Thanks Beagle, very well put. Pricing low leading to revenue damage and brand damage from being seen as "cheap' in the market will do them no good. Let's hope Brent gets this dealt to quick smart.
Thanks Beagle, very well put. Pricing low leading to revenue damage and brand damage from being seen as "cheap' in the market will do them no good. Let's hope Brent gets this dealt to quick smart.
Brents been in the leadership team for a year now ...and no doubt had a great deal of influence with cash involved ....hmmm
At the top of every bubble, everyone is convinced it's not yet a bubble.
Brents been in the leadership team for a year now ...and no doubt had a great deal of influence with cash involved ....hmmm
And that's one of the issues that worries me. A little birdie told me that SUM's former CFO, (incoming CEO now), set all the unit pricing for SUM. Hmmm
Might try and reach out to him after the annual result and try and get a gauge on his thinking.
Last edited by Beagle; 12-03-2021 at 11:39 AM.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Ok that's a fair point and not something I actually thought about before I posted . Although I'd say average occupancy length is more important to DMF than say a 5 to 10 percent increase in price.
Dont get me wrong, the best for shareholders is to be charging a market price. I am just trying to point out rest homes arent your typical property development business.
Even allowing for the so-called ‘mix’ impacts this chart from half year preso didn’t seem quite right at the time .....and maybe confirms what we are talking about
Last edited by winner69; 12-03-2021 at 11:58 AM.
At the top of every bubble, everyone is convinced it's not yet a bubble.
Not sure if you have the time or inclination Winner but it would be interesting to do a chart comparing those selling prices above with the mid point for the relevant period (Sept 2020 for the most recent half year) of the national average market price of houses to track what percentage of the national average price the various types units have been selling for and see what the deterioration in percentage has been.
e.g. Sept 2020 roughly mid point of 1H F21 year national average price was $685K whereas in February 2021 it was $780K so a ~ 14% increase in just 5 months.
I think in the current environment there needs to be firstly an annual pricing change for OCA units effective immediately of circa 23% to account for the movement in the national average price year on year to February 2021 and then quarterly changes from here to ensure they are keeping pace with the market. Their marketing needs to focus more on the benefits of village life and a LOT less on their pricing, (its expensive to live in N.Z. no matter what housing solution you choose including renting, that's just how it is). The standard of care should be forefront in their marketing, lifestyle aspects, camaraderie and companionship with other residents, fixed fees for life, you can bring your pet...all that sort of thing...not price.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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Originally Posted by 850man
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