning at 97 cents. Provided one takes a long term view I think with this new acquisition the shares are a pretty good opportunity at below $1.

[bull....]

Realised underlying earnings per share is positive cash flow earnings. Of course they will be investing more capex in the Bream Bay development to generate future growth in realised underlying earnings in the future and they have a $290m war chest for even more acquisitions.

Be a good chap and go onto another thread and write about something you understand :p

no cashflows are superior to earnings in predicting future profitabilty.

[Beagle]

I think you are completely missing the point here bull.
The acquisition of these two villages with are vastly more orientated toward independent living units indicates a vitally important change in direction for the company.
The lift in the annual build rate to 300 units per annum is also a material change.
We really neded some good news with OCA and we've got some.
This is Brent stamping his mark of leadership on the company and I like what I see so far.
They have another $290m for future acquisitions and this one only cost them $57m. Are you getting the picture now ?
Brent was formerly a director of investment banking at Jarden. Leadership matters and under Brent's leadership we are seeing acquisitions of new villages that are predominantly independent living, (Hobsonville last year was the first example and these two are examples two and three). You see a new pattern emerging here ? I do.
I'm buying more...can't help myself... under $1 is sound long term buying.

This is a game changer, shows Brent is keen on new independent living villages and they have a whopping $290m war chest to execute more deals on attractive terms.

[Gerald]

Why don't they just do buybacks, far more accretive then this acquisition could ever be. I realize the optics might not be fantastic, straight after a raise but who cares. This has always been priced off NTA not cashflows (if any).

[winner69]

That Andrew Buckingham stamping his mark already .... only been there for a short while after they got rid of that old guy who was property and develpment manager

[Beagle]

Why don't they just do buybacks, far more accretive then this acquisition could ever be. I realize the optics might not be fantastic, straight after a raise but who cares. This has always been priced off NTA not cashflows (if any).

You might see a buy-back announced with the annual result very shortly. Wouldn't surprise me at all. Brent a very smart leader.
I believe 5% of issued shares per annum is the maximum buy-back rate, (someone please correct me if my knowledge of the buyback regulations is outdated).

They could do a 5% buy-back spread over 12 months, $35.5m shares), earmark ~ $40m for that and still have quarter of a Billion dollars for more eps accretive acquisitions. Issuing shares over a year ago @ $1.30 and buying some of them back at say ~ $1.15 makes perfect sense for shareholders.

[winner69]

Waterford acquisition has been eps accretive ....so will this one

[Beagle]

That Andrew Buckingham stamping his mark already .... only been there for a short while after they got rid of that old guy who was property and develpment manager

Good they got rid of dead wood. No acquisitions under his & Earl's "leadership", just heaps of cost increases, Earl far too soft.
Waterford and these two acquisitions in very short order under the new team + $290m war chest for more eps acquisitions. Hmmm, this is truly transformational stuff... where did I put the keys to the truck...got to be good buying at anything under $1.15
Rating upgrade announced. BBB Beagle busy buying.

[winner69]

Good they got rid of dead wood. No acquisitions under his & Earl's "leadership", just heaps of cost increases, Earl far too soft.
Waterford and these two acquisitions in very short order under the new team + $290m war chest for more eps acquisitions. Hmmm, this is truly transformational stuff... where did I put the keys to the truck...got to be good buying at anything under $1.15
Rating upgrade announced. BBB Beagle busy buying.

I'm sure they could take on more debt no trouble at all ..... war chest could be said to be over $400m

Wonder whats next on Andrew's shopping list

[winner69]

Probably getting these two sites at a 'good price'

They booked a $8.5m gain on Waterford assets when they loaded them on to the Oceania books

Pretty cool eh

[winner69]

Things seem to be getting exciting

I sense money moving from SUM (down 2% today) into a reinvigorated OCA (up 4% plus)

[LoungeLizzard]

People are getting a little carried away in regarding this acquisition as some sort of game changer. The underlying issues - high overheads, low margins, poor management, - are all still there, as are the macro economic issues of covid, inflation/interest rates, declining property market, increased building costs etc. Expanding operations at this time when the core of the business needs attention isn't a good idea in my opinion and it smacks of smoke and mirrors to draw in the gullible and to (temporarily) arrest the decline in the SP. Arvida did the same thing recently in by buying the Arena villages. It got people excited (including me) initially, but the SP has continued to decline because of the same issues that OCA are facing. There are safer places, with better yields, to park your funds.

[couta1]

People are getting a little carried away in regarding this acquisition as some sort of game changer. The underlying issues - high overheads, low margins, poor management, - are all still there, as are the macro economic issues of covid, inflation/interest rates, declining property market, increased building costs etc. Expanding operations at this time when the core of the business needs attention isn't a good idea in my opinion and it smacks of smoke and mirrors to draw in the gullible and to (temporarily) arrest the decline in the SP. Arvida did the same thing recently in by buying the Arena villages. It got people excited (including me) initially, but the SP has continued to decline because of the same issues that OCA are facing. There are safer places, with better yields, to park your funds. Its a long term hold with some positive news for future growth going forward announced, wouldn't agree with you on your safer places comment, what is safer in these uncertain times than an essential sector with 10 yr tailwinds?

[LoungeLizzard]

Its a long term hold with some positive news for future growth going forward announced, wouldn't agree with you on your safer places comment, what is safer in these uncertain times than an essential sector with 10 yr tailwinds?

Horses for courses. If you are happy with the sector to be in the doldrums for the next few years, and with inflation at 7% (and climbing) for your real return to be in the negative over that time, then good luck. There are stocks in the banking, energy, telecommunications sectors who offer a much better return whilst being just as secure.

[couta1]

Horses for courses. If you are happy with the sector to be in the doldrums for the next few years, and with inflation at 7% (and climbing) for your real return to be in the negative over that time, then good luck. There are stocks in the banking, energy, telecommunications sectors who offer a much better return whilst being just as secure. Five years is crystal ball stuff, inflation can seem out of control yet can also be tamed in a relatively short space of time. Whoops I see you said a few yrs not five but my comment still stands.

[Beagle]

People are getting a little carried away in regarding this acquisition as some sort of game changer. The underlying issues - high overheads, low margins, poor management, - are all still there, as are the macro economic issues of covid, inflation/interest rates, declining property market, increased building costs etc. Expanding operations at this time when the core of the business needs attention isn't a good idea in my opinion and it smacks of smoke and mirrors to draw in the gullible and to (temporarily) arrest the decline in the SP. Arvida did the same thing recently in by buying the Arena villages. It got people excited (including me) initially, but the SP has continued to decline because of the same issues that OCA are facing. There are safer places, with better yields, to park your funds.

The ARV acquisition involved issuing heaps of new shares at a substantial premium to NTA and OCA is trading at a significant discount to last years NTA, (we'll know the new NTA on 20 May). In addition this was debt funded. Look, I agree its not a panacea for all the challenges I've articulated very clearly that OCA are facing but it does confirm, (3 acquisitions now), a change in direction for OCA towards more independent living units and I think that's a very important trend change, and to be honest one I was really looking for. I want the company to dilute down its heavy focus on care and they are doing that and moving in the right direction.

Its not a one or the other thing as far as I am concerned, as always a balanced portfolio of well diversified assets gives the optimum risk reward portfolio.
I've moved up to 5% allocation to OCA at these discounted level's which feels about right to me. I think it was a very meaningful acquisition and the step up in build rate to 300 units per annum is also great to see and they still have $290m for more acquisitions.

[LoungeLizzard]

Five years is crystal ball stuff, inflation can seem out of control yet can also be tamed in a relatively short space of time. Whoops I see you said a few yrs not five but my comment still stands.

My angle is that we are a time where preservation of capital is key. I'm not sure that OCA offers that guarantee - it's SP is on the down escalator and it's not stopping for long at any of the floors. And it's gross yield (4.3%) isn't enough to offset inflation which is here to stay at pretty elevated levels for some time. There's no compelling reason to get on the escalator until it starts going up. TA isn't showing that the bottom floor has been reached and the macroeconomic picture is so fuzzy that even TA isn't that helpful. My gut instinct is to wait it out and wait for a genuine upturn, independent of false flags like todays announcement. I wouldn't be overly surprised if next week the SP is back in the mid-90's, and the mood of this thread turns sour again.

[winner69]

Acquisition even mentioned by RNZ

Taking Simon Henry out if the news :)

https://www.rnz.co.nz/news/business/466725/oceania-healthcare-buys-two-more-retirement-villages

[couta1]

My angle is that we are a time where preservation of capital is key. I'm not sure that OCA offers that guarantee - it's SP is on the down escalator and it's not stopping for long at any of the floors. And it's gross yield (4.3%) isn't enough to offset inflation which is here to stay at pretty elevated levels for some time. There's no compelling reason to get on the escalator until it starts going up. TA isn't showing that the bottom floor has been reached and the macroeconomic picture is so fuzzy that even TA isn't that helpful. My gut instinct is to wait it out and wait for a genuine upturn, independent of false flags like todays announcement. I wouldn't be overly surprised if next week the SP is back in the mid-90's, and the mood of this thread turns sour again. My reasonable sized holding has an avg buy of about $1.40 so I won't do anything either except sit it out, agree about the mood turning with the sp for some but not all of us. I'm not thinking the sp would drop back to that level with the result being next week.

[winner69]

If OCA share price had followed the sector down today it prob would be about 95 now

So 102 is pretty good …. 8% up in ‘real terms’

Market excited about this acquisition ….and what it signals

[bull....]

People are getting a little carried away in regarding this acquisition as some sort of game changer. The underlying issues - high overheads, low margins, poor management, - are all still there, as are the macro economic issues of covid, inflation/interest rates, declining property market, increased building costs etc. Expanding operations at this time when the core of the business needs attention isn't a good idea in my opinion and it smacks of smoke and mirrors to draw in the gullible and to (temporarily) arrest the decline in the SP. Arvida did the same thing recently in by buying the Arena villages. It got people excited (including me) initially, but the SP has continued to decline because of the same issues that OCA are facing. There are safer places, with better yields, to park your funds.

nice to have a rational view of the situation

[couta1]

nice to have a rational view of the situation Problem with your comment is that the market isn't rational, its Schitzophrenic.:cool:

[bull....]

Problem with your comment is that the market isn't rational, its Schitzophrenic.:cool:

lured them in then hammer time

[Beagle]

lured them in then hammer time

I call B.S. on that. The whole market is weak today. Really good announcement in a really weak market.

Maverick and Ferg are probably conferring privately, redoing all their spreadsheets and a few days from now will have worked out its now worth at least $1.70 ;)

[Poolboy]

You guys think OCA is doing badly. Auckland Airport, phew, I should be looking for a tall building. Mind you, perfect storm, new covid variant, higher interest rates offered in bonds and banks, war in Europe, fear of recession.

[Old mate]

Hey bull do you own any stocks at the moment? Give us the low down on your protfilio and tactics please:t_up:

[bull....]

Hey bull do you own any stocks at the moment? Give us the low down on your protfilio and tactics please:t_up:

i have said what i have been doing this yr mths ago ie energy stocks , cash parked us dollars and very nimble trading but i also just recently said whats worked this yr so far may not work going forward ie there may end up being no where to hide going forward so perhaps capital preservation is the name of the game for me now ie whats going to inflict the least loss in real terms

[Greekwatchdog]

i have said what i have been doing this yr mths ago ie energy stocks , cash parked us dollars and very nimble trading but i also just recently said whats worked this yr so far may not work going forward ie there may end up being no where to hide going forward so perhaps capital preservation is the name of the game for me now ie whats going to inflict the least loss in real terms

This is not related to OCA. Take the dribble elsewhere.

[Old mate]

Thanks bull so are you looking to get back in when you think a bottom has been set?

[bull....]

Thanks bull so are you looking to get back in when you think a bottom has been set?

evrything moves in cycles so the answer is yes. as for oca i guess you have to decide when the cycle is in there favour to make the probabilities worth the risk. ( oca is a property development company first and foremost , care is just cream )

[Ferg]

Maverick and Ferg are probably conferring privately, redoing all their spreadsheets and a few days from now will have worked out its now worth at least $1.70 ;)

Haha, I can confirm we have not been conferring and I can confirm I have not redone or reworked anything. I was busy selling a car today plus I was {busy recovering}* from weekend exertions. I'm genuinely waiting for confirmation of the annual result, hence why there is no news or update from me. OCA has the opinion this is EPS accretive - so I see no reason to re-visit anything for the moment. I will look at this again after the annual result. It is good news nonetheless and James108 posted (https://www.sharetrader.co.nz/showthread.php?9856-OCA-Oceania-Group-retirement-villages&p=955758&viewfull=1#post955758) earlier the average value acquired was circa $400k/unit. That appears like good value given Newmarket resale prices will be over $1m - but $400k will be a "nett" figure after deducting ORA liabilities. With a high average value per unit in Newmarket, that means relatively more DMF income per sale for less work/inputs, which is ultimately good. And units to be completed in the winterless North should provide more development margins. Extra margins and DMF divided into the same number of shares is naturally EPS accretive. The part I like most is the statement of adding 300+ units and care suites per year, whereas previously I believe this was ~200 per year.

*aka napping

[Muse]

Haha, I can confirm we have not been conferring and I can confirm I have not redone or reworked anything. I was busy selling a car today plus I was busy* recovering from weekend exertions. I'm genuinely waiting for confirmation of the annual result, hence why there is no news or update from me. OCA has the opinion this is EPS accretive - so I see no reason to re-visit anything for the moment. I will look at this again after the annual result. It is good news nonetheless and James108 posted (https://www.sharetrader.co.nz/showthread.php?9856-OCA-Oceania-Group-retirement-villages&p=955758&viewfull=1#post955758) earlier the average value acquired was circa $400k/unit. That appears like good value given Newmarket resale prices will be over $1m - but $400k will be a "nett" figure after deducting ORA liabilities. With a high average value per unit in Newmarket, that means relatively more DMF income per sale for less work/inputs, which is ultimately good. And units to be completed in the winterless North should provide more development margins. Extra margins and DMF divided into the same number of shares is naturally EPS accretive. The part I like most is the statement of adding 300+ units and care suites per year, whereas previously I believe this was ~200 per year.

*aka napping

is weekend exertions codeword for today's hangover? :)

one of life's great pleasures is when other people are hungover and you are not.

[Beagle]

Haha, I can confirm we have not been conferring and I can confirm I have not redone or reworked anything. I was busy selling a car today plus I was {busy recovering}* from weekend exertions. I'm genuinely waiting for confirmation of the annual result, hence why there is no news or update from me. OCA has the opinion this is EPS accretive - so I see no reason to re-visit anything for the moment. I will look at this again after the annual result. It is good news nonetheless and James108 posted (https://www.sharetrader.co.nz/showthread.php?9856-OCA-Oceania-Group-retirement-villages&p=955758&viewfull=1#post955758) earlier the average value acquired was circa $400k/unit. That appears like good value given Newmarket resale prices will be over $1m - but $400k will be a "nett" figure after deducting ORA liabilities. With a high average value per unit in Newmarket, that means relatively more DMF income per sale for less work/inputs, which is ultimately good. And units to be completed in the winterless North should provide more development margins. Extra margins and DMF divided into the same number of shares is naturally EPS accretive. The part I like most is the statement of adding 300+ units and care suites per year, whereas previously I believe this was ~200 per year.

*aka napping

One of life's great luxuries is to be able to be napping on a Monday. I was doing a lot of dog napping yesterday until someone poked me so I thought I'd poke someone else and wake them up...Maverick must be having a really deep nap LOL
Good to see we're on the same page.

SP today did okay in the context of the market down 2%, SUM down 33 cents and RYM, oh my goodness, down 51 cents, or nearly 6% ! Its never been the same since Simon Challis left, all the proof you need of the value a good leader brings to the business. Speaking of good leadership...I am encouraged by what I see today from our man Brent.

[Baa_Baa]

One of life's great luxuries is to be able to be napping on a Monday. I was doing a lot of dog napping yesterday until someone poked me so I thought I'd poke someone else and wake them up...Maverick must be having a really deep nap LOL
Good to see we're on the same page.

SP today did okay in the context of the market down 2%, SUM down 33 cents and RYM, oh my goodness, down 51 cents, or nearly 6% ! Its never been the same since Simon Challis left, all the proof you need of the value a good leader brings to the business. Speaking of good leadership...I am encouraged by what I see today from our man Brent.

I'm liking the value emerging in OCA even at current SP, but have to say, SUM and RYM have been gutted and are back on the close-watch list for a re-entry. Might be a while until the TA says buy, but whenever that is it will be quite the contrast from being premium priced.

[Maverick]

I'm genuinely waiting for confirmation of the annual result, hence why there is no news or update from me. OCA has the opinion this is EPS accretive - so I see no reason to re-visit anything for the moment. The part I like most is the statement of adding 300+ units and care suites per year, whereas previously I believe this was ~200 per year.

Excellent summery Ferg. Your points are well laid out and I agree with your entire post. Like you , the biggest takeaway from this update for me is the new official build rate . Build rate has averaged 215 and going to 300 next year is VERY significant.

We all pretty well know that any analysis and discussing of it right now is pointless, firstly as new numbers are only 11 days away but even more importantly with SP falls like this, for most people the base of the brain stem is firmly in charge for now.

While a welcome announcement , nothing is unexpected. Joining the dots from the over size of last years capital raise and AGM director comments of further acquisitions were inevitable. Plus Brent already said , just one time only though, the build rate would accelerate to 300-350. Other clues where hiring of 2 more top brass and greatly expanded capex last HY.
It is very nice though to see it all being formalized and being executed, as they always have.

TBH The flat, uninteresting and isolated landscape of Bream Bay ( that's 30 minutes south of Whangarei) had me a bit surprised as its not OCAs style. But then I was even more surprised to see the average price of houses there is $1m!
Buggered if I know how they can fill 80 odd villas with no care offering from a population of 2500 people but everything is presold so maybe there's just no competition. OCA does have to kind of reinvent its style somehow if its to expand in 5-7 years as it runs out of ultra high end areas to build in. So I cant see why it isn't worth a crack as its harmless enough to just add more villas as demand suits. The other Newmarket purchase , at a sensible price, is a no brainer, a classic OCA offering. It will be making money from day one. I especially like how they are all new builds and it was all done with no new shares issued as Ferg pointed out, eps accreditive. A very pleasing announcement for sure.

Anyway, the overall fear out there is palpable and its possible this announced might only have brought us 1 day of relief before the carnage continues tomorrow. RYM the gold standard is being absolutely pummeled and SUM now looking shaky too. I like to think ARV and OCA cant fall much further ,if at all, due to their asset backing.

I expect that the upcoming FY result of OCA will be at least $58m and hope that is enough to halt the share price semi-crash. With RYM and ARV also reporting I also expect them to both have solid results so just maybe that will be enough to show the international markets/sellers that our NZ RV stocks with our magical ORA contracts are not just "domestic homebuilder companies" that they are accustomed too in their own countries.

Its also very pleasing to see all of us OCA posters who have followed OCA for years now ( and merely at breakeven after 3 years of SP disappointment) that we are all agreeing there has become unmistakable value here now, even Beagle buying some of this flea infested mutt this morning....say whaaaaat!

[Beagle]

Good to see you weren't napping all day Mav. We'll be okay, Brent has started applying liberal amounts of flea powder to this mutt ;)
One more thing about yesterday's acquisitions.

Couldn't help noticing that he's talking high percentage of single digit underlying eps accretive or words to that effect which I interpret to mean adding 0.8 cps or thereabouts to underlying eps in FY23, (which is about a 10% boost to earnings but its interesting to note the villages are not settling until about July according to this article
https://www.nzherald.co.nz/business/retirement-village-action-oceania-infratilsuper-fund-winton-radius-whos-buying-whos-selling/T3D5OR5TFIRDQPUDB4PT7PKE3A/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338 (Paywalled sorry) so if they can earn say 0.8 cps in 8 months of FY23, maybe these acquisitions are 1.2 cps eps accretive in FY24 and even more on a per annum basis in the future as they roll out further development of the Ruakaka village ?

Like you Maverick I was pleased to see the (not unexpected) confirmation of increased build rate and the $290m war chest should come in really handy in an environment where some smaller operators are struggling to maintain their care services and may sell cheaply.

Who knows, Brent has the background (former director of investment banking at Jarden) to know all about share buy-backs and how they can also be earnings accretive so maybe we'll see some announcement about this in due course ?

My very rough guess of NAV including all developments in progress and all units at retail price (not the discounted values on unsold units the valuers use) is about $1.50 so there must be good value here in the late 90 cent range.

One things for sure, there's been a LOT more news on the acquisition front since Brent took over as CEO and I find that quite heartening, hence seeing yesterday's announcement taking everything in it into account as very encouraging. Wonder what's next on their $290 million shopping list ? I am sure there will be many more eps accretive acquisitions to come. Better stop yapping now...might get too waggley tailed and excited and end up barking myself into buying too many lol

[Maverick]

Great post Beagle.
Funny you point out today about EPS being 0.8% accreditive. It stood out for me too rereading things this morning.

They know the cost of their borrowing and the incomes likely and I also find that OCA don't exaggerate. So I think it will actually happen.
Ironically , That would mean after 4 years of no EPS growth during that time these 2 acquisitions alone will create more growth than the total sum achieved for all of the toil of the last 4 years.
Of course that's a bit tongue and cheek because you know I'm a fervent believer that the foundation work of the last 4 years and it will finally start bearing ongoing fruit as of the 20th of this month.

You're other point is prescient about OCA s war chest putting it in a strong position to benefit from industry consolidation as we head into troubled times.

Finally, the discounted asset backing of this company to share price blows my mind. New buildings DO NOT go down in value. Their existing older stuff has not been over inflated over the last 2 years as per the mum and dad residential market so seems robustly priced to me to endure any domestic house pricing fall.
How on earth can we buy this stuff today at c.30% discount to cost price???

[winner69]

Hey Mav -- had to laugh at this what you said 'I also find that OCA don't exaggerate'

Remember the days they had an exec LTI scheme in 2018 - the hurdle for them to get rich was Underlying Earnings to grow at 35% pa from 2017 (eps 5.6 cents) through to May 2020. Implied target for May 2020 therefore was eps of 13.8 cents --- like about $85m they were going to achieve .... got $43m

BIG FAIL eh

They have a new LTI scheme (from last year) but won't tell me what the hurdle underlying growth rate is .... wonder why? Hope they get the bit where there share price doesn't do as badly as their peer group.

Whatever we will have to see if they have exaggerated this time around won't we. I don't have the faith you have

[Maverick]

Fair enough Winner , nothing gets past you.:),
Yes, massive fail there for sure (maybe the private equity guys back then had something to do with that unbridled ambition)
so OK apart from that small oooops, I have found their over detailed reporting and any accompanying statements to be always very accurate and Ill even say that the much jeered "point of inflection" has also been accurate, ( now remember that was only said for the "care division" and it did inflect half way through 2020 just as they predicted 6 months earlier).

Are far as faith in this company goes, I don't run on any faith whatsoever, that implies believing or hoping in the unknown.
As my tree felling guys says ..." its all physics and math's".

[850man]

Weird day - OCA have some relatively good news, SP down 2%, RYM have no news, SP up 6.7%....

[couta1]

Weird day - OCA have some relatively good news, SP down 2%, RYM have no news, SP up 6.7%.... Probably one of those US funds that only invests in RYM when it comes to our retirement stocks pushing it up.

[winner69]

Probably one of those US funds that only invests in RYM when it comes to our retirement stocks pushing it up.

Maybe run by somebody who remembers Ryman being one of top 10 Value Creators in health sector …globally.

Stayed in that list for years …..reputation may still exist in that part of the world

Not many NZ stocks have ever appeared on that report

[couta1]

Maybe run by somebody who remembers Ryman being one of top 10 Value Creators in health sector …globally.

Stayed in that list for years …..reputation may still exist in that part of the world

Not many NZ stocks have ever appeared on that report Yep still ranked 8th in the world in 2017, SUM others still have a long way to go aye.

[Maverick]

UBS just upgraded their target price from $1.50 to $1.55.
obviously due to the recent acquisitions.
Pretty heartening especially coming from them. I've seen their 50 page report when they commenced OCA coverage about 1.5 years ago and it was the most comprehensive and thorough from all the reports of seen to date. It specifically dealt with OCA rather than just the more generic retirement village stuff .

I rated UBS very highly after reading it.

[Greekwatchdog]

For Bars Preview.

Oceania Healthcare; OUTPERFORM — NZ$1.65 target price


Recent acquisition of two villages
OCA announced on May 9th that it has entered into agreements to acquire two premium villages; (1) Remuera Rise in Newmarket,
Auckland, and (2) Bream Bay in Ruakaka, Northland for a total consideration of NZ$57m. We will factor in this acquisition into our
forecasts when OCA reports next week and we receive more information. At face value, we view this as a sensible acquisition which
adds (1) mature cashflows and earnings potential through the Remuera Rise village, and (2) staged, large scale, broad acre
development opportunity through the Bream Bay village. OCA estimates that the deal will be high single digit accretive to FY23
earnings from the debt funded acquisition. As part of the release OCA has increased its debt facilities from NZ$350m to NZ$500m
and extended its facilities to 2027. We believe this to be a clear positive and reduces uncertainty around OCA’s debt costs over the
next five years. However, we will look for more details on the call on what OCA's debt costs will be and where the interest rates have
been fixed.

Outside of the general focus on care costs and interest expense, we will be particularly focussed on care suite DMF and build rateexpectations for FY23 and FY24 for OCA. We expect care suite DMF to grow +30% organically and see this as the number one keydeliverable to support the stock long term. OCA has guided for a build rate of 300 units and care suites, higher than our medium termforecasts and we will look for more detail on exactly how it expects to achieve this build rate.

[couta1]

UBS just upgraded their target price from $1.50 to $1.55.
obviously due to the recent acquisitions.
Pretty heartening especially coming from them. I've seen their 50 page report when they commenced OCA coverage about 1.5 years ago and it was the most comprehensive and thorough from all the reports of seen to date. It specifically dealt with OCA rather than just the more generic retirement village stuff .

I rated UBS very highly after reading it. Dont like UBS, they are huge players and market manipulators (They are forever etched in my memory from their work on A2 over the yrs) but it doesn't matter when Forbars have a tp of $1.65.

[Sideshow Bob]

Craigs as at 29/4/22 (pre new acquisitions) had an average target price of $1.51, range of $1.22 to $1.81.


We see OCA as a complementary holding in the New Zealand aged care/retirement sector, particularly for larger portfolios. It has a larger share of aged care than other exposures in our coverage list (Ryman and Summerset), meaning it is at the more defensive end of the market. We see the potential for upside and a higher return profile if management can effectively execute its brownfields development strategy along with recent acquisitions and increase contribution from retirement units, care suites and the overall portfolio to a more premium mix

[Rawz]

All these brokers with target price ~50% above todays spot price.. why arent these guys plowing their clients money into OCA?

[couta1]

All these brokers with target price ~50% above todays spot price.. why arent these guys plowing their clients money into OCA? How do you know they are not? they also need to maintain balanced weightings in each index stock to boot no matter how bullish or not they may be.

[Rawz]

How do you know they are not? they also need to maintain balanced weightings in each index stock to boot no matter how bullish or not they may be.

Just assumed the SP would be a lot higher if they were doing said plowing.

Understand your point re weightings etc

[couta1]

Just assumed the SP would be a lot higher if they were doing said plowing.

Understand your point re weightings etc You will find on those days when the price surges up they are buying eg on Monday I know Jardens were buying a lot of the volume.

[Beagle]

Thanks for those broker updates guys. Reinforces my view that the announcement was very encouraging.
Just a couple of other thoughts. That's a lot of earnings accretion with spending just $57m. I'm really looking forward to seeing what the team come up with in terms of other acquisitions with the $290m in the years ahead. My goodness, with $290m they could do five more acquisitions of the same size (2 villages), that's potentially ten new villages all earnings accretive. Wow ! Interesting times !

In addition I would think the present environment (falling real estate market and very tight labour supply situation), will present some real bargains to be had. With Brent's background I think we can trust his ability to crunch the numbers accurately so all future acquisitions will also be strongly eps accretive.

I'm doing my best not to get too excited about this given all the headwinds I've alluded too previously but I really do think the headroom they have with their new bank facility and the prospect of up to another 10 villages and the direction the company are headed with more emphasis on independent living units is very encouraging for the medium to long term.

It'll be interesting to see the new NAV when they announce their result on 20 May. While some discount to current NAV is warranted by the issues I've alluded to with their legacy basic care model if the fair value NAV is close to $1.50, given the new growth by acquisition approach I can't help but feel the size of that discount pricing this at under $1 is factoring in too much pessimism.

Pending any untoward surprises in the upcoming result I'm inclined to think its now a case of accumulate for long term slow and steady growth on any untoward price weakness under $1. Provided one takes a multi year forward view this should do okay now, provided you buy it cheap.

[SPC]

I've recently handed back a care suite from a parent no longer on the planet for recycling and the heavy duty stiffing (agreed and accepted within contract terms) incurred for a shorter than planned stay should be a positive for the books.
More reasons for a hound to smile 😉
PS fair to say the environment there was the best around and the services received absolutely first rate. No complaints there.

[Beagle]

I'm sorry for your loss mate. Its tough. I lost my Mum in April last year and I still really miss her heaps.

[SPC]

Thanks B, appreciate that.. Pity I couldn't have kept the suite for my dotage but we've both got a while to go my friend 😉

[Ferg]

We expect care suite DMF to grow +30% organically and see this as the number one key deliverable to support the stock long term.

This is what I have been talking about regarding the snowball effect. My forecast for FY22 is ~$49m for DMF, which is +30% versus an annualised FY21 value.



OCA














DMF Revenues $m







10 mths
12 mths






2014
2015
2016
2017
2018
2019
2020
2021
2021 Adj.
2022 F'cast
CAGR
CAGR
5 yrs

















Care
$0.9
$1.5
$2.3
$3.0
$3.6
$5.1
$7.8
$9.5
$11.4
$14.5




Village
$8.2
$10.0
$12.1
$13.3
$15.0
$17.9
$21.4
$22.1
$26.5
$34.9




Total
$9.1
$11.5
$14.4
$16.3
$18.6
$23.0
$29.2
$31.6
$37.9
$49.4
23.5%
24.8%


Adjust


-$3.7











Reported
$9.1
$11.5
$10.7
$16.3
$18.6
$23.0
$29.2
$31.6







13790

[Beagle]

Heck...they might even do 8.5-9 cps or maybe even a bit more ? in underlying eps in FY23 (current year PE about 11) and with the snowball steadily building momentum in the years ahead plus more strongly eps accretive acquisitions more growth appears quite plausible after that. Seems a bit cheap under $1 even with legacy care and staff inflation issues. Hope there's no nasty surprises when they report on the 20th because I am leaning towards talking myself into buying some more.

[Waltzing]

"talking myself into buying some more"

what are the expense variances for those years.. If DMF increases outpace increases in expenses by a large margin well and good.... else ...not so good.

[limmy]

Sorry, what does DMF stand for ?
Thanks

[Habits]

Sorry, what does DMF stand for ?
Thanks

Deferred management fee. The deduction from the resident's payment

[Brain]

Moods changed a lot on this thread. Wasn’t to long ago that I thought that most posters (not all) should have been put on suicide watch.

[winner69]

HPI (House Price Index) down 1.9% in April from March - last three months down 3.5%.

Jeez ... that's an annualised figure over 20%

Maybe likes of ANZ are under estimating the fell in prices

Just as well doesn't impact Oceania else we'd go all gloomy again

[Muse]

HPI (House Price Index) down 1.9% in April from March - last three months down 3.5%.

Jeez ... that's an annualised figure over 20%

Maybe likes of ANZ are under estimating the fell in prices

Just as well doesn't impact Oceania else we'd go all gloomy again

Prices usually dip after March but not by that much. Looks nasty...

[BlackPeter]

HPI (House Price Index) down 1.9% in April from March - last three months down 3.5%.

Jeez ... that's an annualised figure over 20%

Maybe likes of ANZ are under estimating the fell in prices

Just as well doesn't impact Oceania else we'd go all gloomy again

Isn't it amazing how nonsensical linear extrapolations of a cyclical trend can be ?

Its like calculating how little daylight hours will be left for us come December, based on daylight hours dropping by one hour and twenty minutes in March alone. Jeez, at that velocity we will lose another 12 hours by December, i.e. no sun left in the day. However - just imagine come next January ... it will be negative daylight hours by then :scared:

[limmy]

Thanks Habits. I can read those postings again and understand those numbers better.
Cheers,
limmy


Deferred management fee. The deduction from the resident's payment

[Beagle]

"talking myself into buying some more"

what are the expense variances for those years.. If DMF increases outpace increases in expenses by a large margin well and good.... else ...not so good.

Yes I think that sums it up very nicely. Not getting carried away adopting too many of these unloved puppies because expenses have a bad and long established habit of growing at a very fast pace.

[davflaws]

Moods changed a lot on this thread. Wasn’t to long ago that I thought that most posters (not all) should have been put on suicide watch.

Fortunately I am of equable temperament. With 40% of our portfolio in OCA @ 131 it is just as well.

It may be some time before we break out the bubbles.

[Beagle]

Fortunately I am of equable temperament. With 40% of our portfolio in OCA @ 131 it is just as well.

It may be some time before we break out the bubbles.

Wow...you must spend a lot of time out there fishing to be chilled out about that !

[couta1]

Wow...you must spend a lot of time out there fishing to be chilled out about that ! You get used to being down and taking losses (Even very large ones) it helps you focus on whats really important in life, perhaps money has too much priority in your thinking and life?

[Brain]

Fortunately I am of equable temperament. With 40% of our portfolio in OCA @ 131 it is just as well.

It may be some time before we break out the bubbles.

Yes but breakout the bubbles you will. I believe OCA is a class act that will see its day in the sun.

[Maverick]

Yes I think that sums it up very nicely. Not getting carried away adopting too many of these unloved puppies because expenses have a bad and long established habit of growing at a very fast pace.
Leaving aside the "care" expenses as you and I seem polar opposite about those of whether they are a problem or not . Bean counters see growing expenses as largesse and waste while business builders see it as investment- (spend money to make money.)
Only time can prove whether its waste or investment.

However , we do agree though on the corporate expenses have historically risen fast and consistently. FYI , I have factored in continued large corporate rises in the coming years as that's the evidence to date we have to work with. But even despite these hefty rises , should they continue at historical rates ,the growing DMF fees Ferg itemized this morning (great job too) the underlying profit will now out pace them from here. As previously posted the % rises of DMF income is now based on pretty big numbers so now out weighs the expense growth. This should become apparent next Friday.

But wait. There's more... 2 years ago we were told by Earl that corporate expense growth would level off . But its hasn't, I put this down to the stepping up build rates, 4 new acquisitions, covid , restructuring debt /bonds and all the corporate stuff associated with that. They've been bloody busy in the last 2 years so I can forgive them for now that this positive activity has all taken more people.

While I have projected the worst case of cost rises continuing into my workings , I am also quietly expecting these cost rises to level off this FY as we now have the team assembled for the up stepped work load. Now should this actually happen ( rise slower than historical), then that will be all cream on my projections. Due to the current large size of corporate costs that will be a very materially positive adjustment to my expectations in the years ahead. This is one of the key numbers I will be highly interested in next Friday.

[winner69]

Those DMF projections look good ...all feed through to bottom line don't they

[Beagle]

Fair enough Mav, I am sure there will be plenty to mull over next Friday. Might take us the weekend to soak all the information in seeing as its so "easy" to understand ;)

In the meantime here's another thought. The more acquisitions they make the greater the economies of scale with head office costs, now there's something positive I am sure we can agree on :t_up:

[Waltzing]

certainly at these prices .90 to 1.10 all the current property stocks including OCA are tempting by valuations.

but what new taxes await ANZ.

Who can possible understand those accounts without consultants.

[Muse]

HPI (House Price Index) down 1.9% in April from March - last three months down 3.5%.

Jeez ... that's an annualised figure over 20%

Maybe likes of ANZ are under estimating the fell in prices

Just as well doesn't impact Oceania else we'd go all gloomy again


Prices usually dip after March but not by that much. Looks nasty...

Westpac and ASB are saying seasonally adjusted house prices fell 0.8%-0.9% in April, or say annualised run rate of -10%. Hardly surprising to anyone, particularly retirement investors. OCA unit pricing hasn't kept pace on the way up with HPI so hopefully plenty of buffer when the resi market falls.

[justakiwi]

Anyone ever stop to think that perhaps this was a strategic decision, not bad management as some here have touted for months, prior to the recent announcement?

They know exactly what they are doing.



OCA unit pricing hasn't kept pace on the way up with HPI so hopefully plenty of buffer when the resi market falls.

[Beagle]

certainly at these prices .90 to 1.10 all the current property stocks including OCA are tempting by valuations.

but what new taxes await ANZ.

Who can possible understand those accounts without consultants.

Yes they are.
Like everyone else I know in business I am hoping we get a change of Government next year.
Unfortunately its an occupational hazard, (really bad headache almost every time), for some who must try and understand them without consultants. It wouldn't look too good if I had to hire some other firm to explain them to me lol

[winner69]

Guru Mark from Craig has same sentiments as me re how far house prices might fall.

@MarkListerNZ
With that is mind, some of those bank forecasts of a 10-15% decline don’t sound too outlandish at all, do they. Maybe they’re even a little optimistic?

[winner69]

Sharon says: Pay equity for 65,000 care workers in aged care facilities, & those who care for frail, elderly, disabled & injured people in their own homes, is unravelling. Seems like we don’t care about the carers or the people they care for.

Her cartoon

both the elderly person and the care worker in her cartoon don’t look like the cheery, happy and contented people you see in Annual Reports

[justakiwi]

While I understand where she was coming from with this cartoon, I don't like it and I feel it portrays the wrong message to the general public.

Aged care providers in general are not treating our elderly folk as "nobodies." The residents in the vast majority of facilities feel valued and cared for. Caregivers ... not so much.

Maybe this cartoon is actually making a statement about the government ... I don't know. But the public may see it as a commentary about aged care providers, which concerns me.

I am possibly the only union member who does not support another large pay claim. I have expressed my disappointment with the claim they are making as I think it is completely unrealistic. We won't get what they are asking for of course, but making outrageous pay claims damages our cause and loses us the support of the public. As far as I am concerned, we should focusing on safe staffing levels right now. More money can wait till later. More staff would go a long way to reducing the stress I am currently experiencing at work. More money, won't.

But unfortunately, I am one voice amongst 65,000 and not one of them seems to want to hear mine.


Sharon says: Pay equity for 65,000 care workers in aged care facilities, & those who care for frail, elderly, disabled & injured people in their own homes, is unravelling. Seems like we don’t care about the carers or the people they care for.

Her cartoon

both the elderly person and the care worker in her cartoon don’t look like the cheery, happy and contented people you see in Annual Reports

[couta1]

While I understand where she was coming from with this cartoon, I don't like it and I feel it portrays the wrong message to the general public.

Aged care providers in general are not treating our elderly folk as "nobodies." The residents in the vast majority of facilities feel valued and cared for. Caregivers ... not so much.

Maybe this cartoon is actually making a statement about the government ... I don't know. But the public may see it as a commentary about aged care providers, which concerns me.

I am possibly the only union member who does not support another large pay claim. I have expressed my disappointment with the claim they are making as I think it is completely unrealistic. We won't get what they are asking for of course, but making outrageous pay claims damages our cause and loses us the support of the public. As far as I am concerned, we should focusing on safe staffing levels right now. More money can wait till later. More staff would go a long way to reducing the stress I am currently experiencing at work. More money, won't.

But unfortunately, I am one voice amongst 65,000 and not one of them seems to want to hear mine. Agree completely, that cartoon is an insult to both the residents and the workers IMO, its not the face of the sector. PS-There are many, many voices like yours in the sector, you are not alone.

[Bjauck]

Sharon says: Pay equity for 65,000 care workers in aged care facilities, & those who care for frail, elderly, disabled & injured people in their own homes, is unravelling. Seems like we don’t care about the carers or the people they care for.

both the elderly person and the care worker in her cartoon don’t look like the cheery, happy and contented people you see in Annual Reports It is not a well researched article but a cartoon after all and reflects the point the person who drew it wishes to make.

I would say many workers are in the same position as health care workers insofar as the government has overseen priorities over the years that have made housing and accommodation increasingly unaffordable. Salaries are falling further behind.

[jagger]

Good they got rid of dead wood. No acquisitions under his & Earl's "leadership", just heaps of cost increases, Earl far too soft.
Waterford and these two acquisitions in very short order under the new team + $290m war chest for more eps acquisitions. Hmmm, this is truly transformational stuff... where did I put the keys to the truck...got to be good buying at anything under $1.15
Rating upgrade announced. BBB Beagle busy buying.

According to MET's linkedin profile and website Earl and Mark Stockton (former head of property at OCA), aka the "dead wood", have made the following acquisitions in the last 12 months since joining MET:
- Pukekohe (8.6ha site - 168 ILU, 60 beds planned)
- Clevedon (20ha site - 130 ILU, 60 beds planned)
- Mangawhai (13ha site - 160 ILU, 50 beds planned)
- Selwyn Foundation (6 village portfolio)
- Havelock North (4.69ha site - 150 units planned)
- Whenuapai (8.96ha site - 142 ILU, 48 beds planned)
- Wanaka (5.42ha site - 137 ILU planned)

[winner69]

The guy from MacquarieMar expecting Ryman's second-half underlying net earnings were up about 62% on the first half,

Jeez, if OCA managed to do the same their full year underlying profit will come in at about $72m

That would be more like what it should be now we past the inflection point

Bit higher than mavericks (and mine) guess but who knows --- surprises do happen

[Beagle]

Drove past their prestigious Waimarie street development yesterday. Seems to be coming along very nicely but I am not sure if it'll be complete in FY23 or its a FY24 earner ? Certainly the foundational aspects were all in place some time ago and structural aspects of the village are all getting put into place. Heaps of steel beams and stuff rising up all over the show. I'm sure there will be photo's in Friday's annual report.

[couta1]

Someone keen on dispatching a few cheap ones on close, seems illogical a few days out from result, might as well wait and see. Yep 95c bid and 99c ask displays panic selling. Lol

[bull....]

crushed , must be a leak?

[tommy_d]

Aged care providers in general are not treating our elderly folk as "nobodies." The residents in the vast majority of facilities feel valued and cared for. Caregivers ... not so much.

Maybe this cartoon is actually making a statement about the government ... I don't know. But the public may see it as a commentary about aged care providers, which concerns me.

i interpreted the cartoon as saying neither are valued enough by society, and as a consequence, government.
I've heard a lot of praise for aged care workers, and seen people in their care treated incredibly well and very happy about it

[justakiwi]

Just give it up will you. You are now becoming more than a little tedious and annoying.


crushed , must be a leak?

[ralph]

crushed , must be a leak?

Someone knows something !! that is the only logical reason so close to the hoped for good result

[justakiwi]

That is just absolute nonsense talk. The SP has been up and down like a yo yo for months, as you full well know. As has the market in general. But if it makes you both feel better to spend the next few days ago agonising about a doomsday result, be my guest.


Someone knows something !! that is the only logical reason so close to the hoped for good result

[couta1]

Someone knows something !! that is the only logical reason so close to the hoped for good result Panic doesn't know logic, just a knee-jerk reaction to the upcoming week on the US market which may or may not be bad.

[Beagle]

Probably offshore based selling at the close. RYM got really thumped at the close, even worse than OCA and also report on Friday.

[winner69]

Those who’ve sold recently will be really peeved when the takeover offer at $1.40 comes through …possibly private equity

It’ll probably be one of those dastardly Scheme of Arrangements so won’t be stopped

Ex Jarden whizz lids just can’t resist doing deals

Just speculating but I reckon quite likely ….and hoping it all happens soon

[Rawz]

Yes W69.. potential takeover floor got to be 90 cents. Why sell... all the upside and the takeover potential limits the downside

Its a buy!

[Maverick]

Those who’ve sold recently will be really peeved when the takeover offer at $1.40 comes through …possibly private equity

Just speculating but I reckon quite likely ….and hoping it all happens soon
Funny you say that Winner, I've been thinking the same thing a lot lately that a takeover almost likely. I'm not corporate savvy at all but when YOU say it , it counts.
Why wouldn't some hedge or pension fund stump up with $1.40-$1.45 and just steel it for the cost price of the buildings........all the operational and corporate systems, reputation, and imminent growth all chucked in for free. After three years of share price pain , covid fear and now house price worries, it has been relentless so surely they'd find plenty of willing sellers out there.

Quite frankly, with the first collapse of the SP 2020 and now these 9 months of death from a thousand cuts Id actually entertain capitulating myself. That might sound shocking coming from me as I still 100% believe in the company's progress, values, focus on quality and nothing about its growth prospects in my spreedsheets has changed. In fact its even increased meaningfully with their acquisitions and new increased build rate. I still calculate the SP to be north of $2 in FY2024 (PE of 18)when Waimarie starts selling and with the other income streams also snow balling.

Even despite my enormous work Ive put in to really understanding this company Id still be tempted by the idea of walking away with $1.40-$1.45 cash. Buts that's ONLY because that large tax free windfall which would allow to scoop up so many other companies out there now also going for very good entry prices.

Don't get me wrong I have not lost confidence in any way with the company. Im saying what would be a substantial windfall like that ( at this moment in time) , this fresh capital could be put straight to work in this bargain environment (other cheap quality companies RYM and FPH for starters). So come on Global Pensions R US , make an offer and well think about it.

[Goose]

crushed , must be a leak?

You love a dip in share price...YOU LOVE IT. You should report that leak that you have found (?) and report back how that works out. Yeah, I thought so. I have more confidence in the NZX regulation and OCA governance than you.

[Ferg]

I wonder if hoping for takeover should be added to Phaedrus' lists:
https://www.sharetrader.co.nz/showthread.php?8469-Buying-in-a-Downtrend

[winner69]

Infratil and Super Fund hocking off RetireAustralia has probably got a few outfits looking not just at them but other opportunities in this part of the world

Billion or so to spend....RetireAustralia or Oceania ...no question which would be the better buy

[Beagle]

Wouldn't surprise me if the EQT fund that stole MET on the cheap using Covid as the excuse for such a cheap price has a go. Covid still a valid excuse. Imagine the synergies they could extract with a merger with MET ! Earl would them be back in charge of the merged group.

I reckon if they do try and have a go they'd try and nick it though....maybe $1.20.

[Waltzing]

and scare the shareholders into selling for a lower NTA... possible MR B.

but id say right now they are only just recovering from a chase of the heebie jeebies.... at least that what they are saying... very nervous bunch at the moment in nordics...

Musk is pulling a similar move right now..

But maybe they just arnt interested when SUM other stock has shown how much faster they have driven around the track recently...

anti cyclicals are where its at... staples...

its a 2 year thing at least .

[Brain]

If OCA goes private it will be another potentially good company lost to the investing public. Totally shortsighted. Brian Gaynor used to complain about NZers selling their companies too cheap.

[Maverick]

I reckon if they do try and have a go they'd try and nick it though....maybe $1.20.".....tell 'em they're dreaming mate...."

[Beagle]

No its... Mate...you're dreamin :) https://www.youtube.com/watch?v=UT6oZqYij8U

[Maverick]

No its... Mate...you're dreamin :) https://www.youtube.com/watch?v=UT6oZqYij8U
Classic add Beagle but try this, Perhaps the best Aussy comedy ever...

YouTube https://m.youtube.com/watch?v=dik_wnOE4dk

[bull....]

You love a dip in share price...YOU LOVE IT. You should report that leak that you have found (?) and report back how that works out. Yeah, I thought so. I have more confidence in the NZX regulation and OCA governance than you.


look goose when you put a question mark after something its means you dont know maybe someone else knows. your looking for answers that someone else might know
as for being happy about the price falling i guess i could be happy if say for example i was looking to buy at 50c as thats what i thought it was worth and the price was getting closer to my buy zone then of course i would be happy to see it getting closer ... who wouldnt

[Habits]

look goose when you put a question mark after something its means you dont know maybe someone else knows. your looking for answers that someone else might know
as for being happy about the price falling i guess i could be happy if say for example i was looking to buy at 50c as thats what i thought it was worth and the price was getting closer to my buy zone then of course i would be happy to see it getting closer ... who wouldnt

Wow I thought that bull was using an insulting name to respond strongly .... then I realised that is the actual name haha

[Maverick]

Well since we weren't taken over this morning , might as well to lay out my expectations for Friday.

Care profit $24m +8%
Village profit $41.5m +11% ( not including new build margins)
New build Margin $35.5m +22%
Underlying profit $59m +18%
EPS 8.32cps +4% ( profit increase diluted by heaps of extra shares issued)
Cooperate overheads $23.8m +14% ( not including care costs, .ie nurses/ care workers)

Notes;
-It is possible cooperate overheads will be lower as at some point they should slow down these hefty increases as staff levels match the new expansion ambitions
-The biggest variable in all this is "new build margins" . OCA have a lot of apartments for sale FY22 and so depending on how good their summer sales were then this figure could vary the most, however this is not so important in the long run.
-For long term investors then most important number to watch is "village profits " and a high capex spend.

If the numbers are close enough to these then things are progressing very nicely indeed.

[couta1]

Well since we weren't taken over this morning , might as well to lay out my expectations for Friday.

Care profit $24m +8%
Village profit $41.5m +11% ( not including new build margins)
New build Margin $35.5m +22%
Underlying profit $59m +18%
EPS 8.32cps +4% ( profit increase diluted by heaps of extra shares issued)
Cooperate overheads $23.8m +14% ( not including care costs, .ie nurses/ care workers)

Notes;
-It is possible cooperate overheads will be lower as at some point they should slow down these hefty increases as staff levels match the new expansion ambitions
-The biggest variable in all this is "new build margins" . OCA have a lot of apartments for sale FY22 and so depending on how good their summer sales were then this figure could vary the most, however this is not so important in the long run.
-For long term investors then most important number to watch is "village profits " and a high capex spend.

If the numbers are close enough to these then things are progressing very nicely indeed. Dividend over or under 2c? im picking 2.1c.

[BlackPeter]

Well since we weren't taken over this morning , might as well to lay out my expectations for Friday.

Care profit $24m +8%
Village profit $41.5m +11% ( not including new build margins)
New build Margin $35.5m +22%
Underlying profit $59m +18%
EPS 8.32cps +4% ( profit increase diluted by heaps of extra shares issued)
Cooperate overheads $23.8m +14% ( not including care costs, .ie nurses/ care workers)

Notes;
-It is possible cooperate overheads will be lower as at some point they should slow down these hefty increases as staff levels match the new expansion ambitions
-The biggest variable in all this is "new build margins" . OCA have a lot of apartments for sale FY22 and so depending on how good their summer sales were then this figure could vary the most, however this is not so important in the long run.
-For long term investors then most important number to watch is "village profits " and a high capex spend.

If the numbers are close enough to these then things are progressing very nicely indeed.

I love your sense of humour and admire the precision of your forecasts.

Just one question ... if I add up the profits you are suggesting (care + village + development margins), then I get something like $100m. Divided by 710m shares would this be according to my slide ruler something like 14 cents / share, not 8.3 cents as you are suggesting.

Where did I get it wrong?

[Maverick]

I love your sense of humour and admire the precision of your forecasts.

Just one question ... if I add up the profits you are suggesting (care + village + development margins), then I get something like $100m. Divided by 710m shares would this be according to my slide ruler something like 14 cents / share, not 8.3 cents as you are suggesting.

Where did I get it wrong?
Top of the morning to ya BP.
good question.

Yes- to adding up all the 3 income streams but from this total we still need take off the corporate over heads ( called "other") then take off depreciation and finance costs before arriving at underlying profit.

OCA do most of this grouping in their reports but I further separate out the their village profits into " village" (DMFs) and "new build margins". The reason is that I see them having very separate characteristics over time. One is like a property developer which will always be tied to the number of new builds ( it is the main driver of profit in the near term) and cant grow much whereas the village part includes the DMF which is the real growth engine of OCA from here on as it starts to "snow ball" ( Ferg`s term).
By separating these 3 income streams and extrapolating the numbers for their 7yr pipeline it produces a fabulous graph which demonstrates, in 2 minutes, how OCA will grow nicely ahead and explains why its profit has been 4 flat years now.

Winner always talks about OCA telling their story poorly. If OCA ever read this thread then why don't you fellas put a graph like this in your AR somewhere. Then we will all of a sudden "get it" .

If you want me to send you the graph Brent feel free to call, I'm here all week.

[BlackPeter]

Top of the morning to ya BP.
good question.

Yes- to adding up all the 3 income streams but from this total we still need take off the corporate over heads ( called "other") then take off depreciation and finance costs before arriving at underlying profit.

OCA do most of this grouping in their reports but I further separate out the their village profits into " village" (DMFs) and "new build margins". The reason is that I see them having very separate characteristics over time. One is like a property developer which will always be tied to the number of new builds ( it is the main driver of profit in the near term) and cant grow much whereas the village part includes the DMF which is the real growth engine of OCA from here on as it starts to "snow ball" ( Ferg`s term).
By separating these 3 income streams and extrapolating the numbers for their 7yr pipeline it produces a fabulous graph which demonstrates, in 2 minutes, how OCA will grow nicely ahead and explains why its profit has been 4 flat years now.

Winner always talks about OCA telling their story poorly. If OCA ever read this thread then why don't you fellas put a graph like this in your AR somewhere. Then we will all of a sudden "get it" .

If you want me to send you the graph Brent feel free to call, I'm here all week.

Hi Mav, cheers ... and fair enough. I always forget that there are so many different types of "profits" ... and when they are all exhausted, than we still find an unlimited number of ways to define the underlying one's :) .

Probably one of the limitations of my engineering mind ... still grapple with the art of creative accounting ;) ;

How do you think all this might impact on the IFRS earnings? ... or do you subscribe to the school that only underlying earnings are real?

[Maverick]

How do you think all this might impact on the IFRS earnings? ... or do you subscribe to the school that only underlying earnings are real?
Definitely an "underlying" guy
I have no interest or idea how OCA might do this Friday based on building valuations.

Trouble with my style of investing as a contrarian investor is that IFRS (which include paper profits on buildings) can look good on paper but doesn't pay for toys and lollies. When buying an unloved or shunned company I have to wait for years for the market to realize its` oversight on a company's value so in the meantime the real cash profits both keep me going and prove the business is fundamentally working. Much easier to sleep at night too.

Also IFRS can evaporate at the stroke of a building revaluation.

Done rudely well this way from HLG, Bendon, RBD,SKL, WHS etc over the years...you get the idea. OCA fits firmly in this category and after waiting 4 years so far, due to underlying profits, I can wait indefinitely.

Sorry for such an obvious lecture to a man of your expertise BP but its NO1 fundamental to my style and worth repeating, even if its just to myself.

[Beagle]

We need a new way to measure OCA's earnings because they don't have enough variants :lol:
I might have a new theory conceptualized by Friday. I think I'll call it Hound Dog Earnings (HDE)...the only earnings that really can be squared away to a dog food bowl over time. Don't think I will bother submitting my new methodology to the international accounting body for approval though :D

[BlackPeter]

Definitely an "underlying" guy
I have no interest or idea how OCA might do this Friday based on building valuations.

Trouble with my style of investing as a contrarian investor is that IFRS (which include paper profits on buildings) can look good on paper but doesn't pay for toys and lollies. When buying an unloved or shunned company I have to wait for years for the market to realize its` oversight on a company's value so in the meantime the real cash profits both keep me going and prove the business is fundamentally working. Much easier to sleep at night too.

Also IFRS can evaporate at the stroke of a building revaluation.

Done rudely well this way from HLG, Bendon, RBD,SKL, WHS etc over the years...you get the idea. OCA fits firmly in this category and after waiting 4 years so far, due to underlying profits, I can wait indefinitely.

Sorry for such an obvious lecture to a man of your expertise BP but its NO1 fundamental to my style and worth repeating, even if its just to myself.

Cheers & all good.

I can see the pros and cons on both sides. I understand as well the uncertainties of asset valuations ... but still can't get myself to ignore stuff just because it is sometimes a bit hard measure. Sometimes embracing uncertainty might be better than ignoring it ... but hey - I am probably just a greedy bastard who wants to know what my assetts are worth when I try to realize them.

Anyway - it all started with an innocent question into what definition of EPS we are talking about.

Lets see, what OCA comes up with on Friday ... I hope they won't disappoint us and define another way to measure their success :) ... following the old saying "all good things come in threes";

Edit ... just noticed beagle did already the groundwork for this new schema: HDE's! Another (repeat-) lesson for me - always read the whole thread before replying to posts!

[winner69]

Cheers & all good.

I can see the pros and cons on both sides. I understand as well the uncertainties of asset valuations ... but still can't get myself to ignore stuff just because it is sometimes a bit hard measure. Sometimes embracing uncertainty might be better than ignoring it ... but hey - I am probably just a greedy bastard who wants to know what my assetts are worth when I try to realize them.
;

Then why don't you just track Book Value (Equity on the Balance Sheet) ---- and forget about all the different fandangled profit measures

)r if forward looking track the thing they call Net Adjusted Value

All nice and simple that way

[winner69]

Hey Mav - youforecast Underlying Profit $59m

Is that after adjusting (forgetting about) for Care Depreciation?

In other words the new Underlying Earnings measure or the old one

[BlackPeter]

Then why don't you just track Book Value (Equity on the Balance Sheet) ---- and forget about all the different fandangled profit measures

)r if forward looking track the thing they call Net Adjusted Value

All nice and simple that way

Fair enough ... but if it would be that easy then everybody would do it :) , wouldn't they?

[Maverick]

Hey Mav - youforecast Underlying Profit $59m

Is that after adjusting (forgetting about) for Care Depreciation?

In other words the new Underlying Earnings measure or the old one
I'm starting to see that those breakdown of numbers I posted previously are causing a bit of confusion.
Those 3 income stream predictions above are the KPIs I will be watching within the underlying result. As long as they are close they will tell me the story is right on track, they are more important than the bottom line to me.( Not the market though , Ha)

The $59m is the underlying profit I am expecting that OCA will report.

The key variable on this result is apartment sales, as care and village DMF profits are pretty easy to predict accurately. They have a lot to apartments available to sell and could potentially have a very good summer. I've done my best trying to ascertain new sales and things seem to be going well. I don't know for sure if Hamilton was finished enough in time or not. I know they were working their arse off the month prior to achieve it but whether those deposits got turned into official new sales before year end I just don't know.

I also have no idea of how ,much the supposed earning accreditive purchases last year will add so have ignored them for now. This just might add some extra earnings .

While these small nuisances will affect Fridays result it doesn't matter long term as long as those KPIs mentioned are about right.

Hope that helps.

[winner69]

Infratil / NZ Super still got RetireAustralia on the market and no doubt doing the rounds of potential buyers

Nd no doubt those potential buyers will look at other opportunities in this part of the world .... and doesn't Oceania stand out as a great acquisition

[bull....]

Infratil / NZ Super still got RetireAustralia on the market and no doubt doing the rounds of potential buyers

Nd no doubt those potential buyers will look at other opportunities in this part of the world .... and doesn't Oceania stand out as a great acquisition

oca seems to be holding up well before results , maybe they going to buy retireaust ?

[couta1]

Unfortunately a reasonable or good result won't move the sp if the US is red again tonight but them's the breaks.

[bull....]

Unfortunately a reasonable or good result won't move the sp if the US is red again tonight but them's the breaks.

you just have to hope if there another fall in US tonight its small then if oca result good it will rise i reckon. of course if the results bad and wall st tanks :scared: only 24 hrs to wait

[kiora]

Infratil / NZ Super still got RetireAustralia on the market and no doubt doing the rounds of potential buyers

Nd no doubt those potential buyers will look at other opportunities in this part of the world .... and doesn't Oceania stand out as a great acquisition

No updates on Retire Aus from IFT presentation today regarding its sale but RA trading well, record resales & new sales.

[bull....]

oca gone green .... is there a leak?

[Beagle]

oca gone green .... is there a leak?

Finally something you said today rings true.
For this to be up on a day like today when OCA is traditionally a high beta stock that moves more than the market on the face of it I also suspect there's a leak.

[bull....]

Finally something you said today rings true.
For this to be up on a day like today when OCA is traditionally a high beta stock that moves more than the market on the face of it I also suspect there's a leak.

leak who knows but i do agree a stock that shows strenght into a very weak market is something to notice

[mike2020]

I think up one percent on a stock that is well undervalued with expected positive results tomorrow is hardly a leak. I was going to top up today on any weakness.
When the two Bs agree I think they must be both wrong.

[couta1]

I think up one percent on a stock that is well undervalued with expected positive results tomorrow is hardly a leak. I was going to top up today on any weakness.
When the two Bs agree I think they must be both wrong. Yes agree on both points, not a convincing volume for a leak.