OCA - Oceania Group - retirement villages

[trader_jackson]

Sounds very bullish, however they did double their gross profit last year compared to the year before.

They've done it before (2015 to 2016), and remember it is actually only about 9% above 2016, so I think it is potentially a bit conservative.
They have had to estimate the impact a result of lower occupancy levels due, in part, to the decommissioning of sites for redevelopment and a reduction in the stock of Units available for resale. If development or decomissioning was faster than expected, or demand higher than expected, there is a chance they could beat forecasts. The opposite is also true of course.

84 cents would make Oceania very attractive in my view, if this were to be the case.

[trader_jackson]

I wonder what will happen to the share price once Macquarie and Real Assets are able to sell their shares after July 2018, if forecasts are not going as expected.

ARV faced alot of resistance, share price wise, and also at their AGM (a question regarding this was asked) about what would potentially happen when the operators of the villages shares came out of escrow, which was 60 ish % of the company (similar to Macquarie and Real Assets ownership % after IPO).
I myself had this question in my head, but reality was: nothing happened as the villages probably knew how well they were doing, vs the share price which was unresonably undervalued (in my view) and barely above listing price (being around the $1 mark)... and the aprox return subsequently went up 30% in a short period of time.

I think it will be different this time around and Macquarie will want to exit at least part of their big stake, however if the share price is like ARV's was, they may not sell to a few months/years after the escrow, and may sell down in small portions... who knows.

[peat]

From what I've seen it will be at the top of the range.

Personally I dont think its the pick of the bunch, but its just different enough to be of some value for diversification re the care vs residential aspect.

[Joshuatree]

Thanks HectorP for making that article available

[limmy]

Is this IPO limited to firm allocations or can the public apply through a public pool?

[peat]

Is this IPO limited to firm allocations or can the public apply through a public pool?

there is no public pool.
brokers only, its time to pull those strings with the brokers you have given any business .... we'll definitely be favoring those who work with us

[NZSilver]

Is this IPO worth a dabble?

[Lola]

Is this IPO worth a dabble?

Chris Lee has an excellent article on his blog today
Without so much as saying so he thinks yes it is

[trader_jackson]

Chris Lee has an excellent article on his blog today
Without so much as saying so he thinks yes it is

It seems Chris doesn't mind Oceania, which is a huge change of heart compare to Arvida, yet they are remarkably similar

To me, the only logical conclusion I can draw is that Chris didn't read Arvida's IPO Prospectus, but has read Oceania's (this time around)... he goes on about how a good feature of Oceania's is Brownfield Development quote: "It has many villages, some with under-utilised land and a few with such prime locations that complete rebuilding programmes would make sense. This type of expansion is described as Brown Field"... this was a key point referenced on multiple pages time and time again in Arvida's prospectus.

He also mentions quote: "key for those villages, like Arvida and Oceania, which rely largely on rest home margins, has been the Crown’s acceptance of the ‘’premium room’’ charge, as the incentive to build more care beds." as if this is some sort of brand new, never before thought of idea... this was also mentioned several times in Arvida's prospectus! such as on page 38 Primary Aged Care Revenue Drivers; Care Fees; "Arvida charges premium rates for its quality offerings at most of its existing villages".... Premium rooms are not new, but potentially, increasing in popularity.

He also mentions quote: "At that point Arvida looked to have bleak prospects, made the more difficult by the long-term problem it faced (and faces) of integrating dissimilar villages, each one previously owned independently, usually by a couple who were quite used to making their own decisions, and being bound by no corporate management." Integration has never been an issue, and, if anything, the Arvida brand name is now widely known for a good continuum of care, among other positive things, throughout the country... and the villages were probably only to happy to hold shares together rather than fight it alone (and the economices of scale etc that comes with a roll up).

I think in his origional article, dogging Arvida of course, not only did he miss, like most, the huge upside in a quality, carefully executed, acquisition strategy (a point that seperates Arvida and Oceania), he also mentioned how it was just an exit plan for all blacks (or something along these lines) and how this was, also, somehow a reason not to invest...

It seems, like a couple on sharetrader here, he was too quick to try point out all the flaws of Arvida, without actually reading (and thinking) deeper about what Arvida was offering.

Lastly, in the article that was apparently about Oceania, it seems it was also some sort of a justification aritcle on Arvida fantastic performance since listing

[percy]

We live in interesting times.
I think tomorrow will be very interesting for retirement sector investors.
May be known as The IFT/MET ripple effect day?