OCA - Oceania Group - retirement villages

[Old mate]

Oh yes it is. Thank you.

[winner69]

Oh yes it is. Thank you.

Yesterday close adjusted for divie was 132.9 (XD)

So at 130 we’re down 2.2%

[Beagle]

Yesterday close adjusted for divie was 132.9 (XD)

So at 130 we’re down 2.2%

Probably didn't help that some old mutt called it a heavily handicapped nag this morning :blush:
Its all good because if Phar Lap can carry 68 kg's and win the 1931 Melbourne cup this one can be a winner too :t_up:

[stoploss]

Probably didn't help that some old mutt called it a heavily handicapped nag this morning :blush:
Its all good because if Phar Lap can carry 68 kg's and win the 1931 Melbourne cup this one can be a winner too :t_up:
One problem Phar Lap didn't place in the first 3 in 1931 Melb Cup in his last race in Australia:confused:

[Beau]

One problem Phar Lap didn't place in the first 3 in 1931 Melb Cup in his last race in Australia:confused:

Phar Lap won the 1930 Melbourne Cup I’m sure that is what Beagle was referring to unfortunately it got 8th in 1931

[Old mate]

I'm a bit of a freshie at this, does chasing divies really work out? Seems like price drops instantly as soon as share goes exdiv. Are you trying to sell before price drops if you missed it gains would be small if any? Am I missing something ��

[winner69]

One problem Phar Lap didn't place in the first 3 in 1931 Melb Cup in his last race in Australia:confused:

Won when lightly weighted in 1930 and my grandad told me he was a ‘heavily weighted nag’ like OCA is when he ran down the track in 1931

But luckily history not always a good indicator of future fortunes.

Percy just ran a great race for third in the 7th at Wingatui ,,,3 bucks a place OK but would’ve preferred the 10 bucks a win but like Oceania it’ll keep …there’s always a next time.

[Playa]

I don't know who the Phar Lap of the NZX is, but I wouldn't think it would be OCA.OCA have been travelling more like an average maiden who needs to find some fitness

[Beagle]

Phar Lap won the 1930 Melbourne Cup I’m sure that is what Beagle was referring to unfortunately it got 8th in 1931

Oh dear that's a bit ominous. Carried a massive 68 kg's that year.

[winner69]

I don't know who the Phar Lap of the NZX is, but I wouldn't think it would be OCA.OCA have been travelling more like an average maiden who needs to find some fitness

Too old to find fitness …..like they said in the old days one more chance before being sent to Newtown (like the zoo as meat for the lions)

[Beagle]

Too old to find fitness …..like they said in the old days one more chance before being sent to Newtown (like the zoo as meat for the lions)

Hope Brent gets the whip out on it next year and it finds some form or as far as I am concerned its off to the glue factory.
Suppose we better leave the horse analogies there otherwise some animal lover will get upset.
Moving on... Harbour are just out with their roundup of the earrings season and OCA gets a mention
https://www.harbourasset.co.nz/research-and-commentary/long-covid-september-2021-new-zealand-stock-market-reporting-season-net-positive-but-impacted-by-covid-19/ concludes with "But for those companies with pricing power and structural growth drivers, there is potential to keep beating conservative earnings forecasts, supporting equity returns".

Brent, please show me that OCA does have pricing power because if you can't I'm off SUM where else.

[Waltzing]

Sum other horse has bolted long ago ? so far ahead its lapped this old nag 2.5 times already...it's really starting to look long odds...

[justakiwi]

For anyone who is interested and missed the live NZX Investor Relations webinar today, you can watch it here...

https://www.youtube.com/watch?v=KdNE3kEb6UY

I found it very interesting. Brent made it very clear that Oceania is primarily a care business and that is where their focus will always be. This is what sets them apart from the rest. Some of what he mentioned was in the results presentation, but there is some good stuff here that clarified a few things for me.

Worth a look.

[Bjauck]

For anyone who is interested and missed the live NZX Investor Relations webinar today, you can watch it here...

https://www.youtube.com/watch?v=KdNE3kEb6UY

I found it very interesting. Brent made it very clear that Oceania is primarily a care business and that is where their focus will always be. This is what sets them apart from the rest. Some of what he mentioned was in the results presentation, but there is some good stuff here that clarified a few things for me.

Worth a look.
Thanks for the link. A very good and interesting summary of the business direction. He did also stress their emphasis on their Care Suite development (sold under an ORA) including the conversion of some standard beds to care suites. This is a way for Oceania to continue to earn profits as government funding for care has fallen behind cost increases.

If this is reflected throughout the sector, as mentioned by other posters previously, this could make it more difficult for older folk without many assets to find a rest home bed (and there will be increasingly greater percentages of older people who have become priced out of home ownership.)

Brent's presentation also demonstrated Oceania's political lobbying. Hopefully he can impress upon politicians that concerns over government Covid policies and realistic funding for care costs are genuine. Otherwise companies, whose investors naturally expect them to have maximisation of profit as an important aim, will increasingly withdraw from the provision of standard rest home beds.

[Beagle]

Thanks for the link JAK.

Finally something to be positive about. First of all some guidance on the future build rate that to the best of my knowledge hasn't been shared before...keep in mind their previous build rate has been a lot lower than this.
"We have 545 units under construction...we are going to continue to build sort of 300-350 units every year"
If I remember correctly the target was previously 200-250 units per annum under Earl's leadership and if I recall correctly they never got close to 250 ? (I may be mistaken here and am simply going off memory).

The second thing that gives me some much needed reason to be more positive is "we've started to increasingly move into Greenfield development" Over the next 5 years they have 821 care suites and 1140 independent living units planned for development and this will somewhat shift the unit mix. This isn't new info but is certainly worth taking note of.

I think with the rapid growth in development over the years ahead the opportunity is there to bring some economies of scale with head office costs and high level management salaries in particular being amortized over a much bigger business. This might being some relief to the rate at which human resource costs are increasing. They run their own training school for Nurses so they get first dibs on the best graduates.

I think when you compare the current development workload (545 units) and the future plan to build about 300-350 units per annum which is well up on previous build rates, the increasing focus on independent living units and greenfield development there are some grounds for optimism so with them closing on Friday at about 12 cents below the fair value adjusted NAV they are "Probably a pretty good Hold", (I am not upgrading to accumulate yet until they get more momentum in the business).

Lots and lots and lots of patience will be required here. Beagle is not very good at waiting a long, long time for a feed so I hope I can keep hanging in there.

[justakiwi]

Glad you're happy. Do I get my rep vote back? ;)


Thanks for the link JAK.

[THEONE]

Thanks for the link JAK.

Finally something to be positive about. First of all some guidance on the future build rate that to the best of my knowledge hasn't been shared before...keep in mind their previous build rate has been a lot lower than this.
"We have 545 units under construction...we are going to continue to build sort of 300-350 units every year"
If I remember correctly the target was previously 200-250 units per annum under Earl's leadership and if I recall correctly they never got close to 250 ? (I may be mistaken here and am simply going off memory).

The second thing that gives me some much needed reason to be more positive is "we've started to increasingly move into Greenfield development" Over the next 5 years they have 821 care suites and 1140 independent living units planned for development and this will somewhat shift the unit mix. This isn't new info but is certainly worth taking note of.

I think with the rapid growth in development over the years ahead the opportunity is there to bring some economies of scale with head office costs and high level management salaries in particular being amortized over a much bigger business. This might being some relief to the rate at which human resource costs are increasing. They run their own training school for Nurses so they get first dibs on the best graduates.

I think when you compare the current development workload (545 units) and the future plan to build about 300-350 units per annum which is well up on previous build rates, the increasing focus on independent living units and greenfield development there are some grounds for optimism so with them closing on Friday at about 12 cents below the fair value adjusted NAV they are "Probably a pretty good Hold", (I am not upgrading to accumulate yet until they get more momentum in the business).

Lots and lots and lots of patience will be required here. Beagle is not very good at waiting a long, long time for a feed so I hope I can keep hanging in there.

There surely isn't many greenfield sites around. Must be reasonably likely is the Sky site. It would explain why is taking so long and all the secrecy.

[Beagle]

Glad you're happy. Do I get my rep vote back? ;)

Yes, okay ;)

[Beagle]

There surely isn't many greenfield sites around. Must be reasonably likely is the Sky site. It would explain why is taking so long and all the secrecy.

There is plenty of land around.. Getting consent from Council is by far the biggest issue but I see about 75% of OCA's future pipeline is already consented. Perhaps that little fact that's easy to forget and/or gloss over adds a bit more to the fair value adjusted NAV of $1.42 ?

[justakiwi]

Changed your mind huh? ;)
(Not quite fast enough with the edit)

Thank you for the rep vote though :)


Yes, okay ;)

[Beagle]

Back to OCA. I'll give Maverick a chance to chime in here with some number crunching, as i don't like using my steam powered abacus on the weekends.
Hey Mav, if they're developing about 180 units this year (going from memory) and the average run rate about doubles from that going forward and at prices that are heading higher, if we assume that development margin stay's around the mid 20% mark what does that do to their development profits in the years ahead ?

Feeling a bit better about OCA after considering that ? I know we're not heading off into orbit on a rocket with this anytime soon but you can't go too far wrong at $1.30 when fair NAV is $1.42 and 75% of their future development book is already consented, surely !

I guess one other little thing, (or maybe not so little), is at least there's some sort of not too shabby yield prospects with this one and I note the average analyst is predicting 4.2% gross yield next year rising to 5.3% the following year. Those are good yields for this sector.
https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/financials/

[justakiwi]

Brent mentioned that they currently have around 4000 total "beds" (care plus village) - and they are aiming for 6000 - I think he said within the next 4-5 years, but don't quote me on that. He talked about a 26% development margin. He also mentioned that the village side of the business pays for staffing and investor dividends.

Have to go to work but need to watch the video again as there is more information in that video than first meets the eye.


Back to OCA. I'll give Maverick a chance to chime in here with some number crunching, as i don't like using my steam powered abacus on the weekends.
Hey Mav, if they're developing about 180 units this year (going from memory) and the average run rate about doubles from that going forward and at prices that are heading higher, if we assume that development margin stay's around the mid 20% mark what does that do to their development profits in the years ahead ?

Feeling a bit better about OCA after considering that ?

[Maverick]

Beagle, your onto it mate with your questions. I'm away from my stuff for a few days so cant get back to you in any detail. Gotta make the most of the country before AKL get unleashed.
It's been great to watch your thinking over the week exploring firstly the disappointment of the cares costs onto the ever important apartments. This company is almost your nemesis that you love and hate at the same time.
The build rate increase and capex increase ( from 50 to 70m) is one of the huge highlights most would not know how important that is to the next few years profit.
But you've sniffed it out.
I'll get back in a few days to you

The care suites are just the opening band, it's the apartments that are the main event.

And BTW JAK thanks for that link. Its fabulous how everyone here adds to the value.

[Beagle]

Thanks mate. Me and OCA...a clear case of give a dog a bone lol https://www.bing.com/videos/search?q=beagle+chewing+on+a+bone&cvid=73ba215769b34f449a23746217b3c8ad&aqs=edge..69i57.5398j0j1&pglt=43&PC=U531&ru=%2fsearch%3fq%3dbeagle%2bchewing%2bon%2ba%2bbon e%26cvid%3d73ba215769b34f449a23746217b3c8ad%26aqs% 3dedge..69i57.5398j0j1%26pglt%3d43%26FORM%3dANNTA1 %26PC%3dU531&view=detail&mmscn=vwrc&mid=C7052EC931102833CCB2C7052EC931102833CCB2&FORM=WRVORC

[Maverick]

.................

[bull....]

hope people traded the bounce into non imputed div , as expected short lived bounce. in theory the down trend is intact

[justakiwi]

I wanna know what you were going to say ;)


.................

[BlackPeter]

hope people traded the bounce into non imputed div , as expected short lived bounce. in theory the down trend is intact

It is ... though still slightly above the MA400 ($1.27) :):

It is one of the companies I like to buy below the MA400 (a strong buy signal for the right company) ... however have already lots of them and sleeping well :):

[shwatch]

How low below NTA does this go? Essentially liquidate and still get some..

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/384198/361089.pdf

Liz Coutts buys 50,000 more @ $1.31

[bull....]

How low below NTA does this go? Essentially liquidate and still get some..

nta doesnt mean much contrary to what many on here say.

[Maverick]

Back to OCA. I'll give Maverick a chance to chime in here with some number crunching, as I don't like using my steam powered abacus on the weekends.

Hey Mav, if they're developing about 180 units this year (going from memory) and the average run rate about doubles from that going forward and at prices that are heading higher, if we assume that development margin stay's around the mid 20% mark what does that do to their development profits in the years ahead ?

Half year result part 2 - apartments
Ok Beagle, you've dug up the one nugget that matters most to OCAs short term profitability . So let's put care suites aside for now and move on to the main event - apartments. As I've always said , this is where the gold is. All RV companies get a major short term sugar boost from new build margins. The more they build the bigger the rush. SUM has been the master of exploiting this but have painted themselves into a corner as they can`t just keep building in ever increasing volumes to maintain their impressive growth,( IMO they have also previously cut corners too by not keeping up the care building rates which will ultimately bite them when the market is eventually satiated with RVs and it all gets more competitive). Hence RYM and SUM have shifted abroad to keep driving the growth. I suspect OCA remains listed on the ASX for this future reason as well, but I'm just guessing on that. While DMFs will ultimately be the measure of the business in the years ahead, for now it's all about new build margins boosting the bottom line while care and village DMFs will naturally follow.

You ask about quantifying the new build profit effect of the higher build rates ahead
A bit of background first will be helpful...
Every year is different depending on the mix of offerings and location .OCA are very good at telling us what's coming up in the next 2 years but nothing beyond that. I do note that Brent, who repeats twice in his video Q&A, of a future build rate of 300-350, would have a significantly positive effect on the bottom line as they normally build about 210 per year and the known rollout for the next 2 years is still at this older/slower pace. So there's a big question mark there from me that these 2 future build rate expectations do not line up. Brent's projection doesn't even come close to current activities. ( PM me Brent to tell me I'm wrong ,I want to be)

Here are the approximate average profit margins OCA make on their new stuff:
Villa$75k
Caresuite $80k
Apartment in Nelson/ Christchurch $120k
Apartment in Auckland $360k.

You will all see there is bugger all profit on villas unless you are bulk building them and IMO the days of mass building evermore than the previous years are over in NZ. OCA can sell 1 apartment for the same profit as 5 villas. ( while we are at it , just have a think about the overall DMF 30% return when the average tenure of an apartment is only 5 years as opposed to a cheaper villa which is 8 years- but that's for another day). OCA is hardly bothering to build any villas in its pipeline.

Currently OCA is in a flat spot of having a large amount of its empty apartments outside of Auckland so that's not great for record profits for now as they are a lower sell price and margin in comparison. On the flip side they do have a lot of them ( due to inability to sell during lockdowns so no worries) so they should be able pull a rabbit out of the hat this FY. That's as long as more covid lockdowns don't keep f**king sales up like it has for the last 2 years now.

You can see they have really upped their capex lately. That surge is the same amount as when they built the Sands and Meadow bank combined. BTW OCA achieved its record new build margin profit , 2 years after that capex surge ( see highlighted text below as to why the 2 years is noteworthy) but the excellent result never made it to the bottom line as it was unfortunately nullified by the falling care profits at the time because so many old rest home buildings were being decommissioned.
No doubt at all, a big chunk of today's capex will be for Waimarie`s construction. From my graphs and workings the profit reward for this capex spend always shows up on the books 1.5-2 years down the track…no surprise that's also about when Waimarie will be selling down.

So after saying all that, my best guess summary to your question Beagle…
today's increase in capex spend from $50m to $70M , particularly in AKL where they have always gotten a 35% build margin, will produce handsome rewards 2 years from now of about $20m profit for new build margins for the HY - easily setting a new record. (And this time care profits are also increasing rather than falling as in the past, so finally a double positive whammy for shareholders, in fact a triple whammy as DMFs are steadily growing too.)
We can also work your question out a different way …..by using historical average mix of deliveries and historic average margins blah blah blah . So if they are delivering Brent's verbal guidance of , say, 325 a year that's a new building total margin profit of $46m per year. To save folks doing the math's , that's $18m extra on the underlying profit each year. (36% more profit than now)
If they achieved this then that's not a sugar rush , that's cocaine!
Frankly, Despite the recent factual uptick in capex, I'll only believe the higher deliveries Brent speaks of when I actually see it. For now I will stick with the documented build rates....Brent you still havnt PM`d me yet???;)

You are absolutely correct Beagle when you say dogged patience is required with OCA. This company will deliver growing and stable profits with a high degree of investor safety, no doubt at all, and is enhanced nicely with higher capex like this, or even turbo charged if Brent's stated new build rates come true , but it won't be any time soon. It will still continue to be an incredibly unexciting share most of the time.

[Muse]

Superb work Maverick.

[justakiwi]

As usual, you have put an extraordinary amount of time and effort into this Mav, and I for one am truly grateful. I don't have the skills (or patience) needed, to effectively analyse reports, so the fact that you are always willing to do so and share with us, does not go unnoticed.



Half year result part 2 - apartments......

A high degree of investor safety is important to me personally, so I am happy to sit back and be patient. There will eventually be "life after the pandemic" and our elderly folk will continue to need aged care of one kind or another. The need for quality aged care will be greater in the future, than ever before. Lots and lots of opportunity for OCA to take advantage of that.


This company will deliver growing and stable profits with a high degree of investor safety, no doubt at all, and is enhanced nicely with higher capex like this, or even turbo charged if Brent's stated new build rates come true , but it won't be any time soon. It will still continue to be an incredibly unexciting share most of the time.

[Chinesekiwi]

Thank you to all key poster on OCA - and most recently the very generous Maverick.

I simply don't have the nouse or the background smarts to do or even understand some of the mechanics of what you guys share with us. I am very very grateful that you care to share.

I simply like this company and the sector and have a reasonable understanding of it all - enough that over these past 4 or so years I have gone very heavy into OCA for a long term hold.

I see there has been some real argy bargy lately and apologies offered and accepted - I do love reading the jousting of the smart people here - but not so much when it gets heated. Glad that cool heads always prevail.

I love that people have opinions and I don't hold anyone to what positions they have previously held as thoughts change and no ones feet should be held to the fire due to their changing outlooks- robust discussion is so valuable to help us all maintain some sense of objectivity.

Thank you once again to all posters and of course to those who really really dig deep to the benefit of all followers and investors of OCA.

[Greekwatchdog]

Thanks Maverick for sharing, that's some analysis

[Mudfish]

Thanks for sharing all your hard work Maverick. Very much appreciated. I haven't a ****e show of understanding the workings of OCA by myself. Probably speaks volumes as to why the SP doesn't take off. As you have said in the past, OCA is just too hard for an 'average' investor to get a handle on. I'm just thinking about the positives, Greg bought a huge amount of shares @ 1.40 not long ago. Liz just bought a sneaky 50k worth. From memory, F&Barr stated they believe OCA to be one of the safest shares on the NZX. Brent's Q&A video, IMO, showed a competent leader who knows what he is doing. And, your in-depth analysis working the facts and figures helps clarify things enormously. Therefore, I'm comfortable OCA's future looks bright indeed. I'm a happy holder. Obviously, I'll be even more happier to see the market respond in a more positive way but I guess it's just a waiting game.

[Beagle]

Thanks Maverick. I know you are very heavily invested here and I am happy for you to be my wingman anytime ;) but if you don't mind I will add some counter points for others to consider


Half year result part 2 - apartments
Ok Beagle, you've dug up the one nugget that matters most to OCAs short term profitability . So let's put care suites aside for now and move on to the main event - apartments. As I've always said , this is where the gold is. All RV companies get a major short term sugar boost from new build margins. The more they build the bigger the rush. SUM has been the master of exploiting this but have painted themselves into a corner as they can`t just keep building in ever increasing volumes to maintain their impressive growth,( IMO they have also previously cut corners too by not keeping up the care building rates which will ultimately bite them when the market is eventually satiated with RVs and it all gets more competitive). Hence RYM and SUM have shifted abroad to keep driving the growth. I suspect OCA remains listed on the ASX for this future reason as well, but I'm just guessing on that. While DMFs will ultimately be the measure of the business in the years ahead, for now it's all about new build margins boosting the bottom line while care and village DMFs will naturally follow. SUM a great complimentary holding to OCA as their business model is very lite in care as you've noted. I wouldn't rule SUM out. They have a number of material advantages over OCA. Firstly they have a vast land bank. Secondly they do far more of the build themselves, as opposed to contracting out. Thirdly their care lite model obviously has its advantages with rampant increases in the cost of care and last but certainly not least I believe that most people want villages with all the bells and whistles (bowling green, swimming pool, gym sauna e.t.c.), the whole 9 yards, as opposed to the often more boutique style villages OCA build. Its great to see OCA buy a full feature village like the Waterford in Hobsonville as this could easily be a template for them with future greenfield developments. I think OCA are chasing an older demographic. SUM have vast expansion abilities within Australia. I like them and am hoping they pullback some more and
I am looking for a reentry point.

You ask about quantifying the new build profit effect of the higher build rates ahead
A bit of background first will be helpful...
Every year is different depending on the mix of offerings and location .OCA are very good at telling us what's coming up in the next 2 years but nothing beyond that. I do note that Brent, who repeats twice in his video Q&A, of a future build rate of 300-350, would have a significantly positive effect on the bottom line as they normally build about 210 per year and the known rollout for the next 2 years is still at this older/slower pace. So there's a big question mark there from me that these 2 future build rate expectations do not line up. Brent's projection doesn't even come close to current activities. ( PM me Brent to tell me I'm wrong ,I want to be) Its a little disappointing to me that Brent couldn't have articulated OCA's future build rate in the analysts call. I think he has work to do in terms of his communication with investors

Here are the approximate average profit margins OCA make on their new stuff:
Villa$75k
Caresuite $80k
Apartment in Nelson/ Christchurch $120k
Apartment in Auckland $360k.

You will all see there is bugger all profit on villas unless you are bulk building them and IMO the days of mass building evermore than the previous years are over in NZ. OCA can sell 1 apartment for the same profit as 5 villas. ( while we are at it , just have a think about the overall DMF 30% return when the average tenure of an apartment is only 5 years as opposed to a cheaper villa which is 8 years- but that's for another day). OCA is hardly bothering to build any villas in its pipeline.

Currently OCA is in a flat spot of having a large amount of its empty apartments outside of Auckland so that's not great for record profits for now as they are a lower sell price and margin in comparison. On the flip side they do have a lot of them ( due to inability to sell during lockdowns so no worries) so they should be able pull a rabbit out of the hat this FY. That's as long as more covid lockdowns don't keep f**king sales up like it has for the last 2 years now.

You can see they have really upped their capex lately. That surge is the same amount as when they built the Sands and Meadow bank combined. BTW OCA achieved its record new build margin profit , 2 years after that capex surge ( see highlighted text below as to why the 2 years is noteworthy) but the excellent result never made it to the bottom line as it was unfortunately nullified by the falling care profits at the time because so many old rest home buildings were being decommissioned. Yes....the rebuilding of brownfield sites has certainly come with some serious challenges, not the least of which is carrying huge excess human resource cost during the process.. Thank goodness that's behind us.
No doubt at all, a big chunk of today's capex will be for Waimarie`s construction. From my graphs and workings the profit reward for this capex spend always shows up on the books 1.5-2 years down the track…no surprise that's also about when Waimarie will be selling down.

So after saying all that, my best guess summary to your question Beagle…
today's increase in capex spend from $50m to $70M , particularly in AKL where they have always gotten a 35% build margin, will produce handsome rewards 2 years from now of about $20m profit for new build margins for the HY - easily setting a new record. (And this time care profits are also increasing rather than falling as in the past, so finally a double positive whammy for shareholders, in fact a triple whammy as DMFs are steadily growing too.)
We can also work your question out a different way …..by using historical average mix of deliveries and historic average margins blah blah blah . So if they are delivering Brent's verbal guidance of , say, 325 a year that's a new building total margin profit of $46m per year. To save folks doing the math's , that's $18m extra on the underlying profit each year. (36% more profit than now) They're going to need more land to achieve that in the medium term and that's easier said than done.
If they achieved this then that's not a sugar rush , that's cocaine! I want to see them building more independent living apartments, not care suites. There is no money in care. If they don;t tweak their business model they will always be an underperformer, in my opinion
Frankly, Despite the recent factual uptick in capex, I'll only believe the higher deliveries Brent speaks of when I actually see it. For now I will stick with the documented build rates....Brent you still havnt PM`d me yet???;) I think you are right to have a degree of, I'll believe it when I see it about the incresed build rate. Talk about lifting build rate by 50% is one thing, achieving it is another

You are absolutely correct Beagle when you say dogged patience is required with OCA.Dogged patience is not one of my key strengths but this is very cheap at $1.30, at least 12 cents below fair adjusted value of current NAV and the dividends should increase in the years ahead so I am happy to keep a moderate stake This company will deliver growing and stable profits with a high degree of investor safety, no doubt at all, and is enhanced nicely with higher capex like this, or even turbo charged if Brent's stated new build rates come true , but it won't be any time soon. It will still continue to be an incredibly unexciting share most of the time. All stocks have risks but there is certainly good value here which usually confers a degree of lower risk



Thanks for your post mate, I always enjoy your work. Some counter points above for others to consider. I remain of the view that human resource cost increases are going to be a real drag on profit growth going forward and OCA are the most exposed in this sector to the extraordinary and sustained rate of care cost inflation. Stocks that will do well in an inflationary environment, (let's not pretend inflation especially in the care and construction environment is transitory..no point in deluding ourselves) are those with pricing power.

Unfortunately OCA has no pricing power with the basic care side of their business and also with the Govt funded weekly care fees they receive on care suites. They have pricing power with their independent living units and as mentioned above they must redirect more of their efforts in villages they develop in the future towards independent living units if they want to drive satisfactory shareholder returns . The Waimarie greenfield development is a fabulous example of the type of development I'd like to see wherein the significant majority of the village is independent living units. Likewise the Waterford acquisition in Hobsonville is another superb template to replicate going forward. This recipe is a well proven, (SUM and RYM) way to generate huge gains for shareholders. Much more of this, please. I will watch with considerable interest what ratio of independent living to care suite units they develop from the blank canvas that is the Pukekohe site as this will give a valuable indication of their future direction.

Over time the market may accord a higher degree of satisfaction with the care suite model such that they can be repriced further or maybe this remains a drag on future profit growth, only time will tell. At this point I think its crystal clear OCA are not getting a satisfactory return for shareholders with the care side of their business so the market is discounting them well below their peers, and rightly so in my opinion. Its not screaming value...its just fair value as a value stock because the current business model amounts to driving a moderately powered car with the handbrake on. There is value here but it will be like watching grass grow which is why I will stay with just a moderate stake.

Not trying to be a sour puss here, just to highlight there are reasons this is currently cheap and those reasons aren't going to evaporate anytime soon. Happy to hold at $1.30 because the value is clear enough for anyone to see. I think that about SUM's (excuse the pun) it up for me at this point. Not much else for me to do or say about this one for now.

I'll probably get some more hate from someone for not being super duper positive...I suppose that goes with the territory of trying to be truly objective but where would the value be in the forum if all we did was pump each others tyres about the stocks we own ?
Its time for me to have a super long nap with this one :sleep:

PS If the Govt force this sector to share capital gains then this is a taste of what people will get...but is that what people really want ? https://www.nzherald.co.nz/business/fletcher-residential-releases-details-of-new-vivid-living-retirement-business/2BEYQMSA6J6JPPLPMB7B4ZBTUE/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338

[Onion]

Its time for me to have a super long nap with this one :sleep:

Thanks Beagle and Maverick. Your work, thoughts, opinions, etc. are greatly appreciated.

[Muse]

looks like we might have a rights issue on our hands soon if all the gos on the SKT thread pans out. What's an appropriate rights issue discount to fund the purchase of Sky's Mt Wellington property to you reckon?

[Rawz]

looks like we might have a rights issue on our hands soon if all the gos on the SKT thread pans out. What's an appropriate rights issue discount to fund the purchase of Sky's Mt Wellington property to you reckon?

But OCA already raised cash not so long ago.

[Muse]

But OCA already raised cash not so long ago.

ah doyeee good point. i'm a bit of a simp this morning

[justakiwi]

I have no intention of giving you any hate, but I do want to say this. Anyone who has ever invested in OCA, has known from Day 1, that they are a care focused business. OCA have always been transparent about that. Brent mentioned it several times in the video I posted the link to. This makes OCA different from the others in the sector, so maybe it is time analysts and investors started to accept this difference. Comparing OCA with RYM and SUM may not be the best way to approach things, given that they are actually different beasts.

Nobody can say they didn't know about this focus when they chose to invest. We all did. Some of us made our decision to invest based on that focus. Clearly most did not. If OCA investors no longer understand and support the focus on care, it is probably time for them to take their profits and invest in an aged care company whose focus they do support.




At this point I think its crystal clear OCA are not getting a satisfactory return for shareholders with the care side of their business so the market is discounting them well below their peers, and rightly so in my opinion.

[Bjauck]

...
PS If the Govt force this sector to share capital gains then this is a taste of what people will get...but is that what people really want ? https://www.nzherald.co.nz/business/fletcher-residential-releases-details-of-new-vivid-living-retirement-business/2BEYQMSA6J6JPPLPMB7B4ZBTUE/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338 I think it is great to have a company offering an alternative way of securing retirement accommodation. Vivid's offering is for a village with fewer amenities and no rest home facilities. That may actually appeal to a slightly different target market. While they say that their residents will be able to share in market gains, given the massive recent low-interest rate stimulated price gains, I think the risk for some time is weighted currently to future losses or minimal gains (especially after refurbishment cost is taken into account.) However there remains the risk of post-Covid heightened inflation of course.

Disc: Arv, Oca, Sum investor

[dobby41]

PS If the Govt force this sector to share capital gains then this is a taste of what people will get...but is that what people really want ? https://www.nzherald.co.nz/business/fletcher-residential-releases-details-of-new-vivid-living-retirement-business/2BEYQMSA6J6JPPLPMB7B4ZBTUE/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338

There are already outfits like Karaka Pines in the lifestyle sector.
Let's face it, without the care side they would just be lifestyle villages - nothing wrong with that but a different product.

[couta1]

I think it is great to have a company offering an alternative way of securing retirement accommodation. Vivid's offering is for a village with fewer amenities and no rest home facilities. That may actually appeal to a slightly different target market. While they say that their residents will be able to share in market gains, given the massive recent low-interest rate stimulated price gains, I think the risk for some time is weighted currently to future losses or minimal gains (especially after refurbishment cost is taken into account.) However there remains the risk of post-Covid heightened inflation of course.

Disc: Arv, Oca, Sum investor This alternative will be unattractive to the vast majority looking to enter retirement accommodation so I don't see it as any competition to OCA whatsoever.There are already umpteen villages like this operating around NZ where residents get all or nearly all of their capital back upon resale but of course they don't offer what the vast majority are looking for when they enter a village, in fact some of the ones I have been to over the years are quite isolating for many of the residents and are like mini ghost towns.

[Beagle]

I have no intention of giving you any hate, but I do want to say this. Anyone who has ever invested in OCA, has known from Day 1, that they are a care focused business. OCA have always been transparent about that. Brent mentioned it several times in the video I posted the link to. This makes OCA different from the others in the sector, so maybe it is time analysts and investors started to accept this difference. Comparing OCA with RYM and SUM may not be the best way to approach things, given that they are actually different beasts.

Nobody can say they didn't know about this focus when they chose to invest. We all did. Some of us made our decision to invest based on that focus. Clearly most did not. If OCA investors no longer understand and support the focus on care, it is probably time for them to take their profits and invest in an aged care company whose focus they do support.
Let's be clear here. From day one Earl was singing the praises of the business transformational process and saying shifting the model to care suites was the panacea for lifting returns from care side of the business. That's why a lot of people like me invested, we all thought the care suites were going to be a gold mine. If improved returns from care are happening after rampant care cost inflation its certainly painfully slow, much slower than I believe anyone who originally invested expected. As recently as February 2021 Earl was saying he expected future care costs to rise in line with DHB funding. Obviously that's not happening. One of the reasons I can be super patient to see if this works out is I am free riding this. I only have previous profits invested, nothing more and nothing less. Its not an inconsequential sized share stake I can assure you, its 6 figures. I already invest significantly in ARV and am looking for the right time to get back into SUM.


I think it is great to have a company offering an alternative way of securing retirement accommodation. Vivid's offering is for a village with fewer amenities and no rest home facilities. That may actually appeal to a slightly different target market. While they say that their residents will be able to share in market gains, given the massive recent low-interest rate stimulated price gains, I think the risk for some time is weighted currently to future losses or minimal gains (especially after refurbishment cost is taken into account.) However there remains the risk of post-Covid heightened inflation of course.

Disc: Arv, Oca, Sum investor I like your style and stock selection in this sector. No harm whatsoever in having a decent sized stake in ARV and SUM as well, in fact I think its a VERY good idea.


This alternative will be unattractive to the vast majority looking to enter retirement accommodation so I don't see it as any competition to OCA whatsoever.There are already umpteen villages like this operating around NZ where residents get all or nearly all of their capital back upon resale but of course they don't offer what the vast majority are looking for when they enter a village, in fact some of the ones I have been to over the years are quite isolating for many of the residents and are like mini ghost towns. Ouch !! Very good information there mate, thank you. Stick around, you have much to contribute and offer. I believe the more communal facilities a village offers, the more community it generates and this is why the full feature villages ARV, SUM and RYM build are so incredibly popular.

[artemis]

I think it is great to have a company offering an alternative way of securing retirement accommodation. Vivid's offering is for a village with fewer amenities and no rest home facilities. That may actually appeal to a slightly different target market. While they say that their residents will be able to share in market gains, given the massive recent low-interest rate stimulated price gains, I think the risk for some time is weighted currently to future losses or minimal gains (especially after refurbishment cost is taken into account.) However there remains the risk of post-Covid heightened inflation of course.

Disc: Arv, Oca, Sum investor

Agree, a different model is a good thing, and will suit some. I would not like to see people encouraged towards this style of RV by family with an eye to an inheritance though.

One upside of Fletchers going with this approach in volume, over time, is that it will dissuade the government from imposing changes on existing property rights. Which it seems they are working towards, the favoured MO these days.

[bull....]

actually some people want to leave there money to there children over a company

[couta1]

actually some people want to leave there money to there children over a company I'm glad you said some cause my wife and I have seen hundreds of shocking examples of greedy families wanting money from their parents that they have had nothing to do with for years, they all of a sudden start showing an interest when the grim reaper appears on the scene and then the squabbles begin.

[bull....]

I'm glad you said some cause my wife and I have seen hundreds of shocking examples of greedy families wanting money from their parents that they have had nothing to do with for years, they all of a sudden start showing an interest when the grim reaper appears on the scene and then the squabbles begin.

well with the price of houses there sure will be even more greedy kids hoping for a hand up

[artemis]

well with the price of houses there sure will be even more greedy kids hoping for a hand up

With life expectancy these days, those 'kids' with parents moving to a RV are mostly middle aged or even heading into retirement. It's not like they are 20 somethings first home buyers.

[bull....]

With life expectancy these days, those 'kids' with parents moving to a RV are mostly middle aged or even heading into retirement. It's not like they are 20 somethings first home buyers.

they need the inheritance to help there kids

[Greekwatchdog]

About time these kids got off there backsides to help themselves. I bet there parents never got a free hand out.

[Bjauck]

I'm glad you said some cause my wife and I have seen hundreds of shocking examples of greedy families wanting money from their parents that they have had nothing to do with for years, they all of a sudden start showing an interest when the grim reaper appears on the scene and then the squabbles begin.

These days (thanks in part to residential property that has risen faster than salaries?) it is often Grandparents that have the wealth, with younger generations struggling to get a family size home for their families.

[Bjauck]

About time these kids got off there backsides to help themselves. I bet there parents never got a free hand out. It depends how you regard government policy that inflated land prices (at a rate faster than inflation and incomes) and put the onus of tax on income and consumption and not on the inflated capital gains.

[artemis]

These days (thanks in part to residential property that has risen faster than salaries?) it is often Grandparents that have the wealth, with younger generations struggling to get a family size home for their families.

One word. DINK.

[couta1]

they need the inheritance to help there kids Nope our kids don't need any help and don't expect it, they have made a way for themselves through sheer hard work and no Govt handouts, they will of course get a share of whats left over once we depart.

[Maverick]

Thanks for the support all, I really appreciate it.

Your well articulated response Beagle is excellent. I am very happy to hear your well thought out pushback , as Chinesekiwi says , it creates a very healthy environment.
I think with my mega post and Your mega response it is time for me also to have rest for a while with plenty now on the table for readers to chew on.

I think those 2 posts give a really good summary of where OCA is at for now and what to look for in the future:
Build rates ...what actually are they going to be?
Care profit....will they improve faster over time without covid costs and possibly more agressive pricing at some stage?

Only time answer these 2 questions. Again , Beagle ,I greatly appreciate your well thought out counter concerns.

Merry Christmas posters. It's been a fabulous year and looks like next year will be even better.

[Bjauck]

Thanks for the support all, I really appreciate it.

Your well articulated response Beagle is excellent. I am very happy to hear your well thought out pushback , as Chinesekiwi says , it creates a very healthy environment.
I think with my mega post and Your mega response it is time for me also to have rest for a while with plenty now on the table for readers to chew on.

I think those 2 posts give a really good summary of where OCA is at for now and what to look for in the future:
Build rates ...what actually are they going to be?
Care profit....will they improve faster over time without covid costs and possibly more agressive pricing at some stage?

Only time answer these 2 questions. Again , Beagle ,I greatly appreciate your well thought out counter concerns.

Merry Christmas posters. It's been a fabulous year and looks like next year will be even better.
It is great to read the discussion between Beagle and yourself. It helps keep the thread on topic. Season’s greetings!

[BlackPeter]

About time these kids got off there backsides to help themselves. I bet there parents never got a free hand out.

Every generation got their perks as well as their burdens to carry.

The parents of these kids got free education and ways cheaper houses (less average annual incomes to pay for an average house) to buy ...

[allfromacell]

Nope our kids don't need any help and don't expect it, they have made a way for themselves through sheer hard work and no Govt handouts, they will of course get a share of whats left over once we depart.

And there are many young people like this, generational bashing is never helpful. Besides, how can someone blame a generation for any bad habits or traits when they themselves raised them.

The reality is a lot of people growing up today will never own a home. Me personally I don’t want one, I’d much rather build my wealth through stocks and crpyto and enjoy the freedom of being able to move about whenever I want and not participate in the madness that is the NZ property market.

Owning stocks in the retirement sector gives people who don’t have a house a perfect way of still getting exposure to it without the leverage of course (and a cheeky way of making some money back off the oldies :P).

[BlackPeter]

And there are many young people like this, generational bashing is never helpful. Besides, how can someone blame a generation for any bad habits or traits when they themselves raised them.

The reality is a lot of people growing up today will never own a home.

You are right - and make some quite fair points ... If we are not happy with the generation of our children, then we are the only ones to blame ...

Discl: Quite pleased with the development of our own children, but yes, I do see some problem cases both in the younger as well as in the older generation.

[Beagle]

Every generation blames the one before https://www.youtube.com/watch?v=5hr64MxYpgk

It feels to me like its been a very tough year. It was never going to be a good one as I knew going in that 2022 was going to be the year I lost my Mum.

I helped her and Dad choose their retirement village in 2009...we visited about 7 different villages. We knew Dad had dementia and Mum would be alone within a short space of time after moving in. Over the next decade Mum really flourished in the retirement village she was in and made a lot of friends and she was surrounded by these good friends and family in her last few days in April. One of the key reasons I am so keen on full feature retirement villages is I saw how happy my Mum was.

The lockdown in Auckland has been truly brutal on people's mental health, myself included.

During the lockdown its been tough to see this ground down from the mid 140's as recently as a few months ago to under $1.30 a little while ago. In terms of OCA it also feel like it been a tough year and I messed about with the size of my holding quite a lot until I finally found some peace with it a little while ago, thank goodness. Having started the year at $1.45 and now in the low $1.30's, that's been tough because I'm so darn hard on myself I expect every stock I own every year will be a winner. I guess with Covid I need to set more realistic expectations and focus on the long run.

I am hoping for a recovery in 2022 to at least $1.45 by December 2022, (what it closed at in December 2020) which would by then be two years prior. Surely that's not too much to expect in 2022 ? I have set my expectations at what I believe are a very modest level with the hope that I will be pleasantly surprised. As Maverick has suggested, only time will tell.

[dabsman]

And there are many young people like this, generational bashing is never helpful. Besides, how can someone blame a generation for any bad habits or traits when they themselves raised them.

The reality is a lot of people growing up today will never own a home. Me personally I don’t want one, I’d much rather build my wealth through stocks and crpyto and enjoy the freedom of being able to move about whenever I want and not participate in the madness that is the NZ property market.

Owning stocks in the retirement sector gives people who don’t have a house a perfect way of still getting exposure to it without the leverage of course (and a cheeky way of making some money back off the oldies :P).

Can certainly leverage up mate if you want to...

[Ggcc]

About time these kids got off there backsides to help themselves. I bet there parents never got a free hand out.
You are correct, that kids need to keep an eye on their spending habits and help themselves. I did, but also got some assistance from my parents to buy a first home, as did my sister. We were lucky that the bank of mum and dad were open for business.

They only helped us, as we had showed them we were responsible. I paid my mortgage off in 7 year, because any pay increase I got, I threw on the mortgage. Kids nowadays I have witnessed want to maintain their lifestyle, or better it if they get a pay increase. I have learned there is merit for that as well. The body is getting older and can’t do as much as when I was younger.

[Panda-NZ-]

And there are many young people like this, generational bashing is never helpful. Besides, how can someone blame a generation for any bad habits or traits when they themselves raised them.


Yes there should have been more mentoring within companies (similar to japan/europe).

We sadly import managers from overseas while our kids are stuck on not much above the minimum wage.

[Baa_Baa]

Owning stocks in the retirement sector gives people who don’t have a house a perfect way of still getting exposure to it without the leverage of course (and a cheeky way of making some money back off the oldies :P).

You can leverage up to 60% (ASB) Margin on your existing shareholding. Margin is a way to build your holding using the bank loan, for example borrow 60% of your holding on margin right before the Dividend, and pay it back after you've got the dividend or DRP, or keep the margin going if you think there's capital gain coming and the dividend funds the interest. Etc.

[Shareguy]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(1) EPS decreased due to less development margin and more importantly care costs increasing . Oca have a large weighting to care, Oca costs have gone up due to cvd and wage increases and the funding from the government has not matched the big increases in costs. So they are stuck and will get worse unless the government comes to the party.

(2) House prices have peaked and the risk is to the downside. So if this indeed does happen selling prices will be under pressure and existing valuations could fall.

(3) The secter is in a funk due to increasing interest rates and items above plus fear of Government intervention into the retirement secter.

(4) cvd is not over and what lays in store is still undetermined.

Anyway hope that helps. It’s only an opinion of one broker so bear that in mind.

[aquaman]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(1) EPS decreased due to less development margin and more importantly care costs increasing . Oca have a large weighting to care, Oca costs have gone up due to cvd and wage increases and the funding from the government has not matched the big increases in costs. So they are stuck and will get worse unless the government comes to the party.

(2) House prices have peaked and the risk is to the downside. So if this indeed does happen selling prices will be under pressure and existing valuations could fall.

(3) The secter is in a funk due to increasing interest rates and items above plus fear of Government intervention into the retirement secter.

(4) cvd is not over and what lays in store is still undetermined.

Anyway hope that helps. It’s only an opinion of one broker so bear that in mind.

Surely this depends upon your own investment plan time frames. If your a longer term investor(ten yrs or greater) and not into trying to make a quick buck, then i dont think these are of to much concern as focus is overall growth of OCA and you shouldn't be to concerned.

[bull....]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(1) EPS decreased due to less development margin and more importantly care costs increasing . Oca have a large weighting to care, Oca costs have gone up due to cvd and wage increases and the funding from the government has not matched the big increases in costs. So they are stuck and will get worse unless the government comes to the party.

(2) House prices have peaked and the risk is to the downside. So if this indeed does happen selling prices will be under pressure and existing valuations could fall.

(3) The secter is in a funk due to increasing interest rates and items above plus fear of Government intervention into the retirement secter.

(4) cvd is not over and what lays in store is still undetermined.

Anyway hope that helps. It’s only an opinion of one broker so bear that in mind.

good points. as i mentioned earlier in thread about not paying to much attention to nta and this a good example eps is more relevant than nta in valuation of companies as are cashflow metrics

[winner69]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(1) EPS decreased due to less development margin and more importantly care costs increasing . Oca have a large weighting to care, Oca costs have gone up due to cvd and wage increases and the funding from the government has not matched the big increases in costs. So they are stuck and will get worse unless the government comes to the party.

(2) House prices have peaked and the risk is to the downside. So if this indeed does happen selling prices will be under pressure and existing valuations could fall.

(3) The secter is in a funk due to increasing interest rates and items above plus fear of Government intervention into the retirement secter.

(4) cvd is not over and what lays in store is still undetermined.

Anyway hope that helps. It’s only an opinion of one broker so bear that in mind.


Sounds like your broker reads this thread ..:t_up:

Put it to the test …..ask him about ARV or SKT

[RTM]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(.

2-4 pretty much what I posted quite a while ago when I halved my allocation of SUM & OCA.
Still happy with decision and funds went into other companies that are doing well at this stage.

Still a decent sized holding….not adding or selling.

[Muse]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(1) EPS decreased due to less development margin and more importantly care costs increasing . Oca have a large weighting to care, Oca costs have gone up due to cvd and wage increases and the funding from the government has not matched the big increases in costs. So they are stuck and will get worse unless the government comes to the party.

(2) House prices have peaked and the risk is to the downside. So if this indeed does happen selling prices will be under pressure and existing valuations could fall.

(3) The secter is in a funk due to increasing interest rates and items above plus fear of Government intervention into the retirement secter.

(4) cvd is not over and what lays in store is still undetermined.

Anyway hope that helps. It’s only an opinion of one broker so bear that in mind.

All sensible enough. I'm a happy long term term holder and not a buyer across the industry. If I were I'd probably buy some SUM as their business model is more fit for purpose in the current environment. Will look at how things unfold next few years and if a substantial correction maybe buy more otherwise spend me pennies elsewhere (harder said than done in this environment!)

[couta1]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(1) EPS decreased due to less development margin and more importantly care costs increasing . Oca have a large weighting to care, Oca costs have gone up due to cvd and wage increases and the funding from the government has not matched the big increases in costs. So they are stuck and will get worse unless the government comes to the party.

(2) House prices have peaked and the risk is to the downside. So if this indeed does happen selling prices will be under pressure and existing valuations could fall.

(3) The secter is in a funk due to increasing interest rates and items above plus fear of Government intervention into the retirement secter.

(4) cvd is not over and what lays in store is still undetermined.

Anyway hope that helps. It’s only an opinion of one broker so bear that in mind. Opinion of a broker equals rubbish bin material.

[YoungBull]

Opinion of a broker equals rubbish bin material.

Careful now Couts old boy, last time you were using language like this it regarded ATM. Please don’t jinx this one with blind optimism 😂 he raises valid points

[BlackPeter]

I had a conversation with my broker regarding his thoughts on buying more Oca. In summery said it’s not a buy even at current price because.

(1) EPS decreased due to less development margin and more importantly care costs increasing . Oca have a large weighting to care, Oca costs have gone up due to cvd and wage increases and the funding from the government has not matched the big increases in costs. So they are stuck and will get worse unless the government comes to the party.

(2) House prices have peaked and the risk is to the downside. So if this indeed does happen selling prices will be under pressure and existing valuations could fall.

(3) The secter is in a funk due to increasing interest rates and items above plus fear of Government intervention into the retirement secter.

(4) cvd is not over and what lays in store is still undetermined.

Anyway hope that helps. It’s only an opinion of one broker so bear that in mind.

Well, I guess all these are well known observations and assumptions which may or may not come true, however most of them are not specific to OCA. They apply to all retirement villages or probably better to all REITS.

Nothing new, i.e. the market knows about them - i.e. they are fully priced in (but obviously - everybody might put a different likelihood on opportunities and risks eventuating in the future ....

Did I mention that brokers are sometimes right and sometimes wrong ... and statistically seen there seems to be no correlation between their predictions and the actual outcome?

So - better DYOR instead of trusting a broker :) - you won't be more often right or wrong than your broker, but at least in that case its you making or losing your money, not him (or her?) ...;

Discl: holding OCA ... and expecting them to do better than some of the already fuller priced retirement villages like RYM or SUM - but hey, I am as well sometimes right and sometimes I am wrong :) ;

[couta1]

Careful now Couts old boy, last time you were using language like this it regarded ATM. Please don’t jinx this one with blind optimism  he raises valid points OCA is a needs based business and doesn't rely on China for its income, this stock doesn't have anywhere near the hype that ATM had and is just too boring to ever have it.

[Habits]

Sounds like your broker reads this thread ..:t_up:

Put it to the test …..ask him about ARV or SKT

Yes good one :) I am surprised that potential customer demand waning as covid hype dies down, as well as new competitors by the likes of vivid were not mentioned.

[Mrbuyit]

I understand yesterday was the last day of the calculation for the DRP price, does anyone know roughly what the price will be, either with or without the 2.5% discount. It's not super important in the big scheme of things but interested to know roughly how many shares I'll get.

[cymonger]

Opinion of a broker equals rubbish bin material.

I always loved this little sequence from "The Wolf of Wall Street"

Mark Hanna (https://www.imdb.com/name/nm0000190/?ref_=tt_ch): Number one rule of Wall Street. Nobody - and I don't care if you're Warren Buffet or if you're Jimmy Buffet - nobody knows if a stock is going to go up, down, sideways or in circles.



Mark Hanna (https://www.imdb.com/name/nm0000190/?ref_=tt_ch): The name of the game, moving the money from the client's pocket to your pocket.
Jordan Belfort (https://www.imdb.com/name/nm0000138/?ref_=tt_ch): But if you can make your clients money at the same time it's advantageous to everyone, correct?
Mark Hanna (https://www.imdb.com/name/nm0000190/?ref_=tt_ch): NOOOOOOOOO!!!!!!!!!!!!

[Beagle]

Probably a good time to reiterate that the average analyst has a 12 month price target of $1.65 https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/ Obviously that's taking into account all known information recently released.

Just a thought. Is the fact that about 75% of the future projects OCA are to embark upon in the future are already fully consented an asset that's undervalued on their balance sheet ?
Firstly, consider that costs for consenting of projects are rising fast https://www.stuff.co.nz/business/industries/127237068/nz-an-expensive-place-to-get-infrastructure-resource-consents-report-finds?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+10+D ecember+2021
and secondly that getting development consent now is getting more and more difficult as pressure groups, environmental factors, Iwi and other interested parties become ever more forceful with their objections.

Looking through the current malaise caused by Covid I suspect that the real value of the consents OCA holds over most of its future projects is not something being recognized by the market. Anything under stated NAV as at 30 September of $1.34 has to be good long term buying, surely !

Disc: Sticking with a pretty moderate stake for the foreseeable future but if people want to throw them away at under $1.30 again at some point in the future I might step up to the plate for some more.

[thegreatestben]

My feelings around future projects is that until they are finished they aren't worth much! The upshot of that is we'll be golden once they are done but it requires patience.

[Sideshow Bob]

I understand yesterday was the last day of the calculation for the DRP price, does anyone know roughly what the price will be, either with or without the 2.5% discount. It's not super important in the big scheme of things but interested to know roughly how many shares I'll get.

Ask and thou shalt receive - I'm happy to get a few extra at that price.

DRP Strike Price for Interim Dividend - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/384518)

DIVIDEND REINVESTMENT PLAN STRIKE PRICE FOR 2022 INTERIM DIVIDEND

Oceania Healthcare Limited (OCA) advises that the strike price for the Dividend Reinvestment Plan (DRP) operating in respect of the dividend payable on 20 December 2021 has been set at NZ$1.2837 per share.

This strike price will apply in calculating the number of shares to be issued to participants who have elected to receive additional shares rather than cash.

The strike price has been determined, in accordance with the DRP, as the volume weighted average sale price in New Zealand dollars for Oceania Healthcare shares, calculated on all trades of Oceania Healthcare shares which took place through the NZX Main Board over the period of five trading days starting on 3 December 2021, less a 2.5% discount.

Shareholders who have elected to participate in the DRP will receive shares instead of cash in respect of the dividend payable on 20 December 2021.
The new shares will rank pari passu with existing shares on issue as at the date of their issue.

ENDS

[iceman]

I understand yesterday was the last day of the calculation for the DRP price, does anyone know roughly what the price will be, either with or without the 2.5% discount. It's not super important in the big scheme of things but interested to know roughly how many shares I'll get.

$1.2837 per share

[dreamcatcher]

Overall sales rate declining since Oct will probably affect these RV builders with staff/wage inflation headwinds just starting

https://www.interest.co.nz/property/113656/overall-sales-rate-barfoot-thompsons-auctions-drops-43



Disc:hold not adding

[Shareguy]

Opinion of a broker equals rubbish bin material.

I tend to make my own decisions taking into account all views and my own research. I find that brokers and analysts are good to gain information. Like everyone though sometimes they are dead wrong as mine was with Rakon and Steel and Tube . My own broker however has got me into some serious money and opportunities, so for me he is worth his weight in gold.

[Beagle]

Ouch that's a really sad and concerning account. https://www.nzherald.co.nz/nz/no-end-in-sight-taupo-woman-felt-like-giving-up-on-life-as-her-husbands-carers-miss-shifts/OAMDD6DXWUBH6N6XNT37DLXMSY/
Makes a care suite look like a VERY attractive option.

[mike2020]

What I see in Canterbury must be very different to other parts of NZ. Last week house prices that seemed to make even the agents gasp, no exaggeration. A couple I looked at were owners moving into RVs. Having moved here from the north I still see value but the brakes are off the price resistance that used to exist here. I do understand there is more to the sp than NTAs but given the usual lag in valuation OCA has to be a very secure investment right now.

[winner69]

In case some are interested:- Earl taking Metlife down the green path - something Oceania should follow - like it or hate it green is becoming a necessity to get fund managers / institutional / sharemarket support

METLIFECARE COMPLETES NEW ZEALAND’S LARGEST-EVER SUSTAINABLE RE-FINANCING WORTH NZ$1.25 BILLIO

The NZ$1.25 billion Sustainability-Linked Loan comprises NZ$600m of existing debt and $650m new debt, and makes Metlifecare the first operator in the New Zealand and Australian retirement village and aged care sector to be fully debt funded by sustainable financing. The announcement follows Metlifecare’s earlier designation of its existing listed bond into a Sustainability Bond on 26 October 2021, and marks New Zealand’s largest-ever sustainable re-financing.

The material increase in funding capacity will support key elements of Metlifecare’s Full Potential Plan: a five-year growth strategy to increase the company’s landbank and development pipeline, provide geographic diversification and expand its aged care offering, all underpinned by ambitious ESG (Environment, Social, Governance) targets.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/384531/361466.pdf

[LaserEyeKiwi]

What I see in Canterbury must be very different to other parts of NZ. Last week house prices that seemed to make even the agents gasp, no exaggeration. A couple I looked at were owners moving into RVs. Having moved here from the north I still see value but the brakes are off the price resistance that used to exist here. I do understand there is more to the sp than NTAs but given the usual lag in valuation OCA has to be a very secure investment right now.

Christchurch/Canterbury is blessed with literally hundreds of miles of prime flat land - and a massive leap in house building capacity in the decade post quake enabled by a willing local authority. Ample supply insured there was no boom like we saw virtually in every other NZ Metro where the opposite situation is rampant with flat land scarce and councils are fairly useless at approving higher density zoning or new green field infrastructure investment.

I don’t doubt that Christchurch is now looking very attractive to a many Auckland & Welllington first home buyers facing $800k-$1million+ prices for a basic house in those cities, as well as retirees and others looking to “cash out” there windfall equity gains and getting the same or bigger house in Christchurch for far less cost.

Really we simply need more new cities in New Zealand - most of the country is virtually uninhabited farmland. And there are to-many-to-count stretches of pristine land sitting in areas with great weather and in range of beautiful coastlines that would be perfect for new mini-cities.

I like that many of the retirement village operators are targeting exactly these sort of areas, albeit ones not too far from major centers (I guess timely access to a modern hospital is important to many retirees).

[Rawz]

...

Really we simply need more new cities in New Zealand - most of the country is virtually uninhabited farmland. And there are to-many-to-count stretches of pristine land sitting in areas with great weather and in range of beautiful coastlines that would be perfect for new mini-cities.



I think we will see more and more of it in the next century. Working from home, metaverse, skilled labor shortages... Might end up going to the office once or twice a month. Then work 3-4hours away in a little coastal town.

[Beagle]

In case some are interested:- Earl taking Metlife down the green path - something Oceania should follow - like it or hate it green is becoming a necessity to get fund managers / institutional / sharemarket support

METLIFECARE COMPLETES NEW ZEALAND’S LARGEST-EVER SUSTAINABLE RE-FINANCING WORTH NZ$1.25 BILLIO

The NZ$1.25 billion Sustainability-Linked Loan comprises NZ$600m of existing debt and $650m new debt, and makes Metlifecare the first operator in the New Zealand and Australian retirement village and aged care sector to be fully debt funded by sustainable financing. The announcement follows Metlifecare’s earlier designation of its existing listed bond into a Sustainability Bond on 26 October 2021, and marks New Zealand’s largest-ever sustainable re-financing.

The material increase in funding capacity will support key elements of Metlifecare’s Full Potential Plan: a five-year growth strategy to increase the company’s landbank and development pipeline, provide geographic diversification and expand its aged care offering, all underpinned by ambitious ESG (Environment, Social, Governance) targets.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/384531/361466.pdf

Massive building programs from SUM, RYM and OCA as well. Makes me wonder if we're not headed into an oversupply situation in the next few years...maybe for the housing market too ?

[dobby41]

I think we will see more and more of it in the next century.

Beyond my timespan.

[Panda-NZ-]

I like that many of the retirement village operators are targeting exactly these sort of areas, albeit ones not too far from major centers (I guess timely access to a modern hospital is important to many retirees).

Less jobs in christchurch though particuarly at the high end.

[BlackPeter]

Massive building programs from SUM, RYM and OCA as well. Makes me wonder if we're not headed into an oversupply situation in the next few years...maybe for the housing market too ?

Interesting question ... and not necessarily the right thread to discuss in detail.

However - at this stage we still have a significant housing undersupply in NZ, and this despite our government having turned off both the immigration tab as well as the tab of returning Kiwis.

Question is - how will this situation change over the years to come?

(A) Our population is ageing quickly but will hang around for a long time in retirement. I.e. we will need to replace the retired workforce through immigration - hardly imaginable that we won't move back to a net migration of 50k plus per year. These people will need additional houses.

(B) More than a million Kiwis abroad who couldn't move back thanks to the MIQ disaster. Allow only 5% of them to return every year (for good) and you have another 50k people needing a place to live. Sure, some of them might be young and replacing the need for some of the new migrants from group (A), but others will return to NZ for retirement - i.e. just put additional pressure on the shrinking workforce.

(C) More than 20 million Australians free to move to NZ any day ... and watch the climate disaster to unfold in Australia much worse than in NZ with droughts, wild fires and lack of drinking water. Just 1% of Australians moving every year to NZ would be already another 200,000 migrants. We better hope it will be less otherwise we might need to work on adapting our accent .....

While I could see a situation that we might have in some parts of the country (like Queenstown) an oversupply of upmarket housing ... would I think the risk for having too many houses in NZ is for the oversee-able future close to Zilch.

[Beagle]

Good post BP, thanks for sharing your viewpoint. Its been hot enough in Auckland lately, I don't even want to think about how hot it would be in some parts of Australia this summer. Nearly 26 million people live in Australia. Hmmm

[clearasmud]

Good post BP, thanks for sharing your viewpoint. Its been hot enough in Auckland lately, I don't even want to think about how hot it would be in some parts of Australia this summer. Nearly 26 million people live in Australia. Hmmm

Opposite in Southeast Queensland, the water carriers are going out of business.

[Mrbuyit]

$1.2837 per share

Bargain, A fair bit cheaper than the last lot in February then.

[whome]

BP, I would add to your factors for consideration -D. Wages for young people are much higher in Aus than Nz, and have been for the last 40 - 50 years. Being NZ citizens they lack access to Aus govt subsidised health and other benefits but that’s more an oldies problem. I anticipate a tipping point soon where many NZ youth will leave NZ to work in Australia when restrictions ease - or sooner.

[Ggcc]

BP, I would add to your factors for consideration -D. Wages for young people are much higher in Aus than Nz, and have been for the last 40 - 50 years. Being NZ citizens they lack access to Aus govt subsidised health and other benefits but that’s more an oldies problem. I anticipate a tipping point soon where many NZ youth will leave NZ to work in Australia when restrictions ease - or sooner.

That argument has always been there and rings some truth, youth want to travel and earn.

However most of the people entering to nz in 2019 were nz citizens by a substantial mile, followed by Chinese, Indian, South Africans, Australians and Phillipines.

This indicates heavy demand from People wanting to return.

[BlackPeter]

BP, I would add to your factors for consideration -D. Wages for young people are much higher in Aus than Nz, and have been for the last 40 - 50 years. Being NZ citizens they lack access to Aus govt subsidised health and other benefits but that’s more an oldies problem. I anticipate a tipping point soon where many NZ youth will leave NZ to work in Australia when restrictions ease - or sooner.

Any young folks leaving NZ just increasing the pressure on NZ to increase immigration - given that we need the workforce - i.e. people going on OE will in no way reduce the pressure on the housing situation.

Looking at our personal situation ... 33% of our kids on OE did return this year with his family to NZ - boosting our workforce (this is good) and increase the pressure on housing :p;

The other thing is - only a very small number of job seekers is driven exclusively by the salary (and this is good so - good companies don't need people just motivated by money, they need people motivated by challenges and interesting tasks).

Most job seekers look at
- a sufficient salary to make a living (but this is as well considering the cost of living)
- an interesting task
- career opportunities
- social security
- having a job and a life as well (life / work balance)
- opportunities to enjoy the outdoors
- closeness to family / friends

Most of these issues are for Kiwis not better in Australia and some are much worse.

[Panda-NZ-]

BP, I would add to your factors for consideration -D. Wages for young people are much higher in Aus than Nz, and have been for the last 40 - 50 years. Being NZ citizens they lack access to Aus govt subsidised health and other benefits but that’s more an oldies problem. I anticipate a tipping point soon where many NZ youth will leave NZ to work in Australia when restrictions ease - or sooner.

Conversely many aged workers will come back to rely on NZ super (unless they are eligible for Aussie age pension).

edit: and healthcare too.

[sampson]

Most job seekers look at
- a sufficient salary to make a living (but this is as well considering the cost of living)
- an interesting task
- career opportunities
- social security
- having a job and a life as well (life / work balance)
- opportunities to enjoy the outdoors
- closeness to family / friends

Most of these issues are for Kiwis not better in Australia and some are much worse.

While for the most part I agree with you, doesn't the net flow of people from NZ - AUS (I assume, don't know the figures) over a long period of time suggest that job seekers weightings of those factors end up favouring AUS?

[BlackPeter]

While for the most part I agree with you, doesn't the net flow of people from NZ - AUS (I assume, don't know the figures) over a long period of time suggest that job seekers weightings of those factors end up favouring AUS?

Not really - just ask yourself why NZ had over many years a net immigration gain - and this looking particularly at well paid professionals (like engineers, analysts, software developers, technicians) who all came from countries with higher income levels - i.e. they all took a pay-cut and swapped that for better quality of life.

I know what I am talking about - I used to be one of them :):

It is a bit like selling stuff - anybody who needs to compete based on price is screwed. The same is true for countries who only can compete for workforce by offering high salaries.

Much better to compete on quality - and in the context of competing for professionals this is to compete with offering a better quality of life instead of more money.

As indicated - NZ used to do quite well in this game, it is just the last couple of years that the Kiwi government dropped the mask and did show how little they really care about immigrants. The arrogant attitude of our anti immigration minister will be a problem for NZ over many years to come (people have long memories), but it has nothing to do with the size of our salaries.

I suppose however we are now really deviating from the thread ... if you want to continue this discussion, find an appropriate thread (or start a new one) and let us know about it.

[bull....]

well i thought i got out to early but i see its been hammered back down again ... 1.30 test again ?

[allfromacell]

well i thought i got out to early but i see its been hammered back down again ... 1.30 test again ?


Hammered down is't the language I'd use, chart looks nice and volume is low so a cent here and there doesn't mean much. Important to remember it's trading ex a $0.02 dividend so looks nice and healthy to me. Buying this stock under NTA was always going to be a gift.

[BlackPeter]

Hammered down is't the language I'd use, chart looks nice and volume is low so a cent here and there doesn't mean much. Important to remember it's trading ex a $0.02 dividend so looks nice and healthy to me. Buying this stock under NTA was always going to be a gift.

Exactly.

I guess it is just important to understand bulls lingo. Sort of alternative facts stuff. If he says a stock is "being hammered down" (and he loves this expression) than what he really means is "hope to get some more people to sell without doing analysis to give me a still cheaper entry".

Isn't it great that he says the stock gets hammered down, is it?

[BWH]

I sold down part of my holding today using ASB Securities. For 30k shares, I received 47 separate e-mails for individual trades. 3 were for trades of a single share and a handful were for less than 10! Sharesies?

[BlackPeter]

I sold down part of my holding today using ASB Securities. For 30k shares, I received 47 separate e-mails for individual trades. 3 were for trades of a single share and a handful were for less than 10! Sharesies?

Just move your account to Jarden ... with them you get max one statement per order per trading day ...

[fiasco]

well i thought i got out to early but i see its been hammered back down again ... 1.30 test again ?

errrr I think it's time for Bull to take a break from the internet.

Have a great xmas everyone, the stock will do what it wants.

Desc - Holding, review again next financials.

[ronaldson]

BHW - That's the way of the world now, in the sense that most trades on the NZX involve multiple, and usually small, fills.

BP is correct that Jarden send only one Contract Note per Order per day ( you only get more than one for an Order if you end a day with only a part fill of your Order - then the balance gets carried over to the next trading day or days until satisfied ). Even with Jarden thou you can see how many partial buys or sells made up your Order by clicking on "history " of the relevant Order ( next to the "edit" function, where you can vary your price or quantity ).

I commenced as a small holder at the last placement, but have just acquired another 19k. It has traded as high as $1.38 after going ex dividend so in my mind an entry at mid $1.30's or just under is quite reasonable given fundamentals and sector tailwinds. Much harder to start as a holder with RYM or SUM.

[dreamcatcher]

Hard to get a grip of these going up/going down notices

Housing crisis: Asking prices up 50 percent in just five years, homeowners making more from property than work | Newshub (https://www.newshub.co.nz/home/money/2021/12/housing-crisis-asking-prices-up-50-percent-in-just-five-years-homeowners-making-more-from-property-than-work.html)

[allfromacell]

Hard to get a grip of these going up/going down notices

Housing crisis: Asking prices up 50 percent in just five years, homeowners making more from property than work | Newshub (https://www.newshub.co.nz/home/money/2021/12/housing-crisis-asking-prices-up-50-percent-in-just-five-years-homeowners-making-more-from-property-than-work.html)

Just ignore all the noise and follow the REINZ HPI data released monthly, it's a comprehensive dataset that tracks like for like house prices across every major district in the country. Ignore the mean and median, these are too noisy, even the RBNZ monitors the HPI.

So far there is zero evidence of house price falls in this data.

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2021/Residential/November/REINZ%20Monthly%20HPI%20Report%20-%20November%202021.pdf

[850man]

Right now the lack of overseas migrants is helping keep house prices somewhat dampened (even though they are not showing signs of that) with reduced demand. When this loosens up, and let's hope it does because businesses are also suffering with lack of skilled workers, I'm sure we'll see the market take off furiously. Only real solution is increased supply and I have no confidence that will be sorted under the current regime

[BlackPeter]

...

Only real solution is increased supply and I have no confidence that will be sorted under the current regime

Just remind us - what did the regime before this regime do to resolve this problem? Right - absolutely nothing.

Expect the same from this regime and the regime which will come ... but hey, this is anyway for a different thread.

I am sure OCA will do well whoever holds the reigns ...

[Waltzing]

A recent article in the Herald indicated by current construction rates an over supply by 2023.

However the global supply chain for material we are informed wont unlock itself until 2024.

Lots of factors at play and for this sector surely there is going to be an increased costs of protecting inmates that could go sky high with omicron.

But wait they have probably run out of staffing resources.....

which means there systems will have to tighten up even farther to protect the inmates..

Adding to costs and detracting from the business of make big profits.

Winners posted articles of fuel addictive supply shortages in AUS going world wide shows the whole supply chain is starting to be impacted and this company is a property development company doing a lot of development.

[Muse]

A recent article in the Herald indicated by current construction rates an over supply by 2023.

However the global supply chain for material we are informed wont unlock itself until 2024.

Lots of factors at play and for this sector surely there is going to be an increased costs of protecting inmates that could go sky high with omicron.

But wait they have probably run out of staffing resources.....

which means there systems will have to tighten up even farther to protect the inmates..

Adding to costs and detracting from the business of make big profits.

Winners posted articles of fuel addictive supply shortages in AUS going world wide shows the whole supply chain is starting to be impacted and this company is a property development company doing a lot of development.

Rising interest rates, construction material/labour inflation, now *potential* building oversupply (or more likely just in balance/less undersupply)

Risings costs associated with care

few darks clouds out there eh - interesting times.

[Beagle]

They talked about how they're managing supply chain issues in the recent call. I took A LOT of comfort from what they had to say.

Likewise, I think HLG are highly experienced at managing these issues.

I'm not losing any sleep over this.

[Shareguy]

We sold a rental property a couple of months ago in Otara , Auckland . Spoke to the agent who sold it this week who said the market is already down 10 to 15 percent. There has been a lack of first home buyers and investors since the recent finance changes. Ok so what’s the bid deal, when the market is up 30 percent this year.? My concerns are that the Oca and others in the sector rely on unrealised property valuations which in my opinion are over inflated. Building costs are skyrocketing and then you have the threat of COVID and the implications that has. Simon bridges was handed a petition recently to look at this secter. It’s going to happen, it’s just a question of when.

So the government is not coming to the party with care costs when all the operators have increased costs with the minimum wage increase and cv19. There seems to be a lot of talk that there are a million kiwis overseas and a large number want to come home. It could also be argued that there is a large number of people who may leave NZ for greener pastures, after all the world is short of good working people. Competition for skilled workers could be a big threat for NZ.

So to sum it up I think the retirement secter in general has more of a risk to the downside. I have all four main stocks and they are a hold for me until I see some clarity. I notice that Jarden have removed Oca from thier model portfolio.

[Baa_Baa]

Dividend payment tomorrow, or a pile discounted shares on the DRP. :)

[Rawz]

We sold a rental property a couple of months ago in Otara , Auckland . Spoke to the agent who sold it this week who said the market is already down 10 to 15 percent. There has been a lack of first home buyers and investors since the recent finance changes. Ok so what’s the bid deal, when the market is up 30 percent this year.? My concerns are that the Oca and others in the sector rely on unrealised property valuations which in my opinion are over inflated. Building costs are skyrocketing and then you have the threat of COVID and the implications that has. Simon bridges was handed a petition recently to look at this secter. It’s going to happen, it’s just a question of when.

So the government is not coming to the party with care costs when all the operators have increased costs with the minimum wage increase and cv19. There seems to be a lot of talk that there are a million kiwis overseas and a large number want to come home. It could also be argued that there is a large number of people who may leave NZ for greener pastures, after all the world is short of good working people. Competition for skilled workers could be a big threat for NZ.

So to sum it up I think the retirement secter in general has more of a risk to the downside. I have all four main stocks and they are a hold for me until I see some clarity. I notice that Jarden have removed Oca from thier model portfolio.

I think you are right and probably why the share price is depressed. All these concerns seem to be baked in real good

[Beagle]

Huge projected growth represented by a massive premium to NTA is baked into some stocks in this sector but that's not the case with OCA which closed at $1.33, well below fair adjusted NAV as at 30 Sept 2021 (as discussed in the recent call) of $1.42

I have learned to completely ignore what one single real estate agent says, (never once met any agent that does anything other than talk their own book) and focus on what the real estate stat's are telling you, (removes all the bias and B.S.). Chatting with one veteran of the industry last week who's retiring early next year, apparently there are very close to the same number of real estate agents in N.Z. as there are listed properties for sale and most agents make a pitiful living and have very little idea of what's really happening in the market. Its the old 80/20 rule, only 20% of agents are really any good at what they do and they're the ones that make 80% of the income in the industry.

[Waltzing]

To MR B's Comments.

An Agent in a central north island town recently commented that the areas has N numbers of agents and each had only a limited number of houses to sell or lucky if they had one and some were struggling to get any as the price went higher. His clientele before COVID might be from anywhere in the world to take around in his brand new JAG. Now he was considering going back to painting portraits and picking apples.

Not all agents are moving into selling for retirement villages but perhaps that is one area of staff resourcing that this sector wont be short off.

[dubya]

An article from two months ago:

https://i.stuff.co.nz/national/126470732/more-real-estate-agents-than-homes-for-sale-in-nz

[Waltzing]

thanks for that.

[Pegasus2000]

Div/DRP comes in at price $1.2837

[winner69]

Div/DRP comes in at price $1.2837

So 6 cents up .... divie was only 2 cents .... seems you can't go wrong with Oceania

[Sideshow Bob]

Capital Change Notice - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/385078)

Looks like a little less than half the shares were part of the DRP.

3.56 million issued at $1.2837 = $4.57m. Total divvy 706m x $0.021 = $14.8m (before tax).

[artemis]

An article from two months ago:

https://i.stuff.co.nz/national/126470732/more-real-estate-agents-than-homes-for-sale-in-nz

Change can happen fast. Back in September, when that article was published, there were about 17,000 residential properties for sale (Trademe only but that is probably most). This week about 23,000. Includes sections but not retirement villages - they have a separate category. So only useful for trends but still that's a decent jump in 3 months.

Some of those for sale will be for folk selling to move for retirement, but quite likely plenty will be rentals on the market.

[RupertBear]

An article in Stuff today about our very own Justakiwi! Inspiring stuff well done Justakiwi! :t_up:

https://www.stuff.co.nz/business/127205809/shares-for-christmas-for-grandchildren-of-caravandwelling-investor

[Rawz]

An article in Stuff today about our very own Justakiwi! Inspiring stuff well done Justakiwi! :t_up:

https://www.stuff.co.nz/business/127205809/shares-for-christmas-for-grandchildren-of-caravandwelling-investor

I read that earlier this morning and thought it must be her!

Well done JAK, really good read. Good to get the grandkids into investing early

[Grimy]

An article in Stuff today about our very own Justakiwi! Inspiring stuff well done Justakiwi! :t_up:

https://www.stuff.co.nz/business/127205809/shares-for-christmas-for-grandchildren-of-caravandwelling-investor

Great article. Wishing you a Happy Xmas and NY! That's along the lines of what we did with our son - matched birthday/Xmas/allowance money if he invested it rather than spend it. He's now 28 and paid off his student loan and well into paying off his house.

[mike2020]

Just a glance at NTA's and divs on the other 3 retirement companies and OCA is looking horribly unloved. From memory ARV used to pay a higher divi with some imputation. You have OCA paying over 4%? That seems out of sync.

[Antipodean]

Always good to see the top level employees participating in the DRP.
While I did not quite get ~366,000 shares I am happy with my allocation.

[fastbike]

An article in Stuff today about our very own Justakiwi! Inspiring stuff well done Justakiwi! :t_up:

https://www.stuff.co.nz/business/127205809/shares-for-christmas-for-grandchildren-of-caravandwelling-investor

Yes , well done to JAK. And a timely reminder to keep it civil in the korereo as this is an open forum, and us older folk need to be setting a good example.

[winner69]

Typical OCA ….todays market wrap….up,up,up and one down

Retirement village operators were stronger following news aged care provider Heritage Lifecare’s private equity owner entered into a $291m sale-and-leaseback arrangement with ASX-listed Centuria Capital. Ryman Healthcare rose 1.1% to $12.20, Summerset was up 0.8% at $12.95, and Arvida increased 0.5% to $1.95. Aged care provider Oceania Healthcare declined 0.8% to $1.31

[Beagle]

Typical OCA ….todays market wrap….up,up,up and one down

Retirement village operators were stronger following news aged care provider Heritage Lifecare’s private equity owner entered into a $291m sale-and-leaseback arrangement with ASX-listed Centuria Capital. Ryman Healthcare rose 1.1% to $12.20, Summerset was up 0.8% at $12.95, and Arvida increased 0.5% to $1.95. Aged care provider Oceania Healthcare declined 0.8% to $1.31

Its been a disappointing year for shareholders. Started the year at $1.45 and after theoretically promising so much potential its ended up materially underperforming the NZX50. I am holding a moderate stake, (free carry), and hoping for better things in 2022 but not expecting any huge miracles.

[bull....]

well i thought i got out to early but i see its been hammered back down again ... 1.30 test again ?

looking good still may even test that 1.28

[winner69]

End of another month and another year ..... and again SUM share price seems to do better than OCA's

last 12 months OCA down 8% and SUM up 9% ....so the line on the trend heads south

The trend can't continue for ever - that would mean OCA goes to zero lol

Glad I have heaps more SUM than OCA ..... shouldn't have got sucked in by all the hype over the years and inflection points etc etc ...... but at least ahead on OCA but 'diversification' in the sector has been costly

Don't worry OCA believers - you could be right if you see the chart as 2022 is surely the year for OCA to be a star

[Beagle]

To be fair, for most of that time OCA have been making steady progress towards transforming their old business model and with regard to brownfield developments, that's come at quite a cost. I'm hoping for a decent year for OCA in 2022 but not expecting any miracles. 2023 and 2024 should see the Oceania snowball really starting to gather momentum.
Patient puppies will get a very good feed in due course.

[winner69]

To be fair, for most of that time OCA have been making steady progress towards transforming their old business model and with regard to brownfield developments, that's come at quite a cost. I'm hoping for a decent year for OCA in 2022 but not expecting any miracles. 2023 and 2024 should see the Oceania snowball really starting to gather momentum.
Patient puppies will get a very good feed in due course.

Guru's at Forbar reckon OCA going to go gangbusters - 35% CAGR EBITDA growth over next few years

Much higher than the others

Wonder why anybody bothers with Arvida if the chart is indicative of what is going to happen

[Beagle]

It seems a little strange to me that on one hand according to market screener almost all the analysts have this as a BUY with an average target price of $1.64 https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/
and yet on the other it got no love from any broker in the coming years share competition.

Contrasting that with HGH which attracted a lot of love (4 picks) and yet the average analyst price target is just $2.19 https://www.marketscreener.com/quote/stock/HEARTLAND-GROUP-HOLDINGS-47041144/consensus/ compared to the closing price for the year of $2.52.

Go figure ?

[winner69]

Covid ‘allegedly’ in Everil Orr

https://home.nzcity.co.nz/news/article.aspx?id=346202

[Ggcc]

Covid ‘allegedly’ in Everil Orr

https://home.nzcity.co.nz/news/article.aspx?id=346202
it was eventually going to happen. I just hope the residents and staff still feel safe and get through this hurdle

[Beagle]

Dogs of the Dow is a popular strategy. For those that don't know, you buy a bunch of the worst performers for the year of the Dow and hope they outperform the index the following year.

OCA was a real dog last year. Maybe 2022 will see it barking and outperforming the NZX50 ? If not, I think as long as one takes a "dogged" approach to holding over the next few years these should bark very nicely at some stage.

[winner69]

Dogs of the Dow is a popular strategy. For those that don't know, you buy a bunch of the worst performers for the year of the Dow and hope they outperform the index the following year.

OCA was a real dog last year. Maybe 2022 will see it barking and outperforming the NZX50 ? If not, I think as long as one takes a "dogged" approach to holding over the next few years these should bark very nicely at some stage.

Ryman was a bigger DOG …down 18% in 2021

[trader_jackson]

https://www.nzherald.co.nz/nz/kiwis-to-be-without-1pm-covid-19-cases-update-for-first-day-of-2022/QZBHOHNZW4GJCVGKXYGV5HEDPQ/

Not a relative of a resident in an independent unit, not a resident in an independent unit, not a staff member either... but a resident at Everil Orr rest home which Oceania owns.

This may be a little different.

Fingers'n toes crossed this doesn't get into other residents at the rest home.

[Beagle]

Ryman was a bigger DOG …down 18% in 2021

ATM one of the worst dogs of the NZX50 :eek2:...I'm going off this theory is a huge hurry lol

[winner69]

ATM one of the worst dogs of the NZX50 :eek2:...I'm going off this theory is a huge hurry lol

Ryman, Pushpay, Meridan, Synlait and A2 were the worst 5 on the NZX50

Can't imagine you 'investing' in any of those

[Beagle]

Ryman, Pushpay, Meridan, Synlait and A2 were the worst 5 on the NZX50

Can't imagine you 'investing' in any of those

That's the dog's of the dow theory for the NZX done like a dog's dinner right there !

I might put a paw up for a few Meridian in the very low $4's if they ever get there but the rest of them can stay in the dogbox where they belong.

[Biscuit]

That's the dog's of the dow theory for the NZX done like a dog's dinner right there !

I might put a paw up for a few Meridian in the very low $4's if they ever get there but the rest of them can stay in the dogbox where they belong.

Should give a good theory a fair chance though. I don't think I'd put a wager on it but surely its fair odds that on average the "dogs" will out-perform OCA over the next 12 months?

[Muse]

Should give a good theory a fair chance though. I don't think I'd put a wager on it but surely its fair odds that on average the "dogs" will out-perform OCA over the next 12 months?

RE the general dogs of dow theory here is an interesting ASX factoid for everyone: the 10 worst performing stocks on the ASX were up 27.8% in 2021 with 9 of the 10 of them up.

[Beagle]

Should give a good theory a fair chance though. I don't think I'd put a wager on it but surely its fair odds that on average the "dogs" will out-perform OCA over the next 12 months? Mate, with all due respect, you either think its good odds and will back it or you don't. I wouldn't own any of those shares other than Meridian if it gets down to about $4.20 or maybe RYM at about $7. If they don't get down that low, I'm not concerned.

[Maverick]

Happy new years fellow posters!
Let's crack off the new year with a classic long and windy speel.
All this chit chat about stock picking lists and annual competitions is not where I'm at , that all sounds like horse racing to me.

I posted recently about OCA`s build rate and its dominant downstream impact on the bottom line (post 11288) and then the ongoing annuity (DMF) income thereafter.

This is a follow on to that post so that's worth re-reading to help understand this post better.
My concern with OCA is the historical build rate of about 215 p/a. It just isn't enough now that the company has new shares and is now a 2.3B company. Over the new year break I've put some focus into the possibility of Brent's new verbal build target ramping up to 300-350. I had initially dismissed this ambitious statement from my workings in the meantime and said I'll believe it when I see it.

After more mulling, I've now concluded there are now enough clues that he is actually doing as he claims. My reasoning is as follows:
-Last HY saw a very large increase in capex from $40m to $70m.
-Commencing construction of 209 units in the last 6 months 1HY22.
-Raising an extra spare 20m in the capital raise suggests to me expansionary thinking.
-Hiring 2 extra heavy hitting directors. Rob's area is capital markets and Peter`s in property developments.
- And just having a ****-ton of pre-consented construction on hand all set to roll out at will.

So they have the land, the consents, the staff, the funding , the new target… and it seems from the increased capex spend that they have already pulled the trigger.

After sitting in the cynical camp for a while I've decided there are enough clues now to safely join some dots that the rate increase is real.

It will take 5 years from now for the recent projects started to be mature villages so of course this ramping up now won't produce profit immediately. The good news is that it's only 1.5 - 2 years when this capex spend increase produces rewards. firstly with the sugar rush of new build margins (20-35 % of the spend depending on the region) which then reduce and settle into ongoing village annuity (DMFs- 10% for each of the first 3 years). So you can see any capex dollar spent now produces handsome returns over 1.5 - 6 yrs. of about 50-65%.
It also increases the NTA which the share price seems tied to for now.

To quantify how significant the 2 build rate differences of the historical average of 215 is to the new 325 target, I've run the scenarios through the good ol` spreadsheets.
A build rate of 215 over next 7 years = cagr 12%.
A build rate of 325 over next 7 years = cagr 17%.
On top of this are annual dividends to enhance returns further ( say 3% net) .
But wait , there's more!!! If a company can regularly offer somewhere between 12-17% cagr then there is going to be some nice PE expansion for the share price from its current PE18.

So there's plenty to be happy about if one truly has a long term strategy. Certainly not a share that will give many thrills to people who love the market excitement of the NZX but it's rare quality combo of a very solid future returns with the underwritten safety of buying at NTA.(which is constantly growing in itself).

Ps. The 12% growth has already been in play since passing the care profit inflection point but was swallowed up in the recent HY1 by covid costs , paying the wage subsidy back , covid lockdowns and dilution effect of the new capital raise shares. All these are one offs (well maybe not the covid cost just yet) so OCA just might sneak out of the dog box 2022. If not this year then CERTAINLY calendar year 2023 when Waimarie starts selling.

[Rawz]

As per... brilliant post Mav. Very insightful, thanks a million for sharing

[bottomfeeder]

Ultimately the build rate must reach saturation by all resthome providers. Long term profitability must be measured by their operations and not growth.

[Snow Leopard]

Ultimately the build rate must reach saturation by all resthome providers. Long term profitability must be measured by their operations and not growth.

No growth, no profit.

[Beagle]

Happy new year to all.

Good post Mav but I remain cautious of any quick bound up in the build rate....supply chain issues and constrains around physical capability of the construction firms they use in terms of numbers of personnel.

From vague memory, I think they may have tweaked the business model for care suites to 15%, 10%, and 5% DMF.

Valuers use a 14+% discount rate to value the cash flow from units so over the long term one would hope OCA attain at least this return.

Interestingly on the call the team alluded too the true fair NAV (net asset value if unsold units were priced at market value and developments in progress at cost) as being $1.42 as at 30/9/2021.

The real estate market has risen in the last quarter of 2021 and of course you've got 3 months more of that 14% discount rate the valuers use (3.5% per quarter) so I think fair adjusted NAV is currently in the vicinity of $1.42 + 3.5% = ~ $1.47 With the shares closing last year at $1.34 that's close to a 10% discount to estimated current fair value NAV. That seems like a reasonable place to put fresh capital to work so I am biased towards upsizing my current fairly modest free carry holding.

[BlackPeter]

Ultimately the build rate must reach saturation by all resthome providers. Long term profitability must be measured by their operations and not growth.

True ... however - what is long term?

For the next 2 to 3 decades or so demand will continue to increase, and with it needs to go the supply.

I agree that around the mid of this century we likely will have a global population peak, and all will go down from there (is this another inflexion point?). This is when retirement villages will need to venture into other business ... or start shrinking.

Not sure, though whether this will be a big problem for my investment horizon :):

[Maverick]

Ultimately the build rate must reach saturation by all resthome providers. Long term profitability must be measured by their operations and not growth.
Of course Bottom feeder, over building would be a disaster for everyone. But ALL these operators look ahead many years before committing to these massive projects. Its not the same volatile market as domestic, where mum and dad get all enthused and slap a house on their front lawn.

NZ needs 1700 EXTRA units each year to meet the grey tsunami.

OCA`s 2 points of difference over their peers in what is already a competitive market;
Firstly, their land is in more exclusive areas already where the rich listers already live. As apposed to buying a paddock on the outskirts somewhere.
Secondly, the number one factor for residents in selecting a village is its late care offerings and that, I think we can all agree, is where OCA shines.

All operators are reporting very strong demand and all of them have low empty stock . At this point the very opposite of over supply is happening.

Considered and careful expansion is what the game is all about for now. 2040 it all goes tits up, maybe they just sell `em off as apartments. Certainly not something to include in our 2022 list of worries.

[bottomfeeder]

Yep have to agree with you all, probably not something to worry about on our investment horizon. But I would hope that the company is maximizing profits from all aspects of their businesses. I am sure any responsible provider would be doing this. I would hate for resales to be subsidising care for example.

[dobby41]

Ultimately the build rate must reach saturation by all resthome providers. Long term profitability must be measured by their operations and not growth.
There are still a lot of elderly coming up. While your statement is true saturation is a long, long way off.

No growth, no profit.
Surely they can still profit from recycling units, as opposed to building new?

[winner69]

Yep have to agree with you all, probably not something to worry about on our investment horizon. But I would hope that the company is maximizing profits from all aspects of their businesses. I am sure any responsible provider would be doing this. I would hate for resales to be subsidising care for example.

That’s probably happening now ..and will continue

[winner69]

MOH today

Today we can confirm there are now six cases of COVID-19 from the Everil Orr Care Centre in Mount Albert, including five residents and one staff member.

One of the residents, who tested positive on 30th December, is in hospital and is currently in a stable condition. All other residents, and the staff, were tested on 31st December and early on New Year’s Day. All residents and staff are fully vaccinated. The facility is run by Oceania and is being supported by Public Health and Auckland DHB.

[Joshuatree]

And a real possibility of Properties having a 10 -20% correction this year.

[davflaws]

And a real possibility of Properties having a 10 -20% correction this year.

Remember that the experts predicted nine of the last two corrections.

[Beagle]

And a real possibility of Properties having a 10 -20% correction this year.

I agree with John Key that the current level of house prices is unsustainable but seeing as OCA unit prices have risen nowhere near the speed of general real estate in recent years and most people are making a needs based decision or a lifestyle decision to dramatically downsize I don't think a moderate correction would have much impact, if any, on OCA.
You could easily make the case a lot of fear of the unknown with Omicron is already baked into the current price too.
I'm not expecting any miracles this year...maybe we head back towards $1.50 but hopefully momentum starts to build nicely in 2023, 2024 and beyond. Within 5 years it should double or maybe a bit more = ~ 15% annual compounding rate of return + dividends. Nothing too shabby about that.

https://www.oneroof.co.nz/news/40675

[winner69]

6 cases in Everil Orr when whole of Auckland region reported 71 is a bit of worry

Hope it hasnt been undetected there for a week or so ….after all it seems it was only detected when a resident ended up in hospital and apparently only tested then

[Beagle]

Maybe the staff member that got it was asymptomatic. Hope everyone is going to be okay.

[Dlownz]

Even if house prices drop 10%-20%. It won't correlate to oca so much as they have not increased there unit prices anywhere near as much as they could have. In fact I think a little slow on their part. Covid will keep retirement stocks flat this year till this hopefully passes and we are back to normality if that will exist again

[Shareguy]

Let’s hope it works out ok for these folk. Oceania has been all over the news so will be interesting when the market opens on Wednesday.

[Biscuit]

Mate, with all due respect, you either think its good odds and will back it or you don't. I wouldn't own any of those shares other than Meridian if it gets down to about $4.20 or maybe RYM at about $7. If they don't get down that low, I'm not concerned.

No, I wouldn't wager on it. I got burned last year on A2 and am not keen for another dance with them until they have figured out what they are doing. Hold MEL and bought some PPH after it was dumped at the end of last year. Have held RYM for a long time but sold down over the last couple of years and switched into OCA. All in all, I'm not that keen on gambling on the dogs but I like to keep a few outside chances in the stable along with the thoroughbreds.

[winner69]

In between the races / cricket updated my OCA underlying earnings forecasts for F22 and F23

F22 forecast $70m - 255 new sales and 286 resales to give $85m realised gains less $15m loss on running villages and looking after people.

F23 forecast $96m - 270 new sales and 348 resales to give $109m realised gains less $13m loss on running villages and looking after people.

Tried and true methodology .... sales numbers Forbar guesses and realised gains my assessment. Can't see the losses on running villages ad looking after people going away any day soon

F21 12 month was $50m so these forecasts pretty good eh


Share price 180/200 by year end

[Beagle]

Looking at the chart suggests its going to be a bit of a grind for a while longer. Tracking along sideways holding underneath the 200 day moving average. You'd easily be forgiven for thinking its in something of a holding pattern until we know what's going to happen with Omicron and that's probably where its at in the short term in my opinion. My sense is this is best viewed as a long term value play, buying about 10% below its intrinsic fair NAV...just decide how many you want and throw it in the bottom drawer.

[allfromacell]

I wouldn't be surprised to see private equity having a sniff around early this year, the stocks trading at a very compelling price for a long term holding and could probably be brought for less than $2 per share.

A relatively low NZD makes it even more compelling.

[Beagle]

In between the races / cricket updated my OCA underlying earnings forecasts for F22 and F23

F22 forecast $70m - 255 new sales and 286 resales to give $85m realised gains less $15m loss on running villages and looking after people.

F23 forecast $96m - 270 new sales and 348 resales to give $109m realised gains less $13m loss on running villages and looking after people.

Tried and true methodology .... sales numbers Forbar guesses and realised gains my assessment. Can't see the losses on running villages ad looking after people going away any day soon

F21 12 month was $50m so these forecasts pretty good eh


Share price 180/200 by year end

I'm not pleased to see this mutt back at $1.31 and probably our mate Maverick even less thrilled with his XXXXXXL holding. I can't work up too much excitement at getting any more as I think you're too optimistic with your price target.

[Greekwatchdog]

And Mau seems such a long time before we get FY unless they surprise us with an update. And they still have that $100m to spend that they raised from bond offer...

[Waltzing]

this thing is on the line... O Neil always maintained the longer the flat line the higher the jump....in this case it looks like a parachute might be at the ready ...

[Ggcc]

this thing is on the line... O Neil always maintained the longer the flat line the higher the jump....in this case it looks like a parachute might be at the ready ...
It’s a sea of red so would not be too concerned yet. Maybe people are awaiting to see what happened to the Auckland residents who had covid.

[winner69]

At least OCA didn’t end the day sub 130

[Waltzing]

wait for this to hit which is why even SKC is selling off...

https://www.stuff.co.nz/business/127472723/stark-warning-to-businesses-prepare-now-for-the-big-sick

think its sell time..

thats the sound of a klaxon on a war ship going past i hear ..

[Waltzing]

who ever sells at 1.0 can we buy? it got to be a bargain surely..

Price discovery?

But what if Baker is right... spring? just in case this spring thaw actually takes place what state would this market be in then?

Now some say its just lime lighting and so far none of his predictions have come to pass.

Well this will be interesting but not for anyone in a retirement village...they will have to pressure suite the staff!!! oh dear..

Looks like you need the OMI vaccine if transmission is to be dampened..

Pfizer says Omicron vaccine will be ready in March - NZ Herald (https://www.nzherald.co.nz/world/pfizer-says-omicron-vaccine-will-be-ready-in-march/C6G3T5G5T3BT3TND7KCVLHHAVI/)

[bottomfeeder]

who ever sells at 1.0 can we buy? it got to be a bargain surely..

Price discovery?

But what if Baker is right... spring? just in case this spring thaw actually takes place what state would this market be in then?

Now some say its just lime lighting and so far none of his predictions have come to pass.

Well this will be interesting but not for anyone in a retirement village...they will have to pressure suite the staff!!! oh dear..

Looks like you need the OMI vaccine if transmission is to be dampened..

Pfizer says Omicron vaccine will be ready in March - NZ Herald (https://www.nzherald.co.nz/world/pfizer-says-omicron-vaccine-will-be-ready-in-march/C6G3T5G5T3BT3TND7KCVLHHAVI/)
Every one out there is in the same boat. OCA SP is already depressed enough.

[bull....]

looking good still may even test that 1.28

looking good still , weekly bollingers have 1.20 as a possible

[ralph]

wait for this to hit which is why even SKC is selling off...

https://www.stuff.co.nz/business/127472723/stark-warning-to-businesses-prepare-now-for-the-big-sick

think its sell time..

thats the sound of a klaxon on a war ship going past i hear ..
The longer we wait for the big sick in the N Z the harder it is going to hit ,in a country with no herd immunity .

[hogie]

The longer we wait for the big sick in the N Z the harder it is going to hit ,in a country with no herd immunity .

I see things the same way ... NZ is going to be the only country in the world where people have not really experienced Covid ... so when it does hit us it will hit hard!

Make sure you start taking your vitamin C tablets and position yourselves carefully :)

[clearasmud]

I see things the same way ... NZ is going to be the only country in the world where people have not really experienced Covid ... so when it does hit us it will hit hard!

Make sure you start taking your vitamin C tablets and position yourselves carefully :)
I don't think Omicron is dangerous to the non compromised.
It doesn't cause infection of the alveoli.

[Biscuit]

The longer we wait for the big sick in the N Z the harder it is going to hit ,in a country with no herd immunity .

So, this is the complete opposite of the truth. The longer we hold it off, the more people are vaccinated. The longer we hold it off the better the treatments available. NZ has dodged a bullet by managing to hold it at bay so well for so long.

[Poet]

So, this is the complete opposite of the truth. The longer we hold it off, the more people are vaccinated. The longer we hold it off the better the treatments available. NZ has dodged a bullet by managing to hold it at bay so well for so long.

Well, that's true up to a point, but there is an argument, and a very strong one IMO, that we should allow Omicron to circulate freely in order to provide us with immunity against the next iteration of covid which could be far more deadly.

Hopefully when the government finally gets back from their summer holidays, we can get a steer on what the plan is from here.

IMO, we are due an explanation as to why they delayed the start of the 4 month boosters until 5th January rather than getting on with it immediately the decision was made. Also, why bookings can't be taken until 17 January (surely not because programmers on summer holidays). I doubt the PR machine will provide answers though.

At the end of the day (and probably much much sooner) Omicron will be raging through anyway as the MIQ systems won't be competent to keep it out, and there's no way NZ will accept going back to hard lockdown

[JohnnyTheHorse]

Well, that's true up to a point, but there is an argument, and a very strong one IMO, that we should allow Omicron to circulate freely in order to provide us with immunity against the next iteration of covid which could be far more deadly.

Hopefully when the government finally gets back from their summer holidays, we can get a steer on what the plan is from here.

IMO, we are due an explanation as to why they delayed the start of the 4 month boosters until 5th January rather than getting on with it immediately the decision was made. Also, why bookings can't be taken until 17 January (surely not because programmers on summer holidays). I doubt the PR machine will provide answers though.

At the end of the day (and probably much much sooner) Omicron will be raging through anyway as the MIQ systems won't be competent to keep it out, and there's no way NZ will accept going back to hard lockdown

Look at the data coming out on how little protection Pfizer provides on symptomatic infection (note it still provides good protection at minimising severity) after 5+ months post 2nd dose vs. having booster dose. This shows why it is absolutely critical we get booster doses as high as possible within the next 4 weeks, or NZ hospitals will quite simply be severely overwhelmed (unless we went back to a level 4 type lockdown). We have a small window to minimise the impact of what Omicron is going to do to us and at this stage we would be stupid not to take advantage of it.

We still need to be aiming to opening borders end of Feb imo.

[Biscuit]

Well, that's true up to a point, but there is an argument, and a very strong one IMO, that we should allow Omicron to circulate freely in order to provide us with immunity against the next iteration of covid which could be far more deadly.....



So, you have learnt nothing in nearly two years of this pandemic?

[iceman]

So, this is the complete opposite of the truth. The longer we hold it off, the more people are vaccinated. The longer we hold it off the better the treatments available. NZ has dodged a bullet by managing to hold it at bay so well for so long.

"Truth" as the words spoken from the "pulpit of truth" on a daily basis ? What you say here is a repeat of what we were told last year when the drive to 90% double vaccinated was happening. Ralph & Poet made some very valid points, that I agree with.

[777]

Why don't you guys take this rubbish to the coronavirus thread.

[ralph]

Every time someone mentions the covid and a new strain it infects that particular thread for a while and no one knows the truth yet, except Cindy & biscuit of course .

[BlackPeter]

Well, that's true up to a point, but there is an argument, and a very strong one IMO, that we should allow Omicron to circulate freely in order to provide us with immunity against the next iteration of covid which could be far more deadly.

Hopefully when the government finally gets back from their summer holidays, we can get a steer on what the plan is from here.

IMO, we are due an explanation as to why they delayed the start of the 4 month boosters until 5th January rather than getting on with it immediately the decision was made. Also, why bookings can't be taken until 17 January (surely not because programmers on summer holidays). I doubt the PR machine will provide answers though.

At the end of the day (and probably much much sooner) Omicron will be raging through anyway as the MIQ systems won't be competent to keep it out, and there's no way NZ will accept going back to hard lockdown

Anybody knows where the OCA thread is?

[winner69]

Probably be like this in NZ next month.Thousands of residents being locked in their rooms etc etc

Thousands of residents infected as aged care sector hits ‘crisis’
https://www.smh.com.au/national/thousands-of-residents-infected-as-aged-care-sector-hits-crisis-20220111-p59nix.html

[Biscuit]

...... no one knows the truth yet, except Cindy & biscuit of course .

Well, yes, Cindy's not always right though.

[ralph]

Get away with you ,blasphemy

[Joshuatree]

So, this is the complete opposite of the truth. The longer we hold it off, the more people are vaccinated. The longer we hold it off the better the treatments available. NZ has dodged a bullet by managing to hold it at bay so well for so long.

Agree and so true re better treatments coming, win/win big big time.We so lucky.
Poet you can wander into a pharmacy without a booking and be out in 15 20 min with your booster.

[cymonger]

Probably be like this in NZ next month.Thousands of residents being locked in their rooms etc etc

Thousands of residents infected as aged care sector hits ‘crisis’
https://www.smh.com.au/national/thousands-of-residents-infected-as-aged-care-sector-hits-crisis-20220111-p59nix.html


In my early training years, I spent quite a bit of time working in nursing homes as part of different rotations. There is a HUGE correlation between how "busy" and active you can keep people and their future prospects regarding overall health and decline. One of the world's most important neuroscientists named Oliver Sacks (from the movie "Awakenings") discovered how powerful music was, and how it had the power to reach people with even severe cases of dementia. https://www.youtube.com/watch?v=MdYplKQ4JBc. Right here in New Zealand, a wonderful story about the "Hip-Hoperation" crew https://www.youtube.com/watch?v=90sXcZwOSuw highlighted how one woman named Billy Jordan went into nursing homes and turned them into award winning hip-hop dancers!!!! https://www.youtube.com/watch?v=saRWpSqQpPA

My point being, regardless of the dangers of Covid, the dangers of isolation are also devastating for older people. Some studies are being done right now about how Covid and its secondary affects have affected people in nursing homes. This is highly relevant to OCA and all businesses that work with older people. Servicing this population goes well beyond providing comfortable homes. It's about providing healthy and holistic options biologically, psychologically, and socially.

[iceman]

In my early training years, I spent quite a bit of time working in nursing homes as part of different rotations. There is a HUGE correlation between how "busy" and active you can keep people and their future prospects regarding overall health and decline. One of the world's most important neuroscientists named Oliver Sacks (from the movie "Awakenings") discovered how powerful music was, and how it had the power to reach people with even severe cases of dementia. https://www.youtube.com/watch?v=MdYplKQ4JBc. Right here in New Zealand, a wonderful story about the "Hip-Hoperation" crew https://www.youtube.com/watch?v=90sXcZwOSuw highlighted how one woman named Billy Jordan went into nursing homes and turned them into award winning hip-hop dancers!!!! https://www.youtube.com/watch?v=saRWpSqQpPA

My point being, regardless of the dangers of Covid, the dangers of isolation are also devastating for older people. Some studies are being done right now about how Covid and its secondary affects have affected people in nursing homes. This is highly relevant to OCA and all businesses that work with older people. Servicing this population goes well beyond providing comfortable homes. It's about providing healthy and holistic options biologically, psychologically, and socially.

This is a good post and great points you make cymonger. The residents are in many cases very vulnerable and need social contact and physical exercise. A couple of weeks ago a friend of mine who is a Doctor in an emergency department at a hospital at the forefront of Omicron in a Nordic country where it is very rampant, posted in response to a couple of retirement homes being put into isolation/quarantine, that he hoped the residents and their families has been asked if that is what they wanted and that their wishes had been listened to. He went on to say that the very real and negative effects on the residents, both mentally and physically, from being locked down in their rooms on their own, had to be weighed against the potential threat of the "Omicron cold" (his words).

[bull....]

staffing a problem in retirement villages already once omicron is let in it will cause these staffing issues to blow out big time. who's going to care for the residents ? wages will blow out as these companies have to pay over the top to get staff will also be a on going issue.

[BlackPeter]

staffing a problem in retirement villages already once omicron is let in it will cause these staffing issues to blow out big time. who's going to care for the residents ? wages will blow out as these companies have to pay over the top to get staff will also be a on going issue.

No doubt Omicron will create issues for some months ... however - no matter how it plays out, I don't see it as creating ongoing problems for the sector.

[Ggcc]

staffing a problem in retirement villages already once omicron is let in it will cause these staffing issues to blow out big time. who's going to care for the residents ? wages will blow out as these companies have to pay over the top to get staff will also be a on going issue.
You’re only looking at it from 1 angle. All small businesses will struggle more than the OCA models if omicron gets hold. In small businesses one staff member gone could mean they need to close up for how many days it takes to get them back. Your hospitality venues and many other businesses are already running on skeleton crew. I think we will all need to adapt and learn to pay more for the simple things we take for granted now.

[Louloubell]

I see the current weakness in share price as a wonderful opportunity to increase my holding. 😋

[BlackPeter]

I see the current weakness in share price as a wonderful opportunity to increase my holding. ��

I like the spirit!

Discl: hold already more OCA than my diversification policy normally would allow ... but don't loose sleep over it.

[allfromacell]

I see the current weakness in share price as a wonderful opportunity to increase my holding. 

Yep, ones capitulation is another ones entry. Patience will be rewarded but I can't blame some for fearing the worst about the upcoming Omicron wave, uncertain times for the sector absolutely but one needs to look forward a few years. Markets are usually pretty good at doing this eg Auckland Airport not fearing too badly during the pandemic.

[Shareguy]

looking good still , weekly bollingers have 1.20 as a possible

Gosh looks like you might be right Bull.

[Waltzing]

this dead boring stock must be a proxy for the great property game in NZ...otherwise its just plain boring...worse far worse than ARG...

the future is out there in the big world...this is bowls and morning tea ...

Elgars in the south playing in the back ground if your lucky else some terrible country and western music...

[davflaws]

Elgars in the south playing in the back ground if your lucky else some terrible country and western music...

Yewkin allays play in backwrds - git yr dawg back - git yr girl back - git yr truck back. I like both kindsa music - mainly Country - but I like Western too.

Since I am ridiculously overweight at 45% I need some distraction.

[winner69]

this dead boring stock must be a proxy for the great property game in NZ...otherwise its just plain boring...worse far worse than ARG...

the future is out there in the big world...this is bowls and morning tea ...

Elgars in the south playing in the back ground if your lucky else some terrible country and western music...

Wasn't Elgar into Enigmas

Maybe OCA is an enigma .... bull say 120 and allfromacell talks capitulation ..... seems to suggest if share price goes to 120 you may as well wait until its 110 to get the rel bargain.

But Peter not worried so no worries

[Waltzing]

"Enigmas"

well they could play the variations of course ... but really nothing like a bit of Pomp and Circumstance ....

was thinking 1.10 but whos to say it wont stay there for ever...

KIP... just KIPPING alone...

[Beagle]

I see the current weakness in share price as a wonderful opportunity to increase my holding. ��

I was thinking exactly the same thing out on my walk this morning. Be great if it did get down to $1.20 as for anyone with vision to see through the Covid fog that would be a tremendous opportunity to build value over the medium to long term.

[Baa_Baa]

MOH today

Today we can confirm there are now six cases of COVID-19 from the Everil Orr Care Centre in Mount Albert, including five residents and one staff member.

One of the residents, who tested positive on 30th December, is in hospital and is currently in a stable condition. All other residents, and the staff, were tested on 31st December and early on New Year’s Day. All residents and staff are fully vaccinated. The facility is run by Oceania and is being supported by Public Health and Auckland DHB.

Has anyone heard any updates on the covid situation at Everil Orr?

[Habits]

One covid death so far this year on 11 January, maybe that was one of their residents. Been very quiet otherwise

[Greekwatchdog]

What a stupid thing to say Habits. Go take your stupid assumptions elsewhere. Wait for the fact before you comment.

[bull....]

Gosh looks like you might be right Bull.

maybe.
time will tell of course but i do have the trend on my side as well as the fundamentals

[Beagle]

Fundamentals look fine to me, the chart looks like a poorly bred mutt. Sentiment is poor...glad I only have a modest allocation, all free carry. Might up the ante at $1.20 if it gets down there otherwise I'm not fussed about bothering to do anything. I think the threat of Omricon is weighing on the sector and OCA is most exposed with their business model having the highest level of care of the sector so the weakness is understandable.

[Shareguy]

Well I have had a good look at this over last few days. After selling down a good portion last year I’ve come to the conclusion that OCA is over sold currently. The fundamentals stacks up and the risks are priced in. They have some great assets coming to market next few years. The St Helliers development is going to be sold at a premium for a premium location.

When you consider it’s a care model more closely aligned with Arv I still can’t see the justification for the current price selling below Nav, when Arv is selling at a healthy premium.

On that basis I purchased a decent number adding to my position with the last lot purchased this morning at $1.26.

Just can’t see how you can go wrong at this level. Large insider purchases at a much higher price also gives me comfort.

[Beagle]

Fair value adjusted NAV at the last call was $1.42 (counts developments in progress at cost and all unsold units at fair market value) but that was more than 3 months ago and the market was firm in the last quarter of 2021. Probably getting close to $1.50 now with further work in progress on developments, further sales and accrued earnings since then.

I agree 100% that in the medium to long term its hard to see how you can go too far wrong from here. In the short term however when, (not if), Omrcon rips through New Zealand its quite possible (probable ?), sentiment could be so negative that we could see a (materially ?), more advantageous point at which to add to one's stake. Keeping some powder dry for that appears prudent to me.

[winner69]

.....

In the short term however when, (not if), Omrcon rips through New Zealand its quite possible (probable ?), sentiment could be so negative that we could see a (materially ?), more advantageous point at which to add to one's stake. Keeping some powder dry for that appears prudent to me.

could possibly get close to a buck .... don't really want to buy anymore but a buck would be too good to miss out on

[STr]

could possibly get close to a buck .... don't really want to buy anymore but a buck would be too good to miss out on

maybe a dumb question but, given I am already down 14% on this share, and we all generally accept it may go down more before it gets better …. Wouldn’t it be a good idea to sell now, keep the cash ready, and then buy back in once omi has done its damage and thus have more shares than now as the business and share prices looks to recover?

[Rawz]

maybe a dumb question but, given I am already down 14% on this share, and we all generally accept it may go down more before it gets better …. Wouldn’t it be a good idea to sell now, keep the cash ready, and then buy back in once omi has done its damage and thus have more shares than now as the business and share prices looks to recover?

Nobody knows the future. Nobody can time the market. Just hodl
Good to have a diversified portfolio in times like these when on of your stocks comes under pressure.

My OCA holding is dragging. Like it did in 2021. But I still believe in the long term performance of this stock. Better than cash.

Where can you buy property in the main centers for less than its worth? Thats how i look at the NTA discount situation

[winner69]

maybe a dumb question but, given I am already down 14% on this share, and we all generally accept it may go down more before it gets better …. Wouldn’t it be a good idea to sell now, keep the cash ready, and then buy back in once omi has done its damage and thus have more shares than now as the business and share prices looks to recover?

Depends on whether you are a gambler or not

The share price might not fall any further and then you might have to buy higher than you sold yours for. On the other hand sell now and if they go down another 10%/20% you will make a killing

Often wise investors say if the reason for you originally buying hasn't changed than stay on board - even beagle says nothing has really changed long term

Maybe if you really think OCA is good why not save up a few bucks and buy some more if there is a crash

I've got enough at the moment and not selling those but will buy more if down near a buck .... see i'm no trader and I'm assuming neither are you

I'm not a financial advisor so it's got to be your call

[STr]

Depends on whether you are a gambler or not

The share price might not fall any further and then you might have to buy higher than you sold yours for. On the other hand sell now and if they go down another 10%/20% you will make a killing

Often wise investors say if the reason for you originally buying hasn't changed than stay on board - even beagle says nothing has really changed long term

Maybe if you really think OCA is good why not save up a few bucks and buy some more if there is a crash

I've got enough at the moment and not selling those but will buy more if down near a buck .... see i'm no trader and I'm assuming neither are you

I'm not a financial advisor so it's got to be your call

Experience had spoken. Thanks Rawz and Winner.

[Muse]

Nobody knows the future. Nobody can time the market. Just hodl
Good to have a diversified portfolio in times like these when on of your stocks comes under pressure.

My OCA holding is dragging. Like it did in 2021. But I still believe in the long term performance of this stock. Better than cash.

Where can you buy property in the main centers for less than its worth? Thats how i look at the NTA discount situation


True.

But playing devils advocate - it's also analogous to buying (say) a minority shareholding in a dairy that owns the building. The building might be worth a million, but the dairy loses $50k a year. given the two business units are owned by the entity you have to buy a share in, then of course the group equity value will be less than the NTA, given you have to buy the loss making part too. Doesn't mean OCA can't grow NTA, or stablise care earnings in time, but there are good reasons why it trades at a significant discount to SUM on a P/NTA basis.

[Shareguy]

Nobody knows the future. Nobody can time the market. Just hodl
Good to have a diversified portfolio in times like these when on of your stocks comes under pressure.

My OCA holding is dragging. Like it did in 2021. But I still believe in the long term performance of this stock. Better than cash.

Where can you buy property in the main centers for less than its worth? Thats how i look at the NTA discount situation

Rawz sums it up perfectly. Talk of $1.00 sounds like a pipe dream to me, but who no’s. Delta has not been as bad as many on here thought for the sector and what I read says that omicron is less of an issue.

As long as you are diversified and are in for the long term you should do well. There are plenty of people that wait for the perfect price to enter and before you no it the price has escalated.

For me the research I have done it looks like a very good buy. The government will have to come to the party with care costs, otherwise the state will be left with a market like what exists with residential rentals. Operators will reduce care and the state will have to step in.

I have not backed the truck up but now have a healthy position that I will keep adding too if it continues to fall.

[Habits]

What a stupid thing to say Habits. Go take your stupid assumptions elsewhere. Wait for the fact before you comment.


Hahahaha clearly you have not read what you wrote mr Geek its probably the stupidest argument one could make when it comes to share investments. Did you sleep badly or not at all and you got up grumpy. Or is that another assumption to trigger the Geek WD. From now on facts only and no assumptions before commenting

[winner69]

Panic over - I see share price back to 130

Now 120 is only a distant dream

[Beagle]

I think we're on for another challenging year in the market with headwinds of high inflation, rising 10 year bond rates, Omricon and probable subsequent variants, a rising official cash rate and central banks around the world reducing stimulus and increasing interest rates.

Ongoing issues with general staff shortages, difficulties getting and retaining skilled nurses and caregivers and a flat or declining real estate market present are specific challenges to this sector with OCA most vulnerable with staff because of its high level care model. I think most or probably all of this is already in the share price at $1.30 but you cannot discount the possibility that this could ostensibly track sideways for quite a while while we wait for headwinds to abate.

Long term hold and years of patience will likely bring its rewards. In the meantime the dividend yield is probably about the same as you'd get on residential property but this is at about a 13% discount to my estimate of current NAV and work involved with this one is a LOT less than residential property.

That's my read on things. HOLD.

[RTM]

maybe a dumb question but, given I am already down 14% on this share, and we all generally accept it may go down more before it gets better …. Wouldn’t it be a good idea to sell now, keep the cash ready, and then buy back in once omi has done its damage and thus have more shares than now as the business and share prices looks to recover?

Nope…not a dumb question. Generally I am a long term holder and will just add to many stocks on price drops. Retirement villages were ~10 % of our portfolio, I reduced to 5% a year or so ago because of risk that I see in the sector. Mainly, COVID, Regulatory and stagnant or decreasing real estate prices. On top of that we are retired and the dividends are modest.

I am considering exiting the sector completely based on the Omicron risk. I guess it’s going to get out into our community and I imagine that it may hit the retirement villages hard. Not quite sure what I will do at this stage.

I would rebuy at around $1.00.
For what it’s worth.

[bottomfeeder]

Panic over - I see share price back to 130

Now 120 is only a distant dream
Now that it's been below 1.30, that it is back to 1.30 it looks like up to me. But it isn't. $1.30 =is a very low SP for OCA, considering the stage the company is at. Will Omicron be bad, probably. Will it affect staffing capabilities at OCA resthome, no doubt. The real question is how long. South Africa has judged the outbreak as shortlived for some reason, as well as other countries. In several countries cases are on the wane. Hopefully that will happen here. Then we can get down to normal business and a 1.70 SP.

[Waltzing]

"I would rebuy at around $1.00."

that assumes that running costs are going hit the P&L big time and the MR B reminder that they havnt been able to get the margin up on their unit sales?

Feeling like this is a KIP story in the making but surely not.

[bottomfeeder]

13411

I am overweight in OCA and I think I am comfortable with it. But I need the SP to get back to $1.70.

[Louloubell]

I need it to go to $2.50 in order to facilitate my desired life style. 😎

[BlackPeter]

13411

I am overweight in OCA and I think I am comfortable with it. But I need the SP to get back to $1.70.

$1.70? When was it that high? ... I only can see an ATH at $1.60.

[Joshuatree]

I think we're on for another challenging year in the market with headwinds of high inflation, rising 10 year bond rates, Omricon and probable subsequent variants, a rising official cash rate and central banks around the world reducing stimulus and increasing interest rates.

Ongoing issues with general staff shortages, difficulties getting and retaining skilled nurses and caregivers and a flat or declining real estate market present are specific challenges to this sector with OCA most vulnerable with staff because of its high level care model. I think most or probably all of this is already in the share price at $1.30 but you cannot discount the possibility that this could ostensibly track sideways for quite a while while we wait for headwinds to abate.

Long term hold and years of patience will likely bring its rewards. In the meantime the dividend yield is probably about the same as you'd get on residential property but this is at about a 13% discount to my estimate of current NAV and work involved with this one is a LOT less than residential property.

That's my read on things. HOLD.

Good post.Ive been out for a while for the those reasons .Getting and retaining staff (care givers)getting desperate for some ,I'm hearing.A big song and dance was made about a wage rise recently for staff on the front line,8c an hour!!? And the staff are being ,pressured to work harder and harder by management and nurses,with no time off given for very valid family and other reasons.They feel used and bullied and not respected,why should they stay.

[BlackPeter]

Good post.Ive been out for a while for the those reasons .Getting and retaining staff (care givers)getting desperate for some ,I'm hearing.A big song and dance was made about a wage rise recently for staff on the front line,8c an hour!!? And the staff are being ,pressured to work harder and harder by management and nurses,with no time off given for very valid family and other reasons.They feel used and bullied and not respected,why should they stay.

Could you please clarify about which particular OCA retirement village you talk in your example and what the hourly wages are (given you seem to know the last 8 cents).

[forest]

Joshuatree, the NZX notices tells us that directors and other insiders are adding OCA shares to their portfolios.
They do that by dividend reinvestment.
On top of that Chair Elizabeth Coutts, directors Sally Evans, Peter Dufaur and Gregory Tomlinson have been buying on market recently.
One would think the insiders buying together with EBITDA increasing 19.6% in the last financial halve year is a positive and holding is likely more profitable than sitting on the sideline.

[Joshuatree]

Could you please clarify about which particular OCA retirement village you talk in your example and what the hourly wages are (given you seem to know the last 8 cents).

Ryman,around $23.This person I spoke to had given their all for 7 years and had had enough of being over worked and undervalued.Im guessing it's the same with OCA etc but maybe they look after their staff better ,but I doubt it.
Fill your boots forest��.Its just my opinion.

[Beagle]

Joshuatree, the NZX notices tells us that directors and other insiders are adding OCA shares to their portfolios.
They do that by dividend reinvestment.
On top of that Chair Elizabeth Coutts, directors Sally Evans, Peter Dufaur and Gregory Tomlinson have been buying on market recently.
One would think the insiders buying together with EBITDA increasing 19.6% in the last financial halve year is a positive and holding is likely more profitable than sitting on the sideline.

Good post Forest. From memory late last year Gregory Tomlinson, (who is nobody's fool and a very astute and wealthy businessman) bought a couple of million at about $1.40. Caregiver and nurses wages have increased a LOT in the last few years and this is something I have commented about extensively already. Vastly more than the inflation rate. I believe experienced registered nurses now command very close to $40 per hour.

That said, from a TA point of view none of the charts of stocks in this sector look any good so at this point I am happy to run with a pretty modest ~ 7.5% allocation to this sector, most of which is OCA and the rest ARV and am reluctant to add other than at genuine rock bottom bargain prices.

[BlackPeter]

Ryman,around $23.This person I spoke to had given their all for 7 years and had had enough of being over worked and undervalued.Im guessing it's the same with OCA etc but maybe they look after their staff better ,but I doubt it.
Fill your boots forest��.Its just my opinion.

Cheers for clarification. However wondering why you didn't post this in the Ryman thread given it seems to be a Ryman story?

BTW - not sure either, your story is true for Ryman either. Just checking Dr. Google:


The average caregiver salary in New Zealand is $78,275 per year or $40.14 per hour. Entry-level positions start at $47,288 per year, while most experienced workers make up to $82,777 per year.

Quite a bit away from the numbers you are talking about, isn't it? Are you really saying that the biggest retirement village operator in NZ is paying just 60% of the average wage? Not very likely given the current unemployment rate, unless they employ just idiots (which I don't believe).

You might want to check and verify your information ....

[winner69]

Talking of wages and costs in general

Six months to Sept21 Operating Cash Flow was $52.4m. Of this $73.7m (net after repaying outgoing people) came from selling units / ORA

This suggests that it cost them $21.3m to run villages and look after people -- ie expenses much higher than revenue collected --- in other words a $21.3m loss

Hope they keep selling plenty of units to keep subsiding the costs

Too simplistic view?

[BlackPeter]

Talking of wages and costs in general

Six months to Sept21 Operating Cash Flow was $52.4m. Of this $73.7m (net after repaying outgoing people) came from selling units / ORA

This suggests that it cost them $21.3m to run villages and look after people -- ie expenses much higher than revenue collected --- in other words a $21.3m loss

Hope they keep selling plenty of units to keep subsiding the costs

Too simplistic view?

I think we discussed this ad infinitum before on this thread, didn't we?

OCA bought a lot of old, often run down old people homes in prime locations and turned them over time into new high quality homes.

Transition requires to run with increased stuffing levels ... a new village needs to be fully staffed, even when occupation still growing ... and the old homes need still staffing, even when occupation is dropping.

Things will improve given they passed infliction point (well, this is what they said, didn't they?).

It is however correct that nobody expects them to get rich just with collecting fees for the care ... any retirement village is a REIT ... but I am sure you knew that, didn't you?

The big money will always be in building new apartments / units and in recycling the real estate they already built.

[Ferg]

@winner
I wonder if that is a bit simplistic.

Per the Interim Report:


p18 has cash inflows and outflows for receipts for care fees and payments to supplier and employees which shows a gap of $1.5m. Keep in mind some of the employees will be selling units etc where the cash inflow from the sale of units is disclosed separately and they are not part of the care operations.
p28 has the profitability by business unit which has EBITDA $9.6m for "care operations" and NPBT of $2.2m
p15 has total employee costs at $68m out of total operating costs (ignoring depreciation and interest) of {$68.3 + $3.3 + $28.5m) = $100.1m. Some of that will be Sales & Management etc. per the analysis on page 28. (Note the total opex there is within $0.1m of my calc above).
On the assumption employee vs non employee costs are consistent across the 3 business units, this put the employee costs in the "care operations" at about {68% x $76.3m =} ~$52m.

[winner69]

@winner
I wonder if that is a bit simplistic.

Per the Interim Report:


p18 has cash inflows and outflows for receipts for care fees and payments to supplier and employees which shows a gap of $1.5m. Keep in mind some of the employees will be selling units etc where the cash inflow from the sale of units is disclosed separately and they are not part of the care operations.
p28 has the profitability by business unit which has EBITDA $9.6m for "care operations" and NPBT of $2.2m
p15 has total employee costs at $68m out of total operating costs (ignoring depreciation and interest) of {$68.3 + $3.3 + $28.5m) = $100.1m. Some of that will be Sales & Management etc. per the analysis on page 28. (Note the total opex there is within $0.1m of my calc above).
On the assumption employee vs non employee costs are consistent across the 3 business units, this put the employee costs in the "care operations" at about {68% x $76.3m =} ~$52m.


I think your $1.5m is prior year .... Sept21 the difference is $16m

They've also told me in the past that sales/construction people costs are usually capitalised.

All very complicated isn't it ....that's why I tend to follow the money ..... through the cash flow statement

[winner69]

Things will improve given they passed infliction point (well, this is what they said, didn't they?).





Ha ha -- yes they still inflicting pain ....... inflection point just a pipe dream may ....but we've all fallen for it

[Joshuatree]

Cheers for clarification. However wondering why you didn't post this in the Ryman thread given it seems to be a Ryman story?

BTW - not sure either, your story is true for Ryman either. Just checking Dr. Google:



Quite a bit away from the numbers you are talking about, isn't it? Are you really saying that the biggest retirement village operator in NZ is paying just 60% of the average wage? Not very likely given the current unemployment rate, unless they employ just idiots (which I don't believe).

You might want to check and verify your information ....

Fair point.Im generalising that it's across all the care companies.
Yep it's re $23 hour at level 3 caregiving.Newcomers start on less. $27 an hour about the top rate,,level 4.
Its the nurses by the looks you are referring to re those other figs.Im talking about caregiving in the hospital section,dementia etc.

[Ferg]

I think your $1.5m is prior year .... Sept21 the difference is $16m

D'Oh - my bad. I picked up the wrong report.