OCA - Oceania Group - retirement villages

[Antipodean]

Looking at it all wrong, think real world not accounting book.

Search for hidden assets...

Absolutely nobody can figure out actual NTA, it's hilarious people just parroting crap without thinking it through.

I understand there are more interesting ways to look at the assets OCA has, including the float and non tangibles.
I choose to be conservative and use the reported net tangible assets OCA has for some high level analysis.

I've been buying OCA bits since 2018, and haven't sold any. My average is around what the current price is so not a great investment considering the time span.
I think there are risks at the moment - however I also think the market has over punished OCA for this which is why I top up when I can.

What I'm trying to get to is I'm a supporter - so lets not split hairs on which figures we use.

[SailorRob]

The difference is Buffett can generate a decent return from his float. OCA can’t.

Something not working

I don't disagree here but we have to look out a little.

[SailorRob]

I understand there are more interesting ways to look at the assets OCA has, including the float and non tangibles.
I choose to be conservative and use the reported net tangible assets OCA has for some high level analysis.

I've been buying OCA bits since 2018, and haven't sold any. My average is around what the current price is so not a great investment considering the time span.
I think there are risks at the moment - however I also think the market has over punished OCA for this which is why I top up when I can.

What I'm trying to get to is I'm a supporter - so lets not split hairs on which figures we use.

Yeah what's a billion dollars between friends.

Not splitting hairs, the float is the entire story...

[Muse]

Out of curiosity SailorRob what led you to focus on OCA instead of the other RVs like Summerset, Arvida, Ryman etc.? OCA not the only one to have a float. Was it something about OCA's business model (focus on aged care, mix of units etc), its financial metrics (rate of growth in BVPS, uEPS, ROE) or relative valuation (p/nta, PE etc) that led you to focus on OCA instead of one of the others?

[winner69]

Mav will no doubt tell me what happened but heaps more new sales but less realised gains/development margin ($s)

Like H123 there were 61 sales and average gain was $207k
And.H223 there were 67 sales and average gain was $294k
Then H124 84 sales but average gain only $154k

That’s a huge drop and less than what was being achieved pre-covid

No doubt the ol excuse of geographic / type mix eh …not heavy discounting.

[ValueNZ]

Growing the float at 6% in 6 months in a depressed property market ain't too shabby. Plus I'm pretty happy they decided to not pay dividends this interim. Would be better if they stopped it until they can no longer create a satisfactory return from each dollar retained.

Overall things appear to be going well.

[Rawz]

Best not include the float in the equity calc otherwise ROE looks depressing

[winner69]

Cash burn $60m about same as pcp (excluding acquisition) and more than H223 ……..more debt to fund

Just as well they are proud of their debt headroom or whatever they call it

[Leemsip]

I strongly disagree with SR on the float. They have spent it all already. I get that its an interest free loan etc, but the $$ is all sunk into the assets. Counting the float on top of the assets doesnt make sense to me and is a straight double count. Its still a liability as OCA owes the oldies the money, just not an interest bearing liability.

My 2c on OCA is, without valuation uplifts across the portfolio (these are slowing significantly and will slow further), and without loads of new builds which are built for a one off profit (this is slowing), the business model is a money looser and uninvestable. Share price to decline steadily going forward.

I acknowledge and bow before SR superior intellect, money making ability and sharemarket nouse etc.... so not an attack.

I will now hand over to Winner to discuss a cap raise.

[SailorRob]

I strongly disagree with SR on the float. They have spent it all already. I get that its an interest free loan etc, but the $$ is all sunk into the assets. Counting the float on top of the assets doesnt make sense to me and is a straight double count. Its still a liability as OCA owes the oldies the money, just not an interest bearing liability.

My 2c on OCA is, without valuation uplifts across the portfolio (these are slowing significantly and will slow further), and without loads of new builds which are built for a one off profit (this is slowing), the business model is a money looser and uninvestable. Share price to decline steadily going forward.

I acknowledge and bow before SR superior intellect, money making ability and sharemarket nouse etc.... so not an attack.

I will now hand over to Winner to discuss a cap raise.

Holy hell when SR finally gets in front of a God damn laptop....