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  1. #31
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    Quote Originally Posted by couta1 View Post
    Your wrong, I never commented on the management structure at ARV, only that I preferred the Rym and Sum model. Trader Jackson I'm talking about the top heavy structure that needs new blood once it becomes a listed company, but Mum's the word on any further detail.
    It is hard, I think, to see details on the 'top heavy structure' you speak of, have I missed something, or do you know more information about Oceania's structure that makes it 'top heavy' than what I can seem to find? Would be great if you could share what makes it top heavy, and what new blood you think is required once it becomes a listed company etc

  2. #32
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    Quote Originally Posted by trader_jackson View Post
    It is hard, I think, to see details on the 'top heavy structure' you speak of, have I missed something, or do you know more information about Oceania's structure that makes it 'top heavy' than what I can seem to find? Would be great if you could share what makes it top heavy, and what new blood you think is required once it becomes a listed company etc
    Basically under the former CEO, an oversupply of General managers and managers was set up and still remains as we speak, hopefully this will change going forward as the current CEO seems more tuned in and efficient. I know a former employee from their HQ that has given me more info about the above structure than is currently available to the general public. For obvious reasons that's all I can say on the matter.

  3. #33
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    t_j seeing you going to be in boots and all when ; if this IPOs hope you started doing your homework

    Here is their last set of accounts
    https://www.companiesoffice.govt.nz/...CC7A88F831340D

    Worth as much as Summerset as the AFR sort of suggested?
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  4. #34
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    Quote Originally Posted by winner69 View Post
    t_j seeing you going to be in boots and all when ; if this IPOs hope you started doing your homework

    Here is their last set of accounts
    https://www.companiesoffice.govt.nz/...CC7A88F831340D

    Worth as much as Summerset as the AFR sort of suggested?
    Thank you couta1 for your response, and yes winner69 I am interested... but possibly not 'boots and all'... the IPO documents will be of great interest, should the IPO go ahead.
    I don't think it would be fit to compare it to SUM (this did surprise me when AFR mentioned this), at least when comparing on a build rate and land bank, but they do have a strong development ahead, in the short term. On a breif look, Operating cash flows are very strong, and ORA's have experienced good growth, with growth likely to increase in the coming years. Balance sheet heavy with debt, which is nothing new, although I am sure a significant proportion of this will disappear when listing.

  5. #35
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    Oceania Healthcare gearing up for IPO.JPG
    It would seem Oceania is another step closer...

  6. #36
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    Quote Originally Posted by winner69 View Post
    t_j seeing you going to be in boots and all when ; if this IPOs hope you started doing your homework

    Here is their last set of accounts
    https://www.companiesoffice.govt.nz/...CC7A88F831340D

    Worth as much as Summerset as the AFR sort of suggested?
    Interesting....Hmmmm, if it were not for gains on revaluation of properties (IFRS) they would have lost ($13m) in 2016, an improvement from losing ($23m) from operations in 2015. Talk of big growth by promotors does not impress me. Track record to date is well below par. You cannot list on fancy pants multiples because of tailwinds in the sector unless you have a decent track record wherein you've proved your development model. This is why MET who haven't proved their case yet are on an underlying PE of only ~ 16 whereas at the other end of the scale RYM are in the high 20's.
    Promotors promises of future growth when prior growth has been very modest always worry me, Tegal the last example of a float choc-a-bloc full of corporate spin.
    Last edited by Beagle; 21-03-2017 at 02:09 PM.
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  8. #38
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    You keen as mustard eh t_j

    Hope you on your brokers favourites list
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

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  9. #39
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    Quote Originally Posted by trader_jackson View Post
    With such a reliance on care beds to drive profit, it will all come down to them keeping their wages to revenue ratio below a certain level, a tough ask. Most of the money from the IPO will be used to pay down debt and until they get more development going, the previous mentioned ratio will determine how successful or not they will be.

  10. #40
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    Must admit I thought something was imminent as institutions from what I have observed in the market seem to have been keeping their powder dry on any buy bids for SUM and RYM lately.
    Key point of difference is care bed focus. Very little money to be made in that sector as I am sure Couta1 who works in that sector will tell you. (Edit I see you already have implied that mate)
    The real money is in development and recycling of churned units. Very unlikely I will participate based on what I have heard of their top heavy management structure and after reviewing their previous year's financial performance already. Lets be honest, promotors can forecast anything they like, (Tegal anyone ?), but their historical financial performance speaks for itself and it isn't flash on an underlying basis !
    https://www.companiesoffice.govt.nz/...CC7A88F831340D
    Last edited by Beagle; 31-03-2017 at 11:46 AM. Reason: Edited to comment regarding Couta1's post)
    No butts, hold no mutts, (unless they're the furry variety).

  11. #41
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    The trouble with having to rely on the wages to revenue ratio to drive profits is, you only need a few renegade facility managers to destroy a good portion of your profits. This happens when too many agency workers are called in to cover shifts, as well as an over allocation of hours to staff unecessarily. Added to that would be a failure by the manager to manage consumable supplies in a proper fashion, promoting huge wastage.
    Last edited by couta1; 31-03-2017 at 11:33 AM.

  12. #42
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    It has been clear over the past few days investors in ARV are, not surprisingly, interested in Oceania, as evident by ARV's share price weakness... so fittingly I decided to reading over the PDS...

    Will hopefully be able to find time to post a bit more, but there are a few things that did jump out at me...

    1. I do like the dividend, and payout ratio, allowing for good growth, while rewarding shareholders with good dividends along the way.

    2. The number of people being paid over 500k and the directors fees... when comparing to ARV, I can see partly where couta1 is coming from regarding seemingly top heavy management...
    In 2016, 51 employees had remuneration over 100k, with the top guy earning earning between 660k - 669k.
    Contrast this to ARV... they had just 10 employees with remuneration over 100k... the top being on 370 to 379k (and ARV are not 1/5th the size of Oceania!)
    I note that Oceania expects the remuneration and benefits of employees of the Oceania Group exceeding $100,000 in respect of FY2017F to be lower from those in FY2016... and I also note that 27 (most) of these employees were between the 100k and 119k mark, so if most of these were cut out (and the rest, say, moved down a bracket or two) we could be looking at something more realistic.. and it sounds like it could be possible.

    3. I also note that, at time of listing, ARV had 1800 residents, with approximately 1000 (including part time) staff... Oceania has 2800 staff with 2600 aged care residents... but I assume (hope) this excludes about a thousand people or so in units?

    4. Operating expenses were forecast (FY15 prospective) at ARV to be 50.2m (about 77% of Total revenue), and for Oceania FY: 150.1m (about 71% of Total Revenue), so going by this metric, management of expenses (namely wages) doesn't look that bad

    5. Not so sure on the directors fees... seem a tad exorbitant, in comparison to ARV at least:
    Fees for directors of Oceania that apply from listing have been fixed as a total pool of $582,500 per annum... ARV recorded directors fees of $382k in FY2016 (which I believe can go up to $400k)... Are the directors of Oceania worth 52% more? ARV has a current market cap of $424.5m, Oceania has an implied market cap of up to 570.6m... 34% more (and that is assuming it goes for top dollar).

    I may have raised more questions that answers with my post above... but then again, we all know ARV is the old dog that you wouldn't dare touch

    Disclosure: promising, but more research required
    Note: some 'points' may be interrelated
    Last edited by trader_jackson; 01-04-2017 at 10:25 PM.

  13. #43
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    This one is not for me.Appears to be Mutton dressed up as Lamb.
    Happy having a "free ride" with the two I consider best of breed,RYM and SUM.

  14. #44
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    Any similarities to Southern Cross in the U.K.? Wasn't one of their problems that they relied too heavily on revenue from a single customer (the govt).
    https://www.google.co.nz/amp/s/amp.t...business-model

  15. #45
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    Quote Originally Posted by huxley View Post
    Any similarities to Southern Cross in the U.K.? Wasn't one of their problems that they relied too heavily on revenue from a single customer (the govt).
    https://www.google.co.nz/amp/s/amp.t...business-model
    The downfall of Southern Cross appears to be very simple, and dramatically different to the 4 listed (soon to be 5) operators: they leased all their houses... so of course as soon as things got tricky, and the rents kept rising, it is not surprising to see them fall over... I believe the article discusses this. They also don't appear to have any ORA's or higher margin care suits, and were purely a care based.

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