OCA - Oceania Group - retirement villages

[Daytr]

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Thanks, that's actually pretty impressive considering the current market.
Also goes against their guidance of a much larger cut in sales margins.

[Lego_Man]

Forsyth Barr first impressions:

Overall, a solid result from Oceania Healthcare (OCA), no drama with some minor positives and negatives on annuity earnings, coming out in-line with our estimates. On the more “big picture” issues, which we believe are the key reasons why OCA is valued at 0.4x tangible book value, we were encouraged by slightly lower debt than we had anticipated (increased by ~+NZ$25m in 2H24) driven by ~NZ$20m lower capex. OCA also disclosed an Interest Coverage Ratio (ICR) of 3.4x, substantially above covenants of 2.0x and flexibility to move more debt into the development facilities, further increasing the ICR should it be needed. OCA also reiterated that all its debt facilities and bonds mature no earlier than FY28. We estimate that NTA increased to NZ$1.41, up from NZ$1.33 a year ago, and +4cps above our estimates. They key positive in the results was substantially higher new sales gains (~+NZ$10m) than we had anticipated. While we see this as positive, we will look for clarity on the NZ$14m of delayed settlements, something which has become a common feature for the aged care sector these days. Pleasingly, it looks as if net buy backs was a positive (i.e. sold more than bought back). On the call, we believe comments on capex for FY25 will be one of the key issues, we estimate capex to come down meaningfully despite increased deliveries next year, as OCA builds on fewer new villages with a focus on finishing of the villages for delivery in FY25. OCA did not declare a dividend, something we consider a logical decision in the current climate.

[Daytr]

This is exactly what ValueNZ and I look for. Improving business with static or declining share price.

So many punters will be frustrated with the market action today and finally capitulate.

So you plan on increasing the percentage of OCA in your portfolio again.

[ValueNZ]

This is exactly what ValueNZ and I look for. Improving business with static or declining share price.

So many punters will be frustrated with the market action today and finally capitulate.

Speaking of punters capitulating, notice how the number of individuals with less than 100,000 shares has declined, whilst those with above 100,000 shares have increased.
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My interpretation of this is that small uninformed shareholders, who don't understand the ORA model, are selling to larger more informed shareholders.

[ValueNZ]

Does anyone have the link to the Webcast results presentation?

The investor presentation is at the bottom of this link. https://www.nzx.com/announcements/431667

[Toddy]

Are For Barr increasing their holdings or have they been one of the net sellers?

[Lego_Man]

Are For Barr increasing their holdings or have they been one of the net sellers?

They have been net buyers as i understand it. OCA i believe is their top sector pick.

[Balance]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity

[Daytr]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity

Well, it would certainly help if they weren't operating at a day to day of loss of $42M, + net interest costs have increased by $3M.
That's a lot of sales/resales to just break even.

But apparently some on here don't think they are losing money day to day...
They did in FYE23 & have basically doubled that operating loss in the last financial year

[Bjauck]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity

I thought that management had already signalled that development was being scaled back.

It is good to see that employee retention has improved to 67% up from 56% last year. Maybe fewer employees are skipping over to Oz.