Cant bring it up on my iMac other than quick headline "tarred with the same brush"
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Cant bring it up on my iMac other than quick headline "tarred with the same brush"
Ive heard a whisper re Oceania set at 84c but no confirmation. How believeable is profits DOUBLING in 2018 year and has the 50c an hour increase for min wage been factored in??
Heres an excerpt
Oceania Healthcare says it won't be tarred with the same brush as Australian counterparts because the NZ funding model ... Oceania Healthcare says it won't be tarred with the same brush as Australian counterparts because the NZ funding model ... Oceania Healthcare says it won't be tarred with the same brush as Australian counterparts because the NZ funding model is different. Naphat Jorjee
The chief executive of aged care firm Oceania Healthcare, which is preparing to list on both the New Zealand and Australian stock exchanges, says the Kiwi company will be spared from the negativity surrounding Australian counterparts because funding models are totally different.
Earl Gasparich said he did not expect any backwash from the poor sentiment towards the Australian listed players, which have been hurt by government funding cuts and uncertainty.
"The regulatory environment is very much an opportunity on the upside, not on the downside," Mr Gasparich said, referring to the much better prospects in New Zealand.
"It's a different funding model."
Oceania, which is New Zealand's third largest residential aged care provider and the sixth biggest operator of retirement villages, is preparing to raise up to $NZ273 million ($250 million) in a public offering, with an indicative price range of between $NZ0.76 and $NZ1.04. It will undertake a dual listing on both sides of the Tasman.
"It offers a nice level of diversity for Australian investors," he said. Mr Gasparich is headed to Australia on Monday ahead of roadshows to fund managers in Sydney and Melbourne as the float plans step up a gear. A prospectus was lodged on March 31.
The main listed aged care operators in Australia have come under substantial pressure because of government funding cuts, with Estia Health one of the hardest hit. (http://www.afr.com/street-talk/kerry...0170111-gtpux1) It downgraded profits twice in 2016 and embarked on a highly dilutive capital raising. Estia shares were trading at $5.50 in late May 2016 and are now hovering just above $3.
Japara Healthcare shares have dropped from about $3 a year ago to just above $2, while Regis Healthcare (http://www.afr.com/real-estate/estia...206-gt5klj)has slipped from $5 to just below $4.50 in the past 12 months.
*'We've got sufficient land'*
Mr Gasparich said Oceania didn't have any medium-term plans to enter the Australian market, because it had a large pipeline of work as it expands its facilities at home.
"We've got sufficient land to keep us busy for eight years," he said. The long-term demographics in New Zealand are similar to those in Australia, with demand for beds climbing. Across the industry in New Zealand, an extra 1170 to 1340 extra beds will be needed each year until 2026.
"The pent-up demand is there," Mr Gasparich said.
Oceania's facilities are in six main locations in New Zealand – Auckland, Tauranga, Hawke's Bay and Wellington on the North Island and Nelson and Christchurch on the South Island. The company provides accommodation for about 4000 residents across 48 facilities.
Oceania forecasts in its prospectus that revenues for the 12 months ending May 31, 2017 will reach $NZ210.9 million, rising to $NZ215.7 million in the following year. Net profit after tax is expected to be $NZ25.3 million in 2016-17, climbing to $NZ53.1 million in the 12 months ended May 31, 2018.
The existing owner, funds run by Macquarie Infrastructure and Real Assets, has agreed not to sell any of its holdings under escrow arrangements which run until July 2018. Oceania aims to start trading on the Australian and New Zealand stock exchanges on May 5.
Mr Gasparich said the company was clearly explaining to potential investors that the chances of any regulatory changes happening in New Zealand that would be detrimental to Oceania was very slim. But he acknowledged that confidence in the investment community had been rocked in Australia after government funding cuts which had undermined share prices in the main listed players on the ASX.
"There's no doubt that a number of them have been hurt by the funding cuts," he said.
I wonder what will happen to the share price once Macquarie and Real Assets are able to sell their shares after July 2018, if forecasts are not going as expected.:eek2:
Also is that doubling of NPAT feasible?
They've done it before (2015 to 2016), and remember it is actually only about 9% above 2016, so I think it is potentially a bit conservative.
They have had to estimate the impact a result of lower occupancy levels due, in part, to the decommissioning of sites for redevelopment and a reduction in the stock of Units available for resale. If development or decomissioning was faster than expected, or demand higher than expected, there is a chance they could beat forecasts. The opposite is also true of course.
84 cents would make Oceania very attractive in my view, if this were to be the case.
ARV faced alot of resistance, share price wise, and also at their AGM (a question regarding this was asked) about what would potentially happen when the operators of the villages shares came out of escrow, which was 60 ish % of the company (similar to Macquarie and Real Assets ownership % after IPO).
I myself had this question in my head, but reality was: nothing happened as the villages probably knew how well they were doing, vs the share price which was unresonably undervalued (in my view) and barely above listing price (being around the $1 mark)... and the aprox return subsequently went up 30% in a short period of time.
I think it will be different this time around and Macquarie will want to exit at least part of their big stake, however if the share price is like ARV's was, they may not sell to a few months/years after the escrow, and may sell down in small portions... who knows.
From what I've seen ;) it will be at the top of the range.
Personally I dont think its the pick of the bunch, but its just different enough to be of some value for diversification re the care vs residential aspect.
Thanks HectorP for making that article available:t_up:
Is this IPO limited to firm allocations or can the public apply through a public pool?
Is this IPO worth a dabble?
It seems Chris doesn't mind Oceania, which is a huge change of heart compare to Arvida, yet they are remarkably similar :confused:
To me, the only logical conclusion I can draw is that Chris didn't read Arvida's IPO Prospectus, but has read Oceania's (this time around)... he goes on about how a good feature of Oceania's is Brownfield Development quote: "It has many villages, some with under-utilised land and a few with such prime locations that complete rebuilding programmes would make sense. This type of expansion is described as Brown Field"... this was a key point referenced on multiple pages time and time again in Arvida's prospectus.
He also mentions quote: "key for those villages, like Arvida and Oceania, which rely largely on rest home margins, has been the Crown’s acceptance of the ‘’premium room’’ charge, as the incentive to build more care beds." as if this is some sort of brand new, never before thought of idea... this was also mentioned several times in Arvida's prospectus! such as on page 38 Primary Aged Care Revenue Drivers; Care Fees; "Arvida charges premium rates for its quality offerings at most of its existing villages".... Premium rooms are not new, but potentially, increasing in popularity.
He also mentions quote: "At that point Arvida looked to have bleak prospects, made the more difficult by the long-term problem it faced (and faces) of integrating dissimilar villages, each one previously owned independently, usually by a couple who were quite used to making their own decisions, and being bound by no corporate management." Integration has never been an issue, and, if anything, the Arvida brand name is now widely known for a good continuum of care, among other positive things, throughout the country... and the villages were probably only to happy to hold shares together rather than fight it alone (and the economices of scale etc that comes with a roll up).
I think in his origional article, dogging Arvida of course, not only did he miss, like most, the huge upside in a quality, carefully executed, acquisition strategy (a point that seperates Arvida and Oceania), he also mentioned how it was just an exit plan for all blacks (or something along these lines) and how this was, also, somehow a reason not to invest...
It seems, like a couple on sharetrader here, he was too quick to try point out all the flaws of Arvida, without actually reading (and thinking) deeper about what Arvida was offering.
Lastly, in the article that was apparently about Oceania, it seems it was also some sort of a justification aritcle on Arvida fantastic performance since listing ;)
We live in interesting times.
I think tomorrow will be very interesting for retirement sector investors.
May be known as The IFT/MET ripple effect day?