OCA - Oceania Group - retirement villages

[winner69]

What happens when you promote a pretty good suburban chartered accountant to something beyond their core level of competency.

Be funny if Oceania bought them instead

[Beagle]

I wasn't aware it was as high as $1.75. 4 Buys tells the story though...should head into the 170's before too long.

A while back when WHS was in the low 330's the average broker price target was in the 380's, (I agreed and said it was worth at least that) and now the share price is there too.

A while back HGH was in the 180's and Jarden said it was worth $2.30 and I agreed and guess what... (they have since updated to $2.46).

I still reckon there's a lot of cash sitting on the sidelines. 7 year OCA bond issue heavily oversubscribed speaks for itself.

Resales and margins will have been going gangbusters before the lockdown and I think they will go absolutely ballistic afterwards as old folks scramble for the safety and security of a quality safe sanctuary from the world's problems and risks. Probably huge numbers of unit sales online over the lockdown (subject to physical inspection ASAP).

[tommy_d]

I am happy to be back to having a decent holding at 10% portfolio weight.

I stopped buying.
24% right now, average cost still under $1
small portfolio though

[Gunner]

A friend of mine works for another retirement company. They are all push push push and the tradies can't supply everything quick enough. the tradie are getting threatening words if they can't meet demand (no need to threaten if they can't get the parts). Easy to demand when most glaziers in Hawkes bay can't get aluminium for their windows. Workers are doing part time as they have no stuff. Equipment up in Auckland and the retirement provider says just get it. I have just had my house insulated and the insulator has said new builds are waiting for exterior cladding and he can't put stuff in as well as he is stockpiling as there is a shortage of that as well......... 2021 might be the year of the new leaky home saga with a different name..

That's because there'll be a contract with a completion date in it. The rest home may have significant damages due to late completion ie people have a set date to move in.

[Bjauck]

Average target has fallen from $1.75 to $1.68 in last few months ….what’s going on

That $1.75 was back during a short period when only 2 brokers gave a recommendation? Now 4 brokers are giving a recommendation. So maybe the same happened with brokers' target prices, with the average currently affected by more darts being in the dart board.

[winner69]

That's because there'll be a contract with a completion date in it. The rest home may have significant damages due to late completion ie people have a set date to move in.

Wonder if the builders / contractors share in the pain of any damages

[Ggcc]

That's because there'll be a contract with a completion date in it. The rest home may have significant damages due to late completion ie people have a set date to move in.

Could well be. Due to covid though, things are just not appearing. My mate is waiting for a part and was told 1 month to get it into the country. When lockdown hit the boat did a 180 and left the country not just with his equipment. He has now been told 2 more months. I can say without a doubt, that certain parts of rest homes business will just have to slow their build rate, or like cars go without certain stuff. You can’t build if you have no stuff. Another mate just hoarded $6000 worth of roofing screws as they keep running out. I see where this is going

[Greekwatchdog]

A bit of news from For Barr

Aged Care Sector
Lockdown Impacts; Not All About NZ




The share prices in the aged care sector, much like the rest of the New Zealand market, seem to have largely ignored the
impact of the latest lockdown. From a long term perspective this make sense. The experience from the last Alert Level 4
lockdown seems to have been largely benign and we now have an end game in sight in the form of the vaccine. Short-term
we expect to see some headwinds, primarily in the 1H22 (September) results for all three Aged Care operators with
March balance dates. We expect most but not all of this to be recovered in 2H22. We see Ryman Healthcare (RYM) as most
exposed, with its development pipeline weighted towards Auckland and Victoria (also in lockdown), followed by Oceania
Healthcare (OCA). We view Arvida (ARV) as least exposed of the three to the latest lockdowns with regards to
development risk, but it will also experience lost sales headwinds.
Development — will they or won't they deliver according to plan by year end? Victoria looks increasingly difficult
We have left our development delivery forecasts unchanged for New Zealand for all three March balance date aged care operators.
RYM and OCA both have a Auckland skew in their development pipelines and we believe timeframes will be tight to meet FY22
development guidance before financial year end (March 2022). Our forecasts are unchanged under the assumption that Auckland will
be out of lockdown by the end of September. For RYM's Victoria development, however, we have reduced our FY22 expectations by
50 units, taking our expectations of RYM's total deliveries in FY22 to below the bottom end of its guidance. We see the risks as
skewed to the downside to our lowered RYM delivery estimate.
Reducing estimates for FY22, largely unchanged for FY23/24. Increase target prices
We have reduced our FY22 earnings estimates as we believe that both new sales and re-sales won't fully recover from the Auckland
lockdown. There are meaningful sales lead-times, even with re-sales as the units need to be refurbished, marketed, and transacted on.
Even though we expect a catch up effect in 2H22 the net result is still likely to be negative. We have also revisited our target prices
with all three lifting as we roll them forward. We have increased our target multiple modestly for ARV and OCA (from 23x EV/Annuity
EBITDA to 25x) following a slow but steady progress on three fronts; (1) establishing a track-record of greenfield delivery; (2) proof of
concept of the care suite model; and (3) longevity as listed entities. We currently value RYM and Summerset (SUM) at a 40% premium
to ARV and OCA. We view this as motivated due to the longer track record of delivering growth. However, over time we expect the
discount to reduce meaningfully.
Figure 1. Summary of sector ratings and valuation
Company Ticker Current price (NZ$) Target price (NZ$) 24m fwd PE 24m fwd EV/Annuity EBITDA Rating
Oceania Healthcare OCA 1.53 1.90 14.1 18.4 OUTPERFORM
Arvida ARV 2.10 2.50 13.0 20.7 OUTPERFORM
Summerset SUM 15.40 13.85 18.1 34.8 NEUTRAL
Ryman Healthcare RYM 15.61 12.60 23.9 44.1 UNDERPERFORM

[Rawz]

Interesting, thanks for posting GreekWD.

OCA really cheap.

[Onion]

A bit of news from For Barr

Aged Care Sector
Lockdown Impacts; Not All About NZ

Thanks for that. I like the target for OCA!


Question to self - why are so many posters on ST some type of dog? Or cat? Why are vegetables so underrepresented?