OCA - Oceania Group - retirement villages

[ValueNZ]

And it's easy, relatively, to make that happen. The levers to produce investor/owner/shareholder returns are very simple to implement, albeit they take some time to take effect.

Yes, the question becomes whether to
A, finish up development and put all future cash inflow from new occupational right agreements into stocks and or bonds (Safest option, over 8 years investors today are looking probably at a 30%+ CAGR)
B, continue full steam ahead with development, under the assumption growing demand will allow for both the existing stock and newly developed stock to be sold down (This option possibly has the best outcome for investors, but is built on the assumption that stock doesn't just keep growing)
C, some combination of the both.

That's how I see it anyway, I prefer option C.

[Daytr]

Yes, the question becomes whether to
A, finish up development and put all future cash inflow from new occupational right agreements into stocks and or bonds (Safest option, over 8 years investors today are looking probably at a 30%+ CAGR)
B, continue full steam ahead with development, under the assumption growing demand will allow for both the existing stock and newly developed stock to be sold down (This option possibly has the best outcome for investors, but is built on the assumption that stock doesn't just keep growing)
C, some combination of the both.

That's how I see it anyway, I prefer option C.

You seem to be forgetting something.
Even if they finished their current units in development, sold them and then ceased all further developments the funds wouldn't cover the outstanding debt, in fact I would say it's $200M short.

They are then relying on the DMF from resales which my increase to around $50M a year.
But then they are operating at a small loss.

So where is the pool of funds to start investing?
They need to start operating at a profit.

[mistaTea]

Man, everyone buying now is going to at least double their money no matter what.

My computer told me so.

Stock Prediction Under Different Scenarios: Oceania Healthcare Limited (OCA.NZ)


Scenario-Based Stock Price Prediction for OCA.NZ:


Current Market Context:
Oceania Healthcare Limited (Ticker: OCA.NZ) operates in the healthcare and retirement village sectors in New Zealand, which are influenced by demographics, government policy, and economic conditions. Let's explore how various scenarios could impact OCA.NZ's stock price.


Scenarios Considered:
1. Aging Population
- Assumption: Continued growth in the elderly population increases demand for retirement village units and aged care services.
- Impact on OCA.NZ: Positive, as an aging demographic directly benefits Oceania Healthcare’s core business model.


2. Changes in Government Healthcare Funding:
- Assumption: The New Zealand government alters funding or policies related to elder care and retirement services.
- Impact on OCA.NZ: Variable; increased funding would be positive, while cuts or restrictive policies could pose challenges.


3. Economic Recovery Post-COVID-19:
- Assumption: New Zealand's economy recovers steadily from the COVID-19 downturn, improving overall consumer confidence and spending capacity.
- Impact on OCA.NZ: Positive, as economic uplift generally increases disposable income and the ability for older citizens to invest in retirement living options.


4. Increased Competition in Healthcare Sector:
- Assumption: More competitors emerge in the retirement and aged care sector, offering new technologies or competitive pricing.
- Impact on OCA.NZ: Negative in the short-term due to price pressures and market share dilution, but could be positive if it spurs innovation within Oceania Healthcare.


Predicted Stock Price Range Under Each Scenario:
- Aging Population Scenario: Potential price range of NZ$1.40 - NZ$1.60.
- Changes in Government Healthcare Funding Scenario: Potential price range of NZ$1.20 - NZ$1.50 depending on the nature of policy changes.
- Economic Recovery Post-COVID-19 Scenario: Potential price range of NZ$1.30 - NZ$1.50.
- Increased Competition in Healthcare Sector Scenario: Potential price range of NZ$1.00 - NZ$1.20.


These predictions consider how different macroeconomic, demographic, and competitive scenarios might impact Oceania Healthcare's stock price. However, the actual future prices will be influenced by specific developments and broader market dynamics at the time.


Conclusion:
Investors should use these scenario analyses to inform their investment decisions, alongside keeping abreast of New Zealand's economic indicators, healthcare policies, and competitive landscape changes in the healthcare sector. Maintaining a diversified portfolio and staying updated with sector-specific news will help mitigate risks associated with investments in OCA.NZ.

[Getty]

Where can I buy shares in these up and coming Warriors? I looked up under the WAH ticker on the NZX and couldn't find it? Someone said to me, no it isn't under that ticker - you have to look under OCA. I wasn't sure what that acronym might stand for: 'Other Capable Athletes'? As an ESG investor I may have had access to them filtered out by my access bot. I don't think Sam Stubbs from Simplicity would tolerate an investment in the Warriors, as they black list stuff connected to the military.

Did a bit of a news search and found that OCA has a head coach called 'Brent'. Is Brent a particularly violent man?

SNOOPY

So it seems Andrew Webster of the Wahs is now coaching the OCA's.

Bring on the Kiwi tests!

[peat]

Man, everyone buying now is going to at least double their money no matter what.

My computer told me so.

Stock Prediction Under Different Scenarios: Oceania Healthcare Limited (OCA.NZ)

Co Pilot version


Co-Pilot OCA.JPG

[Balance]

You seem to be forgetting something.
Even if they finished their current units in development, sold them and then ceased all further developments the funds wouldn't cover the outstanding debt, in fact I would say it's $200M short.

They are then relying on the DMF from resales which my increase to around $50M a year.
But then they are operating at a small loss.

So where is the pool of funds to start investing?
They need to start operating at a profit.

Few companies (HLG, BGP and STU come to mind) operate with zero debt - in fact, a prudent level of debt optimizes shareholders' returns by lowering the cost of capital.

So it is unrealistic to expect OCA to operate with zero debt and as a property development and investment company, it shouldn't.

The issue for OCA is what should be an appropriate and prudent level of debt.

If you look at OCA's transformative strategy, I believe it has been poorly executed - case in point, I believe that The Helier was a bridge too far for OCA which moved into the super-premium RV market without proper appraisal of how a property downturn would impact on its financials. It used debt to outbid and purchase very expensive land in Kohimarama and a very costly development which is now sapping cash flow and incurring interest costs with diminishing returns.

[ValueNZ]

Few companies (HLG, BGP and STU come to mind) operate with zero debt - in fact, a prudent level of debt optimizes shareholders' returns by lowering the cost of capital.

So it is unrealistic to expect OCA to operate with zero debt and as a property development and investment company, it shouldn't.

The issue for OCA is what should be an appropriate and prudent level of debt.

If you look at OCA's transformative strategy, I believe it has been poorly executed - case in point, I believe that The Helier was a bridge too far for OCA which moved into the super-premium RV market without proper appraisal of how a property downturn would impact on its financials. It used debt to outbid and purchase very expensive land in Kohimarama and a very costly development which is now sapping cash flow and incurring interest costs with diminishing returns.

I for one don't think OCA's debt is that high. $620m on $2.7 billion of assets is pretty low, so long as they are operating within their debt covenants then there is nothing to worry about. I think that they have that under control.

It's worth noting just how low their interest rates for that debt is as well.

I think it'd be smart to wait until the annual report is released before discussing The Helier any further... Don't want to end up with egg on your face again like last year with you confidently predicting a capital raise.

[Balance]

I for one don't think OCA's debt is that high. $620m on $2.7 billion of assets is pretty low, so long as they are operating within their debt covenants then there is nothing to worry about. I think that they have that under control.

It's worth noting just how low their interest rates for that debt is as well.

I think it'd be smart to wait until the annual report is released before discussing The Helier any further... Don't want to end up with egg on your face again like last year with you confidently predicting a capital raise.

Cutting the dividend, slowing and stopping new developments and selling 'surplus' assets as a consequence are all indicative that OCA has too much debt.

The level of debt on assets is but one pertinent measure as to whether debt is too high - what is equally pertinent if not more is a company's ability to service debt and to repay/refinance debt on time.

[ronaldson]

I don't think OCA is "selling 'surplus' assets" as you put it because it has too much debt. It is executing a clear strategy to divest facilities which simply comprise aged care beds and/or are overweight in such beds without good development potential, because these facilities do not offer an adequate return on funds invested.

The fact that the realisation proceeds may be (at least temporarily) used to pay down debt is not indicative that is the underlying purpose or driver of the activity.

The latest announcement is some indication that strategy is finally yeilding the desired outcome, with additional settlements expected this quarter, and it will be interesting when the next set of results are available to see what assets still remain in the "Held for Sale" category. But I suspect we need to wait until the end of FY25 to see the real benefits of both the recent and currently anticipated divestments.

[Balance]

I don't think OCA is "selling 'surplus' assets" as you put it because it has too much debt. It is executing a clear strategy to divest facilities which simply comprise aged care beds and/or are overweight in such beds without good development potential, because these facilities do not offer an adequate return on funds invested.

The fact that the realisation proceeds may be (at least temporarily) used to pay down debt is not indicative that is the underlying purpose or driver of the activity.

The latest announcement is some indication that strategy is finally yeilding the desired outcome, with additional settlements expected this quarter, and it will be interesting when the next set of results are available to see what assets still remain in the "Held for Sale" category. But I suspect we need to wait until the end of FY25 to see the real benefits of both the recent and currently anticipated divestments.

If OCA was just selling 'surplus' assets as one measure to transform its business as announced last year, I would agree with you. But it did not - it announced the dividend cut and the slow down & termination of new developments at the same time.