MET - Metlifecare - one for the fundies?

[Joshuatree]

According to the ASX there hasn't been one trade on the ASX since MET listed in Oct?

[winner69]

According to the ASX there hasn't been one trade on the ASX since MET listed in Oct?

and SNZ has had 3 small ones I think

[Lizard]

I realise there's a lot of cynicism where brokers' research and recommendations are concerned - but here's Macquaries' recent take on MET, with some comparative comment on the big opposition, RYM and SUM.


http://www.macquarie.com.au/dafiles/...MTA2Mjk5NTk5S0

Comments/alternative views sought - I hold them all!

From the report:

In our opinion, there are a number of strong synergies between retirement units and care beds and so integrated villages are a significantly more attractive proposition than villages without care (for instance, better occupancy and younger average entry age).

I find this comment interesting:
1. Care beds - my understanding was that these were relatively low margin and therefore a less attractive use of capex. Their financial value seemed to be mainly as a marketing tool in attracting residents who want greater certainty about end of life care. Has this changed? i.e. IF you can fill the retirement units without adding care beds, why wouldn't you avoid financing these?? (MET not actually showing worse occupancy at this point than RYM.)

2. Entry age - I would have thought Younger is not Better! The (financial) perfect ideal would seem to me to be if the residents stayed just long enough to finish paying the amenities fee in full - from memory, about 4 years?

I think they discard Price/Book too easily. We are talking a four-fold difference between MET to RYM and two-fold MET to SUM. That's a big value arbitrage hinging on management quality and decision making. Sure, MET has not exactly performed to date on a relative basis, but with a re-invigorated board and RYM/SUM providing a benchmark, MET management must surely have some easy gains to make in closing the gap?

[couta1]

Lizard there are many reasons why the continuum of care model is the way to go but here are a few points to consider,care centers are important because they are like a major railway station in this case residents can move from a rest home to hospital to dementia levels without leaving the facility,people coming into the rest home at times end up purchasing a serviced apartment,serviced apartment and standard apartment people can move to the care center without going elsewhere,people from the community come into the Resthome or hospital for respite care,dementia care is becoming more of a need so I've seen people in apartments with dementia move into the dementia unit while their spouse continues to live in the apartment once again no one has to leave and find a new complex splitting a couple up in this case,these are just a few reasons why the continuum of care model is actually a business increasing and marketing model and Met is seeing this now and beggining to move more in that direction like Rym and Sum

[Snow Leopard]

Metlifecare half year results are out and in themselves are terribly underwhelming.

There is a 1.25c unimputed dividend.

But as they make little profit on the day to day stuff ($1.3M) and 'settling' only 19 new units, the bulk of the profit is from a 1.4% increase in the value of the $1.8 Billion of retirement properties.

Still it is all about the future and they are still aiming for their 200+ units a year by 2015. This is not a great target given their size but we hold in the hope that they will aim for bigger things in the longer term.

Best Wishes
Paper Tiger

Disc: Hold MET (& RYM & SUM).

[BlackPeter]

half year results are out: revenue from ordinary activities up 6.1%, though total revenue down 47% (due to merger gains now "expired"), quite "quiet" sales activity (only 19 new units, and 172 resell - both down from previous half year result); however reasonable development pipeline (200 units plus pa from 2015); "renewed" board (with IFT moved in as corner stone share holder and NZ Super buying in); Ah, yes - and divi increased from 1 cts to 1.25 cts / share.

Overall not exciting, but feels they are moving from just buying old stuff to developing new ... cautiously optimistic; discl: holding ...

[Harvey Specter]

Overall not exciting, but feels they are moving from just buying old stuff to developing new ... cautiously optimistic; discl: holding ...

There was the comment that they will be bringing development in house (RYM model) which once they get sorted, hopefully they will increase build rate.

[silu]

New management will sort the growth problem out IMO.

discl. hold MET & SUM

[winner69]

Is today's announcement an earnings downgrade

H1 was up from 8.6m to 15.3m but full year is only going to be 2m to 6m up on last year

Means H2 is down

Have I done the quick sums right

Surely the retirement sector profit bubble hasn't burst big time

[winner69]

This what the Ann said

METLIFECARE FY 2014 EARNINGS GUIDANCE

Metlifecare (NZX: MET; ASX: MEQ) has recently reported its half year results for the period to 31 December 2013. The half year results included reporting an underlying profit of $15.3 million (footnote 1). Metlifecare advises, based on its trading performance to 31 December 2013 and assuming a continuation of these recent trading trends for the next six months, underlying profit guidance of between $34 million and $38 million for the year to 30 June 2014.