OCA - Oceania Group - retirement villages

[couta1]

" ten minutes reading"

That's enough to get you in trouble if you make that an investing Rule for all stocks.

It may be suitable however for a defensive sector like this one where you want a chance of capital growth with low probability of capital destruction.

But the FA results for this puppy require full time approach such as MAV has taken.

Notice MR has yet to comment and that is one suspects for a reason.

My wife and I have a combined 60 yrs experience in this industry and about 16 yrs in OCA alone, get my point?

[Greekwatchdog]

[QUOTE=Waltzing;958424]" ten minutes reading"

That's enough to get you in trouble if you make that an investing Rule for all stocks.

It may be suitable however for a defensive sector like this one where you want a chance of capital growth with low probability of capital destruction.

But the FA results for this puppy require full time approach such as MAV has taken.

Notice MR has yet to comment and that is one suspects for a reason.


Seriously. Make your own mind up with your analyst.

The fact Beagle hasn't said anything mean he is putting his nose through the figures. After he has been in and out of this stock countless times. Just for the record neither has Ferg or Maverick commentated.

Do you still need your Mum and Dads permission to spend your own money?

[justakiwi]

You must have missed this:

#12787

Just for the record neither has Ferg or Maverick commented.

[Greekwatchdog]

You must have missed this:

#12787

I did. Thank you for highlighting this too me.

[Waltzing]

"about 16 yrs in OCA alone, get my point"

Applying a ten minute read is not a good idea ever to a public company.

Working inside an industry certainly reduces Risk.

[Habits]

Put away the cutlery and hide the steak knives, let's take a "ten minute" break. Couta really knows his stuff on this one at least

[allfromacell]

Very happy with the result, especially surprised by the development margins and I can't find any mention of supply chain issues or related cost pressures.

[winner69]

'Cheats' way of forecasting Underlying Profit' is Number of Sales x Realised Gain per Sale +/- a few million for the day to day operational gain/loss

This year all you needed was to forecast 450 sales and $125,300 gain per sale PLUS $1.3m to give $56.7m Underlying Earnings

I was pretty close with the $125k gain per sale but was a bit short of the 450 sales.

[Maverick]

Really nice to see some of the quieter posters with opinions on the result. The “feel “ out there seems pretty positive. OCA really is becoming easier to understand as they turn focus from the highly disruptive brown field developments to the undisruptive work and green field devlopments ahead.

I think Couta summed it up well that it only takes 10 minutes reading to get the vibe things are going ok and indeed OCA is poised for growth.

The negative ;
-The result on an earning per share (EPS) basis however remains bland. Being due to the newly issued shares soaking up the headline improved profit. So 5 years now we have got nowhere on that level.
-Corporate and staff costs continue their inexorable rise.

The positive;
-DMF village growth is growing handsomely ( this is the single most important long term KPI)
-Resales , new sales , new build margins, volumes and prices all going nicely. no weaknesses anywhere.
-empty unit numbers prove sales are still strong.
-Care DMF and PAC are growing into decent numbers now and in line with growth expectations.
-Build rate increased.
-Waimarie and Christchurch to be completed this year FY.
-affordability remains good and prices won't need unwinding due to HPI sliding.

Good to see the result presentation made simpler too with some bits dropped in the “results presentation” for the skimmers ( btw , loved the guy on the front page having a beer. Ha!) and other bits added to help in the annual report for the nerds.

What does all this mean?
Firstly the negatives listed shouldn't be unduly upsetting as they are inline with expectations but I was just hoping they would have started plateauing a little. They will at some point. I accept they are necessary as the increased company growth rate on all fronts is obvious and this all takes more people.
Now we are down to almost no profit margin left on Govt funds after care costs, it's still ok as there are now healthy extra charges for care driving profit growth now demonstrating good traction.

To digress a little , here's the reduction of the profit margin on DHB funding after care costs ...
7 years ago it was 17%. It reduced steadily over the next 4 years to only become 3 % . So for 3 years now the profit on DHB money has been steady around 3% . It was actually 1.5% this year. Now I don't know how much has been deliberate govt underfunding and how much has been covid extra costs. Time will tell. ( Pity the poor rest home owner without these fandangled contracts).

Looking forward;
From here there is still quite a wait for some EPS reward though. With the change in balance date we have a HY1 in winter and HY2 in summer. I'm expecting a weaker result next HY1 but a bumper HY2 result due to oldies hunkering down in the cold. Plus a few covid costs from earlier this year.

With my sheets updated and Waimarie- ,The Helier, brought forward then this company gets real interesting sooner than expected. For now and maybe another result ahead with another benign EPS growth, the share price has no driver to increase (unless the ultra- negative sentiment improves a little) but the profits after HY1 over the following 2 years , particularly 2024, became rather extraordinary. I'm keeping those numbers to myself, sorry guys, just too much work to give away.
So when to buy in is the big question; to wait 6 months or longer seems logical but any big boy who can see the profits looming( which are easy now now with less effort) as my proven spreadsheets are telling , then whammo. This thing is going to “go off” sometime between now and early 2024.

I honestly think Oceania`s biggest risk now is being taken over. These numbers are getting easier to understand in every report. Tons of history now and derisked.The incredible accounting complications of brown field development by emptying , tearing down 15% of your care beds before taking years to build/resell new ones are over as they now only have non disruptive work ahead. You'll notice the usual diagrams of this breakdown/ rebuild process are no longer in the presentations.( of course you did ).Yes, we might get an easy 30% profit tax free with a takeover but I can say that it would significantly pale in comparison to just a couple of years ahead.

Keep an eye on Greg, Liz and the others .I'll bet my right testicle they`ll be buying in as soon as they are allowed.

Over the next 2 years it's going to get pretty sporty.

[Beagle]

https://www.nzherald.co.nz/business/...ay+21+May+2022

Press are writing it up as a great story.

Oceania themselves say "Believe in Better". http://nzx-prod-s7fsd7f98s.s3-websit...382/370976.pdf

Village DMF revenue up a whopping 30%, Premium room income up 24%, EBITDA up 16%. Sounds fabulous.

So why didn't the share price take off on Friday like RYM's and SUM's did ?

Maverick seems happy.

What could possibly be keeping the share price in the doldrums ? a clue is in the negatives posted by Mav...but wait there's more on that front...I have more number crunching to do and will opine in due course.