OCA - Oceania Group - retirement villages

[Harvey Specter]

Looks like there may be another retirement village operator listed.

Macquarie Bank is exploring sale options for its wholly owned local aged care provider Oceania Group including a possible initial public offering and sharemarket listing.
A trade sale is also a possibility for Oceania, which has around 4,600 residents in more than 50 retirement villages and rest homes nationwide. “We’re keeping an open mind and like anyone we’re looking at ways to accelerate growth,” Oceania chief financial officer Matthew Ward tells NBR business reporter Calida Smylie.

http://www.nbr.co.nz/article/oceania...director-share

[couta1]

This is the listing I alluded to a while back on the Sum thread they won't need to buy land as they can build onto many of their current 50 plus facilities.

[Harvey Specter]

... they won't need to buy land as they can build onto many of their current 50 plus facilities.

Do they have low site coverage? Why is this?

They have twice as many villages as Rym but only 2/3 the residents. If they could expand on existing sites, that would be very cost efficent.

[couta1]

Do they have low site coverage? Why is this?

They have twice as many villages as Rym but only 2/3 the residents. If they could expand on existing sites, that would be very cost efficent.

A lot of their sites have low site coverage because up until now many of them only have care centers on them so yes plenty of free land to build on.

[Joshuatree]

We looked at Oceania for our Mother. A tired old building which still looked tired after a quick makeover; no sun and very few common areas. They excitedly opened a small cupboard and said "This will be the library". One good thing they had was a large garden area with an old boat and a bus stop. They will make good margins there but it wasn't good enough for us.

[couta1]

We looked at Oceania for our Mother. A tired old building which still looked tired after a quick makeover; no sun and very few common areas. They excitedly opened a small cupboard and said "This will be the library". One good thing they had was a large garden area with an old boat and a bus stop. They will make good margins there but it wasn't good enough for us.

I've worked in a couple of nicely revamped Oceania facilities remember none of their facilities were purpose built and they are in the process of nationwide refurbishment, they are also in the process of selling facilities which can't be built onto so as mentioned above they won't have to purchase land to expand, hopefully they list later in the year when the market might look better than it currently does.

[couta1]

Just some more thoughts re this possible listing. I think there's a good chance Oceania will be bought outright and that, that would be their preferred outcome rather than a NZX listing. With Bupa already having purchased several of their facilities I hear through the grapevine they have a deadline on whether they wish to purchase the company outright, its seems to me that with a debt level of around $600 mill that a takeover would be a better option than a listing, thoughts anyone?

[Beagle]

That's an ugly debt level considering residents pay all their occupation licence fees up front. How on earth did they end up with that level of debt mate ?

[couta1]

That's an ugly debt level considering residents pay all their occupation licence fees up front. How on earth did they end up with that level of debt mate ?

What do you make of these figures Roger you will be able to interpret them better than me.The company has Net liabilities of 132.9 million, 267.2 million in shareholders loans from Macquarie plus they are carrying 274 million in bank loans.

[Beagle]

What do you make of these figures Roger you will be able to interpret them better than me.The company has Net liabilities of 132.9 million, 267.2 million in shareholders loans from Macquarie plus they are carrying 274 million in bank loans.

I'd prefer to see the full financials before commenting in detail mate but those sort of numbers don't normally go together unless the company has been trading at massive losses over many years. Those debt level's appear to be an extremely serious concern. If a company has net liabilities of $132.9m how are they still a going concern ? How debt and shareholders advances could have ever got that high is what I'm especially interested in and most especially what this says about managements ability.
I'd speculate a recapitalisation is desperately needed and Macquarie's could be in for quite a haircut on their shareholders advances.
Caveat Emptor on this one, definitely one to watch for some creative revaluation of assets.