They should have done the CR and got it out of the way then?
Sp has gone nowhere.
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Man this is awesome. Free money. Cannot believe my luck sometimes.
Yeah, good point, they wouldn't put those properties on market unless they didn't fit the OCA strategy moving to independent living, villas, apartments etc. I don't think selling them is a direct response to balance sheet issues, there aren't any. Selling them or quitting the leases will free up a lot of capital and expenditure, but I don't see that as directly responding to a not-stressed balance sheet.
The suspension of dividends however seems to be a response to the sector pressure to reduce debt, even though debt isn't really a problem (imo). That said, the dividends were not attractive against risk free bank rates, so maybe a pause for thought, about what it takes to attract investors in the current market? No dividend at all is not helping that!
In any event, I don't think a cap raise is remotely likely. It's just not necessary. I'd give more thought to being vulnerable to a takeover as the market has priced this under 50% of NTA. A PE could go after OCA easily, do their thing stripping out costs and flog it off in a few years for a two/three bagger. The question for shareholders then, would be at what price they would give away their shares?
I agree, though maximising shareholders value is important to retain the shareholders that they already have, and I suspect a lot of them are somewhere between wanting regular dividend income and wanting an increase in the share price. Neither of which are happening right now.
Every share bought is a share sold, and at this price there are still plenty of shareholders who are not happy and feeding (selling into) the market. This constant weakness in share price (market cap) is making OCA vulnerable to outside big money interests.
What price would you agree to sell your OCA if some PE waded in with a buyout offer? It could happen. That's why I would like to see OCA more appropriately priced mark to market. To remove this vulnerability. I don't want to sell any of my OCA, let alone be forced to, to some predator PE at multiples lower than it's FV.
Hi Mav, thanks for your sharing your thoughts. Regarding your comments about ignoring care for now - isn't the care suites what OCA used to differentiate themselves and also their core strategy? And if that part is not making profit (due to the high operating cost), then OCA is unlikely to do well?
Apologies if it has been discussed before, I am a newbie despite spending some time on this forum, I am a bit slow on how to analyse businesses.