OCA - Oceania Group - retirement villages

[James108]

I agree to an extent Beagle but in this case I think the board/C-suite needs diverse experience. In a company like Oceania and Summerset I would expect to see good representation of medical professionals and engineers/development professionals on their board/executive team. Good representation of finance professionals is also fine by me, as a long time Summerset holder (albeit not since IPO) I am very happy with Julians work.

I know a listed developer that has no engineers or development professionals on their board/leadership team and it is very much to their detriment.

[artemis]

I agree to an extent Beagle but in this case I think the board/C-suite needs diverse experience. In a company like Oceania and Summerset I would expect to see good representation of medical professionals and engineers/development professionals on their board/executive team. Good representation of finance professionals is also fine by me, as a long time Summerset holder (albeit not since IPO) I am very happy with Julians work.

I know a listed developer that has no engineers or development professionals on their board/leadership team and it is very much to their detriment.

Maybe the decisions are to outsource. Simply because if they turn out to be lemons it is way easier to terminate contractors than actual staff, especially if there are platinum parachutes.

[Dlownz]

Does any one know the possible value of rerate on property value. Comparing 2 bedroom villa in hawkesbay you would be lucky to pay 650000. OCA seem undervalued at 500000. Quite a undervalue and from the last report you could almost expect a extra 30% on property value.
What's everyone's opinion

[James108]

Maybe the decisions are to outsource. Simply because if they turn out to be lemons it is way easier to terminate contractors than actual staff, especially if there are platinum parachutes.

Well, when things go wrong consultants will act in their own self interest first and the clients interests second, I think some level of in house expertise is completely necessary. Further in my experience a client that knows what they are doing pushes and challenges the consultants to find the best possible outcome.

You would be shocked if the board of Xero was all accountants but it doesn’t seem to be as shocking in the construction sector.

The major retirement operators are very much in the construction/development sector.

[Beagle]

Does any one know the possible value of rerate on property value. Comparing 2 bedroom villa in hawkesbay you would be lucky to pay 650000. OCA seem undervalued at 500000. Quite a undervalue and from the last report you could almost expect a extra 30% on property value.
What's everyone's opinion

Agree, hardly any of the property gains in recent years have filtered down to OCA apartment / care suite asking prices so a lot of horsepower to be unlocked here with a smarter investment banker at the helm. I hit Earl up more than once about how underpriced OCA's units were...might as well have been talking in Swahili for all the good it did.

James, OCA development margins are the highest in the industry and their methodology of outsourcing the construction side of the business to highly reputable construction companies means they have a superb track record of getting their villages built on time and on budget. Working like a well oiled Swiss watch.

[Muse]

Maybe you should ask investors in Summerset's IPO at $1.35 just under a decade ago what they think of ex investment banker Julian Cook's skills after enjoying 1000%+ gains ?
You don't get to be director of investment banking at Jarden without being exceptionally talented. Earl a nice guy, but I think we are extremely fortunate indeed to have Brent at the helm. Arguably the best change that's happened since OCA listed.

He showed he's much more than "just" an extremly talented investment banker here https://www.nzherald.co.nz/business/...19b12a0d7d7338 paywalled

Simon Challies is more my style. Plus he invented the business model here in NZ

[Beagle]

Simon Challies is more my style. Plus he invented the business model here in NZ

A legend in his time for sure and still doing awesome work https://www.canterburybraincollectiv...simon-challies but please give Brent a chance to blossom...my sense is he will will prove himself to be an awesome CEO.

[Muse]

A legend in his time for sure and still doing awesome work https://www.canterburybraincollectiv...simon-challies but please give Brent a chance to blossom...my sense is he will will prove himself to be an awesome CEO.

I got fingers & toes crossed as I am a shareholder!

[Dlownz]

Maybe the new ceo will see the quick gain and take the credit 😁

[Ferg]

Maybe someone can help me out here because I can't quite get the sales & capacity volumes to work from the annual reports.

In particular, if I compare new builds versus new sales it appears there were an accumulated 180 new units and care suites unsold at the end of the last fiscal year. That feels too high in light of demand in the sector.

Also I see OCA have restated the prior year occupancy % a couple of time - has anyone else noticed that or seen any comments on why?

Lastly, if I take last years capacity and add the new builds, I consistently get lower numbers than OCA provides in terms of total capacity for units and care suites. Have I done something wrong?

Note: items starred with * have come from the annual report. Each row is tagged with a unique identifier starting with A. Calculated rows show the calculation used by referencing the other rows, except items from the annual report which have the *.

CAPACITY & UNIT SALES ANALYSIS				FY16	FY17	FY18	FY19	FY20	FY21
		*per A/R
Sales of New Units		A*			37	73	76	75	87
Sales of New Care Suites		B*			15	27	57	114	107
Total New Sales		C=A+B			52	100	133	189	194
New Builds (Units & Suites)		D*			44	131	272	176	217
Unsold (New Builds - Total New Sales)		E=D-C			0**	31	139	-13	23
Cumulative Unsold		F=Sum(E)			0	31	170	157	180	??
Capacity	Units	G*		1,022	1,054	1,102	1,202	1,285	1,367
	Care Suites	H*		230	242	340	542	679	847
	Care Beds	I*		2,519	2,580	2,540	2,112	1,882	1,807
Total Capacity		J=G+H+I		3,771	3,876	3,982	3,856	3,846	4,021
Average Occupancy % (Restated)		K*			91.3%	90.4%	91.0%	91.5%	92.4%
Average Occupancy #		L=J*K			3,539	3,600	3,509	3,519	3,715
Unoccupied - All		M=J-L			337	382	347	327	306
Less Cumulative Unsold Units & Suites		N=F			0	31	170	157	180
Unoccupied Care Beds & Resales		O=M-N			337	351	177	170	126
Units & Suites Capacity - prior year		P=G+H (PY)			1,252	1,296	1,442	1,744	1,964
New Builds		Q=D			44	131	272	176	217
Calculated Capacity		R=P+Q			1,296	1,427	1,714	1,920	2,181
Reported Capacity - this year		S=G+H (TY)			1,296	1,442	1,744	1,964	2,214
Difference		T=S-R			0	15	30	44	33	??

**Note: I forced FY17 to zero for unsold given new sales exceeded new builds and we can't start with unsold < 0.