OCA - Oceania Group - retirement villages

[SailorRob]

I think bull said price might now range trade between 69 and 74 for a while (v the 74 to 79 that lasted a while)

Why, that’s how TA often works out

Thanks Winner.

[bull....]

of course the term premium must affect stock like these

[Maverick]

does your analysis take into account new sales declining ? re-sales are keeping these RV companies above water and agree re-sales will continue strong
house market bottoming is not confirmed , just today........

Hi Bull , sorry for my late reply,
NO …I definitely expect new sales to be up , if they weren't I'd be very concerned.

National house sales are up 20% so no reason to think retirees moving around isn't part of that.

Couple of things in OCA`s favour this time;
They have plenty of unsold stock and their regional spread is pretty good. Julian Cook from SUM once said "it takes a long time for a community to digest a new delivery" so having multiple sites around being absorbed into suburbs is better than having only 1 or 2 large blocks.

They also have these deliveries now being sold down at various stages. So while Hellier starts its slow grind up in sales ( they are always slow at the beginning as the community vibe hasn't yet developed ) while others are starting to hum along now such as Awatere which had a very disappointing start.

As you would expect, I've accumulated good data and learnings now to draw on and have come up with sales of 36 this HY.
Without doing any work yourself and only using your personal vibe of the NZ market and the graph below, let me know if 35-40 new sales doesn't seem reasonable to you.

Graph . red = deliveries , Blue =new sales 1hy24 and 2hy24 are my forecasts.

[winner69]

Mav .. my numbers from REINZ sales volumes data have total sales for Apr/July period only up 2% v last year …your 20% seems pretty high to me. Maybe some localised data?

Apr/Jun sales were basically flat and Summerset new sales in that quarter weren’t too flash ..like up a few

Current quarter looking stronger with July/August volumes up 5% on last year ….be interesting to see whether this indicates Summerset reporting better numbers for Q3 (coming any day)


Whatever things looking better than earlier in year

Probably have to wait until late next month to see how Oceania have gone but Summerset report could be a good indicator

[Valuegrowth]

5 year average earnings give better picture than quartely earnings. Future earnings are more important than past earnings and current earnings. Can we expect growing earnings for the next five years at least. High inflation situation and high rates are not going to change anytime soon. Cost of doing business is also not going to go down in the near future.

[BlackPeter]

5 year average earnings give better picture than quartely earnings. Future earnings are more important than past earnings and current earnings. Can we expect growing earnings for the next five years at least. High inflation situation and high rates are not going to change anytime soon. Cost of doing business is also not going to go down in the near future.

Yes and no. House prices seem to be on the rise again (though so far only moderate). As we all know - rising real estate prices are good for retirement villages (for all of them, not just OCA). Interest rates might hang around for another couple of years, but inflation appears to drop already now here as well as in other parts of the globe, so - not quite sure about your concerns in a 5 years scenario?

[Maverick]

Mav .. my numbers from NZIER sales volumes data have total sales for Apr/July period only up 2% v last year …your 20% seems pretty high to me. Maybe some localised data?

Apr/Jun sales were basically flat and Summerset new sales in that quarter weren’t too flash ..like up a few

Current quarter looking stronger with July/August volumes up 5% on last year ….be interesting to see whether this indicates Summerset reporting better numbers for Q3 (coming any day)


Whatever things looking better than earlier in year

Probably have to wait until late next month to see how Oceania have gone but Summerset report could be a good indicator

Hey Winner, you`re really are good at this stuff and I appreciate the feedback,

I recalled from memory somewhere amongst the sea of property statistics the 20% rise so after your post I double checked.
Stats NZ have the Q2 up 23% from Q1 as per chart below but otherwise it looks in line with last year as you rightly point out. I guess the good news is that the cratering of sales Q1 has recovered. The terrible Q1 sales clearly had a huge effect on OCAs sales FY23 ( and other operators ).
Q3 isn't out yet but I expect from general media that it will be similar or slightly better than Q2.( Also as per your figures of July August being up 5% )

You're bang on the money that SUMs next update will be telling, looking forward to that. Last result for them was slow but that was due to stock levels and delivery timings.

None of this alters my 36 sales forecast though as it is calculated on more specific things. I've developed a whole lot of rules and applied them to each specific village to get the total. It works out good enough anyway.

Cheers for your comments.

[Daytr]

Hey Winner, you`re really are good at this stuff and I appreciate the feedback,

I recalled from memory somewhere amongst the sea of property statistics the 20% rise so after your post I double checked.
Stats NZ have the Q2 up 23% from Q1 as per chart below but otherwise it looks in line with last year as you rightly point out. I guess the good news is that the cratering of sales Q1 has recovered. The terrible Q1 sales clearly had a huge effect on OCAs sales FY23 ( and other operators ).
Q3 isn't out yet but I expect from general media that it will be similar or slightly better than Q2.( Also as per your figures of July August being up 5% )

You're bang on the money that SUMs next update will be telling, looking forward to that. Last result for them was slow but that was due to stock levels and delivery timings.

None of this alters my 36 sales forecast though as it is calculated on more specific things. I've developed a whole lot of rules and applied them to each specific village to get the total. It works out good enough anyway.

Cheers for your comments.

Guys these are the figures from REINZ's August report. The September report should be out in the next week.

"Compared to August 2022, August 2023 saw an increase in the total number of properties sold across New Zealand, up 9.2% to 5,509, from 5,047, and up 9.2% month-on-month. For New Zealand excluding Auckland, sales counts also increased by 5.2% year-on-year from 3,508 to 3,690.At the end of August, the total number of properties for sale across New Zealand was 22,750, down 10.6% (2,691 properties) from 25,441 year-on-year, and down 1.5% month-on-month. New Zealand excluding Auckland inventory was down year-on-year from 15,196 to 14,099, a decrease of 1,097 properties or 7.5% annually."

[winner69]

Yes Mav 35 new apartment sales in H1 good compared to 28 last year ….but wouldn’t it be cool if they did 44 like 2 years ago

[Maverick]

Ok Winner, just for fun I did some more math's on new apartment sales. Blending the NZ statistic housing data with sales and stock levels over the last 5 years...

These are my simplified observations;

OCA used to sell 40% of available stock (HY) in a medium to red hot property market. Full delivery sell down takes 1.25 yrs
OCA used to sell 30% of available stock (HY) in a cooling and reversing property market. Full delivery sell down takes 1.6 yrs
OCA just sold 20% of available stock (HY) in the worst property market in 15 yrs. Full delivery sell down takes 2.5 yrs

I would call this market a slowly warming property market which to me suggest sales of 25% ( that's 42 sales compared to my expected 36)

Should they achieve 25% sales of empty stock this HY then that's an extra Unpat 0.6c cps (annualized) to my hopes of 10.5c eps
Your dreamy 44 sales would require them to sell 26% so your tongue and check comment is not at all far fetched. That's an extra 0.9cps.

So whatever November may bring, while my predictions certainly wont be perfect , it is very very hard to see how OCA will disappoint.

Anyway , today has all got far too technical, I've enjoyed digging around the sales stats but I really do have to get the vege garden sorted now.