OCA - Oceania Group - retirement villages

[bull....]

dont forget minimum wage goes up from yesterday by 50c/hr so 2800 employees x 50c is roughly an increase of just under 3 million per annum to operating costs.

Have they factored a potential minimum wage increase in for 2018-19 yr? in there forecasts I doubt it

[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

[trader_jackson]

dont forget minimum wage goes up from yesterday by 50c/hr so 2800 employees x 50c is roughly an increase of just under 3 million per annum to operating costs.

Have they factored a potential minimum wage increase in for 2018-19 yr? in there forecasts I doubt it

I'm not sure if you were posting that as a joke, but one would like to think they would have, although doubt all 2800 of their staff are on the absolute minimum, in fact I would be surprised if it would be more than a couple hundred max on absolute minimum... not sure if you have read much on the thread, but for a start we know 51 of them are on 100k+

[bull....]

I'm not sure if you were posting that as a joke, but one would like to think they would have, although doubt all 2800 of their staff are on the absolute minimum, in fact I would be surprised if it would be more than a couple hundred max on absolute minimum... not sure if you have read much on the thread, but for a start we know 51 of them are on 100k+

haha ok so the wage operating costs will increase more than 3mil per annum also the care bed subsidy from govt is not guaranteed to cover this increase in costs

[trader_jackson]

haha ok so the wage operating costs will increase more than 3mil per annum also the care bed subsidy from govt is not guaranteed to cover this increase in costs

They are not just care beds....... see post 52

[bull....]

weather its ethical or not the future of low margin care bed facilities could be the securitization of them and selling them of as single room investments to the public.

[bull....]

They are not just care beds....... see post 52

yes thats why they moving more into high margin property trading although that gig will end for all of them either when the market becomes saturated or when the govt regulates the sector over the unethical exit fee structure.

[trader_jackson]

yes thats why they moving more into high margin property trading although that gig will end for all of them either when the market becomes saturated or when the govt regulates the sector over the unethical exit fee structure.

If you believe that is the case, MET and SUM will be first to fail, followed by RYM, then Oceania, then ARV... you might want to post on each of the other threads warning others of the 'imminent risk' of government regulation over ORA's

[bull....]

If you believe that is the case, MET and SUM will be first to fail, followed by RYM, then Oceania, then ARV... you might want to post on each of the other threads warning others of the 'imminent risk' of government regulation over ORA's

hardly imminent probably more likely to happen after saturation of the market and thats no where evident at the moment.

[trader_jackson]

hardly imminent probably more likely to happen after saturation of the market and thats no where evident at the moment.

Well that is good! Regardless, Oceania is one of the least concerned with a strong continuum of care (and care itself) focus, and I'm sure the rest of the market (being the other operators) will adjust accordingly.

My own view is that the "high margin property trading gig" probably won't 'end' for a good decade or two, and Government Regulation over "the unethical exit fee structure" will likely never occur.