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09-04-2020, 02:03 PM
#8941
Perhaps in 12 months time a quarter of no growth - but an avoidance of negative growth - will be something to celebrate.
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10-04-2020, 12:52 AM
#8942
Originally Posted by traineeinvestor
Not ac comment on SUM specifically, but I don't understand why companies emphasise "facility headroom" and "undrawn facilities" etc. so much. The banks can always cut a credit facility and if they think a company is under pressure they'll do it pretty quickly (just as they have done in every economic contraction).
Banks can't cancel committed facilities. They only have an "out" in very limited circumstances i.e. illegality to fund, event of default etc. (this includes something which has a material adverse impact on the business, but let's not mention that).
"His loyalty couldn't be bought at any price; but it could be rented remarkably cheaply."
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10-04-2020, 05:12 PM
#8943
Originally Posted by trader_jackson
I was going to post about how this is the 3rd first quarter in a row of virtually no growth (aka FY18, FY19 and FY20 first quarters are all basically the same, and FY17 was actually higher than FY20 first quarter is today)... how the market could possibly like it... but I suppose the share price itself has done the talking. After an initial pump and dump, and on a day when most retirement operators are up alot, SUM is in the red. I'd expect this to trade at no more than NTA ($5.02) at best... yet its nearly 20% higher today.
Clearly sum still have hope this company (with its weak care offering) will pull a rabbit out of a hat.
I'm not one of them any longer. MET my top pick in this sector at the moment, then OCA. I'd own ARV in a heartbeat over SUM and anyone paying more than 2 1/2 times NTA for RYM in the current environment has rocks in their head in my opinion.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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10-04-2020, 06:06 PM
#8944
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10-04-2020, 06:15 PM
#8945
Originally Posted by Baa_Baa
Well, beagle did say they were a no growth company.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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10-04-2020, 08:14 PM
#8946
Originally Posted by Baa_Baa
From MSD "you need to know whether your business has had a 30% decline in revenue" so assuming SUM have got the payout, we shareholders should expect 'at least' a 30% decline in revenue in the current reporting period. $8.87m of easy money granted to offset against employment costs (which per employee will be a great deal more), still a good thing.
But basically a forecast loss of revenue, not sure how they could lose 30%+ revenue per se with essentially a fixed income. Maybe some clever convoluted SUM accounting which they're renowned for conflating 'revenue' from ORA and care fees to include development margins? dyodd. Scott didn't get CFO of the year for nothing, clever guy, take the easy govt money, tidy up the revenue story later.
No other listed retirement company has received the subsidy, as far as I can see. May have applied though.
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11-04-2020, 06:15 AM
#8947
It’s great that in these desperate times of falling revenues Summerset have made a huge commitment to keep 1,344 employees on the payroll and retain them for at least 12 weeks. No job losses in the short term - that’s good.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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11-04-2020, 11:00 AM
#8948
Originally Posted by winner69
It’s great that in these desperate times of falling revenues Summerset have made a huge commitment to keep 1,344 employees on the payroll and retain them for at least 12 weeks. No job losses in the short term - that’s good.
Yes, success in the retirement village business relies heavily on the quality of its people, never more so than in times like this!
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11-04-2020, 11:19 AM
#8949
Regardless of falling revenue the only areas of staffing reduction they could make, would be top level/back office positions. There is no way in hell they could reduce staffing in caregiving, housekeeping, kitchen, laundry. Most of those areas would already be working on minimum staffing levels so cutting them would mean a significant drop in the quality of care/service. Without their “hands on” staff, they have no business.
Originally Posted by winner69
It’s great that in these desperate times of falling revenues Summerset have made a huge commitment to keep 1,344 employees on the payroll and retain them for at least 12 weeks. No job losses in the short term - that’s good.
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11-04-2020, 11:42 AM
#8950
Originally Posted by justakiwi
Regardless of falling revenue the only areas of staffing reduction they could make, would be top level/back office positions. There is no way in hell they could reduce staffing in caregiving, housekeeping, kitchen, laundry. Most of those areas would already be working on minimum staffing levels so cutting them would mean a significant drop in the quality of care/service. Without their “hands on” staff, they have no business.
You are right re front line staff, and to be honest, I don't see that much back office staff surplus to requirements either. Given that they can't close down villages - bills still need to be sent out as well as paid, staff needs to be paid, subsidies need to be applied for.
Maybe they need a handful less of bowling green coordinators and gym managers (with these activities closed down), but more than 1300 people?
On the other hand - SUM is not just running retirement villages, they are developing and building them. I suppose this activity was grinding to a rapid halt with the lock down. Builders, carpenters, plumbers, electricians, painters and other tradespeople as well as sales staff now all busy twiddling their thumbs thanks to the lock down instead of developing the next set of units. Pretty sure that these are the people SUM applied for the wage subsidy - and rightly so.
Last edited by BlackPeter; 11-04-2020 at 04:43 PM.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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