Here's the latest financials.
Can you please point to me what the value of the float is in the report?
From what I am hearing from you, you are saying when they sell a unit & then set aside in cash the 70% they need to pay back at the end of the occupancy and that this cash is invested for a return. Is that correct?
Yep that's what I thought.
But it's not some pile of cash compounding in an investment.
It's just the proceeds from what they sold & they have a future liability to payback 70% plus refurb costs.
And as you say it's reinvested into the business, however they also have $600Mln of debt.
The better way to look at it is they are valuing 100% of their portfolio in the balance sheet as they have only sold a right to occupy and then offsetting the 70% as a liability. The DMF is actually 30% not the 70% and that 30% is less refurb costs.
Of course they are using the proceeds from sales along with debt to fund development, that's normal practice, not some mythical float.
When I discussed this with SailorBoy he was talking up the float as if it was some existing pile of cash being invested. By the end of the discussion we were talking about OCA's future ability to build up an actual float, I.e from say half the DMF I.e 15% plus any profits from new & resales, but this would only come about once expansion at least slowed or ceased.
Yep that's what I thought.
But it's not some pile of cash compounding in an investment.
It's just the proceeds from what they sold & they have a future liability to payback 70% plus refurb costs.
And as you say it's reinvested into the business, however they also have $600Mln of debt.
The better way to look at it is they are valuing 100% of their portfolio in the balance sheet as they have only sold a right to occupy and then offsetting the 70% as a liability. The DMF is actually 30% not the 70% and that 30% is less refurb costs.
Of course they are using the proceeds from sales along with debt to fund development, that's normal practice, not some mythical float.
When I discussed this with SailorBoy he was talking up the float as if it was some existing pile of cash being invested. By the end of the discussion we were talking about OCA's future ability to build up an actual float, I.e from say half the DMF I.e 15% plus any profits from new & resales, but this would only come about once expansion at least slowed or ceased.
What do you reckon Winner?
As I have assessed and posted before, there are two big assumptions being made with all the listed RVs:
1. That the 'free' refundable ORAs are automatically invested profitably on the asset side. St Helier shows that is not the case. And as has been pointed out by other posters, OCA's care units are a severe drag on operating profits.
2. That the RVs property portfolios are somewhat not subjected to the property cycle. Where other property companies have been taking hits on their property valuations in the last 2 years, the RVs have increased and continuously booked steady increases in property revaluations.
The market (the institutional one being critical in terms of driving the sp) obviously does not agree with the assumptions above - hence, the discount to NAB of 56% in the case of OCA :
Simplistically, OCA's property assets were valued at $2.54 billion as at 30 Sep 2023 vs Equity of $1.02 billion - leverage to upside and downside property valuations of 2.5X. So if the institutional market takes the view that OCA's property assets should be revalued down by 15%*, it can be seen that $381m would reduce Equity down to $639m (NAB down to 88c). 20% would reduce Equity by $508m so NAB would be 71c.
Disclosure:
I picked up some shares during the index sell down at 59c and thought that the sp would be tracking back towards 65c comfortably by now before the profit takers (from the index sell down) lock in their 10% gain. But they appear to be selling out at around current levels. Meanwhile, longer term holders have taken a hammering having bought all the way down and seem unable or willing to load up on much more.
I was looking for the directors and management to load up with more shares during the index sell down - would have been very encouraging but there have been no SPH from any one of them post the index sell down.
So looks like sp is going to range trade around current levels until results in late May.
I was looking for the directors and management to load up with more shares during the index sell down - would have been very encouraging but there have been no SPH from any one of them post the index sell down.
Does anyone knows when insiders are allowed to trade the stock? I suspect not until after the current reporting periods results have been made public
Simplistically, OCA's property assets were valued at $2.54 billion as at 30 Sep 2023 vs Equity of $1.02 billion - leverage to upside and downside property valuations of 2.5X. So if the institutional market takes the view that OCA's property assets should be revalued down by 15%*, it can be seen that $381m would reduce Equity down to $639m (NAB down to 88c). 20% would reduce Equity by $508m so NAB would be 71c.
Good thing no serious investor would value this company off it's equity value. What's important is the cash it can produce.
Originally Posted by winner69
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