ARV - Arvida Retirement Villages

[trader_jackson]

Another positive announcement today... https://www.nzx.com/companies/ARV/announcements/267420

Despite the share price being close to, and sometimes below the offer price (during the SPP), somehow the $5m SPP was still oversubscribed, shows the confidence investors have in ARV... not surprising giving it has a 6.1% gross dividend, and capital growth (that will most likely come with an unusually low PE of 14.9 - and fittingly with these metrics one broker has a price target of $1.09 on it)

Regardless of if the rest of the retirement sector is more focused on greenfield development and sales associated with that (as percy explains above - lets hope the housing market doesn't go sour...) these valuation metrics are promising for any company (I would think?) I see the directors and institutional investors (eg ANZ) have caught onto this "future winner", I wonder when the rest of the market will...

What is the differences for brownfeild development (what ARV does) vs greenfeild development (what eg SUM does)?

[percy]

Another positive announcement today... https://www.nzx.com/companies/ARV/announcements/267420

Despite the share price being close to, and sometimes below the offer price (during the SPP), somehow the $5m SPP was still oversubscribed, shows the confidence investors have in ARV... not surprising giving it has a 6.1% gross dividend, and capital growth (that will most likely come with an unusually low PE of 14.9 - and fittingly with these metrics one broker has a price target of $1.09 on it)

Regardless of if the rest of the retirement sector is more focused on greenfield development and sales associated with that (as percy explains above - lets hope the housing market doesn't go sour...) these valuation metrics are promising for any company (I would think?) I see the directors and institutional investors (eg ANZ) have caught onto this "future winner", I wonder when the rest of the market will...

What is the differences for brownfeild development (what ARV does) vs greenfeild development (what eg SUM does)?

Start at the bottom.The difference is HUGE.HUGE HUGE.
ARV may be included in the "retirememt sector" however the comparison of brownfield vs greenfield must be recognised, that you are comparing chalk with cheese.You may compare MET,RYM and SUM as they are greenfield,but I am not sure what I would compare ARV with.May sound stupid but possibly PGW?.If that sounds stupid to you, it makes more sense to me than comparing ARV with RYM etc.
So with ARV you are looking at growth plus divie.PGW forecast PE is 8.92 and yield is 9.56%.
Housing market?? Funny every one talks retirement sector, housing market,except RYM's CEO Simon Challis.I am with Challis.He has proved that Ryman succeed no matter what the housing market does.

[winner69]

Percy, rather than comparing to PGW maybe a better comparison is Greencross?

[percy]

Percy, rather than comparing to PGW maybe a better comparison is Greencross?

As always most probably right.
After I posted I thought the comparison could be a sheep farmer to a dairy farmer.Both in the same rural sector, but different businesses.Then who do you compare Greencross to,ARV or a retailer.?

[Snow Leopard]

This thread looks somewhat different from when I read it over the weekend (it would seem that NewGuy has gone completely) but was intrigued and have actually looked into Arvida as a company.

Firstly the 2015 'Annual' Report and Accounts only cover the period from the foundation of the company on 17-Dec-2014 through to 31-Mar-2015 and are not for a full year.
This appeared to cause a lot of confusion and angst and is a shining example of it paying to actually read company accounts thoroughly and carefully.

Secondly Arvida make a reasonable and real profit on day to day operations and that is a nice source of cash.

Since then they have 'bought' some extra villages for a equity & debt mix and changed the picture a bit and my guess as to where there are currently going is:

Current NTA around $0.763 per share.
A minimum FY16 'after tax operating profit' of $11.3m (4.1cps) and probably more.
Add into that any realised and unrealised revaluation gains as you wish.
Financial headroom to build a few new units or carry on acquiring, but as they intend to pay reasonable dividends then they are not likely to be the 'growth' companies that RYM & SUM are and that MET seems unsure about becoming.

It is early days for Arvida and until they have a few more sets of accounts on the board there is the uncertainty of whether the company will actually perform.

Is it a good buy at $0.85 a pop? Of that I am not sure but could be interested if it came closer to that NTA.

Best Wishes
Paper Tiger

[Master98]

What is the differences for brownfeild development (what ARV does) vs greenfeild development (what eg SUM does)?

http://www.stuff.co.nz/business/7053...are-facilities
"Brownfields refers to a building project that adds on to an existing building or site."
"The 21 villages had about 2140 beds or apartments in total and Arvida could add another 215 beds or units (10 per cent) via brownfield developments"