sharetrader
Page 348 of 355 FirstFirst ... 248298338344345346347348349350351352 ... LastLast
Results 6,941 to 6,960 of 7100
  1. #6941
    Junior Member
    Join Date
    Jun 2020
    Location
    Auckland
    Posts
    12

    Default

    I kind of feel like apologising for these long and technical posts but I don't see how I can communicate this complicated story any easier...which I think is OCAs biggest problem too ...for now.[/QUOTE

    No apologies Maverick. We really appreciate you and others sharing your skills and hard work with us. Some of us have offset our losses from earlier this year (banks, ZEL) by following shared thoughts on this forum.

  2. #6942
    Turn and burn Maverick's Avatar
    Join Date
    Dec 2017
    Posts
    394

    Default

    No apologies Maverick. We really appreciate you and others sharing your skills and hard work with us. Some of us have offset our losses from earlier this year (banks, ZEL) by following shared thoughts on this forum.[/QUOTE]
    kind of you to say Beat the Bank, thank you. In the years ahead you will have some good insights and between us all here we have a good chance of Beating the Insto's.

  3. #6943
    Senior Member
    Join Date
    Apr 2020
    Location
    hamilton
    Posts
    671

    Default

    i second , or third or, fourth n that.

    Thank you Mr B and Mr M.

  4. #6944
    Member
    Join Date
    May 2020
    Location
    New Zealand
    Posts
    37

    Default

    Agreed, thank you all for your insightful analysis.

  5. #6945
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,368

    Default

    Yes, many thanks for your detailed analysis there, Maverick. No apology ever needed for taking the time to explain!


  6. #6946
    Membaa
    Join Date
    Nov 2004
    Location
    Paradise
    Posts
    3,303

    Default

    Ditto that, blessed to have deep insights shared with us, certainly appreciated.

  7. #6947
    Member
    Join Date
    Sep 2017
    Location
    At a cafe somewhere
    Posts
    140

    Default

    I can only ditto the above comments too. With OCA being my largest holding I find the posts on this thread and the depth of analysis absolutely invaluable. Thanks A LOT guys.

  8. #6948
    Member
    Join Date
    May 2020
    Location
    New Zealand
    Posts
    37

    Default

    From post #6793
    Quote Originally Posted by Beagle View Post
    .....What's he's talking about is the real money, not the 25% development margin.
    For example John and Jenny buy a lovely unit at say Ellerslie for say $650K. Nine years later when they pass away their estate gets back about $450K after deductions but the unit is resold for $1,450K with nine years compound capital growth in value and the company makes $1m tax free on resale which is obviously vastly more than the 25% development margin when the $650K unit was first sold = $162K which was taxable.
    ....
    Hey Beagle,

    Could you please explain why the initial development margin is taxable income? I can understand the re-sale gain is essentially a tax free capital gain however not too sure why the initial sale is treated differently? It seems to me that the property when first developed is essentially trading-stock and then subsequently converted to a fixed asset?

    Cheers
    Last edited by baaantom; 18-10-2020 at 09:21 AM.

  9. #6949
    Hunting for more dog food Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    17,238

    Default

    Disc: I don't do the financials' for any property company so this is not a tax opinion it is simply my understanding of the position.
    Developed properties go straight to being fixed assets and are never sold, simply a license to occupy is issued in return for an interest free loan from the incoming resident.
    Upon initial development there is a one off gain between the development cost and the initial value at which the transfer is made to fixed assets, (the development margin) which I understand as a property developer is taxed. I don't believe they're ever trading stock per se as no trading of the actual ownership of each unit ever occurs merely a license to occupy is issued.

    The arrangement whereby someone loans OCA say $400K interest free for the right to occupy a care suite and agrees to pay $X a week in care fees comes under the financial arrangements provisions of the income tax act and I understand there has been a binding ruling that means that while retirement operators must pay tax on any profits from the weekly fees and tax of the 30% retention they take when the resident vacates the unit, (less the costs of refurbishment), they can reissue another license to occupy at a higher price down the track without any tax impost.

    The above could easily be wrong, its simply my understanding of the system.
    Last edited by Beagle; 18-10-2020 at 12:55 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  10. #6950
    Member
    Join Date
    Apr 2014
    Posts
    287

    Default

    A large part of the development cost is also capitalised (I.e roads, communal areas) and does not appear as part of the development margin in the income statement. I treat the “development margin” with a bit of caution as it does NOT mean that if all the units sell on a $100m development at 30% margin you now have $130m.
    Last edited by James108; 18-10-2020 at 01:48 PM.

  11. #6951
    Member
    Join Date
    May 2020
    Location
    New Zealand
    Posts
    37

    Default

    Great, thanks for that. Appreciated.

  12. #6952
    Hunting for more dog food Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    17,238

    Default

    Quote Originally Posted by James108 View Post
    A large part of the development cost is also capitalised (I.e roads, communal areas) and does not appear as part of the development margin in the income statement. I treat the “development margin” with a bit of caution as it does NOT mean that if all the units sell on a $100m development at 30% margin you now have $130m.
    Quite right mate. The real money is not in the development margin for the issue of the first license to occupy, its in the reissue of the second, third, fourth and so on new license's to occupy down the track. In many ways the first occupants get the best deal with brand spanking new communal living area's to enjoy.
    No butts, hold no mutts, (unless they're the furry variety).

  13. #6953
    Senior Member
    Join Date
    Apr 2020
    Location
    hamilton
    Posts
    671

    Default

    Tax position on refurbishments cost?

  14. #6954
    Turn and burn Maverick's Avatar
    Join Date
    Dec 2017
    Posts
    394

    Default

    Quote Originally Posted by James108 View Post
    A large part of the development cost is also capitalised (I.e roads, communal areas) and does not appear as part of the development margin in the income statement. I treat the “development margin” with a bit of caution as it does NOT mean that if all the units sell on a $100m development at 30% margin you now have $130m.
    Ahhhhh.....so that's why they don't bother with building swimming pools

  15. #6955
    Hunting for more dog food Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    17,238

    Default

    Quote Originally Posted by Waltzingironmansinlgescul View Post
    Tax position on refurbishments cost?
    Tax deductible.
    No butts, hold no mutts, (unless they're the furry variety).

  16. #6956
    Senior Member
    Join Date
    Apr 2020
    Location
    hamilton
    Posts
    671

    Default

    Thank you Mr B. Just double checking.

  17. #6957
    Reincarnated Panthera Snow Leopard's Avatar
    Join Date
    Jul 2004
    Location
    Wandering Free
    Posts
    814

    Default

    It strikes me that it would be a good idea for people to [re]read the full year financial statements, very definitely including the notes (especially 3), and get a grip on investment property versus property, plant & equipement and the different tax treatments thereof.

    You should also spot when a road is included in the development margin and when it is not and other exciting things to improve your understanding.

    Careful analysis of the Presentation materials is also encouraged but UNDER NO CIRCUMSTANCES WHATSOEVER should you attempt to make sense of Note 5 of the financials. For that path leads to madness:
    om mani peme hum

  18. #6958
    Turn and burn Maverick's Avatar
    Join Date
    Dec 2017
    Posts
    394

    Default

    Quote Originally Posted by Maverick View Post
    I'm kind of glad the share price fell a bit before the weekend. There is something “grounding “ about it so rational thinking can resume for the 2 day holiday.


    There is no doubt that the rapid SP rise was solely on the back of public recent reratings by 2 analysts (out of 3) . “4 traders” website has the 3 OCA analysts average target price now of $1.40. It seems highly likely that the 3rd analyst will upgrade too when he gets to it.


    I have been lucky enough to have been sent both of those reports from a friend here. After spending a couple of days on the Credit Suisse report I see 2 clear mistakes (the rest of the report is excellent) they have made which produces a significant undershoot in their underlying expectations.
    This gets technical but “a must” to understand for any serious OCA investor….


    First, they have used an assumed ILU price of $720ish by averaging an apartment ($1100ish) and a villa ($480k ish). Problem with this is OCA’s pipeline is 90% apartments and only 10 % villas. See the issue? This makes a massive difference to the bottom line as income from new sales and future annuity like DMFs are seriously understated.


    Second, is to do with the forward assumed resale price % increases. Here they have again averaged the historical resale returns of a care suit (10%) and a ILU(29%) to come up with 19%. What they have missed is the care suits churn every 2.5 years so , apples for apples , care suits actually should be adjusted to 30% resale margin to line up with a 7 year ILU churn. Or better still , actually treat care suits as a completely indepenadant bunch of numbers on their workings.

    In a nut shell, thats 3 out of the 4 income streams where these incorrect assumptions are coming up short . The 4th income stream is DHB care fees, I don't think we should ever expect any income growth coming from there.

    Respectfully, I suggest Credit Suisse have tried to condense the OCA numbers so they fit into an existing SUM or RYM template which doesn't account for OCA’s complex different weightings of high and low value offerings, all the while churning at different rates.


    Forsyth have made almost exactly the same assumptions as CS and their net result is similar to Credit Suisse.


    However what we all can agree on together, is that there is about 15% CAGR in profit in the next 3 years (neither 2 project further than this). It's just that I start from a much higher 2021 base and I am even more bullish with the CAGR. Id like to add Beagles latest earning numbers here are almost identical to mine and for the record we both work independently.


    So I'm saying the latest analyst figures are quite wrong to the underside. These minor errors may seem small buried somewhere in a spreadsheet but produces a result significant under shooting on the bottom line.This tells me that the story is still not understood properly even by the larger broking houses.


    I fully respect the analysts composing these reports . So for clarity , my comment about “ drunk monkeys“ the other day which has taken some traction here was never pointed at them for a moment. We all do agree on all the other well laid out stuff.
    While they will be much smarter than myself, I can say am right on this and they are wrong only because personally I have all day to fully focus specifically on a just few companies I'm interested in. These poor fellas will have to spread themselves thin all over the place under a ton of pressure and deadlines. No swanning around the country doing site visits for them!

    However ,the share price is moved by their words , not lil’ ol’ Mavericks or Beagles butfrankly, what difference does a short term shareprice fluctuation make to a non- trader anyway?


    Late January is judgement day when I'm saying there will be a seriously major uplift in underlying profit well ahead of any expectations to date.
    My conviction on these statements and stock (covid withstanding) is such that if I am proved to be wrong I should be expected to "turn in my wings."
    Well , it seems the 3rd analyst upgraded his recommendation over the weekend. We now have had all 3 recently upgrade their ratings to "outperform, buy and buy". It's worth a couple of minutes checking the scale on "4 traders " website under consensus. It really is a sight to behold for us long sufferers here.
    The little arrow has now shifted from the middle "hold " area to the extreme end of the " buy" indicator. All in 2 weeks.

    Good luck with the SP pull back your team were hoping for now Waltzing man...that's a heck of a current to be rowing against after this.

    Back to the real stuff (FA).... If anybody's has access to the 3rd analysts workings I would really appreciate a pointer to where I can find it. Cheers.
    Last edited by Maverick; 19-10-2020 at 07:49 AM.

  19. #6959
    Guru
    Join Date
    Aug 2012
    Posts
    2,510

    Default

    Quote Originally Posted by Maverick View Post
    Well , it seems the 3rd analyst upgraded his recommendation over the weekend. We now have had all 3 recently upgrade their ratings to "outperform, buy and buy". It's worth a couple of minutes checking the scale on "4 traders " website under consensus. It really is a sight to behold for us long sufferers.
    The little arrow has now shifted from the middle "hold " area to the extreme end of the " buy" indicator. All in 2 weeks.

    If anybody's has access to the 3rd analysts workings I would really appreciate a pointer to where I can find it. Cheers.
    Thanks for all your posts Maverick. The analysts public releases are catching up with how things have turned out - Henny Penny's sky did not fall down after all!

  20. #6960
    Hunting for more dog food Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    17,238

    Default

    https://www.marketscreener.com/quote...268/consensus/

    Analysts are starting to wake up to the growth ahead. As mentioned last week, I predict major upgrades from them all after the interim results in late January 2021.

    I do not think they are fully comprehending that the valuers wrote down unsold units at balance date especially harshly due to their perception of values at that date.
    There is 10 cps in earnings in just selling down stock at balance date at prices assumed by OCA, (not at the values that may be prevailing in the market at present), which is up from 8 cps as at the interim result last year, an extra $2 cps or $12m in extra earnings.

    I remain comfortable with my estimate of earnings for the 10 months ended 31 March 2020 of 10 cps, (annualized 12 cps), well north of even the most optimistic analyst. I see the split being approx $35m underlying profit in the first half and $25m in the second period.

    I think the analysts are spread pretty thin and don't have the time to do the really detailed analysis like some professional investors do.
    Last edited by Beagle; 19-10-2020 at 08:03 AM.
    No butts, hold no mutts, (unless they're the furry variety).

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •