OCA - Oceania Group - retirement villages

[winner69]

Meant to add that Macquarie won’t ‘dump’ their shares on the market ...not their way of doing things

If they want out it will be done all nice and orderly

Talk if this ‘overhang’ is just punters with vivid imaginations

[winner69]

t_j reminded us yesterday share price highest since February

Now it’s broken the shackles and gone through the 101 barrier good time to be in.

Last time it exhibited that behaviour resulted in a good trade

However had to sell around the 109/110 mark when it run out of puff

But time has moved on and OCA have reassured us that all is on track so hopefully this time I’ll be holding a lot longer .....well into the 130s before the end of June I reckon.

[Beagle]

Apart from an institutional sale process the may also offer a rights issue to holders? Or am I far from reality here? Disclaimer here is obvious - I don't know what I'm doing...

I think an institutional placement is the most likely outcome if they want to exit their stake. Probably done nice and orderly like Winner has suggested. They'll probably have a trading halt while the book-build process for the placement is undertaken. Who knows, if its a great result for the year ended 31 May announced in due course and the outlook looks strong any placement could be north of the current SP or perhaps not. What's not in dispute is that the company is confident they're on track to meet their prospectus forecast of 8.42 cps underlying profit and at $1.02 that puts the company on forward PE, (very shortly to be historic PE) of just 12.1 making it the cheapest stock in the retirement sector by quite SUM margin.

That said you'd expect SUM others to be trading at a significantly higher PE given their remarkably consistent and proven high growth rate. This one is like a young filly having its first gallop around the track after showing promising form at the trials. Its cheap but unproven at this stage in my opinion.
I like this one and have a stake but I prefer my horses to be more seasoned and proven performers.

[Maverick]

Beagle, I always respect your point of view and totally rate your opinions offered to us all. I`ve spent a load of time on OCA and ARV recently and I don`t quite feel your reluctance on OCA`s youth. They have been constructing stuff for at least 7 years with their profit margins on the builds CONSISTENTLY improving each year. That tells me they know how to tell builders what they want and how much to pay. Their asset value has also CONSISTENTLY grown too which tells me the same story. Add on to that their proven reputation of no 1 elderly care reputation.

On a slightly different tangent now...The whole macquarie thing seems to have spooked many but I think it's all a bit overdone . My belief is that they have just done their job and geared up working capital for expansion. Bulk up or be swallowed up. On this specific occasion they are our friends.

For me the horse doesn't need to do any more laps, its already bolted.

[Beagle]

Thanks Maverick, that's very kind of you and yes looking at the filly from your perspective the coat looks pretty shiny ! No argument with that and totally respect your point of view. I guess where I'm coming from is for a slightly higher multiple one can have a proven performer that improves its speed at 45% average for every lap of the track and with SUM six laps done now while listed and 14 before that, that's a mighty impressive stayer.

I do acknowledge your point though that OCA have a track record of getting projects completed on time and on budget and that's no mean feat in the Auckland market especially and as you say their care reputation is second to none. They also have a good pipeline of consented developments. Bob each way bet can't hurt, might even get the quinella
I'm looking to add some more OCA and get back into RYM in the near future. The tsunami of baby boomers entering retirement over the next 25 years makes the whole sector a no brainer long term investment in my opinion.

[Lawstudent05]

Hi All,

FYI - https://www.nzherald.co.nz/business/...ectid=12051079

Article on retirement villages as a whole in New Zealand.

[Beagle]

Hi All,

FYI - https://www.nzherald.co.nz/business/...ectid=12051079

Article on retirement villages as a whole in New Zealand.

Thank you for the link. I see the national penetration rate increasing steadily to 15% over the next decade or so.

[Maverick]

Hi All,

FYI - https://www.nzherald.co.nz/business/...ectid=12051079

Article on retirement villages as a whole in New Zealand.

Thanks law student for posting this link. The only thing that could derail this retirement village juggernaut is over supply so the NZ hearlad head lines "81 retirement villages planned but little change in demand among kiwis over 75" is of huge concern.

i doubt there are few who could read this article through its 3 page entirety without drifting off into R.E.M. Sleep. However ...persist we must , the concept is vital. The article headline implies a lacklustre increase in penetration rate* amongst the oldies while villas are being built flat out. (*That means the % of 75+yr olds that live in a retirement home,currently 12.6 %)

the news article is derived from JLL white paper- retirement village data base. Some serious intel gathered for us on a plate by JLL, cheers to you guys.So to sum up the gist of it to save folk out there with better things to do here goes,

JLL Front page executive summary says the low penetration rates are not customer driven but rather "the supply of retirement village units in the region have not kept pace with growth in residents aged 75+ yrs in the area."
also "JLL expects to record continued growth in NZ 75+ penetration rate over the next 15 yrs, assuming adequate RV unit supply reaches the market in order to fulfil demand"

last year an extra 2123 oldies went into a village . So I guess that needs a build rate of about 1700 (my unresearched guess)units to accomodate them which is about the current build rate.

so ....no need for concern,well at least for 20 years. In fact I think the more that get built will just mean more oldies get to move in sooner. "build them and they will come",Kevin Costner.

All of this is about villas , not care beds , so that really plays plays into OCA s hand, because there ain't many of those being built.

disclaimer, I have two oldies who I want the best for.

[Xerof]

I like this filly. She reminds me of Black Caviar - famously recognised to have "the neck of a duchess and the ar$e of a cook".

So far, she has only won her first 'on-track' race, but if I have backed the right horse, there's a winning streak of 24 more 'wins' to come.

I'll keep putting more bets on her nose after each win over the next few years, i.e. add to a winning position

[winner69]

I like this filly. She reminds me of Black Caviar - famously recognised to have "the neck of a duchess and the ar$e of a cook".

So far, she has only won her first 'on-track' race, but if I have backed the right horse, there's a winning streak of 24 more 'wins' to come.

I'll keep putting more bets on her nose after each win over the next few years, i.e. add to a winning position

I think Black Caviar would beat Winx if they could have a match race ....but only just