Loss leaders at Supermarkets.?
It is the supplier who takes the hair cut.
The Supermarket retain their % mark up.
Hey Percy, why are you replying to me?
I'm referring to OCA'S core business.
It's JONU who was comparing his perception of Supermarkets loss leader strategy to OCA'S core business losing money.
Yesterday close 56 cents at least wasn’t 52 week low
But Value probably hoping it’ll make a new 52 week low today
Retail buying and institutional selling.
Notice how the bids are getting thinner but whenever they build up to sufficient volume, the instos take the bids out? Cent by cent, the sp goes lower.
Just be careful out there, folks. No point becoming cannon fodder (something I have learnt from bitter past experience) when a stock has lost favour in such a manner.
Been wrestling with the latest update on sales Winner that you and I are thinking; it just doesn't add up.
Firstly the NZ sales volume graph helps me somewhat to see it's still a very tough environment out there and has taken a fall since Christmas.
Heres another thing that could well be a factor. The guided new sales figure is aggregate ilu and care suites…..just what if cares suite sales are low which makes space for a more acceptable new sales number…things start to add up.
Heres my thoughts. … Its possible PACs are trending up due to public preference and /or OCA is more prepared to PAC them to fill them. ( pacs yield the same cash but don't give OCA capital ) PAC income increases YOY about 13% . That equates to about 40 new PACs per year to generate this growth. Now consider that's on top of the existing PAC contracts.
Sooooo….that would mean the perceived rise of unsold new stock is not actually rsing empty units at all. (As in new cares suites delivered minus new cs sales = surplus empty rooms)
For example last report they had fair dinkum about 128 actually empty stock, which is just fine for a product that should take 2.5 years to sell down fully after delivery.
Also note, that’s out of 1000 of them now.
If I apply total new sold care suites and growth of PACs over the last years to new deliveries , there is actually no growth in empty rooms accruing at all. Also remember an old PAC selling into a new Pac is still considered an unsold unit. ( some lesser apartments and client needs are always going to suit PACS)
What this means , totally confusing as it all is ….is that new apartment sale may not actually be as awful as first assumed given that under the above scenario 2HY24 only 30 or so new caresuites may have been officially sold leaving more headroom in the new sales number to be made up with better apartment sales numbers.
More apartment sales means more margin…more profit …more cashflow ….less debt increase…more chance of dividend blah blah…
So when coupled with the poor NZ housing sales since Christmas , then the usual initial selling slowness of new deliveries (Helier and CHCH). …then just maybe things aren't so bad after all. The rising fear of oversupply and apartments going out of favour just might be overreacting.
All this gobbly gook I have written actually stacks up when back checked. It also is inline with 92% of care currently occupied . Of course we just won't know until we see more detail in the report . the devil will be in the details.
The above possible scenario produces for me an Unpat of $55m and new apartment sales of about 40 ( which is still poor but has positive ramifications for the next few years).
I'm not saying everything is great again, no way, OCA but I might only be half as bad as it currently looks.
OCA are going to have to get their graphics guy doing the reports to somehow do a slide on all this unsold /PAC stuff as its all got very unwieldy especially as the modus operandi is now entrenched.
It would be interesting to know the average age of those entering the care suite environment.
Taking a very high level view and ignoring the circumstances of individuals I would have intuitively said that folk would normally be in the 80+ age group. That means the early boomer generation (b 1946) are not quite there yet, whereas they are now at an age where they are seeking apartment/villa occupations at RVs. So a peak in care suite demand may be yet to arrive.
Additionally I believe competition for RV sales is now at a level which has no past precedent, simply judging from the extent of ongoing advertising by both listed and unlisted operators and the number of units being developed. Certainly in what might be termed desirable locations there seems to be ample choice. So it isn't surprising that time to sell is quite lengthy and especially given the current economic circumstances weighing on those needing to sell to enter an RV.
You reasoning could well be right Maverick but as you say we probably won’t know until more details later in month.
I still don’t agree with your views about the current state of the property market.
As you know I track this from REINZ data and the sales trend is shown in the chart.
Sales activity bottomed out last April/May and has been steadily gaining momentum since. December 23 quarter sales numbers were 17% higher than pcp and March 24 quarter up 28% on pcp. At this rate sales volumes could well be back close to pre-covid levels.
REINZ says “… the data paints a picture of the New Zealand housing market being more active, characterised by increasing listings, solid sales activity, expanding stock levels, and lifts in property prices.”
Sellers have apparently been reluctant to sell because of price but seem to be coming around tonacceoting current market prices.
If Brent and other CEO in sector say the property market is tough blah blah so sales are lower than expected he’s only trying to justifying disappointing new sales performance.(resales seem to be doing OK)
That’s how I see it anyway
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Originally Posted by percy
Reply With Quote
Bookmarks