ARV - Arvida Retirement Villages

[winner69]

Opened at $1.29, an all time high, currently at $1.25, up nearly 10 cents since yesterday's low... so you could keep waiting around, while the re-rating continues, but it would seem this 'tactic' is proving costly


Disclosure: I don't know where the share price is going

Exciting eh - you doing well mate and being rewarded for your faith in this outfit

Can't be in everything - I think i'll stick to my boring old Summerset in this sector

But you go for - maybe $1.60 by Christmas

[In4a$]

Opened at $1.29, an all time high, currently at $1.25, up nearly 10 cents since yesterday's low... so you could keep waiting around, while the re-rating continues, but it would seem this 'tactic' is proving costly


Disclosure: I don't know where the share price is going

I reckon price will come back a bit with re-rating, but for those of us who took a punt on this early this year things a looking good. Cheapest in sector and showing great promise. Might by a few more when price settles down.

[trader_jackson]

I decided to have a deeper look at the numbers:
While the market is still to busy pushing up the valuations of MET, SUM and RYM, below should explain the 'rerating' (ie share price moving steeply upwards in recent days) for ARV (for the few that are interested...)

Pre-acquisition confirmed development opportunity:
Units: 150 (total units: 1001 so 15% increase, 43.6% of total portfolio)
Beds: 37 (total beds: 1296 so 2.9% increase, 56.4% of total portfolio)

Post-acquisition confirmed development opportunity:
Units: 260 (total units: 1248 so 20.8% increase, 47.4% of new portfolio)
Beds: 137 (total beds: 1384 so 9.9% increase, 52.6% of new portfolio)

I am thinking these units will all be built in around 2 years... ie a built rate of 130 a year, maybe if things were a bit slow and it took 3 years, built rate would still be 86 (all about the build rates on the high margin stuff right?)... this is quite a step up from 32 units and beds developed in the previous FY... and we haven't even begun looking at greenfield and/or further other brownfield development (via acquisition)

74% of new total portfolio is needs based which is nice to know (not so affected if there was to be a big downturn in property... and gearing is also ridiculously low... still got a good 33m odd in that ANZ thingy to draw down for more EPS accretive acquisitions)

But what is of particular interest, is that the "highest margin" Apartments/villas have increased by 55.7%: from 443 (19.3% of total porfolio) to 690 (26.2% of new portfolio)

As I have mentioned on several occasions, for several months, it is clear they are moving more into development, on brownfield sites for now while they further refine their internal development team (logical really)... but as the origional IPO booklet noted, greenfield development is the "3rd step" (did anyone actually see this? page 14 of the IPO booklet... I recently had a read over it again for comparative purposes I suppose everyone was to worried about how many accounting issues there would be integrating all these villages?)

It has also occured to me (and I'm sure others), that it is hard to put an exact value on ARV, due to the 'unknown' nature of development and acquisitions... but I suppose I am just happy to keep getting my "2x term deposit" gross dividend and know that development capability and delivery, like the dividend, will only increase in time

[Snow Leopard]

Am I right in thinking this is going to result in a 20%+ increase in the number of shares?

And did they not do something similar last year as well?

Well I am not to sure about this as a growth strategy!

Best Wishes
Paper Tiger

[kiora]

And more care beds,higher margin?

[trader_jackson]

Am I right in thinking this is going to result in a 20%+ increase in the number of shares?

And did they not do something similar last year as well?

Well I am not to sure about this as a growth strategy!

Best Wishes
Paper Tiger

Yes they will be increasing their share capital, rather than borrowing lots (which they could do with a 80m facility)

Yes they did do something similar last year, at just over 80 cents I believe

Yes this intial growth strategy of non-organic (although still EPS accreditation) could be seen as expensive and not ideal... but they are the 'youngest' retirement stock on the NZX (not even 2 years old!)... given this, I would be very worried if they decided to do a heavy borrowing 'SUM maximum effort' style greenfield building of 400 units pa.

Having said that, this could well happen in a few years, once they have had 'practice' developing their internal skills, using acquisition of high quality brownfield sites, while increasing their geographic spread and knowledge and customer recognition that comes with this (which this latest acquisition, like the last, has done).

ARV's product offering is quite different to that of SUM and MET, in that they offer a very, very good continuum of care, hence high quality care beds are an integral part (and one of the reasons why ARV has very high occupancy, in both beds and apartments). What will be most interesting, in regards to care bed margin, will be how placing the ORA over a bed goes.

On another note, 5:00pm is the cut off for the 1 for 7... if last years rights offer price is anything to go by, the share price will be dramatically higher this time next year!

[unhuman]

Just received the offer and I'm all in.

[trader_jackson]

Just received the offer and I'm all in.

You know I'll be taking up my full allocation ... wish I could apply for more really... if it is anything like the capital raising last year, this time next year share price will probably be over $1.80

[Valuegrowth]

It has implied price around 1.26.


52 week: 0.80-1.26


It has some support and It can pass its 52 weeks high provided we see strong market. This is a kind of long term play for me.

[King1212]

So if I buy 20,000 shares for $1.23c= $24,600. That gives me 2857 rights at $1.05c= $2,999. Then $24,600+$2,999= $27,599, with av price for shares=$1.207c. Or could wait for dust to settle and buy in after rights issue, when sp goes back to $1.10 to $1.15c, or I could be wrong.

you might be right....