MET - Metlifecare - one for the fundies?

[winner69]

Solid result from MET, but should this cause concern?

"“In terms of remediation, a comprehensive review has also been completed of all at-risk villages, and we have accordingly increased the estimate of future remediation costs by $23.5 million in the financial statements. This is in addition to the $20.6 million estimated at 30 June 2016 (excludes earthquake works of $1.4 million) and will occur over a period of seven years.”

Wow $44m to fix things is a lot of dosh eh - even over 7 years

Wonder how much other operators have 'allowed' for in their valuations?

Indictment on NZ building industry - even now I doubt that things built today will last as long as they used to.

[Bjauck]

Wow $44m to fix things is a lot of dosh eh - even over 7 years

Wonder how much other operators have 'allowed' for in their valuations?

Indictment on NZ building industry - even now I doubt that things built today will last as long as they used to.

You need strict standards with a strong inspectorate for the building trade. I am sure that the housing crisis that has been allowed to develop in Auckland (for example) will mean that we get a sufficient supply of well-inspected quality buildings. Where's the Tui's?

[Beagle]

Wow $44m to fix things is a lot of dosh eh - even over 7 years

Wonder how much other operators have 'allowed' for in their valuations?

Indictment on NZ building industry - even now I doubt that things built today will last as long as they used to.

It is a lot and surely I am not the only one that doubts they can accurately predict the cost of a building works program over the next 7 years. Hard enough to get a fixed price from a builder for a clearly defined and immediate job, let alone trying to estimate sometimes far less defined remedial works, (with all the grey area's and potential extra wood rot e.t.c. than can be found when you start digging under the surface), for the next seven years. I think that remediation cost can only go one way and shareholders can "look forward" to regular cost updates for the foreseeable future.
Underlying profit growth of 15% is pretty underwhelming in what has been a very buoyant property market and is especially underwhelming compared to SUM's 50%.
SUM blokes on here reckons share prices follow earnings growth
The average age of MET's units are some of the oldest in the industry and therefore I expect that will be a headwind on them going forward.
Still....what do I know, the market seems to like the result, go figure ?

[JeremyALD]

Market is loving the result today, more than the SUMs annoucement. Interesting consider I hold both but thought SUM had the better report

[couta1]

Market is loving the result today, more than the SUMs annoucement. Interesting consider I hold both but thought SUM had the better report

Indeed SUM had the better report, 22.2% development margin compared to 17% for MET for starters etc etc. SUM has always been a slow burning stock in terms of the market waking up. I have never owned MET and have no intention of owning any, they will have more remedial work going forward for one thing.

[Beagle]

When I get some spare time later this week I'll have a good look at comparing their underlying PE's, (in less someone with more spare time right at the minute would like to do so ?).

[winner69]

When I get some spare time later this week I'll have a good look at comparing their underlying PE's, (in less someone with more spare time right at the minute would like to do so ?).

You Bly like Underlying Earnings eh

MET 17.5 / SUM 19.5 / RYM 27.3 times Underlying Earnings

Historical - SUM full year as reported (Dec16) / MET last 2 half years (Dec 16) / RYM last 2 half years (Sep 16)

Didn't do ARV - that's t_j to do

[stevevai1983]

RYM this year underlying profit is 181.7M (assume on target 15%growth) so that's 23.6PE
ARV this year underlying profit is 20.5M (assume 30% growth) PE = 22 （not cheap huh）
SUM 56.6M profit PE = 20

outlook:
RYM stable and boring 15% growth + moderate gearing
SUM highest build rate / total portfolio number + highest gearing
ARV start to sharply increase on build rate + lowest gearing

[macduffy]

The market doesn't seem to hold any doubts about MET's results or their prospects. Shareprice up 21c today.

[Bjauck]

The market doesn't seem to hold any doubts about MET's results or their prospects. Shareprice up 21c today.

Perhaps there is some switching occurring from RYM and SUM into MET.