OCA - Oceania Group - retirement villages

[bullfrog]

It all depends on whether we’ll keep our safe little island Covid free, fingers crossed but v unlikely imo human error vs virus hmmmm. if it takes off, then the kiwi advantage is lost and the returners may boomerang, back to a place with herd immunity, and maybe to a country where house prices have plummeted. The returners may only put a short term stress on housing. OCA model is less connected to house prices than SUM, so imo has a lower long term risk.

[Waltzing]

check out the AIR NZ flight pre cautions or lax of them..

[winner69]

That guy Sagan also said this “When you make the finding of what Oceania is worth yourself - even if you're the last person on Earth to see the light - you'll never forget it.”

[Maverick]

Hey Winner , I'm thinking my prediction of 54m underlying profit you often refer to will prove a bit optimistic.
I've been fiddling away on the good old spreadsheets and have revised it down a little to 52-53m...BUT…. on top of this I still need to add Covid costs. I'm not talking about lost sales etc, that's factored in. What I haven't allowed for is the extra cost of doing business such as sick staff,security and PPE etc.
I've gone through recent ARV and RYM accounts and I can't find any clues what to expect. No point in contacting OCA directly at this ”blackout” stage.
Previously the Govt had said they would compensate providers for this expense but RYM have just said it will only be around 26m to fill a 80m hole(across the whole sector) and what does that even include? So looks like a sizeable allowance might be required.
My best guess , and that's all it is, is maybe around 3m.( RYM stated 54m shortfall divided by OCA market share)

If anyone out there does have an idea on this important missing piece, It would love to hear it.

So whatever the underlying profit might end up,it is very unlikely to have much growth YOY if any.(the last 2 yrs were about 51m).

While I consider a flat result will be an outstanding achievement for any company weathering the full timeline of the storm I still have a suspicion Mr market may remain unimpressed. The facts will read to many as 3 years of growth disappointment.

Reality is that the costs are one of and historical, cashflow will continue to afford a dividend and the delayed sales will still exist but will divert to appear in FY21.

Surely the share price has to sit around $1.20 if OCA can pull of a seemingly ho-hum result under these circumstances.

Again, if anyone can shed some light on what the OCA covid costs of operation might be, I'd be very grateful.

[Beagle]

Hi Maverick,
I have it on good industry insider authority that front line care staff were all paid $2 an hour extra for the 4 weeks of lockdown level 4.
Add to that there will have been extra staff required for security to each facility around the clock, 24/7 during lockdown level's 2, 3 and 4. Allow one security guard per care facility for 3 shifts per 24 hours for however many weeks the full lockdown range went for times say $28 hour and crunch those numbers and see what that figure comes too for security. On top of that will be extra PPE gear. Those are the direct costs that I am aware of.

My gut feel is direct costs and indirect loss of profit due to delay's in construction and settlement of some apartments will run to $10-15 million in total. (This is just a guess on my part as I do not have the patience to labour over spreadsheets for many hours and days trying to firm up any validity behind that) so its just a rough gut feel estimate. Some of this will be recovered from the Govt and some of it recovered in FY21 when delayed settlements are effected.

Positive factors resulting. OCA has considerable external bank debt which is priced based on the wholesale interbank bill rate plus a modest margin, they don't disclose this margin as it would be commercially sensitive information. From the half year report interest rates resulting to OCA on their debt facilities were circa 2.3- 2.8%. Since then the wholesale interbank bill rate has collapsed to unprecedented lows, (90 day rate was as low as 0.18% the other day) so I foresee their cost of debt being at an extraordinary low rate for the foreseeable future, perhaps even less than 2.0% ? You might want to revise down their finance costs for FY21 in your spreadsheet and other near term years going forward from there as I think we will have ultra low interest rates for quite some years to come.

[Snow Leopard]

That guy Sagan also said this “When you make the finding of what Oceania is worth yourself - even if you're the last person on Earth to see the light - you'll never forget it.”

I will never forgot the night he first said that. Mind you he had too many pints of creme de menthe and kept sneaking up to the fridge and then yanking the door open with a look of amazement then appearing on his face.

[Waltzing]

"I have it on good industry insider authority that front line care staff were all paid $2 an hour extra for the 4 weeks of lockdown level 4."

hang on....

no wonder Mr B and Mr P are always down the road with the money and the rest of us are only just pressing the buy or sell!!!!

[Beagle]

Its good to have a friend who works as a village manager at OCA

Estimate of weekly security costs. 44 sites to man using one security guard at each site for all 168 hours a week at an average of $28 per hour = $207K per week for security.
How many weeks were we in level 4, 3 and 2 I forget. 9 - 10 weeks in total ? Maybe $2m total for security costs ?

[Waltzing]

"Its good to have a friend who works as a village manager at OCA "


Well... i am hoping to pic up some more in the MID 70's but i wont hold my breath...

commercial not residential... but .... we moved into ARG recently ..

https://www.interest.co.nz/property/...nt-receive-any

[tommy_d]

Well... i am hoping to pic up some more in the MID 70's but i wont hold my breath...

none of my buying has been above 80cents yet, but i'm about ready to change that