OCA - Oceania Group - retirement villages

[trader_jackson]

You are right - as at May 2016 OCA was worse... it had $259m in debt with 'just' $783m in total assets - as bad as sum others!

What I find most interesting is the Change in fair value of investment property (that has helped support this asset growth, leading to this low ratio of 17%)... it has gone from $34m booked gain in FY15, up to $50m in FY16, then $57m in FY17, and a banger of a FY18 with $68min (wow that is another $175m in paper money generated in 3 years)... so if the music were to stop, and the results at half year seemed to indicate it has pretty much stopped (with fair value change in HF18 being $34.1m vs just $1.6m in HF19 - or even worse, dare I say it, start to go backwards in FY19 or FY20), and total assets were to stay around the $1.2b mark for a year or two while borrowings jumped closer to $300m for a year or two - we will see a dramatic jump from that low 17% figure you correctly point out it was at half year, to 25% - a near 50% increase in less than 2 years... OCA have shown already profit with their care side of things profit is going backwards (hopefully only a temporary thing), so they really need to do the property development side of things (and, most importantly, selling those ORA's) really really well! I have confidence they can do so, but as it was already pointed out on this thread, they sold more stuff at half year, yet still managed to make less money (???), hence I have my concerns, which have only been amplified by the bigly record smashing borrowing.

[Beagle]

Any REIT running at a 25% leverage ratio would be considered by most to be leveraged very conservatively. Bit bored with the debt discussion to be honest. Debt is simply a tool to grow the company, and the company is focusing on providing needs based services that will be in great demand in the years ahead. I think the debt is very conservative in the circumstances and have no qualms about it whatsoever.

[minimoke]

Good stuff, that's telling him !One of the other big issues that I have only touched on, but dont have the hard data on is the number of care workers.

As we age we are not being replaced by younger people at the same rate. So the number of Care Workers, relative to the number of aged people is going to reduce.

Hospitals dont want the aged - so they will have to be out in the community.

Care workers wont want to be driving all over town to look after a portfolio of old folks still living in their home.

Aged care workers will likely much prefer working in a decent environment for a solid working day for a decent wage where decent resources are close at hand.

One of the realities we are faced with is looking after our aging partner. When our back is knackered and we are tired of wiping up more poo a decent aged care facility for both people is going to look mighty attractive, no matter what the prevailing property market is doing.

[couta1]

Any REIT running at a 25% leverage ratio would be considered by most to be leveraged very conservatively. Bit bored with the debt discussion to be honest. Debt is simply a tool to grow the company, and the company is focusing on providing needs based services that will be in great demand in the years ahead. I think the debt is very conservative in the circumstances and have no qualms about it whatsoever. Yes running a certain level of debt is not only necessary but in most cases very prudent.

[Beagle]

One of the other big issues that I have only touched on, but dont have the hard data on is the number of care workers.

As we age we are not being replaced by younger people at the same rate. So the number of Care Workers, relative to the number of aged people is going to reduce.

Hospitals dont want the aged - so they will have to be out in the community.

Care workers wont want to be driving all over town to look after a portfolio of old folks still living in their home.

Aged care workers will likely much prefer working in a decent environment for a solid working day for a decent wage where decent resources are close at hand.

One of the realities we are faced with is looking after our aging partner. When our back is knackered and we are tired of wiping up more poo a decent aged care facility for both people is going to look mighty attractive, no matter what the prevailing property market is doing.

Yeah, tell me about it mate. Its really hard for a partner to put a loved one in a care facility, (my Mum held on for too long when Dad got dementia and it really took a toll on her), but its a bit easier when they know that the care facility is top notch and has the best facilities and care in the industry. I think the whole care suite thing is something that's going to be in massive demand in the years ahead. It's certainly a feel good investment too when you know residents are going to be well cared for and have first class facilities tailored to meet their needs.

[winner69]

Warren, the love of your life Liz loves her tennis. She’s had many senior roles with NZ Tennis and Auckland Tennis over the years

Maybe she’s mates with our Jayne

[warren]

Any REIT running at a 25% leverage ratio would be considered by most to be leveraged very conservatively. Bit bored with the debt discussion to be honest. Debt is simply a tool to grow the company, and the company is focusing on providing needs based services that will be in great demand in the years ahead. I think the debt is very conservative in the circumstances and have no qualms about it whatsoever.

Beagle.
I now understand OCA financing a lot better. You write well and most clearly. Many thanks for your excell input.
I too have no qualms re my considerable (for me) investment. But as I saw my loved mother enjoy her care suite and the quality of care at OCA (compared to where she had been in care before) and I looked at the BoD made up of Nursing , Building , and Aged care experts plus our Liz and our Earl, I had every confidence!
What a bargain.

[SailorRob]

Sorry if this has already been addressed...

Regarding the Refundable occupation right agreements carried as liabilities on the balance sheet, how relevant are these as debt when they are not refunded until a new occupant has paid for their occupation licence? I hope this makes sense. It appears that this is a debt which is never required to be paid off or refinanced.

Thanks in advance.

[Beagle]

Sorry if this has already been addressed...

Regarding the Refundable occupation right agreements carried as liabilities on the balance sheet, how relevant are these as debt when they are not refunded until a new occupant has paid for their occupation licence? I hope this makes sense. It appears that this is a debt which is never required to be paid off or refinanced.

Thanks in advance.

Hello SailorRob.
These are non interest bearing liabilities, (with one caveat) and you are quite right that they do not have to be paid until the unit is resold to a new incoming resident.
A kind and very good friend of mine with industry contacts this week informed me that OCA are changing their ORA agreement model such that the estate will be paid "interest" if the unit is not resold within six months of becoming vacant. What this interest rate is I am not sure but I see this small tweak to their business model as good as it moves them into line with the general industry standard although in this case they only have to pay interest whereas some other companies like RYM for example have to repurchase the ORA agreement (AKA compulsory repurchase) to pay the ORA liability after the six month period if the unit isn't sold.
Hope that helps and welcome to the forum.

[percy]

I do not think OCA are right in changing their policy of not buying back after 6 months.
For an estate to have to wait longer than 6 months means OCA are not focussed on the unit's resale.ie they are no longer customer focussed.A big red flag to me.We have seen The Australian Banking Royal Commission findings on what happened when banks put their own interests before their customers.This is the same.
I would therefore not enter any retirement village, without the 6 months repurchase clause being in place.
In fact I will seriously think about retaining my OCA shares.

[SailorRob]

Thanks Beagle, as usual your input is very helpful.

I am trying to analyse it as a liability fundamentally speaking. Of course technically it is a liability on the balance sheet but in practice is it really, as the only way it would actually become due is if all units were vacated and no more occupation rights issued. It's almost like the liability of the next customer. Very different to bank debt, so I'm wondering how relevant it is when comparing debt to equity for example, which had some discussion earlier in the thread.

Thanks again.

[SailorRob]

Also for anyone interested, I've done a little research into Elizabeth Coutts (director) share purchases in OCA and compared them to other purchases in companies that she’s a director in.

OCA

16th April 19 50k @ $1.02
5th Feb 19 50k @ $1.06
13th Sep 18 350k @1.14
1st Feb 18 25k @$1.02
3rd Aug 17 100K @$1.03

300K at IPO (or before)

So total around 900 grand at current.

In Skellerup she has about 1.8 Mil at current BUT last buy was about 2 years ago.

In Ebos group she has around 630k at current but last buy was 2 years ago and was very small.

She been consistently piling into OCA and not into her other companies. And she knows her way around numbers, former accountant and CEO of big company at age 31. Looks like she was director since well before IPO so continued buying after IPO is exceptionally good sign.

[minimoke]

I do not think OCA are right in changing their policy of not buying back after 6 months.
For an estate to have to wait longer than 6 months means OCA are not focussed on the unit's resale.ie they are no longer customer focussed.A big red flag to me.We have seen The Australian Banking Royal Commission findings on what happened when banks put their own interests before their customers.This is the same.
I would therefore not enter any retirement village, without the 6 months repurchase clause being in place.
In fact I will seriously think about retaining my OCA shares.The six month is only an issue if there is no market for the unit - which I think will be unlikely in OCA's case.

[percy]

The six month is only an issue if there is no market for the unit - which I think will be unlikely in OCA's case.

Not so.
Means OCA does not have a priority to refurbish or market the unit aggressively.
A very real issue which will only attract regulation,and estates dissaproval.
It means the unsold unit is the estate's problem,not OCA's.
Right picture yourself as the estate execuetor, getting fobbed off by OCA as to why the unit has not been refurbished ready for sale,or why it has not been sold. Hard to get tradesmen at this time of year,hard to sell going into winter/summer,Christmas,Easter,Joanne on leave.having three babies,her father is unwell,however in the next year or two we expect the difficult market will improve.Bollocks.!
I would expect OCA would concentrate on new unit sales, as margins would be better.
So you would be in the far que.
Negative.

ps Think of it like trying to resell a time share unit.

[macduffy]

Yes, percy, you do have a point in that the "system" depends on demand for units outstripping, or at least equalling, the rate of new builds in the particular area concerned. Shouldn't be a problem for some time, if projections as to the aging population are correct - but, as with everything connected with the sharemarket there is that element of risk.

Disc: Holding OCA - and SUM and RYM.

[percy]

Yes, percy, you do have a point in that the "system" depends on demand for units outstripping, or at least equalling, the rate of new builds in the particular area concerned. Shouldn't be a problem for some time, if projections as to the aging population are correct - but, as with everything connected with the sharemarket there is that element of risk.

Disc: Holding OCA - and SUM and RYM.

We had this happen with my late mother's unit at a Buderim [Sunshine Coast ,Australia] Retirement village.
All sorts of excuses why her unit had not sold.
Certaintly focussed their attention when we pointed out we were not concerned,because of her right to occupy aggreement, they had to buy it back after six months if it remained unsold.!Don't think they had bothered to read their own agreement ,by their surprised reaction.!
Would have waited years otherwise.

[Baa_Baa]

I think you're being emotive @percy, overstating the risk and implying OCA have ulterior motives.

All said and done OCA are highly motivated to sell all properties under all circumstances as quickly as possible. It looks like a prudent business decision, to take into account a softening market and a higher business risk that some properties might not sell within the 6 months.

I don't see it as an excuse, like you're suggesting, to not put every effort into selling the property, more so as a back stop or risk mitigation if a property happens to be not sold within the said time frame.

As a shareholder I'm happy with the tweak to their policy, I don't want the company to take no steps towards addressing the possibilities arising from a softening market, being lumbered with unsold properties and paying out obligations. This shares the risk with the owner, assuming one can have confidence OCA are doing all they can to sell the property.

If one can't or doesn't have that confidence and can back that with evidence that OCA are in neglect, then by all means challenge your investment decision. There is no evidence as far as I can see at this point in time. It's just a policy decision, which in time will evidence whether good or bad.

That said none of this correlates to OCA not "aggressively" trying to sell vacant properties as soon as is reasonably possible. That's a long bow to draw from a prudent risk sharing policy tweak in a softening property market.

jmho
BAA

[percy]

Personnel experience made me a lot wiser.
A case of what "DID" happen,rather than a case of what "COULD" happen.

[Baa_Baa]

Personnel experience made me a lot wiser.
A case of what "DID" happen,rather than a case of what "COULD" happen.

Anecdote is a dangerous thing when it is transposed from ones own experience with an unrelated entity to ones no experience with another entity. Give OCA a chance to work the policy, it seems prudent in the current market climate, if they can't sell properties within the 6 months, then they have a prudent risk sharing policy.

Think like the investor that you are, not like your loved ones' estate is exposed to some conspiracy to not sell their property when there is no evidence that that is the case.

jmho,
BAA

[minimoke]

Right picture yourself as the estate execuetor, I've been in that position. Unit sold before deceased in the ground full cash settlement within 4 weeks of funeral. These places dont like empty units. They are about the living. and neigbours dont want a vacant place reminding them of the dead and their near future. Also miss out on full monthly fees.

These villages already have tradesmen on tap -, constant turn of units = constant work.

Chalk and cheese with time shares.

Seasons dont matter to the infirm, or those ready to move

[percy]

I've been in that position. Unit sold before deceased in the ground full cash settlement within 4 weeks of funeral. These places dont like empty units. They are about the living. and neigbours dont want a vacant place reminding them of the dead and their near future. Also miss out on full monthly fees.

These villages already have tradesmen on tap -, constant turn of units = constant work.

Chalk and cheese with time shares.

Seasons dont matter to the infirm, or those ready to move

In that case they should have no issues including the 6 month buy back clause.
No clause,no Percy.Simple as that.

[percy]

Anecdote is a dangerous thing when it is transposed from ones own experience with an unrelated entity to ones no experience with another entity. Give OCA a chance to work the policy, it seems prudent in the current market climate, if they can't sell properties within the 6 months, then they have a prudent risk sharing policy.

Think like the investor that you are, not like your loved ones' estate is exposed to some conspiracy to not sell their property when there is no evidence that that is the case.

jmho,
BAA

I only invest using my own experiences.
It really works.

[RTM]

We


Think like the investor that you are, not like your loved ones' estate is exposed to some conspiracy to not sell their property when there is no evidence that that is the case.

jmho,
BAA

I think that’s exactly what Percy is doing. Putting himself in the position of one of Oceania’s customers and wondering if they would buy with that change. If lots of customers think like that......

[kiwico]

These are non interest bearing liabilities, (with one caveat) and you are quite right that they do not have to be paid until the unit is resold to a new incoming resident.


In addition, the Retirement Villages Code of Practice 2008 requires such liabilities to be repaid to a resident if their unit cannot be lived in due to damage to the unit, such as following an earthquake or fire, where the unit is not repaired / rebuilt and a resident's Occupational Right Agreement is terminated. This includes any of the up to 30% (typically) that might have accrued to the retirement village operator. However both parts, the original capital sum paid by the resident and the fixed charge that accrues to the village owner, are insurable.

Clearly this should not be an issue if the damage is minor but could be if the event of major damage and if the liabilities have not been insured. The same would apply to SUM others.

[couta1]

So OCA to join the NZX50 in may by the looks, good news.

[winner69]

So OCA to join the NZX50 in may by the looks, good news.

Good

Needs all the help it can get eh .....like even you, JT and Liz buying heaps hasn’t really helped (except arresting the slide)

[Beagle]

So OCA to join the NZX50 in may by the looks, good news.

Is that official mate ?

[couta1]

Is that official mate ? According to Business desk so I guess they didn't pluck the info out of thin air.

[Well Endowed]

May 3rd

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12223335

[dabsman]

I wont hold my breath as when ATM was added to indexes absolutely nothing happened haha. So there is enough free float to join the index?

[Joshuatree]

They usually buy up well before the official inclusion is my understanding.

[Beagle]

Index inclusion is not a done deal yet.

[warren]

In that case they should have no issues including the 6 month buy back clause.
No clause,no Percy.Simple as that.

Well now it seams to me that if OCA is prepared to pay the estate interest after 6 months that is a sign of good will and generosity AND confidence.. I think that is very fair. Nobody I know will buy back property after 6 months! But to offer interest, well, that's great

[percy]

The unit is owned by OCA.
They sold a "right to occupy".
OCA retain ownership.
It should therefore be OCA's problem, should they fail to resell a "right to occupy" within 6 months.
Paying interest just moves the goal posts onto the estate,which has no rights to sell the 'right to occupy',therefore there must be a time limit put in place .
This out come is not in OCA's clients best interest,which leaves OCA open to regulators,as per The Austalian Banks scandal.

[warren]

The unit is owned by OCA.
They sold a "right to occupy".
OCA retain ownership.
It should therefore be OCA's problem, should they fail to resell a "right to occupy" within 6 months.
Paying interest just moves the goal posts onto the estate,which has no rights to sell the 'right to occupy',therefore there must be a time limit put in place .
This out come is not in OCA's clients best interest,which leaves OCA open to regulators,as per The Austalian Banks scandal.

Percy OK thanks. Why don't we approach Earl or Liz for an answer. I have every confidence that OCA is totally moral and honest. What has been the OCA deal with ----for example---- care suites up to now? I didn't have a clue but I'll tell you that when my loved mother passed away there was an occupier/buyer for her suite in less than 5 days (that, after all, is life) so the concept of 6 months didn't enter my head.
I need to know the existing situation and the proposed change/s spelt out in black and white then I can understand.
M. thanks.

[percy]

Percy OK thanks. Why don't we approach Earl or Liz for an answer. I have every confidence that OCA is totally moral and honest. What has been the OCA deal with ----for example---- care suites up to now? I didn't have a clue but I'll tell you that when my loved mother passed away there was an occupier/buyer for her suite in less than 5 days (that, after all, is life) so the concept of 6 months didn't enter my head.
I need to know the existing situation and the proposed change/s spelt out in black and white then I can understand.
M. thanks.

It is not what happens at present.
Like signing a very long term lease, you need to plan for the worse,hope for the best.

[dubya]

A good article about retirement villages. It appears Ryman and Arvida also pay interest after 6 months, and Metlifecare pays interest after 9 months.

https://i.stuff.co.nz/business/112043818/retirement-villages-are-booming-but-what-are-the-catches

[percy]

A good article about retirement villages. It appears Ryman and Arvida also pay interest after 6 months, and Metlifecare pays interest after 9 months.

https://i.stuff.co.nz/business/112043818/retirement-villages-are-booming-but-what-are-the-catches

Thanks for posting the link.
Certainly appears to me the retirement village sector is ripe for an Australian Banking type Royal Commission.
They must change, and at all times act in their clients best interest,rather than their own.
If they do not do it themselves, the regulators will make them.

[trader_jackson]

A good article about retirement villages. It appears Ryman and Arvida also pay interest after 6 months, and Metlifecare pays interest after 9 months.

https://i.stuff.co.nz/business/112043818/retirement-villages-are-booming-but-what-are-the-catches


Ah yes, Ryman and Arvida... the true gold standards they say!

[Beagle]

Ah yes, Ryman and Arvida... the true gold standards they say!
Arvida policy

Deferred management fee of 7.5 per cent a year, capped at 30 per cent. Weekly fees are fixed for life and stop as soon as resident moves out. Interest paid to resident if unit takes longer than six months to sell.
30 % is right at the very top end...hardly a gold standard.

Speaking of slipping halo's, I thought RYM guaranteed to pay you out if they couldn't resell your unit within 6 months ? Can anyone else please confirm ?
What happened to that promise and why have they apparently changed it ?

[trader_jackson]

Arvida policy
30 % is right at the very top end...hardly a gold standard.

Speaking of slipping halo's, I thought RYM guaranteed to pay you out if they couldn't resell your unit within 6 months ? Can anyone else please confirm ?
What happened to that promise and why have they apparently changed it ?

Yes, but unlike summerset (where "no interest paid to resident if unit takes longer than six months to sell"), ARV and RYM do pay interest after 6 months, MET 9 months... Yes, ARV often charges a Deferred management fee of 30% as it is a premium more unique offering (through smaller villages), and they have never had any issues since listing with re-sales, they have always only gone up... I believe OCA also often charges 30%, did we find out what OCA does with paying interest after certain time frame?

I would seen an offer to pay interest sooner (rather than later, or not at all in sum cases) would indicate how sure the operator is in re-selling the unit, so I'd like to think OCA is right up there with the gold standard RYM and ARV and paying interest after only 6 months.

[Beagle]

I can confirm Oceania pay interest from 6 months t.j.

[percy]

Question.
Should retirement villages be regulated to pay out/buy back a "tenant's" "right to occupy" within one month's of the end of such aggreement.[ie the "tenants" death?
Certainly fees should stop at the end of any such agreement.

[Beagle]

In my opinion weekly fees should stop when the unit is vacated, interest should apply from 6 months and a compulsory buy-back should occur if the unit can't be re-sold after one year. My view is this would strike a reasonable balance.

Extract from Ryman's peace of mind guarantee's section of its website.


Repayment protection

It is standard practice for retirement villages to repay your capital sum when the unit has been on-sold. However you will want an assurance that in the event the on-sale is delayed for some reason you will be repaid.

“We guarantee that if the new resident has not settled within six months of you vacating your unit, then we will pay you interest on your occupancy advance until it is paid in full.”

This gives us an incentive to on-sell your unit and repay you promptly. Did you know that in over thirty years the longest time a Ryman resident has ever waited is six months to be repaid their occupancy advance?

I have to say that I am extremely disappointed in Ryman's advertising. The reason that nobody has had to wait materially longer than 6 months is that they used to guarantee to repay within that time-frame. The fact that they omit to tell anyone that extremely important fact (and it is clearly the most material reason why this timeframe has never been breeched) with their current advertising and yet state that nobody has had to wait longer than 6 months gives a false impression that people can rely on this six month maximum term going forward, surely ?

In my opinion, in effect they have deliberately created a false impression of repayment timeframe through the use of their former guarantee, (which they no longer offer) and are now deliberately concealing that vital information to give a misleading impression.
At best I think this is very shady practice, at worst a gross breech of the Fair Trading Act.

[percy]

Consider this.
The tenant in your rental property has signed a lease [right to occupy] for two years.
After one year he/she dies.
Wouldn't you look a fool going to court seeking the rental for the outstanding year of the lease.?
Most probably an even bigger fool if you said it took you 6 months to refurbish the unit and another 6 months to find another tenant.?

[winner69]

When to settle and all that .....what’s best for shareholders.

Isn’t the prime reason for a company existing to maximise profits for shareholders ....and stuff other stakeholders

[percy]

When to settle and all that .....what’s best for shareholders.

Isn’t the prime reason for a company existing to maximise profits for shareholders ....and stuff other stakeholders

They really are due for an Australian Bank type Royal Commission.
"Not in their clients best interest is no longer acceptable."

[Beagle]

Consider this.
The tenant in your rental property has signed a lease [right to occupy] for two years.
After one year he/she dies.
Wouldn't you look a fool going to court seeking the rental for the outstanding year of the lease.?
Most probably an even bigger fool if you said it took you 6 months to refurbish the unit and another 6 months to find another tenant.?

Need to balance shareholders rights with those of the Estate. Estate's often take 6-12 months get the property into a sellable state and to resell people's homes especially in this market therefore my view is the Estate is not materially disadvantaged by my suggestion of a 12 month compulsory buy-back, in fact in some ways such a guarantee confers an advantage. Some old folks die and leave their homes in one heck of a state and it can take a LOT longer than 12 months to bring it up to a sell-able state and re-sell it.

[Beagle]

They really are due for an Australian Bank type Royal Commission.
"Not in their clients best interest is no longer acceptable."

I don't understand you getting so hot under the collar about this ? What exactly do you expect ? Keep in mind commercial reasonableness and what's a reasonable time to bring a unit up to standard / refurbish it and to have a unit on the market and resell it these days.

Also p[lease keep in mind that simply getting a builder and tradesman to commence minor fix up jobs on one's home can take several months in Auckland now, assuming you can find anyone trustworthy to do the work. There's "theory" and then there's what's practical in this market, they're two quite different things.

[percy]

Need to balance shareholders rights with those of the Estate. Estate's often take 6-12 months get the property into a sellable state and to resell people's homes especially in this market therefore my view is the Estate is not materially disadvantaged by my suggestion of a 12 month compulsory buy-back, in fact in some ways such a guarantee confers an advantage. Some old folks die and leave their homes in one heck of a state and it can take a LOT longer than 12 months to bring it up to a sell-able state and re-sell it.

Yes but the estate has title.
In retirement village agreement there is no title.
The village has ownership.
The estate is therefore powerless.
Remember the village has had use of the "right to occupy" upfront money for years.Most probably used it to build half a dozen more units.

[Beagle]

Yes but the estate has title.
In retirement village agreement there is no title.
The village has ownership.
The estate is therefore powerless.
,

I'd like to know what the interest rate is that the likes of RYM, ARV and OCA pay you after 6 months is as I would suggest that the rate itself would give a good indication of exactly how motivated they are to resell the unit. I don't think the Estate is powerless. Need to have another look at the fine print of my mother's retirement village.
Probably contains clauses like all reasonable efforts to resell and such like.

P.S. I had a quick look at my Mum's retirement village terms and conditions and obligations placed on the retirement village to take all reasonable steps to resell in a prompt manner and it looks pretty fair and reasonable to me.

It would take me ages to type it all out so I won't but I can assure you there are strong legal obligations to act in a fair, responsible, commercially reasonable, professional and timely manner in regard to refurbishment and resale. Also reporting requirements to Estate, obligation to get independent registered valuation after 6 months if unsold and market it at that valuation e.t.c.e.t.c.

My Mum has been very happy at her retirement village and the environment is supportive and caring and she has enjoyed 10 good years there so far.
She's 90 this year...hope she makes it to 100 so she can well and truly get her money's worth !

[percy]

Thank you for your post.
So the nice words are meaningless.[Sounds as though Jacinda wrote it]..lol/.
The only "meat" is "obligation to get independant registered valuation after 6 months".
Something,but not enough.?

OK.Here is something I have been scared to quote.My lawyer told me not to buy a "right to occupy" in one of a leading company's ChCh village, as they are finding resales in that village are near impossible.".Not OCA,or SUM.And not in our area.

[Beagle]

Thank you for your post.
So the nice words are meaningless.[Sounds as though Jacinda wrote it]..lol/.
The only "meat" is "obligation to get independant registered valuation after 6 months".
Something,but not enough.?

OK.Here is something I have been scared to quote.My lawyer told me not to buy a "right to occupy" in one of a leading company's ChCh village, as they are finding resales in that village are near impossible.".Not OCA,or SUM.And not in our area.

Let me take a wild guess, RYM, see post #3456. My commercial head tells me there must be a profoundly good reasons that RYM no longer offer a guaranteed buy-back after 6 months.
They must have been finding that costs them a LOT of money. I have gone out on a limb here and called their marketing deliberately disingenuous because I believe the public needs to know that.

My Mum's agreement with XYZ village is in accordance with the Retirement villages Code of practice in force in 2008.
Contains among other things:-
Provisions relating to promptly refurbishing the unit in a timely way,
Taking proper steps to market the unit
Respond to all enquiries about the unit in a timely and helpful way,
Take all reasonable steps to enter into a new occupation right agreement for the unit in a timely manner
They must consult with the former resident or their Estate about the marketing of the unit,
Advise when the unit goes onto the market,
The general nature of the marketing plan for the unit,
Duty to keep former resident or Estate informed on progress on a monthly basis about progress with marketing,
Six monthly valuation by registered valuer required if not sold within that timeframe at Company's expense and must be marketed at valuation,
Former resident or Estate has the right to obtain an independent valuation if they object to above valuation at their own expense,
Company must consider the second valuation in determining an acceptable marketing price,
There is a formal complaints process

What do you think about RYM's change of policy regarding 6 months and then advertising that nobody has had to wait more than 6 months. Do you know anyone that has had to wait more than 6 months ?

[percy]

The more we discuss these issues, the more I am concerned the whole sector are not acting in their clients best interest.
My business experience tells me you are asking for trouble if you do not.
"Give the customer what they want, and you will get what you want" always worked just fine for me.

[Beagle]

My Mum's village changed to fixed fees for life a couple of years back in exchange for a one-off fee increase of about 5% which seemed very reasonable to me.
She pays $632 per month ~ $146 per week for a lovely large 110 sq meter 2 bedroom unit north facing with views and a very nice sunroom which is so well situated to the sun it often gets up to 30 degree's in winter ! The $146 includes, rates, insurance, gardens, maintenance, panic buttons in various rooms with on call nurse, organised trips, bowling green, swimming pool and spa and so on and so on.
She gets a lovely glossy full colour weekly village newsletter about all the activities planned for the coming week in the village including all the various clubs that are meeting as well as weekly organised trips and visiting guests and news about any special meal occasions in the onsite restaurant.
She is fortunate at nearly 90 she can still drive but when she eventually can't there at 2 or 3 weekly shopping trips in the village van she can take advantage of.
People come and fix things promptly at her unit the odd time something goes wrong, much faster than I can get a tradesman to visit my house lol
Perhaps most importantly of all their is a very good kind vibe to the village and a real sense of community and caring and she has a number of good friends in the village and made a number of new ones since moving in about 10 years ago.
I think its great for her and she has been very very happy living there for just on 10 years in this well supported and caring environment.
A lot of negative stuff about retirement villages needs to be balanced with some positiveness I feel.

[Maverick]

A lot of negative stuff about retirement villages needs to be balanced with some positiveness I feel.
I read the Stuff .co open comments on their retirement articles quite thoroughly to get a feel for how the villages are experienced and viewed from the public. There are always only two main camps....

Group one- It seems almost all residence who experience the villages love the villages along with their families.
Group two- There are are lots of publicwho view the operators as money gouging bastards who are ripping off our oldies.

As a donkey deep shareholder I am proud to be offering the "group one" families the lifestyles they are happily experiencing, while expecting a good return for my capital. (PS I'm currently underwater on both SUM and OCA but with absolutely no concerns)

As far as the "group two" crowd, .... if they really think the villages are the money printing machines they claim ( you can also put in here , "power companies", "air lines" or whatever) they are obviously too stupid to have not worked out they can buy a slice of the action.

[Ggcc]

I read the Stuff .co open comments on their retirement articles quite thoroughly to get a feel for how the villages are experienced and viewed from the public. There are always only two main camps....

Group one- It seems almost all residence who experience the villages love the villages along with their families.
Group two- There are are lots of publicwho view the operators as money gouging bastards who are ripping off our oldies.

As a donkey deep shareholder I am proud to be offering the "group one" families the lifestyles they are happily experiencing, while expecting a good return for my capital. (PS I'm currently underwater on both SUM and OCA but with absolutely no concerns)

As far as the "group two" crowd, .... if they really think the villages are the money printing machines they claim ( you can also put in here , "power companies", "air lines" or whatever) they are obviously too stupid to have not worked out they can buy a slice of the action.

I agree with your summary.

We do need to house the elderly as well as possible bottom line and I am happy I feel they are being catered for in the villages I invest.

I have met plenty from Summerset, Oceania and Ryman who understand why retirement villages charge what they do and how much they enjoy being there. They also mentioned how they were apposed to being alone at home and at the village they have an extended family and many friends, as many of their own families are too busy working in other parts of the country or the world.

I have also met plenty of individuals (Kids of parents in retirement villages) who felt scorned at how much it cost their parents to stay at a village. Things mentioned were they make a fortune off my parents and that all my inheritance is heading into the retirement villages pockets. They ask why do retirement villages need to cost so much?? I try to explain that the retirement village makes very little if anything from their care, but they still think its a rip off. You can't change their minds

[King1212]

Get their kids to look after their parent in their house. Change their nappies...cook for them..talk to them...and etc. The kids only want the inheritance...but don't want any hard works to look after their parents. Therefore....the kids should stop complaining about the fees...we are lucky as society that aged care provider like ARV..OCA...Bupa and other aged care provider look after the oldies..otherwise....it will be a disaster

[Beagle]

I agree with your summary.

I have met plenty from Summerset, Oceania and Ryman who understand why retirement villages charge what they do and how much they enjoy being there. They also mentioned how they were apposed to being alone at home and at the village they have an extended family and many friends, as many of their own families are too busy working in other parts of the country or the world.

I have also met plenty of individuals (Kids of parents in retirement villages) who felt scorned at how much it cost their parents to stay at a village. Things mentioned were they make a fortune off my parents and that all my inheritance is heading into the retirement villages pockets. They ask why do retirement villages need to cost so much?? I try to explain that the retirement village makes very little if anything from their care, but they still think its a rip off. You can't change their minds

I have seen the ugliness of this latter camp within my own extended family. My sister in law thinks it outrageous that my parents decided to go into a retirement village a decade ago and that they have lost 30% of "their" money with the retention and at least the last decade of capital gains. Who does the money really belong too for goodness sake ? Who's welfare and happiness is of paramount concern ? Honestly my parents happiness and needs are factors that have never seemed to even enter into her thought processes....it beggars belief that people could be like this.

Never mind that Dad had dementia and Mum needed support to get through that and we knew Dad only had a few years to live a decade ago and Mum would be on her own all alone in a suburban neighbourhood. How is it my sister in law's money to choose what happens and where has she been in terms of supporting them ?

She knows better than to bring this subject up these days as I didn't hold back last time she did.

She very rarely visits now that my Mum isn't really up to cooking and laying on a good hearty meal for her guests, no surprises there ! My sister in law is just a selfish *****

[macduffy]

Oh, dear!

I suggest that we move on from the emotive side of retirement villages.

Disc: Holding shares in most of them and getting on - in age.

:)

[QOH]

Our lives in retirement village ( Arvida) are very similar to Roger’s mother.
Fixed fees for life ($140 pw).
We came to a town where we knew no one, but its the best decision we could have made, there is always someone to talk to if you want it, free morning tea everyday, medical centre, laboratory, dentist at gate, a quick walk to mall, chartered club next door.
Im embarrassed to say Ive only put petrol in our car twice this year.
I think the answer is to move in when you can make use of all the facilities still.
The only downside is seeing very old people shuffling around, and seeing your future.
I dont think most children care about their inheritance, I suspect many think its a good trade off not having to deal with parents problems. Its a very safe feeling living here.

[Yoda]

Our lives in retirement village ( Arvida) are very similar to Roger’s mother.
Fixed fees for life ($140 pw).
We came to a town where we knew no one, but its the best decision we could have made, there is always someone to talk to if you want it, free morning tea everyday, medical centre, laboratory, dentist at gate, a quick walk to mall, chartered club next door.
Im embarrassed to say Ive only put petrol in our car twice this year.
I think the answer is to move in when you can make use of all the facilities still.
The only downside is seeing very old people shuffling around, and seeing your future.
I dont think most children care about their inheritance, I suspect many think its a good trade off not having to deal with parents problems. Its a very safe feeling living here.
Great to get that from the insiders, QOH.
my sister and husband, moved in with mum n dad to look after them, but it has become a life sentance, as they have lived longer than expected and now she is resentful i am not in the UK to help them out. A sheltered accomodation would have been great .

[Yoda]

My Mum's village changed to fixed fees for life a couple of years back in exchange for a one-off fee increase of about 5% which seemed very reasonable to me.
She pays $632 per month ~ $146 per week for a lovely large 110 sq meter 2 bedroom unit north facing with views and a very nice sunroom which is so well situated to the sun it often gets up to 30 degree's in winter ! The $146 includes, rates, insurance, gardens, maintenance, panic buttons in various rooms with on call nurse, organised trips, bowling green, swimming pool and spa and so on and so on.
She gets a lovely glossy full colour weekly village newsletter about all the activities planned for the coming week in the village including all the various clubs that are meeting as well as weekly organised trips and visiting guests and news about any special meal occasions in the onsite restaurant.
She is fortunate at nearly 90 she can still drive but when she eventually can't there at 2 or 3 weekly shopping trips in the village van she can take advantage of.
People come and fix things promptly at her unit the odd time something goes wrong, much faster than I can get a tradesman to visit my house lol
Perhaps most importantly of all their is a very good kind vibe to the village and a real sense of community and caring and she has a number of good friends in the village and made a number of new ones since moving in about 10 years ago.
I think its great for her and she has been very very happy living there for just on 10 years in this well supported and caring environment.
A lot of negative stuff about retirement villages needs to be balanced with some positiveness I feel.
oh and Happy Easter10489
Beagle

[Maverick]

So OCA to join the NZX50 in may by the looks, good news.
Just curious Couta where you read this ?

[longy]

Just curious Couta where you read this ?

Here it is Maverick

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12223335

[Maverick]

Here it is Maverick

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12223335Thanks Longy.

[Beagle]

Be careful with this index inclusion Maverick. I emailed Earl about this last week and he emailed back and told me its not a done deal yet.

[BlackPeter]

Be careful with this index inclusion Maverick. I emailed Earl about this last week and he emailed back and told me its not a done deal yet.

Always risky to play on index inclusions and departures. If one looks into the history of these frequently hyped up events than all one often sees is some SP volatility around the event (probably more from the hype than from the index transactions), but it is quite rare that the SP moves long term due to the index event.

If OCA will be included into the NZX 50, than all which happens is that the NZX All Ord Index funds move their holdings into the NZX 50 index funds. No big deal.

Obviously - OCA might go up due to other reasons - like great PE in combination with lots of growth and favourable population demographics. Recent gummit decision might help as well (no CGT gives our bulls one reason less to down ramp) - and obviously ... it is not just me who sees them as undervalued (check analyst recommendations: https://www.marketscreener.com/OCEANIA-HEALTHCARE-LTD-34790010/consensus/).

Discl: happy holder, but don't expect fireworks from any index inclusion.

[winner69]

Always risky to play on index inclusions and departures. If one looks into the history of these frequently hyped up events than all one often sees is some SP volatility around the event (probably more from the hype than from the index transactions), but it is quite rare that the SP moves long term due to the index event.

If OCA will be included into the NZX 50, than all which happens is that the NZX All Ord Index funds move their holdings into the NZX 50 index funds. No big deal.

Obviously - OCA might go up due to other reasons - like great PE in combination with lots of growth and favourable population demographics. Recent gummit decision might help as well (no CGT gives our bulls one reason less to down ramp) - and obviously ... it is not just me who sees them as undervalued (check analyst recommendations: https://www.marketscreener.com/OCEANIA-HEALTHCARE-LTD-34790010/consensus/).

Discl: happy holder, but don't expect fireworks from any index inclusion.

Could do a Comvita though ...look at what happened when they got included in the NZX50 ...was like it broke free from all things that had been holding the share price down.

[Beagle]

Could do a Comvita though ...look at what happened when they got included in the NZX50 ...was like it broke free from all things that had been holding the share price down.

Yeap, CVT went up 20%...Not the only example either, PPH got a big lift also of just on 20% on NZX50 inclusion...some naughty dog played both these events and enjoyed a serious feed each time but there have been times when nothing has happened as BP quite rightly cautioned.

Bit of a lottery really. Agree it's good value at $1.00 or thereabouts.
For my money, (and this is purely speculative on my part), if it does get index inclusion the lift, if any, won't be anything like 20% this time.

[winner69]

Yeap, CVT went up 20%...Not the only example either, PPH got a big lift also of just on 20% on NZX50 inclusion...some naughty dog played both these events and enjoyed a serious feed each time but there have been times when nothing has happened as BP quite rightly cautioned.

Bit of a lottery really. Agree it's good value at $1.00 or thereabouts.
For my money, (and this is purely speculative on my part), if it does get index inclusion the lift, if any, won't be anything like 20% this time.

Inclusion in the NZX50 seems to give a stock some respectability ...and this might happen to Oceania and help it get rid of it’s dog status.

[BlackPeter]

Could do a Comvita though ...look at what happened when they got included in the NZX50 ...was like it broke free from all things that had been holding the share price down.

... and look where they are now ;); Comvita is the ultimate example for what hype can do to a boring but badly managed agricultural share.

But sure - there may or may not be opportunities coming up for traders.

[couta1]

The Macca overhang controls and caps the SP of this stock and until it's removed or seriously diluted don't expect any spectacular or long lasting fireworks display.

[Beagle]

Inclusion in the NZX50 seems to give a stock some respectability ...and this might happen to Oceania and help it get rid of it dog status.

Agreed. There's the short term effect of up to a possible ~ 20% gain, (can't ever recall better examples that PPH and CVT) and then the respectability that comes from inclusion in the index although as BP again quite rightly points out if a company is very badly managed, (not suggesting for one minute OCA is), none of this matters in the long run. Also agree 100% with what Couta1 has just said above. I'm agreeing with everyone so far today, that feels a bit strange lol

[dabsman]

Bot sure about what I'm saying but wouldnt it then put it in front of more potential analysts who's funds cant touch it till it is in certain indexes?

[winner69]

Always risky to play on index inclusions and departures. If one looks into the history of these frequently hyped up events than all one often sees is some SP volatility around the event (probably more from the hype than from the index transactions), but it is quite rare that the SP moves long term due to the index event.

If OCA will be included into the NZX 50, than all which happens is that the NZX All Ord Index funds move their holdings into the NZX 50 index funds. No big deal.

Obviously - OCA might go up due to other reasons - like great PE in combination with lots of growth and favourable population demographics. Recent gummit decision might help as well (no CGT gives our bulls one reason less to down ramp) - and obviously ... it is not just me who sees them as undervalued (check analyst recommendations: https://www.marketscreener.com/OCEANIA-HEALTHCARE-LTD-34790010/consensus/).

Discl: happy holder, but don't expect fireworks from any index inclusion.

These four analysts seem to lower their target prices as the share price goes down.

But as long as punters agree with the numbers and gives them some warm fuzzies the guesses must good ones

[winner69]

Bot sure about what I'm saying but wouldnt it then put it in front of more potential analysts who's funds cant touch it till it is in certain indexes?

That’s what they say ...good eh

[BlackPeter]

These four analysts seem to lower their target prices as the share price goes down.

But as long as punters agree with the numbers and gives them some warm fuzzies the guesses must good ones

It is not unheard of that analysts "validate" their forecasts by looking at the market price. You could even say that this might make some sense.

Anyway - show me one stock where the consensus price was rising while the market price was dropping (or vice versa) and I show you 10 where both moved in perfect harmony :p;

[winner69]

Our Liz Coutts is involved with Global Women and Champions for Change.

That’s a big plus

[warren]

Our Liz Coutts is involved with Global Women and Champions for Change.

That’s a big plus

Thanks Winner. Indeed yes. Lets hope Liz is, like Krupskaya and her husband , single minded, driven to creating a mighty entity called OCA, undemanding in personal reward but huge on returns to the owners of the entity. So far so good

[Beagle]

It is not unheard of that analysts "validate" their forecasts by looking at the market price. You could even say that this might make some sense.

Anyway - show me one stock where the consensus price was rising while the market price was dropping (or vice versa) and I show you 10 where both moved in perfect harmony :p;

Surely not !...wash your mouth out with soap and water lol

[winner69]

Thanks Winner. Indeed yes. Lets hope Liz is, like Krupskaya and her husband , single minded, driven to creating a mighty entity called OCA, undemanding in personal reward but huge on returns to the owners of the entity. So far so good

Suppose that’s a good anology

Was Nadezhda Krupskaya one of your heroines? I reckon Karl Marx was pretty cool

Even Oceania needs revolutionaries

[longy]

What is the story of OCA also on ASX? Does any body know is it dual listing or is it something else?

OCA.AU - Oceania Healthc Ltd - Ordinary Fully Paid Foreign Exempt Nzx

Oceania Healthc Limited Foreign Exempt NZX (OCA) 20mins delayed
$1.05

3:00pm 23/04

0.04 (3.96%)

Movement

$0.905$1.14
13.51%

[winner69]

What is the story of OCA also on ASX? Does any body know is it dual listing or is it something else?

OCA.AU - Oceania Healthc Ltd - Ordinary Fully Paid Foreign Exempt Nzx

Oceania Healthc Limited Foreign Exempt NZX (OCA) 20mins delayed
$1.05

3:00pm 23/04

0.04 (3.96%)

Movement

$0.905$1.14
13.51%

Same company ...the one and only Oceania Health as we know it ..dual listed it is

The Aussies must know something we don’t seeing price over their higher than Nz

Almost non-existent on ASX ...like a small trade every now and again

[couta1]

Haha was looking promising with basically no sellers at $1.06 and then bam a big fish wipes out the $1.05 bid line. PS-Plenty of big selling fish swimming deep.Lol

[GR8DAY]

Haha was looking promising with basically no sellers at $1.06 and then bam a big fish wipes out the $1.05 bid line. PS-Plenty of big selling fish swimming deep.Lol

......just some wealthy fisherman wanting to upspec his launch I guess?? ( i thought that was going to happen cos I picked a few up this morning!!)

[Snoopy]

Required staffing levels for the care suites are known at any given time and it is up to the facility manager to police things which leads me to another area a rogue manager can cost the company big time, that is when the occupancy level drops and they dont reduce staffing accordingly(That's why they have a certain level of flexi staffing)

A little known regional newspaper, the Kapiti News, today carried an opinion piece under the guise of an interview by a Mr Mark Rouse. Rouse is the general manager of the Parkwood Retirement Village sited at Waikanae on the Kapiti coast. I can't find a web reference for the article. But the salient points are as follows:

1/ The District Health Board (really the Ministry of Health) determines the fee levels for those in residential care. The DHB is effectively a monopoly and so fees charged by residential care providers are 'negotiated' on a take it or leave it basis.

2/ Staff costs are effectively pre-determined by the government, and increases are not fully funded.

a/ Carers wages have increased significantly because of pay equity legislation introduced by the previous National Government.
b/ Registered Nurses wages are now determined by the DHB and the Nurses Organization MECA agreement.

The DHBs are funding the increase in nurses wages with a 0.43% increase to aged care providers. This increase will only fund 15% of the increase in nurses wages required.

3/ Service delivery auditing costs (the residential interRAI assessment tool) have moved from the DHB to the aged care providers. There has been no extra funding given for the rest home staff to do this extra work.

4/ Residents are more acutely ill and in need of care than in the past, because the government will only approve moving into a full care rest home once all "in your own home" care options have been exhausted. The staff levels have had to be increased to cope with this increased work load. But DHB funding levels have not consummately increased.

Summary: There is very little money in looking after the elderly in residential care and the situation is getting worse. Not good I would think for the likes of OCA!

SNOOPY

[Baa_Baa]

There is an emerging imbalance in the status quo that has previously assured ongoing earnings for investors in aged care for many years, I fear that it is just the beginning, for investors that it's about to be over. At least as we know it today.

Nevertheless, whether or not the government and its agencies leverage their buying power to reduce or stabilise/maintain their contributions, which they will imho, based on growing demand and limited supply, only the privileged can sustainably afford aged care.

Aged care with all the benefits an OCA or others can provide is a luxury. It is not a right or a given. Until it becomes a right, the government will continue to put weight on the sector to shift their business model from purely property investment to providing sustainable care pathways to end of life.

It's a big shift from the the current model where property management makes investors exceptionally wealthy. But it's coming, especially if the Socialists stay in power.

[minimoke]

Summary: There is very little money in looking after the elderly in residential care and the situation is getting worse. Not good I would think for the likes of OCA!

SNOOPYDont forget there is essentially two (or more tiers) of residential care. You can go for your basic bed, ancient furnishings, minimal diversions, basic food etc which will be covered by the DHB payments. Or you can go a bit more "up market" by paying a sum over the rate set by the DHB.

The likes of OCA will do very well as the Boomers exit their paid up properties for that extra level of care in their later years.

OCA (and other similar villages) are not marketed for those coming from minimum wage and renting a council flat.

[dubya]

A little known regional newspaper, the Kapiti News, today carried an opinion piece under the guise of an interview by a Mr Mark Rouse. Rouse is the general manager of the Parkwood Retirement Village sited at Waikanae on the Kapiti coast. I can't find a web reference for the article. But the salient points are as follows:

1/ The District Health Board (really the Ministry of Health) determines the fee levels for those in residential care. The DHB is effectively a monopoly and so fees charged by residential care providers are 'negotiated' on a take it or leave it basis.

2/ Staff costs are effectively pre-determined by the government, and increases are not fully funded.

a/ Carers wages have increased significantly because of pay equity legislation introduced by the previous National Government.
b/ Registered Nurses wages are now determined by the DHB and the Nurses Organization MECA agreement.

The DHBs are funding the increase in nurses wages with a 0.43% increase to aged care providers. This increase will only fund 15% of the increase in nurses wages required.

3/ Service delivery auditing costs (the residential interRAI assessment tool) have moved from the DHB to the aged care providers. There has been no extra funding given for the rest home staff to do this extra work.

4/ Residents are more acutely ill and in need of care than in the past, because the government will only approve moving into a full care rest home once all "in your own home" care options have been exhausted. The staff levels have had to be increased to cope with this increased work load. But DHB funding levels have not consummately increased.

Summary: There is very little money in looking after the elderly in residential care and the situation is getting worse. Not good I would think for the likes of OCA!

SNOOPY

Here's a transcript of the article:

Funding crisis in care of the aged

Parkwood Retirement Village general manager Mark Rouse believes there is a funding crisis in the Aged Residential Care sector where operators are obliged to observe a raft of necessary and ever-increasing compliance costs, while Government funding is not doing nearly enough to keep pace with the changes. He puts the case here for a change in attitude by the Government, essential to ensure that the market provides choice and will not be solely populated by large corporate operators.
Aged residential care seems to me to have become the government’s forgotten sector, the industry that provides a vital social service that doesn’t get the recognition it deserves. It is difficult to recall the last time the minister responsible for aged residential care was in cabinet or the last time the serious funding issues facing care in New Zealand was in the public eye.
As we all know, this problem is not going away with 35,000 people currently in aged care, and in 13 years’ time that number is estimated to increase to 58,000 as more of the Baby Boomer generation move into aged residential care. I’m sure that if this crisis was happening in a sector related to children and young people it would have been resolved many, many years ago.
While the industry has an exceptionally capable national lobbying body in the NZ Aged Care Association (NZACA), I think it is time for someone who has been in the aged care industry for a long time, and has seen the changes at a grass roots level, to give the public a perspective of what is really happening in this critical industry. It is significant that government got out of providing aged residential care in the 80s and 90s because it was costing them a fortune and they weren’t particularly good at it.
I have been in the industry for nearly 25 years and over the last 5-10 years it has become significantly more difficult for aged care providers to even remotely make ends meet. The reason is simple — underfunding — and that underfunding, in my view, is entirely due to a lack of knowledge and concern from successive governments.
It is impossible to make ends meet when you have a business model where the government determines your income and then forces massive cost increases onto you, especially if that government then doesn’t fund you or allow you as a provider to
increase your income to cover those additional costs.
Let me explain . . . Provider income
The DHB (read Ministry of Health/ Government) determines the fee levels for residents in residential care whether they are private payers or subsidised. Realistically, providers have little or no negotiating power as to increases, as there is only one purchaser for their services (the DHB). In essence the DHB typically “negotiates” a CPI or less increase on a take it or leave it basis. The real cost increases for residential care are not the CPI (Sept 18 Full Year 1.9 per cent) but the Statistics Department Aged Care Price Index (Sept 18 Full Year 9.1 percent), an immediate shortfall of 7.2 per cent per annum. Provider costs
1. The staff costs in a residential care facility are now one way or another pretty much determined by the government, not by the provider. Cases in point:
a. Carers’ wages are determined by the pay equity legislation introduced by the previous National Government. These are inadequately funded — remembering the NZACA was not invited to the negotiating table when the legislation was formulated.
b. If you want to retain your registered nursing staff, registered nursing wages are now largely determined by the recent DHB/NZ Nurses Organisation MECA agreement. The DHBs are “funding” this with a 0.43 per cent boost to aged residential care providers, which by my calculations will contribute about 15 per cent towards the actual increased registered nursing wage bill.
c. The minimum wage increase of 7.8 per cent has never been adequately funded.
Of course in all these cases the government makes a windfall gain from additional PAYE and GST.
2. Add to these other significant costs foisted on operators such as the resident interRAI assessment tool, which has moved the cost of resident assessments from the DHB to the operator without any recompense for the staffing required to do this job.
3. Then add into the mix the fact that the level of resident acuity has decreased dramatically over the last decade or so. This is due to many factors, not least of which is increased Government funded home support which often increases the age and frailty of residents entering aged care facilities. This has meant that the assessment system rules have been altered to counter the fact that there are now too many residents getting into higher levels of care and faster than the DHB can manage within their financial budgets — not the DHBs’ fault but unfortunate and hardly resident focused! Our staffing levels have risen over the last decade by more than 30 per cent to cope with these changes and our staffing costs have increased as a percentage of income from 72 per cent in 2010 to 90 per cent in 2019. Not a sustainable model!
If nothing changes, the industry will soon only be populated by large corporates and large charitable organisations and that will dramatically reduce resident choice. The remaining smaller providers who have not already closed down or been sold to corporate operators will cease to exist if the funding issue is not resolved right now. Maybe that is the Government strategy — to reduce the number of providers to a level where they only need to negotiate with a small number of large providers?
I am raising this issue in the hope that the current government will properly address the problem and seek a satisfactory resolution with providers, not simply palm them off as has so frequently happened in the past. I know that the funding model is being reviewed, but this will not resolve any of the immediate issues. Forgive me for being sceptical, but in my time there have been two funding model reviews undertaken and neither resulted in any change.
What needs to be done to resolve this crisis is for the government to recognise there is a crisis and then for it to pay a proper share of the care costs by increasing its contribution (achieved by significantly increasing the funding level and then topping up rest home level care as it now does for hospital and dementia care).

[King1212]

For those that don't have money will live like what snoopy described. For those that have money..will go to OCA ..paying extra to be look after

[Snoopy]

Dont forget there is essentially two (or more tiers) of residential care. You can go for your basic bed, ancient furnishings, minimal diversions, basic food etc which will be covered by the DHB payments. Or you can go a bit more "up market" by paying a sum over the rate set by the DHB.

The likes of OCA will do very well as the Boomers exit their paid up properties for that extra level of care in their later years.

OCA (and other similar villages) are not marketed for those coming from minimum wage and renting a council flat.



For those that don't have money will live like what snoopy described. For those that have money..will go to OCA ..paying extra to be look after.


I am not sure you guys get it. Once you get into residential care, the care required is determined by your overall health: Not your bank balance! The nurses and carers, who the likes of the Parkwood Retirement Lodge are saying are not fully funded provide such 'luxuries' as administering the medication you require, getting you washed and dressed, toileted and feeding you.

SNOOPY

[Gecko]

Dont forget there is essentially two (or more tiers) of residential care. You can go for your basic bed, ancient furnishings, minimal diversions, basic food etc which will be covered by the DHB payments. Or you can go a bit more "up market" by paying a sum over the rate set by the DHB.

The likes of OCA will do very well as the Boomers exit their paid up properties for that extra level of care in their later years.

OCA (and other similar villages) are not marketed for those coming from minimum wage and renting a council flat.


They may not be marketing to them Mini, but this is the influx of clientele that has begun to fill capacity in one Oceania facility in Christchurch. Long service staff are reducing hours or moving on because of it. Source family member (staff) and personal friends (two) who work in facility.

[King1212]

U don't get it snippy. My wife used to be RN at Bupa. U can choose a good provider like OCA, ARV....their care quality is much better than private one which depend on government funding. Or if the oldies have money ..they could go with OCA or ARV...pay more buy got better service

[minimoke]

They may not be marketing to them Mini, but this is the influx of clientele that has begun to fill capacity in one Oceania facility in Christchurch. Long service staff are reducing hours or moving on because of it. Source family member (staff) and personal friends (two) who work in facility.
Excellent news. Oca won't have any difficulty selling Windemere when it is finished (block work currently going up)

[fish]

I am not sure you guys get it. Once you get into residential care, the care required is determined by your overall health: Not your bank balance! The nurses and carers, who the likes of the Parkwood Retirement Lodge are saying are not fully funded provide such 'luxuries' as administering the medication you require, getting you washed and dressed, toileted and feeding you.

SNOOPY
I also am confused about this issue.
I get the fact that DHB placements will be underfunded.
I dont know to what extent Oceania is exposed to this.
The like of small operators such as Parkwood clearly are underfunded and may have no choice but to sell to big corporates who will find ways around funding.
The article states that privately funded placements are also price controlled-I suspect this means that DHBs that place clients in rest homes do so at a fee determined by them.The DHB sets the price and the client is means tested and pays all or part of the care fee until they run out of money
It surely cannot mean that people have no choice if they can afford it to pay for more luxurious care

[Snoopy]

U don't get it snoopy. My wife used to be RN at Bupa. U can choose a good provider like OCA, ARV....their care quality is much better than private one which depend on government funding. Or if the oldies have money ..they could go with OCA or ARV...pay more buy got better service.


You need to expand more on what you are trying to say King1212. OCA, ARV and Bupa are private operators, just as Parkwood is. What do you mean when you say the care at ARV and OCA is 'better'? What is 'better service'?

Yes there are some rich who can afford to pay for their own care. But if you want to pay for your care without eating into your capital you need to be very rich. How rich is that? From the fees I have seen charged and the investment returns on capital managed on a conservative basis you need about $4m in capital for one adult. Anything less and you start eroding your capital so that you end up as a state dependent anyway. There aren't enough people in NZ to fund their own care to this 'rich' level once a facility gets to scale. So if you are running a care facility you have to base the fees you charge on the subsidy the government is prepared to pay for such care. Otherwise when your 'rich' resident finally passes away -unless you can replace them with someone equally rich - , as an operator you go bankrupt.

SNOOPY

[King1212]

In a nutshell....oldies that rely on government funding..they don't have a choice....Bupa...privately owned aged care to be in....but...if oldies have money...they still can get the funding but can pay more with their own money to go to better aged care provider such as oca..arv...where the quality care it is better because the fee is higher....The oldies top up the fee with their money..For extra...hope it makes sense

[King1212]

Better service...staff ratio per resident...quality food..activity ...etc..bupa is using one RN for 25 to 30 highly dependency residents....privately owned operators around 30 to 40 residents.

[minimoke]

The article states that privately funded placements are also price controlled-I suspect this means that DHBs that place clients in rest homes do so at a fee determined by them.The DHB sets the price and the client is means tested and pays all or part of the care fee until they run out of money
It surely cannot mean that people have no choice if they can afford it to pay for more luxurious care
Not price controlled.

I had to put me dad into a level 4 pscyco geriatric care. Mentally he was kind of ok but there were other issues.

I could have put him into cheap as chips dog house. The maximum he could have been charged was $1059 (maximum contribution paid by dhb) a week for basic health care services. (Bed, food, GPS visits, prescribed medicine, laundry which was guaranteed to loose stuff, some diversional theraphy)

But since extras were wanted (sunny room, tv, phone, ensuite) there were added expenses so his bill came to more than $1059.

If he met the means test threshold the dhb would have paid the maximum contribution and we would have had to pay the extra.

He didn't meet the test so the whole amount was paid between us. His govt super and private super paid a reasonable chunk of the weekly bill. I paid the extra.

From there you also have to pay for extra like hair cuts internet, and nail clipping hearing aids etc Ambulance call outside were covered.

You get to appreciate costs when person assessed as likely to have 3 months to live but lingers for years.

As I understand it, if a facility has a contract with a dhb they have to accept a person if a suitable care level bed is available. If oca has beds available for minimum wage council flat residents the person will only get a basic room because they won't be able to afford extras. A care subsidy is available for basic care but you loose pretty much most of your pension. If you don't own a home it's unlikely you would get a care loan.

I wouldn't have thought oca would have too many basic rooms.

[minimoke]

But if you want to pay for your care without eating into your capital you need to be very rich. How rich is that? From the fees I have seen charged and the investment returns on capital managed on a conservative basis you need about $4m in capital for one adult.
You keep paying full whack until your capital runs out to a certain level. Once you reach that level the dhb payment kicks in - but you still have to pay for extras. $300k will get you in and you pay until your assets get to $227k or $124k depending on partner status

[artemis]

It would be interesting to know how the number of subsidised care homes is tracking.

There are anecdotes reported about sales to corporates, close downs, adjustments to job descriptions to remove staff from some duties so that the higher rates don't need to be paid, and people staying longer in hospital as care beds are not available.

If fewer care beds are available, what is the cost to the taxpayer of alternatives?

Anecdotes, but the Health and Seniors Ministers must have been briefed on trends, costs, risks and issues. So where is their plan?

[BlackPeter]

In a nutshell....oldies that rely on government funding..they don't have a choice....Bupa...privately owned aged care to be in....but...if oldies have money...they still can get the funding but can pay more with their own money to go to better aged care provider such as oca..arv...where the quality care it is better because the fee is higher....The oldies top up the fee with their money..For extra...hope it makes sense

I think this makes perfect sense :);

And actually - nobody needs $4m (as balance proposes) to just "improve" their age care and only a limited number of people will need age care for a long time anyway.

If I look at my family - all of my grandparents as well as my mother used to live independently up to the last handful of months (which were spent in hospital or care home). Overall care payments have not been material for any of them. My father (age 88) is since 3 years in a (very good, small and private) care home (not in NZ, but in Germany). This is one out of six who did require a care home. His contribution (on top of any state / insurance / social welfare payments) is roughly NZ$5000 per month. Not cheap, but balances $4m per person (even if they would not have any return) would bring him through the next 67 years. Even a less than 2% return would fund his care for ever.

This number ($4m per person required) is absolutely non-sensical.

Obviously - people may live for a long time in retirement homes, but they don't need all of that time 24/7 care. Dr. Google just told me that the average time a person stays in a nursing home for (end of life care) is 14 months (though most people die during the first 6 months ...).

If I take these 14 months (at $5k per month) - paying for them privately would require less than $100k in capital. Not $4m. I'd think many people in NZ could afford this (many even without the need to sell their homes).

And sure - some people will require longer care (that's the thing with average values), but it does not make sense to paint a 1 in 1000 horror scenario and propose everybody needs to be prepared for it or the world ends and care companies go bankrupt.

Care - even above standard care - will stay affordable for the majority of people and companies providing good quality care will do well.

[flyer]

Attended the Browns Bay ANZAC parade this morning, directly across the road from "the Sands". Its a superb complex, be a great place to live, across the road from the beach, great views etc. Due to open next month but still building going on in some areas but nearly there I would say. Be a great asset for OCA.

[Snoopy]

In a nutshell....oldies that rely on government funding..they don't have a choice....Bupa...privately owned aged care to be in....but...if oldies have money...they still can get the funding but can pay more with their own money to go to better aged care provider such as oca..arv...where the quality care it is better because the fee is higher....The oldies top up the fee with their money..For extra...hope it makes sense


Better service...staff ratio per resident...quality food..activity ...etc..bupa is using one RN for 25 to 30 highly dependency residents....privately owned operators around 30 to 40 residents.

King I can't quite reconcile your two posts above. I think when you say that Bupa is privately owned, you mean that you cannot buy Bupa shares on any sharemarket. ARV and OCA are also privately owned by shareholders. But in this case, you can buy shares in those companies. So you are saying there is a difference in care between the likes of Bupa formerly the British United Provident Association) which has a privately owned not for profit structure, and a privately owned company that is beholden to private shareholders like OCA and ARV.

Then you tell us that Bupa has one RN for every 25 to 30 high dependency residents, but the likes of OCA and ARV have a significantly higher number of residents (30 to 40) to be overseen by one RN. Yet despite the worse staff/resident ratio, you claim that the care at OCA and ARV is better! Please explain.

SNOOPY

[couta1]

King I can't quite reconcile your two posts above. I think when you say that Bupa is privately owned, you mean that you cannot buy Bupa shares on any sharemarket. ARV and OCA are also privately owned by shareholders. But in this case, you can buy shares in those companies. So you are saying there is a difference in care between the likes of Bupa formerly the British United Provident Association) which has a privately owned not for profit structure There certainly is a difference in care, Bupa has had more articles regarding care based complaints in the media than any other company in the sector, you can draw your own conclusions about what that might mean.

[King1212]

Bupa has a lot of oldies funded by government....privately owned aged care such as the lodge that u talking about..owned by a person. OCA is listed company. Hard to explain to u snoopy...best is to go and see their facilities. Or maybe u should get a Filipino nurse to look after.

[Snoopy]

And actually - nobody needs $4m (as Snoopy proposes) to just "improve" their age care and only a limited number of people will need age care for a long time anyway.

If I look at my family - all of my grandparents as well as my mother used to live independently up to the last handful of months (which were spent in hospital or care home). Overall care payments have not been material for any of them. My father (age 88) is since 3 years in a (very good, small and private) care home (not in NZ, but in Germany). This is one out of six who did require a care home. His contribution (on top of any state / insurance / social welfare payments) is roughly NZ$5000 per month. Not cheap, but balances $4m per person (even if they would not have any return) would bring him through the next 67 years. Even a less than 2% return would fund his care for ever.

This number ($4m per person required) is absolutely non-sensical


BP, I never said people need $4m to go into full care. I said if they did not wish to diminish their capital, then they would need the income from $4m, You think that is nonsensical? I don't know what state payment your Dad is entitled to in Germany. But let's say it is the equivalent of $2,000 per month. Add that to his contribution and you get a basic care charge of $7,000 per month. Now lets day he wants a telephone line ($60 per month), Sky TV ($90 per month), effects insurance ($50 per month), health insurance ($200 per month). We are now up to $7,400 per month after tax is paid. At a 30% tax rate you need a before tax income of:

$88,000 / 0.7 = $127,000

If you are in full care a reputable investment advisor will invest your assets conservatively. Say 50% in fixed interest earning 3% (before tax) and in equities earning 5% after tax). But one percentage point will come off both of those for management fees. So average expected portfolio return will be:

Fixed Interest: ( 3%- 1%) x 0.7 = 1.3%
Equities: ( 5% - 1%) = 4%

=> Average Portfolio Return = 2.7%

Based on a $4m balance this equates to $108,000m in after tax income. So it looks like you are $20k ahead. But that isn't the end of your expenses.

Other expenses you might require and not yet covered are dental expenses. Perhaps you wish to retain your car so that visiting relatives can drive you about. Since you have sold your house you will need to rent a garage space to house it, You will also need to pay servicing costs, some fuel costs, vehicle insurance.

Then if you do claim on your medical insurance there is likely to be a large excess you will need to pay.

Next you will require an accountant to process your income tax returns. You will need to hire a lawyer to keep your will up to date.

In today's low interest rate environment, I stand by my claim that you will require $4m of capital to completely fund your full care.

SNOOPY

[Snoopy]

I also am confused about this issue.
I get the fact that DHB placements will be underfunded.
I dont know to what extent Oceania is exposed to this.


More than any other listed operator, because they have the highest proportion of care beds.



The like of small operators such as Parkwood clearly are underfunded and may have no choice but to sell to big corporates who will find ways around funding.


Since funding is on a per resident basis, how do you suppose big corporates will find their way around the funding issue?



The article states that privately funded placements are also price controlled-I suspect this means that DHBs that place clients in rest homes do so at a fee determined by them.The DHB sets the price and the client is means tested and pays all or part of the care fee until they run out of money

It surely cannot mean that people have no choice if they can afford it to pay for more luxurious care


If the government declares there is a person in need who will go into care, then that person takes priority over a private person who is less in need of care but willing to pay more for that same room.

SNOOPY

[minimoke]

In today's low interest rate environment, I stand by my claim that you will require $4m of capital to completely fund your full care.

SNOOPYIf you have $0.00 in capital you can still get full care - that is care that the DHB contracts a provider to provide. Sure, you'll loose most of your govt super and you wont get the "extras" but given you are in a parlous capital state that wil be the least of your worries.

The only time residual capital becomes an issue is when the money grubbing will beneficiaries put their oar in.

[minimoke]

Since funding is on a per inmate basis, how do you suppose big corporates will find their way around the funding issue?Funding is not an issue until a person capital drops below the thresholds I mentioned above.

Bottom line is Aged care costs. First person to pay is those that can afford it. If they cant the State will pay.




If the government declares there is a person in need who will go into care, then that person takes priority over a private person who is less in need of care but willing to pay more for that same room.

SNOOPYIf the "government" (the health professionals) declares a person wil go into care (you cant actually force a person into care) then that person will need a bed at the care level required. A basic bed is a basic bed and everyone gets equal dibs on it. A bed, with say an ensuite, is not a basic care so it stands to reason that those that can afford it will get dibs on that bed. The state doesn't pay for "extra's"

[Snoopy]

Bupa has a lot of oldies funded by government....privately owned aged care such as the lodge that u talking about..owned by a person. OCA is listed company. Hard to explain to u snoopy...best is to go and see their facilities. Or maybe u should get a Filipino nurse to look after.


King , I have looked through a Bupa facility, looked through a couple of Ryman's and also had a look inside that Parkwood Lodge mentioned in the first newspaper article I referenced. All three seemed 'fit for purpose'. I couldn't comment on the staff to inmate ratios at each one. Are you now suggesting that Filipino nurses are not properly trained when working in NZ? At one facility I had a long conversation with a Filipino charge nurse who seemed excellent. You didn't further explain the point you made about Bupa villages being inferior despite having more support staff per resident (your claim).

You (and others) seem to think that there is a steady supply of people who can afford to pay more than for just basic facilities (which are nevertheless $5,000 per month) and so provide a continuous higher level of care at certain listed retirement villages. Yet you don't seem to acknowledge that private full care providers are not free to pick and choose their residents because the majority of their iresidents are government funded. So the demands of the government will almost always outweigh the demands of the not quite so in need of care rich.

SNOOPY

[minimoke]

Just a wee story for the young uns here - you may not realise what a great thing the likes of OCA offer.

Back in the old days if a relative had dementia you would look after them in your home for as long as you could. (think about that for a moment)

At some point the required care got too much. So teh aged relative got committed to a pscych hospital. For my grandmother it was Tokanui. The memories still linger with me. We would drive up to this hospital pretty much in the middle of no where in nice open spaces. You would then walk through the locked front doors and the stench of incontinent patients would hit you - its a smell that still lurks in the back of my memory. The old folks would be kinda lined up. But certainly plonked in a chair and they were essentially left there for the day. I remember the bruises - the old folk fell all the time and wernt recovered that quickly. And then there was the demented wailing from something locked in a room. I remember the big tea urns and I think it was something like a wine biscuit that was morning and afternoon tea. Meals were boiled to an inch of their lives and a treat day was a stew. Medication was freely available - dont know what it was but it was in the day when valium was "mothers little helper". It was a good way of keeping people totally subdued. Back then there was no choice but the state paid.

Fast forward to today. Hospitals do not want the aged in their care - they want them in their own home self caring for as long as possible before moving into care. Now the state doesnt pay - unless virtually all your own capital is used up. But we have choice of care. And I am very thankful that we have that choice. Its not an equal choice - but life isnt equal. Choice today is so much better than what we had in the past

I am more than happy to have money in OCA, SUm and RYM. I get to enjoy divis along the way and no doubt one day in the future I'll need the services they offer. I'm hoping my investment today will pay for my needs to be looked after in the future.

[minimoke]

Snoopy - just so you know. Using the term "inmate" could be pretty offensive to those who have their near and dear in such care facilities.

[King1212]

Get your own nurse to look after u is better...not to mention to put her on your will. She will love u long time...

There are huge waiting list for oldies to get a bed....they are all in hospital medical unit...waiting for government funding to get them a bed.

For those that willing to pay with their own money..will get the bed immediately.

My wife is ex Bupa RN, now RN at hospital. my tenant is EN at ARV.

I am out. End discussion

[warren]

Interesting and good discussion. In my own case my gentle much loved mother was in need of hospital care and her intellect and personality were intact. We purchased an OCA care suite that was for all intents her own apartment/home, small but nice and hers(Private). Within her suite she got full hospital care . The Government paid the $1400 approx. hospital care each week but we paid for the OCA care suite and we may have topped the government subsidy up a little . Best thing we ever did but you need some dough( it was nothing as expensive as a full village apartment however). I can see a substantial demand for this suite type of care and also the no frills basic government care. One can choose to holiday at glorious Millbrook or the Tiwzel motorcamp . Both are good... you take your pick and pays your dollar !!

[Snoopy]

Snoopy - just so you know. Using the term "inmate" could be pretty offensive to those who have their near and dear in such care facilities.


Fair enough minimoke. I have replaced the word that some may find objectionable with 'resident' in my three posts that wee affected. I also apologize for any offence caused. None was intended.

SNOOPY

[Snoopy]

Hospitals do not want the aged in their care - they want them in their own home self caring for as long as possible before moving into care. Now the state doesnt pay - unless virtually all your own capital is used up. But we have choice of care. And I am very thankful that we have that choice. Its not an equal choice - but life isnt equal. Choice today is so much better than what we had in the past
.



There are huge waiting list for oldies to get a bed....they are all in hospital medical unit...waiting for government funding to get them a bed.

For those that willing to pay with their own money..will get the bed immediately.

My wife is ex Bupa RN, now RN at hospital. my tenant is EN at ARV.



Interesting and good discussion. In my own case my gentle much loved mother was in need of hospital care and her intellect and personality were intact. We purchased an OCA care suite that was for all intents her own apartment/home, small but nice and hers (Private). Within her suite she got full hospital care . The Government paid the $1400 approx. hospital care each week but we paid for the OCA care suite and we may have topped the government subsidy up a little. Best thing we ever did but you need some dough( it was nothing as expensive as a full village apartment however). I can see a substantial demand for this suite type of care and also the no frills basic government care. One can choose to holiday at glorious Millbrook or the Tiwzel motorcamp . Both are good... you take your pick and pays your dollar !!

It is good to hear these stories about superior care being available to loved ones. But I suspect, being an investment forum, that those posting here are better with handling their own money, and advising on the use of their loved ones money, than most. I would suggest that those who are financially less savvy are by far the larger proportion of care residents. The above comments I have highlighted in bold are all from the residents and their immediate families point of view. That is not the perspective that I am trying to present.

Look at selecting residents from the operators point of view: follow the money trail It is actually the NZ government that is providing most of the care funding. If a wealthy applicant wants a position in care, there is no way they will be as wealthy as the NZ government. The government bases funding on need. So a rich applicant in a 'not so bad position' will be admitted behind a more disabled less wealthy patient taking up a government hospital bed. Looking at it from an OCA perspective, OCA do not have the choice of who they admit for care. They are also not being compensated for operational cost increases by the government. The squeeze is on for care bed providers. And there aren't enough rich private clients prepared to pay over the odds to make a difference.

SNOOPY

[BlackPeter]

BP, I never said people need $4m to go into full care. I said if they did not wish to diminish their capital, then they would need the income from $4m,

...


If that's the case, than I am not sure what the point of your argument was in the context of this thread.

I thought your point was that the likes of OCA (and SUM and RYM and MET) are threatened because there are not enough people who are able to afford their services (because they prefer to keep their capital and die rich but with inferior care rather than spending at least parts of their capital to improve their care).

My point is that most reasonable people would be quite happy to consume (at least parts of) their capital if it gives them much better quality care - as long as they don't need to worry about their capital running out before their years do. As long as this is the case, there is no problem for the OCA's (and other high quality care providers) of this world.

I would be quite happy if my father spends his money to improve his care - and I would not hesitate to use some of my wife's and my money to improve our care if and when we need it. Wouldn't you? Interesting thing is - I do see (with my father) a real world example ... he commands ways less than the big hairy number you put up. He still can afford to get high quality care - and so far we even managed to keep his pie growing.

Given that there are plenty of others in a similar situation around - I don't see the retirement villages running out of potential clients anytime soon.

So - what exactly are the threats for retirement villages and care providers as long as they manage to provide better quality care than the respective state funded standard care??

[Snoopy]

My point is that most reasonable people would be quite happy to consume (at least parts of) their capital if it gives them much better quality care - as long as they don't need to worry about their capital running out before their years do.


I accept your point BP. You can analyze the problem on a statistical basis and show that there are enough people out there with assets or income to fund their care at the end of life. But statistics do not determine the life expectancy of specific individuals. There are very few people who know exactly how long they will last. The idea of spending your last buck as you draw your last breath is a fantasy.



As long as this is the case, there is no problem for the OCA's (and other high quality care providers) of this world.

I would be quite happy if my father spends his money to improve his care - and I would not hesitate to use some of my wife's and my money to improve our care if and when we need it. Wouldn't you? Interesting thing is - I do see (with my father) a real world example ... he commands ways less than the big hairy number you put up. He still can afford to get high quality care - and so far we even managed to keep his pie growing.

Given that there are plenty of others in a similar situation around - I don't see the retirement villages running out of potential clients anytime soon.

So - what exactly are the threats for retirement villages and care providers as long as they manage to provide better quality care than the respective state funded standard care??

The flaw in your argument is extrapolating the exemplary care of your father and your superior stewardship of his care to the general population. The threat to the likes of OCA is that they will be told by the government who to accept as care patients and they will be unable to say no. If every parent had a child who was as savvy with money as you and they had built up a nest egg like your father has then 'no problem'. But not every care patient is so fortunate.

SNOOPY

[minimoke]

Look at selecting residents from the operators point of view: follow the money trail It is actually the NZ government that is providing most of the care funding. If a wealthy applicant wants a position in care, there is no way they will be as wealthy as the NZ government. The government bases funding on need. So a rich applicant in a 'not so bad position' will be admitted behind a more disabled less wealthy patient taking up a government hospital bed. Looking at it from an OCA perspective, OCA do not have the choice of who they admit for care. They are also not being compensated for operational cost increases by the government. The squeeze is on for care bed providers. And there aren't enough rich private clients prepared to pay over the odds to make a difference.

SNOOPYI'm not sure you are getting the picture.

If an aged person needs a hospital bed then every aged person has equal access to that hospital bed regardless of wealth. But to be in hospital they need to be pretty sick.

After hospital there are essentially two choices. Return to home with appropriate home based care services put in place. Or be assessed as requiring a certain level of residential care.

You now split this second option in two. If a person decides for themsleves they want to go into residential care they pay all costs - no government funding. Alternatively if the health system assesses them as needing residential (basic) care they are then eligible for a DHB / Government residential care subsidy to pay for that care. To get a Residential Care Subsidy you need to pass a means test and essentially be "poor" )if you call having less then a quarter of a mil in assets poor).

The likes of OCA dont have a choice of who they admit for care. Agreed - (except a person has to be eligible for NZ health care). But they do have choices in that they can decline an aged person if they dont have a level of care bed available at the level of care required. So say for example they only have "ensuite attached" beds available then the "poor" person wont get that bed because the govt subsidy wont pay for the extra. The "poor" person will need to look elsewhere for a bed.

Given teh $250k means test threshold I think you will find there is an enormous pipleline of "rich" private clients who will be prepared to pay over the odds to make a difference in their care in the later stages of their life.

One day , if we ever get the latest census data we might have a better idea of the total number of owner occupied homes and the age demographic - but from old data we know there is an aging population and we know too many of these people are holding onto their own property - causing a housing shortage.

Heres a bit from the Ministry of Health
How does a person apply for a residential-care subsidy?Not everyone is entitled to funding under the Social Security Act 1964.
A person must first have a needs assessment from a DHB or DHB funded Needs Assessment Service Coordination agency (NASC). If the needs assessment determines that the person requires long - term residential care indefinitely and the person wishes to apply for a Residential Care Subsidy, then the DHB or NASC will provide the person with a financial means assessment application form to complete.
The Ministry of Social Development (through Work and Income) then carries out a financial means assessment that considers the person’s assets and income, and any gifting that has occurred.
The financial means assessment has two components:


An asset test
An income test.

If the person has assets above the applicable asset threshold then the person is liable to pay for the costs of their care up to the maximum contribution.
If the person’s assets are equal to or below the applicable asset threshold, they qualify for Government funding (the residential care subsidy) to pay for most of the cost of their care. An income test will then determine what the person must contribute to the cost of their care. The level of subsidy will depend on the type of care the person is assessed as requiring.
A weekly personal allowance and an annual clothing allowance are paid separately to the person. are holding onto properrty which is resulting in a housing shortage.

[minimoke]

The flaw in your argument is extrapolating the exemplary care of your father and your superior stewardship of his care to the general population. The threat to the likes of OCA is that they will be told by the government who to accept as care patients and they will be unable to say no. If every parent had a child who was as savvy with money as you and they had built up a nest egg like your father has then 'no problem'. But not every care patient is so fortunate.

SNOOPYThat wont happen. The likes of OCA are private businesses and our goverenments tend to keep their noses out of business - at this kind of level. What may happen, is that in granting resource consent , or becoming a govt approved provider a "village" may need to provide a certain minimum number / ration of "basic" care beds to be be available for those who are eligible for the residential care subsidy. Maybe a bit like how some residential subdivisons have ot provide a certain number of "affordable homes" in the scheme.

If this happened its unlikely such beds would be allowed to sit around empty - so the owners may charge government a base rate for holding an empty bed.

The aged care industry is getting to be pretty big - and that equals a pretty big lobby group. The last thing any government wants is aged care providers to shut up shop. Government do not want elderly people clogging up hospitals.

Gotta remember "health" is a ticking time bomb. We have huge waves of obese / diabetic / elderly building. Alongside a shrinking number of "young" tax paying people to pay for it. Private sector and charities (like Nurse Maude) will be the future

[fish]

I accept your point BP. You can analyze the problem on a statistical basis and show that there are enough people out there with assets or income to fund their care at the end of life. But statistics do not determine the life expectancy of specific individuals. There are very few people who know exactly how long they will last. The idea of spending your last buck as you draw your last breath is a fantasy.



The flaw in your argument is extrapolating the exemplary care of your father and your superior stewardship of his care to the general population. The threat to the likes of OCA is that they will be told by the government who to accept as care patients and they will be unable to say no. If every parent had a child who was as savvy with money as you and they had built up a nest egg like your father has then 'no problem'. But not every care patient is so fortunate.

SNOOPY

you are quite right snoopy-not every care patient is so fortunate.
My understanding is that it can be difficult to get into a basic bed-and even when a person gets into the bed the government makes you pay until you get to a certain threshold.
If dhbs make it impossible to make the required investment to build standard beds this will get worse or less will be provided for those occupying a standard bed-eg porridge for breakfast,peanut butter sandwich for lunch.Weak cheap cups tea etc but ample food and calories-you would have no choice.
But if you are a little savvy and watch others paying for a more luxurious life you might consider upgrading.
Why let the dhbs force you to accept such a life.
Why not spend every cent you have enjoying better care.
If you are alive when money runs out you go back to the standard bed.
For most people the reality is that this wouldnt happen-your relatives would just get less inheritance

[Snoopy]

After hospital there are essentially two choices. Return to home with appropriate home based care services put in place. Or be assessed as requiring a certain level of residential care.

You now split this second option in two. If a person decides for themselves they want to go into residential care they pay all costs - no government funding. Alternatively if the health system assesses them as needing residential (basic) care they are then eligible for a DHB / Government residential care subsidy to pay for that care. To get a Residential Care Subsidy you need to pass a means test and essentially be "poor" (if you call having less then a quarter of a mil in assets poor).

The likes of OCA don't have a choice of who they admit for care. Agreed - (except a person has to be eligible for NZ health care). But they do have choices in that they can decline an aged person if they don't have a level of care bed available at the level of care required. So say for example they only have "en-suite attached" beds available then the "poor" person wont get that bed because the govt subsidy wont pay for the extra. The "poor" person will need to look elsewhere for a bed.

Given the $250k means test threshold I think you will find there is an enormous pipeline of "rich" private clients who will be prepared to pay over the odds to make a difference in their care in the later stages of their life.




That wont happen. The likes of OCA are private businesses and our governments tend to keep their noses out of business - at this kind of level. What may happen, is that in granting resource consent , or becoming a govt approved provider a "village" may need to provide a certain minimum number / ration of "basic" care beds to be be available for those who are eligible for the residential care subsidy. Maybe a bit like how some residential subdivisions have to provide a certain number of "affordable homes" in the scheme.

If this happened its unlikely such beds would be allowed to sit around empty - so the owners may charge government a base rate for holding an empty bed.

The aged care industry is getting to be pretty big - and that equals a pretty big lobby group. The last thing any government wants is aged care providers to shut up shop. Government do not want elderly people clogging up hospitals.


I am not so sure that the principal separation between 'luxury' and 'basic' is having an en-suite washroom and toilet. I would be interested to see any documentation that defines luxury in this way.

I am not even sure it is practical to have two levels of luxury at one site. I mean, think about it. Every day you are going to have to prepare two breakfasts, two lunches and two dinners, doubling the catering logistics. Then can you imagine the arguments:

"Hey - she stole my almond croissant, and left me with her toast and Marmite"

Worse would come at lunch where a battle line would be drawn between the 'blue cheese on asparagus' and 'boiled bean' brigades.

After lunch it would be traffic chaos as all the 'poor' were wheeled down to the end of the corridor to the shared toilet. More work in distance for the carers to cover. More work for the carers cleaning when those in the queue that 'couldn't hold on' soil the common corridor while waiting. Those in the 'cheap rooms' might end up costing more to look after in both time and cleaning products?

Come 'diversional therapy' time, the 'poor' would have to be locked in their room for an hour to make sure they did not benefit from the upper class entertainment. Extra sound proofing would need to be added to the doors of the poor, to ensure there was no leaking to the lower class of music or vocals.

I tend to think that at the extra care end of residency, luxury is more about more help with basic needs. Given no operator is offering a one staff member to one resident ratio, resident demands must of necessity be rationed. So a better staff to resident ratio and allowing more time for basic tasks, like eating in the dining room for instance , could make a real difference to 'quality of life'.

I am intrigued that by building en-suites only, you can exclude the poor from your residential care village. Is this hypothetical speculation, or is it really true?

I know one village I have looked at had a 'luxury room', luxurious because it was sold with a fine view of the manicured garden. The only problem was the bushes had grown up immediately outside the window so the view was largely obscured. Nevertheless I commented to the resident about the view and it turned out she was blind! So much for 'luxury' making a real difference in that case. In this particular facility it turned out 4/5 of the extra care units had been terned 'luxury units' and carried a daily premium surcharge. Whether that was done to (mostly) keep out the riff raff is a question I didn't have the presence of mind to ask. Incidentally, in this facility all rooms were en suite. Perhaps it might be easier to keep the riff raff out of the way 'day to day' with an en-suite configuration?

SNOOPY

[100101]

There again if people use their vote wisely services and pensions can gain a semblance of protection. Look how Winnies Super Gold Card and the basic pension has survived thus far.

[minimoke]

Snoopy.

I suspect Couta can put your issues to bed much more succinctly than I can. I think first you need to understand "Basic" which is the level of care the DHB contracts to the accredited care provider. I have cut / paste from the Min of Health again below for you.

Again from my personal experience. My day had an ensuite in c shower and toilet. My father in law (in a much cheaper local place) has a shared toilet and a separate shower down a corridor.

As far as meals are concerned they were essentially the same. Nutritious but not exciting. I guess as you get old and demented your palate gets less fussy. My dad loved blue cheese so as a treat I woudfl arrange for him to have some on his birthday and christmas - and there would be a charge later on his account. Wine / beer was out of the question - interfered with the meds.

My dad used to get bundled in to a van and taken to a local cafe for a coffee or just a sit in the sun for his diversionary therapy. I doubt that those who didn't go minded - they were in care after all. My father in law has gone nowhere. Both have had people come to play music, sing.

People in care go to the loo at any old time in any old place. Queueing isnt the issue. Thats why if they get to the point they cant wait incontinence nappies are provided.

We paid a bit more for the room with the view. It was superior to the one on the other side of the corridor which had a view over corrugated iron roof of the floor below. My dad got the sun through 2.5m long window, looked over a garden and across a lane to manicured properties. My father in law gets a 400mm wide window and its on the gloomy side of the property.

The other point about luxury, which you allude to, is not the luxury experienced by the resident - often they dont have the ability to experience it. It is the "luxury" the family wants to provide so when they visit or are away they can feel they the surroundings are the best they can provide. The reality is that these places are "gods waiting rooms". If you had a choice of your parents waiting in a sub-standard (by your own personal standards) or waiting in a "luxury" place what would you choose. i suspect those worried about the inheritance would choose the lesser.

Anyway below is wha tteh DHB contract to provide and dont provide.

The services covered by the subsidy (contracted care services) include:


Food services
Laundry
Nursing and other care
General practitioner visits
Prescribed medication
Continence products
All health care that is prescribed by a general practitioner
Transport to health services.

The Age Related Residential Care contract with district health boards requires rest homes and hospitals to tailor services to meet the needs of each resident. They cannot charge subsidised residents for services that are covered in this contract. The services a person can expect should be set out in the admission agreement or private contract they sign with their rest home or hospital.
The services that are not covered by the subsidy (that are not contracted care services) include:


Specialist visits (not publicly funded by the DHB or ACC)
Transport to other services or outside social functions
Toll calls (made by the resident)
Private phone or cellphone
Newspapers, books and magazines (personal)
Personal toiletries
Recreational activities, where those are not part of the normal programme
Hairdresser
Dietitian, podiatrist or other services that have not been prescribed by a doctor or are not funded by the DHB
Spectacles, hearing aids and dental care.

[minimoke]

Snoopy.
Just to give you an idea of the difference between basic and luxury.

The Maximum contribution rate for care was $1,015 a week. This is the "basic" care package and would be payable by the DHB if the aged person met the asset test threshold. For that you get the stuff I listed above

We were paying $1,483 a week for the "luxury' package or $212 a day. Add to that things like a haircut ($18) or non - prescription eye drops at $14.50. It was the weekly consumables that soon mounted up as well.

Basic fact of life - getting old and needing care is not a cheap way of going. May as well go out in style!

(These arent OCA rates - not sure what they charge)

[Snoopy]

Below is what the DHB contract to provide and don't provide.

The services covered by the subsidy (contracted care services) include:


Food services
Laundry
Nursing and other care
General practitioner visits
Prescribed medication
Continence products
All health care that is prescribed by a general practitioner
Transport to health services.

The Age Related Residential Care contract with district health boards requires rest homes and hospitals to tailor services to meet the needs of each resident. They cannot charge subsidised residents for services that are covered in this contract. The services a person can expect should be set out in the admission agreement or private contract they sign with their rest home or hospital.

The services that are not covered by the subsidy (that are not contracted care services) include:


Specialist visits (not publicly funded by the DHB or ACC)
Transport to other services or outside social functions
Toll calls (made by the resident)
Private phone or cellphone
Newspapers, books and magazines (personal)
Personal toiletries
Recreational activities, where those are not part of the normal programme
Hairdresser
Dietitian, podiatrist or other services that have not been prescribed by a doctor or are not funded by the DHB
Spectacles, hearing aids and dental care.



Snoopy.
Just to give you an idea of the difference between basic and luxury.

The Maximum contribution rate for care was $1,015 a week. This is the "basic" care package and would be payable by the DHB if the aged person met the asset test threshold. For that you get the stuff I listed above

We were paying $1,483 a week for the "luxury' package or $212 a day. Add to that things like a haircut ($18) or non - prescription eye drops at $14.50. It was the weekly consumables that soon mounted up as well.


OK, so all those diversional therapy extras are not part of any basic package. Yet the basic care package is quite comprehensive,in the sense that all of your really basic needs (apart from clothing) are covered. It does make one think though, about all those folk stuck on a minimum care package with no extended family looking after them. It would be a very basic existence, that is for sure.

That contribution rate of $1,105 is what the provider gets? I think when it comes to 'billing the client' the residential care provider would add on whatever the after tax payment of NZ Superannuation comes to. In round figures, around $250? So the overall 'basic bill' from the resident client's perspective would be $1,355m per week.

For the luxury option:

$212 x 7 = $1,484

That works out at a premium of $129 per week. That is enough to make a useful difference to the resident's in care experience.

The interesting thing I see in that 'list of the basics' is that they are all services. There is no prescriptive information on how big a room needs to be, or whether there is an en-suite. This suggests to me that the likes of OCA cannot escape their 'public duty' by claiming that their rooms are not 'down to scratch' for potential residents subsidised for only basic care. That means the scenario where the likes of OCA will be assigned a 'poor' -in dollar wealth terms- patient for permanent care is a real one. And to go back to what the chief executive of Parkwood, Mark Rouse, said in the Kapiti News article that I originally mentioned, care beds are not being funded at a rate that can absorb increases in running costs over the last year. This means that an outfit like OCA, that runs a very high percentage of care beds, could be in real trouble going forwards. That is the way I see things anyway.

SNOOPY

[winner69]

Share price down to 103 today if you guys hadn’t noticed

Not that good eh

[trader_jackson]

Share price down to 103 today if you guys hadn’t noticed

Not that good eh

only looked at ARV today, never mind sum others.

[minimoke]

OK, so all those diversional therapy extras are not part of any basic package. No. Some diversional therapy is included in the "basic" package. If you want more it has to be paid for.


Yet the basic care package is quite comprehensive,in the sense that all of your really basic needs (apart from clothing) are covered. It does make one think though, about all those folk stuck on a minimum care package with no extended family looking after them. It would be a very basic existence, that is for sure.Correct - the very basic needs are met - but not relatively basic things such as nail clipping and haricuts


That contribution rate of $1,105 is what the provider gets? I think when it comes to 'billing the client' the residential care provider would add on whatever the after tax payment of NZ Superannuation comes to. In round figures, around $250? So the overall 'basic bill' from the resident client's perspective would be $1,355m per week.Not as I understand it. The way I think it works is the maximum contribution a DHB will make, in this particular region ( the amount is different for each area) is $1105. So the care facility has to provide all "basic" services for this amount. If a "poor" person gets the $1105 care subsidy then they essentially loose there govt pension except fro about $45 a week. So govt is recouping some of the $1105


For the luxury option:

$212 x 7 = $1,484

That works out at a premium of $129 per week. That is enough to make a useful difference to the resident's in care experience.Yup. So if you are "rich" why wouldnt you go for teh upmarket OCA option?


The interesting thing I see in that 'list of the basics' is that they are all services. There is no prescriptive information on how big a room needs to be, or whether there is an en-suite. This suggests to me that the likes of OCA cannot escape their 'public duty' by claiming that their rooms are not 'down to scratch' for potential residents subsidized for only basic care.

There are 50 applicable Standards (eg Health and Disability Services Standards NZS 8134:2008) with over 100 criteria. For example, for toileting its something like "There are adequate numbers of accessible toilets/showers/bathing facilities conveniently located and in close proximity to each service area to meet the needs of consumers." So - no need to provide an Ensuite. Standard bedrooms probably need to be no less than 1.8m wide and no less than 6 SQM - (gotta check that detail) which is why a premium can be charged for a larger room. (as I recall a care facility with a DHB contract has to provide a room if one is available. So if a "poor" person needs a room and only a "premium" one is available they get the premium room. Presumably for as long as no standard room is available.


OKThat means the scenario where the likes of OCA will be assigned a 'poor' -in dollar wealth terms- patient for permanent care is a real one. And to go back to what the chief executive of Parkwood, Mark Rouse, said in the Kapiti News article that I originally mentioned, care beds are not being funded at a rate that can absorb increases in running costs over the last year. This means that an outfit like OCA, that runs a very high percentage of care beds, could be in real trouble going forwards. That is the way I see things anyway.

SNOOPYWithout re reading the article I take it that Parkwood cant run their business on the income made available from teh DHB. Now, if they did something special, like provide ensuites, they could charge their residents more and thus become for financially viable. OCA isnt reliant on DHB as its primary revenue stream - thats its moat!

[Snoopy]

There are 50 applicable Standards (eg Health and Disability Services Standards NZS 8134:2008) with over 100 criteria. For example, for toileting its something like "There are adequate numbers of accessible toilets/showers/bathing facilities conveniently located and in close proximity to each service area to meet the needs of consumers." So - no need to provide an Ensuite. Standard bedrooms probably need to be no less than 1.8m wide and no less than 6 SQM - (gotta check that detail) which is why a premium can be charged for a larger room. (as I recall a care facility with a DHB contract has to provide a room if one is available. So if a "poor" person needs a room and only a "premium" one is available they get the premium room. Presumably for as long as no standard room is available.

Without re reading the article I take it that Parkwood cant run their business on the income made available from the DHB. Now, if they did something special, like provide en suites, they could charge their residents more and thus become for financially viable. OCA isn't reliant on DHB as its primary revenue stream - thats its moat!


Thanks for the extra info on those Health and Disability Standards. I didn't take a tape measure with me on my visits to various facilities over the last few years, But I am fairly sure I haven't seen a care room as small as 6m2. A bed would take one third of that floor area. Stick a chair in the remaining floor space and you get a fairly poor training venue for the regional cat swinging championships.

In one facility in particular that I visited, there certainly were non premium rooms that were larger than 6m2, and those included en-suites. This implies to me that in that particular facility's catchment area, there are not enough 'rich' to allow them to operate without some kind of DHB contract. After all, if en-suite rooms can attract a premium price and there were enough potential residents around to pay for that, then there is no doubt that a well run retirement village would go after those potential customers.

For those without the regional knowledge of the Kapiti area, it is -in Waikanae at least- a relatively wealthy catchment. Historically it has been a place where Wellington residents have acquired a beach cottage and at the end of their working lives retired there. It is so good that even our much esteemed ex prime minister Sir Jimothy Bolger now lives there! So the place is not short of 'older folks' who have made a few bob over their working lives. Even so, it would seem that the retirement villages in the area (including those operated by Arivida, Metlifecare and Ryman) do have DHB contracts.

I didn't get the impression that Parkwood cannot pay its bills from the newspaper article. All of these villages are able to cross subsidize their care beds from their wider residential village businesses. I think that Parkwood CE Rouse was trying to bring an issue to the wider public on the increasing difficulty of funding care for the villages' most vulnerable residents with current government policy settings.

As far as OCA is concerned, I presume it operates in more than one DHB area? Perhaps somewhere in leafy Auckland there is an OCA home without any 'poor' that is completely funded by private residents. But I would doubt that this is the case over the rest of the country, or indeed in the rest of Auckland. I would take some convincing that the 'moat' you tout above 'minimoke', that I have highlighted in bold , really does exist over the whole OCA operation.

SNOOPY

[winner69]

Wonder when Macquaries will unload another lot of shares ...that’s assuming they will

A discount to ucurrent price?

It seems IFT are going to quit RetireAustralia at some point in time if that has any bearing

[777]

Maximum rates for each area which will be adjusted again in July.

https://gazette.govt.nz/notice/id/2018-go2860

Simply for info.

[Maverick]

Wonder when Macquaries will unload another lot of shares ...that’s assuming they will

A discount current price?

It seems IFT are going to quit RetireAustralia at some point in time if that has any bearing
Nice segue Winner...I see what you did there.

[Beagle]

Stick a chair in the remaining floor space and you get a fairly poor training venue for the regional cat swinging championships.
LOL.
Earl mentioned at last years NZSA briefing that the average size is about 14 sq m and the average size of a OCA care suite is about 32 sq m and includes a kitchenette and bathroom.

[King1212]

Hopefully ...OCA will attract big investors at tmwr Macquarie investor conference in Sydney

[Bjauck]

No. Some diversional therapy is included in the "basic" package. If you want more it has to be paid for.

Correct - the very basic needs are met - but not relatively basic things such as nail clipping and haricuts

Not as I understand it. The way I think it works is the maximum contribution a DHB will make, in this particular region ( the amount is different for each area) is $1105. So the care facility has to provide all "basic" services for this amount. If a "poor" person gets the $1105 care subsidy then they essentially loose there govt pension except fro about $45 a week. So govt is recouping some of the $1105...

That’s not very cost effective. Nails if left unclipped can lead to complications the treatment for which the DHB would have to cover.

My local Oceania facility have premium rooms in the rest home. Residents can take out an ORA for them. The medical and rest home care is the same as for those on the basic package. The room is more “luxurious” with Exclusive use en-suite assured.

in the UK, during the last election campaign, there was political debate on private funding for rest home care. In the face of a public backlash the Right wing Conservative Government were forced to limit “wealthy” individuals to 7 years of self funding rest home care. They had been criticised for trying to impose a “dementia tax” on those who needed long-term care by having them pay for their care until they ran out of assets. In other words the current NZ type of system was politically unacceptable in the UK.

[minimoke]

Here you go Snoopy. From todays Macquarrie presentation see page 6 and 7 fro an explanation on beds and costs.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/333786/298951.pdf

[GR8DAY]

Direct Broking have OCA returning a dividend of around 4.5% pa.........anyone like to confirm if this is correct current and sustainable? (asks he who just became a shareholder)

[777]

Direct Broking have OCA returning a dividend of around 4.5% pa.........anyone like to confirm if this is correct current and sustainable? (asks he who just became a shareholder)

Gross return it is correct. After tax is a bit over 3%.

[GR8DAY]

....cheers 777. So you're saying 3% in our hand , less personal tax or 3% no more tax to pay? ( apologies for the ignorance but I rarely invest for dividends........time to change that approach I think)

[minimoke]

....cheers 777. So you're saying 3% in our hand , less personal tax or 3% no more tax to pay? ( apologies for the ignorance but I rarely invest for dividends........time to change that approach I think)
Shareprice = $1.05. Gross (before tax) dividend paid = $0.047 a share. So you get a gross divi yield of 4.48%

Now take off your tax (say 33%) and you are left with a net return of 3%

Which is a whole lote better than money sitting in a bank account.

[777]

Each share paid 3.15c into bank account after having tax deducted from 4.7c.

Dividend statements will give you the information when you get them. If you are a 33c/$ tax payer then all will be correctly done. If less then when you file a return you will get a tax refund.

[LAC]

Shareprice = $1.05. Gross (before tax) dividend paid = $0.047 a share. So you get a gross divi yield of 4.48%

Now take off your tax (say 33%) and you are left with a net return of 3%

Which is a whole lote better than money sitting in a bank account.

And if all goes to plan, increasing dividends in the years ahead:)

[ziggy415]

Each share paid 3.15c into bank account after having tax deducted from 4.7c.

Dividend statements will give you the information when you get them. If you are a 33c/$ tax payer then all will be correctly done. If less then when you file a return you will get a tax refund.

Is 33% always the tax rate then you claim it back if your tax rate is lower or can you nominate your actual tax rate if it's lower

[777]

Is 33% always the tax rate then you claim it back if your tax rate is lower or can you nominate your actual tax rate if it's lower

All dividends paid are net of any imputation credit and RWT. The two add up to 33c.

If it is a PIE then there can be imputation credits or excluded amounts. Max deduction is 28c. However this is a final tax and does not need to be included in a tax return.

But if your tax rate is 10.5c or 17.5c then it pays to include these to get some of the imputation credit refunded.

No, you don't get a chance to nominate the rate for deduction for payouts from listed shares/units.

[ziggy415]

All dividends paid are net of any imputation credit and RWT. The two add up to 33c.

If it is a PIE then there can be imputation credits or excluded amounts. Max deduction is 28c. However this is a final tax and does not need to be included in a tax return.

But if your tax rate is 10.5c or 17.5c then it pays to include these to get some of the imputation credit refunded.

No, you don't get a chance to nominate the rate for deduction for payouts from listed shares/units.

Thanks 777....

[Grimy]

All dividends paid are net of any imputation credit and RWT. The two add up to 33c.

If it is a PIE then there can be imputation credits or excluded amounts. Max deduction is 28c. However this is a final tax and does not need to be included in a tax return.

But if your tax rate is 10.5c or 17.5c then it pays to include these to get some of the imputation credit refunded.

No, you don't get a chance to nominate the rate for deduction for payouts from listed shares/units.

A great summary 777, certainly clearer than a lot of company literature!
And of course if you are invested in an unlisted PIE fund, you can elect your PIR %. And this should be checked each year (Due to retirement I'm in the process of changing mine with a few investments).
Some companies contact you each year to remind you to check your rate is correct. Some don't.

[GR8DAY]

All good thanks..........agree better than money in the bank but not up there with HLG and AIR etc?

[BlackPeter]

All good thanks..........agree better than money in the bank but not up there with HLG and AIR etc?

I'd say less divvies, but much more potential for capital appreciation - certainly if you invest for the long haul.

[winner69]

Hopefully ...OCA will attract big investors at tmwr Macquarie investor conference in Sydney

Yep a big event Macquaries put on over three days with more than 100 presentations.

Hope punters found time to take in the Oceania one.

[dubya]

Wow. Two good days in a row. Are the bots on holiday or is this the start of a slow but steady climb to a higher level? Guess time will tell, but my fingers are crossed it's going back into the high teens (at least :) ) .

[Joshuatree]

Anyone got a link to the MAQ OCA presentation (if out), it would be appreciated by the many holders here.

[BigBob]

Anyone got a link to the MAQ OCA presentation (if out), it would be appreciated by the many holders here.

It was released via the NZX first thing this morning...

[dubya]

Anyone got a link to the MAQ OCA presentation (if out), it would be appreciated by the many holders here.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/333786/298951.pdf

[winner69]

Yep a big event Macquaries put on over three days with more than 100 presentations.

Hope punters found time to take in the Oceania one.

Wonder if more punters came to the OCA preso than the A2 one

[minimoke]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/333786/298951.pdf
Not a bad presentation. But the thing I do not like is the NZ Aged Care Supreme Winner award on Page 2. Unclear if it is 2015 - 2017. Regardless it show they didn't win it in 2018. Which shows there is someone better. Dont need to highlight that to the market.

reminds me of those sad restaurants that have their "menu" award form 1983 stuck in the front window

[Blue Skies]

OCA won 'NZ Aged Care Supreme Winner Award' 2015,2016,2017, and the 'Innovative Delivery Award' 2018,2017, and 'Staff Training & Development' 3 years in a row.
I'ld take it, they're pretty consistently one of the the best in the industry & consistency builds trust & reputation.

[Onion]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/333786/298951.pdf

Slide 4: "Attractive demographics are just the start"

Seems like they are copying someone else:

Bunnings: "Lowest prices are just the beginning"

[King1212]

Slide 4: "Attractive demographics are just the start"

Seems like they are copying someone else:



Bunnings: "Lowest prices are just the beginning"


U cracked me up...:D

[BlackPeter]

Not a bad presentation. But the thing I do not like is the NZ Aged Care Supreme Winner award on Page 2. Unclear if it is 2015 - 2017. Regardless it show they didn't win it in 2018. Which shows there is someone better. Dont need to highlight that to the market.

reminds me of those sad restaurants that have their "menu" award form 1983 stuck in the front window

Tried to find out who won the 2018 award. Apparently it was the "Wyndham & Districts Community Rest Home Inc in Wyndham": https://nzaca.org.nz/events/awards-2018/;

Don't know the criteria for the price but not too concerned if one tiny retirement home in Southland with a total of 23 beds takes it. Small is beautiful, but it can't be an insurmountable competitor for OCA:

https://www.eldernet.co.nz/Facilities/Rest_Home_Care/Wyndham_and_Districts_Community_Rest_Home/Service/DisplayService/FaStID/1082

[Mudfish]

Wow. So many buyers and relatively few sellers. Presentation may have stirred interest? I've not seen a line up like this for a long time.

[couta1]

Wow. So many buyers and relatively few sellers. Presentation may have stirred interest? I've not seen a line up like this for a long time. Or big boys buying prior to the possible/probably inclusion into the NZX50.

[percy]

I have sold my OCA holding today,getting $1.08 from buyers wanting in before OCA hits the NZX 50 index..
I did not see the property down turn affecting the sector.
Yesterday's SUM agm proved me wrong.
The projected reduced development margin sends a clear signal that the glory days have gone for the time being.
Hopefully the property market downturn in Auckland and ChCh will not last too long,but who knows.?

[couta1]

I have sold my OCA holding today,getting $1.08 from buyers wanting in before OCA hits the NZX 50 index..
I did not see the property down turn affecting the sector.
Yesterday's SUM agm proved me wrong.
The projected reduced development margin sends a clear signal that the glory days have gone for the time being.
Hopefully the property market downturn in Auckland and ChCh will not last too long,but who knows.? Long term no worries and OCA has more of a moat than SUM others due to their care based % and the lower average sale price of their care suites and apartments. Having said that the Macca overhang is a very large elephant and $1.10 is a huge resistance level at this point in time IMO.

[percy]

Long term no worries and OCA has more of a moat than SUM others due to their care based % and the lower average sale price of their care suites and apartments. Having said that the Macca overhang is a very large elephant and $1.10 is a huge resistance level at this point in time IMO.

Agreed.
I will be back.
Just don't know when.

[minimoke]

I have sold my OCA holding today,getting $1.08 from buyers wanting in before OCA hits the NZX 50 index..

Dont you just hate it when it then goes to $1.09

[warren]

Agreed.
I will be back.
Just don't know when.

Good stuff Percy. However I am sure OCA is a bargain. Here's why:
1. How many stocks that pay 4% return on current share price exist at the low purchase price of approx 110 cents,
2. How many Companies have done exactly what they said they would do?? OCA has.
3. How many stocks have a solid gold backing of real estate that OCA has?.
4. How many stocks in NZ can you buy into with close to 3000 skilled staff?
5. How many stocks have the Ageing Population/longer living population figures to market to like OCA does?
6. How many Companies have absolute 'company business experts" on the BoD like OCA does?
7. Look at the competitors share price R =$12 S-$6 so I suggest at $1.10 OCA is a bargain

[percy]

Dont you just hate it when it then goes to $1.09

No surprises there.!!.
I was prepared to sell at $1.06 so am relaxed.
Just have to see how I get on now with my buy order for the stock I am repacing OCA with.
Just received the contract,brought SKL at $2.19 which is better than the $2.20 I thought I would have to pay.Remain "well positioned."
ps .Have a bit leftover to buy a fun stock in Aussie

[suse]

maybe you should take a look at WBT Percy :)

[couta1]

Good stuff Percy. However I am sure OCA is a bargain. Here's why:
1. How many stocks that pay 4% return on current share price exist at the low purchase price of approx 110 cents,
2. How many Companies have done exactly what they said they would do?? OCA has.
3. How many stocks have a solid gold backing of real estate that OCA has?.
4. How many stocks in NZ can you buy into with close to 3000 skilled staff?
5. How many stocks have the Ageing Population/longer living population figures to market to like OCA does?
6. How many Companies have absolute 'company business experts" on the BoD like OCA does?
7. Look at the competitors share price R =$12 S-$6 so I suggest at $1.10 OCA is a bargain Yes it's a bargain according to the Couta ratio theorum but until the Elephant is retired it ain't going anywhere fast and Percy has plenty of time to get back on board.

[percy]

maybe you should take a look at WBT Percy :)

Far to exciting for me.!!..lol,but thank you.
No I am buying [I think] MSV.

Warren.SKL's divie is higher than OCA's.It is 50% imputated while OCA's is not.

[warren]

Far to exciting for me.!!..lol,but thank you.
No I am buying [I think] MSV.

Warren.SKL's divie is higher than OCA's.It is 50% imputated while OCA's is not.

Hello Percy
Yes I agree, Skellerup is indeed a good company and $2.2 is a good entry point and the inputation is indeed excellent. However NZ manufacturing is not easy.
Nor is a business looking after 3000 infirm aged folk, with tight earnings and where cost Must be watched like a hawk. But nonetheless OCA income is guaranteed by the wealthiest client in NZ (80% of all OCA income?? ) month after month, year after year.
An investor must have total confidence in
1. the product
2. The manager
3. The board
4. The entry price
5. The future
I have and Thus I am certain, over time, OCA stock price will double--as SKL's may do also --My interest thus is driven by what I regard as a fact and nothing, I repeat, nothing, has persuaded me otherwise so far!

[percy]

Hello Percy
Yes I agree, Skellerup is indeed a good company and $2.2 is a good entry point and the inputation is indeed excellent. However NZ manufacturing is not easy.
Nor is a business looking after 3000 infirm aged folk, with tight earnings and where cost Must be watched like a hawk. But nonetheless OCA income is guaranteed by the wealthiest client in NZ (80% of all OCA income?? ) month after month, year after year.
An investor must have total confidence in
1. the product
2. The manager
3. The board
4. The entry price
5. The future
I have and Thus I am certain, over time, OCA stock price will double--as SKL's may do also --My interest thus is driven by what I regard as a fact and nothing, I repeat, nothing, has persuaded me otherwise so far!

I am not going to knock OCA.
However I made a big mistake.I did not think the property slow down in ChCh and Auckland would affect retirement village sales,or margins..
My rational was it was a lifestyle decision for most, and a necessity for others.
SUM agm commentary proved me wrong.So I sold out of the sector,even though OCA with it level of "care units" may not be so affected as RYM and SUM.
I will buy back into OCA,but I do not know when,but it will be when I see the property market picks up,and the sector's margins improve. Could be months away,could be years away,who knows.?

[warren]

[QUOTE=percy;757508]I am not going to knock OCA.

Hello again Percy. You move quicker than me so well done. I'm a turtle but maybe a slightly wise turtle (time will judge my wisdom).
How do you know OCA's exact position re slowing NZ city house prices?
Sum's reporting may not hold for OCA. With the huge OCA client base of care folks paid by the wealthiest actor on the NZ stage it definitely changes the outlook in tough times and I like that very much.
I shall ring Earl and ask.
I will say the following OCA snippet from several months ago is quite beyond my small business lifetime experiences and, I repeat, fills me with confidence, as I have stated.

"Operating cashflow was particularly strong over the period,(half year) increasing from $17.1m to $47.1m (175.9%) with sales proceeds from our developments completed earlier in 2018 contributing $43.5m, which represents an increase of 287.7% compared to the prior corresponding period. Our total assets are now $1.2bn

cash flow up to 47 mill for 6 months .This is already a major NZ company !!!!
$1.10 what a bargain

[Beagle]

I am not going to knock OCA.
However I made a big mistake.I did not think the property slow down in ChCh and Auckland would affect retirement village sales,or margins..
My rational was it was a lifestyle decision for most, and a necessity for others.
SUM agm commentary proved me wrong.So I sold out of the sector,even though OCA with it level of "care units" may not be so affected as RYM and SUM.
I will buy back into OCA,but I do not know when,but it will be when I see the property market picks up,and the sector's margins improve. Could be months away,could be years away,who knows.?

Long term development margin's had previously been clearly articulated by SUM. Some people in Auckland are unsure about how much they will get for their house and how long it will take to sell and as a result of that there is a percentage of them that are waiting until their house sale is unconditional before pulling the trigger on a retirement village decision.

I understand your decision to want more yield than OCA is able to generate and their lack of imputation credits as well so as a retired investor with no need for further capital accretion it probably makes more sense for you to concentrate on higher yielding shares and that's perfectly understandable and rational in your circumstances.

[trader_jackson]

I note a bigly turnover at $1.09 ish, VWAP of $1.097... buyers now lining up at $1.09... percy, you buying back in?

[percy]

I note a bigly turnover at $1.09 ish, VWAP of $1.097... buyers now lining up at $1.09... percy, you buying back in?

Not yet.?..lol.
Index buying.

[BlackPeter]

Not yet.?..lol.
Index buying.

Index buying? Hardly. Correct me if I am wrong, but I don't think it has yet been confirmed that they are moving into the index, and even if - today is not index balance day. Funds don't have the liberty to buy on rumour and weeks prior to the event.

Maybe some punters speculating on the index inclusion, but more likely investors who see OCA's underlying value and potential.

Anyway - SP moved above the MA200 - and we have higher highs - looks like an uptrend to me ;);

[minimoke]

I'm hoping $1.09 is now as cheap as we will ever see them again.

[couta1]

I'm hoping $1.09 is now as cheap as we will ever see them again. I doubt it wait a week or two, plenty of big fish sellers hiding in underwater caves.Lol

[percy]

Index buying? Hardly. Correct me if I am wrong, but I don't think it has yet been confirmed that they are moving into the index, and even if - today is not index balance day. Funds don't have the liberty to buy on rumour and weeks prior to the event.

Maybe some punters speculating on the index inclusion, but more likely investors who see OCA's underlying value and potential.

Anyway - SP moved above the MA200 - and we have higher highs - looks like an uptrend to me ;);

I put mine on the market yesterday morning at $1.06.
Craigs did not put mine up for sale.
My broker rang their trader who advised he was waiting for the index buyers to show up in the afternoon.Which they did do.Therefore they moved mine at $1.08.

[Joshuatree]

Yep common knowledge they buy up ahead of inclusion , removal.

[winner69]

I doubt it wait a week or two, plenty of big fish sellers hiding in underwater caves.Lol

Isn’t there tens of millions of shares doing the rounds ...big end of town bored and playing games with each other and recycling the shares

[couta1]

Isn’t there tens of millions of shares doing the rounds ...big end of town bored and playing games with each other and recycling the shares Yep a goodly portion of that 95 mill Macca placement at $1.10 on the merry go round, I'd be very surprised if it goes over $1.10 for a while yet.

[warren]

Hello Mr Couta. i wouldn't be !!!! ------ and here are more reasons why.....in addition to my views on OCA being a "Good Company"

Never before has the world seen
1. Total assets of Australia’s pension funds surged from only A$164 billion in December 1991 to over A$2,000 billion in December 2015 !!! Heavens knows what it is today May 2019??
2. NZ's tiny little "Cullen "Fund is now worth 50 Billion NZ 2019
3. NZ ACC fund now worth 40 Billion NZ 2019
5. NZ Kiwisaver (a dog said a National Minister) worth 50 Billion (this stat I haven't double checked) 2019?

All this dough has to go, and is going , somewhere and into good companies it cannot fail but to go! We aint seen anything yet so long as these massive funds grow and grow as they must for some time yet if my math is any good

[peat]

we have higher highs - looks like an uptrend to me ;);

Yeh I want to sell too (Percy) but noticed an uptrend so gonna show some patience. Not too fussed either way really but technically should reduce in the sector given the increase in my SUM holding.

[macduffy]

Hello Mr Couta. i wouldn't be !!!! ------ and here are more reasons why.....in addition to my views on OCA being a "Good Company"

Never before has the world seen
1. Total assets of Australia’s pension funds surged from only A$164 billion in December 1991 to over A$2,000 billion in December 2015 !!! Heavens knows what it is today May 2019??
2. NZ's tiny little "Cullen "Fund is now worth 50 Billion NZ 2019
3. NZ ACC fund now worth 40 Billion NZ 2019
5. NZ Kiwisaver (a dog said a National Minister) worth 50 Billion (this stat I haven't double checked) 2019?

All this dough has to go, and is going , somewhere and into good companies it cannot fail but to go! We aint seen anything yet so long as these massive funds grow and grow as they must for some time yet if my math is any good

Very true, warren. But big funds are very quick to quit a stock that doesn't perform to their expectations and to move on to something else - often offshore. Saying that, I too have confidence in OCA and continue to hold.

:)

[minimoke]

Very true, warren. But big funds are very quick to quit a stock that doesn't perform to their expectations and to move on to something else
:)I'd point you to the PEB thread.

[couta1]

6 mill shares went through on close, like I said plenty of big fish lurking in underwater caves, when it looked like a $1.11 close they came out. Lol

[trader_jackson]

Not yet.?..lol.
Index buying.

So wasn't you earlier, but were you buying the 6m odd shares in the closing minutes??;)

[dubya]

So wasn't you earlier, but were you buying the 6m odd shares in the closing minutes??;)

Lol. I wasn't sure I was seeing it properly. Certainly some last minute action.

10512

[dr_]

Entry to NZX50 tomorrow

6mil in auction and over 6mil post-auction



110
1,000,000
17:14
SP


110
900,000
17:11
SP


110
100,000
17:11
SP


110
1,650,000
17:10
SP


110
1,806,320
17:06
SP


110
396,252
17:06
SP


110
559,538
17:05
SP


110
750,000
17:02
SP


110
848
17:00



110
337,702
17:00



110
10,000
17:00



110
10,000
17:00



110
642,298
17:00



110
500,000
17:00



110
75,000
17:00

[trader_jackson]

that dodgy aussie private equity outfit that brought the debt-laden OCA to market at 79 cents this time 2 years ago selling out a bit further maybe?

[BlackPeter]

6 mill shares went through on close, like I said plenty of big fish lurking in underwater caves, when it looked like a $1.11 close they came out. Lol

Still - pretty good day for OCA. Interesting that the big money which sold OCA all seem to have reinvested their funds in SUM?

Great finish for SUM at $5.81.

I call this a win-win ... (hold both ;);

[winner69]

With all that action share price be 115 tomorrow

Unless all those shares transacted at the close have been put on the merry go round ...and going to be recycled

[couta1]

With all that action share price be 115 tomorrow

Unless all those shares transacted at the close have been put on the merry go round ...and going to be recycled Is that a typo winner, did you mean to put 1.05.

[BlackPeter]

that dodgy aussie private equity outfit that brought the debt-laden OCA to market at 79 cents this time 2 years ago selling out a bit further maybe?

Certainly not - if MacQuarie would sell, they would do that as placement (as last time). Doubt as well they want to flog off their remaining shares that cheap. Wait for the mid 120'ies and we might see them again.

[couta1]

Still - pretty good day for OCA. Interesting that the big money which sold OCA all seem to have reinvested their funds in SUM?

Great finish for SUM at $2.81.

I call this a win-win ... (hold both ;); You probably mean $5.81 at $2.81 I would have spent every last cent on SUM shares.

[Beagle]

6 mill shares went through on close, like I said plenty of big fish lurking in underwater caves, when it looked like a $1.11 close they came out. Lol

Its that gargantuan sized blue whale swimming in plain sight in the shallows that we need to keep our eye on. He has an almost insatiable appetite for reef fish.

[warren]

Its that gargantuan sized blue whale swimming in plain sight in the shallows that we need to keep our eye on. He has an almost insatiable appetite for reef fish.

Hello Beagle.
Its Mental Turtle here after a malt.!. Do explain? I suspect you mean ----any number of the funds with either many trillions (I cannot see that amount mentally) or a kiwisaver fund of 50 bill or a ACC fund of 40 Bill or a Cullen fund of 50 bill)?
All these billions have quite exhausted me so I shall retire to my Millbrook Villa (the greatest resort on earth where the coffee in the Hole in One cafe will cost you 4.50 ) for a rest and await your learned reply.
$1.10 what a bargain!!!!!! Wait til tomorrow.

[Maverick]

Just to recap a good investment strategy....

"OCA, you just can't have too many."

[Beagle]

Just to recap a good investment strategy....

"OCA, you just can't have too many."

Woohoo there it is, high five's all round...who cares about the big blue Macquarie whale... what could possibly go wrong lol

[couta1]

Just to recap a good investment strategy.......

"OCA, you just can't have too many." Did you mix up your letters Maverick I think you meant to say "HLG you just cant have too many" and you definitely cant.

[percy]

Did you mix up your letters Maverick I think you meant to say "HLG you just cant have too many" and you definitely cant.

Think you too have mixed up your letters?
Surely you meant HGH.?..lol.

[Baa_Baa]

All of the above. Whether or not OCA moves on past the blocking $1.10 in the short term, doesn’t matter to me, happy holder. Can’t accumulate as much as I’d like to without breaking portfolio rules… hmm 🤔

[warren]

All of the above. Whether or not OCA moves on past the blocking $1.10 in the short term, doesn’t matter to me, happy holder. Can’t accumulate as much as I’d like to without breaking portfolio rules… hmm ��

15 million shares and she held at 110. Geeez that's incredible -- shows what a tiny flicker from Auss and her trillions does ---That means in a 1 hour session her real value of $2 has been shown to all.

[couta1]

All of the above. Whether or not OCA moves on past the blocking $1.10 in the short term, doesn’t matter to me, happy holder. Can’t accumulate as much as I’d like to without breaking portfolio rules… hmm 樂 Portfolio rules are made to be broken and that's why I dont have any.

[Baa_Baa]

Portfolio rules are made to be broken and that's why I dont have any.

Have to love market diversity eh, while your gutometer has evolved, it took me decades to build my portfolio rules for different types of investments or trades, they’re always fluid but I follow them mostly and it works for me.

In any event I reckon OCA is probably one of the best long term value investments on NZX right now. Might have to evolve my portfolio rules, to take a long term advantage in this one.
😉

[alex f]

Oceania Healthcare will replace Trade Me on the NZX 50.....may explain recent activity?

[oldtech]

Have to love market diversity eh, while your gutometer has evolved, it took me decades to build my portfolio rules for different types of investments or trades, they’re always fluid but I follow them mostly and it works for me.

In any event I reckon OCA is probably one of the best long term value investments on NZX right now. Might have to evolve my portfolio rules, to take a long term advantage in this one.


A bit off-topic, but as someone who is still at the early stages of deciding what my "portfolio rules" are, I'm always interested to learn from others what works for them (and what doesn't). Wonder if you would mind sharing, just in general terms, what some of your rules and guidelines are?

PM me if you'd rather not share on the forum, or if it's going a bit too much off-topic my apologies!

[BlackPeter]

You probably mean $5.81 at $2.81 I would have spent every last cent on SUM shares.

Of course. Happens if I rely too much on my typing skills - the "2" is directly under the "5". Corrected it now.

[Maverick]

A bit off-topic, but as someone who is still at the early stages of deciding what my "portfolio rules" are, I'm always interested to learn from others what works for them (and what doesn't). Wonder if you would mind sharing, just in general terms, what some of your rules and guidelines are?

PM me if you'd rather not share on the forum, or if it's going a bit too much off-topic my apologies!
Old tech, I think " rules" should be replaced with " general policy" or as Baabaa says, a gutometer , which is "fluid and ever evolving". Rules are pointless as the only person policing them is you !
My only self test these days as to whether I'm getting a bit loopy is discussing it with my wife( obviously not the week to week stuff.). If I find myself concealing my latest "inspired brilliance " then I know I'm venturing off the reservation.

[BlackPeter]

A bit off-topic, but as someone who is still at the early stages of deciding what my "portfolio rules" are, I'm always interested to learn from others what works for them (and what doesn't). Wonder if you would mind sharing, just in general terms, what some of your rules and guidelines are?

PM me if you'd rather not share on the forum, or if it's going a bit too much off-topic my apologies!

Maybe a great theme for a new thread in the "Investment strategies" forum?

[winner69]

Back on topic .. where’s the share price heading today?

[Soolaimon]

Back on topic .. where’s the share price heading today?

Down hopefully, so I can get some more.

[couta1]

I'm hoping $1.09 is now as cheap as we will ever see them again. As I was saying yesterday that would be a no.

[Food4Thought]

Have to love market diversity eh, while your gutometer has evolved, it took me decades to build my portfolio rules for different types of investments or trades, they’re always fluid but I follow them mostly and it works for me.

In any event I reckon OCA is probably one of the best long term value investments on NZX right now. Might have to evolve my portfolio rules, to take a long term advantage in this one.
😉

Too right with long term. I strongly see this one has potential going 10 banger in 20 years. Then there's the possibility of the merger which will happen between some health providers and real estate health businesses. Dan Penã has confirmed some huge possibilities for this field globally...and he plays with cash... fiesty and wise

[oldtech]

Maybe a great theme for a new thread in the "Investment strategies" forum?

Good suggestion ... done! ;)

[trader_jackson]

Just as we were all getting excited, OCA back to $1.07, still better than the $1.04 it was at the start of the week so we should be happy

[couta1]

Just as we were all getting excited, OCA back to $1.07, still better than the $1.04 it was at the start of the week so we should be happy You need to wait till next week to get back to $1.04. Lol

[Brain]

Too right with long term. I strongly see this one has potential going 10 banger in 20 years. Then there's the possibility of the merger which will happen between some health providers and real estate health businesses. Dan Penã has confirmed some huge possibilities for this field globally...and he plays with cash... fiesty and wise

If you’re looking at a time horizon of 20 years you are clearly a younger man than I and probably
most other posters on share trader I suspect.

[rainey]

Im afraid I can only look 2 years ahead now, not 20 never mind

[777]

Im afraid I can only look 2 years ahead now, not 20 never mind

My mother used to say she wouldn't buy green bananas.

[BlackPeter]

My mother used to say she wouldn't buy green bananas.

I am sure she was a wonderful woman ... but probably not a successful investor and / or trader in bananas ;);

If you want to make money with them you better buy them green (or sell them very fast).

[Baa_Baa]

OCA has been in a defined downtrend for some time since the heady $1.20's back in Sept 2018. This week technically, it rose nicely to the downtrend line at $1.10 (just a smidge below the 200MA and also horizontal resistance since January) and then backed off to close $1.08. Nice price action, especially with the massive 15m volume through on Thursday. I reckon another crack at the resistances next week, should be interesting. OCA coming back into favour maybe, seems a cracker deal to me.

[percy]

OCA has been in a defined downtrend for some time since the heady $1.20's back in Sept 2018. This week technically, it rose nicely to the downtrend line at $1.10 (just a smidge below the 200MA and also horizontal resistance since January) and then backed off to close $1.08. Nice price action, especially with the massive 15m volume through on Thursday. I reckon another crack at the resistances next week, should be interesting. OCA coming back into favour maybe, seems a cracker deal to me.
You may find SKL's chart more to your likening.>?....lol.

[Baa_Baa]

You may find SKL's chart more to your likening.>?....lol.

Maybe, but it has nothing to do with OCA. See you on the SKL thread, maybe (nice breakout).

[percy]

Maybe, but it has nothing to do with OCA. See you on the SKL thread, maybe (nice breakout).
Has everything to do with OCA as I sold them at $1.08 them to buy SKL at $2.19.

[BlackPeter]

Has everything to do with OCA as I sold them at $1.08 them to buy SKL at $2.19.

You are saying OCA is just passing the percy gully, while on the other hand SKL just reached the percy ridge?

What is winners bowling club doing?

[winner69]

Oceania financial year nearly completed. No news as to how they went financially so must be doing OK

Underlying profit last year $52m and I don’t think think they’ve given any guidance for this year but hopefully it will be heaps more to justify the hype (my guess $72m underlying earnings)

I see they actually confirmed guidance on May 1st last year ...hmm

[percy]

You are saying OCA is just passing the percy gully, while on the other hand SKL just reached the percy ridge?

What is winners bowling club doing?

Please keep them away from SKL...lol.

[Beagle]

Oceania financial year nearly completed. No news as to how they went financially so must be doing OK

Underlying profit last year $52m and I don’t think think they’ve given any guidance for this year but hopefully it will be heaps more to justify the hype (my guess $72m underlying earnings)

I see they actually confirmed guidance on May 1st last year ...hmm

I think there's a good reason they haven't given guidance this year and that's because its so variable depending upon how many of the 272 units they (there's that euphemistic term again, "deliver") are actually delivered (AKA more conventionally known as "Sold") to incoming residents.

I think the FY19 number is quite frankly anyone's guess. OCA more a 2020 and beyond story.

[trader_jackson]

Just as we were all getting excited, OCA back to $1.07, still better than the $1.04 it was at the start of the week so we should be happy

Oh no back to $1.06

[Soolaimon]

Oh no back to $1.06

Ooops, that's my buy price.

[Beagle]

Headed back to $1.00 in my opinion as they're just as susceptible to slow sales as SUM other companies are. RYM the next shoe to drop after that.
Correct ratio according to this dog is 6 OCA = 1 SUM.

[macduffy]

Headed back to $1.00 in my opinion as they're just as susceptible to slow sales as SUM other companies are. RYM the next shoe to drop after that.
Correct ratio according to this dog is 6 OCA = 1 SUM.

So none of this "correction" is related to the 1% drop in the market generally today, which follows international markets' reaction to Trump increasing tariffs on Chinese imports?

;)

[warren]

1cent drop in a very difficult day shows the value of OCA. After having personal experience with OCA, looking at the BoD, looking at the size of the company , reviewing the growth plans , I have huge faith in OCA leaders to deliver what they say ..... an outstanding growing Company , highly regarded , backed by real value bricks and mortar , a blue chip share ,nothing more sure .

[couta1]

Headed back to $1.00 in my opinion as they're just as susceptible to slow sales as SUM other companies are. RYM the next shoe to drop after that.
Correct ratio according to this dog is 6 OCA = 1 SUM. You might be being a little too pessimistic there Beagle, as much as accumulators would love it to go back to $1 it's very unlikely now its entered the NZX50, $1.04 should be the floor I reckon. PS-Im happy to be all out of SUM others as of today(For a loss I might add)

[percy]

You might be being a little too pessimistic there Beagle, as much as accumulators would love it to go back to $1 it's very unlikely now its entered the NZX50, $1.04 should be the floor I reckon. PS-Im happy to be all out of SUM others as of today(For a loss I might add)

And I thought you were only making profits nowadays.!

[couta1]

And I thought you were only making profits nowadays.! I'm making a lot more than I'm losing. Lol

[percy]

I'm making a lot more than I'm losing. Lol

Good to hear.
Keep it up.

[winner69]

1cent drop in a very difficult day shows the value of OCA. After having personal experience with OCA, looking at the BoD, looking at the size of the company , reviewing the growth plans , I have huge faith in OCA leaders to deliver what they say ..... an outstanding growing Company , highly regarded , backed by real value bricks and mortar , a blue chip share ,nothing more sure .

Hey warren, you are slipping up

You forgot to mention the 3000 skilled staff

[Beagle]

You might be being a little too pessimistic there Beagle, as much as accumulators would love it to go back to $1 it's very unlikely now its entered the NZX50, $1.04 should be the floor I reckon. PS-Im happy to be all out of SUM others as of today(For a loss I might add)

You let the trading beast get the better of you and you sold too early. Buy back quickly at ten times the volume :D

Macca's overhang will "dog us" and is going to be an extreme test of shareholders patience.

[couta1]

You let the trading beast get the better of you and you sold too early. Buy back quickly at ten times the volume :D

Macca's overhang will "dog us" and is going to be an extreme test of shareholders patience. Macca's overhang is a Traders friend but the enemy of the impatient.

[warren]

Hello Winner
Not really a slip up, more a chance to elicit a moral boosting reply from alert investors. I DO remain impressed. They have done exactly what they said and in business that is a very fine thing. The market is absolutely littered by bull-------- who cant do that.

[couta1]

You need to wait till next week to get back to $1.04. Lol As I was saying.

[Beagle]

As I was saying.

Legend. Leave it another week and it might be back to $1.00.

[percy]

Dont you just hate it when it then goes to $1.09

Well one week later OCA's share price is $1.06.down 2 cents on my sale price of $1.08.
In the meantime the SKL I brought at $2.19 are trading up 20 cents at $2.39.
In hindsight I had great foresight..................up 10% in a week.[well positioned]