Great result. Sometimes the art is in presenting old information as if it is new. Perception goes a long way. I think this is one we will be really glad to have gotten in so early on in a few years.
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Great result. Sometimes the art is in presenting old information as if it is new. Perception goes a long way. I think this is one we will be really glad to have gotten in so early on in a few years.
[QUOTE=Baa_Baa;722391]Don't forget that the government doesn't pay for everyones care, accomodation etc at these facilities.
Hello Baa. Thanks you for your input. Well my research says the government is rather generous in its payment for care. It pays approx $1140 for care per week and $1489 per week for hospital care (these are very unwell/elderly folks, terminal, and there is a tidal wave coming, me included). And lets not even mention trusts!!!!!!!!!!! or should I say rorts??
So here are some stats from the Department. Also a ring to any of the good care resorts will tell you approx 90% of the care income comes directly from the government---on time and without fail---Facts I could only dream about when I was in business. I accept low margins in this area of care but in hard times it will do me(investor) given brilliant, well dressed :), budget conscious and honest leadership.
Asset thresholds
If you’re 65 years or over, the value of your assets must be equal to or below the threshold for your circumstances.
Single or have a partner in care
The total value of your combined assets must be $227,125 or less if you either:
- don’t have a partner
- have a partner who is also in long-term residential care.
Have a partner not in care
If you have a partner who is not in care, you can choose whether the total value of your combined assets is either:
- $124,379, not including the value of your house and car
- $227,125, including the value of your house and car.
Your house is only exempt from the financial means assessment when it is the principal place of residence of the partner who is not in care, or a dependent child.
Warren, oca today said 80% of care income is govt funded
Hopefully today and next week will be a very rewarding time
OCA hasn’t been much of investment of late
Now is for the time hype to turn into dollars and time to stuff this perceived overhang
http://nzx-prod-s7fsd7f98s.s3-websit...282/283328.pdf
First Impressions:-
Solid result slightly beating underlying profit forecast. I get 8.54 cps underlying against IPO forecast of 8.43 cps...so highly credible and a solid effort but not stunning in my opinion.
Outlook:-
Increased build rate, note that the build rate for FY19 is more than double FY18. This augers very well for profit growth.
Note also the embedded value of each unit is around $170K vs $120K per IPO forecast. This also is highly encouraging for future profit growth.
Delivering developments on time and on budget is no mean feat, (its actually incredibly hard in the Auckland market especially).
I need to do a lot more work on my forecast for FY19 but at this stage its fair to say I think we can look forward to quite significant underlying profit growth in 2019 mostly driven by the dramatic uplift in build rate FY19 compared to FY18.
Opinion:-
Rome wasn't built in a day but I really like the way these guys are laying the foundations...
F19 underlying earnings should be about $85to $90m shouldn’t they ...if not more
Maybe the RYM:OCA share price ratio will get back to that 10:1 ratio again
That be good
The bean counting hound was slow out of the blocks this morning. Get my snout into this properly, shortly, and should have a forecast later today.
At very first glance I get about $75 -$80m based on development build uplift alone. Then there's resales at higher embedded value...I'll probably get to where you are but need another coffee and some more time to think about it first :) Heck even if they get to my first glance mid point estimate that's 12.6 cps underlying and put a PE of 13 on that and we're off to the races...
Update. Key assumptions in my FY19 forecast. Doubling of build rate gives doubling of development profit, gives $21m uplift, (assume margins the same).
Resale underlying profit to increase in line with embedded value, assume same number of resales) gives $3.5m uplift in underlying profit.
This gives circa $24.5m uplift and suggests 52.1m plus 24.5m = $76.6m.
Sticking with $75-80m underlying profit forecast at this stage, about 12.6 cps underlying and on a PE of 13 this suggests to me a price target of ~ $1.64 12 months out is not unrealisdtic. Stock is presently been held back in a major way by the Macquarie overhang in my opinion. Once we get clarity on that it could really pop, Need to look at balance sheet and funding costs next noting the very strong cash flow over the last year. Disc: Topped up some more on the open this morning at $1.15
Tell you what with re $1200 a week every week of the year(monthly) coming out to look after a relative in care it sure is a GREAT cashflow for the carers and i dont like being in a minority but thats the way it is, with no hidden assets and am just a little proud about that.
Well at 9.45 am this morning when I placed my buy order "at open", it looked as though I would be paying $1.12 per share.In fact I ended up paying $1.15.
Happy at that.
I am sticking with $75-80m for now. I think it could surprise to the upside of that range but I would rather err on the side of conservatism at this stage mate. At $80m underlying this would give a 80/52.1m = 53.6% increase in underlying EPS to 13.1 cps. I'll let you do the maths if the market decides given this growth and the very robust long term outlook with strong demographic tailwinds that a multiple of 14 times underlying earnings is appropriate this time next year :) Possibly worth noting that the shares currently trade cum a 2.6 cps dividend so one isn't really paying $1.16 for next years earnings, just $1.134 putting the stock on a forward PE of just 8.6...interestingly that's about where it floated too cheaply last year.
I remain of the view that once Macquarie's have clarified their position this has very strong potential to outperform over the year ahead.
Its full steam in Tauranga with a $250 million eco friendly retirement village all go in papamoa. Generus Living Group who already have a 250 house village are just about to start the new 350 house village. I Like the environmental theme . solar power, , composting, commercial climate controlled glasshouse, market garden, fruit trees , charging bays etc. take note OCA,RYM,SUM etc you are behind the trend.
Do they offer the full continuum of care including hospital and dementia care and have they earned a stellar reputation over a long period of time for excellent care ? If they don't do all the basics extremely well, (I have no knowledge either way) the environmental stuff is just a creative way to appear to be caring for the environment when I put it to you all that REALLY matters for people at this stage of their life is the quality of the facilities and care. They all have gardens and a pleasant environment.
Could it just be that the eco side to this village is just a marketing gimmick ?
You don't think there is anyone out there with $250M who would buy a stock with a forward PE of 8.6 with huge tailwinds? I don't see this like a large cap dog where a large shareholder is going to dump the stock at any minute. More like there will be a hungry placement done off market... Macquarie will know what they are doing.
I couldn't agree more. I think there will be very robust demand for any potential placement organised off market, especially if its at a slight discount to the current market price. I for one would really appreciate the opportunity to double down at say $1.10 in any possible placement.