OCA - Oceania Group - retirement villages

[mistaTea]

Jesus.

Why can’t we all just love each other.

[Balance]

You have one thing that balance can never have ValueNZ, and that is the potential to retire young and be financially independent.

Life has passed Balance by and his aggression towards you is understandable at his age and need to stay on the rat wheel compared to the opportunities you have in front of you.

He's had his opportunity and messed it up.

LOL.

If you weren't such an obvious social misfit, I may actually think of inviting you to my tropical seaside home.

Never mind, you just a' keep spouting your nonsense and live in your deluded world.

Maybe, you can help ValueNZ stack some shelves?

[Toddy]

Jesus.

Why can’t we all just love each other.

Yep. All this valuation accounting theory rubbish lead to long hours in the office debating over, well, theory.

[Balance]

From Beagle on the other site :

For those that don't know, there's a full transcript of the analysts call on the other channel and it appears there's lots of confusion with the financial accounts...there's a big surprise lol.

It would seem they are selling some care suites on credit terms.

There seems to be a lot of confusion about the debt level and how come its grown.

Also a lot of confusion about unsold stock level's, reported number has gone down from first half number but the number built in the second half exceeded the number sold in that half.

Winner suggested obfuscation. Its either that or a real dog's breakfast, or more likely some combination of that.

The only value I can add to that debate is to me it seems quite clear that at the first half result in late November they showed a graphic of unsold stock and separately identified numbers which were temporarily occupied as premium room accommodation. At the full year result the unsold numbers were down because they no longer included unsold stock temporarily occupied under premium daily rate.

Whether this is deliberate obfuscation or just generally a really slack and inconsistent approach used by the CFO from one period to another, judge for yourself but my opinion is the accounts are actually extremely messy and complicated even for professionals and analysts to understand and the senior management team do a very, very poor job maintaining consistency with reporting around certain key details of key metrics from one period to another. That does them absolutely no favours with institutional investors.

The increase in debt level is again concerning but it appears they are clearly in "tapering off development mode" and will be reducing their build rate in the future in line with how RYM and ARV are doing this to try and stop their debt going up. I think new unit deliveries in FY26 and FY27 will be quite modest. The impact of that on profit in future years remains to be seen.

Management seems confident that returns on care beds are improving and I acknowledge they have made decent progress with the reduction is basic care services, in terms of the number of beds with basic care villages sold or closed which is encouraging but there is a long way to go.
My view is that in certain respects the company has been very poorly lead and governed in the last few years. Even in FY25, despite hundreds of new unsold care suites they are still building heaps more of them. With proper leadership that simply wouldn't be happening. From the call, thankfully it would seem FY25 is the last year for quite some time that vast amounts of new care suites will be built.

Interesting comment from Brent that the new CEO has a lot of "cleaning" to do. Can't help wondering what "cleaning" really means ? Like others on the other channel, I think he has "checked out" already.

Conclusion: I think this looks okay to me as a bondholder and the level of debt will gradually start to come down in the years ahead. Shareholders can make their own minds up but for me, this seems anchored in the sub 50% of NTA zone until such time as they can clearly execute on a greatly enhanced volume of new unit sales. Forbar have been picking 275 for FY25, up nearly 50%. That looks like fantasy land stuff to me with the housing market in the sombre state it's in.

One thing that really caught my eye on the call was only 13 confirmed apartment sales at the Helier out of (from memory 72 apartments) and that's with all the pre-construction sales hype, opening a sales office in St Heliers and Brent previously assuring shareholders they had really good levels of enquiry.
Given the very best north facing units with sea views always sell quickly to cashed up MINO's (money is no object) I think its going to be a very long hard slog to sell the other 59 units.

Maybe the new CEO brings a new approach that generates better results or maybe just even more ESG focus...time will tell.
Disc: Bondholder,, no shares held..

Just some of my thoughts. If others see it very differently that's absolutely fine and good luck.

[Bikeguy]

Your right to your opinion is respected

Do you think other market participants may have had this profound insight of yours as well?

Seriously dude, listen to what I'm saying.

I do think you have some good insights, and I have taken many of them onboard at times Sailor,

I do not think for other market participants, so unless they share their opinions I have no idea what their insights are…

I still think that a fundamental such as aging is very good supply/demand environment for a business involved in retirement housing etc, and not once have I suggested it is the “only” requirement for a successful investment in this sector…

It is up to each investor as to which business they think will be successful in producing them their best return on their investment.

[ValueNZ]

If you weren't such an obvious social misfit, I may actually think of inviting you to my tropical seaside home.

Sounds to me like you've exchanged freedom for a bach.

Accumulate productive assets that put cash in your pocket, instead of stuff to impress others that take cash from your pocket. This is the way you get really rich.

[SailorRob]

Sounds to me like you've exchanged freedom for a bach.

Accumulate productive assets that put cash in your pocket, instead of stuff to impress others that take cash from your pocket. This is the way you get really rich.

And do you notice how he and Daytr always talk about how much fun they had in their youth?

That is a euphemism for they messed up and need to work till death but at least had some fun.

[Balance]

And do you notice how he and Daytr always talk about how much fun they had in their youth?

That is a euphemism for they messed up and need to work till death but at least had some fun.

Yawn.

And you invest and spout your nonsense the same way you assume you know people like me?

[SailorRob]

LOL.

If you weren't such an obvious social misfit, I may actually think of inviting you to my tropical seaside home.

Never mind, you just a' keep spouting your nonsense and live in your deluded world.

Maybe, you can help ValueNZ stack some shelves?

Just give me the address and I'll come in my yacht.

And Balance, I can come any time as I'm independent.

Don't worry though that leave you applied for should come through.

[Daytr]

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I've been thinking about the sales margins which are a lot higher than the company's own forecast not that long ago.
To be able to still get 31% margin on new builds?
The number doesn't pass the sniff test to me in the current market.

So it begs the question instead of cutting prices as much as OCA predicted, what incentives are they offering & where will these show up in the accounts in future?
A year free of body corporate fees perhaps?
Maybe more?

If this is the case, what impact will it have on the day to day operating cashflow that was negative $40M in the last year?
Also if this is the case as For Bar theorized, I would hope that OCA were transparent about it.

This industry or OCA really needs to clean up their act in regards reporting. It's unnecessarily overly complicated which raises suspicion in itself.