OCA - Oceania Group - retirement villages

[BlackPeter]

Collapse of RYM share price the talk of the town at the moment

Since listing on the average the relativity between RYM and OCA has been 11 OCA shares for 1 RYM share. Its been like this most of the time (around the stupid times around the beginning of covid it got out of skew) and even this time last year it wasn't far away from that average.

Occassionally I'm tempted to buy a few more OCA but heck at the current relativity between RYM and OCA I reckon RYM is a much better bet going forward .....so that's on the buy list - probably around the time of the capital raise that punters are speculating on

I'm sure higehr returns from RYM over the next few years than from OCA

Good point.

Just comparing:
SP forw PE (3yrs) avg. backw PE (10 yrs)
OCA 79 7.9 10.0
RYM 581 5.2 8.7

So yes, both are cheap as chips, but Ryman is at current prices still more attractive.

But I am sure many people prefer to wait until price is up again above their favorite indicator ... just to be safe :) ;

[Panda-NZ-]

I'm sure house prices under today's most pessimistic assumptions exceed even the boldest forecasts made in 2014 when RYM was around $7.85.

[Biscuit]

Forward PE of 581, surely a typo?


Good point.

Just comparing:
SP forw PE (3yrs) avg. backw PE (10 yrs)
OCA 79 7.9 10.0
RYM 581 5.2 8.7

So yes, both are cheap as chips, but Ryman is at current prices still more attractive.

But I am sure many people prefer to wait until price is up again above their favorite indicator ... just to be safe :) ;

[davflaws]

Forward PE of 581, surely a typo?
I think that's the price.

[Biscuit]

My bad, covid brain.


I think that's the price.

[Poolboy]

Forward PE of 581, surely a typo?

I wish it was a typo.

My RYM is down 52.8%, whereas I'm only down 16% with my OCA. Gotta laugh or I'd cry.

If it wasn't for Auckland Airport shares I'd be living in a tent.

[BlackPeter]

I wish it was a typo.

My RYM is down 52.8%, whereas I'm only down 16% with my OCA. Gotta laugh or I'd cry.

If it wasn't for Auckland Airport shares I'd be living in a tent.

Always good to look at the context :); As previous posters already discovered - it was not a typo, but it wasn't the PE either :) ;

[ralph]

I wish it was a typo.

My RYM is down 52.8%, whereas I'm only down 16% with my OCA. Gotta laugh or I'd cry.

If it wasn't for Auckland Airport shares I'd be living in a tent.

Hang on long enough ,One day you will be back in the trailer park

[Poolboy]

it was not a typo,

Sorry, don't know what you are talking about. I just said I wish it was a typo.


Hang on long enough ,One day you will be back in the trailer park

That's a big step up from the tent. Fingers crossed.

I think all (most) of us investors have been stung by the huge drop in value.

Not wishing to wind up the militant labourites on this board, but things will get much better with labour gone next year.

[nztx]

Sorry, don't know what you are talking about. I just said I wish it was a typo.



That's a big step up from the tent. Fingers crossed.

I think all (most) of us investors have been stung by the huge drop in value.

Not wishing to wind up the militant labourites on this board, but things will get much better with labour gone next year.


Haha .. very good :)

[Balance]

Good news - Treasury forecasts that property prices will rise to new highs in 2026 (only 4 years away).

Just be prepared to ride out the slum until June 2024 - only 1.5 years away.

Think I will keep my powder dry for a little while yet.

[SailorRob]

Good news - Treasury forecasts that property prices will rise to new highs in 2026 (only 4 years away).

Just be prepared to ride out the slum until June 2024 - only 1.5 years away.

Think I will keep my powder dry for a little while yet.

NZ Treasury forecasts are always perfect. The big American hedge funds always trying to head hunt NZ treasury forecasters.

[BlackPeter]

Good news - Treasury forecasts that property prices will rise to new highs in 2026 (only 4 years away).

Just be prepared to ride out the slum until June 2024 - only 1.5 years away.

Think I will keep my powder dry for a little while yet.

I guess the only thing we know for sure is that neither treasury nor any other analysts are able to predict the future. They got it sometimes right and sometimes wrong in the past and that's the way it will stay. While everybody who makes enough predictions gets from time to time a prediction right, they will get as well many wrong.

What we do know is that so far no bear market lived forever - i.e. at some stage prices will turn upwards again. And to be fair, so far this bear was neither particularly long nor deep - so, what's all the whinging about?

Prices might turn in 3 months (unlikely), 9 months or the year after (any longer would be really unusual) - who knows?

The ideal investment strategy for this particular bear will be revealed with the benefit of hindsight, but the options are basically:

a) stay full in and ride the bear out (which can be ok as long as one has enough cash to get through the trough).
b) stay in cash until you think the trough has passed and buy in later (and obviously lose the initial gains as well as taking the risk of tapping into a bull trap) or
c) guess the length of the bear, divide your available cash by the estimated bear months and buy every month a parcel - averaging out your risks and opportunities.

I shall tell you in a couple of years, which of these strategies would have been best for the bear at hand :p ... but see option b) as the most risky one;

[bottomfeeder]

Good news - Treasury forecasts that property prices will rise to new highs in 2026 (only 4 years away).

Just be prepared to ride out the slum until June 2024 - only 1.5 years away.

Think I will keep my powder dry for a little while yet.

Forecast is just that. They know the way inflation has been progressing, and in particular, not the CPI, but the construction index. It is only when the public realises that the costs of building has gone through the roof, that secondhand property is cheap. Only desperate sellers, who have really overcommitted themselves, thinking that interest rates will only keep going down as well as investors who want to make a quick buck, are the ones selling at the moment. Oh yes and those elderly people who have got no choice.

Should we set a market by the lowest common denominators, and if we do it usually is only a short term trend. Perhaps buyers are influenced by the media, thinking we are going to get a bargain soon. But I think that recovery in house prices will start to take affect much sooner than Treasury forecasts. All we need is a break from interest rate increases to restart the fire.

Now licence to occupy is a different kettle of fish. Are they really tagged closely to movements in house prices. They certainly are not tagged closely to interest rates, because usually those in a position to go to retirement villages dont borrow to occupy, or if they do the amount is very small.

[bull....]

covid death figure's not to good this week

[justakiwi]

Take this to the covid thread please.



covid death figure's not to good this week

[Rawz]

covid death figure's not to good this week

Bull, the dumping ground for RV stocks has now moved to the RYM thread okay. OCA is a shining light in the sector. A very well managed company that raises capital when its SP is near on double what it currently trades at. Unlike RYM, tsk tsk

[bull....]

Bull, the dumping ground for RV stocks has now moved to the RYM thread okay. OCA is a shining light in the sector. A very well managed company that raises capital when its SP is near on double what it currently trades at. Unlike RYM, tsk tsk

lol
anyway the death rate rising each week at the moment must be good for re - sales ?

[justakiwi]

We already know it has made zero difference so quit your stirring and find something constructive to do with your time.


lol
anyway the death rate rising each week at the moment must be good for re - sales ?

[bull....]

We already know it has made zero difference so quit your stirring and find something constructive to do with your time.

ok so you dont like talking about covid and how it impacts re-sales or how it will. i wont say anymore.

i read today KFC has a coleslaw supply problem maybe since you dont want to talk about covid maybe you can enlighten us if your starting to see issues around cabbage availabilty in retirement villages ? have you seen the price lately i could post a graph ive got one it has tripled over the last yr :scared:

[justakiwi]

There is literally zero evidence that covid deaths have had any impact whatsoever on sales. You are a game playing stirrer. I have no clue why, but it's who you are, and it is a complete waste of everyone's time.

The preschoolers I used to teach were more mature than you. Just go back to your 12 screen day trading, and stop cluttering up this thread for the rest of us.

Putting you back on ignore - Merry Christmas!


ok so you dont like talking about covid and how it impacts re-sales or how it will. i wont say anymore.

i read today KFC has a coleslaw supply problem maybe since you dont want to talk about covid maybe you can enlighten us if your starting to see issues around cabbage availabilty in retirement villages ? have you seen the price lately i could post a graph ive got one it has tripled over the last yr :scared:

[bull....]

There is literally zero evidence that covid deaths have had any impact whatsoever on sales. You are a game playing stirrer. I have no clue why, but it's who you are, and it is a complete waste of everyone's time.

The preschoolers I used to teach were more mature than you. Just go back to your 12 screen day trading, and stop cluttering up this thread for the rest of us.

Putting you back on ignore - Merry Christmas!

i have already proved on this forum the link between covid and stock prices of retirement villages so i dis-agree about zero evidence on covid deaths to re-sales link. if you used statistical methods a clear link will become more evident going forward if my method is correct this should boost re- sales. time will tell in the figure's. but as ive explained earlier on the other hand it will effect supply/demand dynamic's.
anyway enough about this covid data i understand it's probably a sensitive topic to some but worth keeping an open mind about for others

[percy]

Pleasing seeing so many of The Team taking DRP.[makes me feel guilty taking cash].
- Elizabeth Coutts
- Alan Isaac
- Kerry Prendergast
- Sally Evans
- Gregory Tomlinson
- Peter Dufaur
- Brent Pattison
- Anna Thorburn
- Kathryn Waugh

[Sideshow Bob]

Pleasing seeing so many of The Team taking DRP.[makes me feel guilty taking cash].
- Elizabeth Coutts
- Alan Isaac
- Kerry Prendergast
- Sally Evans
- Gregory Tomlinson
- Peter Dufaur
- Brent Pattison
- Anna Thorburn
- Kathryn Waugh

Never feel guilty about taking the cash Percy!!

[winner69]

Pleasing seeing so many of The Team taking DRP.[makes me feel guilty taking cash].
- Elizabeth Coutts
- Alan Isaac
- Kerry Prendergast
- Sally Evans
- Gregory Tomlinson
- Peter Dufaur
- Brent Pattison
- Anna Thorburn
- Kathryn Waugh

Good tones they are feeling the pain that ordinary shareholders are …..all of them under water even more now …..but at least they have their big fees and salaries to soften the blow

[ronaldson]

Yes, DRP price (with discount) was 80.41c only a few days ago, and current share price 76c. At this rate (and notwithstanding the Team's efforts) the company will be next to worthless early next year! Cash is king Percy!

[winner69]

Our Liz now $545,000 under water on her Oceania shares

Just realised oceania probably does mean under water

[justakiwi]

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



Yes, DRP price (with discount) was 80.41c only a few days ago, and current share price 76c. At this rate (and notwithstanding the Team's efforts) the company will be next to worthless early next year! Cash is king Percy!



Our Liz now $545,000 under water on her Oceania shares

Just realised oceania probably does mean under water

[Rawz]

Our Liz now $545,000 under water on her Oceania shares

Just realised oceania probably does mean under water

that is a truck and trailer load of cash wow.
Got to think that she is hustling hard in the board room.. getting this company to perform the best it possiblY can so she can correct that paper loss

[850man]

how low will this go, already buying something valued at $1.34 for 76 cents - not far of half price!

[winner69]

that is a truck and trailer load of cash wow.
Got to think that she is hustling hard in the board room.. getting this company to perform the best it possiblY can so she can correct that paper loss

But they say never buy in a downtrend …I take it that applies to taking shares in DRPs as well

[Habits]

how low will this go, already buying something valued at $1.34 for 76 cents - not far of half price!

I don't know but not prepared to wait to find out. Yesterdays 77 was bad enough and probably well below support. Could bounce back

[nztx]

that is a truck and trailer load of cash wow.
Got to think that she is hustling hard in the board room.. getting this company to perform the best it possiblY can so she can correct that paper loss

It aint named Oceania for nothing .. and a good dip shouldn't be seen as only a part of past history either :)

could be worse .. a bit of a bathing could turn into a real drenching, & could come for the whole sector yet ;)

In an economy deflating, and artificially polished sector earnings expected to slide down a slippery slope with most of the dials firmly pointing south, what is keeping the SP's in this sector up ? ;)

[bottomfeeder]

... what is keeping the SP's in this sector up ? ;)

My favorite quote "The SP has been down for so goddam long it looks like up to me"

Now your favorite quote nztx.

[SailorRob]

not quite sure, though whether these are funds ANZ are actively managing (i.e. decided to buy), or whether this just means that individual ANZ customers who happen to have their shares in ANZ depots decided to buy OCA shares.

Anyway - looks like a good buy to me! And I guess somebody must start to buy to end a down trend :) ;


Everyone selling in a downtrend is selling to a buyer....

Each sale is also by definition a purchase.

[bull....]

summerset putting on hold there building of retirement village in parnell

say rising building costs and falling property market make the project not viable

https://www.nzherald.co.nz/business/...I6JBCEPNZUZDI/ (https://www.nzherald.co.nz/business/300m-auckland-retirement-village-plans-stall-falling-house-values-rising-building-costs/HBEB5FENAVCFBI6JBCEPNZUZDI/)

wonder if oca being affected by same ?

[SailorRob]

Well, if you're a customer of ANZ New Zealand Investments Limited, you'd hope they were experts. Anyhoo, they snaffled about 10m shares at a decent average and have around 7.5% of the company. If you had that much fire power, and vested interest, you'd be careful what you chose to invest in. Always nice to know who's on the buy side when the lemmings are being panicked out of their holdings. When the insto's are accumulating stock, it's some solace for the minnows like us, who are doing the same thing.


Really?

What are the track records of said instos?

Have any at all outperformed the market over the last 15 years? If so which ones and by what margin.

[justakiwi]

Given that all their builds are fixed price contracts, I doubt it.


summerset putting on hold there building of retirement village in parnell

say rising building costs and falling property market make the project not viable

https://www.nzherald.co.nz/business/...I6JBCEPNZUZDI/ (https://www.nzherald.co.nz/business/300m-auckland-retirement-village-plans-stall-falling-house-values-rising-building-costs/HBEB5FENAVCFBI6JBCEPNZUZDI/)

wonder if oca being affected by same ?

[bull....]

Given that all their builds are fixed price contracts, I doubt it.

for how long ?

[bull....]

[/COLOR]

Really?

What are the track records of said instos?

Have any at all outperformed the market over the last 15 years? If so which ones and by what margin.

exactly baa baa talking s...t again

[SailorRob]

There is literally zero evidence that covid deaths have had any impact whatsoever on sales. You are a game playing stirrer. I have no clue why, but it's who you are, and it is a complete waste of everyone's time.

The preschoolers I used to teach were more mature than you. Just go back to your 12 screen day trading, and stop cluttering up this thread for the rest of us.

Putting you back on ignore - Merry Christmas!


Regarding the preschoolers maturity compared to Bull*&$%, would you care to comment on their comparative literacy?

[bull....]

Regarding the preschoolers maturity compared to Bull*&$%, would you care to comment on their comparative literacy?

lol
luckily litarcy doesnot correlate to IQ in the real world. anyway hows your OCA going ? buying more yet

[850man]

New annual low trading at 72c today :scared:

[Entrep]

Don’t worry. Market leading and renowned ANZ instos are in this

[Cassie]

New annual low trading at 72c today :scared:
Which makes it a good pick for 2023 picking contest. Trade staff will increase in the 2023 period should the govt get their visa act together.

[winner69]

New annual low trading at 72c today :scared:

Good positive sign that it didn’t close at that low of 72 cents ….. 75 cents is quite respectable

[bottomfeeder]

summerset putting on hold there building of retirement village in parnell

say rising building costs and falling property market make the project not viable

https://www.nzherald.co.nz/business/...I6JBCEPNZUZDI/ (https://www.nzherald.co.nz/business/300m-auckland-retirement-village-plans-stall-falling-house-values-rising-building-costs/HBEB5FENAVCFBI6JBCEPNZUZDI/)

wonder if oca being affected by same ?

The article does mention rising building costs. $300 mill development now costs $450 million. Wont be long that the building costs which are having exponential increases will be reflected in values of existing stock. Those wanting and needing to get into assisted living, will just have to pay up. There is no free lunch out there and OCA is not a non profit or charitable organisation.

Anyway thats what I keep telling myself, rather than have a boo boo bear attitude, oh me oh my.

[bull....]

The article does mention rising building costs. $300 mill development now costs $450 million. Wont be long that the building costs which are having exponential increases will be reflected in values of existing stock. Those wanting and needing to get into assisted living, will just have to pay up. There is no free lunch out there and OCA is not a non profit or charitable organisation.

Anyway thats what I keep telling myself, rather than have a boo boo bear attitude, oh me oh my.

dont think it quite works the way your thinking , if it did they would still be doing the project

[BlackPeter]

dont think it quite works the way your thinking , if it did they would still be doing the project

Actually, I think bottomfeeder made a good point.

Of course - increased building costs do hit everybody, i.e. it can make a lot of sense to temporarily reduce building activity. Makes as well Mr Orr happy because it helps to worsen the recession he designed.

However - this means reduced supply of retirement and care facilities which will push the price up. Demand will keep rising (demographics) and supply gets throttled (thanks to Orr & Co). What do you think will be the result?

Actually its a double win - if everybody reduces building activity the earnings potential of their existing (i.e. already paid for) stock will go through the roof - i.e. all these retirement villages turn into cash cows. They can milk them and don't even need to invest into building more.

[bull....]

Actually, I think bottomfeeder made a good point.

Of course - increased building costs do hit everybody, i.e. it can make a lot of sense to temporarily reduce building activity. Makes as well Mr Orr happy because it helps to worsen the recession he designed.

However - this means reduced supply of retirement and care facilities which will push the price up. Demand will keep rising (demographics) and supply gets throttled (thanks to Orr & Co). What do you think will be the result?

Actually its a double win - if everybody reduces building activity the earnings potential of their existing (i.e. already paid for) stock will go through the roof - i.e. all these retirement villages turn into cash cows. They can milk them and don't even need to invest into building more.

more likely i reckon is they cut costs in the building process not the rate of supply meaning residents pay for a lesser quality product at the same price. just like they do now with residential homes. quality of new builds now in quality of product and life of product compared to 50 yrs ago is terrible.

[BlackPeter]

more likely i reckon is they cut costs in the building process not the rate of supply meaning residents pay for a lesser quality product at the same price. just like they do now with residential homes. quality of new builds now in quality of product and life of product compared to 50 yrs ago is terrible.

Maybe they reduce size and perhaps as well quality - though not quite sure about both. I'd prefer every time a house build in the 2020'ies over a house build in the 1970'ies (obviously in comparable location). Double glassing and wall/floor/roof insulation to mention only some obvious improvements in the last 50 years.

However - does not make any difference for the argument. Whatever it is - retirement villages will cream it from existing stock, and if they restart to build new, than either their customers will pay same for less or more for same.

Sounds like a good business proposal for the village no matter how you turn it.

[winner69]

more likely i reckon is they cut costs in the building process not the rate of supply meaning residents pay for a lesser quality product at the same price. just like they do now with residential homes. quality of new builds now in quality of product and life of product compared to 50 yrs ago is terrible.

They only need to last one generation bull….

I hear the generations that resulted from the baby boomers having fun are going to be so poor as a result of looking after the oldies they won’t be able to afford things like retirement villlages … if they on struggle street now what will they be like in 20 years time

[Greekwatchdog]

more likely i reckon is they cut costs in the building process not the rate of supply meaning residents pay for a lesser quality product at the same price. just like they do now with residential homes. quality of new builds now in quality of product and life of product compared to 50 yrs ago is terrible.

Thats a load of crap Bull. Where do you dream up this stuff? Have you evidence to support facilities being built with less quality? Have you gone and visited any sites to support this?

Quality of these facilities is first class and there will no cost cutting in builds as builder will be held to account via contracts.

[Baa_Baa]

Thats a load of crap Bull. Where do you dream up this stuff? Have you evidence to support facilities being built with less quality? Have you gone and visiyted any sites to support this?

Quality of these facilities is first class and there will no cost cutting in builds as builder will be held to account via contracts.

exactly bull**** talking s...t again

[justakiwi]

Really? Well if you are right, guess which RV company will be in the best position to provide those poor souls with government subsidised care?




I hear the generations that resulted from the baby boomers having fun are going to be so poor as a result of looking after the oldies they won’t be able to afford things like retirement villlages … if they on struggle street now what will they be like in 20 years time

[bull....]

Thats a load of crap Bull. Where do you dream up this stuff? Have you evidence to support facilities being built with less quality? Have you gone and visited any sites to support this?

Quality of these facilities is first class and there will no cost cutting in builds as builder will be held to account via contracts.

if you read correctly , i said going forward. if you think thats not what will happen then you do not understand the world you live in. winner is right it only needs to last the lifespan of the resident.

here's the funny bit the the dead resident will pay more to flash it up again lol

[Greekwatchdog]

if you read correctly , i said going forward. if you think thats not what will happen then you do not understand the world you live in. winner is right it only needs to last the lifespan of the resident

I did and your clasping at straws as always, Contracts are in place and high standards will delivered as they are doing so now. There will be no creating shortcuts to save money by creating Residents with poor quality facilities, much like you do when you go buy a house you check these things before you buy.

[bull....]

I did and your clasping at straws as always, Contracts are in place and high standards will delivered as they are doing so now. There will be no creating shortcuts to save money by creating Residents with poor quality facilities, much like you do when you go buy a house you check these things before you buy.

how would you know whats under your coat of paint lol that's what marketing is to make it look flash and expensive
govt reg's say many things now a days only need to last less than 15 yrs

[Greekwatchdog]

how would you know whats under your coat of paint lol that's what marketing is to make it look flash and expensive
govt reg's say many things now a days only need to last less than 15 yrs

There are processors and people in place bull. Stop clasping at straws..

Back to OCA.
How many revenue streams does OCA have Bull?
What operator is less effected by the Housing Market Correction Bull? Now use 1 of your 12 screens and go do some real research instead of making stupid ignorant claims as per above.

[bull....]

There are processors and people in place bull. Stop clasping at straws..

Back to OCA.
How many revenue streams does OCA have Bull?
What operator is less effected by the Housing Market Correction Bull? Now use 1 of your 12 screens and go do some real research instead of making stupid ignorant claims as per above.

come on you know the people and processes are to keep things on budget and below cost .... and that the plasterers and painters top rate lol

[Greekwatchdog]

come on you know the people and processes are to keep things on budget and below cost .... and that the plasterers and painters top rate lol

The operators don't deal with cowboys bull They also have their own people on the ground inspecting.

[bull....]

The operators don't deal with cowboys bull They also have their own people on the ground inspecting.

i never say they have cowboy's i implied you need top notch plasters and painters and the stuff underneath can be cheap as chips as your never know as long as its product certified from china lol

[a_browndog]

Forsyth Barr have been blowing smoke up OCAs behind for awhile. Are they genuine beliebers or is there possibly something else going on there?

[kiora]

Thats a load of crap Bull. Where do you dream up this stuff? Have you evidence to support facilities being built with less quality? Have you gone and visited any sites to support this?

Quality of these facilities is first class and there will no cost cutting in builds as builder will be held to account via contracts.

Not OCA but Ryman?
All fixed?
https://www.stuff.co.nz/business/122582856/more-detail-about-faults-in-100m-havelock-north-retirement-village-revealed

[Poolboy]

Quality of these facilities is first class

Definitely first class. Would even outlast the owner (occupier) LOL

[percy]

Definitely first class. Would even outlast the owner (occupier) LOL

I was thinking about turnover of units.
Ryman's first village opened in 1996.They raised $25mil Market Cap then was $134mil.Today MC is $2.896 bil.
Wonder what a unit cost then,how many times has it turned over,what that unit cost to build,and how much does that unit sell for today.?
I would think each unit would have been a "gold mine".
And that "gold mine" would still be earning today,and will keep on earning for the foreseeable future.
A great business model for all in the sector to follow.

[Brain]

I was thinking about turnover of units.
Ryman's first village opened in 1996.They raised $25mil Market Cap then was $134mil.Today MC is $2.896 bil.
Wonder what a unit cost then,how many times has it turned over,what that unit cost to build,and how much does that unit sell for today.?
I would think each unit would have been a "gold mine".
And that "gold mine" would still be earning today,and will keep on earning for the foreseeable future.
A great business model for all in the sector to follow.

Median house price1996 about $150k. 70% of that might be a good guess so about $105k for a Ryman unit.

[Poolboy]

A great business model for all in the sector to follow.

I thought it was great too but I'm down 54% on my RYM. Luckily I don't have many.

Oceania; I'm only down 17% - Ah, the luxury of only 17%

[SailorRob]

that is a truck and trailer load of cash wow.
Got to think that she is hustling hard in the board room.. getting this company to perform the best it possiblY can so she can correct that paper loss


I don't think she's a moron. She will not want the stock price up.

[SailorRob]

lol
luckily litarcy doesnot correlate to IQ in the real world. anyway hows your OCA going ? buying more yet


Very very well thanks. The closer to free it gets the better for me.

Haven't bought more yet, missed the dip to 72c.

If Oceania was given to the OCA thread sharetrader members for free they would all be suicidal. Lives ruined.

Lower prices are better folks do the Math (with caveat that business isn't permanently impaired)

[Entrep]

Forsyth Barr have been blowing smoke up OCAs behind for awhile. Are they genuine beliebers or is there possibly something else going on there?

Working to secure that cap raise... just like the rest of the brokers in NZ.

[nztx]

A pretty good sort of ski slope graph for OCA

Since early Sep 2021 to now, let's say from $1.57 it's roughly halved since on yesterday's 0.76

[bull....]

major event next year add's big risk to sector

Review of Retirement Villages Act begins in 2023

At a high level, the review is set to consider whether the current Act and all its parts remain fit for purpose

https://www.hud.govt.nz/news/review-...egins-in-2023/ (https://www.hud.govt.nz/news/review-of-retirement-villages-act-begins-in-2023/)

[Bjauck]

They only need to last one generation bull….

I hear the generations that resulted from the baby boomers having fun are going to be so poor as a result of looking after the oldies they won’t be able to afford things like retirement villages … if they on struggle street now what will they be like in 20 years timeThat's true. Boomers rode the crest of a wave. The wealthier boomers inheriting estates after Estate Duties were set to zero, then gift duties were done away with. Then interest rates fell and property prices continued to surge. The income multiples needed to buy a house are much higher than long term averages.

So even without tax reform to bring us in line with other OECD countries, now perhaps we will see the multiples of incomes needed to buy median houses gradually reduce. The children of wealthier boomers will still inherit, either from deceased estates or as trust fund beneficiary babies. The rest may still be able to borrow as lower quartile house prices return to more manageable multiples of median incomes.

[Rawz]

Boomer tax

[Panda-NZ-]

So even without tax reform to bring us in line with other OECD countries, now perhaps we will see the multiples of incomes needed to buy median houses gradually reduce.

Well, not if we become a place to launder CCP or russian money again due to minimal trust and property regulation.

[bottomfeeder]

Well, not if we become a place to launder CCP or russian money again due to minimal trust and property regulation.
Plenty more models of income and cost recovery to explore by OCA.

[nztx]

Well, not if we become a place to launder CCP or russian money again due to minimal trust and property regulation.


It's already happening - look no further than the gangs & money laundering big time.
Someone's favourite government dont seem to be too worried, instead intent on
trying to pluck more of the easy low fruit that they can see ;)


Meanwhile the OCA downwards spiral continues as the smart investors see today's news for
it may mean - more red tape, more expense, less shareholder gain, further economic carnage ;)

[bottomfeeder]

It's already happening - look no further than the gangs & money laundering big time.
Someone's favourite government dont seem to be too worried, instead intent on
trying to pluck more of the easy low fruit that they can see ;)


Meanwhile the OCA downwards spiral continues as the smart investors see today's news for
it may mean - more red tape, more expense, less shareholder gain, further economic carnage ;)

Can understand with all the uncertainty in this sector, eventhough it is already built in the SP, that investors are sitting in the fence, but who would be selling at this value. I would think it would be a strong hold.

[nztx]

Can understand with all the uncertainty in this sector, eventhough it is already built in the SP, that investors are sitting in the fence, but who would be selling at this value. I would think it would be a strong hold.


Sit on the fence hoping that the raging torrents don't take out lengths of the fence
or jump in and start swimming to get out of harms way / prospect of drowning ? ;)

Oh dear - what a choice .. maybe the smarter ones have already seen the writing on the wall
and the medicine prescribed for the sector long before now, and mostly flown away ? :)

[Rawz]

Sit on the fence hoping that the raging torrents don't take out lengths of the fence
or jump in and start swimming to get out of harms way / prospect of drowning ? ;)

Oh dear - what a choice .. maybe the smarter ones have already seen the writing on the wall
and the medicine prescribed for the sector long before now, and mostly flown away ? :)

why bother aye. plenty of multi baggers elsewhere ;););)

[mike2020]

I see it as cyclical if you take a longer view. If I get some at 20 cents I might get a ten bagger. :mellow:

[nztx]

why bother aye. plenty of multi baggers elsewhere ;););)



I sit on even higher fence out of firing line watching .. deliberating on next run of multibagger spoils :)

[Poolboy]

14384

I'm waiting for this sign to come out.

[BlackPeter]

Sit on the fence hoping that the raging torrents don't take out lengths of the fence
or jump in and start swimming to get out of harms way / prospect of drowning ? ;)

Oh dear - what a choice .. maybe the smarter ones have already seen the writing on the wall
and the medicine prescribed for the sector long before now, and mostly flown away ? :)

I think we need to conserve this post for for history, since it won't age well!

I will put your avatar forward for the position of scaremonger in chief ...

[a_browndog]

Working to secure that cap raise... just like the rest of the brokers in NZ.

So show support in the hope they are chosen to run a Cap raise in the future? Why specifically OCA are they speculating they are more likely to go that direction then others

[limmy]

OCA may not need to raise capital. Currently trading significantly below their NTA of $1.34, they could become a takeover target, just like MET, Metlifecare before.

[nztx]

I think we need to conserve this post for for history, since it won't age well!

I will put your avatar forward for the position of scaremonger in chief ...

Why thank-you BP .. Merry Christmas!

Hopefully the rain will stay away :)

[nztx]

OCA may not need to raise capital. Currently trading significantly below their NTA of $1.34, they could become a takeover target, just like MET, Metlifecare before.


Always that possibility .. think many did well with MET hopping on the bike at very good entry points

but alas conditions in the local goldfish bowl appear to be on the change from those heady times

[Greekwatchdog]

I don't see OCA requiring a CR. The only operator I see will be RYM.

This is an abstract from For Bars report 24/11.

Three reasons to be comfortable with OCA's level of debt
OCA's increase in net debt was higher than we had anticipated, following a familiar pattern over the last few reporting seasons across the aged care sector. That said, we remain comfortable with OCA's ~NZ$500m of debt for three reasons; (1) the value of finished, unsold stock is over half of OCA's total net debt. In addition, OCA's flagship development, 'The Helier' should deliver a net >NZ$100m in cash; (2) OCA has termed out its debt sufficiently. It has ~NZ$220m of debt headroom and zero debt maturing until FY28, and (3) we estimate that OCA could be free cash flow neutral already next year, depending on how ambitious its greenfield program is.

[bottomfeeder]

I don't see OCA requiring a CR. The only operator I see will be RYM.

This is an abstract from For Bars report 24/11.

Three reasons to be comfortable with OCA's level of debt
OCA's increase in net debt was higher than we had anticipated, following a familiar pattern over the last few reporting seasons across the aged care sector. That said, we remain comfortable with OCA's ~NZ$500m of debt for three reasons; (1) the value of finished, unsold stock is over half of OCA's total net debt. In addition, OCA's flagship development, 'The Helier' should deliver a net >NZ$100m in cash; (2) OCA has termed out its debt sufficiently. It has ~NZ$220m of debt headroom and zero debt maturing until FY28, and (3) we estimate that OCA could be free cash flow neutral already next year, depending on how ambitious its greenfield program is.


Would be a bad move to do a CR unless as a last resort. Thats why RYM SP is so depressed. Have to agree.

[limmy]

Always that possibility .. think many did well with MET hopping on the bike at very good entry points

but alas conditions in the local goldfish bowl appear to be on the change from those heady times
Many used the $ from MET to buy OCA shares.

[Balance]

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deleted

[winner69]

deleted

deleted

Merry Christmas to you Balance …have a good day …and behave

Cheers

[Balance]

Merry Christmas to you Balance …have a good day …and behave

Cheers

Merry Christmas to you too, W69.

It’s has been a tough old year but we are still here and we give thanks.

Not sure about behaving but am certainly looking forward to cooking & enjoying the prime Black Angus grain fed wagyu steak with family tomorrow.

Cheers!

[Baa_Baa]

deleted

deleted

14385

Did you do the maths? If the punter bought perfectly at about $1.35 on the day MET paid out, Nov 3 2021 and sold perfectly at the $1.60 peak early 2021 or $1.59 late August 2021, they'd bank about $0.25 cps capital gains, less brokerage fees, less tax on profits, less missed dividends. Not such a brilliant trade, even for those who could time it perfectly.

[winner69]

Merry Christmas to you too, W69.

It’s has been a tough old year but we are still here and we give thanks.

Not sure about behaving but am certainly looking forward to cooking & enjoying the prime Black Angus grain fed wagyu steak with family tomorrow.

Cheers!

The local fishing boats were out today bringing in the crayfish …….scored a decent one fresh off the boat.

Just finished cooking the turkey ,….. we have Xmas lunch at a vegetarians place and no meat cooking allowed but cold turkey is fine.

I’ll leave the waygu for my birthday

[Bjauck]

Thanks to all contributors to The OCA. It is certainly a lively thread. It has provided an interesting read when in waiting rooms this year! Whether you enjoy a crayfish, turkey or nut roast, Happy Holidays!

[Poolboy]

Merry Christmas Guys.

[SailorRob]

Merry Christmas to the OCA thread.

Here is a present for you all.


ANY company that has an interest free non callable loan that is equal almost to the equity capital of that company (let alone one which grows at 26% per year), all they have to do with their funds is something that isn't stupid and you're going to have a hell of a result over the long term. Then imagine on top of that another dollop of cash equal to nearly half your equity at extremely low rates for a long time as well. You don't have to invest it well to have a hell of a good result.


Let's put this into simple terms.


You have saved up $949,000 and then uncle Ebeneezer of Nigeria has loaned you $817,000 interest free and promised to give you more and more and he can't ask for it back, now you have 1.8 million dollars to invest, well you can just jam it into a term deposit and you're going to do very well. But wait, some other idiot gives you another $380,000 at ridiculously low interest rates (well below the term deposit).


You don't need to do anything special to generate incredible returns on your $949,000.


But imagine if you were a decent investor as well and you had a long track record of being able to allocate capital effectively.


Would you then take this 2.2 million dollar investment vehicle and sell it for $560,000?


Or if it was offered to you would you happily pay $560,000 for it?

[nztx]

Merry Christmas Guys.


and likewise from me .. Merry Christmas everyone :)

Will continue watching OCA .. when the spiral downwards abates, who knows :)


Will be watching for the arrival of untold riches from Nigeria that our good Sailor friend has ordered for us all :)

I'm concerned however that Govt's 'AML' mits might put the kybosh on the whole scheme before it makes it here ;)

[winner69]

Cool, Forbar have included Oceania in their Brokers Tips for 2023 in the nzherald

That should help share price

Forbar seen light if day .. for 2022 they picked ARV lol …left ARV to this years top performer MSL Capital this time

[mike2020]

Cool, Forbar have included Oceania in their Brokers Tips for 2023 in the nzherald

That should help share price

Forbar seen light if day .. for 2022 they picked ARV lol …left ARV to this years top performer MSL Capital this time

Bulls probably on holiday so I will give it a shot.

"Yeah maybe a brief uptick after NYs then back to the downtrend till mid year when we see which way the polls and RB are heading"

[Entrep]

Cool, Forbar have included Oceania in their Brokers Tips for 2023 in the nzherald

That should help share price

Forbar seen light if day .. for 2022 they picked ARV lol …left ARV to this years top performer MSL Capital this time

So Forbar, which picked ARV for last year and got rekt, is picking OCA this year and that is meant to be bullish?

[BlackPeter]

So Forbar, which picked ARV for last year and got rekt, is picking OCA this year and that is meant to be bullish?

Even a blind hen sometimes finds a grain of corn.

I agree that it is easy to find examples where Forbar got it wrong, but I am sure, there are as well as many examples where they got it right - otherwise one could exploit their forecasting capabilities: Just always do the opposite of what they recommend and make money :) . Given however it is as hard to get forecasts in a statistically meaningful way above average wrong as to get them above average right I would not recommend this method either.

But seriously - no analyst, no broker and no poster is able to predict in a statistical meaningful way how share prices are going to develop, which means the only value these broker recommendations have is to move the market mood around (and yes, sometimes they might turn into self full filling prophecies).

Always good to understand the market mood, since that is guiding the hype component of any share price (which currently with OCA is in the ditch). Broker recommendations as well as posts in forums like this are outstanding indicators for the market mood.

[winner69]

Hey BP …have you done a thesis or written a book on the predictability of unpredictable forecasting results

I’d love to read it if you have

[BlackPeter]

Hey BP …have you done a thesis or written a book on the predictability of unpredictable forecasting results

I’d love to read it if you have

No, sorry - my thesis was about low power high voltage transformations for solar systems ... and you would need some electrical engineering background and be able to read German to enjoy it :);

I played some years ago with trying to analyse the quality of broker predictions (to help me to understand whether it adds any value to follow them) - some of my observations from that time are as well somewhere buried on share trader: https://www.sharetrader.co.nz/showthread.php?11721-How-good-are-the-forecasts-of-stockmarket-analysts&highlight=consensus

I went at that time as well through some academical papers to get a better handle on the subject. Need to see, whether I find anything of that (and what the language is), when I have time (but this might be a more distant point in the future :);

But no, sorry - no book. You need to trust me on that :) ;

[SailorRob]

Even a blind hen sometimes finds a grain of corn.

I agree that it is easy to find examples where Forbar got it wrong, but I am sure, there are as well as many examples where they got it right - otherwise one could exploit their forecasting capabilities: Just always do the opposite of what they recommend and make money :) . Given however it is as hard to get forecasts in a statistically meaningful way above average wrong as to get them above average right I would not recommend this method either.

But seriously - no analyst, no broker and no poster is able to predict in a statistical meaningful way how share prices are going to develop, which means the only value these broker recommendations have is to move the market mood around (and yes, sometimes they might turn into self full filling prophecies).

Always good to understand the market mood, since that is guiding the hype component of any share price (which currently with OCA is in the ditch). Broker recommendations as well as posts in forums like this are outstanding indicators for the market mood.

Wrong.......

[justakiwi]

But tell you zilch about the quality or value of the company.


Broker recommendations as well as posts in forums like this are outstanding indicators for the market mood.

[winner69]

No, sorry - my thesis was about low power high voltage transformations for solar systems ... and you would need some electrical engineering background and be able to read German to enjoy it :);

…….l.


BP ..I’ve been trying to suss this out

It’s a study uses the frequency-to-time mapping technique to implement the spectral Hanbury-Brown and Twiss measurement, revealing directly the single frequency-mode bandwidth of the biphoton state.

[peat]

December doesnt appear to have been kind to OCA with a further 15% approx loss in market value. In fact there almost appears to be a new downward trend asserting itself.
However some glimmer of hope is shown in the recent hammer candle followed by a bearish engulfing - both bullish signs in themselves but are they capable of starting a medium term reversal?
Who knows, but certainly I'll be wishing they can do it, even if some people want the price lower.......
14390

Yes its been a bearish time for a while now and many stocks have suffered but OCA isnt holding up with the NZX50 over the last few months, so any exposure to that index would have decreased capital value reduction (unless of course you see prices lower as a good thing, because a market does take all types)
14391

and of course some sectors have actually risen not only reducing capital losses but actually providing capital gains, so here - something completely different - with RIO from the Aussie market diworseification sadly works even better

14392

I guess I just dont have the patience not to diversify.

[BlackPeter]

Wrong.......

Which bit do you think is wrong? Or do you want to tell us that everything you are able to say is "wrong" :p ?

[BlackPeter]

But tell you zilch about the quality or value of the company.

Yes and no.

A good broker report should be able to give you as well some indication of the quality or the present underlying value of a company. Some posts do that as well.

Obviously - nobody can give you a measure for the future ... and sadly - the number of good broker reports is smaller than the number of broker reports. Latter statement applies as well for posts, just that the ratio would be still smaller.

[SailorRob]

[QUOTE=peat;987144]December doesnt appear to have been kind to OCA with a further 15% approx loss in market value. In fact there almost appears to be a new downward trend asserting itself.
However some glimmer of hope is shown in the recent hammer candle followed by a bearish engulfing - both bullish signs in themselves but are they capable of starting a medium term reversal?
Who knows, but certainly I'll be wishing they can do it, even if some people want the price lower.......


My god.

I cannot believe I missed the candle hammer bearish engulfing and on this moon phase too. A salmon gulping side shifting may be just around the corner.

Thanks for pointing it out.

Please explain reason for wanting the price higher.

[SailorRob]

Which bit do you think is wrong? Or do you want to tell us that everything you are able to say is "wrong" :p ?


'But seriously - no analyst, no broker and no poster is able to predict in a statistical meaningful way how share prices are going to develop, which means the only value these broker recommendations have is to move the market mood around (and yes, sometimes they might turn into self full filling prophecies)'.

Well this is essentially stating the efficient market hypothesis which has been discredited for over 30 years. I generally agree regarding the brokers but it seems like you are saying that no broker, no analyst nor poster can beat the market in a statistically meaningful way.

[Mrbuyit]

Please explain reason for wanting the price higher.

Maybe @peat is looking to hock a few off and put the proceeds towards a new deck?

[SailorRob]

Maybe @peat is looking to hock a few off and put the proceeds towards a new deck?


That would be a fair reason but they would have to rise a hell of a long way to be ripe for selling.

[BlackPeter]

'But seriously - no analyst, no broker and no poster is able to predict in a statistical meaningful way how share prices are going to develop, which means the only value these broker recommendations have is to move the market mood around (and yes, sometimes they might turn into self full filling prophecies)'.

Well this is essentially stating the efficient market hypothesis which has been discredited for over 30 years. I generally agree regarding the brokers but it seems like you are saying that no broker, no analyst nor poster can beat the market in a statistically meaningful way.

No, this has nothing to do with efficient market hypothesis. This has something to do with Chaos theory.

But referring to your last statement - for brokers and (paid) analysts this is absolutely correct. If they could beat the market sustainably and in a statistically meaningful way, than they would not need their income from broking or analysing companies and from selling their "advice".

For successful investors its a bit more difficult to say ... but then I think the answer is still yes. Sure, there is Warren Buffet and some other big names - and to be honest, to date I have never checked how far their success streaks are away from the standard deviation, but I just checked it today for you - according to some algorithm at Google:


The Warren Buffett Portfolio obtained a 9.40% compound annual return, with a 13.42% standard deviation, in the last 30 Years.


That's not that much more than the average 8% the index does per year, isn't it? And of course, a skilled and prudent investor will sit with his (or her) returns in the upper part of the Gauss curve. They have to, otherwise nobody could make less to satisfy the average, and as we all know, there are less lucky (or less prudent investors) who make less return than the average, and some even lose money including their shirts ...

So, yes, good investors will sit somewhat above the average ... and not so good investors somewhat (or lots) below. However - nobody will be able to predict what their specific shares are going to do in the future, despite taking prudent and skillful picks. Remember how Warren bought airline shares before Covid started?

[SailorRob]

No, this has nothing to do with efficient market hypothesis. This has something to do with Chaos theory.

But referring to your last statement - for brokers and (paid) analysts this is absolutely correct. If they could beat the market sustainably and in a statistically meaningful way, than they would not need their income from broking or analysing companies and from selling their "advice".

For successful investors its a bit more difficult to say ... but then I think the answer is still yes. Sure, there is Warren Buffet and some other big names - and to be honest, to date I have never checked how far their success streaks are away from the standard deviation, but I just checked it today for you - according to some algorithm at Google:



That's not that much more than the average 8% the index does per year, isn't it? And of course, a skilled and prudent investor will sit with his (or her) returns in the upper part of the Gauss curve. They have to, otherwise nobody could make less to satisfy the average, and as we all know, there are less lucky (or less prudent investors) who make less return than the average, and some even lose money including their shirts ...

So, yes, good investors will sit somewhat above the average ... and not so good investors somewhat (or lots) below. However - nobody will be able to predict what their specific shares are going to do in the future, despite taking prudent and skillful picks. Remember how Warren bought airline shares before Covid started?


BP I would like to thank you profoundly. Without people like you the equity markets would not produce long term returns circa 10% as pricing would be much more efficient. Mass ignorance is a requirement.


Thanks for checking the success streak of Warren Buffett for me using 'some algorithm at google' perhaps another could tell you it's Buffett not Buffet. Anytime you are debating anything to do with Warren or Berkshire with me your mouth is writing cheques that your arse simply cannot cash.


https://www8.gsb.columbia.edu/articles/columbia-business/superinvestors


What about Bull and that Chris Lee mate of yours?

[winner69]

BP I would like to thank you profoundly. Without people like you the equity markets would not produce long term returns circa 10% as pricing would be much more efficient. Mass ignorance is a requirement.


Thanks for checking the success streak of Warren Buffett for me using 'some algorithm at google' perhaps another could tell you it's Buffett not Buffet. Anytime you are debating anything to do with Warren or Berkshire with me your mouth is writing cheques that your arse simply cannot cash.


https://www8.gsb.columbia.edu/articles/columbia-business/superinvestors


What about Bull and that Chris Lee mate of yours?

I believe that there are no good investors in this world.

There’s only investors in the right place at the right time.

Fortune rather than skill

[winner69]

Peat says OCA could go to 50 cents

There will be many backing up the truck if it gets back down that low

Jeez cheap as now ….. but 50 cents would be really really cheap

[Habits]

Peat says OCA could go to 50 cents

There will be many backing up the truck if it gets back down that low

Jeez cheap as now ….. but 50 cents would be really really cheap

Currently double the 38 cent covid low, didn't stay down there long. Compare Ryman price action, below covid and in no hurry to bounce.

[alokdhir]

I believe that there are no good investors in this world.

There’s only investors in the right place at the right time.

Fortune rather than skill

Very profound statement mate but sometimes U can vouch/ trust on an already bluechip company blindly and will do well in the long term ...yes for short term luck matters the most but still u can maximise your chances by going for the " Current " momentum plays ...

[nztx]

Currently double the 38 cent covid low, didn't stay down there long. Compare Ryman price action, below covid and in no hurry to bounce.


Anyone see a rapid reversal of economic headwinds any time soon towards higher revenue to offset higher costs
and that magical revaluation factor to yurn the bottom line magically green in a big way instead of red ? ;)

Let's face it - the reported surpluses in the sector have mostly represented financial wizardry around
internal gains and revaluations, resulting in little or no real tax paid, in turn imputation credits being
mostly non existent :)

[bottomfeeder]

Peat says OCA could go to 50 cents

There will be many backing up the truck if it gets back down that low

Jeez cheap as now ….. but 50 cents would be really really cheap

Theres always the dreamers in this world. I suppose he dreams that one day he will retire to a south sea island with a beautiful woman, with his spoils from a 50 cent OCA. Then the record that playing "beautiful dreamer" hits the groove scratch, and it all comes back to earth. He is living in his pensioner flat wondering why his order has been declined, "too far away from market value", and below minimum order value". All his dreams went up in the puff of smoke that he is smoking illegally.

[nztx]

Theres always the dreamers in this world. I suppose he dreams that one day he will retire to a south sea island with a beautiful woman, with his spoils from a 50 cent OCA. Then the record that playing "beautiful dreamer" hits the groove scratch, and it all comes back to earth. He is living in his pensioner flat wondering why his order has been declined, "too far away from market value", and below minimum order value". All his dreams went up in the puff of smoke that he is smoking illegally.


Oh .. do you know him well then ? ;)

[Brain]

I believe that there are no good investors in this world.

There’s only investors in the right place at the right time.

Fortune rather than skill

I totally agree with that.

[Baa_Baa]

I believe that there are no good investors in this world.

There’s only investors in the right place at the right time.

Fortune rather than skill

It takes skill to identify the right place, and the right time. To make a fortune.

[peat]

Oh .. do you know him well then ? ;)


haha


Theres always the dreamers in this world. I suppose he dreams that one day he will retire to a south sea island with a beautiful woman, with his spoils from a 50 cent OCA. Then the record that playing "beautiful dreamer" hits the groove scratch, and it all comes back to earth. He is living in his pensioner flat wondering why his order has been declined, "too far away from market value", and below minimum order value". All his dreams went up in the puff of smoke that he is smoking illegally.
I didnt say I want it to go to 50c and I would not be backing up the truck because as has been made clearly apparent I believe in diversification,

If the market stayed about the same and OCA went to 50c it would be a major warning that something was wrong not the buying opportunity some of you think I'm hoping for, thats other peoples game to double down in hope. I do that in my computer game blackjack (toy money) and it rarely works to recover.

While there are periods of share price volatility that provide opportunity, largely the trend is your friend, and as my earlier post mentioned it appears as if OCA has started another downtrend.

So many people on this forum reckoning about my life style its hilarious.


seeing as there is so much interest = view having coffee this morning in my pensioner flat.
14396

[Rawz]

haha


I didnt say I want it to go to 50c and I would not be backing up the truck because as has been made clearly apparent I believe in diversification,

If the market stayed about the same and OCA went to 50c it would be a major warning that something was wrong not the buying opportunity some of you think I'm hoping for, thats other peoples game to double down in hope. I do that in my computer game blackjack (toy money) and it rarely works to recover.

While there are periods of share price volatility that provide opportunity, largely the trend is your friend, and as my earlier post mentioned it appears as if OCA has started another downtrend.

So many people on this forum reckoning about my life style its hilarious.


seeing as there is so much interest = view having coffee this morning in my pensioner flat.
14396

I still don’t understand where the 50 cents comes from thou?

I bet that’s Lavazza in that plunger. No moccona in your cupboard lol

[Balance]

I have finished my 5 years overview and a very brief synopsis is as follows.

The Float and Business Case
OCA floated on the premise that the new product called care suites would be transformational and generate far superior returns for investors.
As you can see from the presentation on page 19 http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/392382/370976.pdf
the exact opposite of what was promised has occurred and returns on care have nearly halved from an EBITA margin of 21% to just 12%. Importantly returns were declining rapidly before Covid came along but its clear that Covid has exacerbated the issues.

Some of the reasons that explain this spectacular failure in execution of their business case as promoted at the time of the IPO appear to include:-
1. Rampant increases in the cost of human resources in the business with spectacular growth in employee costs from $103m when they listed to $156m last year an incredible 51.5% increase in staff costs.
2. A much slower increase in revenue growth from $171.8m to $231.1m over the 5 years period (34.5%).
3. Government underfunding has seriously undermined their business case and the premiumization of care hasn't worked.
4. Care suites have not met wide market acceptance and there are a total of ~ 450 unsold units inclusive of ILU units as at balance date 31 March 2022, a whole years stock. (Care suites are often initially let out as premium accommodation until they are sold, see footnote at bottom of page 31).

As a result of the spectacular failure of care suites and the systemic underfunding by the Govt of basic care (which and I am going off memory here was just on $100m in 2022 so is a huge part of their business model) underlying eps has declined from 8.60 cps in their first full year of listed operations in 2018 to 7.98 cps in 2022 and decline of 17.5% in real terms if you account for inflation.
As I have pointed out before the company has no pricing power with care suites which were only up 1-2% last year and have not kept pace with the real estate market.
Ultimately from personal experience with my Mum I believe customers are reluctant to commit to an ORA model when they don't know their longevity.

Looking forward to the next 5 years
I expect the cost of provision of care services to continue to experience rampant inflation pressures as a worldwide shortage of care and nursing staff causes huge issues with demands for more money and staff shortages. I also expect the Labour Government will play hardball with retirement village companies and continue to make them heavily subsidise care operations from other parts of their business.
This is going to cause an indefinite period during which OCA will generate very low and completely unsatisfactory returns from care.

So how long will it take OCA to execute their Pivot to independent living units so they represent more than 50% of the business model ?

Looking at page 31 and the PIE charts.
Its important to understand that currently the ratio of care to independent living units is 61:39
There are 1957 units in their development pipeline and 71% of them have already been designed and consented so it would be very difficult to change consented developments.
If they can execute at a sustained rate of 300 units per annum the pipeline will take 6.5 years to complete, a total of 11.5 years since they listed. (Please note that at the time of the listing we were told the business transformation would take 6 years)
As a result of a further 6.5 years of development they will end up with a care to independent living unit ratio of 55:45
In other words it takes a full year to move the needle one percent from care to ILU.

Conclusion
The business case upon which OCA floated has not worked. Its actually been a very poor failure in a period of strongly rising house prices, (DYOR on how much SUM grew underlying earnings in their first 5 years by way of comparison)
Care suites are not meeting wide market acceptance and OCA has no pricing power with them or basic care which combined is currently 61% of their business model.
Despite this they continue a heavy development pipeline of more care suites with most units in FY23 being care suites.

Its one thing to say you are going to pivot to independent living units but it would appear it will be 7-10 years before they have more ILU units than care, (barring major ILU village acquisitions which could somewhat speed up the process)

Seeing as this is an incredibly intense care focused business model and will be for the foreseeable future investors need to decide for themselves whether the intense cost pressures faced by those providing care services will abate anytime soon so that OCA will earn a materially better margin on its services. I think this is extremely unlikely as shortages of staff is a worldwide issue and Covid isn't going away anytime soon. Its very important to understand that even in 2028, (barring major acquisitions which might change the mix a little) OCA will still be predominantly a care based business operation.

People who believe that there is more money to be made in independent living focused business model's can execute their own pivot in less than a minute on the market, not the decade it will take OCA !

Going forward I think this will seriously underperform the others in the sector for the foreseeable future so I completed my exit from the company this week. I think the whole sector faces very serious headwinds for 2022 and potentially 2023 as well so I may remain on the sidelines for some time. In addition the Government review of this sector is very concerning and serious Government underfunding is highly likely to continue under Labour into late 2023 at least.

When the time is right I will invest the proceeds of my sell down in SUM with its well proven business model that has generated an average annual compound growth rate of 33% per annum since it listed.

I will leave you folks in peace on this thread now and conclude by wishing shareholders good luck.

I know some will hate my post and have counter points and that's fine. For the foreseeable future my time with OCA and debating it is over.
I certainly won't miss the headache's of interpreting their financial statements !

Posted by Beagle on 22 May 2022.

Sp then was $1.04.

Worth reading again in the light of OCA’s recent results.

[SailorRob]

I believe that there are no good investors in this world.

There’s only investors in the right place at the right time.

Fortune rather than skill


Certainly a good belief for one to hide behind their failures and subsequent positions in life. Brain may use this thesis to explain to the family where their money has gone?


Reading the initial prospectus of any company you're interested in as well as a decade worth of recent annual reports and checking what happened against what was supposed to happen. Listening to conference calls and reading proxies. Fortune or Skill?


Gaining an in-depth understanding of accounting from a practical perspective, do earnings match up with cash flows over time? studying the accounts strengths and weaknesses as well as spending hundreds of hours studying the accounts of past frauds and blow ups. Fortune or Skill?



Having run your own sizeable business and seen how they work from the inside. Fortune or Skill?


Studying management, the board of directors and their prior track records. How are their interests aligned with shareholders. Fortune or Skill?


Studying capital allocation over long periods of time, how has retained equity been used? What value has it created? Fortune or Skill?


Carefully studying the balance sheet and understanding the capital required and where it's coming from. Fortune or skill?


Studying inside activity closely. Fortune or Skill?


Studying the history of markets and investments and having a firm understanding of base rates (such as how often has a company ever been able to grow at x for y time etc) and understanding margins across different companies. Fortune or Skill?


Avoiding trying to time the market in any way, holding little cash unless you cannot find value anywhere. Fortune or skill?


Completely avoiding ALL of the insanity that presented itself over the last 24 Months and recognising it for what it was crystal clear. Fortune or skill?


Completely avoiding any form of trying to predict future prices based on past trends/charts. Fortune or Skill?


Completely avoiding all macroeconomic predictions and macroeconomics all together. Fortune or Skill?


Reading each annual report and quarterly report for companies you own as well as conference calls. Fortune or skill?



Always studying at least 10 years of financial statements, preferably 15 covering the GFC and building your own data sets form these statements. Fortune or Skill?


Not diversifying unnecessarily and being able to take concentrated positions when it makes sense. Fortune or Skill?


Not letting your emotions control your decisions in any way at any time regarding investing, remaining completely rational at all times. Fortune or skill?


Never letting the market dictate the value of anything to you ever. Fortune or Skill?


Having an in-depth understanding of different capital requirements of different companies and how capital spending is accounted for. Fortune or Skill?


Spending hundreds of hours studying and following the actions of the great investors with 30 year plus track records. Fortune or Skill?


Seeing something selling for less than the value of Steel inventory on its shelves less all liabilities and acting aggressively?


Reading trade publications and developing relationships inside different industries. Fortune or Skill?


Reading hundreds of relevant investing books. Fortune or Skill?

Reading 'the intelligent investor' every year and seeing that the 2021 episode was almost identical to the dot com episode highlighted by Zweig. Fortune or Skill?




Winner (or loser)? You ain't doing anything mate and then when you get a crap result you blame it on misfortune... Come on.

[SailorRob]

I totally agree with that.


The world cares not a bit what you agree with or what you don't. It means nothing.

[bottomfeeder]

haha


I didnt say I want it to go to 50c and I would not be backing up the truck because as has been made clearly apparent I believe in diversification,

If the market stayed about the same and OCA went to 50c it would be a major warning that something was wrong not the buying opportunity some of you think I'm hoping for, thats other peoples game to double down in hope. I do that in my computer game blackjack (toy money) and it rarely works to recover.

While there are periods of share price volatility that provide opportunity, largely the trend is your friend, and as my earlier post mentioned it appears as if OCA has started another downtrend.

So many people on this forum reckoning about my life style its hilarious.


seeing as there is so much interest = view having coffee this morning in my pensioner flat.
14396

Sorry Peat, didnt mean to disparage you personally, after all I dont know you. Just a comment on anyone who thinks OCA will reach 50 cents. After all I get the impression that anyone who thinks 50 cents is the target SP, is an old curmudgeon.

Clearly, I must apologise, but I see you took it in good humour.

[Brain]

The world cares not a bit what you agree with or what you don't. It means nothing.

I totally agree with that just as the world doesn’t care about your opinions they mean nothing.

[justakiwi]

This is now getting vicious and nasty. Enough.

[nztx]

It takes skill to identify the right place, and the right time. To make a fortune.


I'm pretty certain it wont be on anything listed on NZX anytime short term going ahead :)

[Maverick]

Sorry Peat, didnt mean to disparage you personally, after all I dont know you. Just a comment on anyone who thinks OCA will reach 50 cents. After all I get the impression that anyone who thinks 50 cents is the target SP, is an old curmudgeon.

Clearly, I must apologise, but I see you took it in good humour.
Really nice you posted that clarification Bottom Feeder. I met Peat a couple of years ago and a decent and humble bloke he most certainly is. At the time He’d just been doing a lot of work on some weird named company and concluded it was a stand out buy at $18…..Ebos.

[justakiwi]

It seems I also owe Peat an apology for my previous comment, but I'm with you. If the 50c wasn't just plucked out of thin air, how did you arrive at this figure Peat?


I still don’t understand where the 50 cents comes from thou?

I bet that’s Lavazza in that plunger. No moccona in your cupboard lol

[winner69]

It seems I also owe Peat an apology for my previous comment, but I'm with you. If the 50c wasn't just plucked out of thin air, how did you arrive at this figure Peat?

Maybe Peat reread Beagles post that Balance just reposted and then saw this new down trend on the chart and concluded 50 cents is about where the downtrend will end.

In Robs lingo …fortune or skill?

[bull....]

Posted by Beagle on 22 May 2022.

Sp then was $1.04.

Worth reading again in the light of OCA’s recent results.

beagle the trader who was busy pumping OCA was going to $2 not long before this post lol

[bull....]

agree it is well proven fact skill separate's good investors from bad over the long term.
how many sharetraders can vote with a smile emoji they had a positive 2022 return :)

[winner69]

agree it is well proven fact skill good investors from bad over the long term.
how many sharetraders can vote with a smile emoji they had a positive 2022 return :)

A couple of days to go but I’ve had good fortune :):):)

[Balance]

beagle the trader who was busy pumping OCA was going to $2 not long before this post lol

He did but as he articulated with a full assessment in his post of 22 May 2022 (after reviewing OCA's results released on 20 May 2022), he changed his mind.

That is the difference between him and the rampers, be them down or up - Beagle backs up his views with supportive assertions.

[Balance]

A couple of days to go but I’ve had good fortune :):):)

Congrats, W69!

Can't say the same myself but them's the breaks! :)

[SailorRob]

I totally agree with that just as the world doesn’t care about your opinions they mean nothing.


Well I haven't expressed any opinions, not on this topic anyway. Just facts backed up by a lot of data and the scientific method which is the gold standard.

Is it fortune that makes it possible for Maverick or Beagle or Justakiwi to present us with their insights into OCA which then can be used to more accurately gauge the future of this business?

I will guarantee that no sharetrader posters, myself included, practice all of the 'fortune or skill' methods I listed and they are but a few.

One thing Brain that you may be aware of is that in such times as 2021 the wind can blow strongly enough that even Turkeys can fly.

Once it stops and the turkey pile drives into the dirt do not try to hide behind the pathetic 'misfortune' excuse. You alone are responsible for the money you have lost and you should never attribute it to misfortune. We can certainly say that you were in the wrong place at the wrong time, but that has nothing to do whatsoever with misfortune.

To state in public that you strongly believe there is no such thing as a good investor highlights the great irony in the names 'brain' and 'winner.'

Come on people get real. 2023... Spend at least 1500 hours on your investments or just index.

If you truly believe the nonsense you are posting, then instead of a one liner about your 'beliefs' why don't you explain your thesis that 'there is no such thing as a good investor in this world' Make sure you include a lot of evidence and show us how the investors that are perceived as great by many people are in fact not great, they were just in the right place at the right time because of fortune.

[bull....]

Well I haven't expressed any opinions, not on this topic anyway. Just facts backed up by a lot of data and the scientific method which is the gold standard.

Is it fortune that makes it possible for Maverick or Beagle or Justakiwi to present us with their insights into OCA which then can be used to more accurately gauge the future of this business?

I will guarantee that no sharetrader posters, myself included, practice all of the 'fortune or skill' methods I listed and they are but a few.

One thing Brain that you may be aware of is that in such times as 2021 the wind can blow strongly enough that even Turkeys can fly.

Once it stops and the turkey pile drives into the dirt do not try to hide behind the pathetic 'misfortune' excuse. You alone are responsible for the money you have lost and you should never attribute it to misfortune. We can certainly say that you were in the wrong place at the wrong time, but that has nothing to do whatsoever with misfortune.

To state in public that you strongly believe there is no such thing as a good investor highlights the great irony in the names 'brain' and 'winner.'

Come on people get real. 2023... Spend at least 1500 hours on your investments or just index.

If you truly believe the nonsense you are posting, then instead of a one liner about your 'beliefs' why don't you explain your thesis that 'there is no such thing as a good investor in this world' Make sure you include a lot of evidence and show us how the investors that are perceived as great by many people are in fact not great, they were just in the right place at the right time because of fortune.

cathy wood of ark invest comes to mind of in the right place at the right time

[SailorRob]

cathy wood of ark invest comes to mind of in the right place at the right time


Yeah.. or this year you could say she was in the wrong place at the wrong time!

Cathie being down 82% has nothing to do with her being a lousy investor. It's simply misfortune, wrong place at the wrong time.

[SailorRob]

For those posting returns for the year, remember you must include cash as well which will make your results look much better this year (for most people) but it will destroy you in a normal year as well.

So maybe a lot of you have done better than you think.

[nztx]

A couple of days to go but I’ve had good fortune :):):)


Me too elsewhere & not attributable to NZX which has in many respects retreated

12 months ago similar - ASX up in a huge way, but NZX descending from what I believe was a peak

It takes skill to pick what & where is likely to cost one money - sure the Divs may still continue flowing
or be slightly reduced, but what's the point in wearing possible capital losses to produce taxable income
which may or may not have been hit with DWT deductions handed to the outstretched arm of the Tax Dept ? ;)


You got to also look to protect your capital outlay as well

[winner69]

Back on topic ….OCA share price UP today

Maybe Peats new downtrend was short lived and in months time share price will back over 90 cents heading to a buck

[nztx]

Back on topic ….OCA share price UP today

Maybe Peats new downtrend was short lived and in months time share price will back over 90 cents heading to a buck


A wee tinge of green on NZX now ... just in time for end of quarter

might be pretty diabolical all round but for a late sign of a little more positive than red :)

[Balance]

They who take offence when none is intended is a fool.

They who take offence when offence is intended is an even bigger fool as they have succumbed to the will of their adversary.

[Brain]

They who take offence when none is intended is a fool.

They who take offence when offence is intended is an even bigger fool as they have succumbed to the will of their adversary.

I totally agree with that

[ronaldson]

nztx - My portfolio is shown on my DB account, and positive is blue rather than green, but I appreciate the allusion to "green shoots". So a wee tinge of blue on-market, as funds get ready to present/enhance their end of year balances/performance outcomes.

I fancy this momentum will continue today and for the foreshortened trading session tomorrow given the year-to-date circumstance. Perhaps we can see the new year in with hope rather than apprehension?

[SailorRob]

nztx - My portfolio is shown on my DB account, and positive is blue rather than green, but I appreciate the allusion to "green shoots". So a wee tinge of blue on-market, as funds get ready to present/enhance their end of year balances/performance outcomes.

I fancy this momentum will continue today and for the foreshortened trading session tomorrow given the year-to-date circumstance. Perhaps we can see the new year in with hope rather than apprehension?


Hope means dramatically lower prices and thus far higher total returns over remainder of life.

Apprehension is a market that becomes more expensive.

[SailorRob]

They who take offence when none is intended is a fool.

They who take offence when offence is intended is an even bigger fool as they have succumbed to the will of their adversary.


Correct. Suffering fools has never been my strong point and as you point out, ironically it makes me a fool. But it's exceptionally enjoyable to me.

[peat]

55c is the 88.6 % retracement of 40c - 160c the price range during post covid era. .
usually the 78.6% retracement (which would be 66c) would hold but I think it will overshoot based on a strong trend

of course this is all just tea leaves as we all know with any future projection.
but that is the basis for my comment so that it can be critiqued, or ridiculed as per your bent.

[nztx]

55c is the 88.6 % retracement of 40c - 160c the price range during post covid era. .
usually the 78.6% retracement (which would be 66c) would hold but I think it will overshoot based on a strong trend

of course this is all just tea leaves as we all know with any future projection.
but that is the basis for my comment so that it can be critiqued, or ridiculed as per your bent.



If you guys get overly enthusiastic on OCA, I might have to revise my 2023 picks :)

Dont let me stop anyone diving in and clearing the table right now .. I wouldn't want to spoil anyone's
new year or aspirations to empty their wallets on the counter earlier.. this side of 1.1.23 ;)

[Panda-NZ-]

OCA & HLG .. beagles recommended picks are in the dog house.

I picked only one of those for 2023 (not oca).

[nztx]

OCA & HLG .. beagles recommended picks are in the dog house.

I picked only one of those for 2023 (not oca).


so you wish to be in the dog house as well .. well halfway ? :)

remember there are those around who only come in for a couple of chomps
at the dividends .. if a few aren't careful, they could wind up with the empty
lunchbox as a consolation prize :)

[Panda-NZ-]

Sometimes you have to take a dogged approach.

The competition is for next year only & not long term (OCA may well win long term).

[nztx]

Sometimes you have to take a dogged approach.

The competition is for next year only & not long term (OCA may well win long term).


May be there is also merit in what Tina says ... "Money in da bank" .. to avoid chance of a great pool of red too :)

I don't see any early / short term multibaggers in this sector .. the times of that appear to be largely well gone when Robbo & Orrsome got their straws out ready for some syphoning work on the goldfish bowl in past year :)

[Panda-NZ-]

All in for NZC?

The problem is it's locked in sh*tty rates instead of the latest ones (I suppose that helps when the rates are cut again though). :sleep:

[winner69]

Looking at the 1 year % chart you have to think the decline is all over

So brighter times ahead for the share price

As they say onward and upwards from here

[peat]

Looking at the 1 year % chart you have to think the decline is all over

So brighter times ahead for the share price

As they say onward and upwards from here

cant really see any obvious basis for that statement w69.
the one year chart shows us that in July a new low of 90 was reached and that took four months to be breached on the downside.
we've now have a new low in December, and the only thing positive I can see is slight divergence on the RSI at that point. volume has risen during Nov and Dec but that is not that meaningful and might even be a bad thing as the price drops. Bolllinger bands are still wide from the Dec fall, oh and my lifestyle comment must advise that the bottle of Bolly on NY eve was very good.
So not really sure why you say that, you could expound further, or just leave it as one of your random gibberish comments which you are prone too ;+) (Some interesting and informative comments too of course).
14408

[Rawz]

Random gibberish comments :scared:

[winner69]

Just that to me the downtrend seems to have flattened out and that the last few days it’s been up …. and of course things generally look brighter when a new year comes around.

You mention volumes peat ….volumes were relatively high during Nov/Dec and it was this during this time a bit more volatility occurred but to my eyes the overall down trend slowed down.

Be interesting to see chart at end of Jan …hopefully looking better …after all we are in new year

[Poolboy]

Maybe a smidgen. But the labor shortage, high costs, problems still exist. Crystal ball gazing I see the share prices really taking off when this bunch of half wits leave government.

[BlackPeter]

Maybe a smidgen. But the labor shortage, high costs, problems still exist. Crystal ball gazing I see the share prices really taking off when this bunch of half wits leave government.

Don't forget - markets are forward looking ... which may or may not be a good thing ;)

And obviously - neither high prices nor labour shortages are an issue if there is demand and if their competition plays on the same field. People are prepared to pay amazing prices for stuff they need ... in times of shortage.

[Poolboy]

Oh I wish I knew. I'd been bragging that I bought most of my OCA at 76 cents, I'm not so smug now LOL

Lets just hope this year is a happier place.

[BlackPeter]

Oh I wish I knew. I'd been bragging that I bought most of my OCA at 76 cents, I'm not so smug now LOL

Lets just hope this year is a happier place.

Buying under value and selling above value requires skill.

Buying at the absolute bottom as well as selling at the absolute top however is just good luck (or, if its just a story ... fantasy :);

Pretty sure that in the long run you will be happy with your 76 cents - and hey, you made already 4%!.

[nztx]

Wonder what OCA's next announcement of their FY March 2023 Result will look like ? :)

[BlackPeter]

Wonder what OCA's next announcement of their FY March 2023 Result will look like ? :)

Don't we all?

Analyst consensus is 274 m revenue and 6 cents EPS. But obviously - analysts are not more often right in predicting the future than anybody else. Lets hope somebody did wake the market up ...

However - I think 2024 will be more interesting than 2023. By FY2024 REITS should all be on the way back and market up from their hibernation ...

[winner69]

Don't we all?

Analyst consensus is 274 m revenue and 6 cents EPS. But obviously - analysts are not more often right in predicting the future than anybody else. Lets hope somebody did wake the market up ...

However - I think 2024 will be more interesting than 2023. By FY2024 REITS should all be on the way back and market up from their hibernation ...

That can’t be right BP

Last years revenue was $308m and eps was 8.7 cents

Só revenue going backwards and EPS collapsing to 6 cents

What’s happened to the ‘positioned for growth’

No wonder share price is so low

[nztx]

Don't we all?

Analyst consensus is 274 m revenue and 6 cents EPS. But obviously - analysts are not more often right in predicting the future than anybody else. Lets hope somebody did wake the market up ...

However - I think 2024 will be more interesting than 2023. By FY2024 REITS should all be on the way back and market up from their hibernation ...


That's done it .. I feel obliged to acquire a few solitary lamp posts to track this forecast trending with interest :)

[BlackPeter]

That can’t be right BP

Last years revenue was $308m and eps was 8.7 cents

Só revenue going backwards and EPS collapsing to 6 cents

What’s happened to the ‘positioned for growth’

No wonder share price is so low

Last years revenue was 231 m, but EPS was 16 cents (including revaluations). Well, that's what my spreadsheet says, I didn't double check. Anyway - I guess this is what happens if real estate markets turn around. Revaluation gains disappear.

Good thing is - while property markets could have risen forever, they can't possibly drop forever :p ;

They say markets are forward looking, but maybe - these markets are a bit short sighted, aren't they?

[nztx]

Last years revenue was 231 m, but EPS was 16 cents (including revaluations). Well, that's what my spreadsheet says, I didn't double check. Anyway - I guess this is what happens if real estate markets turn around. Revaluation gains disappear.

Good thing is - while property markets could have risen forever, they can't possibly drop forever :p ;

They say markets are forward looking, but maybe - these markets are a bit short sighted, aren't they?


This is the way I look at the OCA 2022 P&L Account

Total Income $308 m 2021 $260 m
Deduct:
Gain on purchase of Biz Assets (10.0)
Change Fair value Investment Property (64.0 m) 2021 (82 m)

Net Real Revenue $234m - 2021 $178m

Expenses:

Total expenses $252m - 2021 $184.0 m

Deduct
Impairments (5.2 m) 2021 + 3.0m

Adjusted Expenses 246.8 2021 - 187.0 m

Adjusted Real Surplus (12.8 m) LOSS - 2021 (9.0 m) LOSS


This removes all the creative internal revaluation write ups and fancy financial wizardry
out of the equation.

Lets face it - the internal write ups & revaluations could evaporate or reverse, if not realised first,
or do even worse or may be not..


Reported Tax Benefit +4.8 m - 2021 +10.4 m

No Tax paid in either years


Recognition and Measurement

No income tax was paid or payable during the year (31 March 2021: nil).


No income tax was paid or payable during the period (2020: nil).


Tax Losses:


After taking into consideration losses generated in the period to 31 March 2022, the Group now has an estimated $130.3m (31 March 2021: $86.9m) of available tax losses as at 31 March 2022.


After taking into consideration losses generated in the period to 31 March 2021, the Group now has an estimated $86.9m (2020: $53.4m) of available tax losses as at 31 March 2021.



That is $43.4 million of additional TAX LOSSES generated on estimated figures disclosed in 2022 Year and $33.5 million of TAX LOSSES generated in 2021 Year !


Why is OCA paying dividends, when these are costing holders 33% DWT, as no imputation credits attached ?

Are they borrowing to pay dividends ? - because eliminating the fancy financial fair value and revaluation footwork results in red ink or adjusted REAL LOSSES for both years - 2022 and 2021


No disclosure of Imputation credit balance that I can see - so should we assume that none exist ?


The SP Level seems to factor in that should an unfavourable wind blow, there may not be many smiling
faces on an equation that relies on revaluation / fair value gains to even make it over the line out of the red ;)


How many other Sectors rely on fair valuing upwards the valuation of the unsold contents
of the cookie jar bought in to sell over the next week ahead of the customers actually
landing (if they will indeed) to empty the Cookie Jar as hoped ? :)

[BlackPeter]

This is the way I look at the OCA 2022 P&L Account

Total Income $308 m 2021 $260 m
Deduct:
Gain on purchase of Biz Assets (10.0)
Change Fair value Investment Property (64.0 m) 2021 (82 m)

Net Real Revenue $234m - 2021 $178m

Expenses:

Total expenses $252m - 2021 $184.0 m

Deduct
Impairments (5.2 m) 2021 + 3.0m

Adjusted Expenses 246.8 2021 - 187.0 m

Adjusted Real Surplus (12.8 m) LOSS - 2021 (9.0 m) LOSS


This removes all the creative internal revaluation write ups and fancy financial wizardry
out of the equation.

Lets face it - the internal write ups & revaluations could evaporate or reverse, if not realised first,
or do even worse or may be not..


Reported Tax Benefit +4.8 m - 2021 +10.4 m

No Tax paid in either years






Tax Losses:







That is $43.4 million of additional TAX LOSSES generated on estimated figures disclosed in 2022 Year and $33.5 million of TAX LOSSES generated in 2021 Year !


Why is OCA paying dividends, when these are costing holders 33% DWT, as no imputation credits attached ?

Are they borrowing to pay dividends ? - because eliminating the fancy financial fair value and revaluation footwork results in red ink or adjusted REAL LOSSES for both years - 2022 and 2021


No disclosure of Imputation credit balance that I can see - so should we assume that none exist ?


The SP Level seems to factor in that should an unfavourable wind blow, there may not be many smiling
faces on an equation that relies on revaluation / fair value gains to even make it over the line out of the red ;)


How many other Sectors rely on fair valuing upwards the valuation of the unsold contents
of the cookie jar bought in to sell over the next week ahead of the customers actually
landing (if they will indeed) to empty the Cookie Jar as hoped ? :)

Looks like you original question was completely rhetorical ... you just needed an excuse to publish your damning analysis :) ;

Anyway - a great example for creative accounting - and it demonstrates that pessimists can be as creative in painting different shades of black, than optimists can be in painting different shades of white. Just remove the major income stream from the calculation and everything looks really bad. Easy.

Reality is normally somewhere in the middle - shades of grey.

I think what you missed is that ANY Retirement village operating by selling licences to occupy and charging deferred management fees is in the main a REIT. So, yes, if you assume (as you seem to do) that the real estate industry is doomed, real estate is crashing into the ground and people will throw away any property in a handful of years to avoid being charged a disposal fee, than your analysis makes lots of sense.

It is just - I don't share your train of thought, but if you really believe this nonsense you are writing, than why don't you just give me all your property? I am happy to take it off you without charging you disposal fees. Remember - it will be worth nothing in some years anyway :p;

[Poolboy]

Thanks for the accounting. But it has no bearing on the share market price,

[Champion]

Newbie here. Doesn't the reported revenue include selling licences / charging deferred management fees? So wouldn't nztx analysis above conclude that it is still making a loss with the deferred management fees? I am always confused with what is included in each number in the report ....

[winner69]

Great sales update from Summerset for their Q4

Bodes well Oceania 2nd half ........be good if their sales are up 18% (or more) as well

[percy]

Great sales update from Summerset for their Q4

Bodes well Oceania 2nd half ........be good if their sales are up 18% (or more) as well

Yes,OCA were well positioned with a lot of new units available for sale.I would expect they would have concentrated on sales.

Interesting comments from SUM's Mr.Scoullar.
Mr Scoullar said that the motivation to move into a retirement village is often driven by life events, not the property market.
“Our residents are driven by factors like community, security or health, which lead them to look at an offering like ours. These influences don’t change significantly even in a difficult property market. As a result, we continue to see good levels of demand across our portfolio.”

I take Mr.Scoullar's remarks to mean the sector's health and future remains robust,and the outlook is not reflected in the sector's share prices.

[BlackPeter]

Newbie here. Doesn't the reported revenue include selling licences / charging deferred management fees? So wouldn't nztx analysis above conclude that it is still making a loss with the deferred management fees? I am always confused with what is included in each number in the report ....

Look at it this way: If you build a house and charge the majority of your rent only at the time the tenant dies (retirement villages call that DMF - deferred management fee - and in OCA's case we are talking in average 3 years tenure), then after two years you clearly have still a loss, given that the tenant hasn't yet paid the DMF (which is a loan on the books).

Of course did OCA already receive DMF's for older stock, but for their new stock sold in the last 3 years, they didn't. They only need to stop building new apartments and their loss magically disappears from the books, but wait then for the howling of the critics.

Given that OCA is still ramping up pretty fast (though some might say not fast enough) they do have a lot of units where they paid the building costs (nztx calls that a "loss", while others might call it an investment), some of them obviously are already occupied (i.e. they received the interest free loan), but given that the first tenant is still alive, they didn't yet receive a DMF for this unit.

Time will fix that, no doubt.

[percy]

Look at it this way: If you build a house and charge the majority of your rent only at the time the tenant dies (retirement villages call that DMF - deferred management fee - and in OCA's case we are talking in average 3 years tenure), then after two years you clearly have still a loss, given that the tenant hasn't yet paid the DMF (which is a loan on the books).

Of course did OCA already receive DMF's for older stock, but for their new stock sold in the last 3 years, they didn't. They only need to stop building new apartments and their loss magically disappears from the books, but wait then for the howling of the critics.

Given that OCA is still ramping up pretty fast (though some might say not fast enough) they do have a lot of units where they paid the building costs (nztx calls that a "loss", while others might call it an investment), some of them obviously are already occupied (i.e. they received the interest free loan), but given that the first tenant is still alive, they didn't yet receive a DMF for this unit.

Time will fix that, no doubt.

Great explanation of DMF and resales.
Thank you.

[nztx]

Newbie here. Doesn't the reported revenue include selling licences / charging deferred management fees? So wouldn't nztx analysis above conclude that it is still making a loss with the deferred management fees? I am always confused with what is included in each number in the report ....


Yes - that's the way I read it


It's amazing with this sector that they continue clocking up Large Tax Losses on Accounts for the Tax Department

The Reported Accounts for everyone else is completely the opposite - Large Surpluses inflated by Revaluation and
Fair Value Adjustments.


The Gap between the two sets of figures is already huge and growing with every reported period

[nztx]

Looks like you original question was completely rhetorical ... you just needed an excuse to publish your damning analysis :) ;

Anyway - a great example for creative accounting - and it demonstrates that pessimists can be as creative in painting different shades of black, than optimists can be in painting different shades of white. Just remove the major income stream from the calculation and everything looks really bad. Easy.

Reality is normally somewhere in the middle - shades of grey.

I think what you missed is that ANY Retirement village operating by selling licences to occupy and charging deferred management fees is in the main a REIT. So, yes, if you assume (as you seem to do) that the real estate industry is doomed, real estate is crashing into the ground and people will throw away any property in a handful of years to avoid being charged a disposal fee, than your analysis makes lots of sense.

It is just - I don't share your train of thought, but if you really believe this nonsense you are writing, than why don't you just give me all your property? I am happy to take it off you without charging you disposal fees. Remember - it will be worth nothing in some years anyway :p;

"selling licences to occupy and charging deferred management fees" were not removed in adjustments from the 2021 & 2022, so by default have been left in and are included in the adjusted figures

Suggest you recheck what was posted, as you appear to have got the wrong end of the stick :)

But for Fair Value & Revaluation items included in OCA's 2021 & 2022 Reporting, both years
would have otherwise recorded LOSSES as you should be able to see :)

This is more clearly seen with Large increases in TAX LOSSES recorded for both 2021 & 2022 years
as disclosed in the Annual Reports.

[Snow Leopard]

Look at it this way: If you build a house and charge the majority of your rent only at the time the tenant dies (retirement villages call that DMF - deferred management fee - and in OCA's case we are talking in average 3 years tenure), then after two years you clearly have still a loss, given that the tenant hasn't yet paid the DMF (which is a loan on the books).

Of course did OCA already receive DMF's for older stock, but for their new stock sold in the last 3 years, they didn't. They only need to stop building new apartments and their loss magically disappears from the books, but wait then for the howling of the critics.

Given that OCA is still ramping up pretty fast (though some might say not fast enough) they do have a lot of units where they paid the building costs (nztx calls that a "loss", while others might call it an investment), some of them obviously are already occupied (i.e. they received the interest free loan), but given that the first tenant is still alive, they didn't yet receive a DMF for this unit.

Time will fix that, no doubt.

OK. Sorry. But this is so completely incorrect.

Dig up last year's full year financial statements from the report and read them, especially Note 2.2.

As an added assignment think through the cashflow.

[winner69]

Brent can’t really say it’s difficult selling things now.

[Snow Leopard]

....
But for Fair Value & Revaluation items included in OCA's 2021 & 2022 Reporting, both years
would have otherwise recorded LOSSES as you should be able to see :)

This is more clearly seen with Large increases in TAX LOSSES recorded for both 2021 & 2022 years
as disclosed in the Annual Reports.

You are conflating two separate things here.

Isn't accounting fun ? :t_down:

[Sideshow Bob]

I see Oceania one of the major sponsors of the tennis.

That's good stuff, eh.

[BlackPeter]

OK. Sorry. But this is so completely incorrect.

Dig up last year's full year financial statements from the report and read them, especially Note 2.2.

As an added assignment think through the cashflow.

Completely incorrect? So you are saying everything I wrote is wrong?

Look, I do acknowledge that your accounting experience is by whatever number of years you've been on the job longer than mine - i.e. I am sure you can pick issues in my example which I tried to use to explain how one major financial income stream of a retirement village works.

Does not mean that the example is wrong, but sure, I should have said that the DMF is treated by OCA as a lease instead of as a loan, shouldn't I? Does this make my post completely wrong and does it change the story?

If you want to be constructive, than you might think about a better example than the one you said is "completely wrong" (how can an example be wrong, btw ???) and give that to us.

Cheers. ... and sorry, while I sometimes enjoy your games I am currently too busy to play them.

[nztx]

You are conflating two separate things here.

Isn't accounting fun ? :t_down:


It is . the tax reporting playing field is the same level field with rules that investors & individuals play by :)

From the company reporting side - take out the fair value and revaluation items and that gives an idea
of actual nuts and bolts (simplistic it may be, but without vaguarities of valuation swings).

For a long time, revaluations etc were taken directly into shareholders funds - not touching P&L
before changes in reporting standards.

Under current standards, there are many ways of viewing the unsold contents of the cookie jar
and how they should be valued / reported :)

Leases, notional interest and depreciation are yet another area of accounting imagination
sent to confuse, enthuse or confound most :)

The benefactors of these concocted reporting schemes are likely in main to include that same group who
dreamt them up to try to impose on all, in the first place

[Poolboy]

I see Oceania one of the major sponsors of the tennis.

That's good stuff, eh.

With the company doing so badly, I don't think that's a good idea giving money away.

[justakiwi]

The Company is not doing badly. You need to learn to sort the wheat from the chaff in these discussions, do your own due diligence, and make your own decisions about whether or not you invest in OCA, or any other company. Do not take anything you read here as gospel, and do not base your investing decisions purely on the opinions expressed in these forums. And yes, that includes mine.


With the company doing so badly, I don't think that's a good idea giving money away.

[winner69]

I see Oceania one of the major sponsors of the tennis.

That's good stuff, eh.

Our Liz likes her tennis

[Aaron]

Of course did OCA already receive DMF's for older stock, but for their new stock sold in the last 3 years, they didn't. They only need to stop building new apartments and their loss magically disappears from the books, but wait then for the howling of the critics.

A bit afraid to comment as my understanding is limited. Not sure about OCA but Arvida shows "Revenue In Advance" and "Resident Loans" in the balance sheet. I had assumed this was the proceeds received from the sale of units, split between what gets paid back to the deceased estate and what is kept as deferred mgmt fees. The notes say
Deferred Management Fees
Deferred management fees entitle residents to accommodation and the use of the community facilities within the village. They are recognised over the period of service being the expected period of tenure.

I had assumed they guesstimate the average life/tenancy of the residents and show this as income in the P & L over the expected tenancy with a washup on the departure of the tenant, which could be longer or shorter than estimated.

This means cashflows and income recognition would be very different.

As usual shooting from the hip. I will make an effort to look at this more closely tonight and am happy to be corrected here. I await our lesson from Snow Leopard.

Regarding nztx's comments on accounting trickery Arvida's 2022 accounts have a $44,905MILLION dollar "gain on acquisition of villages"??????

My understanding is that market value is what a willing buyer and seller agree on, but Arvida is saying what they bought is worth $44mill more than what they actually paid and revalued the new villages upwards and booked an additional $44mill profit. Although it is not taxable as this defies normal common sense.

Perhaps it is something to do with what they intend to sell units for.

If you take all the non-cash revaluations out of the P & L (not including the mgmt fee estimate) then they made no profit. Again this is Arvida not OCA. Should be some massive losses in the March 2023 accounts with interest rates rising.

[Snow Leopard]

Completely incorrect? So you are saying everything I wrote is wrong?

Look, I do acknowledge that your accounting experience is by whatever number of years you've been on the job longer than mine - i.e. I am sure you can pick issues in my example which I tried to use to explain how one major financial income stream of a retirement village works.

Does not mean that the example is wrong, but sure, I should have said that the DMF is treated by OCA as a lease instead of as a loan, shouldn't I? Does this make my post completely wrong and does it change the story?

If you want to be constructive, than you might think about a better example than the one you said is "completely wrong" (how can an example be wrong, btw ???) and give that to us.

Cheers. ... and sorry, while I sometimes enjoy your games I am currently too busy to play them.

Seeing has the gloves are coming off...

Yes, complete rubbish.

And f you want to rage in ignorance instead of learn then that is fine by me.

Note 2.2

[Poolboy]

The Company is not doing badly. You need to learn to sort the wheat from the chaff in these discussions, do your own due diligence, and make your own decisions about whether or not you invest in OCA, or any other company. Do not take anything you read here as gospel, and do not base your investing decisions purely on the opinions expressed in these forums. And yes, that includes mine.

Thanks for the 101 on sharemarket trading LOL

The share price is about half what it was a while ago. That's a sign isn't it. Your optimism isn't going to help the smart money's opinion of the company.

[justakiwi]

Well if you don't need a lesson in investing 101, you should know that the share price is not a reliable indicator of the worth or value of a company.




Thanks for the 101 on sharemarket trading LOL

The share price is about half what it was a while ago. That's a sign isn't it. Your optimism isn't going to help the smart money's opinion of the company.

[winner69]

Seeing has the gloves are coming off...

Yes, complete rubbish.

And f you want to rage in ignorance instead of learn then that is fine by me.

]Note 2.2

Ah só, the old recognising revenue on a straight line basis trick eh

[Poolboy]

share price is not a reliable indicator of the worth or value of a company.

Duh, it IS the value of the company.

[Sideshow Bob]

10 days into 2023 and the tangled web of OCA's accounts remain no.1 ST topic......:sleep:

In light of timing, deferred income, depreciation, increases/decreases in property values, don't you just look at the cash? (Don't shoot me, I'm not an accountant)

1441214413

[bull....]

This is the way I look at the OCA 2022 P&L Account

Total Income $308 m 2021 $260 m
Deduct:
Gain on purchase of Biz Assets (10.0)
Change Fair value Investment Property (64.0 m) 2021 (82 m)

Net Real Revenue $234m - 2021 $178m

Expenses:

Total expenses $252m - 2021 $184.0 m

Deduct
Impairments (5.2 m) 2021 + 3.0m

Adjusted Expenses 246.8 2021 - 187.0 m

Adjusted Real Surplus (12.8 m) LOSS - 2021 (9.0 m) LOSS


This removes all the creative internal revaluation write ups and fancy financial wizardry
out of the equation.

Lets face it - the internal write ups & revaluations could evaporate or reverse, if not realised first,
or do even worse or may be not..


Reported Tax Benefit +4.8 m - 2021 +10.4 m

No Tax paid in either years






Tax Losses:







That is $43.4 million of additional TAX LOSSES generated on estimated figures disclosed in 2022 Year and $33.5 million of TAX LOSSES generated in 2021 Year !


Why is OCA paying dividends, when these are costing holders 33% DWT, as no imputation credits attached ?

Are they borrowing to pay dividends ? - because eliminating the fancy financial fair value and revaluation footwork results in red ink or adjusted REAL LOSSES for both years - 2022 and 2021


No disclosure of Imputation credit balance that I can see - so should we assume that none exist ?


The SP Level seems to factor in that should an unfavourable wind blow, there may not be many smiling
faces on an equation that relies on revaluation / fair value gains to even make it over the line out of the red ;)


How many other Sectors rely on fair valuing upwards the valuation of the unsold contents
of the cookie jar bought in to sell over the next week ahead of the customers actually
landing (if they will indeed) to empty the Cookie Jar as hoped ? :)

my take is declining div or no div ... to come

[winner69]

my take is declining div or no div ... to come

Bobs cash flow says borrowed heaps more but paid out $20m in divies

[justakiwi]

OK, I didn't word that well (I was multi tasking and distracted) but you knew exactly what I meant, so don't be pedantic.

Have a lovely rest of your day.





Duh, it IS the value of the company.

[Poolboy]

Sorry... I still have no idea of what you are talking about.

[justakiwi]

Don't worry about it. Beginning to understand why the vast majority of your Rep votes are red.


Sorry... I still have no idea of what you are talking about.

[Poolboy]

Instead of being a cry baby, why not just stay on topic.

[Aaron]

10 days into 2023 and the tangled web of OCA's accounts remain no.1 ST topic......:sleep:

In light of timing, deferred income, depreciation, increases/decreases in property values, don't you just look at the cash? (Don't shoot me, I'm not an accountant)

1441214413

Still under the disclaimer of understanding very little. Can you tell me under operating cashflow we have $214,188 "Receipts from new occupation right agreement" and $(69,998)Payments for outgoing occupation rights. These include both the Repayable portion and the Deferred Management Fee. Wouldn't the repayable portion be better shown under "Cashflow from Financing" I guess ultimately once receipts and payments are netted off you have the deferred mgmt fee but the operating cashflow looks overstated by the repayable portion, which is not actually income to OCA.

I am unsure I even have that right. My understanding is the right to occupy is sold and on the death/departure of the tenant a 20-30% mgmt fee is charged with the remaining 70-80% paid to the tenant or their estate. The value of the right to occupy does not change but if property prices are going gang busters like they have been then retirement villages are on a winner.

If tenants live a long time then the deferred mgmt fee may not be as profitable.

What does OCA charge for its deferred mgmt fee?

[Poolboy]

Doesn't make any difference. It's all about the markets, not OCA.

OCA is not a "Glamour" stock. Not on the radar. So the numbers don't matter. When the market picks up (death of Labour) OCA will pick up. But not before. Bless you guys for your financial analysis but it doesn't make any difference.

[Bjauck]

With the company doing so badly, I don't think that's a good idea giving money away. Tennis - I think - is a sport followed by the older well-heeled set. So a target market with which it is good to raise the profile.

[Bjauck]

10 days into 2023 and the tangled web of OCA's accounts remain no.1 ST topic......:sleep:

In light of timing, deferred income, depreciation, increases/decreases in property values, don't you just look at the cash? (Don't shoot me, I'm not an accountant)

1441214413
The OCA thread is off to a roaring start of the year - some venting too after the holidays :scared:

[Champion]

Hi nztx, I do agree taking out the revaluation etc better reflect the business. However, on the expense side, shouldn't we also take out depreciation of buildings as they do really mean much? Actual repair and maintenance costs are already accounted for separately?


It is . the tax reporting playing field is the same level field with rules that investors & individuals play by :)

From the company reporting side - take out the fair value and revaluation items and that gives an idea
of actual nuts and bolts (simplistic it may be, but without vaguarities of valuation swings).

For a long time, revaluations etc were taken directly into shareholders funds - not touching P&L
before changes in reporting standards.

Under current standards, there are many ways of viewing the unsold contents of the cookie jar
and how they should be valued / reported :)

Leases, notional interest and depreciation are yet another area of accounting imagination
sent to confuse, enthuse or confound most :)

The benefactors of these concocted reporting schemes are likely in main to include that same group who
dreamt them up to try to impose on all, in the first place

[Ferg]

Peter - this is 100% incorrect as SL says. SL has pointed you to the notes which contain the answer. If you want details on where you have gone wrong, then read on.


Look at it this way: If you build a house and charge the majority of your rent only at the time the tenant dies (retirement villages call that DMF - deferred management fee

That is incorrect. Yes it is a somewhat akin to rent, but the majority of DMF is not charged when the tenant dies. DMF is charged from when the tenant moves in. Total DMF is 30% assuming no early departure, and is charged over 3 years. ILU's and apartments are 10% p.a., whereas care suites are 15% in year 1, 10% in year 2 and 5% in year 3. So for ILUs and apartments, on average there is no charging of DMF when the tenant dies - on average that was completed some years ago.


- and in OCA's case we are talking in average 3 years tenure),

That is incorrect. 'Tenure' in your quote relates to the time until the tenant dies given that is what preceded that part of the comment outside of the statement in the brackets. For OCA average tenure in ILUs was historically 7 years, apartments 5 years and care suites was less than 3 years. Average term for charging DMF is almost 3 years. Client tenure is completely independent of the profile for charging DMF.


then after two years you clearly have still a loss,

That is incorrect. The DMF is charged to the client as noted above but held on the Balance Sheet, for now. That value is released to the P&L monthly on a straight line basis over the expected tenure of the client (being 3, 5 and 7 years for c/s, apartments and ILUs). So we have revenue from the DMF appearing in the P&L during the first 2 years, in addition to the various weekly charges etc. There is no loss per se.


given that the tenant hasn't yet paid the DMF (which is a loan on the books).

This is also incorrect. The DMF is eventually deducted from the ORA payment made by the client when they purchased the c/suite, apartment or ILU. The client has already paid for the DMF via their ORA payment when they moved in. The money for the ORA is in the OCA bank account from day 1. Also, the DMF charged is not a loan on the books - the ORA is a loan on the books. The DMF charged to the client is actually a deduction from the ORA loan, so it is actually a negative loan for want of a better phrase. They call this 'Management Fee Receivable' in the AR under the notes for ORA liabilities.

Apologies for accounting speak bit it is (simplistically) a 4 step process:
1) Money in the bank upon sale: debit cash, credit ORA Loan (say $1m)
2) DMF is charged to the client over 3 years: debit ORA Mgmt Fee Receivable (the 'negative ORA loan'), credit Deferred Mgmt Fees on Balance Sheet (this is like income in advance that sits on credit side of the Balance Sheet) say $300k
3) DMF is released to the P&L monthly (typically over 3, 5 or 7 years): debit DMF on Balance Sheet, credit DMF Revenue in the P&L.
4) Client departs and ORA is paid out less the ORA Mgmt Fee Receivable: debit ORA Loan $1m, credit ORA Mgmt Fee Receivable $300k, credit bank $700k (assuming weekly fees are paid and not added to the tab - but here I am trying to illustrate the impact of DMF on the ORA payout & P&L).

For a single unit with an ORA of $1m where the client has departed, OCA have $300k in the bank and $300k in retained profits.

Note that in the cashflow report step 4 is compressed to $700k under the title 'ORA payments'. I believe OCA could help themselves by separately disclosing both components of $1m liability extinguished, but $300k was retained. IMO the $1m in and out are financing cash flows, the $300k retained is an operating cash inflow.


Of course did OCA already receive DMF's for older stock, but for their new stock sold in the last 3 years, they didn't.

Incorrect for the reasons outlined above. DMFs have been received and fully taken to the P&L for clients that have since departed, versus DMF has been received in cash via the ORA but not yet fully taken to the P&L for resident clients as explained above.


They only need to stop building new apartments and their loss magically disappears from the books

Not correct either. First up there is no loss. Secondly, building and selling apartments results in realised development margins. These will be lost if there are no new builds. New builds hurt cashflows, not the P&L.


but wait then for the howling of the critics.
Lots of critics howl so I guess we can agree on this point.


Given that OCA is still ramping up pretty fast (though some might say not fast enough) they do have a lot of units where they paid the building costs (nztx calls that a "loss", while others might call it an investment), some of them obviously are already occupied (i.e. they received the interest free loan), but given that the first tenant is still alive, they didn't yet receive a DMF for this unit. Time will fix that, no doubt.

Building something is an investment but the comments about the tenant being alive hence no DMF received is not correct as outlined above.

Makes sense?

[justakiwi]

Excellent explanation Ferg. Really helpful to me!


Peter - this is 100% incorrect as SL says. SL has pointed you to the notes which contain the answer. If you want details on where you have gone wrong, then read on.
<SNIP>

[Ferg]

A bit afraid to comment as my understanding is limited. Not sure about OCA but Arvida shows "Revenue In Advance" and "Resident Loans" in the balance sheet. I had assumed this was the proceeds received from the sale of units, split between what gets paid back to the deceased estate and what is kept as deferred mgmt fees. The notes say


Deferred Management Fees
Deferred management fees entitle residents to accommodation and the use of the community facilities within the village. They are recognised over the period of service being the expected period of tenure.

I had assumed they guesstimate the average life/tenancy of the residents and show this as income in the P & L over the expected tenancy with a washup on the departure of the tenant, which could be longer or shorter than estimated.

This means cashflows and income recognition would be very different.

Aaron - that is spot on.


Regarding nztx's comments on accounting trickery Arvida's 2022 accounts have a $44,905MILLION dollar "gain on acquisition of villages"??????

My understanding is that market value is what a willing buyer and seller agree on, but Arvida is saying what they bought is worth $44mill more than what they actually paid and revalued the new villages upwards and booked an additional $44mill profit. Although it is not taxable as this defies normal common sense.

Perhaps it is something to do with what they intend to sell units for.

Yes - it will be supported by a valuation from an independent expert and will be based on actual and projected sales values.

[FTG]

Peter - this is 100% incorrect as SL says. SL has pointed you to the notes which contain the answer. If you want details on where you have gone wrong, then read on.

Very succinct (and patient) response & explanation Ferg. Otherwise we could have ended up with a few folk walking down the wrong garden path.
Thank you!

[nztx]

Hi nztx, I do agree taking out the revaluation etc better reflect the business. However, on the expense side, shouldn't we also take out depreciation of buildings as they do really mean much? Actual repair and maintenance costs are already accounted for separately?

I have left in depreciation, as I suspect it may be a allowable deductible expense - for tax purposes.
I may be wrong, but consider the Rest Home operation to be a commercial business operation.
I haven't researched as to deductibility - ie commercial buildings for which deduction was once again possibily
allowed V Residential rental properties for which depreciation in most cases deductibility went out the window on/around 2011

[Champion]

I have left in depreciation, as I suspect it may be a allowable deductible expense - for tax purposes.
I may be wrong, but consider the Rest Home operation to be a commercial business operation.
I haven't researched as to deductibility - ie commercial buildings for which deduction was once again possibily
allowed V Residential rental properties for which depreciation in most cases deductibility went out the window on/around 2011

Yes, I think it is allowable deductible expense for tax purpose. I am more thinking about from evaluating the business point of view, depreciation of buildings seems like unrealized loss similar to capital gain (unrealized gain), thus I wonder if they should both be ignore if we want to look at the real profit/loss. The loss probably get cancelled out by capital gain in the long run? However, looking at it again I realize the depreciation of buildings is actually a small part of the depreciation loss, and other depreciations are likely to be real (e.g. they have to replace the chattels etc). So probably doesn't make much of a difference.

Also I wonder why care suites depreciation is so high (and included separately) but not other units?

[Balance]

Here's what Warren Buffet said about depreciation :

"Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years).

It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game.

People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business.

This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense.

We at Berkshire are going to spend more this year on cap ex than we depreciate."

[Perky]

Thanks for taking the time to give a good clear working example there Ferg.

Just waiting for the snow leopard to come out of his cave and see if you get a tick (lick) or a swipe from his paw! Lol

[Champion]

Thanks Balance!


Here's what Warren Buffet said about depreciation :

"Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years).

It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game.

People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business.

This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense.

We at Berkshire are going to spend more this year on cap ex than we depreciate."

[Aaron]

Thanks Ferg helpful and educational posts.

[bottomfeeder]

Here's what Warren Buffet said about depreciation :

"Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years).

It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game.

People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business.

This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense.

We at Berkshire are going to spend more this year on cap ex than we depreciate."

Yep well and good, but as with statistics, a lot of comments can be slanted to assert a biased agenda.

OCA revalues its assets each year, up or down, and the resultant increase or loss is attributed to earnings. I believe thats the case. Correct me if I am wrong. Tax depreciation is based on historical cost, and amortised to tax profit or loss. It is only when a development is sold, that the difference between the holding values, and the tax holding values get closer together. So in theory, there is an amount in a provision for deferred income taxation that is sitting there until sold.

So I think Warren Buffet's comment has been taken out of context. Depreciation can be based on many different values, ie Tax depreciation rates, financial depreciation rates of some sort, true value depreciation rates, or revaluation depreciation rates. Generally, Pland, Machinery, vehicles differ in depreciation policy than Buildings and property.

[Champion]

Thanks Ferg helpful and educational posts.

Yes, very informative. Thanks!

[BlackPeter]

Peter -

...

Makes sense?

Cheers for a very patient and thorough explanation. Yes, I am sure this does make a lot of sense for accountants ... and I consider myself corrected!

I recon my mistake was to see the transaction from the other side (the resident) who just gives an interest free loan to OCA and receives later the principal back (obviously minus DMF) without considering all the black magic accounting is doing to the books.

Correct as well that the 3 years I used in the example are only applicable for the care suites. I was lazy not to mention that the DMF rules (and the average mortality) for ILU's and apartments are different. Having said that - it was just an example, and as far as I recall are they (the care suites) the main business of OCA (as beagle always used to remind us) :) ;

[Maverick]

I do want to wade in at this point and firstly compliment Ferg on a very solid set of posts how some of the nuts and bolts work. Great job.
Secondly I must compliment BP on his mature acceptance of having his assumptions corrected without any of the usual pissing competition nonsense that would normally break out on these forums.
Really good to see the sharing of this info between some very good posters here.

Now to add something new with the DMF stuff squared away.

NZTX threw out the " rhetorical " question about any FY profit predictions.
This 2nd half is impossible to be accurate. Care, DMFs and even resales are trucking predictably and nicely.
It's the new sale's that are the problem child.
SUM result yesterday sheds no light ( I was hoping it would) as they should have completed about 380 and only sold 129( they usually have good presales with their villas) so maybe they are apartments that dont presell well, maybe they are care suits, same thing...or maybe the new sales are just dire. I just dont know from their announcement.
Next thing is OCA are sitting on a gold mine with solid presales of the soon the be delivered Helier. Will any appear this FY, I suspect not but just maybe some will.
Plus how will the extra care funding AND pay parity materialize.

So lots of substantial unknowns. My range of profit expectations for 23FY is up at worst 8% and at best 20%.
Both estimates dont include any Helier sales.

It is also pleasing to see OCA finally start to break out from its usual shadowing of the ARV shareprice. ( ie , they are treated like twins but they at very different chapters of development) .Good to see buyers reemerging and the selling of the last 14 months dry up. I suspect the analysts are now factoring in some pretty good news coming OCAs way shortly.

I'm away from my stuff and just posting from my crappy phone so I appoligize in advance for any bad grammar or spell check things.

[bull....]

Doesn't make any difference. It's all about the markets, not OCA.

OCA is not a "Glamour" stock. Not on the radar. So the numbers don't matter. When the market picks up (death of Labour) OCA will pick up. But not before. Bless you guys for your financial analysis but it doesn't make any difference.

totally agree ( under normal times numbers matter but we are not in normal times value investing is still not in vogue ) and hence why my theory on covid deaths to retirement stock relationship has proven the best method to play these stocks.
as my previous charts showed on this thread the relationship is strong with a 82% r factor and just recently the slow down in covid wave has lead to the temporary fall in stock prices right on que again.
On the re-sale figure's rising ( as i alluded to with my boiled cabbage joke ) this has proved correct. i continue to see perhaps even re-sales becoming the dominant sales factor in these stocks as covid evolves and takes its toll
( obviously the plan all along lol was to rid the world of old people to solve the world pension problem ) these stocks benefit from re-sales in this regard.
but in conclusion why the resales help it does not replace the fact property market direction and rising build costs outweigh this hence why stock prices wont recover till property market does.

[davflaws]

Thanks for that analysis Mav, and I share your appreciation for Ferg's hard work and BP's response. I am not only learning a lot, but also enjoying the tone of the thread.

[nztx]

The Sector must have been one of the more profitable in 2022, based on the lavish reports issued

It also clocked up (I'm guessing) the most Tax losses of any of the sectors

and with that pulled off another prize - paid next to No Tax on those results

How long will the partying continue on those terms ? :)

[winner69]

Mav says 'It's the new sale's that are the problem child.'

Yep, a problem child and a real mystery

I'm not really on top of understanding which villages have had the new sales over the years - this probably is the story behind these new sales numbers which are pretty horrendous in the contest of the all the things they say in reports and presentations

For 12 months (2 half years) to November 2020 they had 250 new sales. The number had been grown from 50 as at November 2017

Roll on a couple of years for the 12 months to September 2022 they had 144 new sales

144 new sales is a long way down from 250 eh - and as Mav implies is the main reason why underlying earnings have been disappointing (not grown much)

As Mav says 'new sales a problem child ' - hope they are getting on top of it sooner than later.

[Champion]

Yeah, thank you everyone for the useful information, especially BP for replying to my question in the first place 🙂.

[Ggcc]

Thanks for that analysis Mav, and I share your appreciation for Ferg's hard work and BP's response. I am not only learning a lot, but also enjoying the tone of the thread.
I second that and well done BP to accept it in good fashion.

[winner69]

My feeling downtrend flattening out aand getting ready for more positive share price movements (yep, that random gibberish remark) might have been a good observation last week

Last week been pretty good ... holding over 80 and even reaching 82 at times

Looking good

[Poolboy]

Dump OCA and buy Auckland Airport. It's up 15 cents a share right now.

[Sideshow Bob]

Phew, thought the world was off-kilter there for a while.

Just 3 days without an OCA post.....:mellow:

[iceman]

Phew, thought the world was off-kilter there for a while.

Just 3 days without an OCA post.....:mellow:

Then you get one, about AIA :confused:

[limmy]

OCA appears to be on an uptrend now.
Hopefully it's onwards and upwards from now on.

[limmy]

Hopefully, increasing 1c a day

[777]

Surely I can make a post without you trash people making harsh comments. I talk about trading and trash boys and Greeko turn it personal.

It must be a lonely life being a wog boy in Chch. You should move to wogsville Paramatta.

This post alone should merit a holiday by Vince.

[alokdhir]

OCA thread is either quite or fireworks ...nothing in between ...lol

Hopefully W69 will say something encouraging soon ...I understand he thinks downtrend is getting over ...it's surely consolidating ...after that up or down ?

[nztx]

OCA appears to be on an uptrend now.
Hopefully it's onwards and upwards from now on.


it wasn't going to stay on it's low forever, but a lower bottom can't be discounted
going forwards either :)

At least with AIA Bumblefoot's fleet of bubbles of debt are sailing backwards and forwards
emptying revenue on AIA's counter each time for the privilege :)

[ronaldson]

Curious fact that one of the most active threads on Sharetrader goes strangely silent when the on-market activity starts to show signs of incremental price increase. Will today confirm the much-anticipated uptrend?

[bull....]

Curious fact that one of the most active threads on Sharetrader goes strangely silent when the on-market activity starts to show signs of incremental price increase. Will today confirm the much-anticipated uptrend?

yes might be very bullish if it goes above 85c , riding the sector higher from oversold or seriously undervalued ? you decide

[Maverick]

Fair enough Ronaldson, Thought it was about time to say g'day. Basically I'm procrastinating today on other stuff I don't want to do.

It's very pleasing to see that OCA SP might have reached bottom after a brutal and relentless 15 months.

Ive been observing the SP seems to inversely track US10yr treasury / NZ 10yr bond graphs which are now suggesting we are past global inflation peaks. I figure these 2 measures are driving the global funds aversion ( ie selling) to all things property. Those peaks coincided the same time when OCA was 76c. This, coupled with a sharp drop off in turnover also at the same time, also suggests the offshore sellers are now packed up and gone. After watching RYM get some massive love out of nowhere this week it is looking like the tide against the whole retirement village sector has turned.

I am not a chartist by any stretch, I'll leave that to Baabaa and others, but even I can see sentiment has changed, as it was always going to at some point.

The other pleasing thing of note is that OCA`s SP has broken away from parroting and trailing ARV, % wise.
As of 2 weeks ago OCA has risen nicely ahead of ARV which is highly unusual as the markets have always treated these companies as twins. I certainly disagree with that idea as they are quite different models and offerings of which the market has possibly not recognized until now. This is not to disparage ARV but to me it suggests OCA is now receiving more scrutiny on its own unique merits. Particularly at this point in time of its development.
-Lately care suites are really coming into their own with successful market acceptance. ( IMO the running down of regular rest homes leaving nowhere else for those in need to go has played into OCAs hands) OCA has 972 care suites while ARV has 114.
-Then of course OCA has the Helier pre-selling down nicely at some eye watering prices. I note they changed their wording 1hy23 that deliveries will now be both this FY23 AND early FY24 . So slightly behind plan, but considering the year it's been ….. no biggie.

Where does this leave the math? ….Well the biggest question is new sales, what will they be?
FY22 they sold 92 new apartments . They should have sold even more than that this FY23 given their high available new stock but as we know first half sales were BAD, only 28.
After reading SUM sales were poor NOV and DEC, I have allowed for 65 sales FY23.
I have not allowed for any Helier or Windermere-Christchurch new sales being banked this FY23. ( it's always a possibility)

I get 4.95c EPS this 2HY23. To compare that to last 3 HY periods …3.9…4.15…3.9

So based on my expectations Mr Market is currently affording a PE of 8.6 at 85c. It is my expectation the company's annual profit will grow 10% YOY.
With the turbo boost of Helier and CHCH happening just around the corner 1HY24 and with the unfreezing of awful sentiment to the sector ( ie. RYM and SUM regaining some love) it is very difficult to not see MUCH happier days just ahead for OCA.

As a long term investor in OCA`s projects and model, the whiplash of the share price, despite clinging to the fundamentals of the company has still been most difficult. The market says each day what an awful company this is……The market is right , it is always right …but just like the last 3 years... Just you watch it change its mind yet again.

[ronaldson]

Good comments Maverick. And OCA has indeed closed today well bid at 87c, up from the low of 76c just 4 weeks ago, which is a significant increment in % terms. But ARV even better today, up 4c to $1.18. So the whole sector is benefitting from a change in sentiment and a generally oversold circumstance. I think the opportunity to enter really cheaply is quickly receding, and we may even see FOMO in play again before too long as folk start to reassess.

I know the property market has well and truly gone off the boil but the desire for security, the need for aged care services, and the availability of social facilities and amenities among a peer group, is well proven in this country as a powerful attractant for over 70's. And the current demographic tail wind is compelling and simply can't be "switched off ". Not to mention actually replicating the existing built environment of the NZX listed entities at current labour and materials costs would probably make a mockery of valuations attributed for the purpose of their financial statements.

An incoming tide waits for no one. So top up while it is still reasonable to do so.

[Baa_Baa]

And OCA has indeed closed today well bid at 87c, up from the low of 76c just 4 weeks ago, which is a significant increment in % terms.

An incoming tide waits for no one. So top up while it is still reasonable to do so.

OCA low was 72c on 20/12/22, so at 87c it's up 20.82% from that, a nice gain for anyone who got some. Still down a whopping 45% from the SP high, and 35% discount to NTA.

Technically OCA has made a potentially very significant breakout -up- through a very nasty long term down channel since the high back in August 2021 (!) .. no wonder it seems so long, because it has been. OCA is currently tapping on a minor price resistance at 87c but the basic indicators are now in oversold territory, so unless that FOMO you speak of kicks in, expect some profit taking from the savvy traders amongst us.

[winner69]

Looking at the 1 year % chart you have to think the decline is all over

So brighter times ahead for the share price

As they say onward and upwards from here

Great call a couple of weeks ago …I think gibberish could become the new norm ……real TA stuff

Hope many you got on board ….esp the savvy traders amongst us …….or the desperately worried ones didn’t sell out

[limmy]

I'm still yet to breakeven on OCA.
Bought in Apr last year above $1 and again in May at 0.99
Bought more luckily at 0.73 in Dec at only 1c above its recent lows, bringing my average now down to 0.89, and I can't wait for it to breakeven. This is quite a volatile stock and I'm considering whether to just recover my losses, should the price rise to my breakeven point. If interest rates rise again in Feb, I suspect the sentiment will turn negative again for the whole sector ?