It was good to hear Liz say the Board passed the skills matrix test
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Soft close for the day. Nobody really excited enough from the annual meeting to move the needle. Maverick has been very, very quiet lately.
Ok guys , after a bit of baiting, here are my findings/ opinions from yesterday's meeting.
The overall impression from meeting and the pleasure of chatting with Greg T ( the founder from 1980's) before hand , it seems OCA is trundling along as per expectations. In fact there was very little to take away other than reaffirming things are nicely on track.
A highlight for me was the new sales numbers of fy19 late deliveries are slightly ahead of my own expectations and that they are selling well and at this rate will be nearly all sold down within fy20.
Another thing of interest , but not surprising, was they are expecting care profit to be in line with last year, circa 25 million.The extra costs and inefficiencies of rebuilding are being offset by efficiencys coming on stream from fy19 deliveries and PAC and DMF fees.
i have no concerns about escalating costs (as strongly raised previously on ST) as they have gone to some effort to explain why they are what they are and their offsets. None of this is new but they gave more detail.
I made very slight tweaks upwards to the spreadsheets yesterday and long story short, FY 20 is looking on track (to me) to deliver 68 million underlying Profit , as mentioned here several months ago. ( FWIW a PE of 12.5 the share price should be around $1.39 ish in a year if this all comes to fruition, which calculations were reaffirmed in my mind yesterday.)
i am still extremely confident that FY20 is the year the money starts to sustainably turn up starting 1HY late January 2020.
They have given enough clues and numbers now to easily join the dots and that things are going hunky dory.
it was a good meeting there were no surprises and this is a very well run company doing exactly what it set out to do.
just for fun, one fellow bought 2 x Sands apartments and knocked the wall out between them , 3.5 million total, some people just have too much money.
Nice, thanks for putting in the work here Maverick
Maverick, thanks for this summary - and agree with your conclusions.
Not been to the meeting myself (wrong town ...), but I agree - the presentation did well explain the reasons for the increased cost ... and why we should not worry about it in the long term. Sounds like a sound investment.
At a SP of $1.01 stands this share in my books at a forward PE of 10.1 and an EPS CAGR of 26. Juicy, though patience might be required ...
Discl: holding (lots).
Thanks for the feedback Mav.
Consent for the St Heliers site last week was good and sales progress at the Sands and at Meadowbank seems satisfactory, although care suites are pretty slow.
Macca's will be all over squashing this like a 3 ton Elephant if it gets anywhere near your suggested target price and with a 42% shareholding there's so much supply to come to meet prospective demand that my thoughts are they are really going to have to post some magnificent numbers to get any meaningful share price traction.
Could be okay buying at about $1 but investors will need to take an extremely patient and "dogged" approach :)
Sum may put on the blinkers and ignore this... But forsyth getting less keen on OCA... target price (released today) of $1.08 (down from $1.13, but a good chunk higher than $1.01)... then we apply the ARV and SUM Discount Models (aka how 'wrong' Forsyth are with their target prices for those two companies - and have been for a year or more now)... the share price is between 85 cents (forsyth off by 27% for ARV) and 96 cents (forsyth off by 15% for SUM)... so midpoint of that means OCA overpriced and maybe should be at be at 90 cent mark :( (or maybe ARV and/or SUM share prices should be higher?)
As a holder, I'm not that happy given forsyth's analysis is clearly far to optimistic... so I think i'll ignore the analysis and put the blinkers on myself now and hope the nice words yesterday pan out into growth (forsyth do say 14% growth for FY20 which is nice)
Hey, thanks for info Maverick. Love your research, steady as she goes.
the care suits do appear slow , especially since they are going to be mass rolled out in coming years. So this is a vital consideration.
i specifically asked Greg Tomlinson (original founder) about the seemingly slow progress selling the 20 empty cares suits available at Bayview late last calendar year. (I spoke to the sales lady there 3 months ago and things did seem sluggish then)He responded things are actually going nicely there now with 17 sales since, he seems a good solid bloke and IMO wasn't " putting a spin on". Extrapolating, they should churn fully over every 2.5- 3 years which is about the target, so that's is an appropriate sale rate for self replenishing.
Then , remember the Sands care suites were delivered a month or two (again from memory) after apartment delivery. Awatere were delivered this FY and some time is then spent commissioning, getting certification etc.
So while care suites sales do appear sluggish, they have had much less time on the market that the apartments have had.