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04-10-2022, 06:21 PM
#1421
Hey Winner, your back of envelope maths are pretty good and sadly I fully agree with your summary too.
I feel sorry for ARV, they have been caught out pretty bad by Govt underfunding.
OCAs shuffling with their rest homes have gained them ~$8m in extra premium fees over the last 2 years . This large gain hasn’t even kept their care operations treading water . Compare that to ARV which has gained only $0.7m in extra premium fees.
of the ~1600 beds they own they have only 10% as care suits. Most seem to be just conversions as opposed to new deliveries. Just not enough to offset the Govt damage.
Luckily , or through brilliant management, ARV bought loads of good quality villas and have enjoyed a housing boom since. They have done really well on that front but with the extra shares issued to do it and the now millstone of their rest homes, it has made it a pretty neutered EPS result ( very generally speaking.)
These poor guys really have been screwed by the Govt with underfunding. So they divest 4 rest homes this year , what else can they do? No doubt each divestment also comes with a negative sale price.
For a $3.4 b company, building 250-300 villas and care units is the only option left available but is not going to get them out this lower growth situation in a hurry.
ARV are run really well and are rolling out SUM style villages , generally single level, which is a great model. But owning all these care beds is now problematic. Unfortunately doing more care suit single level conversions won’t work well enough either to compensate as there just isn’t enough profit in those (they don’t sell for that much and they can only be done in moderate numbers), as opposed to a full high density rebuild in a premium area.
ARV will still grow slowly for now and just maybe the Govt will increase funding but the poor buggers have really been rogered through no fault of their own doing.
Really sorry TJ , I know you love this company. Todays report , to me, paints a clear picture of how dire the ordinary rest home side of the industry currently is. That even the great stuff happening in the ARV villas , high sales rates, prices and margins seems to be barely sufficient to compensate the care for now.
On the positive , there will come a time when their village developments will grow past the anchor of their care but I don’t follow this company close enough to know when that might be….maybe we are already there.
Last edited by Maverick; 04-10-2022 at 10:00 PM.
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06-10-2022, 11:08 AM
#1422
Arvida getting into the habit of talking really positive and setting high expectations and then not delivering on them.
Like at the time they announced the Arena acquisition they indicated FY22 Underlying Earnings would be $67m plus 5 months of Arena. FY22 proforma guidance for Arens was $32m-$34m so lets say Arvida would have got $14m giving total group profit of $81m
They delivered $73.5 Underlying Earnings - a miss of $7.5m. Arena contributed $14.9m (a better than expected) which means the rest of the business contributed $58.6m - some 13% short of the expected $67.0m though was 13% more than the FY21.
Come FY23 Arvida still talked growth etc etc etc setting expectations of Underlying Earnings of at least $105m. This assumed modest growth as well as 12 months of Arena.
The news yesterday showed that first half realised gains on sales are likely to be 70% up on last year - so good start to the year but then they gave that veiled profit 'downgrade' for the full year.
Working with those statements about dividends etc it seems that FY23 Underlying Earnings will be about $83m (my workings)
Jardens reported that what was said could imply $86m and reduced their forecasts from $101m to $88m
Whatever eventuates its clear that Arvdida missed FY22 earnngs expectations big time and are on thrack to miss FY23 expectatons big time as well.
Not very good record Arvida - no wonder your share price was in the 130's yesterday
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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19-10-2022, 06:22 PM
#1423
Goodness gracious me - Arvida share price closed today at $1.28 .... and looks like it's going to fall further
Glad I didn't get seduced into buying those cheap shares they hocked off a year ago - $1.85 not a bargain after all. And even more glad I quit the few I had at the time around $1.95 when the market reaction to the Arena acquisition wasn't all that enthusiastic.
What's incredible is that the current market cap of $926m is $187m less than what it was at the time of announcing that acquisition .... and that's after raising $330m of new capital - massive loss of market value eh
Probably a case of no worries - it'll be all OK one day
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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20-10-2022, 10:48 AM
#1424
Originally Posted by winner69
Goodness gracious me - Arvida share price closed today at $1.28 .... and looks like it's going to fall further
Glad I didn't get seduced into buying those cheap shares they hocked off a year ago - $1.85 not a bargain after all. And even more glad I quit the few I had at the time around $1.95 when the market reaction to the Arena acquisition wasn't all that enthusiastic.
What's incredible is that the current market cap of $926m is $187m less than what it was at the time of announcing that acquisition .... and that's after raising $330m of new capital - massive loss of market value eh
Probably a case of no worries - it'll be all OK one day
Three All Blacks can't be wrong ... or something like that?
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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20-10-2022, 11:30 AM
#1425
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22-11-2022, 04:06 PM
#1426
$1.18 now. The market is being completely merciless with this share.
What will the half year result to 30 September signal on 29 November except a known slowdown in completion rate for new builds (many deferred to this half) and poor outcomes for the rest homes (although the subsidy rate increased by 5.5% from 1 September, less than the rate of inflation, and that rate in this sector will be even higher!).
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22-11-2022, 05:05 PM
#1427
Originally Posted by ronaldson
$1.18 now. The market is being completely merciless with this share.
What will the half year result to 30 September signal on 29 November except a known slowdown in completion rate for new builds (many deferred to this half) and poor outcomes for the rest homes (although the subsidy rate increased by 5.5% from 1 September, less than the rate of inflation, and that rate in this sector will be even higher!).
The market is being completely merciless with this sector ..... profits from building and selling things not sufficient to 'subsidise' the cost of running villages and caring for people - that cost is spiraling out of control,
More carnage to come ... across the sector
The
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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23-11-2022, 01:17 PM
#1428
Originally Posted by winner69
The market is being completely merciless with this sector ..... profits from building and selling things not sufficient to 'subsidise' the cost of running villages and caring for people - that cost is spiraling out of control,
More carnage to come ... across the sector
The
That's what happens when reversal of revaluation growth threatens meagre dividends.
Factor in rising interest rates, RRE on the way down and imaginary inflation running rampart
courtesy of Robbo and head RB Dreamer's hands inspiring further pull in of the strings
(These blundering high level twits will spin us into a recession if they don't wake up soon)
And that's before another bunch of quazi Govt meatheads want to take a knife to dividing up
gains on units between Operators and occupants.
The smart money can see it - a turning of the wheel and value starts evaporating
Time to value the sector on basis of negative real growth and Nil Dividends going forwards
Also high risk of discounted Cap Raises to sure up balance sheets
Anyone still interested in the sector or do other sectors look more attractive in a higher
inflation economic environment ?
Last edited by nztx; 23-11-2022 at 01:24 PM.
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23-11-2022, 01:35 PM
#1429
Originally Posted by nztx
That's what happens when reversal of revaluation growth threatens meagre dividends.
Factor in rising interest rates, RRE on the way down and imaginary inflation running rampart
courtesy of Robbo and head RB Dreamer's hands inspiring further pull in of the strings
(These blundering high level twits will spin us into a recession if they don't wake up soon)
And that's before another bunch of quazi Govt meatheads want to take a knife to dividing up
gains on units between Operators and occupants.
The smart money can see it - a turning of the wheel and value starts evaporating
Time to value the sector on basis of negative real growth and Nil Dividends going forwards
Also high risk of discounted Cap Raises to sure up balance sheets
Anyone still interested in the sector or do other sectors look more attractive in a higher
inflation economic environment ?
Absolutely. Solid fundamentals, strong growing demand and hyped down prices ... this is the best time to buy ;
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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23-11-2022, 01:38 PM
#1430
Originally Posted by BlackPeter
Absolutely. Solid fundamentals, strong growing demand and hyped down prices ... this is the best time to buy ;
Buy too soon BP on the current Sector Market sentiment, and one could land a pile of red too
The Fundamentals may be good, but that hasn't stopped a slide from 2 bucks or so down
to $1.13 today.
Had some of these when the last Cap raise came through at the top of the range
$1.97 which signalled start of the recent slide. Was that 12-18 months ago ?
The Revaluations may be out the window headed deeply red, dividend flagged, a bit
of balance sheet therapy needed to sure up the show needing a reverse dividend
back from holders pockets, and no sign of relief on the horizon for next 3-5 years ?
Last edited by nztx; 23-11-2022 at 01:44 PM.
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