ARV - Arvida Retirement Villages

[percy]

Yes and even that was to like: With strong demand for retirement village living, an improving aged-care environment and a lowly geared balance sheet, Arvida is well placed to deliver improved performance into the second half of the financial year.

No wonder the share price will (hopefully) be back in the $1.30's by the end of today, if not by lunch time.

I joined the share register today buying at $1.23
Thought it was an excellent result.
Buying at a 36% discount to NTA appealed to me.
And the bonus is I will receive the divie on the 21st of December.

[Master98]

Not saying it isn't true, it is, but 6 months later, ARV continue to perform very well...

well done t_j, you are on it, arv will continue performing well.

[BlackPeter]

This was from May (when full year results were announced):
Commenting Mr Beverley said the environment for the year ahead included many uncertainties and some significant challenges for the New Zealand economy and property market.

Funding for aged care continues to materially lag the actual cost of care, which is resulting in considerable financial pressure for traditional aged care operations. Acute nurse shortages in the healthcare sector are also challenging the continued provision of services in some regions.

Not saying it isn't true, it is, but 6 months later, ARV continue to perform very well...

Actually - my citation was lifted from todays announcement.

You are saying they recycle them?

[winner69]

Are you sure this is valid? Ugly picture if it is. Wheels fallen off in H123, is it recoverable H223?

Attachment 14359Attachment 14358

No idea if ‘valid’ but for years I have done these sort sums on all in the sector to get a feel for how ‘profitable’ the day to day to stuff is.

A few versions of this ‘Operating Surplus from Day to DY Operations’ -

1 One can take Reported NPAT and deduct Fair Value/Revaluations to see what’s left
2 and Underlying NPAT less Realised Gains / Development Margins

Generally the result is +ve (surplus) but lately with most in the sector it’s become less +ve and in some cases -ve (shortfall.)

[trader_jackson]

Actually - my citation was lifted from todays announcement.

You are saying they recycle them?

They quite possibly do recycle them - sector facing similar issues as 6 months ago still - but ARV keep delivering - that's the stunning part

[winner69]

This 'Operating Surplus from Day to Day Operations' metric of mine was +$3.3m in H122 and has turned into -$4,3m in H223 - a turnaround of $7.6m (adverse / not good)

Maybe best summarised like this -

H123 v H122
Fees / Income Up $15.1m
Employee Cost Up $11.2m
Other Costs Up $11.5m
Operating Surplus day to day Down $7.6m

Realised Gains Up $19.9m


Increase in Underlying Profit Up $12.3m


So great work on the sales/development side by making $19.9m than last year but as expenses have gone up $7.6m more than revenues Underlying Profit was only $12.3m up

The expense problem summed up in interim report 'Operating expenses increased $19.9 million when compared to the prior corresponding period. This included the addition of the Arena portfolio that was acquired in November 2021. We also once
again supported our front-line teams with a Covid bonus payment and pay increase. Higher leave provisions and roster covering were again a factor in higher employee costs.'

Considering that revenue increase also had the benefit of Arena to me it looks as if things are a bit askew at the moment with their control of day to day operations

Make of this what you will but then again i might just be looking at things the wrong way

[Snow Leopard]

Result OK by me....

Well, better than OCA

Would have been happier if they kept the DRiP on.

[BlackPeter]

Good they earned enough money to be able pay for their latest building problems:

https://www.nzherald.co.nz/business/...LBQGDSFJWA45E/

(possibly paywalled)

I guess making Santa's main route into the house unsafe is clearly a NO-NO ...

[winner69]

Good they earned enough money to be able pay for their latest building problems:

https://www.nzherald.co.nz/business/...LBQGDSFJWA45E/

(possibly paywalled)

I guess making Santa's main route into the house unsafe is clearly a NO-NO ...

OMG a $50,000 chandelier in the foyer as well

[ronaldson]

This share was discussed at the Sharetrader get together at Oyster and Chop on Sunday. I decided to add another 10k to my investment portfolio today at $1.25 but cum the 2.5 cps unimputed dividend. A little late on the scene as it was quite a bit lower not that long ago and pre the half-year results announcement, but I reread all the detail, and the other recent announcements.

One point that took my eye this time is that ARV has 257 registered nurses providing care. The Government has stated it will fund pay parity going forward, although exactly when hasn't been specifically identified to the industry. This will surely add $3 - $4m pa directly to ARV's bottom line when it does occur, and additionally the daily rate subsidy for care bed occupancy has increased by 5.5% from 1 September. So the least profitable sector of ARV's activities could contribute a little more in future, although any private sector activity which depends on government funding is doomed to mediocrity at best.

Interestingly, despite delivering only 51 new units in the half to 30 September they still maintain they will reach the original full year target of 270 units built and delivered. I have seen that asserted twice in written form notwithstanding that slow build rate, so management/the Board must be at least reasonably confident about that, which in turn suggests that if sales momentum can be maintained the year-end outcome should be solid. And dividend guidance is to repeat last year's 5.5c in total. The yield isn't startling at around 4.5%, but at least there is one.

As Percy points out, at current prices you are purchasing at a substantial discount to NTA so longer term that should demonstrate value. Let's hope so.