A few snippets from NBR re week ago 23rd june.Worth grabbing a copy if any left? Or going to library.
Retirement villages have had a charmed life for more than a decade, aided by a tax free business model tacitly endorsed by a grateful Govt....Tim Hunter
Confidence in the sectors use of underlying profit as a performance measure could fall, he said,"with it increasingly clear that the measure can be managed from period to period" Tim Hunter " Arie Dekker" FNZC
The contrast between the sectors high valn's and low free cashflow is "both a valuation and financial risk- particularly where alot of forward value is priced in"
"there is a limited capacity to rely on the cashflow statement for the retirement village operators either"
... An important feature of the retirement prop industry is that its biggest cashflows don't count as revenues.
... key phrase "if the mkt momentum turns"
The new bond will be used to pay down some of summer sets bank debt of about $280 million.
..."its frustrating for us.... that the offer does not provide us with insight into the key covenant of interest we have in the sector- the banks ebit/ interest coverage"
"the gap between disclosure in the listed property vehicle and the retirement village sector at results time is large...."
The criticism of disclosure standards may have already made its mark but its mere existence suggests the mkt is contemplating the end of the property boom. Or is that a bubble? Tim Hunter