OCA - Oceania Group - retirement villages

[trader_jackson]

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]
hey percy, if we're looking at short term moves, what if you'd swapped it out into FXL.ASX last week?
OCA only down a cent on last week- that'll be more than made up in next dividend in about 2 months

[percy]

hey percy, if we're looking at short term moves, what if you'd swapped it out into FXL.ASX last week?
OCA only down a cent on last week- that'll be more than made up in next dividend in about 2 months

For an investor like me, Aussie shares offer no imputation credits.Just gross dividends .Flexi is very Flexi.In the past two years the share price has DECREASED from $2.00 to $1.67,while SKL's has INCREASED from $1.39 to $2.39.
FXL's dividend is the same as OCA's.Just a gross dividend .FXL 7.7 cps and OCA 4.7 cps.
SKL's dividend is 12.5 cps 50% imputated.Higher yield too.

[couta1]

Looking at the trading pattern later today I'd say someone is still buying for index purposes, aside from that the price would have closed at $1.04-$1.05. PS-If anyone wonders where the SP is heading over the next while have a rewatch of that old goodie movie Groundhog day.

[Joshuatree]

Far to many helicopter parents here, havnt you got something better to do then watch your net worth hourly? Take your elderly folks out maybe and buy them a hokeypokey cone etc.

[couta1]

Far to many helicopter parents here, havnt you got something better to do then watch your net worth hourly? Take your elderly folks out maybe and buy them a hokeypokey cone etc. Its called multitasking, some of us are quite apt at it.

[Baa_Baa]

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]

You sound like a trader with this one Percy. A few cents here a few cents there, possibly a good switch but your attention to the daily prices, the instant responses to any commentary here or on any thread that you own shares, and focus on the very short term price action belies a long term investors perspective. Did you make a bad call buying OCA and just quit for a better option, and was your net result positive on OCA taking into account SP movement, dividends and trading fees?

Here's a T-shirt saying I saw that you might like, "there's two types of people in the world, those that can extrapolate from insufficient information"

[percy]

Hardly a trader.More a long term investor.
The outlook for OCA for the next few years ,while the property market remains underpressure, means retirement village operators face headwinds.ie slower sales and lower margins.

At the same time the low NZ interest rates will put pressure on the NZ $.With most of their sales being offshore SKL will benefit from this.and their business is gaining momentum .

[couta1]

There are two types of traders on here being the frequent and the infrequent. Lol

[Baa_Baa]

There are two types of traders on here being the frequent and the infrequent. Lol

Yes, or the impetuous and the patient. Lol.

Been quite a week so far and only halfway through. Lots of NZX shares pretty much shrugged off the 550 point drop in the DOW, some even made some gains, maybe on the back of RBNZ dropping OCR again.

Interesting times.

[winner69]

There are two types of traders on here being the frequent and the infrequent. Lol

couts, right on.

None on here are investors per se ......we are all traders

[warren]

Hardly a trader.More a long term investor.
The outlook for OCA for the next few years ,while the property market remains underpressure, means retirement village operators face headwinds.ie slower sales and lower margins.

At the same time the low NZ interest rates will put pressure on the NZ $.With most of their sales being offshore SKL will benefit from this.and their business is gaining momentum .

Hello Percy. You are sharp and observant so lets review OCA in light of your observations above.
The big drop in cash rates has already sent investors scrambling to the stocks paying sound dividends and 4--5% is Very sound indeed. Property, yes ,interesting but with 3500 infirm folks $1150 ---$1500 per week, paid by the biggest cash house in town every single month without fail--gee that's gold Percy. And the property --all of it in big NZ cities, is not going to stay "steady' for long as we all know. And the size, 3000 staff. as Winner tells us, means this is no minnow and only going to grow (maybe much bigger). And the leadership --well Earl and Liz and an Industry specific BoD --wow.
The entry price $1 something!!!!!! geeeez get on board----------- in 3 years it'll be $5 maybe more.
OCA --What a bargain.

[couta1]

Hey Warren $5 in 3 yrs means SUM will be $25(Beagle will be happy) and RYM will be a whopping $50. PS-You might be being a TAD optimistic there.

[BlackPeter]

couts, right on.

None on here are investors per se ......we are all traders

Not the right thread, but just a clarification (asking Dr. Google):


investor: a person or organization that puts money into financial schemes, property, etc. with the expectation of achieving a profit.


trader: a person who buys and sells goods, currency, or shares.

Unless some of us acquired their shares without buying them (gift, inheritance) and never bought or sold some, we are all traders.

Unless some of us don't want to achieve a profit from our money, we are all investors (though I would argue that even without this expectation we are all "invested").

Shock, horror, we all might be both traders and investors, even if we think the other side is so despicable ...

[minimoke]

In case it has been missed


"Today's Reserve Bank interest rate cut (http://0.186.153.77/) - taking the OCR to record low of 1.5 per cent - will reignite New Zealand's housing market, Westpac chief economist Dominick Stephens says,"Mortgage rates have plunged over the past two months, and today's OCR cut will cause them to fall further," Stephens said.
"We think the consequence will be an upturn in the housing market, starting in the second half of 2019."

[Beagle]

Very helpful - http://www.scoop.co.nz/stories/BU1905/S00263/aged-care-welcomes-immigration-decision-on-nurses.htm
The other thing is that after yesterday's interest rate cut a 4.5% yield isn't looking to shabby at all.

[warren]

Hey Warren $5 in 3 yrs means SUM will be $25(Beagle will be happy) and RYM will be a whopping $50. PS-You might be being a TAD optimistic there.

Hello Mr Couta
Not quite--you are writing from a logical perspective! My somewhat different perspective about stock price suggests to me that , for ex, a WBC stock is unlikely to double to $56 in 3years BUT an undervalued stock of $1 entry point ---well lets see shall we? Again ethics, honesty, accountability, cash flow, affordable growth , sustainability and A team leadership are ,of course vital, to the growing company.

[Leftfield]

Headed back to $1.00 in my opinion as they're just as susceptible to slow sales as SUM other companies are.

Another great prediction now looking less likely IMHO.

[couta1]

Another great prediction now looking less likely IMHO. I called $1.04 last week and it hit that yesterday, I call that the new floor and $1.10 the ceiling for now.

[Joshuatree]

18/7/14

A lot of their sites have low site coverage because up until now many of them only have care centers on them so yes plenty of free land to build on. Just a reminder.I guess they still have plenty of Brown fields expansion to go?

[couta1]

18/7/14
Just a reminder.I guess they still have plenty of Brown fields expansion to go? I reckon about a third completed to date so still plenty to go.

[Ggcc]

I think beagle maybe correct with OCA heading back to $1 shortly. A pure bargain for the longterm hunter

[Joshuatree]

I reckon about a third completed to date so still plenty to go.

Thats got to be a great future generator having all that land at 2014 or earlier prices , reducing risk as well if property prices correct, which is looking unlikely to me.

[minimoke]

Went past Windermere this morning. Shes going up pretty quick. Concrete slab down. Block work now high enough to see over the fence.

[winner69]

So Tomlinson increases his holdings

Sort of reads like he got some Macquarie shares .....Or did he already own them under Macquaries name

[percy]

So Tomlinson increases his holdings

Sort of reads like he got some Macquarie shares .....Or did he already own them under Macquaries name
Lack of price certainly makes the transaction vague.
Not satisfactory.

[winner69]

Lack of price certainly makes the transaction vague.
Not satisfactory.

Using the word purchase suggests he did ‘buy’ some shares and this isn’t just a paper shuffling exercise to move some shares around to different ownerships.

Maybe if you want a few million more shares just give Macquarie a call is the game

Yes, Percy a bit vague

[trader_jackson]

anybody looked at The Sands?
I posted a month ish ago about what counts as delivered units... others mention on here (or implied) that things were gonna be all good and no worries.
I've driven past today (1 day before OCA's financial year end, and a couple days after the first residents were meant to move in) and there are about 40 workmen on site, some scaffolding on some parts, at least 1 digger, gravel, and footpaths still to have concrete in them (this is what I roughly saw anyway)... thoughts?

share price not to great either so maybe some people worrying about the 'delivery' of 100 ish units... would be a big dent on OCA's track record... and as we know, it's all about building up a track record (oh and about the NPAT)

[Harley]

anybody looked at The Sands?
I posted a month ish ago about what counts as delivered units... others mention on here (or implied) that things were gonna be all good and no worries.
I've driven past today (1 day before OCA's financial year end, and a couple days after the first residents were meant to move in) and there are about 40 workmen on site, some scaffolding on some parts, at least 1 digger, gravel, and footpaths still to have concrete in them (this is what I roughly saw anyway)... thoughts?

share price not to great either so maybe some people worrying about the 'delivery' of 100 ish units... would be a big dent on OCA's track record... and as we know, it's all about building up a track record (oh and about the NPAT)

I walked past the Sands this morning (as I do 2-3 times a week) and judging by the progress they have made in the last 2 weeks, I would say there is about another week or two of work left. A large part of the landscaping is done. There are at least 3 apartments occupied, judging by the furniture on the decks, the majority of the apartments have curtains, this would indicate a high level of completion. I notice they have installed pedestrian road crossings, one for ease of residents getting to the shops and the other for crossing the road to the beach & park, I wasn't expecting this level of consideration. The Sands sales office in the main street of Browns bay is closed down.

[trader_jackson]

I walked past the Sands this morning (as I do 2-3 times a week) and judging by the progress they have made in the last 2 weeks, I would say there is about another week or two of work left. A large part of the landscaping is done. There are at least 3 apartments occupied, judging by the furniture on the decks, the majority of the apartments have curtains, this would indicate a high level of completion. I notice they have installed pedestrian road crossings, one for ease of residents getting to the shops and the other for crossing the road to the beach & park, I wasn't expecting this level of consideration. The Sands sales office in the main street of Browns bay is closed down.

It would have almost certainly been a requirement (I would have thought) to put a crossing at some point along the road given there actually isn't any official crossings around the place, but yes, still nicely done.

So the big question is, will they consider this standard (which, like me, you are not entirely sure if you could consider it complete), enough to count the 64 independent living units and 44 care suites in FY19's development activity? It would seem it would be cheeky of them to do so, but given this development is about 45% of the total units/beds/care suites expected to be delivered this FY19, it would be a huge blow if it wasn't... I suppose the bigger question is, what is the definition of 'delivered' or 'complete' for OCA?

[BlackPeter]

I walked past the Sands this morning (as I do 2-3 times a week) and judging by the progress they have made in the last 2 weeks, I would say there is about another week or two of work left. A large part of the landscaping is done. There are at least 3 apartments occupied, judging by the furniture on the decks, the majority of the apartments have curtains, this would indicate a high level of completion. I notice they have installed pedestrian road crossings, one for ease of residents getting to the shops and the other for crossing the road to the beach & park, I wasn't expecting this level of consideration. The Sands sales office in the main street of Browns bay is closed down.

Cheers for sharing. Sounds to me like they are on plan.

[warren]

Hi Harley
I too have visited the Sands many times. IMO it is magnificent. Absolutely north facing, right in the middle of a top village and right beside the sea. I have my name down on the huge waiting list. However I note the following from 2018 NZSX announcements "1/5/2018,
Oceania Healthcare confirms earnings guidance, enhances development landbank"

Why not similar this year? Come on Directors get moving. Reliable, on the dot info builds confidence

[winner69]

Hi Harley
I too have visited the Sands many times. IMO it is magnificent. Absolutely north facing, right in the middle of a top village and right beside the sea. I have my name down on the huge waiting list. However I note the following from 2018 NZSX announcements "1/5/2018,
Oceania Healthcare confirms earnings guidance, enhances development landbank"

Why not similar this year? Come on Directors get moving. Reliable, on the dot info builds confidence


Too close to call I’d say

[Maverick]

Guys guys guys......if the Sands is or isint done within a few weeks what does it matter? I appreciate the updates, thanks for posting. But splitting hairs over some arbitrary date is unneeded pressure. Its building which involves builders and councils.besides, we know it's one thing to build em and another to fill em afterwards
I also take the view if you pay a few cents more or less then what does that really matter 5 years from now?

[Beagle]

FWIW I recently trimmed down my position at $1.06 as I think its reasonably clear that very few of the Sands units will be actually "Sold" in FY19.
SUM other company has a vastly more proven business model and history of growth to hang one's hat upon and the investment metrics are quite similar.
I guess as a bean counter I have to be true to myself and invest based on my belief that long term track record really matters !
I feel more comfortable with SUM knowing their track record and I think their senior management team and Directors are first class.
OCA needs more runs on the board before I will feel comfortable with them.

[trader_jackson]

Guys guys guys......if the Sands is or isint done within a few weeks what does it matter? I appreciate the updates, thanks for posting. But splitting hairs over some arbitrary date is unneeded pressure. Its building which involves builders and councils.besides, we know it's one thing to build em and another to fill em afterwards
I also take the view if you pay a few cents more or less then what does that really matter 5 years from now?

You're absolutely right, but given this makes up 45% of their development programme this year, wouldn't look great if they weren't able to deliver on that promise... as we know, it is crucial to be able to hit the targets you mention, and now have things slip here and there (makes OCA look like they are not really knowing what they are doing ae? Even worse if they didn't hint to the market they might not be able to deliver this material amount of FY19 building)

[percy]

FWIW I recently trimmed down my position at $1.06 as I think its reasonably clear that very few of the Sands units will be actually "Sold" in FY19.
SUM other company has a vastly more proven business model and history of growth to hang one's hat upon and the investment metrics are quite similar.
I guess as a bean counter I have to be true to myself and invest based on my belief that long term track record really matters !
I feel more comfortable with SUM knowing their track record and I think their senior management team and Directors are first class.
OCA needs more runs on the board before I will feel comfortable with them.

mmmmmmmmmmmmmmmmmm.I guess "no surprises here"...lol.

[Maverick]

You're absolutely right, but given this makes up 45% of their development programme this year, wouldn't look great if they weren't able to deliver on that promise... as we know, it is crucial to be able to hit the targets you mention, and now have things slip here and there (makes OCA look like they are not really knowing what they are doing ae? Even worse if they didn't hint to the market they might not be able to deliver this material amount of FY19 building)
TJ, By chance have you seen these developments, they are massive! I`m proud to be part of such significant projects (I was an electrician by the way, so am familiar with pointless rushing that happens in the last week) . These behemoths are so complex I am in awe they could even finish with the desired month. Also , we know that if they meet their targets or even walk on water on results day the market will continue its indifference and , sacrebleu, they not meet targets then how much lower can the SP go.
OCA have plenty of other income streams to cover the FY19 P+L so this is really just the icing on the cake.

[winner69]

First half Cash Flows were really ‘strong’ because $18m cash came in from sales recognised in FY17

If one really keen they can try to understand all the notes in the Annual Report about income and revenue recognition.

So might be a case of if curtains can be seen from the road (chosen by the new occupier) = a new sale ....even if not paid for.

Maverick probably right about it doesn’t really matter what happen before or on May 31st .....but the abysmal H1 financial results better not be repeated for H2

Still can’t fathom how they managed to sell heaps more units than pcp but made stuff all extra money v pcp

[couta1]

FWIW I recently trimmed down my position at $1.06 as I think its reasonably clear that very few of the Sands units will be actually "Sold" in FY19.
SUM other company has a vastly more proven business model and history of growth to hang one's hat upon and the investment metrics are quite similar.
I guess as a bean counter I have to be true to myself and invest based on my belief that long term track record really matters !
I feel more comfortable with SUM knowing their track record and I think their senior management team and Directors are first class.
OCA needs more runs on the board before I will feel comfortable with them. Hmm I am SUMwhat unconvinced about one of the above points, guess which one? Anyway it's clear you love SUM as much as Percy loves a certain vehicle sales company and i myself are bathing in a rather large tub of a certain unique kinda milk so each to their own.

[Leftfield]

FWIW I recently trimmed down my position at $1.06 as I think its reasonably clear that very few of the Sands units will be actually "Sold" in FY19..

Crikey Beagle, after your many many many posts praising OCA as a relatively safe long term dividend/yielding retirement sector stock we now find your thinking was/is quite short term.

I'm interested in your strategy, are you just averaging down and anticipating buying more at some stage, or are you out all together?

[winner69]

You can’t have too many of OCA ..or something like that

[couta1]

You can’t have too many of OCA ..or something like that Actually I did have too many at one point( Still plenty of red ink overall )but I'm yet to see any evidence that you can have too many ATM.

[BlackPeter]

Actually I did have too many at one point( Still plenty of red ink overall )but I'm yet to see any evidence that you can have too many ATM.

Just watch the SML saga unfolding and you might get your requested evidence :p;

[couta1]

Just watch the SML saga unfolding and you might get your requested evidence :p; Better not clog the OCA thread up talking about milk but ATM will either take over SML completely or they will find other sources to meet their needs(Actually I reckon even with complete control of SML they will still eventually need other sources)

[winner69]

Just watch the SML saga unfolding and you might get your requested evidence :p;

SML was loved by many ....but when punters lost faith in management it’s turned turtle eh

Wonder if punters could lose faith in Oceania’s management if things don’t turn out as expected

Nice guy CEO with no mongrel doesn’t inspire me .....but we do have Liz so all honky dory.

[Leftfield]

You can’t have too many of OCA ..or something like that

Tee Hee ....Best thing since sliced bread?

Whatever..... OCA is no longer favour of the month it seems.

[value_investor]

https://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=12236080

Interesting read. It really shows how early the industry is in terms of maturity which is perhaps reflected in the price at the moment. As time goes the population growth in the 70+ region will really weigh on the demand side. We are probably high on the supply side at the moment.

[Food4Thought]

https://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=12236080

Interesting read. It really shows how early the industry is in terms of maturity which is perhaps reflected in the price at the moment. As time goes the population growth in the 70+ region will really weigh on the demand side. We are probably high on the supply side at the moment.

I have been wondering about this as well. Yet it is hard to build quality quickly.

Regarding the management team. I feel the industry will be attracting plenty of attention as the money is good and the growth is going to be quicker than some other steady industries.

With my research, mostly in Australia, I feel there is a lot of potential in New Zealand.

I've spoken with many people who wish to retire in New Zealand... a beautiful safe country

[trader_jackson]

I see The Sands asking $850k+ for a two bedroom apartment and having an 'open home' days this Saturday and Sunday 10am till 3pm - I will be going down to check it out and likely post my thoughts on here.
Hope the person I'll be visiting with doesn't want a pool or spa, otherwise might have to go up the road to the Arvida village (who are also holding an 'open home' days this Saturday and Sunday 11am till 3pm).

I found it interesting in an article going back 4 odd years: https://www.stuff.co.nz/auckland/local-news/north-shore-times/68954873/... here's what I found interesting:
- The comment how "Oceania chief financial officer Matthew Ward says the company can maintain affordability for village residents through "sensible intensification" of existing sites"...I hope the 55 existing elderly in the village before moving out got a great bargain somewhere else or in the new village, and not too sure how $850k starting price is very "affordable"...
- The redevelopment was going to cost $40m... hope they stuck to that budget and we don't find out it cost $50m...
- Quite proudly mentioned "Each one of our sites is purpose-built for the community and we're very appreciative of the heritage of this site, it will retain the Maureen Plowman name." and how happy the Plowman family and salvation army (the original builders of the village back in the 1980's before OCA brought it in 2005) were... hopefully unlike the blowout in the name change, the redevelopment budget didn't blowout as well...

I also saw alot of workmen still on site, you can even still see the old Maureen Plowman sign still up... both of these things are a bit surprising given OCA will almost certainly count these 100 ish units as finished in FY19 results to be announced in a bit over a month and a half
They have to, would be to bigger blow to their development track record if they didn't

[Beagle]

Unless you've been living under a rock in Auckland for the past decade, $850K for a 2 bedroom apartment north facing right across the road from the beach at Browns Bay is exceptional value. I would have thought $1.2 - $1.4m given the outstanding location basically right on the beach.

Why don't you take a better photo of the view and post it on here :p https://www.google.com/maps/place/The+Sands+Rest+Home+%26+Village/@-36.7126008,174.7472311,17z/data=!3m1!4b1!4m5!3m4!1s0x6d0d3a5ee233fae7:0x474f5 ab74e186678!8m2!3d-36.7126008!4d174.7494198

[percy]

Agreed.
Exceptional value.

[winner69]

Unless you've been living under a rock in Auckland for the past decade, $850K for a 2 bedroom apartment north facing right across the road from the beach at Browns Bay is exceptional value. I would have thought $1.2 - $1.4m given the outstanding location basically right on the beach.

Why don't you take a better photo of the view and post it on here :p https://www.google.com/maps/place/The+Sands+Rest+Home+%26+Village/@-36.7126008,174.7472311,17z/data=!3m1!4b1!4m5!3m4!1s0x6d0d3a5ee233fae7:0x474f5 ab74e186678!8m2!3d-36.7126008!4d174.7494198

Jeez $850k at 30% margin is $280k realised profit (first time around and that’s not counting the times it resells)

That times many units is a lot of profit eh

Cool

[Jerry]

Wow! Looked at Browns Bay, lovely place... er... sea-level?

[LAC]

Jeez $850k at 30% margin is $280k realised profit

That times many units is a lot of profit eh

Cool

And you would hope that some time in the future 30% = 850k:) Only time will tell...
Got to love the model at as it stands

[minimoke]

Wow! Looked at Browns Bay, lovely place... er... sea-level?Its a worry. Sea level rise has been: 1.60 (±0.08) mm/year from 1899 to 2015

[winner69]

Its a worry. Sea level rise has been: 1.60 (±0.08) mm/year from 1899 to 2015

They say 10 metre waves to hit Auckland today (climate change to blame they say)

Or was that the other side of Auckland under threat

[percy]

Its a worry. Sea level rise has been: 1.60 (±0.08) mm/year from 1899 to 2015

No worry for me,as I very much doubt I will be still alive in another 116 years time,maybe lucky to get just another 16 years.!
Perhaps you should get a 2nd floor unit.

[bull....]

The dune system along Papamoa has an average height above mean sea level of about 8m, so when a 14m wave hits the dunes, only the top 6m of the wave flows onto the land. Once a tsunami hits land it loses about 1m of height for every 300m it travels.

dont know how accurate this info is from tga council but the japan tsunami travelled 6 miles inland

[winner69]

Full moons make high tides higher ...and if the wind blows stronger it surges even higher .....those across the road from the beach should not venture out

[bull....]

Full moons make high tides higher ...and if the wind blows stronger it surges even higher .....those across the road from the beach should not venture out

dont sleep with ear plugs in either you wont hear the siren

[davflaws]

It is not if but when! Fortunately -we are short lived creatures, and for each of us the chances of a tsunami disaster, major volcanic event, or catastrophic earthquake are tiny.

[Baa_Baa]

Does OCA have a DRP?

[Benny1]

Does OCA have a DRP?
No... Not at the present.

[Maverick]

Visited the Sands open day yesterday with a great mate. WOW!....it's STUNNING! Unbelievable position with units priced from 800k-$2.5 million. If I had not personally seen these units and position I would be concerned about OCA pricing themselves out of the market. After seeing them first hand and talking with a local multi house owner I am satisfied the asking prices are justified. FYI the $2.5 million units have nice red sold dots on them.(a total of 17 are sold and a further 7 on hold-2 residence have moved in)
The internal work seems 100% finished except the care suit floor which is scheduled in another month or so. Ground work is only half finished. I would think it needs also one more month.But it's done enough to imagine how fabulous it will be when completed.
The sales people were run off their feet taking tours and they were a bit over run with the high level of interest.
This asset must surely be the jewel in OCAs crown. I could not think of a better place to spend my later years in and, yes, even a tight ar*se like myself would pay their asking prices to live there.
I continue to hold OCA with great confidence in their business model and high quality of execution. If they need another month to finish the Sands at this calibre then they have no quarrel from me.

[BlackPeter]

Thank you for sharing your impressions, yes, this looks like a quite nice development!

For anybody living too far away to look at it in person - here is the webpage:

https://www.oceaniahealthcare.co.nz/the-sands-care

[winner69]

Thanks Maverick

Jeez, a 30% margin on a $2.5m villa is big bucks .....and more every few yearseh

[BlackPeter]

Thanks Maverick

Jeez, a 30% margin on a $2.5m villa is big bucks .....and more every few yearseh

winner, you repeatedly referred to the deferred management fees as "margin". I am sure you understand the difference between revenue (which the DMF is) and margin (which would be revenue minus cost) and am slightly confused why you would knowingly make wrong statements?

They use these fees to pay staff and materials to manage the village and maintain the grounds and typically as well to renovate the units after they are vacated.

From one of the competitors (Ryman):


The deferred management fee is your contribution to the refurbishment and management of the retirement village. It is charged on an “enjoy now, pay later” basis, and is deducted when your capital sum is repaid to you.

[winner69]

OK BP

Yes, there is a difference between ‘development margin’ and ‘realised gains on resale’ but both are profits (underlying earnings)

[BlackPeter]

OK BP

Yes, there is a difference between ‘development margin’ and ‘realised gains on resale’ but both are profits (underlying earnings)

Hmm - now I am really confused.

I assumed you are talking about the deferred management fee (since you posted "and more every few years") - which is clearly not profit (or margin), but revenue.

However - now you start talking about "development margin" which might be around 20% (not 30%) and it would be a one off gain anyway. The development margin would be the purchase price minus the development cost and yes, this would be profit.

What 30% did you talk about in your post?

[winner69]

Hmm - now I am really confused.

I assumed you are talking about the deferred management fee (since you posted "and more every few years") - which is clearly not profit (or margin), but revenue.

However - now you start talking about "development margin" which might be around 20% (not 30%) and it would be a one off gain anyway. The development margin would be the purchase price minus the development cost and yes, this would be profit.

What 30% did you talk about in your post?

Yes you are correct - deferred management fees are revenue.

Yes, there is a one off ‘development margin’ / realised gain when a unit is first sold. There last report said this was 29.5% so close to 30%


And then when that is resold they realise another gain ( though could be a loss). The realised gain on resale is the difference between the incoming residents’ ORA licence payment and the ORA licence payment previously received from the outgoing resident. They reported a 30.3% resale margin in H119 - some $5.9m realised gains on resale (included in underlying profit)

[Maverick]

Yes you are correct - deferred management fees are revenue.

Yes, there is a one off ‘development margin’ / realised gain when a unit is first sold. There last report said this was 29.5% so close to 30%


And then when that is resold they realise another gain ( though could be a loss). The realised gain on resale is the difference between the incoming residents’ ORA licence payment and the ORA licence payment previously received from the outgoing resident. They reported a 30.3% resale margin in H119 - some $5.9m realised gains on resale (included in underlying profit)
aye aye Winner, I concur captain . Plus.......
-The 30% DMF collected on exit ("enjoy now pay later"- thank you Black Peter)
-some extra "health care" profit by upselling the care suites to include premium care fees(PAC) .....on top of (if any) actual normal care profits.
All the while the asset is keeping up with the inflation of the era.(as you have mentioned with the adjusted resell ORA liscense price).
This seems a rort of our wealthy oldies but when you see what they are getting in return then it's win win for everyone.

[Blue Skies]

Thanks for your update on The Sands Maverick, that's great to hear.
I was talking to some OCA staff down country while visiting a relative recently & they were pretty excited about it too, one said if she moved to Auckland she was def keen to work there, such an appealing location for staff as well as the residents. Although costs starting at $800,000 might sound high, it's not at all for Auckland & extraordinarily cheap for a beach location.

Personally am not worried if there were any delays finishing or even if initial sales figures were not brilliant, as there's going to be so much demand for this in the future.

[Maverick]

Thanks for your update on The Sands Maverick, that's great to hear.
I was talking to some OCA staff down country while visiting a relative recently & they were pretty excited about it too, one said if she moved to Auckland she was def keen to work there, such an appealing location for staff as well as the residents. Although costs starting at $800,000 might sound high, it's not at all for Auckland & extraordinarily cheap for a beach location.

Personally am not worried if there were any delays finishing or even if initial sales figures were not brilliant, as there's going to be so much demand for this in the future.
Excellent post Blueskies-simply said but that's basically it. Good point about the staff, I'd go back to work if it was there. ( nah , who am I kidding?)
BTW, although only 2 residence have moved in so far the cafeteria is 100 % operational as per the prospectus promise.I better learn how to make a mean scone and apply for that job.

[value_investor]

Visited the Sands open day yesterday with a great mate. WOW!....it's STUNNING! Unbelievable position with units priced from 800k-$2.5 million. If I had not personally seen these units and position I would be concerned about OCA pricing themselves out of the market. After seeing them first hand and talking with a local multi house owner I am satisfied the asking prices are justified. FYI the $2.5 million units have nice red sold dots on them.(a total of 17 are sold and a further 7 on hold-2 residence have moved in)
The internal work seems 100% finished except the care suit floor which is scheduled in another month or so. Ground work is only half finished. I would think it needs also one more month.But it's done enough to imagine how fabulous it will be when completed.
The sales people were run off their feet taking tours and they were a bit over run with the high level of interest.
This asset must surely be the jewel in OCAs crown. I could not think of a better place to spend my later years in and, yes, even a tight ar*se like myself would pay their asking prices to live there.
I continue to hold OCA with great confidence in their business model and high quality of execution. If they need another month to finish the Sands at this calibre then they have no quarrel from me.

I still haven't had the chance to go out there and see it but good to hear that it has interest. I think property downturn or not, well presented properties in good locations will always be desirable.

By the sounds of it, a lot of the sales won't hit the FY19 results but possibly the FY20 half year result.

[Baa_Baa]

I still haven't had the chance to go out there and see it but good to hear that it has interest. I think property downturn or not, well presented properties in good locations will always be desirable.

By the sounds of it, a lot of the sales won't hit the FY19 results but possibly the FY20 half year result.

Happy with that, good to hear from those who visited on site, sounds and looks very impressive. Compared to the Bob Scott (RYM) low rise monolith right next to a railway commuter line (for example) it looks like heaven. Regardless of location, the standard of OCA dwellings and facilities is emerging as a differentiator.

It's times like these where true quality long term investments emerge at attractive prices. Thankfully these attractive prices sustain while not so rich folks can quietly accumulate. Maybe one day, thanks to some extent investing in OCA, we can all afford a lovely retirement by the beach.

[trader_jackson]

I went for a tour (with a few other family members) on Saturday... here are my thoughts in no particular order
- It did feel fairly unfinished, with the tour guide having to explain what a few outdoor areas should look like, it seemed we were also only allowed in 1 apartment as well (I think we had another tour group or someone having to wait outside until we were finished as our group asked a fair few questions I felt, hence took longer... if they were all finished, why couldn't they have gone into another one I wonder...). We were also not able to see Level 2 - the care suites... despite the above, I feel the build was very well done (high quality) and had some well thought out features in it.
- The show apartment felt fairly cramped (in some places) if I am honest, not terribly cramped, but a little tight around the bedroom areas for my liking, but I suppose they have to do this to squeeze as many as possible in, and it is a small site at the end of the day. ARV's units down the road I toured a year and a bit ago felt a bit more roomy.
- I like how there will only be about 100 residents... this is a smaller offering I feel those will prefer to the hundreds and hundreds (perhaps thousand(s)) of residents filed into sum other villages (where walking to and from your apartment feels more like you are transiting through an airport terminal)... in return, these smaller more niche villages (alot of ARV's are also like this by the way) will be more costly (ie higher unit prices), but, in my view, it is worth the additional cost (and there are certainly enough people who can afford this offering)
- The care suites [all and only on level 2] of which there are 40 odd start at $290k (I think it was this, 2 something) and go to $650k, the apartments of which there are 64 I think start at $750k (well $850k if you exclude the one 1 bedroom unit [lol] and go to $2.5m)... the DMF (same for both care suites and apartments I think) was pretty much the most expensive possible - 3 years, 10% each year, 30% total (ARV down the road was 30% for their apartments as well, but 7.5% over 4 years)
- They have sold over 25% of the apartments, with the first residents moving in this week (two weeks later than previously announced "late may" move in date for the first residents). I didn't think this was terribly strong, but I felt interest was very strong so things will fairly swiftly take off from here. I doubt any settlements were in FY19. Of interest, ARV's village's apartments which were finished just over a year ago (25 or so I think) were sold for an average price of $997k, I would like to think OCA's average sell price will be more around the $1.3-$1.4m mark, helped by a few top end units priced at $2.5m. The lowest priced unit (1 bedroom - of which there is only 1 [lol] is $750k). All the rest are 2 bedroom or 2+ bedroom. I personal would have liked to see a few more 1 bedrooms, but this may have come at the cost of 2 bedrooms (which start at $850k - $100k more than the one 1 bedroom unit) and hence would have reduced the amount OCA receives.
- I was intrigued with the Oceania's '3 month guarantee' where if the resident doesn't like their unit/village within this period, they can leave and get the money they paid or their unit back (I can't remember the exact name at this moment they used for it but there was a little stick on each book)... is this an Oceania wide initiative? If so, I would have thought this was mentioned in the booklet, not just a small sticker I had to inquire about.
- Another person on our tour did point out (to the group) their is no pool... I nearly felt like interjecting and telling her she could consider the Arvida village down the road if one wanted a pool ;)
- Afterwards, we had a good chat to the village manager where we went down to see the underground carpark and further my understanding of the care suite side of things (although was not allowed to go see a show care suite on that day) ... their isn't a dementia part of this facility, but there is the other 2 levels: Rest home and hospital level, so this is pretty good... I nearly felt like mentioning that if one wanted Dementia level care, they [OCA] could recommend that person head 1km ish down the road to ARV's village [Aria Bay] which will soon have this (as well as rest home, hospital, serviced apartments, independent living units).

Overall, I was impressed by the village and the village staff and pleased by the interest supposedly expressed. I do not think it is cheap at all, given I live in a 2 story 5 bedroom house with a great sea view, less than 2km away from the village, and on one of the most desirable streets in browns bay (so they say), and it is 'only' worth $1.5m (in today's market), but given the villages niche offering and desirability it will likely still sell well.

Disclosure: Before I am accused of favoring ARV heavily, please note I own substantial amounts (for me anyway) of both ARV and OCA, although do have a higher holding in ARV... I have been a shareholder of both since day 1 of their respective listings.

[Maverick]

.....I do not think it is cheap at all......
Great post Trader. Thankyou for taking the time to pass on your experience. I agree with all you have said and my tour experience was similar.
As you probably know I come from a provincial town so its good to get your local view.
A miss conception which may exist out there about this particular block is that its` focus is on late stage health care (OCA`s point of difference). IT IS MOST CERTAINLY NOT! It used to be a Salvation Army and older rest home site but now has been transformed to high end living.
Browns Bay is all about accommodating the the "rich and famous."- So are the units cheap? Hell no, but as you predict, they should sell just fine.
One last point to add- these units are available to anyone over 70 yrs old. I see this lower age as a tool used to widen the customer base, rather than dropping the price) and this age limit will no doubt ratchet up when the units start to fill up.
Personally , I applaud any company that focuses on service and quality allowing a premium price tag. (i.e the opposite of WHS).
Once again Trader Jackson, I rally do appreciate you taking the time.

[trader_jackson]

Great post Trader. Thankyou for taking the time to pass on your experience. I agree with all you have said and my tour experience was similar.
As you probably know I come from a provincial town so its good to get your local view.
A miss conception which may exist out there about this particular block is that its` focus is on late stage health care (OCA`s point of difference). IT IS MOST CERTAINLY NOT! It used to be a Salvation Army and older rest home site but now has been transformed to high end living.
Browns Bay is all about accommodating the the "rich and famous."- So are the units cheap? Hell no, but as you predict, they should sell just fine.
One last point to add- these units are available to anyone over 70 yrs old. I see this lower age as a tool used to widen the customer base, rather than dropping the price) and this age limit will no doubt ratchet up when the units start to fill up.
Personally , I applaud any company that focuses on service and quality allowing a premium price tag. (i.e the opposite of WHS).
Once again Trader Jackson, I rally do appreciate you taking the time.

Yup, it is very much transformed from the rest home that it was that is for sure... totally different product... But some saying it is a 'bargain for the area' and 'cheap' are telling porkies I reckon... it is neither of those, but service and quality are right up there that is for sure. By the way, the age of entry for the care suites is actually 65.
I got brochures on both the care suites and apartment living.

[oldtech]

Thanks for a well-written and objective report trader_jackson, I appreciate it and am sure many others do too.

[Maverick]

By the way, the age of entry for the care suites is actually 65.

Cheryl the sales lady told our group it was 70 yrs so maybe the ratcheting has already begun;)

[trader_jackson]

Cheryl the sales lady told our group it was 70 yrs so maybe the ratcheting has already begun;)

Are you sure she wasn't talking about the apartments? they are 70 years for sure.
I'll have to check the brochure when I get home to ensure I did see 65 years of entry for the care suites.

[Maverick]

Are you sure she wasn't talking about the apartments? they are 70 years for sure.
I'll have to check the brochure when I get home to ensure I did see 65 years of entry for the care suites.
My bad. I didn't realise there was a difference between them

[MauroNZ]

Thanks Maverick and Trader_Jackson for both reports, it helps a lot to read that when working from a desk in Wellington. If you guys were close enough I would be cooking an argentinian asado for you.

[iceman]

Thanks Maverick and Trader_Jackson for both reports, it helps a lot to read that when working from a desk in Wellington. If you guys were close enough I would be cooking an argentinian asado for you.

Cordero o vaca ?? :-) Maybe you should do that for the next opening in Wellington to welcome new owners :-)

[MauroNZ]

Cordero o vaca ?? :-) Maybe you should do that for the next opening in Wellington to welcome new owners :-)

Ambos ;). As you are in Nelson you will see in photos.

[Maverick]

For anybody out there interested, Goose (also a serious share holder) and I have since visited Lady Allum (AKL north shore)and Trevellyn (Hamilton)a few days after the Sands. The purspose was to see how OCA was doing in a less spectacular area than what "The Sands" is. Also to observe these slow rebuilds within existing villages as opposed to starting again from scratch. Here are some key points from our observations and discussions with staff....
-OCA modus operandi seems to own functioning dated rest homes in well healed and geographically elavated/ desirable areas and then systematically replace them with multi level high end accomodation. The result is a premium product with superior views in a wealthy catchment.
-They bowl over the low density villas etc and replace them with 3x the dwelling density.(multi story)
-Their target customers are definitely the high end from the area and these areas can afford the high price tags.
-Staff are very happy to a surprisingly high degree with their superiors and village developers.
-unit/ apartment design is continually evolving and improving in consultation with staff on the ground.
-at Lady Allum, the fairly recent completed , classic OCA, new multi story apartment development (approx $1 million each) are all full except one. This is without even the community center being built yet (a key cornerstone to any village to get new customers) ,also no pool or bowling green. They receive constant requests for units over the whole village of which they have to turn away because of no vacancies. They have five more years of development ahead of them and bought houses around them to continue expansion as required.

To conclude, I remain convinced OCA is a company who know what they doing and are doing it exceptionally well. I believe they have more than enough demand for their high end product as it comes online.

PS, I have figured they don't bother with pools or bowling greens in these areas as land is such a premium, it's not stifling demand and it surely allows them to put in another bunch of dwellings instead. I'm told by staff the oldies don't use the pools anyway. Perhaps that's one reason they can get 30% development margin.

Anyway , im super happy with OCAs staff, business model,execution and product.

[Joshuatree]

Thanks for doing the legwork and sharing. Slight sidetrack i read in a westpac handout that(right or wrong) they expect a 7% rise in NZ prop prices in the next year citing removal of cap gains tax , low interest , immigration etc.

[MauroNZ]

For anybody out there interested, Goose (also a serious share holder) and I have since visited Lady Allum (AKL north shore)and Trevellyn (Hamilton)a few days after the Sands. The purspose was to see how OCA was doing in a less spectacular area than what "The Sands" is. Also to observe these slow rebuilds within existing villages as opposed to starting again from scratch. Here are some key points from our observations and discussions with staff....
-OCA modus operandi seems to own functioning dated rest homes in well healed and geographically elavated/ desirable areas and then systematically replace them with multi level high end accomodation. The result is a premium product with superior views in a wealthy catchment.
-They bowl over the low density villas etc and replace them with 3x the dwelling density.(multi story)
-Their target customers are definitely the high end from the area and these areas can afford the high price tags.
-Staff are very happy to a surprisingly high degree with their superiors and village developers.
-unit/ apartment design is continually evolving and improving in consultation with staff on the ground.
-at Lady Allum, the fairly recent completed , classic OCA, new multi story apartment development (approx $1 million each) are all full except one. This is without even the community center being built yet (a key cornerstone to any village to get new customers) ,also no pool or bowling green. They receive constant requests for units over the whole village of which they have to turn away because of no vacancies. They have five more years of development ahead of them and bought houses around them to continue expansion as required.

To conclude, I remain convinced OCA is a company who know what they doing and are doing it exceptionally well. I believe they have more than enough demand for their high end product as it comes online.

PS, I have figured they don't bother with pools or bowling greens in these areas as land is such a premium, it's not stifling demand and it surely allows them to put in another bunch of dwellings instead. I'm told by staff the oldies don't use the pools anyway. Perhaps that's one reason they can get 30% development margin.

Anyway , im super happy with OCAs staff, business model,execution and product.

Very nice report Maverick, thanks a lot for sharing it.

[minimoke]

Thanks for the reports on the other villages.

Down my neck of the woods Windemere is making good progress. Workers out there early morning under lights. Every day there are new bits poking above the fence line.

[Maverick]

Annual report is due out in about five weeks time. I,m picking 55.1 million underlying profit.5.6% up on last year. That's a PE of 11.5 at $1.04. (I'm hopeful the market might be pleasantly surprised as low expectations are already baked into the share price)
The result will be pretty unremarkable as their new units delivered will be mostly empty at this point. I'm thoroughly convinced the company will do very well indeed in the years to come but at this stage the underlying results will most likely appear very sluggish.

[Baa_Baa]

Annual report is due out in about five weeks time. I,m picking 55.1 million underlying profit.5.6% up on last year. That's a PE of 11.5 at $1.04. (I'm hopeful the market might be pleasantly surprised as low expectations are already baked into the share price)
The result will be pretty unremarkable as their new units delivered will be mostly empty at this point. I'm thoroughly convinced the company will do very well indeed in the years to come but at this stage the underlying results will most likely appear very sluggish.

Agree, sometimes its hard to bring oneself to buying future prosperity when the immediate future looks rather flat, but at these prices every few cents makes a big difference to long term yield. Accumulation is like that, patience building a book, enjoying suppressed prices. The future takes care of itself.

[percy]

Agree, sometimes its hard to bring oneself to buying future prosperity when the immediate future looks rather flat, but at these prices every few cents makes a big difference to long term yield. Accumulation is like that, patience building a book, enjoying suppressed prices. The future takes care of itself.

Agreed.
However, sometimes you just have to stay solvent longer than the market stays wrong.!!..lol.
It is called "conviction".
Easier when the company such as OCA pays a divie.

[Brain]

https://www.stuff.co.nz/business/property/113453987/house-prices-nationwide-are-tipped-to-soar-by-20-per-cent-over-the-next-four-years

[King1212]

Great...when the economists said it is going to soar..normally will go down. Just the way the predicted interest rate....when they said it is going up....it is always down and vice versa

[winner69]

Agreed.
However, sometimes you just have to stay solvent longer than the market stays wrong.!!..lol.
It is called "conviction".
Easier when the company such as OCA pays a divie.

Pretty dumb paying dividends (unimputed as well) when they have a negative free cash flow and need to borrow more to pay the divie ......as well a build more things

[percy]

Pretty dumb paying dividends (unimputed as well) when they have a negative free cash flow and need to borrow more to pay the divie ......as well a build more things

Think you are right,and from the research I have read, they are expected to increase their divie.

[BlackPeter]

Pretty dumb paying dividends (unimputed as well) when they have a negative free cash flow and need to borrow more to pay the divie ......as well a build more things

But is this what they are doing?

Didn't went back into the financials, but according to 4-traders:

https://www.marketscreener.com/OCEANIA-HEALTHCARE-LTD-34790010/financials/

FY2018: 12.7 cents EPS, 4.7 cents dividend
FY2019: 8.65 cents EPS, 4.93 cents dividend

OK - I guess 2019 is still just a forecast, and from memory the earnings in the first HY have been pretty slim, but it still feels a bit premature to claim that they have to borrow money to pay the dividend - doesn't it?

[winner69]

But is this what they are doing?

Didn't went back into the financials, but according to 4-traders:

https://www.marketscreener.com/OCEANIA-HEALTHCARE-LTD-34790010/financials/

FY2018: 12.7 cents EPS, 4.7 cents dividend
FY2019: 8.65 cents EPS, 4.93 cents dividend

OK - I guess 2019 is still just a forecast, and from memory the earnings in the first HY have been pretty slim, but it still feels a bit premature to claim that they have to borrow money to pay the dividend - doesn't it?

Net cash from ORAs get counted in Operating Cashflows but cash for building things get counted in Investing Cashflows

Adjusting for this Operating Cash Flow F18 was $4m and they paid $13m out in divies (H119 cash outflow $4m and divies paid $16m)

Borrowings went up $69m in F18 and another $35m in H119 —- that’s $104m of which $86m funded property things (spend less income from ORAs) and $18m towards divies.

That’s how I see the cash money go round anyway

[BlackPeter]

Fair enough - though admittedly, as soon as they sell their units (and we are talking here hopefully months, not years from now), this money should be back in the kitty. Might not be as bad as for some players in other industries who need many years to repay their investments.

[winner69]

Fair enough - though admittedly, as soon as they sell their units (and we are talking here hopefully months, not years from now), this money should be back in the kitty. Might not be as bad as for some players in other industries who need many years to repay their investments.

Yep, it goes back into the kitty to build more things and not pay divies. Wouldn’t need to borrow as much to build things.

Oceania a growth company I’m told

If punters want income from Oceania they should sell a few shares every year.

[Maverick]

Just visited my last village on the tour, "meadow bank". This time I wanted to see a fully operational village with community areas fully functioning.Ordered garlic prawns for $16.50 and an Americano for $3.50($400-$4.50street value) an excellent meal and service BTW.
I'll try to keep this post short,
8 of the recently 48 delivered apartments ,stage 4, are now occupied,some selling for 2 million.
All of last years delivered units are now full,
The care suite deliveries appear well filled but the sales lady could not confirm numbers as this is not her area.
The cafeteria staff, sales lady and groundsman ,once again,love working in the villages and under OCA management.
The stages are now arriving BEFORE time deadlines as building systems are streamlined. Stage 4 was handed over one week ahead of schedule. Where in history of the world has this ever happened?
Stage 5 now well underway and going even smoother.
The finishing and final product offering ,as always, is superclassy, as stunning as the Sands is.
Both of the residents I spoke to went to pains to tell me how happy they are there. One said the place is heads and shoulders above other offerings in the area she was choosing from,including RYM.

This wraps up my tour and to some up in a few sentences
I think this years upcoming result will appear rather poor as the recent new deliveries are fairly empty. I can't see SP will going anywhere soon upon the upcoming annual result. However, Next year will be a WHOLE different story, these offering will be all but full with the machine in full swing with years of continuous pipeline being developed. This is a fabulous company which is doing something quite special which has not yet been realised by the market or investors yet.

My investment strategy in OCA comes from a quote on this forum" better to be two hours too soon than one muinute too late." So FOMO keeps me holding through this protracted desert patch. I continue to believe with great confidence "you just can't have too many"

[MauroNZ]

Just visited my last village on the tour, "meadow bank". This time I wanted to see a fully operational village with community areas fully functioning.Ordered garlic prawns for $16.50 and an Americano for $3.50($400-$4.50street value) an excellent meal and service BTW.
I'll try to keep this post short,
8 of the recently 48 delivered apartments ,stage 4, are now occupied,some selling for 2 million.
All of last years delivered units are now full,
The care suite deliveries appear well filled but the sales lady could not confirm numbers as this is not her area.
The cafeteria staff, sales lady and groundsman ,once again,love working in the villages and under OCA management.
The stages are now arriving BEFORE time deadlines as building systems are streamlined. Stage 4 was handed over one week ahead of schedule. Where in history of the world has this ever happened?
Stage 5 now well underway and going even smoother.
The finishing and final product offering ,as always, is superclassy, as stunning as the Sands is.
Both of the residents I spoke to went to pains to tell me how happy they are there. One said the place is heads and shoulders above other offerings in the area she was choosing from,including RYM.

This wraps up my tour and to some up in a few sentences
I think this years upcoming result will appear rather poor as the recent new deliveries are fairly empty. I can't see SP will going anywhere soon upon the upcoming annual result. However, Next year will be a WHOLE different story, these offering will be all but full with the machine in full swing with years of continuous pipeline being developed. This is a fabulous company which is doing something quite special which has not yet been realised by the market or investors yet.

My investment strategy in OCA comes from a quote on this forum" better to be two hours too soon than one muinute too late." So FOMO keeps me holding through this protracted desert patch. I continue to believe with great confidence "you just can't have too many"

Fantastic report Maverick, that helps a lot to understand when the next report comes. Thank you for sharing your own experience.

This reminded me a bit what I read about Warren Buffet in the Elena Chirkova's book that he went to have dinner at a restaurant and chose to sit close to the counter so he could see how many people will pay with AMEX.

[Filthy]

thanks Mav. great summary

[Jay]

yeah thanks Maverick, we'll keep you on :t_up:

[Blue Skies]

My thanks also for a great report Maverick.

I like that saying, ...'better to be 2 hours early than a minute late'. Has worked well for me.

[Blue Skies]

Plenty of support immediately under OCA's todays closing price 103, esp compared to rather thin support under SUM.

Disc, hold both though more OCA

[trader_jackson]

Plenty of support immediately under OCA's todays closing price 103, esp compared to rather thin support under SUM.

Disc, hold both though more OCA

If you want to see support, go have a look at ARV
and tell em' I sent ya

[whatsup]

If you want to see support, go have a look at ARV
and tell em' I sent ya

Now we know why !

[bull....]

If you want to see support, go have a look at ARV
and tell em' I sent ya

arv far superior , people might switch to arv from oca and get the rights looking at the volume in arv this morning

[trader_jackson]

High volume probably also Forsyth/their clients happy to sell out at an instant premium of about 7-8% on the cheap shares that were allocated (placement shares).
I have tried to argue for years that ARV have a superior offering - great to see this finally seems to be accepted by Mr Market and others... as some famous investment guy said "it is when the tide goes out that you discover who is swimming naked"... and the tide is going out right now (temporarily at least) in this sector

[warren]

High volume probably also Forsyth/their clients happy to sell out at an instant premium of about 7-8% on the cheap shares that were allocated (placement shares).
I have tried to argue for years that ARV have a superior offering - great to see this finally seems to be accepted by Mr Market and others... as some famous investment guy said "it is when the tide goes out that you discover who is swimming naked"... and the tide is going out right now (temporarily at least) in this sector

Fair enough Mr Trader. BUT I have been suggesting that OCA is a superior investment and I firmly stand by that opinion.
GDY exactly the same . Entry price near to 30% lighter in favour of OCA.
OCA has Magnificent care and a care independence model that my own family have enjoyed.
Tremendous quality share for a buck in my opinion and i have backed that with a considerable investment.
Cheers and good investing.

[warren]

Hello Forum contributors.
Where has Beagle gone? I miss his really insightful and knowledgeable posts. Is he is the sun on the Gold Coast ?

[Benny1]

Hello Forum contributors.
Where has Beagle gone? I miss his really insightful and knowledgeable posts. Is he is the sun on the Gold Coast ?

Hi Warren... He's been banned from this site.
There is another forum where you can find him.. But won't say it on here as I don't want to suffer the same fate!

[trader_jackson]

Hello Forum contributors.
Where has Beagle gone? I miss his really insightful and knowledgeable posts. Is he is the sun on the Gold Coast ?

You might find, dare I say it, Beagle is not so positive on OCA these days...
in fact that other place seems to have brought up recently a few things I was concerned about a month or two ago on here

[BlackPeter]

[QUOTE=warren;765189]Hello Forum contributors.
Where has Beagle gone? I miss his really insightful and knowledgeable posts. Is he is the sun on the Gold Coast ?

[fish]

Hi Warren... He's been banned from this site.
There is another forum where you can find him.. But won't say it on here as I don't want to suffer the same fate!

I dont know for sure why he was banned-we havnt heard both sides of the story.

I do now if you want to make ?fat profits you need to study all the information available then make your own judgement

[fish]

[QUOTE=warren;765189]Hello Forum contributors.
Where has Beagle gone? I miss his really insightful and knowledgeable posts. Is he is the sun on the Gold Coast

[dabsman]

Whats everyone's pick for dividend? 2.6c final last year. My guess it it will stay put

[winner69]

Whats everyone's pick for dividend? 2.6c final last year. My guess it it will stay put

Shouldn’t be paying divies

Cash flow negative every year .....keep borrowing more and more ......and pay divies ...hmm


But they will seduce you dabsman with maybe a 3 cent divie maybe.

[Ggcc]

Shouldn’t be paying divies

Cash flow negative every year .....keep borrowing more and more ......and pay divies ...hmm


But they will seduce you dabsman with maybe a 3 cent divie maybe.
Whether it be for dividend or to expand, all retirement stocks borrow money. As long as their Value (NTA) keeps increasing and does not go backwards

[winner69]

Whether it be for dividend or to expand, all retirement stocks borrow money. As long as their Value (NTA) keeps increasing and does not go backwards

paying unimputed divies the taxman at least gets a small cut of the earnings ...with shareholders paying it

[trader_jackson]

Oh no, one broker (who is very ambitious with their share price target on SUM) has come out with a preview of what they reckon we'll expect... and it ain't that pretty... OCA's 3rd annual report since being listed, and earnings are going backwards they say... I remember some other dog in this sector starting with A never, ever having earnings per share contracting since they listed (and they've been listed far longer than OCA), and yet sum people have much more favorable views of OCA than that dog ARV...
ironic really, given OCA is not building a very good track record at all, and yet this was number 1 pick on sharetrader for this years stock picking contest and has many rampers, sum of whom then don't like the listed dog that has a better track record

At least forsyth reckon dividend is go increase from 4.7c last year to 4.8c this year... but underlying EPS is going backwards 7% they say

OCA cheap at least

[trader_jackson]

https://www.nzx.com/announcements/338084

Actually a tad better than I was expecting... Still looks very complex compared to others in the listed sector... DRP at least (also means they need more cash and probably worried they are beginning to borrow to much - as I previously mentioned)
What is this impairment on something in the care division? That other dog ARV never had that... Aged care division keeps going down in profitability 3 years running now, interesting ARV isn't impacted by this trend (in fact the opposite has happened)
Care, Village Operations & Corporate costs flat or going down over the medium term... not sure if this is a good or bad thing (not really sure what this means)
Resale margins dropping, embedded value barely going up (isn't this value quite important for future earnings? some creative accounting going on here as well...), development margin going up still at least.
Net Debt up a whopping 65% on prior year

One thing is for sure, ARV looks pretty flash compared to OCA!
ARV also bigger now as well.

[bull....]

i say it again OCA remain dependant on trading gains in a rising property market for a big chunk of there profit. hence why there net profit is down as property market is flat

[trader_jackson]

wow ARV's Basic earnings per share is 90% higher than OCA's... yet ARV's share price is only 28% higher than OCA... ARV is the bargain round here, OCA not so cheap really...

[Well Endowed]

didn't realise this was the ARV thread

[percy]

Pretty average sort of result.
Currently not holding.

[trader_jackson]

didn't realise this was the ARV thread

OCA is often compared to ARV as they are fairly similar in business model... yet many who 'love' (or previously loved) OCA, are staunchly against ARV... funny stuff really. But yes, I'll try stop highlighting why ARV is a better company than OCA, OCA's result today helps highlight this enough (when compared to the similar ARV)

I hold both ARV and OCA shares afterall (and have done since they both listed respectively) and I think they both have the right model in the long term, just surprised OCA is having a few more 'issues', that will hopefully be short lived... certainly glad I hold 2x more ARV shares thats for sure... I really need to install the upgrade as I'm sure the normal rampers of OCA (and opponents of ARV) no longer post much on here

[forest]

The bits that matters are up, comprehensive income and operational cash flow


Total Comprehensive Income has
increased by 22.1% to $99.8m over the
year. This measure takes into account the
enhanced value that we are adding to our
aged care business as we bring new care
suites onto the market.


Operational cashflow up more than 8%

[trader_jackson]

Can anyone find in OCA's announcements this morning any reference to facilities with 4 year certification? for a company that is (supposed) to be so care focused, there seems to be very little info on 'benchmarks' around their care offering/service itself, such as facilities with 4 year certification

[bull....]

Oh no, one broker (who is very ambitious with their share price target on SUM) has come out with a preview of what they reckon we'll expect... and it ain't that pretty... OCA's 3rd annual report since being listed, and earnings are going backwards they say... I remember some other dog in this sector starting with A never, ever having earnings per share contracting since they listed (and they've been listed far longer than OCA), and yet sum people have much more favorable views of OCA than that dog ARV...
ironic really, given OCA is not building a very good track record at all, and yet this was number 1 pick on sharetrader for this years stock picking contest and has many rampers, sum of whom then don't like the listed dog that has a better track record

At least forsyth reckon dividend is go increase from 4.7c last year to 4.8c this year... but underlying EPS is going backwards 7% they say

OCA cheap at least


i was virtually castrated online by the rampers of this stock for even mentioning it was not that good and funny enough some of the biggest rampers are not even that bullish on it anymore. very hillarious

[44wishlists]

On top of the expected OCA result, I am just thinking why Beagle is banned from this forum, while trader_jackson can still be here, constantly singing for ARV?

[trader_jackson]

On top of the expected OCA result, I am just thinking why Beagle is banned from this forum, while trader_jackson can still be here, constantly singing for ARV?

I'm not sure why Beagle was banned to be honest so I won't speculate, but seeing he is no longer a holder of OCA (unlike myself), I doubt he will be constantly singing praises of OCA...
Just always found it ironic how he backed, rather heavily at times, OCA over ARV, to the extend of bordering rubbishing ARV (something I don't do, to either SUM or OCA)... despite ARV more clearly than ever before having a better track record (past and present)

[bull....]

might go under $1 today. was not a good report market thinks

[whatsup]

Looking sub $1.00 hmmmmm !

[Ggcc]

All in all I think todays results were not as bad as I had predicted. I am happy to keep holding for now, as I believe next years result will paint a more accurate picture of how the business is operating.

I also don't see the elephant dropping shares at these prices in the near future. They may consider offloading a few more when it goes past $1.10 again.

[forest]

All in all I think todays results were not as bad as I had predicted. I am happy to keep holding for now, as I believe next years result will paint a more accurate picture of how the business is operating.

I also don't see the elephant dropping shares at these prices in the near future. They may consider offloading a few more when it goes past $1.10 again.

Ggcc, I think todays results were quite good. It is just that the headline numbers are not showing the full picture.
When I understood the comprehensive income and the way new stock gets valued the results are looking a lot better to me.

I think there are quite a few who opine without having read that deep into the presentation. :)

[macduffy]

I agree, forest. OCA 's been subject to a lot of over-hyping at times - now the pendulum is tending to swing too far in the opposite direction.

[Baa_Baa]

I agree, forest. OCA 's been subject to a lot of over-hyping at times - now the pendulum is tending to swing too far in the opposite direction.

Me too, agree that is.

[trader_jackson]

You might find, dare I say it, Beagle is not so positive on OCA these days...
in fact that other place seems to have brought up recently a few things I was concerned about a month or two ago on here

Warren asked on the 6th of this month where has Beagle gone, I replied to him with this... I wonder where has warren gone?
Would be interesting to hear his thoughts in these (seemingly) increasingly dark times

[bull....]

Warren asked on the 6th of this month where has Beagle gone, I replied to him with this... I wonder where has warren gone?
Would be interesting to hear his thoughts in these (seemingly) increasingly dark times

beagle seems to be quite negative on the company now reading his posts , as i tried to say he was probably a trader all along ( nothing wrong with that)

[percy]

Finished the day at $1.03,down just 4 cents..

[sb9]

I agree, forest. OCA 's been subject to a lot of over-hyping at times - now the pendulum is tending to swing too far in the opposite direction.

Well if Maccas decide to offload another tranch, we might see sp drift even further.

[percy]

Well if Maccas decide to offload another tranch, we might see sp drift even further.

That would be interesting.

[warren]

Warren asked on the 6th of this month where has Beagle gone, I replied to him with this... I wonder where has warren gone?
Would be interesting to hear his thoughts in these (seemingly) increasingly dark times
Hello TJ.
I've have been quiet of late as I patiently awaited the OCA result.
1. Not bad-- Not bad. Cash flow to die for.
2. Loans way up but, hey, you try building a new house to add to your asset collection and if a loan takes your collection to $1.4 bill so be it.
3. I do like directors/ company leaders who firmly deal with the tough stuff as well as the nice stuff and do we get that here ?
4. I like the Director purchases of OCA share very much------ compare that with the leaders of a certain NZ insurance company dumping many millions of their own shares onto buyers before -------(Nothing and I mean nothing excuses that type of action --not "a free market", not "mine to sell"----Nothing).
5. i personally am utterly in agreement with the Care Suite concept having experienced the value personally.
6. A 2 year old company I brought into for a buck paying me 4.7% on money I had in the bank !!!!!!
Bloody beautiful my mate TJ.

[Joshuatree]

beagle seems to be quite negative on the company now reading his posts , as i tried to say he was probably a trader all along ( nothing wrong with that)

He was, pumped the hell out of anything he was in and trashed anything he was out of. Rinse and repeat. Still we aren't all perfect, his accountantcy analysing skills of a companies results was freely shared, with a human bias. Dont miss the ramping though. Life gets on and we have you Bull as a contrarian ,which is healthy.

[allfromacell]

Does anyone know where to go to join the new drp?

[hogie]

Does anyone know where to go to join the new drp?

I guess we will be getting an email about that in due course?

[Kelvin]

Does anyone know where to go to join the new drp?

You would apply through the Computershare investor portal. However i tried to do so today, and it's not ready to take applications yet

[Snow Leopard]

....his accountantcy analysing skills of a companies results was freely shared, with a human bias....
He let his emotions get in the way of his accountancy 'skills' far too often.

For better or worse I bought into these a couple of years ago, still have them, but made very little profit so far :(.

Still to analyse the results, but will probably just keep them and join the DRiP, subject to completely changing my mind when I analyse the results. :confused:

[44wishlists]

You would apply through the Computershare investor portal. However i tried to do so today, and it's not ready to take applications yet

It's ready now. I just signed up for the DRP via Computershare.

10695

[value_investor]

Thoughts and observations after reading the annual report:

- Its no easy feat for a company to actually deliver projects on time so to do all three on time and on budget is very impressive. Other companies are obviously not doing things right as it seems impossible in the industry. It seems as though sales numbers from The Sands aren't being recognised (except for a few) according to the presentation in the current period.

- The recent increase in wage costs has really slowed down the lucrative and talked up premium care side of the industry. Interesting to see that employee costs went up faster than revenue. I'm not sure if anything can be done here, as decreasing staff numbers reduces quality care. This is going to be a problem going forward, there's a line there of other expenses that will rise with revenue. Its importance is understated, but repairs and maintenance, consumables, insurance, and legal are all going to continue increasing as well.

- The DRP is really going to put a dampener on the ability of the company to increase earnings per share if they can't generate consistent year on year earnings. I'm not the biggest fan of DRP's as it dilutes all the existing shareholders, but I can understand it for companies growing very fast and need the money. I'm not sure if they can afford to be paying a dividend in the first place as the operating earnings in the cash flow don't cover the investing activities and the shortfall is in borrowings to pay a dividend.

I will continue holding my position, still makes a small part it. I think the care side of the business, and the whole industry really is still very early. Its not hit the critical mass in terms of retirement yet. The money is on the development side, which the company has shown it can do. I'd accumulate in the sub $1 basis, as a long term hold of the portfolio.

[Lewylewylewy]

In the property industry, cash (loans or otherwise) = profit. Therefore drp is good imo.

[winner69]

WOW ....that's all that can be said

Oceania windfall: $30m development margin expected at new $90m Browns Bay project



https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12257132

[Baa_Baa]

WOW ....that's all that can be said

Oceania windfall: $30m development margin expected at new $90m Browns Bay project



https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12257132

Impressive eh! "once sales are complete", in the meantime we can buy it for $1 a share. :eek2:

[Beagle]

$30m net, if really achieved, see below, amounts to a one-off ~ 4.9 cents per share for a project that's taken years to bring to fruition.
Of course they have many other projects on the go so its easy enough to make the case that "decent sized" development profits will be a feature for the next 7-8 years as they slowly work through the process of transforming their business model and selling it down.

So what is decent sized development margins ?
Couple of thoughts.
Development profits are significantly watered down by extra staff costs they carry throughout the redevelopment of older facilities.
They primarily use fixed price construction contracts with external parties, (like Naylor Love) but project manage the process themselves.

I would think when the Sands construction project was executed construction costs were quite significantly lower than current costs. It has been reported that construction cost inflation has been running at about 10% per annum in Auckland.

Whilst projects in FY19 and fixed price construction contracts related thereto, tendered perhaps as much as 2 years previously, have enabled strong development margins I am expecting that OCA, just like SUM, are not immune to the reality of rapidly rising costs so they will feel the pressure on those margins going forward.

SUM warned of a return to a long run expectation of 20-25% margins. I think that gives us a valuable insight into what might be a reasonable expectation going forward.

Fair enough they trumpet their accomplishment on this development, they have done well with it. Looking forward though..

Just one other thought. No developer I have ever done the books for really knows their net profit after costs until the units are all eventually sold down and all the holding costs from development loan(s) are all tallied up. OCA bean counters must be a lot more clever than me so they have probably estimated all the development loan / holding costs in advance with their feasibility study...but what if they're wrong and the units are slower to sell or they don't quite achieve the asking prices and / or have to get involved in significant sales incentives ?

[fish]

$30m net, if really achieved, see below, amounts to a one-off ~ 4.9 cents per share for a project that's taken years to bring to fruition.
Of course they have many other projects on the go so its easy enough to make the case that "decent sized" development profits will be a feature for the next 7-8 years as they slowly work through the process of transforming their business model and selling it down.

So what is decent sized development margins ?
Couple of thoughts.
Development profits are significantly watered down by extra staff costs they carry throughout the redevelopment of older facilities.
They primarily use fixed price construction contracts with external parties, (like Naylor Love) but project manage the process themselves.

I would think when the Sands construction project was executed construction costs were quite significantly lower than current costs. It has been reported that construction cost inflation has been running at about 10% per annum in Auckland.

Whilst projects in FY19 and fixed price construction contracts related thereto, tendered perhaps as much as 2 years previously, have enabled strong development margins I am expecting that OCA, just like SUM, are not immune to the reality of rapidly rising costs so they will feel the pressure on those margins going forward.

SUM warned of a return to a long run expectation of 20-25% margins. I think that gives us a valuable insight into what might be a reasonable expectation going forward.

Fair enough they trumpet their accomplishment on this development, they have done well with it. Looking forward though..

Just one other thought. No developer I have ever done the books for really knows their net profit after costs until the units are all eventually sold down and all the holding costs from development loan(s) are all tallied up. OCA bean counters must be a lot more clever than me so they have probably estimated all the development loan / holding costs in advance with their feasibility study...but what if they're wrong and the units are slower to sell or they don't quite achieve the asking prices and / or have to get involved in significant sales incentives ?

If they are wrong Kerry Prendagast,a director will lose a lot more after buying a further 100.000 shares on market last week at 103 cents-they are now 101 cents.
Maybe time to buy more .
They seem to have large margins of all kinds that keep repeating .

[Ggcc]

https://www.nzx.com/announcements/338962

And they keep accumilating more shares

[fish]

https://www.nzx.com/announcements/338962

And they keep accumilating more shares
I see its over a million shares !

[Baa_Baa]

https://www.nzx.com/announcements/338962

And they keep accumilating more shares

Huge vote of confidence, not chump change either! Slap down a couple of hundy for Stockton and eight hundy for Tomlinson, great stuff when insiders see the value and put their (substantial) money where their mouth is.

[couta1]

Huge vote of confidence, not chump change either! Slap down a couple of hundy for Stockton and eight hundy for Tomlinson, great stuff when insiders see the value and put their (substantial) money where their mouth is. Agree and a great Long term hold but I dont see any hurry to hold an XXXOS position again over the next year or so, not forgetting also that Macca will be keen to spit out several truckloads of peanuts as soon as the price has any significant rise.

[fish]

Agree and a great Long term hold but I dont see any hurry to hold an XXXOS position again over the next year or so, not forgetting also that Macca will be keen to spit out several truckloads of peanuts as soon as the price has any significant rise.

Who knows
I personally have been buying a lot at this knock down down price

[forest]

Who knows
I personally have been buying a lot at this knock down down price

Director Alan Isaac bought as high as $1.14 some time ago, five other directors have been buying shares for $1.10

Also remember that more than 3 mil Long Term Incentive shares are available to selected employees if OCA reach the financial target. According to Winner some time ago this target was 13.8c a share.

I can see a few positive there for you. Wish you well.

[RTM]

Another flash village to be built.
Wonder how the sales of The Sands units are going ?

https://www.oceaniahealthcare.co.nz/the-sands-village
I see the entry age is ....
Minimum age of entry for residents is 70 years.

But trademe is saying 65 ?
https://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?search=1&cid=9017&sidebar=1&rsqid=f8d140e75aff4da888fd569fa574ef7d-001&132=PROPERTY&selected135=7&134=1&135=5&153=The+Sands+Apartment&29=Apartment&49=0&49=0&178=0&178=0&sidebarSearch_keypresses=39&sidebarSearch_suggested=0

20/08/2019 10:00

GENERAL
NOT PRICE SENSITIVE
REL: 1000 HRS Oceania Healthcare Limited

GENERAL: OCA: Resource consent issued for Waimarie Street Development

RESOURCE CONSENT ISSUED FOR WAIMARIE STREET DEVELOPMENT

Oceania Healthcare is pleased to announce that it has obtained resource
consent from Auckland Council for its development at Waimarie Street in St
Heliers, Auckland. The resource consent application was publicly notified,
and the application was heard before a Council Hearing Panel on 22 and 23
July 2019.

Oceania Healthcare initially acquired 8,945m2 of land in Waimarie Street in
March 2018 and subsequent purchases of neighbouring properties in the second
half of 2018 increased Oceania Healthcare's holding to 13,464m2.

The premium integrated aged care centre and retirement village complex will
comprise 76 independent living apartments and 31 luxury care suites, together
with undercover parking and community facilities. The property is in an
excellent location with strong demand for Aged Care and Retirement Village
living.

Oceania Healthcare Chief Executive Officer, Earl Gasparich said "We are
delighted to have received the consent for our Waimarie Street development.
This site presents a unique opportunity for us to construct a boutique
village in the heart of St Heliers, with most units enjoying stunning views
over the Waitemata Harbour and the Auckland CBD. The development is an
integral part of Oceania Healthcare's strategic growth plan and will be the
first "greenfield" development that we have undertaken. With the resource
consent now granted, we are putting the finishing touches on the design of
the village and are looking forward to construction starting in the second
half of 2020."

[Food4Thought]

Is it too late to get in on the divi? If stocks bought of late?

Cheers

[percy]

Is it too late to get in on the divi? If stocks bought of late?

Cheers

Yes as they went ex dividend on 9th August.

[Beagle]

Great result on the consent for the WAIMARIE development.

RTM - Care suites entry age is advertised at 65 which is perplexing ? I guess its quite plausible to be 65 and need help, all depends upon one's state of health.
https://www.trademe.co.nz/property/retirement-villages/auction-2212631514.htm?rsqid=9d3fe6dcda1c47d6ac43be4b790b5 605-002
A little birdie in the industry tells me that the entry age into facilities can become more flexible when sales are slow. Wonder if that's a factor already ?

[percy]

Offcourse that is true,otherwise they will get hounded by the Beagles on ST..!!.
And no one wants to hear them in full flight.!!
Even worse after they have had a glass of A2 milk.
Does not seem to agree with the neighbours.!
P & P.[pitiful and painful]..lol.

[Food4Thought]

Yes as they went ex dividend on 9th August.

Excellent

Thank you Percy. Then I'll wait a bit and see how the divi reinvestment comes along and adds to the solid bundle for this <40 year old.

I enjoy a great divi play.

Hard to hold onto cash with these low prices. 👌

[dobby41]

RTM - Care suites entry age is advertised at 65 which is perplexing ? I guess its quite plausible to be 65 and need help, all depends upon one's state of health.

I don't see what is perplexing. Cold hearted really.
A care suite admission implies ill health so shortened life span (you wouldn't be wanting a care suite if you still ran half marathons).
Allowing them in at 65 will fill the beds while still allowing a reasonable turnover when they 'leave'.

[Beagle]

Offcourse that is true,otherwise they will get hounded by the Beagles on ST..!!.
And no one wants to hear them in full flight.!!
Even worse after they have had a glass of A2 milk.
Does not seem to agree with the neighbours.!
P & P.[pitiful and painful]..lol.

Looks like you had more liquor in your A2 milk last night than I did LOL :p

[RTM]

I don't see what is perplexing. Cold hearted really.
A care suite admission implies ill health so shortened life span (you wouldn't be wanting a care suite if you still ran half marathons).
Allowing them in at 65 will fill the beds while still allowing a reasonable turnover when they 'leave'.

I guess that’s right Donny. These guys will be experts with respect to the statistics of ageing.

[Beagle]

Sorry, I don't understand the cold hearted sentiment ? What am I missing ?
Some people have strokes or any other number of debilitating health issues and often need help long before others.
How is it cold hearted allowing those people who need help to move into a care suite earlier so they can get the help they need ?
Are you suggesting there should be no age limit ?
My understanding is the average age of entry is mid 8o's so isn't a 20 year variation around the average fair and reasonable ?

[RTM]

Sorry, I don't understand the cold hearted sentiment ? What am I missing ?
Some people have strokes or any other number of debilitating health issues and often need help long before others.
How is it cold hearted allowing those people who need help to move into a care suite earlier so they can get the help they need ?
Are you suggesting there should be no age limit ?
My understanding is the average age of entry is mid 8o's so isn't a 20 year variation around the average fair and reasonable ?

I'm not saying that its not fair....they are running a business after all.
But for me the "cold hearted" piece comes from the ages being set from a simple assessment of the numbers. And not based on peoples needs.
As I said...they will be experts with respect to the statistics of ageing. That's great. I'm a shareholder.

[Beagle]

Okay I see where you're coming from which is fair enough but my perspective is they are running a retirement village not a general medical facility for the public of any age so given the normal entry age to a care suite is mid 80's, setting a minimum of 65 seems quite reasonable. I think RYM are 70 or is it 75 now ?

[RTM]

Okay I see where you're coming from which is fair enough but my perspective is they are running a retirement village not a general medical facility for the public of any age so given the normal entry age to a care suite is mid 80's, setting a minimum of 65 seems quite reasonable. I think RYM are 70 or is it 75 now ?

I don't think anyone is disagreeing. I would have used "dispassionate" rather than "cold hearted". A little kinder.

[dobby41]

I don't think anyone is disagreeing. I would have used "dispassionate" rather than "cold hearted". A little kinder.

Words - whatever makes you feel better.
The upshot is that the ages are set based on expected live span to enable the company to recycle the units.
It's a business and they want to make money (for me the shareholder).

[Beagle]

Shown elsewhere on their website but the industry leader RYM say their villages are designed for people 70+ and there is no mention of a lower age for care in an apartment so it would appear OCA are (as I suggested earlier in this thread) quite generous with their 65 year age limit on care suites.
FWIW here's RYM's brochure on assisted living in independent apartments. https://issuu.com/rymanhealthcareltd/docs/rymannz-serviced-apartment-booklet.?fr=sYWYyNzY3Nzgx

[RTM]

Shown elsewhere on their website but the industry leader RYM say their villages are designed for people 70+ and there is no mention of a lower age for care in an apartment so it would appear OCA are (as I suggested earlier in this thread) quite generous with their 65 year age limit on care suites.
FWIW here's RYM's brochure on assisted living in independent apartments. https://issuu.com/rymanhealthcareltd/docs/rymannz-serviced-apartment-booklet.?fr=sYWYyNzY3Nzgx


Words - whatever makes you feel better.
The upshot is that the ages are set based on expected live span to enable the company to recycle the units.
It's a business and they want to make money (for me the shareholder).

I don’t think there is any value in continuing this train of thought on here.

[Mudfish]

Greg T, another 500,000....just saying.

[winner69]

AGM tomorrow

Might give some guidance for 2020 ....remember $84m Underlying is the hurdle under the Exec LTI

[Beagle]

Greg T, another 500,000....just saying.
Macquarie have plenty more waiting for him.


AGM tomorrow

Might give some guidance for 2020 ....remember $84m Underlying is the hurdle under the Exec LTI
Maverick been a bit quiet lately. I think they have no chance of getting to $84m or anywhere close with their problem with rampant expense growth.

With much slower growth in real estate prices tight well disciplined control over costs, both operational and building development should be front and centre for all companies in this sector.

[winner69]

Macquarie have plenty more waiting for him.


Maverick been a bit quiet lately. I think they have no chance of getting to $84m or anywhere close with their problem with rampant expense growth.

With much slower growth in real estate prices tight well disciplined control over costs, both operational and building development should be front and centre for all companies in this sector.

But I was led to believe that 15% pa underlying earnings growth over 3 years was a given ....and LTI targets aren't usuallt set very high are they

[percy]

Greg T, another 500,000....just saying.

A very astute investor..............just saying.

[trader_jackson]

AGM tomorrow

Might give some guidance for 2020 ....remember $84m Underlying is the hurdle under the Exec LTI

I can't see alot of guidance present... can anyone else?

[Beagle]

AGM tomorrow

Might give some guidance for 2020 ....remember $84m Underlying is the hurdle under the Exec LTI

No guidance given. Sales of Sands apartments have been going well since balance date but care suite sales are slow, in my opinion.

A reminder that it will take them approx. 3 years from now to get to a 50 / 50 basic care to new ORA business model and we still have the 42% Macquarie overhang.

[winner69]

No guidance given. Sales of Sands apartments have been going well since balance date but care suite sales are slow, in my opinion.

A reminder that it will take them approx. 3 years from now to get to a 50 / 50 basic care to new ORA business model and we still have the 42% Macquarie overhang.

Earl must be getting a bit bored of repeating the same stuff and showing the same pictures over and over again.

Jeez shareholders are a pain ...but a necessary burden

[tuaman]

Getting too much competition in this sector?

https://www.stuff.co.nz/business/115374104/christchurch-richlister-john-ryder-plans-a-160m-retirement-village-taking-nationwide-development-to-750m

[Beagle]

Earl must be getting a bit bored of repeating the same stuff and showing the same pictures over and over again.

Jeez shareholders are a pain ...but a necessary burden

He's probably feeling pretty chipper today. He gets to tell shareholders how they've been investing so heavily in company staff and I'm sure shareholders will be really excited to see staff wages go up so nicely while their dividends stay the same and profit has declined. He really missed a trick with the other two really important matters that shareholders really care most about though. They need a comprehensive right up to the minute inclusiveness policy so LGTBQP's feel all loved and valued and then there's the extremely important carbon reduction program, another vital K.P.I. that shareholders love so much. Where's that info ?
Earnings...who cares....that's "gunna" come right so no worries...

[Baa_Baa]

Earl must be getting a bit bored of repeating the same stuff and showing the same pictures over and over again.

Jeez shareholders are a pain ...but a necessary burden

Earl speaks very well, knowledgeable and confident. The development progress and pipeline is impressive, happy to keep loading up while the transition occurs and SP is muted.

[winner69]

He's probably feeling pretty chipper today. He gets to tell shareholders how they've been investing so heavily in company staff and I'm sure shareholders will be really excited to see staff wages go up so nicely while their dividends stay the same and profit has declined. He really missed a trick with the other two really important matters that shareholders really care most about though. They need a comprehensive right up to the minute inclusiveness policy so LGTBQP's feel all loved and valued and then there's the extremely important carbon reduction program, another vital K.P.I. that shareholders love so much. Where's that info ?
Earnings...who cares....that's "gunna" come right so no worries...

It was good to hear Liz say the Board passed the skills matrix test

[Beagle]

Soft close for the day. Nobody really excited enough from the annual meeting to move the needle. Maverick has been very, very quiet lately.

[percy]

Soft close for the day. Nobody really excited enough from the annual meeting to move the needle. Maverick has been very, very quiet lately.

Maybe taking notice of Trader Jackson's posts.?...................................lol.

[Maverick]

Maybe taking notice of Trader Jackson's posts.?...................................lol.
Ok guys , after a bit of baiting, here are my findings/ opinions from yesterday's meeting.
The overall impression from meeting and the pleasure of chatting with Greg T ( the founder from 1980's) before hand , it seems OCA is trundling along as per expectations. In fact there was very little to take away other than reaffirming things are nicely on track.
A highlight for me was the new sales numbers of fy19 late deliveries are slightly ahead of my own expectations and that they are selling well and at this rate will be nearly all sold down within fy20.
Another thing of interest , but not surprising, was they are expecting care profit to be in line with last year, circa 25 million.The extra costs and inefficiencies of rebuilding are being offset by efficiencys coming on stream from fy19 deliveries and PAC and DMF fees.
i have no concerns about escalating costs (as strongly raised previously on ST) as they have gone to some effort to explain why they are what they are and their offsets. None of this is new but they gave more detail.
I made very slight tweaks upwards to the spreadsheets yesterday and long story short, FY 20 is looking on track (to me) to deliver 68 million underlying Profit , as mentioned here several months ago. ( FWIW a PE of 12.5 the share price should be around $1.39 ish in a year if this all comes to fruition, which calculations were reaffirmed in my mind yesterday.)
i am still extremely confident that FY20 is the year the money starts to sustainably turn up starting 1HY late January 2020.
They have given enough clues and numbers now to easily join the dots and that things are going hunky dory.
it was a good meeting there were no surprises and this is a very well run company doing exactly what it set out to do.
just for fun, one fellow bought 2 x Sands apartments and knocked the wall out between them , 3.5 million total, some people just have too much money.

[oldtech]

Nice, thanks for putting in the work here Maverick

[BlackPeter]

Maverick, thanks for this summary - and agree with your conclusions.

Not been to the meeting myself (wrong town ...), but I agree - the presentation did well explain the reasons for the increased cost ... and why we should not worry about it in the long term. Sounds like a sound investment.

At a SP of $1.01 stands this share in my books at a forward PE of 10.1 and an EPS CAGR of 26. Juicy, though patience might be required ...

Discl: holding (lots).

[Beagle]

Thanks for the feedback Mav.
Consent for the St Heliers site last week was good and sales progress at the Sands and at Meadowbank seems satisfactory, although care suites are pretty slow.
Macca's will be all over squashing this like a 3 ton Elephant if it gets anywhere near your suggested target price and with a 42% shareholding there's so much supply to come to meet prospective demand that my thoughts are they are really going to have to post some magnificent numbers to get any meaningful share price traction.
Could be okay buying at about $1 but investors will need to take an extremely patient and "dogged" approach :)

[trader_jackson]

Sum may put on the blinkers and ignore this... But forsyth getting less keen on OCA... target price (released today) of $1.08 (down from $1.13, but a good chunk higher than $1.01)... then we apply the ARV and SUM Discount Models (aka how 'wrong' Forsyth are with their target prices for those two companies - and have been for a year or more now)... the share price is between 85 cents (forsyth off by 27% for ARV) and 96 cents (forsyth off by 15% for SUM)... so midpoint of that means OCA overpriced and maybe should be at be at 90 cent mark :( (or maybe ARV and/or SUM share prices should be higher?)

As a holder, I'm not that happy given forsyth's analysis is clearly far to optimistic... so I think i'll ignore the analysis and put the blinkers on myself now and hope the nice words yesterday pan out into growth (forsyth do say 14% growth for FY20 which is nice)

[Mudfish]

Hey, thanks for info Maverick. Love your research, steady as she goes.

[Maverick]

Thanks for the feedback Mav.
Consent for the St Heliers site last week was good and sales progress at the Sands and at Meadowbank seems satisfactory, although care suites are pretty slow.

the care suits do appear slow , especially since they are going to be mass rolled out in coming years. So this is a vital consideration.
i specifically asked Greg Tomlinson (original founder) about the seemingly slow progress selling the 20 empty cares suits available at Bayview late last calendar year. (I spoke to the sales lady there 3 months ago and things did seem sluggish then)He responded things are actually going nicely there now with 17 sales since, he seems a good solid bloke and IMO wasn't " putting a spin on". Extrapolating, they should churn fully over every 2.5- 3 years which is about the target, so that's is an appropriate sale rate for self replenishing.
Then , remember the Sands care suites were delivered a month or two (again from memory) after apartment delivery. Awatere were delivered this FY and some time is then spent commissioning, getting certification etc.
So while care suites sales do appear sluggish, they have had much less time on the market that the apartments have had.

[Beagle]

Good point Mav.

[Maverick]

Cheers Beagle, Winner and BLack Peter for your thoughts/opinions over on the SUM thread re OCA.
Thought I'd revive this thread rather than divert the happiness party over there. Ps,this thread was 3.5 pages down. Man , this company is really on the "ignore" list!
Firstly , I'm completely comfortable waiting for the inevitable catch-up , I'm not a trader and want to keep my "investing " status with the IRD that way . So that precludes being in and out of shares for a short time.Getting a 4.5 % Gross divi sure helps with my patience too as BP mentions.
Im very pleased to see ALL the other retirement stocks (even good Ol' MET) getting reinvigorated, OCA will catch up at some point.
I have absolutely no concerns about Maquarie killing the SP long term. I think that damage is already, more than, fully priced in. I personally suspect they will do a back room deal overnight at some stage. Whatever SP reaction happens, it will be only temporary and will surely preceed a SP solid rise once it has washed out.
Lastly the maths on OCA is very strong for FY20. There are 3 main categories that make the underlying profit;
Care profit -As previously stated , both by my calcs and also Earls recent AGM statement, will be inline with last year, 25m.
Overall corporate and finance costs- This should also be inline with last year . Last year was a significant step up in development costs which will be stable as this year has similar building ambitions, so no significant increases on FY19 here.
Property profit-We know how many new and resales are available, the rate of sales, the margins and the prices. This is where the wall of moola will flood in, it's inevitable and already happening.
I have previously given my own expectations of underlying profit and anticpated SP 10 months from now. There is one big pot of tax free reward for the waiting, if I'm right.
I do appreciate your thoughts though fellas but don't worry about me, I'm as happy as a pig in Sh...t.

[Mudfish]

Alan Isaac buying in. Not huge but the faith is strong.

[tuaman]

Alan Isaac buying in. Not huge but the faith is strong.

Without THEIR supporting the price we might have seen under $1. :D

[winner69]

Alan Isaac buying in. Not huge but the faith is strong.

sort of gives you some confidence that they are not leading you up the garden path with all the hype but no earnings growth

it might all come right ...one day

[suse]

It's a slow ride this one. I bought shares in OCA 2 years ago and basically they are the same price give or take a cent. Still at least I havent lost a bundle (unlike on some other bad choices I made around the same time)

[percy]

sort of gives you some confidence that they are not leading you up the garden path with all the hype but no earnings growth

it might all come right ...one day

Director Gregg Tomlinson has also been adding to his substantial holding.
Neither he or Alan Isaac are mugs.

[RTM]

Director Gregg Tomlinson has also been adding to his substantial holding.
Neither he or Alan Isaac are mugs.

RTM is trying to add to his unsubstantial holding.
As neither Greg or Alan are mugs.
Recycling money from THL. Their direction concerns me.

[Beagle]

Good they got another major consent approved today and future development pipeline is 84% consented. Very impressive...if only they had an internal development model and could control development costs... A major point of difference between this one and RYM and SUM is these guys use external construction companies but project manage it themselves.
Its one thing to get consent for a development which is great but quite another to get a quality construction company to give you a competitive fixed price construction quote in the prevailing construction market. I doubt they'll get margin's in the 30%+ range or anywhere even close like they did on the Sands going forward from here...

Yes those investors are no mugs but my sense is they are playing a very, very long game...which is fine as long as you have the patience.
I might have another sniff when Macca's finally sell their last tranche, whichever year that might be.

[RTM]

[QUOTE=Beagle;771236

Yes those investors are no mugs but my sense is they are playing a very, very long game...which is fine as long as you have the patience.
I might have another sniff when Macca's finally sell their last tranche, whichever year that might be.[/QUOTE]

As long as they keep the modest dividend coming, then I am OK with the long game. Slow steady growth over the next 10 years or so will be perfect.

[Baa_Baa]

I might have another sniff when Macca's finally sell their last tranche, whichever year that might be.

I've been unable to find out when the Macquarie GIF II and GIF III unlisted funds started, but both are 10 year closed-end funds and both hold Oceania within the NZ vehicle of Oceania Healthcare Holdings Limited.

Presumably they can hold those funds for the full 10 years or sell anytime within the 10 years. In total GIF II and GIF III currently hold 254,175,418 shares (41.65%) in Oceania Healthcare Limited (OCA), I don't know how much each fund holds respectively. GIF II has only 3 companies remaining of an original 9 companies in the fund. GIF III has only 2 remaining companies of an original 4 companies. On 5 Sept 2018, Macquarie sold 95,000,000 shares (15.567%) in OCA reducing their holdings from 349,175,418 (57.218%).

The effect on OCA at the time of the Macquarie 95m shares selldown was virtually nothing! 1 cent down on the day $1.14-1.13, flat the day after and another cent down the day after that. It didn't move the market at all <1% and the SP drop of 2 cents over three days may not have had anything to do per se with Macquarie selling. Shortly afterwards the market boosted OCA from $1.12 up to $1.23 and I recall the excitement being expressed here!

My conclusion is that the Macquarie "over hang" is not something I need be concerned about, nor the timing of when Macquarie sells whenever they do. It is certainly not a fearful future event and I don't think it will have any material bearing on the share price at the time. In fact Macquarie would be unlikely to sell cheaply when they can hang on until the bitter end of their two 10-year closed-end funds waiting to reap the highest returns for their investors.

When Macquarie do sell, probably in tranches, I expect it will be to another very deep pocketed insto and off-market at an agreed price between the parties at the time. Once again having virtually no effect on the market price on that day.

[Beagle]

Technically what you point out in regard to the price action looks quite correct to me but I suspect a large number of those 95m shares got churned over and over again on market which had a suppressive effect on the share price. That said most of the sector came under pressure late in 2018 / early 2019 so who knows.
I simply don't think our market is anywhere near capable of absorbing that level in one tranche and contrary to Mavericks hope of a back room deal to enable a Macca's complete clearance to another party, my understanding is that might be a trigger event under the takeover's code.

Off market part tranche deal quite possible. The likes of ACC have plenty of money.

I remain of the view overhang's are never a good thing and it will take them about 3 years to get to a 50 / 50 split between the old and new model care system.

[Baa_Baa]

Technically what you point out in regard to the price action looks quite correct to me but I suspect a large number of those 95m shares got churned over and over again on market which had a suppressive effect on the share price. That said most of the sector came under pressure late in 2018 / early 2019 so who knows.
I simply don't think our market is anywhere near capable of absorbing that level in one tranche and contrary to Mavericks hope of a back room deal to enable a Macca's complete clearance to another party, my understanding is that might be a trigger event under the takeover's code.

Off market part tranche deal quite possible. The likes of ACC have plenty of money.

I remain of the view overhang's are never a good thing and it will take them about 3 years to get to a 50 / 50 split between the old and new model care system.

It was an off-market block trade deal with a syndicate of Deutsche Craigs Limited and Craigs Investment Partners Limited, First NZ Capital Group Limited, Macquarie Securities (NZ) Limited. Priced at $1.08 (below the market on the day at $1.14-$1.13). https://www.nzx.com/announcements/323383 (the SSH notice is attached at that link).

There are plenty of very large rich insto's and brokers who can underwrite deals of the size of Macquarie's holdings. One might consider that the sale had zero effect on the market on the day, but as those underwriters started pumping out their new OCA shares to their punters the SP rose very quickly to a high of $1.23.

I remain unconvinced that the Macquarie shareholding has or should have any material effect on my decisions about buying, holding or selling OCA. Next time it happens perhaps I should sell my shares into the punters rally afterwards! Then buy them back when the market SP drops as it catches up with reality ... like it did last time.

[Valiant]

Good they got another major consent approved today and future development pipeline is 84% consented. Very impressive...if only they had an internal development model and could control development costs... A major point of difference between this one and RYM and SUM is these guys use external construction companies but project manage it themselves.
Its one thing to get consent for a development which is great but quite another to get a quality construction company to give you a competitive fixed price construction quote in the prevailing construction market. I doubt they'll get margin's in the 30%+ range or anywhere even close like they did on the Sands going forward from here...

Yes those investors are no mugs but my sense is they are playing a very, very long game...which is fine as long as you have the patience.
I might have another sniff when Macca's finally sell their last tranche, whichever year that might be.


Hi Beagle, are you saying that RYM & SUM directly employ construction labour and trades people versus OCA who utilise external contractors? So RYM / SUM are not utiliising any external contracts with construction trades? I'm unsure myself but I'd be very surprised if RYM/SUM employed their own labour and had no constructions contracts on their books.

I agree with your comments regarding the difficulty obtaining quality construction companies - there is just not enough competent players in the market at this time. Remember this affects all developers. Comparing the contract of the Sands to new developments going forward is not a fair comparision IMO, the market has altered vastly in the past 2-3 years and I see contractors starting to look harder at their RFP's and ensuring they're pricing deisgn and programme risk more effectively.

[Beagle]

Hi Valiant,
RYM have made great strides in internalising their construction processes. SUM are somewhat behind RYM. Others are well behind the 8 ball and far more vulnerable to rampant construction cost inflation.

All I am saying is that shareholders in OCA get a free look at how construction costs might rise when SUM comment that construction cost inflation is running at about 10% per annum in Auckland and they expect development margins to return to more normal level's of about 25% on a national average basis from early 30's%. My understanding is SUM are far more internalised in their development process than OCA.

To be clear what I am suggesting is next time OCA approach say Naylor Love for a fixed price construction contract the directors might get quite a shock.
One thing to get consents, another to build it on time with an acceptable development profit and another to run it cost effectively. Earl is a great guy and very affable, likeable and wants to please people but controlling costs, (especially in older facilities which is still by far the bulk of their current business model) is something that's not being executed especially well at present in my opinion.

Baa Baa, we'll have to agree to disagree on the materiality of Macca's overhang. Takes two to make a market eh :)

[Valiant]

Beagle, I don't disagree. All signs point towards further cost increases across the whole construction industry and good on SUM managment for getting in front of it and advising their shareholders of whats to come. Personally, I'd be shocked if the directors of OCA didn't know that they can expect increased construction / development costs moving forward.
OCA still have multiple brownfield developments left to execute and as you'll appreciate these are more difficult to execute then greenfield developments.
FWIW, a few years back I worked in one of the large engineering firms consulting to SUM. My understanding is they still utilise external consultants for various services (as do MET, ARV, OCA).

Oh, yeah - I was evaluating a Naylor Love tender earlier this week. They're up there with the best we have in the Southern Lakes region.
Cheers

[Beagle]

Beagle, I don't disagree. All signs point towards further cost increases across the whole construction industry and good on SUM managment for getting in front of it and advising their shareholders of whats to come. Personally, I'd be shocked if the directors of OCA didn't know that they can expect increased construction / development costs moving forward.
OCA still have multiple brownfield developments left to execute and as you'll appreciate these are more difficult to execute then greenfield developments.
FWIW, a few years back I worked in one of the large engineering firms consulting to SUM. My understanding is they still utilise external consultants for various services (as do MET, ARV, OCA).

Oh, yeah - I was evaluating a Naylor Love tender earlier this week. They're up there with the best we have in the Southern Lakes region.
Cheers

Yeap, saw quite a few of their signs up on construction sites when I was down your way last week. Crikey the level of construction in Queenstown is quite "remarkable"
For sure, SUM still use the technical expertise of a range of expert consultants and some subby's.
Missing Qtown already :( Some people are fortunate to call the place their home, enjoy :)

[Baa_Baa]

Baa Baa, we'll have to agree to disagree on the materiality of Macca's overhang. Takes two to make a market eh :)

Sure does, happy to politely disagree when the facts suggest I’m correct.

Normally I’d agree that an overhang is worrying if the large seller is compelled to sell on market, but in this case I seriously doubt that they will.

The volume involved in unloading is so high that a sustained on market sell would take ages and ruin their margin, so when it happens I anticipate it will be staggered over time in tranches via underwriters who can absorb large holdings and/or sell to their punters.

Next time it happens I have a trading diary note to watch carefully what the SP does in the following few days. I expect no effect on the market price from another large off market sale. Just like they orchestrated it last time.

These folks are way too savvy to ruin their progressive exit by fecking the SP with an on market dump.

I do not see any material risk to OCA SP from an eventual and probably inevitable sell down from Macquarie.

[Maverick]

Good to hear 2 different opinions from very respected posters re the inevitable 38% MCQ sale.
BaaBaa, FWIW, to add to your notes, as to the effect on a SP of a recent large capital placement,check out ARV.
They raised $152m effortlessly and quickly. They attracted attention and new shareholders which has done marvellous things to turnover and the SP.
While I personally don't like ARVs strategy of growing faster by acquisition (I have sold down since) , I completely underestimated the positive value of the new attention brought onto what was a fairly neglected stock.
Soooo.... back to OCA, at $1.20 MCQ will need someone to stump up ~ $280m to exit, thats not a crazy amount more than ARVs effort. If it's anything like the ARV capital raise,the share price and market sentiment will ONLY benefit.
The fact MCQ are prepared to wait this out thus far ,when they might have cut and run, can only mean they see unappreciated value.(and the directors also)
I can only see upside to when MCQ finally pull the trigger.

[peat]

yes it seems a robust discussion but when I boil it down supply is potentially large at any time and price is a function of demand and supply.

when is the Doctor not a Doctor
when they hold a Doctorate in Nursing.
Just kidding , it sounds a terrific appointment.

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=5134836

[winner69]

I had to laugh at the NZSA review of the Oceania AGM when it was noted that no board member had building/construction background but it had many accountants on the Board

The reviewer said - A cynic would have wondered how three accountants on a board could possibly have any diversity of thought.

Maybe she could have added something about accountants building retirement villages ...better do what Keith Quinn didn’t and finish with lol.:)

[horus1]

I am selling out , there are too many adverts from all retirement villages.

[winner69]

Haven’t heard much from Oceania lately.

Must have realised all their fancy presentations with lots of new age bull**** aren’t working.

[winner69]

Suppose this from Oceania is not entirely aspirational rhetoric but is close to it



Our vision
To be the preferred provider of care and lifestyle options for senior New Zealanders by meeting or exceeding the expectations of our residents, staff and stakeholders.

Our mission
We provide excellent contemporary care that reflects our residents’ individuality and their right to choice, respect and dignity. We provide a positive and welcoming environment where our residents are encouraged and supported to enjoy a high quality of life.


They say a mission statement should say what they’ll do but also say what they won’t do. Oceania fails in this respect.

Listening to Earl and reading some Oceania material I’m surprised that their vision isn’t something like ‘we aim elevate the world’s consciousness.”

I betcha Oceania have regular ra ra management sessions (ie conferences) where the vision and mission is drummed into the participants in case they’ve forgotten. They must be a xciting.

I wonder if they ever talk about exceeding shareholder expectations

[Brain]

Looking back over the last few months Gregory Tomlinson has been buying a heap of shares on market. Surely this insider buying would be a good sign.

[Blue Skies]

Looking back over the last few months Gregory Tomlinson has been buying a heap of shares on market. Surely this insider buying would be a good sign.

Looks like he's not the only one, & seems all Directors added to their already substantial share holdings in the recent DRP.

Got to give pause for thought.

[Baa_Baa]

Looks like he's not the only one, & seems all Directors added to their already substantial share holdings in the recent DRP.

Got to give pause for thought.

Definitely, very encouraging. Some people lack patience but that’s probably understandable if they bought into the big ramp to $1.20 which means their break even might be a while away yet. Note how resilient the SP is despite all the recent market turmoil, it bodes very well for patient accumulation. Gltah

[trader_jackson]

I see The Sands in Browns Bay being advertised with a new initiative to attract buyers: no weekly fees for 2 years (on the usual A4 double sided peice of paper that seems to come out monthly - perhaps even more regularly - sort of like a news letter lol)... must be struggling to sell them because if they were going gangbusters, over 4 months on from when we were told they were finished (aka by 31 May balance date), they seem to be more desperate than ever to sell them.
At least the advertised 2 bedroom price hasn't dropped (that would be a serious cause for concern) and still starting at $850k

[Beagle]

https://www.oceaniahealthcare.co.nz/the-sands-village Ouch...I thought all the local Metlifecare villages offering free weekly fees for one year was bad enough...and this right in the middle of the supposed best time for selling, Spring.

[Blue Skies]

https://www.oceaniahealthcare.co.nz/the-sands-village Ouch...I thought all the local Metlifecare villages offering free weekly fees for one year was bad enough...and this right in the middle of the supposed best time for selling, Spring.

No such thing as a free lunch.
Pretty common marketing now to create urgency & get buyers to act, rather than discounting the price, give 'free' rental/ subscription/fees etc & factoring them into the selling price.
Everyone knows but still works.

[winner69]

Definitely, very encouraging. Some people lack patience but that’s probably understandable if they bought into the big ramp to $1.20 which means their break even might be a while away yet. Note how resilient the SP is despite all the recent market turmoil, it bodes very well for patient accumulation. Gltah

The instos playing amongst themselves (churning) with the 95 million shares from the sell down helps support the price ....along with some insider support

[BlackPeter]

I find it hard to understand the people complaining about OCA not delivering enough "shareholder value". They are now listed for something like 3 years and delivered already (in average) more than 5% capital appreciation per year as well as a roughly similar sized dividend.

10802

If we look at the so called gold standard in retirement villages - Ryman's share price flat lined for longer periods at a time than OCA is totally listed. Didn't they nevertheless deliver great shareholder value? I would think so ...

10800

Just have a look how much "shareholder value" Ryman returned during the first three years it was listed. Jeez, what a dud ...

Note - generating shareholder value for long term investors means not controlling the daily / weekly / monthly SP jitter, but adding value to an organisation over decades. OCA started (as listed company) with lots of quite mediocre old people homes at outstanding sites but with lots of potential to turn them into top notch retirement villages. Doing so does take time - but I am sure the rewards will come.

I am happy to wait for that point in time and content with the average capital appreciation and dividend they pay me so far for waiting.

[SailorRob]

Definitely, very encouraging. Some people lack patience but that’s probably understandable if they bought into the big ramp to $1.20 which means their break even might be a while away yet. Note how resilient the SP is despite all the recent market turmoil, it bodes very well for patient accumulation. Gltah


Regarding market turmoil resilience, the 50 index is up around 26% YTD and OCA is down 4%... and the top 50 index (Gross) is less than 2% of all time highs.

[Ggcc]

I find it hard to understand the people complaining about OCA not delivering enough "shareholder value". They are now listed for something like 3 years and delivered already (in average) more than 5% capital appreciation per year as well as a roughly similar sized dividend.

10802

If we look at the so called gold standard in retirement villages - Ryman's share price flat lined for longer periods at a time than OCA is totally listed. Didn't they nevertheless deliver great shareholder value? I would think so ...

10800

Just have a look how much "shareholder value" Ryman returned during the first three years it was listed. Jeez, what a dud ...

Note - generating shareholder value for long term investors means not controlling the daily / weekly / monthly SP jitter, but adding value to an organisation over decades. OCA started (as listed company) with lots of quite mediocre old people homes at outstanding sites but with lots of potential to turn them into top notch retirement villages. Doing so does take time - but I am sure the rewards will come.

I am happy to wait for that point in time and content with the average capital appreciation and dividend they pay me so far for waiting.
Excellent post and find that everyone wants unrealistic gains quickly all the time with this share. I am happy with my holding and find people just need to be patient with this share

[value_investor]

The stock has been very flat lately and fair enough because the result was of the same nature. Ofcourse its perplexing because some 'solid' stocks have done nothing of note and rocketed up because of their reputation as safe haven stocks (AIA for example). OCA don't get that kind of luxury due to their unknown namesake in the market place.

While I like where this one is going, and the future is bright from what they have indicated. I think that this FY they will have to deliver some promising results or prospective and/or current shareholders will start to get a bit restless. I believe their core competency has been on delivering units on time and on budget which is no easy feat, the care side as a whole has yet to hit critical mass in this country. Building units is great, but you can't sell a good secret and getting them sold is the next hurdle.

I'm not 100% sure on their marketing, and the deep discount of no fees for two years is a bit suspicious. I need to see some solid numbers to validate the good work they seem to be doing.

Disc: Hold a small parcel but willing to accumulate based on how they go at HY.

[couta1]

The inability to date to control spending coupled with the Macca overhang means there are two giant sized elephants in the room, this coupled with a large number of recirculating shares from the last Macca peanut offload equals a very stagnant share price with no immediate reason for any lasting increase to occur.

[winner69]

The inability to date to control spending coupled with the Macca overhang means there are two giant sized elephants in the room, this coupled with a large number of recirculating shares from the last Macca peanut offload equals a very stagnant share price with no immediate reason for any lasting increase to occur.

.......but long (long) term a bonza of an investment eh Couts

But punters should note your comment re no immediate reason for any lasting increase to occur.

Makes you wonder where share price might be today without that recirculating / churning of shares from the last sell down. I hazard a guess manybdont appreciate theveffect that is having.

[trader_jackson]

https://www.oceaniahealthcare.co.nz/find-a-place/retirement-villages/meadowbank-retirement-village?utm_campaign=2519_fees_promo&utm_source=mediaworks&utm_medium=display&utm_content=meadowbank_cube_300x600

Oh dear, I found another village being advertised to me whilst on Newshub with No weekly fees for 2 years... I am to worried to look at any more OCA villages to see if there are any more that have this promo.
What is worse is both of the villages I have seen (The Sands and Meadowbank) are suppose to be really flash, high margin sort of stuff (both with 2 bedrooms starting at $850k) and yet they obviously aren't selling very well, otherwise they wouldn't be giving away $15,000 or so in free weekly fees.

[winner69]

https://www.oceaniahealthcare.co.nz/find-a-place/retirement-villages/meadowbank-retirement-village?utm_campaign=2519_fees_promo&utm_source=mediaworks&utm_medium=display&utm_content=meadowbank_cube_300x600

Oh dear, I found another village being advertised to me whilst on Newshub with No weekly fees for 2 years... I am to worried to look at any more OCA villages to see if there are any more that have this promo.
What is worse is both of the villages I have seen (The Sands and Meadowbank) are suppose to be really flash, high margin sort of stuff (both with 2 bedrooms starting at $850k) and yet they obviously aren't selling very well, otherwise they wouldn't be giving away $15,000 or so in free weekly fees.

Probably built the $15k into the advertised price mate

No worries here mate

[BlackPeter]

https://www.oceaniahealthcare.co.nz/find-a-place/retirement-villages/meadowbank-retirement-village?utm_campaign=2519_fees_promo&utm_source=mediaworks&utm_medium=display&utm_content=meadowbank_cube_300x600

Oh dear, I found another village being advertised to me whilst on Newshub with No weekly fees for 2 years... I am to worried to look at any more OCA villages to see if there are any more that have this promo.
What is worse is both of the villages I have seen (The Sands and Meadowbank) are suppose to be really flash, high margin sort of stuff (both with 2 bedrooms starting at $850k) and yet they obviously aren't selling very well, otherwise they wouldn't be giving away $15,000 or so in free weekly fees.

$15k in $850k are a 1.7% discount. Jeez, times must be really tough if business needs to resort to such huge discounts, wouldn't you say so? Must be time to run for the hills ...

Or maybe just time for some poster to do their marketing 101 homework :p;

[Baa_Baa]

Probably built the $15k into the advertised price mate

No worries here mate

And a rounding error on the development margins when sold.

[trader_jackson]

$15k in $850k are a 1.7% discount. Jeez, times must be really tough if business needs to resort to such huge discounts, wouldn't you say so? Must be time to run for the hills ...

Or maybe just time for some poster to do their marketing 101 homework :p;

In the case of the sands, they are 'giving away' half a million dollars (on just half of the apartments on 1 site, assuming half of them have been sold)... if they do this at all their village developments, that's millions of dollars in development margin disappearing... Clever marketing, or overpriced, or not selling as well as predicted? Probably a combination of the 3...
I would have thought the 64 or so apartment units at the Sands would have been able to sell easily, given it has been 4+ months they have been around, considering also the strong interest OCA has continually trumpeted for a couple years (around The Sands), and yet they are now giving away money to try get sales across the line before the end of the half year... funny that.

Sure, $15k here and there (oh and don't forget to account for the potentially huge marketing expenses for those dreaming up and implementing these ideas), but it all adds up, and doesn't paint a good picture for sales momentum or margins.... because, at the end of the day, if all was hunky dory, they wouldn't have to keep increasing incentives to buy as the months go on - they'd be sold already.
ARV's village down the road apartments, released a few years ago when house prices were lower (and they have no sea views/as close to the beach) had no problems achieving a $1m average sale price, yup: no need to give $15k away per unit or spend time and money in the marketing department/consultants, or buying big internet adds or putting up big motorway billboards to get those sales across the line... that marketing department can be expensive stuff you know... Better off to just have a compelling enough proposition for customers to begin with!

[winner69]

In the case of the sands, they are 'giving away' half a million dollars (on just half of the apartments on 1 site, assuming half of them have been sold)... if they do this at all their village developments, that's millions of dollars in development margin disappearing... Clever marketing, or overpriced, or not selling as well as predicted? Probably a combination of the 3...
I would have thought the 64 or so apartment units at the Sands would have been able to sell easily, given it has been 4+ months they have been around, considering also the strong interest OCA has continually trumpeted for a couple years (around The Sands), and yet they are now giving away money to try get sales across the line before the end of the half year... funny that.

Sure, $15k here and there (oh and don't forget to account for the potentially huge marketing expenses for those dreaming up and implementing these ideas), but it all adds up, and doesn't paint a good picture for sales momentum or margins.... because, at the end of the day, if all was hunky dory, they wouldn't have to keep increasing incentives to buy as the months go on - they'd be sold already.
ARV's village down the road apartments, released a few years ago when house prices were lower (and they have no sea views/as close to the beach) had no problems achieving a $1m average sale price, yup: no need to give $15k away per unit or spend time and money in the marketing department/consultants, or buying big internet adds or putting up big motorway billboards to get those sales across the line... that marketing department can be expensive stuff you know... Better off to just have a compelling enough proposition for customers to begin with!

Maybe this us what happens when the Board is dominated by accountants and the CEO seems to spend all time on people stuff.

Maybe Oceania isn’t really a property development company after all

[Leftfield]

Oh dear, I found another village being advertised to me whilst on Newshub with No weekly fees for 2 years... I am to worried to look at any more OCA villages to see if there are any more that have this promo.
What is worse is both of the villages I have seen (The Sands and Meadowbank) are suppose to be really flash, high margin sort of stuff (both with 2 bedrooms starting at $850k) and yet they obviously aren't selling very well, otherwise they wouldn't be giving away $15,000 or so in free weekly fees.

Even cheaper elsewhere..... Only $390k in Upper Hutt! (https://www.trademe.co.nz/property/retirement-villages/auction-2339546262.htm?rsqid=e6adccee893a4e5a9d469334ed276 bd9-001) (Of course no comparison to the quality of life in Auck, but an interesting premium none-the-less. Winner's mates at the local bowling club will be happy.)

[Beagle]

Sands units probably falls into two distinct categories. Those units with good sea views and the rest. People with money chasing lifestyle will ante-up and buy the sea view units and I wouldn't mind betting they've sold really well. The issue will be with the units with no, or very limited sea views. Rinse and repeat for Meadowbank.

[couta1]

Even cheaper elsewhere..... Only $390k in Upper Hutt! (https://www.trademe.co.nz/property/retirement-villages/auction-2339546262.htm?rsqid=e6adccee893a4e5a9d469334ed276 bd9-001) (Of course no comparison to the quality of life in Auck, but an interesting premium none-the-less. Winner's mates at the local bowling club will be happy.) There has to be a good discount to convince the punters to live in the Bogan capital of NZ.

[dobby41]

There has to be a good discount to convince the punters to live in the Bogan capital of NZ.

I thought people didn't really move town to live in a village - they purchase in a village near where their roots (recent or past) are.
So those buying in Upper Hutt will know what they are getting.

[couta1]

I thought people didn't really move town to live in a village - they purchase in a village near where their roots (recent or past) are.
So those buying in Upper Hutt will know what they are getting. As a rule yes although there are quite a few out of towners in that particular village(Probably old Bogans at heart)

[Snow Leopard]

$1.04

Is this a little break-out with some volume behind it? :eek2:

Has everybody finally stopped worrying about the 'over-hang'? :p

and where will it go from here? :confused:

[couta1]

$1.04

Is this a little break-out with some volume behind it? :eek2:

Has everybody finally stopped worrying about the 'over-hang'? :p

and where will it go from here? :confused: To answer your 3 questions, #1-Possibly. #2-No. #3-Up then down