OCA - Oceania Group - retirement villages

[trader_jackson]

To give you an idea of how ARV and Oceania have (or likely to) change a few years after listing:

Arvida:
Prospectus (December 2014 - 17 villages):
Care Beds: 952
Retirement Units: 812 ('high margin' Independent living apartments: 46%)
54% / 46% split
1764 Total

March 2017 - 26 Villages
Care Beds: 1461
Retirement Units: 1285 ('high margin' Independent living apartments: 54%)
53% / 47% split
2746 Total

March 2019 Forsyth Forecast - 26 Villages
Care Beds: 1511
Retirement Units: 1517
50% / 50% split
3028 total

Oceania:
Prospectus (March 2017):
Care Beds: 2638
Care Suites/Care Studios: 241 ('high margin' care beds)
Retirement Units: 1071 ('high margin' Independent living apartments: 100% - I think)
67% / 6% / 27% split
3950 total

March 2019: (Total Consented or Under Construction)
Care Beds: 2284
Care Suites/Care Studios: 580 ('high margin' care beds)
Retirement Units: 1669 ('high margin' Independent living apartments: 100% - I think)
50% / 13% / 37% split
4533 total

March 2021?: (Total Consented, Under Construction and in Planning and Consenting phase)
Care Beds: 2284
Care Suites/Care Studios: 877 ('high margin' care beds)
Retirement Units: 2050 ('high margin' Independent living apartments: 100% - I think)
44% / 17% / 39% split
5211 total

Perhaps interestingly, Oceania has a higher, current, percent of independent 'high margin' units that Arvida, although note that Arvida are beginning to roll out/convert care beds into higher margin Care Suites/Care Studios like Oceania (ie putting an ORA over the care bed)

Conclusion: It is clear both Oceania and Arvida are moving away, in % terms, from a 'care heavy' model, while maintaining a great continuum of care, something that will become increasingly important. Greenfield development is only a matter of time for both Arvida and Oceania... both respective prospectus have mentioned this, yet was somehow missed when Arvida went public (and its share price proceeded to the low 80's, before becoming the best performer by a mile the following year).

If you aren't interested, please pass this information onto your brokers asap, preferably mentioning that the price is far to expensive... that way I might pick up a bargain

Posted this back in the dark old days (early april) when all anyone and everyone (including the supposed insiders) were doing was talking about was how bad/inefficient management, how the wage rises are going to kill them, how they surely couldn't achieve what they had laid out in the PDS and a bunch of other things which seemed to be (pretty) fake news (later confirmed to be by the share price I suppose, now 23% ahead of IPO price in less than 3 months).

I saw an interesting slide (slide 6) that looked very similar to my analysis/assumptions, the numbers were not surprising I suppose, reconfirmed they are bang on track, what was surprising was this 'transformation' was signaled (and largely ignored) nearly 3 months ago... I just couldn't quite match OCA's pretty graph and stuff.

Great to be on board with 3198 other shareholders.

[Joshuatree]

You're a legend tj; the real deal. Thanks for helping me and a few others making money, hats off.

[Snow Leopard]

But if you are going to subtract the property revaluations then you also need to remove the other costs associated with those revaluations. Fortunately OCA do that for us on page 14 of their presentation and show underlying NPAT of $13.4M

You have misunderstood page 14. Take the property revaluations out and you are back to a loss.
Then add in the expensed transaction costs and it is possibly break even.

tj - I got on the register today and I am in profit - but not enough to pay for drinks yet.

Best Wishes
Paper Tiger

[winner69]

Head honcho Bill on radio this morning

http://www.radionz.co.nz/audio/playe...o_id=201852693

Talking off 300 plus new units in F18 which seems heck of a lot more than in IPO forecasts

And countless mentions of acquisitions because plenty of funds at their disposal (more debt t_j). People knocking their door say buy us etc.

Comfortable with F18 forecast - yes, we know what comfortable really means eh

Wow - have a listen to give you the warm fuzzies on a cold morning

[Bjauck]

Posted this back in the dark old days (early april) .....

Great to be on board with 3198 other shareholders.

3199 now. I waited for the results and have now switched some Rym for a holding in OCA. It took some steel and confidence for you to stick to your guns despite a raft of cynicism (as with ARV.)

[janner]

Not enough fuel to back the truck up... Had to be satisfied with the boot of the Mini.. Now holding at ave .91


Disc Happy holder. Onwards and Upwards..

[Beagle]

Not FOMO - just an astute play by Mr Beagle

Potentially good/great short/medium returns with low risk.

Thanks mate but not really an astute play, just simply risk mitigation. As mentioned before, no harm in letting an IPO find a floor and back test its IPO price and then build an uptrend and buy into that uptrend. Fact is this is FAR less risky than being an IPO investor and doubling down into that uptrend is still less risky in my opinion but generates superior profits as compared to a single shot IPO investment.
By way of illustration while watching CNBC the other day they noted that of recent IPO's in the States 4 out of 5 are now underwater.

All that said kudos to IPO investors who were fortunate enough to have a good relationship with their broker and get a decent allotment. I am happy for you and there's plenty of profit all round for everyone so lets all have a big group hug and be happy

Moving on...the IPO forecast is for 8.42 cps underlying profit for FY18. Initially I thought this might gain traction to a PE of 12 if they could hit that target and growth rate of 40% but after reviewing the result yesterday and reviewing their development margin and consented development pipeline I think this has the potential to grow to a PE of as much as 15 in its first year which sees my 1 year target price at 15 x 8.42 = $1.26.

Also worth noting with this one is the dividend yield. Based on 55% payout ratio stated in IPO doc's and 8.42 cps that's 4.63 cps and on 98 cps that gives a dividend yield of ~ 4.7% By way of illustration that's more than double RYM or SUM and the shares currently trade on a forward PE of 11.6, about half of RYM and 78% of SUM.
SUM have the proven track record though so are still my value pick for the sector but this horse looks like it might run pretty well too, (if they can prove they can execute well).

[janner]

As stated before, no harm in letting an IPO find a floor and back test its IPO price and then build an uptrend and buy into that uptrend. Fact is this is FAR less risky than being an IPO investor and doubling down into that uptrend is still less risky in my opinion but generates superior profits as compared to a single shot IPO investment.
By way of illustration while watching CNBC the other day they noted that of recent IPO's in the States 4 out of 5 are now underwater.

All that said kudos to IPO investors who were fortunate enough to have a good relationship with their broker and get a decent allotment. I am happy for you and there's plenty of profit all round for everyone so lets all have a big group hug and be happy

Moving on...the IPO forecast is for 8.42 cps underlying profit for FY18. Initially I thought this might gain traction to a PE of 12 if they could hit that target and growth rate of 40% but after reviewing the result yesterday and reviewing their development margin and consented development pipeline I think this has the potential to grow to a PE of as much as 15 in its first year which sees my 1 year target price at 15 x 8.42 = $1.26.

Re IPO's. My sentiments also...

[winner69]

Mr Beagle said - not really an astute play, just simply risk mitigation.

Risk migration IS an astute play

[Beagle]

https://www.odt.co.nz/business/newly...eats-forecasts