OCA - Oceania Group - retirement villages

[macduffy]

Fairly normal for stocks to trade more heavily following an announcement. The fact that price has dropped would indicate that there were a lot of holders disappointed by the numbers.

Disc: Happy and holding.

[winner69]

I think we need to forget doing comparisons to last year and think just what maybe in the future.

As beagle says should sell more units in H2 and the way the property market is going they should easily exceed the $52m underlying profit ‘target.’

A lot has happened since they came up with that number (esp property prices) so maybe that word on the street $60m plus is still a give.

[warren]

Fairly normal for stocks to trade more heavily following an announcement. The fact that price has dropped would indicate that there were a lot of holders disappointed by the numbers.

Disc: Happy and holding.

Many thanks for that

Disc: Happy and adding

[Ggcc]

Earl Gasparich, Chief Executive Officer, commented:
We have delivered a strong result for the first half of the year and expect to achieve our forecasts for the year ending 31 May 2018 set out in our Product Disclosure Statement.

I really don’t know what people expected other than a miracle lol. I am still a happy holder and when more funds become available I will be investing at these prices. Great long term company

[dabsman]

Pretty happy. Just doubled up. Third biggest holding now.

[BobbyMorocco]

First impressions. Solid result investing for the future. Developments on track and on budget, (no easy feat in today's market)
Underlying profit on track for 8.42 cps as per IPO forecast. Most future developments already consented removes risk compared to other sector participants.
Seems obvious to me 2H realized profit from new developments will be a lot higher than 1H.
Looking forward into 2019 and beyond they have a credible development pipeline and are slowly building a credible track record of completing developments on time and on budget. Care standards second to none. NTA is up to $1.01 per share. Good embedded value of $145k per unit. Development margin in 2H looking to be mid 30% mark which is impressive.

This looks to be a shaping up as a good core portfolio stock going forward. $1.01 / 0.842 = forward PE of just under 12. Very cheap for a sector with strong tailwinds and their stellar care reputation will hold them in good stead in terms of market demand. (Note I have used the theoretical ex divvy price in PE analysis as they're going ex very shortly)

Yeah, I admit there are some good things to come out of the announcement (for those of you who think I'm just being a Negative Nancy) but OCA's trailing twelve month PE is just shy of 18. This is using earnings from the second half of FY17 and HY18. Using SUM as a comparison, SUM's trailing twelve month PE at the current share price is just shy of 16. This is using full year earnings of $78m that will be announced next month.

This morning I was considering buying into OCA with some of the funds I've allocated for the retirement sector, but after the announcement this morning I don't think I will. I think SUM, as a proven performer and on a lower PE is better value and am happy to stick with that for now. I will reconsider OCA after the full year results if they meet their forecasts. I expect OCA's share price to stay around $1.00 - $1.05 until then. Happy to be proven wrong and wish the holders luck.

[hardt]

It’s got me stuffed and I’m pretty clever

But a 112% profit increase is good no matter what .....should give share price a decent boost

Almost all of that profit increase was a reduction in debt load ex IPO leading to a 90% reduction in interest and finance costs.

Closer to 10-15% growth if we are looking on a like for like basis.

Still solid growth and will soon be trading on the lower end of the sectors valuations and paying a fair dividend.

[Beagle]

Yeah, I admit there are some good things to come out of the announcement (for those of you who think I'm just being a Negative Nancy) but OCA's trailing twelve month PE is just shy of 18. This is using earnings from the second half of FY17 and HY18. Using SUM as a comparison, SUM's trailing twelve month PE at the current share price is just shy of 16. This is using full year earnings of $78m that will be announced next month.

This morning I was considering buying into OCA with some of the funds I've allocated for the retirement sector, but after the announcement this morning I don't think I will. I think SUM, as a proven performer and on a lower PE is better value and am happy to stick with that for now. I will reconsider OCA after the full year results if they meet their forecasts. I expect OCA's share price to stay around $1.00 - $1.05 until then. Happy to be proven wrong and wish the holders luck.

Hi mate,
I hold both with a bias in terms of capital allocation to the proven performer. The market is always a forward looking animal so tailing PE's are of little relevance.
I'm happy to take them at their word that OCA is on track to meet IPO forecasts and believe a forward PE of 12 is very sound value for a stock in this sector with their stellar reputation for care.
Look at it this way. If you're moving into a retirement village in the mid 80's you're going to probably pick one with the stellar care reputation, kind of like if you want really good inflight service you'll fly Singapore Airlines or Emirates business class. A PE of this level is possible still appropriate until they prove themselves further but there is definitely potential for a rerating over time.

SUM's strengths are their independent living units which are very spacious on average for the sector. Too early to make the call on their underlying profit for 31/12/18 but my best guess at this stage is $90-95m, about 40 cps. Dec 18 forward PE is about 13.8 times.

[winner69]

Quite often when a decent divie is declared the share price goes up by about the size of the divie

So the 5 cent fall in the share price today is pretty dramatic in this context - not up 3cents but down 5cents

Even more of a bargain I hear some of you say .....but leave some for tj

[Onion]

So the 5 cent fall in the share price today is pretty dramatic in this context - not up 3cents but down 5cents

To all the posters that were all promising me a share price jump -- I want a refund!

On other other hand Percy - hopefully I am "well positioned".