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  1. #1
    Member The Grinch's Avatar
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    Default Arvida... The latest IPO

    What's the sentiments?

    It's been a while since I reviewed/paid attention to the retirement village listings - felt all the positivity has been well priced in - and had to laugh when I saw this potential IPO. Fantastic idea perfect time to sell a piece of your pie, not only are people paying good money for new equities but everyone loves this growth industry. Why not piggy back of Rymans & Co's good work?

    Will have a gaze over the prospectus. but don't expect it to be cheap, will be interesting to see who steps up to be CEO.

    Cheers
    TG

    http://www.nzherald.co.nz/business/n...ectid=11325559

  2. #2
    An Awesome Cool Cat winner69's Avatar
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    Quote Originally Posted by The Grinch View Post
    What's the sentiments?

    It's been a while since I reviewed/paid attention to the retirement village listings - felt all the positivity has been well priced in - and had to laugh when I saw this potential IPO. Fantastic idea perfect time to sell a piece of your pie, not only are people paying good money for new equities but everyone loves this growth industry. Why not piggy back of Rymans & Co's good work?

    Will have a gaze over the prospectus. but don't expect it to be cheap, will be interesting to see who steps up to be CEO.

    Cheers
    TG

    http://www.nzherald.co.nz/business/n...ectid=11325559
    What conclusions you come to?

    Others interested in reading the prospectus
    http://www.business.govt.nz/companie...426F2CE2AF781D

  3. #3
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    Quote Originally Posted by winner69 View Post
    What conclusions you come to?

    Others interested in reading the prospectus
    http://www.business.govt.nz/companie...426F2CE2AF781D
    note this is the pre ipo prospectus - ie to existing village owners to approve the consolidation. Once approved the ipo prospectus will be launched I assume.

    I haven't read but should be some good market info in there.

  4. #4
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    Many thanks Grinch for the doc.

    An uncannily similar sized operation to SUM, very similar gross and net margins, similar FV adjustments on a percentage basis also. It will be interesting to compare relative valuations closer to the time.

    Havenít yet assessed comparative forward growth rates. As an opportunity it may well come down to just that and their ambitions to build flat out, I've been disappointed by SUM not increasing their growth rate further, there ambitions have waned a little IMO.

    Both are dividend paying, wouldn't buy either into a growth portfolio now, perhaps as income stock though.

    Itís an interesting time to IPO though, six months ago might have been a better sweet spot for them and the sector.

  5. #5
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    Default

    I expect the whole sector to lose more altitude from previous lofty level's as the fundamental laws of supply and demand play themselves out. Looking for another circa 20% altitude loss for RYM and then buy the market leader

  6. #6
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    Quote Originally Posted by winner69 View Post
    What conclusions you come to?

    Others interested in reading the prospectus
    http://www.business.govt.nz/companie...426F2CE2AF781D
    Interesting chart on page 9. SUM has quite a different asset distribution than the rest with a lot higher percentage of units.

    As far as Hercules goes, their villages are currently run by various managers/owners. Hercules would have to quickly stamp managing practices on each to ensure a good standard of care, etc. I see it as a bit risky.

  7. #7
    Member The Grinch's Avatar
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    Hey W69,

    Unfortunately haven't been following this industry for a while so a bit behind on it all. Did squiz through the investor prospectus and do a little follow up on Ambrose, Bill Mcdonald and co etc which peaked my interest a little bit.

    Thanks MACs for your summary. Does anyone know more about Grant Adamson, Rodgers and Co ltd, Bill Mcdonald etc other than what a google search throws up?
    - McDonalds Linkedin pitch seems to put him as well qualified for the position.
    - Couldnt find much on Grant Adamson but what I did was pretty positive.
    - Rodgers and Co seem like a good outfit and nice to know Ambrose has very intimate knowledge of the NZ industry.

    Will have to wait and see what sort of price there thinking of

    http://www.rodgers.net.nz/our-servic...-care-services
    http://www.harnesslink.com/News/Prom...t-Adamson-dies
    http://nz.linkedin.com/pub/bill-mcdonald/10/9a6/253

  8. #8
    An Awesome Cool Cat winner69's Avatar
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    Quote Originally Posted by The Grinch View Post

    - Couldnt find much on Grant Adamson but what I did was pretty positive.

    -http://www.harnesslink.com/News/Prom...t-Adamson-dies
    [
    I don't think you chose the right words here mate

    Didn't realise Grant had died even thought it was a year ago ..... he was a good bloke .... really sad
    Last edited by winner69; 18-10-2014 at 04:18 PM.

  9. #9
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    Quote Originally Posted by Roger View Post
    I expect the whole sector to lose more altitude from previous lofty level's as the fundamental laws of supply and demand play themselves out. Looking for another circa 20% altitude loss for RYM and then buy the market leader
    I'm looking to strike as well if there is a market tumble.

  10. #10
    percy
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    Merging 19 privately owned retirement villages into a single publicly owned company should prove challenging.19 different computer systems,19 different resident's contracts,19 different payrolls,19 different sets of standards,and 19 different sets of owners.Very challenging!!!
    I think it shows that stand alone retirement villages can not compete with the likes of MET,RYM,and SUM.Compliance and other costs are now too high for them.
    Yes more choice for the investor, having more listed retirement sector companies to chose from,but the fact remains the demand is,and will continue to be greater than supply.
    I think the Ben Hurst referred to in the article is a member of The Hurst Pratley Group, who own a number of very good villages.
    Last edited by percy; 18-10-2014 at 06:17 PM.

  11. #11
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    I'm not into this listing although it could be worth a stag for you staggers. Ryman and Summerset are number 1 and 2 in terms of development of retirement villages in NZ and I can't see that changing any time soon so I'm sticking with them. I can't wait for a couple of years to come when Ryman and Sum start getting more of their excellent landbanks cranked up and on the build, the current dripping taps will start to flow.

  12. #12
    percy
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    couta1.
    When you get back from South Africa I think the Hercules CEO might have a nice little earner for you.
    "Just pop down to ChCh and tell Richie and the boys, the new computer system they installed at Park Lane, at huge ,is of no value to the group going forward,so Hercules will not be able to include it in the settlement valuation."
    May be you will be safer in South Africa.!! lol.
    Last edited by percy; 18-10-2014 at 06:19 PM.

  13. #13
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    Default Headache or opportunity?

    Quote Originally Posted by percy View Post
    Merging 19 privately owned retirement villages into a single publicly owned company should prove challenging.19 different computer systems,19 different resident's contracts,19 different payrolls,19 different sets of standards,and 19 different sets of owners.Very challenging!!!
    But isn't that one of the key short-term profit drivers? I.e reduction in the back office costs.

    What I found interesting was the number of care beds as a percentage of total beds. They won't be a development company (like RYM and SUM). They won't rely (as much) on development and resale margin. Instead, it is the care fees. As such, execution risk should be much lower. They won't be as sensitive to NZ house prices (a good thing IMO).

    I'd expect a proper dividend given they are not in a position to expand (no land bank).

    Valuation will be key, but I'm not discounting Hercules yet.
    No advice here. Just banter. DYOR

  14. #14
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    I personally prefer the way Hercules generates profit from its care network and doesn't focus on villa sale like RYM or SUM even though I hold plenty of both.

    I'd like to see Hercules pay out 50-60% profit as a dividend and use remaining profit for take over and buy outs of other privately owned hospitals and Retirement Homes.

    Like others I'll wait for a better valuation. Might have to pick up some so I can kick back with Richie and the lads at the AGM's =P

  15. #15
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    Quote Originally Posted by PartyPooper View Post
    I personally prefer the way Hercules generates profit from its care network and doesn't focus on villa sale like RYM or SUM even though I hold plenty of both.

    I'd like to see Hercules pay out 50-60% profit as a dividend and use remaining profit for take over and buy outs of other privately owned hospitals and Retirement Homes.

    Like others I'll wait for a better valuation. Might have to pick up some so I can kick back with Richie and the lads at the AGM's =P
    PP generating profit from care centers is a tough road indeed around 50 beds is the break even point but even larger facilities of around 100 plus care beds do it tough when occupancies are down such as the winter just gone and remember the industry is currently underfunded to the tune of 500 million per annum by the Govt. At least Hercules have villas and apartments to help subsidize things during the tough times but still their current model falls short of Rym and Sum which are primarily property developers. I would think any significant dividends would be slow coming forward during the first year or two due to costs of the merger but hey with the All Black feel good factor many will take a punt based on that alone. Could be worth a small holding but the current listed companies are going to drive this sector for a long time to come particularly Ryman IMHO.

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