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  1. #701
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    Quote Originally Posted by Maverick View Post
    While the underlying profit is nicely up , just as anticipated, the earnings per share is only up 5.2% on last year. They seem to be always increasing the shares on issue.
    fy17 -261 million shares ,eps.0888.
    fy18-371 million shares,eps .0887.
    fy19-414 million shares,eps.0933.
    I`m very happy with the result as it was exactly where it should be but it is not as "amazing " as it first seems. To me its a great result as it indicates stability, predictability and steady as she goes over the industry.
    Like all of the sector (especially the new boys ARV and OCA), it is a slow but sure journey that takes plenty of time. I`m happy ARV are doing just fine but the 5.2% underlying profit(per share) increase is not better than RYM 11%. Nor SUM 21% increase , although 5 months ago now.
    If you use end of year shares on issue (rather than weighted average), I think you'll find that ARV have not increased shares on issue significantly since the end of the 2018 FY. (413.7 --> 413.9).
    Yes, there was a big increase during the FY18 year, to incorporate their purchased expansion. Might only be a small %age increase this year, but should be a lot better in future as a result.
    Also - I note the ROCE (on an underlying profit basis) has been steadily climbing each year for the last 5 - from 1.9% to this year's 7%. That's nice to see - the 'steady performance' is underpinned at a steady rate on increasing efficiency of capital.

  2. #702
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    Quote Originally Posted by Maverick View Post
    While the underlying profit is nicely up , just as anticipated, the earnings per share is only up 5.2% on last year. They seem to be always increasing the shares on issue.
    fy17 -261 million shares ,eps.0888.
    fy18-371 million shares,eps .0887.
    fy19-414 million shares,eps.0933.
    I`m very happy with the result as it was exactly where it should be but it is not as "amazing " as it first seems. To me its a great result as it indicates stability, predictability and steady as she goes over the industry.
    Like all of the sector (especially the new boys ARV and OCA), it is a slow but sure journey that takes plenty of time. I`m happy ARV are doing just fine but the 5.2% underlying profit(per share) increase is not better than RYM 11%. Nor SUM 21% increase , although 5 months ago now.

    By the way , I don`t accept the recent forums "adoptance" that SUM`s margins are failing, they certainly arn`t (at present ). I presume that myth has come from the CEO`s comments that they are ANTICIPATING a softening of margins, they haven't arrived yet. That will apply to everyone when/if they do come.
    It was largely expected that underlying earnings per share would only increase modestly... This year will see 170 units built (another record build rate - up 50% on last year) and further integration, utilization and synergies exploited from previous years acquisitions... I believe we will see a high single digit or low double digit uplift in underlying EPS this coming year, while sum others may well see their underlying EPS continue to halve...
    Meanwhile, on the 'real bottom line front', being basically NPAT per share, ARV is fearing much better (so far) than other listed operators.

    On another note, Wow 17 facilities now with the gold standard level of care (4 year cert) - an increase of 42% on previous year and now well in front of all other providers (except RYM)... maybe PE multiple is linked to how many facilities as a % of total facilities you can get with the gold standard?? I hope so, as then ARV should be in for a very large re-rating!

    And debt levels, while increasing, are still well below sum, actually most, other listed operators - as previously mentioned, OCA wins the prize in growth in this area.

    hey, just noticed, FY21 ARV is gonna deliver more units than OCA, in fact in the next two FY's I reckon OCA and ARV are going to be be building about the same - and yet some people say OCA gonna build (alot) more than ARV in FY20 and beyond? (the FY20 and beyond story as some have said)... Given ARV has a track record better than that of OCA (as one has to build up a reputation as a listed company of delivery, as some ohers have mentioned on sum other threads)... so I'll be backing ARV over OCA when it comes to delivery (for starters, The Sands in browns bay is coming right down to the wire!) and when it comes to margins (OCA has been very patchy in this department - unlike ARV which has a steady increasing trend for both new and resales)
    Last edited by trader_jackson; 28-05-2019 at 10:31 AM. Reason: minor changes

  3. #703
    Speedy Az winner69's Avatar
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    ARV trading just below its Book Value of $1.32

    The historical numbers on Page 40 are more than solid...and support a P/B multiple of at 1.2

    That’s a share price of $1.60

    Just bought a few .....cheep as
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  4. #704
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    Quote Originally Posted by winner69 View Post
    ARV trading just below its Book Value of $1.32

    The historical numbers on Page 40 are more than solid...and support a P/B multiple of at 1.2

    That’s a share price of $1.60

    Just bought a few .....cheep as
    Yup - a true growth company across the board... ARV now has a great track record, and "well positioned" to continue that sustainable and steady growth, without having to suddenly reduce the build rate by a third or something... I remember the not so long ago days when another guy always use to harp on about on sum other thread, "the track record, the track record!" only for that track record to start dramatically reversing with underlying profit growth halving, net profit growth going negative (ie not growth) and the build rate to be dramatically cut... quite sumthing indeed.

    Not going to even bother talking about the dividend, as we all knew this was going to be good (and continue to be so).
    Last edited by trader_jackson; 28-05-2019 at 11:51 AM.

  5. #705
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    Quote Originally Posted by winner69 View Post
    ARV trading just below its Book Value of $1.32

    The historical numbers on Page 40 are more than solid...and support a P/B multiple of at 1.2

    That’s a share price of $1.60

    Just bought a few .....cheep as
    Cheap for a reason, slowest growing of the retirement companies on an underlying eps basis...MUTT.
    Julian is confident of underlying profit growth this year T.J. but I suppose I should trust SUM stranger on the internet who thinks he knows better... NO thanks !
    Last edited by Beagle; 28-05-2019 at 11:55 AM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  6. #706
    Speedy Az winner69's Avatar
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    Had to smile when ARV mention “ Softened residential housing market, particularly in Auckland and Christchurch. We continue to monitor the impacts on the construction market and land prices”

    No mention of mystery shoppers though ....ARV might be missing a trick here
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  7. #707
    …just try’n to manage expectations… Maverick's Avatar
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    Quote Originally Posted by Maverick View Post

    For what it's worth I forcast OCA should deliver 9.0 cps shortly (no imputation credits) -FWD PE 11.2. ARV to deliver 9.3 cps (plus 1 cent of imputation credits thrown in, so apples for apples let's say ARV 10.3 cps ) FWD PE 12.3
    ARV is still a great company at good value its just that OCA right now is screaming bargain.Just my opinion of course -

    I`ve spent yesterday day going over ARV`s result and updating my spreadsheets. And magnificent spreadsheets they are too, predicting back in March (post above) that the EPS would be 9.3 cps.(maybe the broken clock thing)

    Firstly, I am very impressed with the layout of the investor presentation . I have always bagged ARV for sub-par presentations but they have really got that sorted now.
    Here goes.....
    -They seem to be suffering the same phenomena as SUM of taking longer to sell the new stuff with only 46 of the 113 new units delivered FY19 being sold. Their new sales reduced from FY18 =79 to FY19=70. While SUM got canned for falling new sales recently we seem to be getting more accustomed now. I personally have no issue with this as it takes time for new builds to be digested by the community. The true indicator of oversupply (according to SUM CEO king Julian) is resales and ARV have good resales with only 2% being empty. SUM is 1.5% but it has gone lower to 1% at the time of their recent AGM , RYM 1%
    -All their YOY figures seem healthy enough with no red flags that I can see. It is good to see their YOY DMF`s up 18 % and resales profit up 47%
    -Their new build margins are way behind the others at 17% (SUM and OCA at circa 30-33%)
    -To compare apples with apples I have added back the tax ARV pay as OCA, SUM and RYM seem to pay feck all tax. This increases ARV`s EPS to 10cps.
    Sooo… EPS (untaxed) and PE as follows;
    ARV $1.30 eps 10.0c = PE 13
    OCA $1.04 eps 8.5c= PE 12.2 (this is 12 months old, FY ends this weekend- my spreadsheets are predicting eps 9.1eps =11.43)
    SUM $5.55 eps 47c= PE 11.8
    RYM $11.50 eps 45.4 = PE25.3

    Seems to me SUM and OCA are ones offering best value with ARV a wee way behind in 3rd place. Plus I really like the OCA and SUM directors (I don`t know anything about ARV directors but probably outstanding individuals too).

    Disc; hold truck loads of OCA, a van load of SUM and a lime scooter load of ARV.


  8. #708
    Speedy Az winner69's Avatar
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    Maverick ...the amount of tax paid is a sort of an bdicator for how much profit is made in looking after people (rather from property activities)

    ARV paying relatively more tax as per your post sort of says they actually make a reasonable profit from care activities
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #709
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    Quote Originally Posted by Maverick View Post

    I`ve spent yesterday day going over ARV`s result and updating my spreadsheets. And magnificent spreadsheets they are too, predicting back in March (post above) that the EPS would be 9.3 cps.(maybe the broken clock thing)

    Firstly, I am very impressed with the layout of the investor presentation . I have always bagged ARV for sub-par presentations but they have really got that sorted now.
    Here goes.....
    -They seem to be suffering the same phenomena as SUM of taking longer to sell the new stuff with only 46 of the 113 new units delivered FY19 being sold. Their new sales reduced from FY18 =79 to FY19=70. While SUM got canned for falling new sales recently we seem to be getting more accustomed now. I personally have no issue with this as it takes time for new builds to be digested by the community. The true indicator of oversupply (according to SUM CEO king Julian) is resales and ARV have good resales with only 2% being empty. SUM is 1.5% but it has gone lower to 1% at the time of their recent AGM , RYM 1%
    -All their YOY figures seem healthy enough with no red flags that I can see. It is good to see their YOY DMF`s up 18 % and resales profit up 47%
    -Their new build margins are way behind the others at 17% (SUM and OCA at circa 30-33%)
    -To compare apples with apples I have added back the tax ARV pay as OCA, SUM and RYM seem to pay feck all tax. This increases ARV`s EPS to 10cps.
    Sooo… EPS (untaxed) and PE as follows;
    ARV $1.30 eps 10.0c = PE 13
    OCA $1.04 eps 8.5c= PE 12.2 (this is 12 months old, FY ends this weekend- my spreadsheets are predicting eps 9.1eps =11.43)
    SUM $5.55 eps 47c= PE 11.8
    RYM $11.50 eps 45.4 = PE25.3

    Seems to me SUM and OCA are ones offering best value with ARV a wee way behind in 3rd place. Plus I really like the OCA and SUM directors (I don`t know anything about ARV directors but probably outstanding individuals too).

    Disc; hold truck loads of OCA, a van load of SUM and a lime scooter load of ARV.

    Appreciate the comments, here is my view on a few things:
    1. For FY17, FY18 and FY19 added up, ARV built 219 new units, and sold 181 units, ie they sold 82.6% of the units they built over the past few FY's, SUM built 1379 in that period and sold 1125, ie 81.6% (FY19 is an estimate of 475 built and 404 sold - the sold amount could be a bit ambitious as this would require a very large lift from FY18's 339 sold). So SUM are, proportionally speaking, building more than they can sell vs ARV... and unlike ARV, SUM were saying they were gonna increase their high built rate even more, to 600 or something units per year (from 450), before then realizing this is way to much (at this point in time) and hence had a huge reversal... ARV mean while is the slow and steady performing with gradual increases their villages and the market can handle, but yes, new sales do come in waves (just like in FY17 ARV sold 32 new units and only built 5)
    2. Building margins have been indicated by both OCA and SUM to drop... there may not be much of a difference between ARV and OCA and SUM, although I do expect SUM to still be 1st ranked, OCA to be 2nd and ARV to be 3rd, just not with the big difference there is currently (which has narrowed in recent years already)
    3. Winner is right - ARV's care operations are pretty profitable, more so than OCA, meanwhile SUM's isn't profitable right now (that is what they say anyway). ARV seem to have excellent control of costs and able to pass on increased costs to end users successfully, in fact in recent times I would say ARV has done this the best in the sector - yes, even beating the famed RYM
    4. Of your list, ARV has the lowest gearing - not that that matters too much as interest rates are low, but if interest rates were to turn round, and house prices stagnate further (or fall even), then sum operators will be caught in a tight position faster than others will!

    Summary: ARV is on slightly higher multiples than OCA or SUM, yet seem to have much better prospects than sum at least (improving margins vs going backwards, higher build rate and sales vs going backwards in build rate and crossing our fingers for an increase in sales, increasingly profitable care operations vs not profitable, lower gearing vs higher gearing, high dividend vs lower dividend)
    Last edited by trader_jackson; 30-05-2019 at 08:37 AM.

  10. #710
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    @Maverick thanks for your thoughts, you must indeed have a pretty cool spreadsheet. I’m not sure though that it is legit to fiddle with the tax and calc eps and PE, especially making comparisons.

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