Thanks for those broker updates guys. Reinforces my view that the announcement was very encouraging.
Just a couple of other thoughts. That's a lot of earnings accretion with spending just $57m. I'm really looking forward to seeing what the team come up with in terms of other acquisitions with the $290m in the years ahead. My goodness, with $290m they could do five more acquisitions of the same size (2 villages), that's potentially ten new villages all earnings accretive. Wow ! Interesting times !
In addition I would think the present environment (falling real estate market and very tight labour supply situation), will present some real bargains to be had. With Brent's background I think we can trust his ability to crunch the numbers accurately so all future acquisitions will also be strongly eps accretive.
I'm doing my best not to get too excited about this given all the headwinds I've alluded too previously but I really do think the headroom they have with their new bank facility and the prospect of up to another 10 villages and the direction the company are headed with more emphasis on independent living units is very encouraging for the medium to long term.
It'll be interesting to see the new NAV when they announce their result on 20 May. While some discount to current NAV is warranted by the issues I've alluded to with their legacy basic care model if the fair value NAV is close to $1.50, given the new growth by acquisition approach I can't help but feel the size of that discount pricing this at under $1 is factoring in too much pessimism.
Pending any untoward surprises in the upcoming result I'm inclined to think its now a case of accumulate for long term slow and steady growth on any untoward price weakness under $1. Provided one takes a multi year forward view this should do okay now, provided you buy it cheap.
Last edited by Beagle; 11-05-2022 at 11:30 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
I've recently handed back a care suite from a parent no longer on the planet for recycling and the heavy duty stiffing (agreed and accepted within contract terms) incurred for a shorter than planned stay should be a positive for the books.
More reasons for a hound to smile 😉
PS fair to say the environment there was the best around and the services received absolutely first rate. No complaints there.
I'm sorry for your loss mate. Its tough. I lost my Mum in April last year and I still really miss her heaps.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
We expect care suite DMF to grow +30% organically and see this as the number one key deliverable to support the stock long term.
This is what I have been talking about regarding the snowball effect. My forecast for FY22 is ~$49m for DMF, which is +30% versus an annualised FY21 value.
Heck...they might even do 8.5-9 cps or maybe even a bit more ? in underlying eps in FY23 (current year PE about 11) and with the snowball steadily building momentum in the years ahead plus more strongly eps accretive acquisitions more growth appears quite plausible after that. Seems a bit cheap under $1 even with legacy care and staff inflation issues. Hope there's no nasty surprises when they report on the 20th because I am leaning towards talking myself into buying some more.
Last edited by Beagle; 11-05-2022 at 10:17 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
what are the expense variances for those years.. If DMF increases outpace increases in expenses by a large margin well and good.... else ...not so good.
Originally Posted by couta1
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