ARV - Arvida Retirement Villages

[trader_jackson]

How the Herald are reporting it https://www.nzherald.co.nz/business/...ectid=12334750

Fantastic really, not sure they (or any media outlet) has called the ol' dog "retirement giant" I like it... in fact I don't even know if the Herald bothered to 'report' FY19's result last year.

[Snow Leopard]

Is it good though?

There are hours of entertainment value to be had delving into the accounts and especially trying to balance out the effects of notes 5,7 & 8.

I will need a good bottle of wine to help .

Disc: hold

[trader_jackson]

Summary from FY16 to FY20:
Underlying profit per share CAGR is 14.0%
Net tangible assets per share CAGR is 11.3%
Dividends per share CAGR of 8.1%
And net profit per share is only down 10.5% vs FY16 (still up significantly when FY20 is compared to FY15)

There may be sum operators that are 'cheaper' at this moment, but I do not know of any other listed operator that has such solid track record of growth across various key metrics from FY16 and FY20, but please do share if so.

It will be interesting to compare RYM's 5 year track record against ARV's given their same reporting periods. Maybe ARV should trade on the sort of premiums RYM does?

I have often mentioned how continuum of care will only ever get more important, and this virus has only accelerated that. It is nice ARV continues to make money in this tricky area, whilst having excellent staff and customer engagement/reviews.

With all of the above, even with whats going on during these crazy times, I'll continue to happily hold.

(Also, I feel we should really try compare apples with apples, or at least try - can't really go comparing those companies with financial years ending 'on a high', being a FY19 result on December 31 2019 [or a quarter before - and looking at CAGR from FY15 to FY19], with those with a FY20 result ending during a world wide pandemic combined with a nationwide lockdown I would have thought)

[macduffy]

(Also, I feel we should really try compare apples with apples, or at least try - can't really go comparing those companies with financial years ending 'on a high', being a FY19 result on December 31 2019 [or a quarter before - and looking at CAGR from FY15 to FY19], with those with a FY20 result ending during a world wide pandemic combined with a nationwide lockdown I would have thought)

Good point, tj, but can we do away with the small print in the afterthought? Old eyes, y'know!

[Waltzing]

What may come to matter more than NTA and profit margins is dividends above 3.5% The flood of money in the next 2 years to the market may result in assets bubbles redeveloping and NTA becoming no longer a dominating financial statistic.

[bull....]

What may come to matter more than NTA and profit margins is dividends above 3.5% The flood of money in the next 2 years to the market may result in assets bubbles redeveloping and NTA becoming no longer a dominating financial statistic.

fundamentals are not really relevant at the moment in the markets so yield could well be all that matters

[winner69]

Some bonuses paid out.

ARV on of the better performers in their peer group

n the 2017 Tranche,Arvida’s TSR was second out of the five companies in the peer group and 25th out of 45 companies in the NZX50 group. In the 2015 Tranche,Arvida’s TSR was second out of the four companies in the peer group and 15th out of 39 companies in the NZX50 group. The overall result was that 35% of the 2017 Tranche entitlement vested into ordinary shares and 77% of the 2015 Tranche entitlement vested into ordinary shares.

Well done Arvida management

[winner69]

Pretty impressive Underlying Profit up 34%

But $9.8m came from acquired villages ...so ‘base’ business only up about 8%

I think that 8% is an indicator of how ‘challenging’ 2021 is going to be ....growth likely to be less than 8% even with another 4 months contribution from those acquired villages

[Maverick]

Pretty impressive Underlying Profit up 34%

But $9.8m came from acquired villages ...so ‘base’ business only up about 8%

I think that 8% is an indicator of how ‘challenging’ 2021 is going to be ....growth likely to be less than 8% even with another 4 months contribution from those acquired villages

too true Winner, totally agree with your sentiment. I spent a bit of time on this one today. It's always tricky working with ARV because they keep buying stuff and prolifically issuing new shares.

They increased underlying earnings per share by 10% and increased the divi for the year. Good but not great.

But they also only had 1.5 weeks of lockdown in this FY and have clearly stated FY2021 is where the covid effect shows up. They have also stated future growth will not be is good as it was. And frankly , it wasn't that stella before. Wait there's more.... they are reducing their development goals.

Now im not bagging ARV at all, the result was not bad, it just wasn't good. I am saying we now have the same picture from SUM and ARV results without much or any covid influence and there is definitely a tide turning with villa building inthe RV sector going from "excellent" growth to "just adequate" growth. I do note they delivered all ILU's rather than Care suits this year.

Both companies now have reduced future building rates and have produced much lower historic underlying EPS growth rates of around 8-10%.

(It is pleasing both SUM and ARV have responded pragmatically with their housing supply goals opposite to how an Arab does when there is starting to get too much oil around.)

Personally, ARV should trade on this result about a PE of 13-14 max ,so about $1.30-$1.40 feels right to me.

Disc, sold out on ARV went they spent up big on buying established villages last year.

[Beagle]

Sometimes useful to compare NTA from one year to another to see the gain as a property company.
NTA was $1.25 and is now $1.27 after all the razmatazz of acqusitions of fancy villages and all the headlines of 34% growth, (which I am sure would have lined some mangers pockets) but for shareholders they added 2 cents of value while paying 5.76 cents in dividends during the year = 7.76 cps shareholder value generated during the year.
PE of 18 on that basis and they reckon FY21 is going to be tough. Hmmm. I think a fair bit of window dressing to dress up old mutton as fresh spring lamb goes on with this company.