OCA - Oceania Group - retirement villages

[dubya]

I'm grateful to ALL the posters on this forum, and especially those that post on this thread as OCA is the only retirement sector company I have shares in, and it is also the largest holding I have in a single company by far. So thanks one and all.

I phoned OCA a week ago to make some enquiries for a family member, and as I haven't seen it mentioned on this thread, thought I would post what I was told regarding deferred management fees.

Individual accommodation (apartments, villas etc) the DM fee is 10% pa calculated and charged on a monthly basis (max 30% over three years).
With Care Suites the DM fee is 15% for the first year (fixed, as in no refund if the person only stays a week), then 10% for the second year and 5% for the third year. The second and third years are calculated and charged on a monthly basis.

[Beagle]

Individual accommodation (apartments, villas etc) the DM fee is 10% pa calculated and charged on a monthly basis (max 30% over three years).
With Care Suites the DM fee is 15% for the first year (fixed, as in no refund if the person only stays a week), then 10% for the second year and 5% for the third year. The second and third years are calculated and charged on a monthly basis.

That's the secret to their very robust cash flow business model right there along with the higher churn ratio than other market participants.

[Snow Leopard]

...With Care Suites the DM fee is 15% for the first year (fixed, as in no refund if the person only stays a week), then 10% for the second year and 5% for the third year. The second and third years are calculated and charged on a monthly basis.

Is the rate for the fourth and subsequent years also 5%?

Or do they throw them out at that point?

[couta1]

Is the rate for the fourth and subsequent years also 5%?

Or do they throw them out at that point?

Umm there is no DM fee after the third year as the 30% has been accounted for, service fees are paid from moving in until moving out at either the Hospital or Resthome level depending on which level of care the individual is receiving whilst in the care suite.

[Snow Leopard]

The 2018 accounts show quiet clearly that at the EBIT level and allowing for the 'change in fair value of investment property' that OCA is profitable...

...to the tune of about $10.5M a year.

However normalising for the 'impairment of property, plant & equipment' line indicates a drop of over $5M between 2017 and 2018. Could be a concern but I will be looking at the HY2019 (and beyond) results with interest on that one rather than worrying now.

How much of a price that people are prepared to pay for occupation rights going forward and the correlation between that and NZ housing prices is yet to be determined for OCA.

That is something else to look forward too.

[Snow Leopard]

Umm there is no DM fee after the third year as the 30% has been accounted for, service fees are paid from moving in until moving out at either the Hospital or Resthome level depending on which level of care the individual is receiving whilst in the care suite.

Tak.

They should definitely throw them out then .

[couta1]

Tak.

They should definitely throw them out then .

HaHa yes excepting that a large % of occupants would have entered the afterlife by the end of the 3 year period, meantime they or the Govt continue to pay between 50- 60k per year in service fees to OCA.

[warren]

I have been drawn to this thread as I have found Mr Couta and Mr Beagle's input really 1st class. I thank them very much indeed. I especially like the effort of these folks to get out into the business and meet the Directors and the managers. I have believed in good people all my business life and shunned bad people (of whom there have been 000's). I can feel one hell of a correction in NZ re prices of all sorts and I am fully confident that OCA's good capable people and their large quality aged care will see me right as a large investor. I rest very easy at night and will continue to do so. $1.16 what a bargain.

[minimoke]

. $1.16 what a bargain.

That was my thinking this morning when I picked a few more up at $1.15

[Maverick]

I`m getting quite keen to see the RYM (this Friday)and ARV (next Tuesday)results coming up. It will be good to have a fresh update from the sector. Plus I'm picking it might conjure up some enthusiasm and get us over $1.20 again. (not that it matters long term but it will feel nice... like pissing in your wetsuit)