OCA - Oceania Group - retirement villages

[Beagle]

Compounding interest is great, but its benefit is neutralised a lot if there is leakage to the taxman. This leakage is minimal when dividends are fully imputated, but is pretty significant when there are no imputation credits and a significant dividend is paid. Overseas shareholders may distort the calculation a bit, but if all shareholders were on a 33% marginal tax rate, a full 2% of OCA's value is being gifted to the tax man each year. This choice to give away 2% of the company to the tax man each year could be part of why OCA isn't trading closer to, or above NTA. Sorry - if you had a discretionary expense lowering your surplus by $10m/yr wouldn't you look to address it?

A better alternative would be for OCA not to pay a dividend but buy-back 6% of its shares each year. This should give shareholders an additional 6%/yr tax-free capital gain rather than the 4% they get from receiving the dividend as cash. If someone wants the cash, they can sell a small proportion of their shares each year. Share buybacks are very common overseas, particularly in countries like america where imputation credits don't exist (hence the low dividend payments over there). The problem is educating some of the existing shareholder base that there is an alternative.

Conceptually I would have no problem with that and it certainly makes profound common sense when the shares are trading under NTA (but a lot less sense when they are trading at a significant premium to NTA) but OCA has a history of paying good dividends and I am confident this will continue. They are the highest yielding stock in this sector but quite a comfortable margin.

[bottomfeeder]

Compromise, with dividend up to level of imputation credits and balance of cash flow to reduce debt.

[dibble]

'd be an agreeable strategy if they had use for the money and had any imputation credits but none for last 2 years...perhaps none ever. Accounts are full of deferred this and that, incl $13m tax benefit and $15m deferred tax liability. Not too sure what that all means, but perhaps at some point in the future some net tax cash will need to be paid and imputations assigned. Maybe.

[Cyclical]

Salt still selling ...lot more to go

Remember what they think of this sector ....net short

Thanks winner, I managed to miss this one yesterday. It's interesting that they only ceased having a substantial holding on Monday, and yet we've been seeing good upward momentum since a nice uplift in the SP since early last week.

So do we assume they've backed off selling at such large volumes, maybe because they've reached their target holding of under 5%? Or have they just slowed down a little in order to eek out more value from their remaining shares and will continue to offload at a more sedate pace? If the latter, it's pretty impressive that we've seen such an increase in the SP over the last couple of weeks and it should go gang busters once Salt have finished selling Sounds a bit like I'm pumping doesn't it, but truth be known, I wouldn't be too upset if Salt dumped out quicker and we had an opportunity to pick a few more up in the 70s.

[nevchev]

If Salts average sell down price was 75c,had they have held on and trickle fed and averaged at say 82c.......
12000000×0.07=$840,000.
Must be nice to play with someone elses money

Maybe they read my post from the 25th

[Beagle]

No new Covid 19 cases today and only one active case left in all of New Zealand. Crikey that's an outstanding result. I can almost feel vulnerable people all over New Zealand breathing a collective breath of relief !

[RTM]

No new Covid 19 cases today and only one active case left in all of New Zealand. Crikey that's an outstanding result. I can almost feel vulnerable people all over New Zealand breathing a collective breath of relief !

You will be almost ready to vote Labour Beagle !

[justakiwi]

It is an outstanding result and it is entirely due to the measures the government took from day one, combined with the cooperation and commitment of Kiwis. NZ can, and should be proud of this outstanding result.


Regardless of what the one who shall remain nameless believes.

No new Covid 19 cases today and only one active case left in all of New Zealand. Crikey that's an outstanding result. I can almost feel vulnerable people all over New Zealand breathing a collective breath of relief !

[Beagle]

You will be almost ready to vote Labour Beagle !

Crikey, that's a scary prospect but I have to say in a time of crisis, whether it was the Chch Mosque shooting, the White Island eruption tragedy and especially in this Covid 19 crisis, Jacinda Ardern has done a truly outstanding job. I am a bit worried if Labour can win the next election on their own as everyone needs checks and balances.
I wouldn't want her getting too carried away with the comrades thing and we need to radically change the tax system to equalise out all the wealth in the country.

We should be back to level 1 soon enough and life can get back to very close to normal at OCA villages. Having faced this thing down and stared the possibility of having it right in the face, the sense of relief we're on top of this thing is palpable. I might go and spend some money this weekend and some airpoints at Mitre Ten

[dobby41]

We should be back to level 1 soon enough and life can get back to very close to normal at OCA villages.

Does level 2 restrict rest homes or do they restrict themselves?
I think it is the later - villages can be as close to normal as the rest of us but, I think, they choose not to.