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17-04-2019, 06:13 PM
#3511
Thanks Beagle, as usual your input is very helpful.
I am trying to analyse it as a liability fundamentally speaking. Of course technically it is a liability on the balance sheet but in practice is it really, as the only way it would actually become due is if all units were vacated and no more occupation rights issued. It's almost like the liability of the next customer. Very different to bank debt, so I'm wondering how relevant it is when comparing debt to equity for example, which had some discussion earlier in the thread.
Thanks again.
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17-04-2019, 06:21 PM
#3512
Also for anyone interested, I've done a little research into Elizabeth Coutts (director) share purchases in OCA and compared them to other purchases in companies that she’s a director in.
OCA
16th April 19 50k @ $1.02
5th Feb 19 50k @ $1.06
13th Sep 18 350k @1.14
1st Feb 18 25k @$1.02
3rd Aug 17 100K @$1.03
300K at IPO (or before)
So total around 900 grand at current.
In Skellerup she has about 1.8 Mil at current BUT last buy was about 2 years ago.
In Ebos group she has around 630k at current but last buy was 2 years ago and was very small.
She been consistently piling into OCA and not into her other companies. And she knows her way around numbers, former accountant and CEO of big company at age 31. Looks like she was director since well before IPO so continued buying after IPO is exceptionally good sign.
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17-04-2019, 07:04 PM
#3513
Originally Posted by percy
I do not think OCA are right in changing their policy of not buying back after 6 months.
For an estate to have to wait longer than 6 months means OCA are not focussed on the unit's resale.ie they are no longer customer focussed.A big red flag to me.We have seen The Australian Banking Royal Commission findings on what happened when banks put their own interests before their customers.This is the same.
I would therefore not enter any retirement village, without the 6 months repurchase clause being in place.
In fact I will seriously think about retaining my OCA shares.
The six month is only an issue if there is no market for the unit - which I think will be unlikely in OCA's case.
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17-04-2019, 07:20 PM
#3514
Originally Posted by minimoke
The six month is only an issue if there is no market for the unit - which I think will be unlikely in OCA's case.
Not so.
Means OCA does not have a priority to refurbish or market the unit aggressively.
A very real issue which will only attract regulation,and estates dissaproval.
It means the unsold unit is the estate's problem,not OCA's.
Right picture yourself as the estate execuetor, getting fobbed off by OCA as to why the unit has not been refurbished ready for sale,or why it has not been sold. Hard to get tradesmen at this time of year,hard to sell going into winter/summer,Christmas,Easter,Joanne on leave.having three babies,her father is unwell,however in the next year or two we expect the difficult market will improve.Bollocks.!
I would expect OCA would concentrate on new unit sales, as margins would be better.
So you would be in the far que.
Negative.
ps Think of it like trying to resell a time share unit.
Last edited by percy; 17-04-2019 at 07:56 PM.
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17-04-2019, 08:35 PM
#3515
Yes, percy, you do have a point in that the "system" depends on demand for units outstripping, or at least equalling, the rate of new builds in the particular area concerned. Shouldn't be a problem for some time, if projections as to the aging population are correct - but, as with everything connected with the sharemarket there is that element of risk.
Disc: Holding OCA - and SUM and RYM.
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17-04-2019, 08:48 PM
#3516
Originally Posted by macduffy
Yes, percy, you do have a point in that the "system" depends on demand for units outstripping, or at least equalling, the rate of new builds in the particular area concerned. Shouldn't be a problem for some time, if projections as to the aging population are correct - but, as with everything connected with the sharemarket there is that element of risk.
Disc: Holding OCA - and SUM and RYM.
We had this happen with my late mother's unit at a Buderim [Sunshine Coast ,Australia] Retirement village.
All sorts of excuses why her unit had not sold.
Certaintly focussed their attention when we pointed out we were not concerned,because of her right to occupy aggreement, they had to buy it back after six months if it remained unsold.!Don't think they had bothered to read their own agreement ,by their surprised reaction.!
Would have waited years otherwise.
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17-04-2019, 08:52 PM
#3517
I think you're being emotive @percy, overstating the risk and implying OCA have ulterior motives.
All said and done OCA are highly motivated to sell all properties under all circumstances as quickly as possible. It looks like a prudent business decision, to take into account a softening market and a higher business risk that some properties might not sell within the 6 months.
I don't see it as an excuse, like you're suggesting, to not put every effort into selling the property, more so as a back stop or risk mitigation if a property happens to be not sold within the said time frame.
As a shareholder I'm happy with the tweak to their policy, I don't want the company to take no steps towards addressing the possibilities arising from a softening market, being lumbered with unsold properties and paying out obligations. This shares the risk with the owner, assuming one can have confidence OCA are doing all they can to sell the property.
If one can't or doesn't have that confidence and can back that with evidence that OCA are in neglect, then by all means challenge your investment decision. There is no evidence as far as I can see at this point in time. It's just a policy decision, which in time will evidence whether good or bad.
That said none of this correlates to OCA not "aggressively" trying to sell vacant properties as soon as is reasonably possible. That's a long bow to draw from a prudent risk sharing policy tweak in a softening property market.
jmho
BAA
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17-04-2019, 09:01 PM
#3518
Personnel experience made me a lot wiser.
A case of what "DID" happen,rather than a case of what "COULD" happen.
Last edited by percy; 17-04-2019 at 09:08 PM.
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17-04-2019, 09:15 PM
#3519
Originally Posted by percy
Personnel experience made me a lot wiser.
A case of what "DID" happen,rather than a case of what "COULD" happen.
Anecdote is a dangerous thing when it is transposed from ones own experience with an unrelated entity to ones no experience with another entity. Give OCA a chance to work the policy, it seems prudent in the current market climate, if they can't sell properties within the 6 months, then they have a prudent risk sharing policy.
Think like the investor that you are, not like your loved ones' estate is exposed to some conspiracy to not sell their property when there is no evidence that that is the case.
jmho,
BAA
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17-04-2019, 09:23 PM
#3520
Originally Posted by percy
Right picture yourself as the estate execuetor,
I've been in that position. Unit sold before deceased in the ground full cash settlement within 4 weeks of funeral. These places dont like empty units. They are about the living. and neigbours dont want a vacant place reminding them of the dead and their near future. Also miss out on full monthly fees.
These villages already have tradesmen on tap -, constant turn of units = constant work.
Chalk and cheese with time shares.
Seasons dont matter to the infirm, or those ready to move
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