OCA - Oceania Group - retirement villages

[percy]

Oh dear $1.04 again....never mind...Chinese year of the dog ends on 4 February 2019 so all those that bought a pup off Macca's when they sold down at $1.10 in September 2018 should be all good later next month...or maybe not. 2019 for the Chinese is the year of the brown earth pig
Anyway enough silliness for me on Auckland anniversary day.

Yesterday you were going to get a plaque made "Rome was not built in a day".
Today it is "we brought a pup of Macca's".
Wonder what it will be tomorrow.?..................lol.

ps.You may like to give your old plaque to W69's bowling mates.

[couta1]

Could have been worse and closed at 103

Macquarie sucked in many eh ....wonder what they do next?

Nothing at all.

[Beagle]

Yesterday you were going to get a plaque made "Rome was not built in a day".
Today it is "we brought a pup of Macca's".
Wonder what it will be tomorrow.?..................lol.

ps.You may like to give your old plaque to W69's bowling mates.

Was a bit of tongue in cheek silliness Percy. Day off up here...

[percy]

Yes well...................???????????????.Yes...lol.

[Baa_Baa]

If it's as good as the promoters repeatedly say it is, which took it to over $1.20, and you believe it, then as reality has taken hold, it's time to average down and maybe even hope for some calamity as well, like a housing price bust and/or a global finance/equities bust and sentiment acceleration into value investing territory where your average hold ends up being the cumulative buy of a lifetime. Well, one of them anyway.

I love Vagors stories about buying RYM during the GFC where he just smashed it (cudos), OCA could be a repeat, we can only hope. Either which way, I reckon we should all decide on our personal price point which represents fair value and accumulate whatever we can afford and justify around and below that, then do what Couta says and wait it out for a few years, enjoying the dividends along the way and any capital gains that emerge after the bad times pass. It may be short lived, or it may get caught in a recession, who knows. That shouldn't weigh on ones long term conviction. It should present opportunity where others might see despair.

The only real concern I have is unquantifiable, being what the government morons might do when they finally decide everyone should prosper from the retirement sector largess rather than a few greedy selfish shareholders, like what's happening in the West Island at present. But even then, I reckon someone has to own these companies and it's too big already for the government to burden general taxpayers, so whether it gets a bit diluted by the socialists wanting retirement living and care to be a social service, the owners will still look after themselves and us shareholders' precious earner.

A fascinating opportunity in troublesome times, my holding just keeps getting steadily larger, it may be smaller or larger than yours, but that's irrelevant, my sentiment should be clear.

GLTAH
BAA

[kiora]

I don't hold but well said Baa. GLTAH

[Beagle]

I am presently doing a Snoopy, (no apparent interest in this one from the other Beagle) so I have to dig around myself.... and endeavouring to obtain more background information on what is behind the ~ $7m increase in other expenses in the financial statements that is not explained with a note to the accounts. Are these one-off expenses or does this represent a fundamental ongoing shift in their cost structure ?
Important to note these are not wages cost increases which are disclosed elsewhere and explained.

I have emailed Earl as I feel an apparent ~ $14m per annum increase in undisclosed "other expenses", (I have to assume they are ongoing at this stage in the absence of a satisfactory other explanation) without any explanation in the accounts is both material and requires further explanation. I'll let you guys know what I find out, (if anything) in due course.

If anyone wants to opine on what might be behind this increase I am all ears.

[Joshuatree]

I have bought more for our Estate ,waiting to add for more myself. Too many helicopter parents here micro managing their children and we know what they turn out like

Over 3 months
OCA down re 9%
SUM,RYM,MET re 12-12.5% down
ARV re 2% up

[winner69]

Just been looking at your interesting post on value creation v destruction. How do you (or others) rate Oceania for return on capital prospects?

In this sector ROICs are - about 4% for MET, about 7% for OCA, ARV and RYM, and SUM has highest at about 10%. (Based on last full year financials for each)

Depending on what cost of equity punters want to use the 7% is probably enough to cover their cost of capital which means ARV, RYM and OCA not ‘destroying value’ like MET is. SUM is a ‘value creator’ on this ‘profit’ measure.

As to OCA prospects ....if all goes to plan it will no doubt improve. Sounds a bit like Kiwibuild doesn’t it - build a lot of units and hope for the best.

[trader_jackson]

In this sector ROICs are - about 4% for MET, about 7% for OCA, ARV and RYM, and SUM has highest at about 10%. (Based on last full year financials for each)

Depending on what cost of equity punters want to use the 7% is probably enough to cover their cost of capital which means ARV, RYM and OCA not ‘destroying value’ like MET is. SUM is a ‘value creator’ on this ‘profit’ measure.

As to OCA prospects ....if all goes to plan it will no doubt improve. Sounds a bit like Kiwibuild doesn’t it - build a lot of units and hope for the best.

Not really like KiwiBuild at all, for starters, projects are on time and on budget (and actually getting built... aka not exactly a Twitford "sounds good, doesn't work" policy)
And OCA tearing down hundreds of beds/units and replacing them with new care suites... KiwiBuild isn't tearing down any units I thought but could be wrong here (and all the disruption that causes for those residents being in the middle of a construction site). I am slightly worried OCA are getting a bit to aggressive with rolling out these care suites, as they aren't a silver bullet "one size fits all" that is for sure...
(maybe there is a reason none of the other 4 listed operators, with at least 1, RYM, having extensive experience in the care side of things, aren't too keen on 'pushing' care suites to anyone and everyone?)

I like how OCA 'introduced' a new headline number for how they report occupancy (by ignoring those villages with construction going in/around them)
(and then when you compare actual occupancy it isn't even in the 90's yet)... imagine if ARV did that, would probably be 99% or higher.

Anyhow, I look forward to walking around The Sands (which I drive past nearly daily) once it opens in May (possibly a bit hopeful with the May deadline, but we'll see)... it replaced a 50ish bed facility with 60 or so apartments and 40 or so care suites... no care beds there... then I can walk down the road to see Aria Bay, where a brand new state of the art hospital is being developed, along with more apartments - the real McCoy that one, with everything: Dementia, Hospital Care, Serviced Apartments, Independent Apartments and probably a few more options I don't know about. Great flexibility, shame the views aren't quite the same as The Sands, right opposite the Bowling club at least.