OCA - Oceania Group - retirement villages

[Ggcc]

Someone seems keen to dump a few. Maybe they know something we don’t?

[winner69]

Someone seems keen to dump a few. Maybe they know something we don’t?

You watching the depth again ...dangerous practice

Maybe its Warren selling

[Beagle]

OCA decommissioning a lot of care beds and converting them into care suites based on the occupation right agreement model.
They have a stellar reputation as service and care provides there's no question about that and also no question that these care suites offer a very high standard of facilities.
Further, if they can hit their forecast target of 8.42 cps this stock is the cheapest of the retirement operators by quite some margin and quite obviously directors and management have a LOT of skin in the game...So...what could possibly go wrong ?

Where I think the jury could be out is in regard to this consideration.
Its one thing to sign up for an occupation license agreement at age 70 when you might have a reasonable expectation of living about 15 years in an independent living unit and then have the flexibility to shift to a care suite / apartment as your needs change like RYM / SUM and others do at no additional cost to the original 20-25% loss one suffers on their original license agreement but I think its quite another thing to move into a care suite from scratch in your mid 80's knowing you'll lose 20-25% of one's capital in only a couple / few years occupancy.
I note SUM are having a few issues selling care suites at present and that's with a long runway of independent living environment unit occupiers who might want to change at very little cost, (I think from memory SUM charge 2% to transfer to a different unit / RYM are free).
Only time will tell. Disc: Still holding a moderate sized moderate conviction parcel. SUM have a more proven model with a good solid history of very high growth so hold 5 x the value there.

More than happy to hear other's opinion on this concern I have...Believe it or not Beagle's do use their ears and listen from time to time

[Ggcc]

https://simplywall.st/stocks/nz/heal...osts-too-high/

I do look into this liquidity test and do believe they may need a small capital raise to bring their books into a positive area regarding this test. I am happy to be told by accountants on this forum how this issue may become problematic. Still happy to hold and would support a capital raise to help Oceania expand.

[percy]

OCA decommissioning a lot of care beds and converting them into care suites based on the occupation right agreement model.
They have a stellar reputation as service and care provides there's no question about that and also no question that these care suites offer a very high standard of facilities.
Further, if they can hit their forecast target of 8.42 cps this stock is the cheapest of the retirement operators by quite some margin and quite obviously directors and management have a LOT of skin in the game...So...what could possibly go wrong ?

Where I think the jury could be out is in regard to this consideration.
Its one thing to sign up for an occupation license agreement at age 70 when you might have a reasonable expectation of living about 15 years in an independent living unit and then have the flexibility to shift to a care suite / apartment as your needs change like RYM / SUM and others do at no additional cost to the original 20-25% loss one suffers on their original license agreement but I think its quite another thing to move into a care suite from scratch in your mid 80's knowing you'll lose 20-25% of one's capital in only a couple / few years occupancy.
I note SUM are having a few issues selling care suites at present and that's with a long runway of independent living environment unit occupiers who might want to change at very little cost, (I think from memory SUM charge 2% to transfer to a different unit / RYM are free).
Only time will tell. Disc: Still holding a moderate sized moderate conviction parcel. SUM have a more proven model with a good solid history of very high growth so hold 5 x the value there.

More than happy to hear other's opinion on this concern I have...Believe it or not Beagle's do use their ears and listen from time to time

If it works they will do more.
If it does not work, they will not.
A customer driven company.

disc,.I hold, and The Trust I help out on brought a reasonable parcel this morning.

[winner69]

https://simplywall.st/stocks/nz/heal...osts-too-high/

I do look into this liquidity test and do believe they may need a small capital raise to bring their books into a positive area regarding this test. I am happy to be told by accountants on this forum how this issue may become problematic. Still happy to hold and would support a capital raise to help Oceania expand.

Hope t_j doesn’t read that report

[Beagle]

https://simplywall.st/stocks/nz/heal...osts-too-high/

I do look into this liquidity test and do believe they may need a small capital raise to bring their books into a positive area regarding this test. I am happy to be told by accountants on this forum how this issue may become problematic. Still happy to hold and would support a capital raise to help Oceania expand.

Have teacup...some will make storm therein.
More than likely just a timing issue as development commitments as at balance date due within the next 12 months must be classified as a current liability. Apartments due for completion and hopefully sale within that time frame must be classified as a fixed asset in development until such time as the developed units are sold. This would only become problematic if sales of care suites dropped off like a lead balloon falling and that's certainly not the extent of the potential problem I was alluding too earlier today. Just a accounting classification issue in this bean counting hounds opinion and doesn't give me any "paws" for thought

I think the price / PE on this one is about right until such time as they give us more colour on how their developments are going and prove up their care suite development model.

[hogie]

Bit sad when reading articles like this in the Herald last week:
http://www.nzherald.co.nz/nz/news/ar...ectid=12026595


Hopefully these kinds of stories are the exception rather than the norm and will not hit shareholder and patient expectations too much.

[Beagle]

If it works they will do more.
If it does not work, they will not.
A customer driven company.

disc,.I hold, and The Trust I help out on brought a reasonable parcel this morning.

Good long term hold for a trust I reckon, (that's how I am looking at it too). Cheap PE, long term there's very strong demographic tailwinds, get rich slowly...

[warren]

If it works they will do more.
If it does not work, they will not.
A customer driven company.

disc,.I hold, and The Trust I help out on brought a reasonable parcel this morning.

Hello Readers.
It was caring for aged family members that first got me interested in a modest investment. My relations were very elderly but fit and enjoyed their own apartment purchased within a retirement "village". With the death of one and quickly deteriorating health of the surviving family member we were in a hell of a predicament as the village where the apartment was had no hospital care (as many villages don't) .We sold up the apartment at huge loss (the gain to the village owner was staggering thanks to selling it for more than double the original purchase cost, a $10000 selling fee and refurbishment fee of $35000, all agreed to by Grandpop upon purchase) and we trustees couldn't buy an OCA care suite fast enough. It was fabulous, we knew exactly the write off following death ($25 000 fixed) and my ancient mum was so happy. She passed away only 6 months later, we paid our $25000 loss (would have been the same if she lived 20 years) and couldn't have enjoyed the OCA experience more. I will say it again, 1st class hospital care paid by the Government in your own new suite --wow no wonder she was so happy) Popular ???? Line up folks.