OCA - Oceania Group - retirement villages

[Maverick]

OCA's care as a percentage of its business model is much higher than Arvida's and OCA reports for the period ended 31 May 2020 which encapsulates the full period of the lockdown and its effects in March, April and May, before we emerged from lockdown in early June. Importantly care suites were deemed an essential service throughout the lockdown.

Taking into account both direct costs and lost profit from inability to sell independent living units, I remain comfortable with my earlier assessment of overall effect $10-15m and nothing in the Arvida analysis has surprised me or caused me to amend my best guess. Importantly we did emerge to level 2 lockdown late in May which will have enabled some independent units to settle before balance date. What I have not accounted for is the slowdown in construction caused by Covid 19.

I remain very cautious about expectations regarding this years underlying profit but its this very thing of a high percentage of care that fills me with so much enthusiasm for the long run as they build heaps more care suites and they churn them every 2-3 years there is such excellent potential for profit growth down the track. This is a long term investment and my caution is those hoping for a quick buck could find themselves frustrated in the short term.

Disc: Holding long term for yield that will grow nicely over the long run.

Thanks fellas for that info on ARV`s covid costs.
So to complete the puzzle from a few posts back I`m seeing an underlying profit of $53 minus covid costs (lets say 40% bigger than ARV because of all the PPE needed for the OCA care suits =4m ) , therefore an underlying of about $49 .
That`s ever slightly down on last year despite going through the full covid experience.

I`m more optimistic than you Beagle so well see soon enough who owes who a beer.

As far as construction holdup, I`m not seeing that as a biggie. We know it was 'tools down' for only 6 weeks. Without doubt some behind the scenes stuff still got done during lock down too. BTW OCA received about 2 million on the wage subsidy.

I fully agree with you though Beagle that this is no get rich quick thing. The Sharsies guys might get a bit bored with this one and have to keep playing with Cannasouth and AIR etc , but for the rest of us who actually "invest" then this is still looking a most fabulous company to me.

[Waltzing]

I look forward to hearing from MR B and other experts on OCA as the business of health care progresses and many thanks for there public spirit to communicate to investors.

[King1212]

On one news couple minutes ago...houses sold like a hot cake..kiwi expert returned home...all bought houses.

100k resident visa applications waiting list from riches Americans n English....wanting to move to NZ...bring thier wealth to start business n invest because NZ is a safe haven

So... expecting our assests n shares price kept going up....

[Joshuatree]

Maybe, maybe not

Read more »

[King1212]

Thats kiwis ehh JT....during property boom...they all increased thier loans....for holidays....new kitchen...spa pool...new cars...new toys...not sex toy....such as boats..caravans....

Now..they are in trouble. Well....let the experts buy thier house.

Or....the 100k wealthy Americans and UK will buy thier houses

[Paradox]

Good stuff ...how did day 2 go.

Is a good approach.

Keep us up to date.

OK, here it goes....I've completed my first iteration of valuation based on residual income.

Assuming:
- cost of capital (equity) at 10.7%
- cost of operations is 7.4%
- perpetual growth of residual income from 2025 at 2-3%
- Value per share is $1.77- $1.90

Total PV of the ReOI is $114m and PV of continuing value is $440m.

Once the full year results are out, I'll adjust it a tad.

Welcome any feedback.

thanks

Disc: I now hold a few shares and will be buying more.

[King1212]

No doubts..the SP will be double in the next couple years...

If it was not a covid around....SP would be $1.30 easily

[Waltzing]

"100k resident visa applications "

is this a fact and over what time period might this new expected horde arrive. A new migration from the north east and north west.

they wont get them processed this year.

Canada expecting immigration from Hong Kong. Some coming here?

[winner69]

Thats kiwis ehh JT....during property boom...they all increased thier loans....for holidays....new kitchen...spa pool...new cars...new toys...not sex toy....such as boats..caravans....

Now..they are in trouble. Well....let the experts buy thier house.

Or....the 100k wealthy Americans and UK will buy thier houses

Hey kingi. ...that 100k plus is in addition to the hundreds of thousands of rich kiwis coming back home ...good eh

Good for a year or so but big trouble ahead when they all realise NZ isn’t the promised land after all and they all sell up and leave

[King1212]

Short term...yes... assests will kept going up.

Regarding jobs.....the government needs to be smart.... close the overseas migrant tap.. concentrate to returning kiwis...

Saying that.....baby boomers are all starting to retire.....so.... job vacancy will be filled by these returning kiwis