OCA - Oceania Group - retirement villages

[warren]

Interesting math here ---"Ryman will pay a final dividend of 10.9 cents a share on June 22, taking the total dividend for the year to 20.4 cents, up from 17.8 cents a year earlier.Its shares last traded at $11.24 and have gained 30 percent the past year".

Good for Ryman but as I see it its a 2% (max ) return on capital ($11.24) to the stock holder?
Yet in its 1st year OCA is on target to pay stockholders 4....4.9% maybe even 5% ($1.0 .......$1.05 share cost approx) . I love dividends so should I sell every Ryman share I have and buy OCA ?? I do see the 30% increase in stock value but I love cash --and they may not get another 30% as the numbers get rather large whereas on a little bitzy $1 ummm!

[couta1]

Interesting math here ---"Ryman will pay a final dividend of 10.9 cents a share on June 22, taking the total dividend for the year to 20.4 cents, up from 17.8 cents a year earlier.Its shares last traded at $11.24 and have gained 30 percent the past year".

Good for Ryman but as I see it its a 2% (max ) return on capital ($11.24) to the stock holder?
Yet in its 1st year OCA is on target to pay stockholders 4....4.9% maybe even 5% ($1.0 .......$1.05 share cost approx) . I love dividends so should I sell every Ryman share I have and buy OCA ?? I do see the 30% increase in stock value but I love cash --and they may not get another 30% as the numbers get rather large whereas on a little bitzy $1 ummm!

If it's divvies you want, why wouldn't you buy the likes of HLG and SPK and get 10% gross minimum return? I would be basing the decision on potential increase in SP over the next few years, OCA should double over the next 2 or so years, I doubt RYM will. PS-Having said that RYM still top dog on the porch and have an amazing history in comparison to OCA at this point in time.

[winner69]

Interesting math here ---"Ryman will pay a final dividend of 10.9 cents a share on June 22, taking the total dividend for the year to 20.4 cents, up from 17.8 cents a year earlier.Its shares last traded at $11.24 and have gained 30 percent the past year".

Good for Ryman but as I see it its a 2% (max ) return on capital ($11.24) to the stock holder?
Yet in its 1st year OCA is on target to pay stockholders 4....4.9% maybe even 5% ($1.0 .......$1.05 share cost approx) . I love dividends so should I sell every Ryman share I have and buy OCA ?? I do see the 30% increase in stock value but I love cash --and they may not get another 30% as the numbers get rather large whereas on a little bitzy $1 ummm!

Ryman have never gone back to shareholders for more cash since the IPO ...majority of profits churned back into the business

I reckon that Oceania will need to go back to shareholders sometime if they continue to pay these big divies ....debt can only go so far

[Maverick]

Ryman have never gone back to shareholders for more cash since the IPO ...majority of profits churned back into the business

I reckon that Oceania will need to go back to shareholders sometime if they continue to pay these big divies ....debt can only go so far

The way I see the model it's not that cash hungry to expand. The magic of the "right to occupy" model is that you don't need that much money to keep growing.

Bob the builder assembles the unit, OCA say thanks very much, good job and hands over the cash for the keys. Then grandma rocks up to OCA and says "wow , I like that " and pays cash up front for it and moves in for 7.7 years. OCA have just recouped their outlay (which includes about a $58,000 profit margin on the build.) All cashed up ,OCA can go back to see Bob to build another one. Repeat.

Then when Grandma moves out she has the substantial deferred management fees and tidying up costs deducted from her initial outlay. OCA put their prices up after 7.7 years of inflation and starts the whole process again.

The way gran sees it, she bought the "corker nice" place. OCA see it as Gran has just paid cash for a house she is now renting from OCA...plus she will pay to repaint it when she leave.... model tenant. Everyone is happy.

They are looking at applying this model to care beds now too but I don`t know how far down that track they are.

[Xerof]

Q. Are IFT talking to MQG about an OCA shareholding?

A. I don't know

but what sliver of info has prompted your question?

[Ggcc]

Q. Are IFT talking to MQG about an OCA shareholding?

When I went to the infratil shareholder meeting. One of the directors said the reason why they sold out of Metlifecare was the clever accounting was even too clever for them to understand. They believed MET was a sound business, but due to them not fully understanding they sold that asset...... seemed with MET they did the right thing.
I would be surprised if they bought into OCA, but hey who know what the superfund and infratil could do for the elderly of NZ.

[warren]

If it's divvies you want, why wouldn't you buy the likes of HLG and SPK and get 10% gross minimum return? I would be basing the decision on potential increase in SP over the next few years, OCA should double over the next 2 or so years, I doubt RYM will. PS-Having said that RYM still top dog on the porch and have an amazing history in comparison to OCA at this point in time.

Many thanks C. Most interesting. Naturally I am as keen on tax fee C growth as anyone hence my very real $ interest in OCA.
but to hold Ryman stock at , say, 2% return when the chances of it doubling to $22 are fairly remote to say the least! makes me scratch my head. (I willingly acknowledge R's blue chip status but we've got Liz they haven't!) But OCA with a 4--5% return already proved (and almost in the bank) and a very Very real chance of doubling to $2 makes me feel rather content. (as I see things) so far.

[tobo]

I was just reading about an Australian company, Zenitas, who are addressing a gap in public funding and addressing the fact that a large percentage of people 'want' to age in their own home, by providing in-home services. Obviously this business model is very transport oriented, needing a distributed localised delivery.
It appears that the equivalent services are supplied by a myriad of little businesses in NZ. (And, indeed, Zenitas bought a few businesses to build themselves up.)
Am I right in thinking there is no public company in NZ that has this business model? It occurs to me that a village with a large infrastructure (kitchen, health, and care staff) could add this (as a sub-business) to people living in the surrounding streets (or wider). A village-based business already has a network of infrastructure around the country.

[Xerof]

For in-home assistance in NZ, it's provided by a division of the DHB's called Health Care. It's free (or at least it might be asset tested, not sure) and is an attempt to keep folk in their homes as long as possible, before they go into rest homes. Far cheaper for the gummit, before they go in to villages that carry a massive taxpayer funded subsidy. It works very well, I have recently experienced it with my mother-in=law.

[tobo]

Thanks Xerof.

Discl: holding and buying OCA